Reef Oil & Gas Income & Development Fund III LP - FORM 8-K - EX-10.1

Attached files

file	filename
8-K - Reef Oil & Gas Income & Development Fund III LP	v171990_8k.htm
EX-10.4 - Reef Oil & Gas Income & Development Fund III LP	v171990_ex10-4.htm
EX-10.3 - Reef Oil & Gas Income & Development Fund III LP	v171990_ex10-3.htm
EX-10.2 - Reef Oil & Gas Income & Development Fund III LP	v171990_ex10-2.htm
EX-10.5 - Reef Oil & Gas Income & Development Fund III LP	v171990_ex10-5.htm

PURCHASE AND SALE AGREEMENT

TABLE OF CONTENTS

ARTICLE I PURCHASE AND SALE		1
1.01	Purchase and Sale	1
1.02	Interests	1
1.03	Effective Time	2

ARTICLE II PURCHASE PRICE		3
2.01	Purchase Price	3
2.02	Adjustments to Purchase Price	3

ARTICLE III REPRESENTATIONS AND WARRANTIES		4
3.01	Representations and Warranties of Seller	4
3.02	Representations and Warranties of Buyer	7

ARTICLE IV COVENANTS		9
4.01	Covenants of Seller	9
4.02	Covenants of Buyer	10

ARTICLE V TITLE MATTERS, ENVIRONMENTAL MATTERS, CASUALTY LOSS AND ABANDONMENT		11
5.01	Seller’s Title	11
5.02	Definition of Marketable Title	11
5.03	Definition of Permitted Encumbrances	11
5.04	Definition of Title Defect	13
5.05	Title Procedure	13
5.06	Consents and Preferential Rights	14
5.07	Environmental Procedure	14
5.08	Casualty Loss	16
5.09	Plugging and Abandonment	17
5.10	Disclaimer of Warranties	17

ARTICLE VI CONDITIONS TO CLOSING		18
6.01	Conditions to Obligations of Seller	18
6.02	Conditions to Obligations of Buyer	18

ARTICLE VII CLOSING		18
7.01	Date of Closing	18
7.02	Place of Closing	18
7.03	Closing Obligations	19

ARTICLE VIII OBLIGATIONS AFTER CLOSING		20
8.01	Post-Closing Adjustments	20
8.02	Sales Taxes and Recording Fees	20

8.03	Indemnification	21
8.04	Further Assurances	21
8.05	Survival	21
8.06	Limitation on Seller’s Liability

ARTICLE IX TERMINATION OF AGREEMENT		22
9.01	Termination	22
9.02	Return of Information	22
9.03	Liabilities upon Termination	22

ARTICLE X MISCELLANEOUS		23
10.01	Expenses	23
10.02	Notices	23
10.03	Amendment	23
10.04	Assignment	23
10.05	Announcements	24
10.06	Generality of Provisions	24
10.07	Headings	24
10.08	Counterparts	24
10.09	References	24
10.10	Governing Law	24
10.11	Entire Agreement	24
10.12	Severability	25
10.13	Parties in Interest	25

PURCHASE AND SALE AGREEMENT

This Purchase and Sale Agreement (“Agreement”) dated as of December 18, 2009 (the “Execution Date”), but effective as of December 1, 2009, is by and between Azalea Properties, Ltd., a Texas limited partnership (“Seller”), and RCWI, L.P., a Texas limited partnership (“Buyer”), relative to the “Interests” (as hereinafter defined).

In consideration of the mutual promises contained herein, the benefits to be derived by each party hereunder and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Buyer and Seller agree as follows:

ARTICLE I

PURCHASE AND SALE

1.01 Purchase and Sale. Seller agrees to sell and convey and Buyer agrees to purchase and pay for the Interests subject to the terms and conditions of this Agreement.

1.02 Interests. All of the following shall be referred to as the “Interests”:

(a) The undivided interests described in Exhibit A hereto, in and to the entire estates created by the leases, licenses, permits and other agreements described in Exhibit A (the “Leases”) insofar as the Leases cover and relate to the lands described in Exhibit A (the “Lands”), together with (i) all rights, privileges, benefits and powers conferred upon the holder of the Leases with respect to the use and occupation of the surface of the Lands that may be necessary, convenient or incidental to the possession and enjoyment of the Leases, (ii) all rights in respect of any pooled or unitized acreage located in whole or in part within the Lands by virtue of the Leases, including rights to production from the pool or unit allocated to any Lease being a part thereof, regardless of whether such production is from the Lands, (iii) all rights, options, titles and interests of Seller granting Seller the right to obtain, or otherwise earn interests within the Lands no matter how earned, and (iv) all tenements, hereditaments and appurtenances belonging to any of the foregoing;

(b) All of Seller’s right, title and interest in and to the Fee, Fee Mineral and Fee Royalty Interests described in Exhibit A;

(c) Identical undivided interests in and to all of the oil and gas wells, saltwater disposal and water wells and injection wells (whether or not currently producing) (the “Wells”) associated or located on the properties listed on Exhibit B (the “Properties”), all pipelines, flowlines, plants, gathering and processing systems, platforms, buildings, compressors, meters, tanks, machinery, tools, pulling machines, utility lines, and all of the personal property, equipment, fixtures and improvements now or as of the Effective Time (as defined in Section 1.03 below) in or on the Lands, appurtenant thereto or used in connection therewith or with the production, treatment, sale or disposal of hydrocarbons or water produced therefrom or attributable thereto and all other appurtenances thereunto belonging, whether or not located on the Leases;

(d) The contracts and contractual rights, obligations and interest, including all farmout agreements, farmin agreements, drilling contracts, operating agreements, sales contracts, saltwater disposal agreements, division orders and transfer orders and other contracts or agreements set forth on Exhibit C attached hereto covering or affecting any or all of the Leases and/or Lands. In the event there are other agreements or contracts necessary or desirable with respect to the operations being conducted on the Leases, Fee Interests, Wells and Lands, at its option, Buyer shall be entitled to the benefits of such contracts or agreements;

(e) The easements, licenses, authorizations, permits and similar rights and interests applicable to, or pertinent to, the ownership and operation of Leases, Fee Interests, Wells and the Wells;

(f) All inventories, oil, gas and production in tanks, in storage below the pipeline connection in tanks or upstream of the sales meter (“line fill”) and inventory attributable to the Leases Fee Interests, Lands and Wells;

(g) All other right and interests in, to or under or derived from the Interests, even though same may be improperly described or omitted from the exhibits. It is the express intent of the Seller and Buyer that all of Seller’s right, title and interest in any of the properties described on Exhibit A and Exhibit B and those on Exhibit C, subject to the qualifications set forth in Article 1.02(d), and the interests appurtenant thereto, be assigned to Buyer hereunder; and

(h) All original files, records, documentation and data in Seller’s possession relating to (or evidencing) Seller’s ownership or rights in the Leases Fee Interests, Lands and Wells, production, rights-of-way or other rights and interests described herein, including but not limited to lease files, land files, well files, accounting files, production sales agreements files, division and transfer order files, written contracts, title opinions and abstracts, legal records, governmental filings, geological data, seismic data, information and analysis, production reports, production logs, core sample reports and maps as such data is assembled in the normal course of business but exclusive of (A) any such records, data or information where the transfer of same is prohibited by third party agreements or applicable law, as to which Seller is unable to secure a waiver, or (B) the work product of Seller’s legal counsel, excluding title opinions.

The respective values allocated to Seller’s interest in each of the Interests (the “Allocated Values”) are as set forth in Exhibit B hereto.

1.03 Effective Time. The purchase and sale of the Interests shall be effective for all purposes as of December 1, 2009 at 7:00 a.m., local time at the location of the Interests (the “Effective Time”).

ARTICLE II

PURCHASE PRICE

2.01 Purchase Price. The purchase price for the Interests shall be Twenty Two Million and No/100 ($22,000,000) (the “Purchase Price”), which shall be adjusted as set forth in Section 2.02 below. Upon the execution hereof, Buyer shall pay to Seller by wire transfer the sum of One Million One Hundred Thousand and No/100 ($1,100,000) (the “Earnest Money”) which shall be governed by the terms hereof.

2.02 Adjustments to Purchase Price. The Purchase Price to be paid at Closing shall be minus the Earnest Money and further adjusted as follows and the resulting amount shall be referred to as the “Adjusted Purchase Price”:

(a) The Purchase Price shall be adjusted upward by an amount up to the total Allocated Value of the Proven Undeveloped (“PUD’s”) opportunities set forth on Exhibit D, which Exhibit D shall be generated after the Execution Date in accordance with the provisions of this Article 2.02(a) and delivered at Closing, and which total amount shall be no more than Two Million Five Hundred Thousand Dollars ($2,500,000.00). Buyer and Seller shall enter into good faith negotiations to reach agreement on the increase to the Purchase Price allocated pursuant to this Section 2.02(a). Seller shall use commercially reasonable best efforts to provide Buyer with all land maps necessary for Buyer to evaluate the PUD’s at least seven (7) days prior to Closing. Buyer shall provide Seller with Exhibit D as soon as reasonably possible after Seller’s delivery to Buyer of all maps it obtains. Between the Execution Date and Closing, Seller will use commercially reasonable best efforts to obtain documentation evidencing Seller’s ownership in those leaseholds where the individual PUD’s are located. Provided such PUD documentation is obtained, the Purchase Price will be increased by those amounts of the Allocated Value attributable to the PUDs.

(b) The Purchase Price shall be adjusted upward for any cash expenditures actually made by Seller relating to the Interests from the Effective Time to the Closing Date;

(c) The Purchase Price shall be adjusted downward for any cash actually received by Seller relating to the Interests from the Effective Time to the Closing Date.

(d) The Purchase Price shall be adjusted downward for the exercise of any Preferential Rights (as defined in Section 5.06) or the failure to obtain any Consents (as defined in Section 5.06) prior to the Closing pursuant to Section 5.06(b).

(e) The Purchase Price shall be adjusted downward for any Title Defect Amount pursuant to Section 5.05(e) and Environmental Defect Amount pursuant to Section 5.07(f).

(f) The Purchase Price shall be adjusted downward for 11/12ths of any ad valorem, property, production, severance and similar taxes and assessments on the Interests for

the calendar year 2009, which have not been paid prior to the Effective Time. It is the intent of this provision that Seller shall bear its proportionate part of any unpaid ad valorem, property, production, severance and similar taxes and assessments for the tax year 2009.

(g) The Purchase Price shall be adjusted downward by any amount attributable to contracts, liens, judgments, encumbrances or other material liabilities and/or obligations of Seller related to the Interests, but excluding the PUDs, under any contracts or binding obligations which are disclosed by Seller or discovered by Buyer after the Execution Date, and which remain ongoing obligations affecting the Interests as of the Effective Date (collectively, the “Post Execution Liabilities”). The amount of any adjustment shall be equal to the amount by which such Post Execution Liabilities reduces the value of the Interests below the Allocated Value.

(h) Seller and Buyer agree that no adjustments other than those set forth from (a) to (e) above shall be made to the Purchase Price.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

3.01 Representations and Warranties of Seller. Seller represents and warrants to Buyer as follows:

(a) Seller is a Texas limited partnership duly organized, validly existing and in good standing under the laws of its state of organization.

(b) Seller has the requisite power and authority to carry on its business as presently conducted, to enter into this Agreement, to sell the Interests on the terms described in this Agreement and to perform its obligations under this Agreement. The consummation of the transactions contemplated by this Agreement will not violate, nor be in conflict with, (i) any provision of Seller’s governing documents, (ii) any agreement or instrument to which Seller is a party or is bound, except those as to which consents have been or will be obtained prior to the Closing, or (iii) any judgment, decree, order, statute, rule or regulation applicable to Seller.

(c) The execution, delivery and performance of this Agreement and the transactions contemplated hereby have been duly and validly authorized by all requisite action on the part of Seller.

(d) This Agreement has been duly executed and delivered on behalf of Seller, and at the Closing all documents and instruments required hereunder to be executed and delivered by Seller shall have been duly executed and delivered. This Agreement does, and such documents and instruments shall, constitute legal and valid obligations of Seller enforceable against it in accordance with its and their respective terms.

(e) Seller has incurred no liability, contingent or otherwise, for brokers’ or finders’ fees relating to the transactions contemplated by this Agreement for which Buyer shall have any responsibility whatsoever.

(f) Schedule 3.01(f) describes (i) all of the unit agreements, farmout and farmin agreements, pooling agreements, pooling designations, unit operating agreements and operating agreements, exploration agreements, participation agreements, transportation and gathering agreements, rig contracts, pipe and other supply contracts and area of mutual interest agreements included in the Interests, (ii) all of the production sales, marketing and processing agreements included in the Interests, other than such agreements which are terminable by Seller without penalty on 30 or fewer days’ notice, (iii) any contracts or agreements (other than contracts for utility services) included in or burdening the Interests that could reasonably be expected to obligate Seller to expend or pursuant to which Seller may receive in excess of Twenty Five Thousand and NO/100 Dollars ($25,000) in any calendar year, (iv) any contract or agreement included in or related to the Interests that is with any affiliate of Seller, and (v) any contract or agreement that evidences an obligation to pay the deferred purchase price of property or services ((i) - (v) collectively, the “Material Contracts”). Seller has not received written notice of any default under any of the Material Contracts or the Leases. The Contracts and the Leases are in full force and effect and have not been modified or amended in any material respect, and Seller is not in default thereunder. Prior to the execution of this Agreement, Seller furnished to Buyer true and complete copies of each Material Contract and all amendments thereto.

(g) No claim, demand, filing, hearing, notice of violation, proceeding, notice or demand letter, investigation, administrative proceeding, civil, criminal or other action, suit or other legal proceeding is pending or, to the best of Seller’s knowledge, threatened against Seller or any third party which operates an Interest relating to, resulting from or affecting the ownership or operation of the Interests. No notice from any governmental authority or any other person (including employees) has been received by Seller or, to the best of Seller’s knowledge, any third party which operates any Interest as to any claim, demand, filing, hearing, notice of violation, proceeding, notice or demand letter, relating to, resulting from or affecting the ownership or operation of the Interests and the Material Contracts, claiming any violation of any law, statute, rule, regulation, ordinance, order, decision or decree of any governmental authority (including, without limitation, any such law, rule, regulation, ordinance, order, decision or decree concerning the conservation of natural resources) or claiming any breach of contract or agreement with any third party.

(h) Seller does not operate and has not operated any of the Interests.

(i) All royalties, rentals, and other payments due pursuant to or with respect to the Interests, which are payable by Seller have been properly and timely paid, and if payable by third parties, have been properly and timely paid. There are no royalty suspense accounts maintained by Seller with respect to the Interests. Neither Seller, nor, to the knowledge of Seller, any other party is in default under any Lease or oil and gas lease not listed on Exhibit A as of the

Execution Date, and to which Seller is a party, and the Leases identified on Exhibit A are valid and subsisting oil and gas leases and are currently in full force and effect.

(j) Seller has obtained and is in compliance with all licenses, permits, contracts, easements and agreements relating to the Interests that are required to be obtained by Seller. To the knowledge of Seller, each third party operator of the Interests has obtained and is in compliance with all licenses, permits, contracts, easements and agreements relating to the Interests that are required to be obtained by it. To the knowledge of Seller, all such licenses, permits, contracts, easements and agreements are set forth in Schedule 3.01 (j) and are in full force and effect; and no violations exist under such licenses, permits, contracts and agreements. Seller is in compliance with all laws, rules and regulations of federal, state or local entities, which have jurisdiction over Seller, or the Interests to be sold hereunder, including but not limited to all environmental regulations and laws. Seller has been and is in material compliance, and to the knowledge of Seller, each third party operator of the Interests is in material compliance, under all environmental laws.

(k) To the knowledge of Seller, gas imbalances identified on Schedule 3.01(k) are the only gas imbalances that exist with respect to the Interests.

(1) Except as provided on Schedule 3.01(1) all requisite third-party consents to assign or third-party waivers to the assignment have been secured by Seller, or will have been secured by the Closing Date. Only the Interests identified on Schedule 3.01(1) are subject to any third party preferential rights to purchase.

(m) There are no Wells included in the Interests that (i) Seller, or, to the knowledge of Seller, a third party operator, is obligated by law or contract to currently plug and abandon, or (ii) are subject to exceptions to a requirement to plug and abandon issued by a governmental authority. Seller has not installed any underground storage tanks or constructed any unlined production pits in, on or underlying any of the Interests, and to the knowledge of Seller, no underground storage tanks or unlined production pits have been installed or constructed by anyone else in, on or underlying any of the Interests.

(n) Schedule 3.01(n) contains a true and complete list of (i) all authorizations for expenditures for all drilling operations applicable to the Interests in excess of Five Thousand and NO/100 Dollars ($5,000) or for capital expenditures with respect to such Interests in excess of Five Thousand and NO/100 Dollars ($5,000) that have been proposed by any person on or after the Effective Time, whether or not accepted by Seller or any other person, and (ii) all authorizations for expenditure in excess of Five Thousand and NO/100 Dollars ($5,000) and written commitments for all drilling operations in excess of Five Thousand and NO/100 Dollars ($5,000) applicable to such Interests or for other capital expenditures with respect to such Interests in excess of Five Thousand and NO/100 Dollars ($5,000) for which all of the activities anticipated in such authorizations for expenditures or commitments have not been completed by the Effective Time.

(o) All property, ad valorem, production, severance and other taxes of a similar nature that are due have been timely paid or are being contested in good faith. Seller has timely filed or caused to be timely filed all tax returns, reports, statements and similar filings required by applicable laws, statutes, rules or regulations with respect to the Interests due on or prior to the Closing Date. There are no extensions or waivers of any statute of limitations with respect to such taxes or tax liens burdening the Interests except for liens for current taxes not yet due and payable.

(p) The Interests are not subject to any tax partnership agreement or provisions requiring a partnership income tax return to be filed under Subchapter K of Chapter 1 of Subtitle A of the Internal Revenue Code of 1986, as amended.

(q) Schedule 3.01(q) lists all bonds, letters of credit, guarantees and other similar commitments held by Seller that are required by third parties in order for Seller to own the Interests.

(r) Seller is not a “foreign person” within the meaning of §1445 of the Internal Revenue Code of 1986, as amended.

(s) There are no bankruptcy or receivership proceedings pending against, being contemplated by, or threatened against Seller.

(t) Seller is an experienced and knowledgeable investor in the oil and gas business. Seller has been advised by and has relied solely on its own expertise and legal, tax, reservoir engineering, environmental and other professional counsel concerning this transaction, the Interests and value thereof.

(u) Seller is not obligated by virtue of a hedging contract to deliver hydrocarbons produced from the Wells at any time after the Closing Date without then or thereafter receiving full payment therefor.

(v) Schedule 3.01(v) contains a list of all outstanding and unpaid obligations of the Seller pertaining to the Interests which are not otherwise set forth in this Agreement.

3.02 Representations and Warranties of Buyer. Buyer represents and warrants to Seller as follows:

(a) Buyer is a Texas limited partnership and is duly organized, validly existing and in good standing under the laws of its state of organization.

(b) Buyer has all requisite power and authority to carry on its business as presently conducted, to enter into this Agreement, to purchase the Interests on the terms described in this Agreement and to perform its other obligations under this Agreement. The consummation of the transactions contemplated by this Agreement will not violate, nor be in conflict with, any provision of Buyer’s governing documents, or any agreement or instrument to

which Buyer is a party or is bound, or any judgment, decree, order, statute, rule or regulation applicable to Buyer.

(c) The execution, delivery and performance of this Agreement and the transactions contemplated hereby have been duly and validly authorized by all requisite action on the part of Buyer.

(d) This Agreement has been duly executed and delivered on behalf of Buyer, and at the Closing all documents and instruments required hereunder to be executed and delivered by Buyer shall have been duly executed and delivered. This Agreement does, and such documents and instruments shall, constitute legal and valid obligations of Buyer enforceable against it in accordance with its and their respective terms.

(e) Buyer has incurred no liability, contingent or otherwise, for brokers’ or finders’ fees relating to the transactions contemplated by this Agreement for which Seller shall have any responsibility whatsoever.

(f) Prior to executing this Agreement, Buyer has been afforded an opportunity to (i) examine the Interests and such materials as it has requested to be provided to it by Seller, and (ii) discuss with representatives of Seller such materials and the nature and operation of the Interests. In entering into this Agreement, Buyer has relied solely on the express representations and covenants of Seller in this Agreement, its independent investigation of, and judgment with respect to, the Interests and the advice of its own legal, tax, economic, environmental, engineering, geological and geophysical advisors and not on any comments or statements of any representatives of, or consultants or advisors engaged by, Seller or its representatives.

(g) Prior to the Closing, Buyer will use its commercially reasonable efforts to satisfy all bonding requirements of all state and federal governmental authorities so that Buyer is qualified to own the Interests. The consummation of the transactions contemplated hereby will not cause Buyer to be disqualified as an owner of state or federal oil, gas and mineral leases, or to exceed any acreage limitation imposed by any law, statute, rule or regulation.

(h) Buyer is an experienced and knowledgeable investor and operator in the oil and gas business. Buyer is acquiring the Interests for its own account and not with a view to, or for offer of resale in connection with, a distribution thereof, within the meaning of the Securities Act of 1933, 15 U.S.C. §77a et seq., and any other rules, regulations and laws pertaining to the distribution of securities.

(i) Buyer has arranged to have available by the Closing Date sufficient funds to enable the payment to Seller by wire transfer the Adjusted Purchase Price in accordance with Section 7.03 hereof and to otherwise perform Buyer’s obligations under this Agreement.

ARTICLE IV

COVENANTS

4.01 Covenants of Seller. Seller covenants and agrees with Buyer that from the date hereof to the Closing Date, except (i) as provided herein, or (ii) as otherwise consented to in writing by Buyer, Seller shall:

(a) Give Buyer and its representatives access to, and the right to copy, at Buyer’s expense, all information in its possession relating to the Interests which shall include, without limitation, the Material Contracts, title opinions, abstracts of title, land records, accounting records, production records, operating expense records, engineering, geological and geophysical data, development plans and permits, and any other information of whatsoever kind relating to the production and operation of the Interests but shall not include (A) any such records, data or information where the transfer of same is prohibited by third party agreements or applicable law, as to which Seller is unable to secure a waiver or (B) the work product of Seller’s legal counsel, excluding title opinions. All such information shall be open to inspection and photocopying at Seller’s offices at any reasonable time during the term of this Agreement, but until subsequent to the Closing shall remain confidential and shall not be disclosed to any third party other than Buyer’s employees and agents.

(b) On and after the Effective Time until the Closing Date, Seller (i) will operate its business in the ordinary course consistent with past practice, (ii) will not, without prior written consent of Buyer, which consent will not be unreasonably withheld, commit to any operation, or services of related operations, reasonably anticipated by Seller to require future capital expenditures by Seller in excess of Five Thousand and NO/100 Dollars ($5,000), or make any capital expenditures in excess of Five Thousand and NO/100 Dollars ($5,000) or subject to (v) below, terminate, amend, assign or extend any Material Contracts, (iii) will not incur liabilities or encumbrances with respect to the Interests for which Buyer would be responsible after Closing, in an amount (not to exceed Five Thousand and NO/100 Dollars ($5,000)) consistent with past practices employed by Seller with respect to the Interests, (iv) not cancel any indebtedness owed to Seller in respect of the Interests, which has a value, individually or in the aggregate, in excess of Five Thousand and NO/100 Dollars ($5,000), (v) notwithstanding (ii) above, will terminate or cause its respective affiliates to terminate, effective as of the Closing Date, any contracts or agreements between Seller and its respective affiliates that relate to or bind the Interests, (vi) will use commercially reasonable efforts to preserve relationships with all third parties having business dealings with respect to the Interests, (vii) will maintain general insurance coverage on the Interests presently furnished by nonaffiliated third parties in the amounts and of the types presently in force, (viii) will use commercially reasonable efforts to maintain in full force and effect all Leases, (ix) will maintain, or use commercially reasonable efforts to obtain, all material governmental permits and approvals affecting the Interests, (x) will pay all taxes and assessments with respect to the Interests that become due and payable prior to the Closing Date, (xi) will not transfer, farmout, sell, hypothecate, encumber or otherwise dispose of any Interest except for sales and dispositions of oil and gas production made in the

ordinary course of business consistent with past practices, (xii) will not enter into, assign, terminate or amend, in any material respect, any contract or any other agreement by which the Interests are bound and which would be a Material Contract, (xiii) and will not commit to do any of the foregoing described in clause (ii), (iii), (iv), (xi) or (xii).

(c) Take or cause to be taken all such actions as may be necessary or advisable to consummate and make effective the sale of the Interests and the transactions contemplated by this Agreement and to assure that as of the Closing Date it will not be under any organizational, legal or contractual restriction that would prohibit or delay the timely consummation of such transactions.

(d) Not itself or through any investment banker, broker, agent, representative or affiliate, directly or indirectly, (i) offer to sell, or solicit, negotiate or seek in any other way offers or proposals to purchase, all or any portion of the Interests, (ii) provide any third parties, other than Buyer and its representatives, with access to data concerning the purchase of all or any portion of the Interests, or (iii) take any similar actions with respect to a sale of the partnership interests or other equity interest in Seller or any merger, consolidation or business combination involving Seller.

(e) Cause all the representations and warranties of Seller contained in this Agreement to be true and correct on and as of the Closing Date.

(f) Notify Buyer (i) if any representation or warranty of Seller contained in this Agreement is discovered to be or becomes untrue, or (ii) if Seller fails to perform or comply with any covenant or agreement contained in this Agreement or it is reasonably anticipated that Seller will be unable to perform or comply with any covenant or agreement contained in this Agreement.

(g) Deliver to Buyer updated and complete Schedules and Exhibits to this Agreement.

(h) Notify Buyer of any Post Execution Liabilities it discovers.

4.02 Covenants of Buyer. Buyer covenants and agrees with Seller that from the date hereof to the Closing Date, except (i) as provided herein, or (ii) as otherwise consented to in writing by Seller, Buyer shall:

(a) Take or cause to be taken all such actions as may be necessary or advisable to consummate and make effective the purchase of the Interests and the transactions contemplated by this Agreement and to assure that as of the Closing Date it will not be under any material organizational, legal or contractual restriction that would prohibit or delay the timely consummation of such transactions.

(b) Cause all the representations and warranties of Buyer contained in this Agreement to be true and correct on and as of the Closing Date.

(c) Promptly notify Seller (i) if any representation or warranty of Buyer contained in this Agreement is discovered to be or becomes untrue, or (ii) if Buyer fails to perform or comply with any covenant or agreement contained in this Agreement or it is reasonably anticipated that Buyer will be unable to perform or comply with any covenant or agreement contained in this Agreement.

(d) Notify Seller of any Post Execution Liabilities it discovers.

ARTICLE V

TITLE MATTERS, ENVIRONMENTAL MATTERS,

CASUALTY LOSS AND ABANDONMENT

5.01 Seller’s Title. Seller represents to Buyer that Seller’s title to the Interests as of the Effective Time is (and as of the Closing shall be) “Marketable Title” as defined in Section 5.02 hereinbelow.

5.02 Definition of Marketable Title. As used in this Agreement, the term “Marketable Title” shall mean, as to each of the Interests, that the title acquired by Buyer:

(a) Will entitle Buyer to receive and retain, the percentage set forth in Exhibit A as Seller’s “Net Revenue Interest” of all hydrocarbons produced, saved and marketed from each Property as set forth in Exhibit B, all without reduction, suspension or termination of such interest throughout the productive life of such Wells on each Property, except for any reduction, suspension or termination caused by Permitted Encumbrances.

(b) Will obligate Buyer to bear not more than the percentage set forth in Exhibit A as Seller’s “Working Interest” of the costs and expenses relating to the maintenance, development and operation of each Property as set forth in Exhibit B, all without increase throughout the productive life of such Wells on each Property, except for any increase caused by Permitted Encumbrances.

(c) Is free and clear of all liens, mortgages, security interests, encumbrances, burdens and claims of any kind, except for Permitted Encumbrances.

(d) Is set forth in documents, which have been properly recorded in the County or Parish in which they are located and/or in such other place as required by state law in the state wherein the Interest is located, such that Buyer’s recordation of an Assignment or Deed from Seller shall not be made ineffective by a prior recordation by a third party of an instrument conveying such Interest to a third party.

5.03 Definition of Permitted Encumbrances. As used herein, the term “Permitted Encumbrances” shall mean:

(a) Lessors’ royalties, overriding royalties, reversionary interests and similar burdens, whether recorded or unrecorded, that do not operate to reduce Seller’s Net Revenue Interests set forth in Exhibit B or increase Seller’s Working Interests set forth in Exhibit B.

(b) Division orders and sales contracts terminable without penalty upon no more than thirty (30) days’ notice to the purchaser.

(c) Except as provided in Section 5.06 below, preferential rights to purchase and required third-party consents and similar agreements with respect to which waivers or consents are obtained under this Agreement prior to the Closing from the appropriate parties or the appropriate time period for asserting the right has expired prior to the Closing without an exercise of the rights.

(d) Encumbrances relating to the Interests that arise under operating agreements to secure payment of amounts not yet delinquent and are of a type and nature customary in the oil and gas industry.

(e) Encumbrances relating to the Interests securing payments to mechanics and materialmen and encumbrances securing payment of taxes or assessments that are, in either case, not yet delinquent or, if delinquent, are being contested in good faith in the normal course of business consistent with past practice, and of which Buyer is notified in writing before Closing and for which Seller indemnifies Buyer subsequent to Closing.

(f) All rights to consent by, required notices to, filings with, or other actions by governmental entities in connection with the sale or conveyance of oil and gas leases or interests therein if they are customarily obtained subsequent to the sale or conveyance and have been properly obtained in connection with all prior sales and conveyances.

(g) Conventional rights of reassignment obligating Seller to reassign its interest in any portion of the Interests to a third party in the event it intends to release or abandon such Interests prior to the expiration of the primary term or other termination of such Interests.

(h) Easements, rights of way, servitudes, permits, surface leases, surface use restrictions and other surface uses and impediments on, over or in respect to any of the Interests that do not, taken as a whole, materially interfere with the operation, value or use of the Interests.

(i) All rights reserved to or vested in any governmental, statutory or public authority to control or regulate any of the Interests in any manner, and all applicable laws, rules and orders of governmental authority, so long as the foregoing do not interfere in any material respect with the operation of the portion of the Interests burdened thereby.

(j) Such Title Defects which Buyer fails to deliver to Seller in writing as provided in Section 5.05(b) below.

5.04 Definition of Title Defect. As used in this Agreement the term “Title Defect” shall mean any defect which renders the title to an Interest to be less than Marketable Title.

5.05 Title Procedure.

(a) As used herein, Title Defect Amount means the value attributable to the portion of the Interests affected by such Title Defect, multiplied by a fraction (i) the numerator of which is the difference between (x) the Net Revenue Interest for the affected Interest set forth on Exhibit A minus (y) the Net Revenue Interest for the affected Interest agreed or determined to be owned by Seller; and (ii) the denominator of which is the Net Revenue Interest for that Interest set forth on Exhibit A.

(b) If Buyer discovers any Title Defect, Buyer shall give Seller notice of such Title Defect no later than five (5) days prior to the Closing Date. Such notice shall be in writing and shall include (i) a description of the Title Defect, and (ii) the Title Defect Amount therefor. Buyer shall be deemed to have waived all Title Defects of which Buyer has not given timely notice to Seller thereof.

(c) Seller, at its option, shall have the right and opportunity, but not the obligation, to cure any Title Defect so that the title to be acquired by Buyer shall become Marketable Title.

(d) If Seller decides not to or cannot cure a Title Defect and Seller does not agree with any claimed Title Defect Amount or any proposed value for the affected Interest, Seller shall so notify Buyer within two (2) days of its receipt of the notice from Buyer under Section 5.05(b), and the parties shall promptly enter into good faith negotiations and attempt to agree on those matters. The value agreed by the parties with respect to a Title Defect will be the Title Defect Amount for that Title Defect.

(e) If the parties cannot reach agreement concerning the existence of a Title Defect or a Title Defect Amount by the Closing Date, then Buyer may (i) delete the portion of the Interest affected by such Title Defect from the Interests to be conveyed by Seller at Closing and adjust the Purchase Price downward by the value applicable to such Interest, or (ii) acquire such Interest at Closing with no adjustment to the Purchase Price.

(f) Notwithstanding any terms contained in this Agreement to the contrary, in the event the aggregate amount of the Title Defects, the value of the Interests subject to unobtained consents to assignment set forth in Article 5.06(a) hereinbelow, the value of the Interests subject to Preferential Rights set forth in Article 5.06(b) hereinbelow, the Environmental Defects set forth in Article 5.07, the Casualty Loss set forth in Article 5.08 hereinbelow and the value of the Interests subject to Diminution set forth in Article 5.09 hereinbelow which Buyer timely asserts exceeds Two Million Two Hundred Thousand and NO/100 Dollars ($2,200,000), either Seller or Buyer may elect to terminate this Agreement.

5.06 Consents and Preferential Rights.

(a) If any third party consent (“Consents”) to the sale and transfer of the Interests is not obtained prior to the Closing, Buyer shall not add that portion of the Interests subject to such consent requirement to the aggregate under Articles 5.05(f), 5.06(c), 5.07(g) or 5.08 or 5.09(a) if such consent is customarily secured after the Closing or such consent does not materially affect the value of the affected Interest if such consent were withheld.

(b) After execution hereof, if an Interest is subject to preferential purchase rights, rights of first refusal, or similar rights (collectively “Preferential Rights”), Seller shall notify the holders thereof of its intention to sell such Interest and of the value attributable thereto based upon the mutual agreement of Seller and Buyer. Seller will not be liable to Buyer if any Preferential Rights are exercised, or any Consents are denied, prior to the Closing Date, provided that the Purchase Price shall be reduced by the value attributable to the portion of the Interests that is subject to such Preferential Rights or Consents. However, if Seller is unable to obtain the required waivers of Preferential Rights or Consents prior to the Closing Date (other than Consents from governmental agencies ordinarily obtained after Closing), the portion of the Interest affected will, at the option of Buyer (i) be deleted from this sale and the Purchase Price decreased by the value attributable thereto; or (ii) be sold to Buyer, in which event Buyer shall be entitled to receive any amounts paid upon exercise of the Preferential Rights applicable thereto. If the holder of a Preferential Right on an Interest that has been deleted from the sale to Buyer fails to consummate the purchase of the Interest covered by such right within the time required (in no event shall such time period extend beyond thirty (30) days after the Closing Date), then Seller shall so notify Buyer and within thirty (30) days after Buyer’s receipt of such notice from Seller, Seller shall sell to Buyer and Buyer shall purchase from Seller for the value attributable thereto, and upon other terms of this Agreement, the Interest to which the Preferential Right applied, provided no material adverse change has occurred in the Interest.

(c) Notwithstanding any terms contained in this Agreement to the contrary, in the event the aggregate amount of the Title Defects set forth in Article 5.05 above, the value of the Interests subject to unobtained consents to assignment set forth in Article 5.05(a), the value of the Interests subject to Preferential Rights set forth in Article 5.06(b), the Environmental Defects set forth in Article 5.07 hereinbelow, the Casualty Loss set forth in Article 5.08 hereinbelow and the value of the Interests subject to Diminution set forth in Article 5.09 hereinbelow and which Buyer timely asserts exceeds Two Million Two Hundred Thousand and NO/100 Dollars ($2,200,000), either Seller or Buyer may elect to terminate this Agreement.

5.07 Environmental Procedure.

(a) Prior to the Closing Date, Buyer may conduct a field inspection of the Interests and Buyer may further secure, at its sole risk, cost and expense, an environmental audit of all or any of the Interests. At Buyer’s request, Seller will make arrangements with the operators of the Interests for Buyer, or Buyer’s representatives, to conduct the inspection or audit. If Buyer makes use of said audit to assert an Environmental Defect under the terms of this Agreement, Buyer shall furnish a copy of such environmental audit to Seller, and the contents

of such environmental audit shall remain confidential unless required to be disclosed by any rule, order or governmental proceeding.

(b) As used herein, Environmental Defect shall mean any material environmental defect relating to the Interests in the nature of environmental pollution or contamination, including pollution of the soil, ground water or the air; underground injection activities and waste disposal on site or offsite; failure to comply with applicable land use, surface disturbance, licensing or notification requirements; or violations of environmental or land use rules, regulations, demands or orders of appropriate state or federal regulatory agencies.

(c) As used herein, Environmental Defect Amount means the cost to remediate such Environmental Defect in accordance with applicable environmental laws.

(d) If Buyer discovers any Environmental Defect, Buyer shall give Seller notice of such Environmental Defect no later than five (5) days prior to the Closing Date. Such notice shall be in writing and shall include (i) a description of the Environmental Defect, and (ii) the Environmental Defect Amount therefor. Buyer shall be deemed to have waived all Environmental Defects of which Buyer has not given timely notice to Seller thereof.

(e) If Seller does not agree with any claimed Environmental Defect or any proposed Environmental Defect Amount, Seller shall so notify Buyer within two (2) days of its receipt of the notice from Buyer under Section 5.07(d), and the parties shall promptly enter into good faith negotiations and attempt to agree on those matters. The value agreed by the parties with respect to an Environmental Defect will be the Environmental Defect Amount for that Environmental Defect.

(f) If the parties cannot reach agreement concerning either the existence of an Environmental Defect or an Environmental Defect Amount therefor with respect to any Interest by the Closing Date, then Buyer may (i) delete the portion of the Interest affected by such Environmental Defect from the Interests to be conveyed by Seller at Closing and adjust the Purchase Price downward by the value applicable to such Interest, or (ii) acquire such Interest at Closing with no adjustment to the Purchase Price.

(g) Notwithstanding any terms contained in this Agreement to the contrary, in the event the aggregate amount of the Title Defects set forth in Article 5.05 above, the value of the Interests subject to unobtained consents to assignment set forth in Article 5.05(a) above, the value of the Interests subject to Preferential Rights set forth in Article 5.06(b) above, the Casualty Loss set forth in Article 5.08 hereinbelow, the Diminution Amount set forth in Article 5.09 hereinbelow and the Environmental Defects which Buyer timely asserts exceeds Two Million Two Hundred Thousand and NO/100 Dollars ($2,200,000), either Seller or Buyer may elect to terminate this Agreement.

5.08 Casualty Loss. If, prior to the Closing, all or any portion of the Interests shall be destroyed by fire or other casualty, or if any portion of the Interests shall be

taken in condemnation or under the right of eminent domain or if proceedings for such purposes shall be pending or threatened, Seller shall promptly notify Buyer of each instance of such casualty loss to the Interests. In addition, Seller shall assign, transfer and set over unto Buyer all of the right, title and interest of Seller in and to any unpaid awards or other payments arising out of such destruction or taking. Seller shall not voluntarily compromise, settle or adjust any amounts payable by reason of such destruction or taking without first obtaining the written consent of Buyer. This Agreement shall remain in full force and effect notwithstanding any such destruction or taking, and Seller shall at Closing pay to Buyer all sums paid to Seller by reason of such destruction or taking, provided that, in the event the aggregate amount of the Title Defects set forth in Article 5.05, the Environmental Defects set forth in Article the value of the Interests subject to unobtained consents to assignment set forth in Article 5.05(a) above, the value of the Interests subject to Preferential Rights set forth in Article 5.06(b) above the value of the Interests subject to Diminution set forth in Article 5.09 hereinbelow and any Casualty loss, individually or in the aggregate, exceeds Two Million Two Hundred Thousand and NO/100 Dollars ($2,200,000), either party shall have the right to terminate this Agreement by delivery of a written notice to the other.

5.09 Diminution in Value of the Interests.

(a) If Buyer discovers or is made aware of any Post Execution Liabilities, Buyer shall give Seller notice of such discovery no later than five (5) days prior to the Closing Date. Such notice shall be in writing and shall include (i) a description of the Post Execution Liability, and (ii) the diminution in the value of the Interests (“Diminution Amount”) therefor. Buyer shall be deemed to have waived all discoveries under this Article or Article 2.02(g) of which Buyer has not given timely notice to Seller thereof.

(b) If Seller does not agree with any claimed Diminution Amount or any proposed value for the affected Interest, Seller shall so notify Buyer within two (2) days of its receipt of the notice from Buyer under Section 5.095.05(b), and the parties shall promptly enter into good faith negotiations and attempt to agree on those matters. The value agreed by the parties with respect to a Diminution Amount will be the Diminution Amount for that Post Execution Liability.

(c) If the parties cannot reach agreement concerning the existence of a Diminution Amount by the Closing Date, then Buyer may (i) delete the portion of the Interest affected by such Post Execution Liability from the Interests to be conveyed by Seller at Closing and adjust the Purchase Price downward by the value applicable to such Interest, or (ii) acquire such Interest at Closing with no adjustment to the Purchase Price.

(d) Notwithstanding any terms contained in this Agreement to the contrary, in the event the aggregate amount of the Title Defects set forth in Article 5.05, the value of the Interests subject to unobtained consents to assignment set forth in Article 5.06(a), the value of the Interests subject to Preferential Rights set forth in Article 5.06(b), the Environmental Defects set forth in Article 5.07, the Casualty Loss set forth in Article 5.08 and the value of the Interests subject to a Diminution Amount set forth in this Article 5.09 which Buyer timely asserts exceeds

Two Million Two Hundred Thousand and NO/100 Dollars ($2,200,000), either Seller or Buyer may elect to terminate this Agreement.

5.10 Plugging and Abandonment. Upon Closing, Buyer shall assume all of Seller’s plugging, replugging, abandonment, removal, disposal and restoration obligations associated with the Interests acquired hereunder. Such obligations being assumed shall include, but not be limited to, all necessary and proper plugging and abandonment and/or removal and disposal of all of the Wells, whether pre-existing or drilled by Seller, and all structures, personal property and equipment located on or associated with the Leases listed on Exhibit A, the necessary and proper capping and burying of all associated flow lines, and any necessary disposal of naturally occurring radioactive material (NORM) or asbestos. All plugging, replugging, abandonment, removal, disposal and restoration operations shall be in compliance with applicable laws and regulations and conducted in a good and workmanlike manner.

5.11 Disclaimer of Warranties. EXCEPT FOR THE SPECIAL WARRANTY OF TITLE IN THE ASSIGNMENT, THE EXPRESS REPRESENTATIONS AND WARRANTIES OF SELLER CONTAINED IN THIS AGREEMENT (OR IN THE ASSIGNMENT TO BE EXECUTED PURSUANT TO THIS AGREEMENT) ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, AND SELLER EXPRESSLY DISCLAIMS ANY AND ALL SUCH OTHER REPRESENTATIONS AND WARRANTIES. SUBJECT TO THE FOREGOING, THE INTERESTS SHALL BE CONVEYED PURSUANT HERETO WITHOUT ANY WARRANTY OR REPRESENTATION, WHETHER EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE RELATING TO THE CONDITION, QUANTITY, QUALITY, FITNESS FOR A PARTICULAR PURPOSE, CONFORMITY TO THE MODELS OR SAMPLES OF MATERIALS, OR MERCHANTABILITY OF ANY EQUIPMENT OR ITS FITNESS FOR ANY PURPOSE, AND WITHOUT ANY OTHER EXPRESS, IMPLIED, STATUTORY, OR OTHER WARRANTY OR REPRESENTATION WHATSOEVER. BUYER SHALL, EXCEPT AS PROVIDED OTHERWISE HEREIN, ACCEPT ALL OF THE SAME “AS IS, WHERE IS”. WITHOUT LIMITATION OF THE FOREGOING, EXCEPT TO THE EXTENT EXPRESSLY PROVIDED IN THIS AGREEMENT, SELLER MAKES NO WARRANTY OR REPRESENTATION, EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, AS TO THE ACCURACY OR COMPLETENESS OF ANY DATA, REPORTS, RECORDS, PROJECTIONS, INFORMATION, OR MATERIALS NOW HERETOFORE, OR HEREAFTER FURNISHED OR MADE AVAILABLE TO BUYER IN CONNECTION WITH THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, PRICING ASSUMPTIONS OR QUALITY OR QUANTITY OF HYDROCARBON RESERVES (IF ANY) ATTRIBUTABLE TO THE INTERESTS OR THE ABILITY OR POTENTIAL OF THE INTERESTS TO PRODUCE HYDROCARBONS OR THE ENVIRONMENTAL CONDITION OF THE INTERESTS OR ANY OTHER MATERIALS FURNISHED OR MADE AVAILABLE TO BUYER BY SELLER, OR BY SELLER’S AGENTS OR REPRESENTATIVES. EXCEPT TO THE EXTENT EXPRESSLY PROVIDED IN THIS AGREEMENT, ANY AND ALL SUCH DATA, RECORDS, REPORTS, PROJECTIONS, INFORMATION, AND OTHER MATERIALS (WRITTEN OR ORAL) FURNISHED BY

SELLER OR OTHERWISE MADE AVAILABLE OR DISCLOSED TO BUYER ARE PROVIDED TO BUYER AS A CONVENIENCE AND SHALL NOT CREATE OR GIVE RISE TO ANY LIABILITY OF OR AGAINST SELLER, AND ANY RELIANCE ON OR USE OF THE SAME SHALL BE AT BUYER’S SOLE RISK TO THE MAXIMUM EXTENT PERMITTED BY LAW.

ARTICLE VI

CONDITIONS TO CLOSING

6.01 Conditions to Obligations of Seller. The obligations of Seller to consummate the transactions contemplated by this Agreement are subject to (i) the satisfaction, or waiver by Seller, of the condition that all representations and warranties of Buyer contained in this Agreement shall be true in all material respects (or true in all respects as to such representations and warranties that are qualified by materiality) at and as of the Closing as if such representations and warranties were made at and as of the Closing, (ii) Buyer shall have performed and satisfied all covenants and agreements, required by this Agreement to be performed and satisfied by Buyer at or prior to the Closing, (iii) there being no suits, actions or other proceedings pending or threatened to restrain or prohibit the consummation of the transactions contemplated by this Agreement, and (iv) neither party having exercised its right to terminate this Agreement pursuant to Section 9.01.

6.02 Conditions to Obligations of Buyer. The obligations of Buyer to consummate the transactions contemplated by this Agreement are subject to (i) the satisfaction, or waiver by Buyer, of the condition that all representations and warranties of Seller contained in this Agreement shall be true in all material respects (or true in all respects as to such representations and warranties that are qualified by materiality) at and as of the Closing as if such representations and warranties were made at and as of the Closing, (ii) Seller shall have performed and satisfied all covenants and agreements required by this Agreement to be performed and satisfied by Seller at or prior to the Closing, (iii) there being no suits, actions or other proceedings pending or threatened to restrain or prohibit the consummation of the transactions contemplated by this Agreement, (iv) neither party having exercised its right to terminate this Agreement pursuant to Section 9.01, and (v) all Consents (except for Consents customarily obtained subsequent to transfer of title) having been obtained.

ARTICLE VII

CLOSING

7.01 Date of Closing. Subject to the conditions stated in this Agreement, the consummation of the transactions contemplated by this Agreement (the “Closing”) shall be held at 10:00 AM on or before January 19, 2010. Said date shall be referred to as the “Closing Date”.

7.02 Place of Closing. The Closing shall be held at ______________, or at such other place as Buyer and Seller may agree upon in writing.

7.03 Preliminary Closing Settlement Statement. Seller shall provide Buyer a “Preliminary Closing Settlement Statement” two (2) days prior to Closing respecting adjustments to the Purchase Price.

7.04 Closing Obligations. At the Closing the following events shall occur, each being a condition precedent to the others and each being deemed to have occurred simultaneously with the others:

(a) Seller shall execute, acknowledge and deliver (in sufficient counterparts to facilitate recording) the Assignment, Conveyance and Bill of Sale (“Assignment”) conveying the Leases to Buyer in substantially the form attached as Exhibit D hereto and the Mineral Deed (“Deed”) conveying the Fee Minerals to Buyer in substantially the form attached as Exhibit E hereto. As appropriate, Seller shall also execute, acknowledge and deliver separate assignments of the Interests on officially approved forms, in sufficient counterparts, to satisfy applicable statutory and regulatory requirements.

(b) Buyer and Seller shall agree upon and execute a “Closing Settlement Statement,” that shall set forth the Preliminary Amount (as hereinafter defined) and each adjustment and the calculation of such adjustments used to determine such amount. The term “Preliminary Amount” shall mean the Purchase Price adjusted as provided in Section 2.02 using for such adjustments the best information then available.

(c) Seller shall deliver to Buyer a payoff letter from Texas Capital Bank (the “Bank”) evidencing the payoff amount, as of the Closing Date, of the mortgage set forth on Schedule 3.01(v) (the “Payoff Amount”).

(d) Buyer shall deliver to Seller a cashier’s check or wire transfer for the Preliminary Amount, less the Payoff Amount, which shall be paid directly by Buyer to the Bank.

(e) Buyer and Seller shall execute the joint instructions to disburse the Earnest Money (the “Joint Instruction Letter”).

(f) Seller shall deliver to Buyer exclusive possession of the Interests.

(g) Buyer shall deliver transfer orders or letters in lieu thereof directing all purchasers of production to make payment of proceeds attributable to production from the Interests after the Effective Time to Buyer; and Seller shall execute and deliver to Buyer Seller’s affidavit of non-foreign status.

(h) Seller shall deliver to Buyer copies of all original land, legal, accounting, engineering, geological and geophysical records in its possession relating to the Interests, including without limitation, all information and material referred to in Section 4.01(a).

(i) Seller shall deliver to Buyer fully executed originals in recordable form of Releases of Liens and releases of security interests encumbering the Interests in favor of the Bank.

(j) Seller and Buyer shall deliver to each other a certificate, dated as of the Closing Date, and executed by their respective authorized officer that the conditions set forth in Sections 6.02 and 6.01 have been fulfilled.

ARTICLE VIII

OBLIGATIONS AFTER CLOSING

8.01 Post-Closing Adjustments. After the Closing, Seller shall make available to Buyer all accounting records necessary for Seller to prepare, in accordance with this Agreement, a statement (the “Final Settlement Statement”) setting forth each adjustment or payment which was not finally determined as of the Closing or finally determined pursuant to the last sentence of this Section 8.01 and showing the calculation of such adjustments. As soon as practicable after receipt of the Final Settlement Statement, Buyer shall deliver to Seller a written report containing any changes which Buyer proposes be made to the Final Settlement Statement. The parties shall undertake to agree with respect to the amounts due pursuant to such post-closing adjustment no later than ninety (90) days after the Closing. If such post-closing adjustment has not been agreed to within ninety (90) days after the Closing, either party may seek to enforce any rights it claims hereunder. The date upon which such agreement is reached or upon which the Adjusted Purchase Price is established, shall be referred to as the “Final Settlement Date.” In the event that (i) the Adjusted Purchase Price is more than the Preliminary Amount, Buyer shall deliver to Seller or to Seller’s account the amount of such difference in immediately available funds, or (ii) the Adjusted Purchase Price is less than the Preliminary Amount, Seller shall deliver to Buyer or to Buyer’s account the amount of such difference in immediately available funds. Payment by Buyer or Seller shall be made within five (5) days of the Final Settlement Date. To the extent not accounted for in the computation of the Adjusted Purchase Price, all uncollected accounts receivable attributable to the Interests on or after the Effective Time shall be assigned to Buyer. Notwithstanding the foregoing, if after the Closing either party shall receive any payment belonging to the other party, the party receiving the payment due to the other party shall remit within five (5) business days the same to such other party.

8.02 Sales Taxes and Recording Fees. Seller will determine, with Buyer’s assistance, what sales tax, if any, is due in connection with the sale of the Interests. Seller and Buyer agree to use commercially reasonable efforts and cooperate in good faith to exempt the sale, conveyance, assignments and transfers to be made to Buyer from any sales, use, stamp, real estate transfer, documentary, registration, recording and other similar taxes (each a “Transfer Tax”). If a determination is made that a Transfer Tax applies, Buyer shall be liable for such tax occasioned by the sale of the Interests.

8.03 Indemnification. After the Closing, Buyer and Seller shall indemnify each other as follows:

(a) Including any “Environmental Claim” as defined herein, Buyer shall defend, indemnify and save and hold harmless Seller against any and all costs, expenses, claims, demands and causes of action of whatsoever kind or character, including court costs and attorneys’ fees, arising out of any operations conducted, commitment made or any action taken or omitted with respect to the Interests, which accrue or relate to times on and after the Closing Date. “Environmental Claim” shall mean any claim, demand or cause of action asserted by any governmental agency or any person, corporation or other entity for personal injury (including sickness, disease or death), property damage or damage to the environment resulting from the discharge or release of any chemical, material or emission into one or more of the environmental media at or in the vicinity of the Interests.

(b) Excluding any Environmental Claim, Seller shall defend, indemnify and save and hold harmless Buyer against any and all costs, expenses, claims, demands and causes of action of whatsoever kind or character, including court costs and attorneys’ fees, arising out of any operations conducted, commitment made or any action taken or omitted with respect to the Interests, which accrue or relate to times prior to the Closing Date.

(c) THE INDEMNIFICATION, RELEASE AND ASSUMPTION PROVISIONS PROVIDED FOR IN THIS AGREEMENT SHALL BE APPLICABLE WHETHER OR NOT THE LOSSES, COSTS, EXPENSES AND DAMAGES IN QUESTION AROSE SOLELY OR IN PART FROM THE ACTIVE, PASSIVE OR CONCURRENT NEGLIGENCE, STRICT LIABILITY, BREACH OF DUTY (STATUTORY OR OTHERWISE), OR OTHER FAULT OF ANY INDEMNIFIED PARTY, PROVIDED THAT NO SUCH INDEMNIFICATION SHALL BE APPLICABLE TO THE EXTENT OF ANY GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE INDEMNIFIED PARTY. BUYER AND SELLER ACKNOWLEDGE THAT THIS STATEMENT COMPLIES WITH THE EXPRESS NEGLIGENCE RULE AND IS CONSPICUOUS.

8.04 Further Assurances. Seller and Buyer shall execute, acknowledge and deliver or cause to be executed, acknowledged and delivered such instruments and take such other action as may be necessary or advisable to carry out their obligations under this Agreement and under any exhibit, document, certificate or other instrument delivered pursuant hereto.

8.05 Survival. Except for the Special Warranty of Title, the representations, warranties, covenants, agreements and indemnities contained in this Agreement shall survive for a period of six (6) months following the Closing Date.

ARTICLE IX

TERMINATION OF AGREEMENT

9.01 Termination. This Agreement and the transactions contemplated hereby may be terminated in the following instances:

(a) By Buyer if any condition set forth in Section 6.02 above shall not be satisfied on or before the Closing;

(b) By Seller if any condition set forth in Section 6.01 above shall not be satisfied on or before the Closing;

(d) By the mutual written agreement of Buyer and Seller.

9.02 Disposition of Earnest Money. In the event this Agreement is terminated, the Earnest Money shall be treated as follows:

(a) If this Agreement is terminated by Buyer pursuant to Section 9.01(a), Buyer shall be entitled to a refund of the Earnest Money, and Seller shall execute and deliver the Joint Instruction Letter instructing the disbursement of the Earnest Money to Buyer.

(b) Except as set forth below, if this Agreement is terminated by Seller pursuant to Section 9.01(b), Seller shall be entitled to receive the Earnest Money, and Buyer shall execute and deliver the Joint Instruction Letter instructing the disbursement of the Earnest Money to Seller. If this Agreement is terminated by Seller pursuant to Section 9.01(b) and that termination is based on the occurrence of the circumstances set forth in Section 6.01 (iii) which involve Seller only, or Buyer and Seller, together, Seller shall execute and deliver the Joint Instruction Letter instructing the disbursement of the Earnest Money to Buyer.

(c) If this Agreement is terminated by Buyer or Seller pursuant to Section 9.01(c), Buyer shall be entitled to a refund of the Earnest Money, and Seller shall execute and deliver the Joint Instruction Letter instructing the disbursement of the Earnest Money to Buyer.

(d) If this Agreement is terminated by Buyer and Seller pursuant to Section 9.01(d), Buyer shall be entitled to a refund of the Earnest Money, and Seller shall execute and deliver the Joint Instruction Letter instructing the disbursement of the Earnest Money to Buyer.

9.03 Liabilities upon Termination. If this Agreement is terminated for any reason or is breached, nothing contained herein shall be construed to limit Seller’s or Buyer’s legal or equitable remedies including, without limitation, damages for the breach or failure of any representation, warranty, covenant or agreement contained herein and the right to enforce specific performance of this Agreement.

ARTICLE X

MISCELLANEOUS

10.01 Expenses. Except as otherwise specifically provided in this Agreement, all fees, costs and expenses incurred by Buyer or Seller in negotiating this Agreement or in consummating the transactions contemplated by this Agreement shall be paid by the party incurring the same, including without limitation, legal and accounting fees, costs and expenses.

10.02 Notices. All notices and communications required or permitted under this Agreement shall be in writing and shall be effective when received by mail, telecopy or hand delivery as follows:

If to Seller:	Azalea Properties, Ltd.
	c/o Maple Ridge Property Company
	its general partner
	___________________
	___________________
	Attn: Frances Marianne Talbot
	Phone: _________
	Fax: ________

If to Buyer:	RCWI, L.P.
	1901 North Central Expressway
	Suite 300
	Richardson, Texas 75080
	Attn: H. Walt Dunagin
	Phone: (972) 437 – 6792
	Fax: (972) 994 – 0369

Either party may, by written notice so delivered to the other, change the address to which notice shall thereafter be made.

10.03 Amendment. This Agreement may not be altered or amended, nor any rights hereunder be waived, except by an instrument in writing executed by the party or parties to be charged with such amendment or waiver. No waiver of any term, provision or condition of this Agreement, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any other term, provision or condition of this Agreement.

10.04 Assignment. Neither Seller nor Buyer may assign any portion of its rights or delegate any portion of its duties or obligations under this Agreement without the prior written consent of the other party, which consent shall not be unreasonably withheld, delayed or conditioned.

10.05 Announcements. Seller and Buyer shall consult with each other with regard to all press releases and other announcements concerning this Agreement or the transaction contemplated hereby and, except as may be required by applicable laws or regulations of any governmental agency, neither Buyer nor Seller shall issue any such press release or make any other announcement without the prior written consent of the other party until the transactions contemplated herein have been consummated.

10.06 Generality of Provisions. The specificity of any representation, warranty, covenant, agreement or indemnity included or provided in this Agreement, or in any exhibit, document, certificate or other instrument delivered pursuant hereto, shall in no way limit the generality of any other representation, warranty, covenant, agreement or indemnity included or provided in this Agreement, or in any exhibit, document, certificate or other instrument delivered pursuant hereto.

10.07 Headings. The headings of the articles and sections of this Agreement are for guidance and convenience of reference only and shall not limit or otherwise affect any of the terms or provisions of this Agreement.

10.08 Counterparts. This Agreement may be executed by Buyer and Seller in any number of counterparts. Each of the counterparts shall be deemed an original instrument, but all of which together shall constitute but one and the same instrument.

10.09 References. References made in this Agreement, including use of a pronoun, shall be deemed to include where applicable, masculine, feminine, singular or plural, individuals, partnerships or corporations. As used in this Agreement, “person” shall mean any natural person, corporation, partnership, trust, estate or other entity. As used in this Agreement, “affiliate” of a person shall mean any partnership, joint venture, corporation or other entity in which such person has an interest or which controls, is controlled by or is under common control of such person.

10.10 Governing Law. This Agreement, and the transactions contemplated hereby, shall be construed in accordance with, and governed by, the laws of the State of Texas without regard to its conflict of laws principles, and venue shall be in Dallas County, Texas.

10.11 Entire Agreement. This Agreement (including the exhibits hereto) constitutes the entire understanding between the parties with respect to the subject matter hereof and supersedes all negotiations, prior discussions and prior agreements and understandings relating to such subject matter. No material representation, warranty, covenant, agreement, promise, inducement or statement, whether oral or written, has been made by Seller or Buyer and relied upon by the other that is not set forth in this Agreement or in the instruments referred to herein, and neither Seller nor Buyer shall be bound by or liable for any alleged representation, warranty, covenant, agreement, promise, inducement or statement not so set forth.

10.12 Severability. If any term or provision of this Agreement shall be determined to be illegal or unenforceable, all other terms and provisions of this Agreement shall nevertheless remain effective and shall be enforced to the fullest extent permitted by applicable law.

10.13 Parties in Interest. This Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors and assigns. Nothing contained in this Agreement, express or implied, is intended to confer upon any other person or entity any benefits, rights or remedies.

SIGNATURE PAGE FOLLOWS

EXECUTED as of the date first written above.

SELLER:	AZALEA PROPERTIES, LTD.

	By:	Maple Ridge Property Company
		Its sole general partner

	By:		/s/ Frances Marianne Talbot
			Frances Marianne Talbot, President

BUYER:	RCWI, L.P.

	By:	RCWI, GP, LLC
		Its general partner

	By:		/s/ Michael J. Mauceli
			Michael J. Mauceli, Manager

EXHIBIT B

Attached to and part of that certain Purchase and Sale Agreement by and between Azalea Properties, Ltd., Seller, and RCWI, L.P., Buyer, dated December 18, 2009.

Adjusted Final

Case Name

FIELD

Operator

COUNTY

STATE

WI %

RI %

Value

THUMS LONG BEACH UNIT

WILMINGTON

THUMS LONG BEACH COMPANY

LOS ANGELES

0.186580

8684.986

NONION STRUMA SAND UNIT - 1

IOTA

HEADINGTON OIL COMPANY LIMITED

ACADIA

3.297923

2.665318

975.576

CL & F #1(R4C RC SUA) - 1

BAYOU PENCHANT

CHAPARRAL ENERGY INC

TERREBONNE

6.013680

4.179700

957.942

WEST DOLLARHIDE DEVONIAN UNIT

DOLLARHIDE

OXY USA INC.

LEA

4.177660

3.629120

709.280

TIGER 495 #1

WASSON

GUNGOLL CARL E EXPLORATION LLC

GAINES

3.000000

2.160000

498.062

GRISSOM SEC 2 #2-2

MAVERICK

ZEPHYR OPERATING LLC

WHEELER

8.000000

6.240000

384.637

DOBSON SEC 1 #4-1

MAVERICK

ZEPHYR OPERATING LLC

WHEELER

8.000000

6.023625

346.583

SKINNER UNIT 30-10 #1 - 1

CHOCTAW RIDGE NORTH

PRUET PRODUCTION CO

CHOCTAW

1.115860

0.927350

344.467

LSU #2 & SL 5024 #2 (MPT MV RA SU) - 002D

MANCHAC POINT

HILCORP ENERGY CO INC

E BTN RG

4.180760

3.085630

264.389

EDEN 1-5H

Colony Wash

CHESAPEAKE OPERATING INC.

HEMPHILL

1.209680

0.946450

263.530

DUVAL COUNTY RANCH -J- - MULTI

DEJAY

KARPER OIL & GAS CORPORATION

DUVAL

6.964286

6.093756

216.320

WIGINTON 2-5H

ALEDO SOUTHWEST

DUNCAN OIL PROPERTIES, INC.

CUSTER

2.428570

1.821430

209.338

ARMSTRONG #20-10

ZEPHYR-STILES RANCH

ZEPHYR OPERATING LLC

WHEELER

7.100000

5.325000

205.892

HOLLINGSWORTH #1-TJ UNIT-001T

LOGANSPORT

BP AMERICA PRODUCTION CO

DESOTO

2.535714

1.901791

166.805

RED HILLS UNIT #2 - 2

LUSK

CIMAREX ENERGY CO

LEA

1.445820

1.244640

162.463

MEADOWS 4-01 - 1

BUFFALO WALLOW

ELAND ENERGY

HEMPHILL

3.000000

2.287500

161.657

CENTRAL DRINKARD UNIT

DRINKARD

CHEVRONTEXACO

LEA

0.559240

0.471480

158.750

COLLINS EAST UPPER CV UNIT

COLLINS EAST

MOSBACHER ENERGY COMPANY

COVINGTON

1.044700

0.796860

155.932

MORRISON #1 - 1

AMROW NORTH

TEXLAND PETROLEUM LP

GAINES

8.104690

6.269830

148.817

J B TUBB B LEASE

SAND HILLS

APACHE CORP

CRANE

0.909180

0.795510

133.723

COOT MOORE 1

OKATOMA

MOSBACHER ENERGY COMPANY

COVINGTON

1.875000

1.500000

131.074

Turner 1-34

ZEPHYR-VICI

ZEPHYR OPERATING LLC

WOODWARD

4.764710

3.811760

125.478

JOHNSON 40 1 - 1

SLASH RANCH

FOREST OIL CORPORATION

LOVING

1.609040

1.327700

116.374

DOBSON SEC 1 #3-1

MAVERICK

ZEPHYR OPERATING LLC

WHEELER

5.242970

4.089520

109.281

MCKNIGHT, MB A&F LEASE

SAND HILLS

BURNETT OIL CO INC

CRANE

2.309010

1.731770

107.063

BRYANT-LINK CO. 1 - MULTI

FULLERTON

TEXLAND PETROLEUM LP

ANDREWS

9.071429

6.803571

103.590

ARMSTRONG #09

ZEPHYR-STILES RANCH

ZEPHYR OPERATING LLC

WHEELER

2.474240

1.856000

102.263

HIGGINS TRUST INC - 1

LOVINGTON

PECOS OPERATING COMPANY

LEA

2.348500

1.761980

98.078

WILEY GLENNBURN UNIT

WILEY

ENCORE OPERATING, LP

BOTTINEAU

0.638380

0.000000

94.177

WEDMAN #1-4

MUSTANG & YUKON

PREMIER ENERGY LLC

CANADIAN

5.375000

3.970160

93.030

BUCKTHAL #2-25 - 225

BUCKTHAL-HELTON

FOREST OIL CORPORATION

HEMPHILL

2.062500

1.553750

90.150

KEYSTONE #1-13 KEYS - 1

SPELUNKER & WALSH

ENERGY ALLIANCE CO INCOR

BACA

6.658260

5.343940

89.989

CHARLES 1-24 (Skinner)

MUSTANG & YUKON

PREMIER ENERGY LLC

KINGFISHER

4.411760

3.441180

87.982

LINDHOLM GAS UNIT 1 - 1

HOSTETTER

CABOT OIL & GAS CORP

MCMULLEN

6.296720

4.729200

74.279

HILL P.C. -D- - 8

QUITO

SEABOARD OIL COMPANY

WARD

0.000001

0.511720

73.567

SUMERLIN, C. E. - MULTI

FULLERTON

TEXLAND PETROLEUM LP

ANDREWS

9.071429

6.803571

71.660

MCKNIGHT, MB C LEASE

SAND HILLS

BURNETT OIL CO INC

CRANE

2.309010

1.731770

71.153

SMITH #8 - 8

CADDO

O’NEAL DRILLING INC

CARTER

2.500000

1.875000

69.458

FRANCES SEC 9 #9-1 - 1

MAVERICK

ZEPHYR OPERATING LLC

ROGER MILLS

5.302180

4.203530

69.215

CLARK #1-3 - 1-3

Zephyr-Winter

ZEPHYR OPERATING LLC

BLAINE

2.625000

2.100000

68.149

STATE AM LEASE 1, 2, & 3 - 3

CAPRITO

CHEVRONTEXACO

WARD

4.062500

3.385420

67.903

Page 1 of 11

EXHIBIT B

Attached to and part of that certain Purchase and Sale Agreement by and between Azalea Properties, Ltd., Seller, and RCWI, L.P., Buyer, dated December 18, 2009.

Adjusted Final

Case Name

FIELD

Operator

COUNTY

STATE

WI %

RI %

Value

HEFLEY 4-2 - 2

BUFFALO WALLOW

ELAND ENERGY

HEMPHILL

3.000000

2.325000

67.546

BREEDLOVE B-DEVONIAN MANY (1-24)

BREEDLOVE

ROFF OPERATING COMPANY

MARTIN

0.229490

0.195810

65.462

ARMSTRONG #05 - 5

ZEPHYR-STILES RANCH

ZEPHYR OPERATING LLC

WHEELER

2.474240

1.837910

65.336

JENNINGS A FEDERAL #4 - 4

LUSK

HENDRIX JOHN H CORPORATION

LEA

4.678570

3.906610

65.211

STROUD-POLK UNIT #2 - 1

JAYNESVILLE

MOSBACHER ENERGY COMPANY

COVINGTON

0.970370

0.744080

64.757

BREEDLOVE B-43

BREEDLOVE

ROFF OPERATING COMPANY

MARTIN

0.229490

0.195810

64.298

MCKNIGHT, MB LEASE

SAND HILLS

BURNETT OIL CO INC

CRANE

2.309010

1.876080

63.502

WEDMAN #1-3 - 1-3

MUSTANG & YUKON

PREMIER ENERGY LLC

CANADIAN

5.375000

3.970160

63.402

7502 JV-S R.O.C. #1U-1U

R.O.C

BTA OIL PRODUCERS

WARD

3.812270

3.812260

59.707

GRAND CANYON B1-32 - A2-5

GRAND CANYON

BABCOCK & BROWN ENERGY

OTSEGO

0.767650

0.580750

59.397

HOOPLE (CLEAR FORK) UNIT W 13 - W 13

HOOPLE

GUNGOLL CARL E EXPLORATION LLC

CROSBY

1.417690

1.085380

58.753

FLATHEAD 27-1 - 271

WALKER-CARTER

KEITH F WALKER

CARTER

1.250000

0.923400

58.168

RIESLING 1 - 1

VINTAGE

TELLUS OPERATING GROUP LLC

JEFFERSON DAVIS

0.241150

0.184780

57.430

COMSTOCK #9-2

WALKER-FANGTASTIC

KEITH F WALKER

MEADE

1.562500

1.175220

57.365

EZELL UNIT 29-05 #1 - 1

CHOCTAW RIDGE NORTH

ESCAMBIA OPERATING CO, LLC

CHOCTAW

1.296900

1.151060

57.332

VARIOUS LEASES

PHYLLIS SONORA

BYRD OPERATING CO

SUTTON

2.276000

1.834650

56.800

STRONG FED COM #1-E - 1

WHITE CITY

MURCHISON OIL & GAS INCORPORAT

EDDY

4.904790

4.291690

55.882

CLEVELAND 2-84

ZEPHYR-TIMBER CREEK

ZEPHYR OPERATING LLC

HEMPHILL

4.200000

4.987010

54.438

WOODS, IMA 1 - 1

KEY (MORROW, UP.)

ZEPHYR OPERATING LLC

Wheeler

2.250000

1.750000

52.234

STRONG FED COM #1 -1

WHITE CITY

MURCHISON OIL & GAS INCORPORAT

EDDY

3.828130

3.349610

51.855

SCHLOSSER FRED ESTATE -B- -13

ROJO CABALLOS

APACHE CORP

PECOS

1.373600

1.071120

51.193

MEADOWS 4-02 - 2

BUFFALO WALLOW

ELAND ENERGY

HEMPHILL

2.550000

2.015630

49.475

HENSLEY MORRIS SEC 9 #9-1 - 9-1

MAVERICK

CROWN ENERGY COMPANY

ROGER MILLS

5.935330

4.629330

49.101

JOHNSON #1 - 1

CHEROKITA TREND

DAVON DRILLING CO

GRANT

7.812500

6.825770

48.806

BUCKTHAL #1-25 - 1025

BUCKTHAL-HELTON

FOREST OIL CORPORATION

HEMPHILL

2.062500

1.553750

48.236

MEADOWS 4-08 - 8

BUFFALO WALLOW

ELAND ENERGY

HEMPHILL

2.968250

2.337100

46.920

MCKNIGHT, MB D-1 - MULTI

SAND HILLS

BURNETT OIL CO INC

CRANE

2.309010

1.912170

44.590

TIGER 493 #1

WASSON

GUNGOLL CARL E EXPLORATION LLC

GAINES

3.000000

2.160000

44.305

SL 5021 #2; MARG H STRAY RA SUA - 002

MANCHAC POINT

HILCORP ENERGY CO INC

E BTN RG

4.375000

3.046340

44.038

POSSUM 9-1

WALKER-POSSUM SHOAL

KEITH F WALKER

MEADE

3.750000

2.812500

43.943

COLE TRUST A #1 - 1

NEWARK EAST

ENCANA OIL & GAS (USA) INC.

DENTON

4.156250

2.784690

42.974

DERBY 1-4H

COLONY WASH

CHESAPEAKE OPERATING INC.

WASHITA

0.289620

0.217210

42.655

UNIVERSITY 18-29 #2, 3, 5, 7

WAR-WINK, S

ANADARKO PETROLEUM CORPORATION

WARD

0.519670

0.443540

42.304

SAYRE RANCH SEC 5 #4-5 -1

MAVERICK

CROWN ENERGY COMPANY

ROGER MILLS

7.083910

5.314400

41.385

ARMSTRONG #04 - 4020

ZEPHYR-STILES RANCH

ZEPHYR OPERATING LLC

WHEELER

3.493380

2.651910

40.989

EAST PACHUTA CREEK OIL UN

PACHUTA CREEK EAST

BERGMAN COMPANIES

CLARKE

0.318570

0.262940

40.207

STINGER 41-12 #1-41-12

BLUE MOUNTAIN

ABRAXAS PETROLEUM CORPORATION

WIBAUX

3.241880

2.588740

38.276

MAHOTA #1-26 - 26-1

CHEROKEE

B&W OPERATING LLC

ROGER MILLS

2.500000

1.875000

37.410

FOWLER #2 - 003AL

MIDDLEFORK

F W RABALAIS

LINCOLN

1.593750

1.195310

36.478

GL GAUDET ET AL 3 - 3

HESTER

KEY ENERGY OF CO INC

ST JAMES

0.727000

0.551240

36.172

SEVENTY-SIX RANCH 1 1R

WALKER-CHESTERFIELD

KEITH F WALKER

MEADE

3.750000

2.812500

35.629

Page 2 of 11

EXHIBIT B

Attached to and part of that certain Purchase and Sale Agreement by and between Azalea Properties, Ltd., Seller, and RCWI, L.P., Buyer, dated December 18, 2009.

Adjusted Final

Case Name

FIELD

Operator

COUNTY

STATE

WI %

RI %

Value

ALEXANDER #2-2

ZEPHYR-WASHITA CREEK Granite Wash

ZEPHYR OPERATING LLC

HEMPHILL

1.500000

1.218390

35.530

WILLIAM TAYLOR 29 #3H - 1

WALKER-CLEVELAND

KEITH F WALKER

ELLIS

1.234380

0.896140

35.051

FERRELL A-14 - 14A

RAMIRENA

MOSBACHER ENERGY COMPANY

LIVE OAK

3.694450

2.828560

34.698

LEWIS 2U -1

RUSTON

DEVON ENERGY PRODUCTION CO.

LINCOLN

0.621950

0.544430

34.099

DELLA COLVIN 1-18 - 1

RUSTON

DEVON ENERGY PRODUCTION CO.

LINCOLN

0.855280

0.748360

33.870

WEATHERBY IVY B 3 - 3

ROJO CABALLOS

CHEVRONTEXACO

PECOS

0.409380

0.332620

33.847

MARILYN 1-5 - 1-5

KELTON EAST

APACHE CORP

WHEELER

0.524900

0.407470

33.518

BALLOU #1-30 -1-30

DEMPSEY

B&W OPERATING LLC .

ROGER MILLS

3.856800

2.875240

32.017

SANDER #1 - 1-11

ZEPHYR-MAGNESS

ZEPHYR OPERATING LLC

MAJOR

4.250000

3.315000

31.937

HEFLEY 4-5 - 5

BUFFALO WALLOW

ELAND ENERGY

HEMPHILL

3.000000

2.325000

31.756

HEFLEY 4-3 - 3

BUFFALO WALLOW

ELAND ENERGY

HEMPHILL

3.000000

2.325000

31.721

DOBSON RANCH SEC 2 #1-2

MAVERICK

ZEPHYR OPERATING LLC

WHEELER

6.014060

4.690960

31.410

LOUISIANA FURS #5 DISC - 005

ESTHER SW

MOSBACHER ENERGY COMPANY

VERMILION

3.815440

2.887550

31.353

ARMSTRONG #02 - 2020

ZEPHYR-STILES RANCH

ZEPHYR OPERATING LLC

WHEELER

2.695510

2.158330

31.293

JUANITA EMMETT #1-1 - 1-1

DEMPSEY

SOUTHERN BAY OPERATING, LLC

ROGER MILLS

1.250000

0.968750

30.852

HAJEK #2-17

WATONGA WEST

CONTINENTAL RESOURCES INC

BLAINE

1.250000

1.000000

30.678

CURTNER, S H, -A-1 - 1

SMR AREA

SABRE OPERATING INCORPORATED

WISE

4.375000

3.708500

30.166

DOBSON SEC 1 #2-1 - 201

MAVERICK

ZEPHYR OPERATING LLC

WHEELER

9.401980

7.213980

28.039

WAYNICK A-1

NEWARK EAST

THE CUMMINGS CO, INC.

ERATH

6.250000

4.687500

27.755

WAYNICK 1

NEWARK EAST

THE CUMMINGS CO, INC.

ERATH

6.250000

4.687500

27.755

REDSTONE 2-18 - 2-18

SPELUNKER & WALSH

ENERGY ALLIANCE CO INCOR

BACA

4.166410

3.333110

27.570

MEADOWS 4-05 - 5

BUFFALO WALLOW

ELAND ENERGY

HEMPHILL

2.550000

2.002500

27.073

ARMSTRONG #03 - 3020

ZEPHYR-STILES RANCH

ZEPHYR OPERATING LLC

WHEELER

2.938380

2.305310

26.824

STRONG FED COM #3 - 3

WHITE CITY

MURCHISON OIL & GAS INCORPORAT

EDDY

4.912280

4.252190

26.511

WILLIAM 29 #4 H - 29-4H

WALKER-CLEVELAND

KEITH F WALKER

ELLIS

1.234380

0.896140

26.051

COLE TRUST A #2 - 2

NEWARK EAST

ENCANA OIL & GAS (USA) INC.

DENTON

4.156250

2.784690

25.408

SALLIE 505

KELTON EAST

SANGUINE GAS EXPLORATION

WHEELER

0.524900

0.377930

25.389

REED, DM #5 - 5

CABEZA CREEK

MOSBACHER ENERGY COMPANY

GOLIAD

2.500000

1.812500

25.278

SIMPSON 27-2 - 27-2

NETA-MINNELUSA

RESOLUTE WYOMING

Campbell

1.010420

0.833600

25.224

COLE TRUST A #3 - 3

NEWARK EAST

ENCANA OIL & GAS (USA) INC.

DENTON

4.156250

2.784690

25.203

DELLA COLVIN 3-18 - 3

RUSTON

DEVON ENERGY PRODUCTION CO.

LINCOLN

0.855280

0.748360

24.390

DULIN #1-27 - 1-27

RANKEN-KIM

RANKEN ENERGY CORPORATION

MCCLAIN

2.000000

1.560000

24.337

H1NK 106

KELTON EAST

SANGUINE GAS EXPLORATION

WHEELER

0.524900

0.377930

23.013

VIRGINIA CITY #17-1 - 1-17

WALKER-FANGTASTIC

KEITH F WALKER

MEADE

1.562500

1.084820

22.953

LONG #1-1 - 1-1

BOKOSHE S

SOUTHERN BAY OPERATING, LLC

LEFLORE

1.294270

0.970700

22.838

SL 5021 #3 MPT CIB3 HAZ 3 - 3

MANCHAC POINT

HILCORP ENERGY CO INC

E BTN RG

4.375000

3.181260

22.820

BASS 3-59 - 3-59

KELTON EAST

APACHE CORP

WHEELER

0.374000

0.291330

22.573

CAMPBELL #2H - 2H

NEWARK EAST

HARDING COMPANY

PARKER

1.250000

0.937500

22.519

DOBSON SEC 4 #1-4

MAVERICK

ZEPHYR OPERATING LLC

ROGER MILLS

8.875000

6.922500

22.484

BURGUNDY 1 - 1

VINTAGE

TELLUS OPERATING GROUP LLC

JEFFERSON DAVIS

0.241150

0.184780

22.193

Hatfield 1-6R

WALKER-FANGTASTIC

KEITH F WALKER

MEADE

1.562500

1.175220

22.177

Page 3 of 11

EXHIBIT B

Attached to and part of that certain Purchase and Sale Agreement by and between Azalea Properties, Ltd., Seller, and RCWI, L.P., Buyer, dated December 18, 2009.

Adjusted Final

Case Name

FIELD

Operator

COUNTY

STATE

WI %

RI %

Value

WALSER 206 - 1-5

KELTON EAST

SANGUINE GAS EXPLORATION

WHEELER

0.524900

0.410730

21.955

ARMSTRONG #06 - 6020

ZEPHYR-STILES RANCH

ZEPHYR OPERATING LLC

WHEELER

1.971740

1.464640

21.880

LODE 16-2 - 16-2

WALKER-FANGTASTIC

KEITH F WALKER

MEADE

1.562500

1.175220

20.966

LINNIA J 1-18 - 1-18

ZEPHYR-CHAIN RANCH

ZEPHYR OPERATING LLC

DEWEY

4.175320

3.296750

20.874

BREEDLOVE B-26

BREEDLOVE

ROFF OPERATING COMPANY

MARTIN

0.229490

0.195810

20.831

TRIGGER #1-35 - 1-35

WATONGA WEST

CONTINENTAL RESOURCES INC

BLAINE

2.256590

1.805270

20.749

SUSAN LATHAM #1

NEWARK EAST

THE CUMMINGS CO, INC.

ERATH

3.750000

2.812500

20.221

1NDIANOLA #5

NEWARK EAST

THE CUMMINGS CO,INC.

ERATH

3.750000

2.812500

20.180

INDIANOLA #6

NEWARK EAST

THE CUMMINGS CO, INC.

ERATH

3.750000

2.812500

20.180

BIG CHIEF #8

BIG CHIEF

DINERO OPERATING CO

EDDY

1.042980

0.782240

20.147

SHOOK #A-5 - 5

BREEDLOVE

ROFF OPERATING COMPANY

MARTIN

0.248820

0.212080

19.991

HEFLEY 4-7 - 7

BUFFALO WALLOW

ELAND ENERGY

HEMPHILL

3.000000

2.325000

19.753

COWAN #2-2

WATONGA WEST

ZEPHYR OPERATING LLC

BLAINE

2.588580

1.941160

19.515

GATLIN 3-01 - 1

BUFFALO WALLOW

ELAND ENERGY

HEMPHILL

2.773630

2.311080

19.266

UNIVERSITY 18-29 #6, 8, 10 - 10

QUITO

ANADARKO PETROLEUM CORPORATION

WARD

0.519670

0.454710

19.067

PLAINS UNIT FEDERAL #2 - 2

LUSK

CIMAREX ENERGY CO

LEA

0.000001

0.584820

19.045

DREAM 6-1

WALKER-DREAMWEAVER

KEITH F WALKER

MEADE

1.562500

1.175220

18.446

JENNINGS FEDERAL COMM #1 - 1

LUSK

RAYA ENERGY CORP.

LEA

2.339290

1.953310

17.900

WEDMAN #2-1

MUSTANG & YUKON

PREMIER ENERGY LLC

CANADIAN

5.375000

4.079160

17.855

TUCKER 1-9 35-129-23317 1-9 - 1-9

MAVERICK

MAVERICK-ZEPPHYR OPERATING

Roger Mills

7.142000

5.625000

17.658

BRADFORD #1-28A

WATONGA WEST

CONTINENTAL RESOURCES INC

BLAINE

1.220410

0.915380

17.512

ENTZ #1 - 1-20

ENTZ

BLAKE PRODUCTION COMPANY

CADDO

0.468750

0.380860

17.265

COOKSEY #17-15

CHISMVILLE

FOREST OIL CORPORATION

LOGAN

1.486030

1.168480

17.182

SCHLOSSER, F ET AL 2 - 3

ROJO CABALLOS

CHEVRONTEXACO

PECOS

0.409380

0.332620

17.139

CHIANTI 1 - 1

VINTAGE

TELLUS OPERATING GROUP LLC

JEFFERSON DAVIS

0.129600

0.102180

16.552

JENSEN #1-22 - 1-22

EL RENO

CHESAPEAKE OPERATING INC.

CANADIAN

1.864130

1.398160

16.510

LORNE 8-4

WALKER-FANGTASTIC

KEITH F WALKER

MEADE

1.562500

1.175220

16.131

UMPHRES5, C. F. ET #1, 2, 3 - 4

MER-MAX

CIMAREX ENERGY CO

HOWARD

2.265630

1.840820

16.082

BIG CHIEF #7 - 7

BIG CHIEF

DINERO OPERATING CO

EDDY

1.050000

0.831150

15.637

ARMSTRONG #07 - 7020

ZEPHYR-STILES RANCH

ZEPHYR OPERATING LLC

WHEELER

2.474240

1.837910

15.519

GODFREY 1-19 - 1

SPELUNKER & WALSH

ENERGY ALLIANCE CO INCOR

BACA

4.279740

3.423780

15.300

RYALS #1-33 - 1-33

MORGANTOWN EAST

GUNGOLL CARL E EXPLORATION LLC

JEFFERSON DAVIS

2.724610

2.043460

15.113

MEADOWS 89-01 - 1

BUFFALO WALLOW

ELAND ENERGY

HEMPHILL

2.407810

1.866050

14.913

WEAVER 29 1R

WALKER-DREAMWEAVER

KEITH F WALKER

MEADE

1.562500

1.175220

14.762

ALEXANDER #2-1 - 1

WASHITA CREEK

B&W OPERATING LLC

HEMPHILL

1.500000

1.218350

14.715

BASS-CALCOTE 3-59 - 1-5

KELTON EAST

APACHE CORP

WHEELER

0.350020

0.261910

14.452

DUNN A #3 H - 3H

NEWARK EAST

ENCANA OIL & GAS (USA) INC.

DENTON

5.829140

4.371860

14.277

BENNETT #1-22 - 1-22

EL RENO

CHESAPEAKE OPERATING INC.

CANADIAN

1.875000

1.406250

14.200

SALUE 4-5

KELTON EAST

APACHE CORP

WHEELER

0.524900

0.410730

14.077

HEFLEY 4-6 - 6

BUFFALO WALLOW

ELAND ENERGY

HEMPHILL

3.000000

2.325000

13.905

BEN 16 1R - 16-1R

WALKER-FANGTASTIC

KEITH F WALKER

MEADE

1.562500

1.175220

13.642

Page 4 of 11

EXHIBIT B

Attached to and part of that certain Purchase and Sale Agreement by and between Azalea Properties, Ltd., Seller, and RCWI, L.P., Buyer, dated December 18, 2009.

Adjusted Final

Case Name

FIELD

Operator

COUNTY

STATE

WI %

RI %

Value

KOLE #1 - 1-2

ST ANNES

SOUTHERN BAY OPERATING, LLC

SEMINOLE

1.770230

1.327670

13.086

FERRELL, MRS. ISABEL R. A-08 - MULTI

RAMIRENA

MOSBACHER ENERGY COMPANY

LIVE OAK

3.694450

2.828560

12.994

CLEVELAND 1-84

ZEPHYR-TIMBER CREEK

ZEPHYR OPERATING LLC

HEMPHILL

4.200000

3.360000

12.899

BEV ZAN #2 - 2

CABEZA CREEK

MOSBACHER ENERGY COMPANY

GOLIAD

2.500000

1.812500

12.898

PATSY NELL #1 - 108

ZEPHYR-LAKE GEORGE

ZEPHYR OPERATING LLC

HEMPHILL

2.500000

2.000000

12.746

RED MOON #1-13 - 1-13

REYDON

THE GHK COMPANY

ROGER MILLS

0.625000

0.437500

12.645

AYCOCK M C 1, 5, 7 - 7

HOOPLE

GUNGOLL CARL E EXPLORATION LLC

CROSBY

1.471040

1.174910

12.557

FLYING J 12-9 - 12-9

DILL CITY

CONOCOPHILLIPS

WASHITA

1.275000

0.905250

12.184

AYCOCK D W A 2 - 2

HOOPLE

GUNGOLL CARL E EXPLORATION LLC

CROSBY

1.471040

1.174890

12.096

BOARD OF SUPERVISORS 16-14 #1 - 1

JAYNESVILLE

MOSBACHER ENERGY COMPANY

COVINGTON

0.951220

0.713410

11.944

RIVERBEND #1-27 - 1-27

RANKEN-KIM

RANKEN ENERGY CORPORATION

GARVIN

2.000000

1.560000

11.907

LUCKY DOG 1, 2, 4 - 2

QUITO

TEXON OIL COMPANY, INC.

Ward

0.000001

0.511720

11.902

CARTWRIGHT 20-1

WALKER-FANGTASTIC

KEITH F WALKER

MEADE

1.562500

1.175220

11.842

MICHAEL 8-2

WALKER-FANGTASTIC

KEITH F WALKER

MEADE

1.562500

1.175220

11.616

UNIVERSITY 18-30 #2 - 2

QUITO

ANADARKO PETROLEUM CORPORATION

WARD

0.519670

0.454710

11.360

EDWIN 1-1 - 1-1

MUSTANG & YUKON

PREMIER ENERGY LLC

CANADIAN

4.735290

3.551470

11.349

COOKSEY #12-15 - 12-15

CHISMVILLE

FOREST OIL CORPORATION

LOGAN

1.454790

1.071250

11.310

BROWN 4-59

KELTON EAST

APACHE CORP

WHEELER

0.425000

0.331060

11.243

UNIT 25-4 1 - 1

VINTAGE

RANGE RESOURCES

JEFFERSON DAVIS

0.121190

0.090650

11.240

SNELL, IRVIN 1 & 3E - MULTI

BREEDLOVE

ROFF OPERATING COMPANY

MARTIN

0.227060

0.193680

11.222

FILLINGIM 88-12 - 12

BUFFALO WALLOW

LINN OPERATING INC.

HEMPHILL

0.963410

0.761090

11.020

SAYRE RANCH SEC 5 #3-5 - 1

MAVERICK

CROWN ENERGY COMPANY

ROGER MILLS

7.089980

5.319720

10.601

MCKINLEY 2-20 - 2

SPELUNKER & WALSH

ENERGY ALLIANCE CO INCOR

BACA

4.039990

3.231730

10.566

TURNBOW, E. L. 3 - MULTI

BREEDLOVE

ROFF OPERATING COMPANY

MARTIN

0.232810

0.198710

10.544

GLEICHMAN #1

HUNTON

NEW DOMINION

SEMINOLE

0.000001

0.715000

10.470

ROBINSON/FERRELL - 1

RAMIRENA

MOSBACHER ENERGY COMPANY

LIVE OAK

3.694460

2.862500

10.318

FILLINGIM 88-06 - 6

BUFFALO WALLOW

LINN OPERATING INC.

HEMPHILL

0.963410

0.761090

9.924

GATLIN 3-02 - 2

BUFFALO WALLOW

ELAND ENERGY

HEMPHILL

2.357430

1.868070

9.883

HEFLEY 4-4 - 4

BUFFALO WALLOW

ELAND ENERGY

HEMPHILL

3.000000

2.325000

9.545

HOLLINGSWORTH #3 - 3

LOGANSPORT

BP AMERICA PRODUCTION CO

DESOTO

2.535714

1.901791

9.367

PONDEROSA #33-01

WALKER-FANGTASTIC

KEITH F WALKER

MEADE

1.562500

1.175220

9.193

SALLIE 2-5 - 2-5

KELTON EAST

APACHE CORP

WHEELER

0.524900

0.410730

9.100

HOP SING #1

WALKER-FANGTASTIC

KEITH F WALKER

MEADE

1.562500

1.175220

9.074

MARCUM #1-28 - 1-28

RANKEN-KIM

RANKEN ENERGY CORPORATION

MCCLAIN

2.000000

1.560000

9.007

ROWEN #1-6 - 1-6

DEMPSEY

SOUTHERN BAY OPERATING, LLC

ROGER MILLS

1.437500

1.078130

8.899

TRICE UNIT 35-04

CHOCTAW RIDGE NORTH

PRUET PRODUCTION CO

CHOCTAW

0.443940

0.352420

8.835

FOWLER #3 - 003AL

MIDDLEFORK

F W RABALAIS

LINCOLN

1.593750

1.195310

8.624

COOKSEY #16-15

CHISMVILLE

FOREST OIL CORPORATION

LOGAN

1.486030

1.168480

8.336

DINERO 16-STATE-4 - 4

BIG CHIEF

DINERO OPERATING CO

EDDY

0.524330

0.399730

8.328

WEAVER #2-27

RANKEN-KIM

RANKEN ENERGY CORPORATION

MCCLAIN

2.000000

1.560000

8.244

HOBART 9A1R

WALKER-FANGTASTIC

KEITH F WALKER

MEADE

1.562500

1.175220

8.196

Page 5 of 11

EXHIBIT B

Attached to and part of that certain Purchase and Sale Agreement by and between Azalea Properties, Ltd., Seller, and RCWI, L.P., Buyer, dated December 18, 2009.

Adjusted Final

Case Name

FIELD

Operator

COUNTY

STATE

WI %

RI %

Value

BRUCE #1-15 - 1-15

PRUE SPRINGER

CONTINENTAL RESOURCES INC

BLAINE

1.150000

0.911790

8.093

OFFUTT L. D. 1 & 2 - MULTI

BREEDLOVE

ROFF OPERATING COMPANY

MARTIN

0.148760

0.123890

8.058

CHAMPAGNE 1 - 1

VINTAGE

TELLUS OPERATING GROUP LLC

JEFFERSON DAVIS

0.129600

0.102180

7.798

MORRIS #1-6 - 1-6

DEMPSEY

SOUTHERN BAY OPERATING, LLC

ROGER MILLS

1.067220

0.800420

7.791

GATLIN 3-03 - 3

BUFFALO WALLOW

ELAND ENERGY

HEMPHILL

2.964260

2.454050

7.790

AGNES 1-15H

COLONY WASH

CHESAPEAKE OPERATING INC.

WASHITA

0.033480

0.025110

7.730

PUFF ROYALTY WELLS

VARIOUS ORRI

WAPITI OPERATING, LLC

VARIOUS

21.212120

7.691

TRICE UNIT 35-02

CHOCTAW RIDGE NORTH

PRUET PRODUCTION CO

CHOCTAW

0.443940

0.352420

7.669

AYCOCK M C A 1A, 2A, & 4A - 4A

HOOPLE

GUNGOLL CARL E EXPLORATION LLC

CROSBY

1.471040

1.174910

7.663

UNIVERSITY 18-29 #1 - 1

QUITO

ANADARKO PETROLEUM CORPORATION

WARD

0.654710

0.566620

7.605

WILKINSON 1-11

Zephyr-Winter

ZEPHYR OPERATING LLC

BLAINE

2.117060

1.693650

7.506

HARPER 1-20 - 1

SPELUNKER & WALSH

ENERGY ALLIANCE CO INCOR

BACA

4.040030

3.231760

7.360

CAROLYN #1-36

DEMPSEY

B&W OPERATING LLC

ROGER MILLS

3.750000

2.812500

7.296

HARTMAN #1-9 - 1-9

SWEETWATER DRAGON

QUESTAR EXPL & PROD CO

ROGER MILLS

1.500000

1.155500

7.271

COOK NMD 1-13 - 1

SPELUNKER & WALSH

ENERGY ALLIANCE CO INCOR

BACA

6.463990

5.201310

7.248

MEADOWS 4-07 - 7

BUFFALO WALLOW

ELAND ENERGY

HEMPHILL

3.400000

2.682500

6.883

BREEDLOVE B-40

BREEDLOVE

ROFF OPERATING COMPANY

MARTIN

0.229490

0.195810

6.776

BRYANS MILL UNIT PF RECORD 1 - 1

BRYANS MILL

SULPHUR RIVER EXPLORATION INC

CASS

1.165339

1.019671

6.730

RED HILLS UNIT #4 - 4

LUSK

COG OPERATING LLC

LEA

0.000001

0.285920

6.710

NEYLAND HEIRS 1-37 - 1-37

SAINT PATRICK

GUNGOLL CARL E EXPLORATION LLC

AMITE

3.375000

2.557790

6.680

MONCRIEF #1 - 1

MIDDLEFORK

F W RABALAIS

LINCOLN

1.246880

0.949010

6.592

BUCKINGHAM 105 - 1-5

KELTON EAST

APACHE CORP

WHEELER

0.524900

0.410730

6.589

MCDONALD #1 - 1

MIDDLEFORK

F W RABALAIS

LINCOLN

1.593750

1.195310

6.268

COOKSEY #04-22 - 4-22

CHISMVILLE

FOREST OIL CORPORATION

LOGAN

1.438990

1.060170

6.164

LEE #4-2 - 2

LEE

CHESAPEAKE OPERATING INC.

WHEELER

1.312500

0.984380

6.105

GINGER KAY 28-3

WALKER-FANGTASTIC

KEITH F WALKER

MEADE

1562500

1.175220

6.071

COOKSEY #05-15 - 5-15

CHISMVILLE

FOREST OIL CORPORATION

LOGAN

1.438990

1.060170

5.996

COOKSEY #03 - 3-C

CHISMVILLE

FOREST OIL CORPORATION

LOGAN

1.441410

1.062100

5.889

FEDERAL #1-27 - 1-27

RANKEN-KIM

RANKEN ENERGY CORPORATION

MCCLAIN

2.000000

1.560000

5.813

ALLEY 2-17 - 2

SPELUNKER & WALSH

ENERGY ALLIANCE CO INCOR

BACA

3.827250

3.061780

5.707

SAYRE RANCH SEC 5 #5-5 - 1

MAVERICK

ZEPHYR OPERATING LLC

ROGER MILLS

8.472780

6.354590

5.678

MEADOWS 4-04 - 4

BUFFALO WALLOW

ELAND ENERGY

HEMPHILL

1.500000

1.162500

5.669

FILLINGIM 88-02 - 2

BUFFALO WALLOW

LINN OPERATING INC.

HEMPHILL

0.963410

0.761090

5.510

MCKNIGHT, MB E-2 - 2

SAND HILLS

BURNETT OIL CO INC

CRANE

2.309010

1.876080

5.431

BASSETT 13-02 - 2

MUSTANG & YUKON

LINN OPERATING INC.

CANADIAN

0.000001

0.165950

5.422

GAS FARM 1-17 - 1-17

SPELUNKER & WALSH

ENERGY ALLIANCE CO INCOR

BACA

4.324740

3.459780

5.381

BUCKINGHAM 205 - 2-5

KELTON EAST

SANGUINE GAS EXPLORATION

WHEELER

0.524900

0.410730

5.340

KEITH 1-58 - 1-58

KELTON EAST

APACHE CORP

WHEELER

0.524900

0.377930

5.191

COOK 2-7 - 2

SPELUNKER & WALSH

ENERGY ALLIANCE CO INCOR

BACA

3.827340

3.061850

5.177

EL CHICO #2 H - 2H

NEWARK EAST

CARRIZO OIL & GAS, INC

PARKER

0.400000

0.300000

5.054

OBENCHAIN B3H - B3H

NEWARK EAST

RANGE RESOURCES

DENTON

0.625000

0.462500

5.045

Page 6 of 11

EXHIBIT B

Attached to and part of that certain Purchase and Sale Agreement by and between Azalea Properties, Ltd., Seller, and RCWI, L.P., Buyer, dated December 18, 2009.

Adjusted Final

Case Name

FIELD

Operator

COUNTY

STATE

WI %

RI %

Value

SELF GAS UNIT #69-3 - 1

HOSTETTER

CHEVRONTEXACO

DUVAL

4.760670

3.610120

4.997

HOSS 21-1 - 21-1

WALKER-FANGTASTIC

KEITH F WALKER

MEADE

1.562500

1.175220

4.996

UNIVERSITY 18-31 #6 - 6

QUITO

ANADARKO PETROLEUM CORPORATION

WARD

0.519670

0.454710

4.923

MCCOMB M GAS UNIT 1 - 1

MCCOMB

EXXONMOBIL CORPORATION

PECOS

2.588240

2.102940

4.837

GARR 3-11 - 3-11

MUSTANG & YUKON

PYRAMID OIL OF AMERICA INC

Canadian

0.698000

0.523500

4.808

TURKEY CREEK UNIT 1 - 1

TURKEY CREEK

PRUET PRODUCTION CO

CHOCTAW

0.573160

0.477950

4.655

GARRETT #1 - 1

JAYNESVILLE

MOSBACHER ENERGY COMPANY

COVINGTON

0.828530

0.639520

4.565

FILLINGIM 88-01 - 1

BUFFALO WALLOW

LINN OPERATING INC.

HEMPHILL

0.963400

0.761092

4.390

WEIDEMANN 2-11 - 2-11

MUSTANG & YUKON

PYRAMID OIL OF AMERICA INC

CANADIAN

1.198000

0.898500

4.349

RUTH ANN #1-14 - 1-35

WATONGA WEST

CONTINENTAL RESOURCES INC

BLAINE

2.061670

1.546250

4.332

JAGGER DEAN #1 - 34-1

WALKER-FANGTASTIC

KEITH F WALKER

MEADE

1.562500

1.175220

4.248

CRANZ #14 - 14

SPEAKS SW

MOSBACHER ENERGY COMPANY

LAVACA

3.428730

2.532620

4.206

FILLINGIM 88-09 - 9

BUFFALO WALLOW

LINN OPERATING INC.

HEMPHILL

0.963410

0.761090

4.136

TURNBOW, E. L. 4 - 4

BREEDLOVE

ROFF OPERATING COMPANY

MARTIN

0.232810

0.198710

4.134

OBENCHAIN E2H - E2H

NEWARK EAST

RANGE RESOURCES

DENTON

0.625000

0.462500

4.097

RYAN #2-6 - 2-6

RED OAK

SOUTHERN BAY OPERATING, LLC

LATIMER

0.519380

0.389530

4.066

ABBIE COLVIN T 1-25 - 1

RUSTON

DEVON ENERGY PRODUCTION CO.

LINCOLN

0.310840

0.271980

4.050

LITTLE JOE 28-1 - 28-1

WALKER-FANGTASTIC

KEITH F WALKER

MEADE

1.562500

1.175220

3.994

FILLINGIM 88-08 - 8

BUFFALO WALLOW

LINN OPERATING INC.

HEMPHILL

0.963410

0.761090

3.864

KAPLAN 2-1

MUSTANG & YUKON

D C ENERGY INCORPORATED

CANADIAN

0.823890

0.900330

3.797

RSK #4 - 4

NEWARK EAST

WOLSEY WELL SERVICE

WISE

1.800000

1.278000

3.640

COKER SEC 10 #10-1 - 101

MAVERICK

CROWN ENERGY COMPANY

ROGER MILLS

6.111110

4.766600

3.596

HILLBOLDT, D. C. - 1

ORANGE HILL, S

QUAIL CREEK OIL CORPORATION

ORANGE

1.567060

1.303640

3.594

BEACONS GULLY 7500’ FRIO SAND - 1

BEACONS GULLY

WAGNER OIL COMPANY

EVANGELINE

1.471810

1.095080

3.577

UGLY HOG #1 - 1

QUITO

SEABOARD OIL COMPANY

Ward

6.140630

4.701420

3.510

CORDES 1-15 - 1-15

ALEDO SOUTHEAST

LINN OPERATING INC.

CUSTER

0.133650

0.121100

3.339

COOKSEY #14-22 - 14-22

CHISMVILLE

FOREST OIL CORPORATION

LOGAN

1.445040

1.064410

3.329

BREEDLOVE B-37 R

BREEDLOVE

ROFF OPERATING COMPANY

MARTIN

0.229490

0.195810

3.285

BASS 5059 - 5-59

KELTON EAST

SANGUINE GAS EXPLORATION

WHEELER

0.524900

0.410730

3.271

OBENCHAIN D2 - D2H

NEWARK EAST

RANGE RESOURCES

DENTON

0.625000

0.462500

3.220

OBENCHAIN A3H - A3H

NEWARK EAST

RANGE RESOURCES

DENTON

0.625000

0.462500

3.175

COOKSEY #15-22

CHISMVILLE

FOREST OIL CORPORATION

LOGAN

1.514600

1.244030

3.061

INLOW 1-14 - 1-14

MAYFIELD

CHESAPEAKE OPERATING INC.

BECKHAM

0.320000

0.240000

3.054

STEFFEN HARVEY 2 - 2

WATONGA-CHICKASHA TREND

RANGE RESOURCES

CANADIAN

0.261720

0.227710

3.030

WATSON, MATTIE 1-25 - 1

RUSTON

DEVON ENERGY PRODUCTION CO.

LINCOLN

0.310840

0.271980

3.025

OBENCHAIN E3H - E3H

NEWARK EAST

RANGE RESOURCES

DENTON

0.625000

0.462500

2.877

NELLIE 21 - 1

LOVINGTON

CHESAPEAKE OPERATING INC.

LEA

1.661430

1.247230

2.850

BRADLEY A #7 - 7-T

BOX CHURCH

XTO ENERGY INC

LIMESTONE

1.116290

0.971380

2.776

NEYLAND HEIRS 1-07 - 1-7

SAINT PATRICK

GUNGOLL CARL E EXPLORATION LLC

AMITE

2.250000

1.700010

2.774

BASSETT 12-01 - 1-12

MUSTANG & YUKON

LINN OPERATING INC.

CANADIAN

0.200000

0.254170

2.734

BREEDLOVE B-30

BREEDLOVE

ROFF OPERATING COMPANY

MARTIN

0.145380

0.132720

2.719

Page 7 of 11

EXHIBIT B

Attached to and part of that certain Purchase and Sale Agreement by and between Azalea Properties, Ltd., Seller, and RCWI, L.P., Buyer, dated December 18, 2009.

Adjusted Final

Case Name

FIELD

Operator

COUNTY

STATE

WI %

RI %

Value

OBENCHAIN D1H - D1H

NEWARK EAST

RANGE RESOURCES

DENTON

0.625000

0.462500

2.637

BREEDLOVE B-39

BREEDLOVE

ROFF OPERATING COMPANY

MARTIN

0.229490

0.195810

2.567

HOFFMAN 1-11H

ALEDO SOUTHWEST

DUNCAN OIL PROPERTIES, INC.

CUSTER

1.829270

1.431400

2.553

GARR 2-11 - 11-2

MUSTANG & YUKON

GDA INVESTMENTS INCORPORATED

CANADIAN

1.083230

0.866580

2.544

BROWN 1-5 - 105

KELTON EAST

APACHE CORP

WHEELER

0.375000

0.292110

2.496

TURNBOW 5

BREEDLOVE

ROFF OPERATING COMPANY

MARTIN

0.258370

0.220070

2.442

PATHFINDER #2-13 - 2-13

REYDON

THE GHK COMPANY

ROGER MILLS

0.652290

0.506360

2.307

DEVENIE KAY 28-2 - 28-2

WALKER-FANGTASTIC

KEITH F WALKER

MEADE

1.562500

1.175220

2.223

COOKSEY #13-22 - 13-22

CHISMVILLE

FOREST OIL CORPORATION

LOGAN

1.439860

1.060770

2.203

COOKSEY #07-22 - 7-22

CHISMVILLE

FOREST OIL CORPORATION

LOGAN

1.525910

1.135280

2.173

DUNN A #1 - 1

NEWARK EAST

ENCANA OIL & GAS (USA) INC.

DENTON

5.829140

4.371860

2.120

DINERO 16-STATE-5 - 5

BIG CHIEF

DINERO OPERATING CO

EDDY

1.500000

1.125000

2.100

ADAM #28-1 - 28-1

WALKER-FANGTASTIC

KEITH F WALKER

MEADE

1.562500

1.175220

2.046

GROTTO ROUGE 1-30 - 1-30

SPELUNKER & WALSH

ENERGY ALLIANCE CO INCOR

BACA

3.707700

2.980640

2.042

TARON 2-28H/28

SNEAKY PETE

TRANSPRO ENERGY LLC

POTTOWATOMIE

2.625000

2.100000

2.015

KEYSTONE #1-13 CHEROKEE - 1

SPELUNKER & WALSH

ENERGY ALLIANCE CO INCOR

BACA

6.658260

5.343940

1.993

COLTHARP 1-58 (REENTRY) - 1-58

KELTON EAST

APACHE CORP

WHEELER

0.461910

0.332580

1.920

SALLIE 3-5 - 1-5

KELTON EAST

APACHE CORP

WHEELER

0.524900

0.410730

1.889

STROUD-POLK UNIT #1 - 1

JAYNESVILLE

MOSBACHER ENERGY COMPANY

COVINGTON

0.970370

0.744090

1.852

BROWN 205 - 2-5

KELTON EAST

SANGUINE GAS EXPLORATION

WHEELER

0.375000

0.292110

1.814

OBENCHAIN F1H - F-1H

NEWARK EAST

RANGE RESOURCES

DENTON

0.625000

0.462500

1.802

BREEDLOVE B-25

BREEDLOVE

ROFF OPERATING COMPANY

MARTIN

0.229490

0.195810

1.718

COLTHARP 2-58 - 2-58

KELTON EAST

SANGUINE GAS EXPLORATION

WHEELER

0.524900

0.377930

1.717

MEADOWS 4-06 - 6

BUFFALO WALLOW

ELAND ENERGY

HEMPHILL

2.700000

2.122500

1.711

BREEDLOVE B-36

BREEDLOVE

ROFF OPERATING COMPANY

MARTIN

0.234030

0.199780

1.703

DUNN A #2 - 2

NEWARK EAST

ENCANA OIL & GAS (USA) INC.

DENTON

5.009420

3.757060

1.697

MURRAY A E #2 - 2

SUPRON

ROSETTA RESOURCES OPERATING LP

NACOGDOCHES

0.520780

0.359760

1.629

COOKSEY #02 - 2-C

CHISMVILLE

FOREST OIL CORPORATION

LOGAN

1.438990

1.060170

1.620

GREENE 8-3

WALKER-FANGTASTIC

KEITH F WALKER

MEADE

1.562500

1.175220

1.565

BARBOUR 12-3 - 12-3

MINCO EAST

LINN OPERATING INC.

CANADIAN

0.067860

0.055090

1.528

DOBSON RANCH SEC 6 #1-6 - 1

MAVERICK

CHESAPEAKE OPERATING INC.

ROGER MILLS

1.890010

1.535140

1.488

HORTON ESTATE 1-1 - 1-1

SAINT PATRICK

GUNGOLL CARL E EXPLORATION LLC

WILKNSON

2.250000

1.713080

1.483

ZINFANDEL 1 - 1

VINTAGE

TELLUS OPERATING GROUP LLC

JEFFERSON DAVIS

0.241150

0.181760

1.445

SHOOK, H. L, A4 - MULTI

BREEDLOVE

ROFF OPERATING COMPANY

MARTIN

0.228880

0.200530

1.373

BLOCKER #21-2 - 21-2

WALKER-FANGTASTIC

KEITH F WALKER

MEADE

1.562500

1.175220

1.333

DETRIX #48-1 - 1048

HIGGINS S

ARNOLD OIL PROPERTIES

HEMPHILL

3.500000

2.800000

1.319

COOKSEY #09-22 - 9-22

CHISMVILLE

FOREST OIL CORPORATION

LOGAN

1.526180

1.135510

1.283

BLACK RIVER FED #1 - 1

WHITE CITY

MURCHISON OIL & GAS INCORPORAT

EDDY

4.445540

3.889840

1.275

WORD FAYE #1 - 1046

HIGGINS S

ARNOLD OIL PROPERTIES

HEMPHILL

3.500000

2.800000

1.256

COOKSEY #10-22 - 10-22

CHISMVILLE

FOREST OIL CORPORATION

LOGAN

1.526180

1.135510

1.252

GRAFT #1 - 1-9

ZERBY

PAYNE EXPLORATION COMPANY

CUSTER

2.500000

1.875000

1.223

Page 8 of 11

EXHIBIT B

Attached to and part of that certain Purchase and Sale Agreement by and between Azalea Properties, Ltd., Seller, and RCWI, L.P., Buyer, dated December 18, 2009.

Adjusted Final

Case Name

FIELD

Operator

COUNTY

STATE

WI %

RI %

Value

UNIVERSITY 18-31 #4 - 4

QUITO

ANADARKO PETROLEUM CORPORATION

WARD

0.519670

0.454710

1.216

UNIVERSITY 18-29 #4 - 4

QUITO

ANADARKO PETROLEUM CORPORATION

WARD

0.519670

0.454710

1.029

USA #14-5 - 14-15

PISTOL RIDGE DEEP

GUNGOLL CARL E EXPLORATION LLC

PEARL RIVER

1.990810

1.493110

1.028

BREEDLOVE B-44 - 44

BREEDLOVE

ROFF OPERATING COMPANY

MARTIN

0.302070

0.257480

0.981

COOKSEY #08-22 - 8-22

CHISMVILLE

FOREST OIL CORPORATION

LOGAN

1.520510

1.131500

0.980

LOUISIANA FURS #4

ESTHER SW

MOSBACHER ENERGY COMPANY

VERMILION

3.815440

2.887550

0.957

DOBSON SEC 1 #1-1 - 1

MAVERICK

CROWN ENERGY COMPANY

WHEELER

5.156250

4.054330

0.862

EBLING 2-1 - 1-Feb

MUSTANG & YUKON

PREMIER ENERGY LLC

CANADIAN

5.266140

3.950000

0.846

BASS 2-59 - 3-59

KELTON EAST

APACHE CORP

WHEELER

0.407820

0.304160

0.836

BEAR 1-19 - 1-19

EAKLY-WEATHERFORD TREND

UNIT PETROLEUM CORP

CADDO

0.148760

0.151310

0.827

PATTY #1-33 - 1-33

RANKEN-KIM

RANKEN ENERGY CORPORATION

MCCLAIN

2.525000

1.969500

0.822

BRADLEY A #9 - 9

BOX CHURCH

XTO ENERGY INC

LIMESTONE

1.116290

0.971380

0.798

WIGGINS #2 - 2

NEWARK EAST

MILLWOOD ALLIANCE OPERATING CO

TARRANT

1.800000

1.340460

0.789

BASS-CALCOTE 2-59 - 1-59

KELTON EAST

APACHE CORP

WHEELER

0.350020

0.261910

0.762

BREEDLOVE B-28

BREEDLOVE

ROFF OPERATING COMPANY

MARTIN

0.229490

0.195810

0.734

WEAVER #1-27 - 1-27

RANKEN-KIM

RANKEN ENERGY CORPORATION

MCCLAIN

2.000000

1.560000

0.687

OBENCHAIN B2 - B2

NEWARK EAST

RANGE RESOURCES

DENTON

0.625000

0.462500

0.683

COLE TRUST A #4 - 4

NEWARK EAST

ENCANA OIL & GAS (USA) INC.

DENTON

4.156250

2.784690

0.661

LEWIS 2D - 002D

RUSTON

DEVON ENERGY PRODUCTION CO.

LINCOLN

0.621950

0.527580

0.657

FENTON SEC 33 #1-33 - 1

MAVERICK

CHESAPEAKE OPERATING INC.

ROGER MILLS

0.750000

0.597520

0.652

COOKSEY #06-22 - 6-22

CHISMVILLE

FOREST OIL CORPORATION

LOGAN

1.527430

1.136440

0.647

BRADLEY A #8 - 8

BOX CHURCH

XTO ENERGY INC

LIMESTONE

1.116290

0.971380

0.633

HEFLEY 4-8 - 8

BUFFALO WALLOW

ELAND ENERGY

HEMPHILL

3.000000

2.325000

0.610

LOUISIANA FURS #3 - 003AL

ESTHER SW

MOSBACHER ENERGY COMPANY

VERMILION

3.815440

2.887550

0.604

HASKELL #1-4 - 1-4

RIVER

UNITED PRODUCTION CO

WOODWARD

2.812500

2.109380

0.587

MCDANIEL, LOIS #1 - 1

QUITO

ANADARKO PETROLEUM CORPORATION

WARD

0.519670

0.454710

0.579

BRADLEY A #3 - 3

BOX CHURCH

XTO ENERGY INC

LIMESTONE

1.116290

0.971380

0.521

HENDERSON #3 - 3

SPEAKS SW

VENOCO INC.

LAVACA

0.000001

0.022540

0.511

COOKSEY #11-15 - 11-15

CHISMVILLE

FOREST OIL CORPORATION

LOGAN

1.526180

1.135510

0.470

BLACKSTONE MINERALS #1-31 - 1

POPLARVILLE

GUNGOLL CARL E EXPLORATION LLC

PEARL RIVER

5.000000

3.500000

0.404

BOSWELL #1-11 - 1-11

ROLL SW

SOUTHERN BAY OPERATING, LLC

ROGER MILLS

2.409490

1.824450

0.349

ROSA 1-6 - 1-6

MUSTANG & YUKON

PREMIER ENERGY LLC

CANADIAN

5.147060

3.860290

0.342

DOKE 2-8 - 2

SPELUNKER & WALSH

ENERGY ALLIANCE CO INCOR

BACA

3.827250

3.061780

0.340

NORTH WHITE #1

NEWARK EAST

HARDING COMPANY

PARKER

0.600000

0.450000

0.167

HENDERSON #2 - 2

SPEAKS SW

VENOCO INC.

LAVACA

0.000001

0.022540

0.159

EL CHICO #1 H - 1H

NEWARK EAST

CARRIZO OIL & GAS, INC

PARKER

0.400000

0.300000

0.158

OBENCHAIN B1 - B1

NEWARK EAST

RANGE RESOURCES

DENTON

0.625000

0.462500

0.151

MOORE, KATHLEEN J. B1 - 1

ROJO CABALLOS

APACHE CORP

PECOS

0.361880

0.300910

0.148

PYOTE GAS UNIT #5 - 1A

BLOCK 16 (DEVONIAN)

MOSBACHER ENERGY COMPANY

WARD

0.648380

0.516300

0.104

PETREE ESTATE #1-12 - 1-12

EL RENO

UNITED PRODUCTION CO

CANADIAN

1.562500

1.171880

0.084

WRIGHT STAR UNIT 1 #1 - 1

NEWARK EAST

EXTERRA ENERGY INC

DENTON

0.300000

0.222000

0.071

Page 9 of 11

EXHIBIT B

Attached to and part of that certain Purchase and Sale Agreement by and between Azalea Properties, Ltd., Seller, and RCWI, L.P., Buyer, dated December 18, 2009.

Adjusted Final

Case Name

FIELD

Operator

COUNTY

STATE

WI %

RI %

Value

BREEDLOVE B-31

BREEDLOVE

ROFF OPERATING COMPANY

MARTIN

0.145230

0.132610

0.054

McCRARY #1-32 - 1-32

MOUDRY

QUESTAR EXPL & PROD CO

BLAINE

0.572000

0.395520

0.043

BRYAN #1-19 - 1-19

DEMPSEY

SOUTHERN BAY OPERATING, LLC

ROGER MILLS

1.500000

1.125000

0.033

AUSTIN 1-6 - 1-6

KELTON EAST

APACHE CORP

WHEELER

0.524900

0.406770

0.027

TURLEY #1-09 - 1-9

ROLL SW

SOUTHERN BAY OPERATING, LLC

ROGER MILLS

1.571170

1.178380

0.022

FILLINGIM 88-07 - 7

BUFFALO WALLOW

LINN OPERATING INC.

HEMPHILL

1.029530

0.813990

0.016

MONROE #2 - 2

QUITO

GRIFFIN PETROLEUM COMPANY

WARD

0.000001

0.013670

0.007

EASTMAN #1 - 1

NEWARK EAST

HARDING COMPANY

PARKER

0.400000

0.300000

0.002

GRAYSON #1-13 - 1-13

EL RENO

UNITED PRODUCTION CO

CANADIAN

1.596490

1.277190

0.001

POKEY #14-2 - 14-2

WALKER-POKEY

KEITH F WALKER

BEAVER

1.562500

1.169800

0.000

EARL #1-21 - 1-21

RIVER

PREMIER ENERGY LLC

DEWEY

4.571430

3.428570

0.000

DAVIS 9-4 #1-21H

SNEAKY PETE

TRANSPRO ENERGY LLC

POTTOWATOMIE

2.625000

2.100000

0.000

DAVIS 3-21H/15

SNEAKY PETE

TRANSPRO ENERGY LLC

POTTOWATOMIE

2.625000

2.100000

0.000

HILL #1-29 - 1-29

WILSON

SOUTHERN BAY OPERATING, LLC

BECKHAM

0.705790

0.530900

0.000

HAJEK #1-17 - 1-17

WATONGA WEST

CONTINENTAL RESOURCES INC

BLAINE

1.250000

1.000000

0.000

SIDES #3-9 - 3-9

REYDON

B&W OPERATING LLC

ROGER MILLS

2.250000

1.687500

0.000

LEON #1-10 - 1-10

ROLL SW

SOUTHERN BAY OPERATING, LLC

ROGER MILLS

1.480400

1.115020

0.000

INDEPENDENCE 28-1

MUSTANG & YUKON

PREMIER ENERGY LLC

CANADIAN

1.333200

1.103210

0.000

HUNT #1-27 - 1-27

RANKEN-KIM

RANKEN ENERGY CORPORATION

MCCLAIN

2.000000

1.560000

0.000

MILDRED #1-1 - 1-1

MUSTANG & YUKON

PREMIER ENERGY LLC

CANADIAN

4.735290

3.551470

0.000

YULONDA 29 #2 - 29-2

WALKER-CLEVELAND

KEITH F WALKER

ELLIS

1.234380

0.896140

0.000

ARMSTRONG #08 - 8020

ZEPHYR-STILES RANCH

ZEPHYR OPERATING LLC

WHEELER

2.474240

1.837910

0.000

WEIDEMANN 1-11

MUSTANG & YUKON

GDA INVESTMENTS INCORPORATED

CANADIAN

1.083330

0.866670

0.000

BIG CHIEF #6 - 6

BIG CHIEF

DINERO OPERATING CO

EDDY

1.050000

0.831150

0.000

KORCZAK #1 - 1

LUSK

NADEL & GUSSMAN PERMIAN LLC

LEA

3.216520

2.626770

0.000

HOFFMAN 1-27

DILL CITY

MARATHON OIL COMPANY

WASHITA

0.472660

0.354490

0.000

FILLINGIM 88-10 - 10

BUFFALO WALLOW

LINN OPERATING INC.

HEMPHILL

0.963410

0.761090

0.000

CAMPBELL #1 - 1

NEWARK EAST

HARDING COMPANY

PARKER

1.250000

0.937500

0.000

MEADOWS 4-03 - 3

BUFFALO WALLOW

ELAND ENERGY

HEMPHILL

1.500000

1.162500

0.000

BETTY LOU#1-21 - 1-21

STERLING

SOUTHERN BAY OPERATING, LLC

COMANCHE

2.500000

1.900000

0.000

LILLIE #1-33 - 1-33

WATONGA WEST

ZEPHYR OPERATING LLC

BLAINE

1.920000

1.536000

0.000

HATCHER #1-35 - 1-35

ZEPHYR-PRUE SPRINGER

ZEPHYR OPERATING LLC

CANADIAN

3.125000

2.500000

0.000

ROSE #1-33 - 1-33

BERWYN SYNCLINE

L E JONES OPERATING INC

CARTER

2.536980

2.041070

0.000

WALKER, P. ET AL - 6

QUITO

ANADARKO PETROLEUM CORPORATION

WARD

0.519670

0.454710

0.000

NECTAR 1-52 - 1

KELTON EAST

BP AMERICA PRODUCTION CO

WHEELER

0.000001

0.005250

0.000

MCKNIGHT, MB B-2 - MULTI

SAND HILLS

BURNETT OIL CO INC

CRANE

2.309010

1.731770

0.000

FARRIS J7 #1-22 - 1-22

DILL CITY

JMA ENERGY COMPANY LLC

WASHITA

3.125000

2.476560

0.000

FILLINGIM 88-05 - 5

BUFFALO WALLOW

LINN OPERATING INC.

HEMPHILL

1.029530

0.813990

0.000

CURTISS, JEFF #1 - 1

RAMIRENA

MOSBACHER ENERGY COMPANY

LIVE OAK

3.694450

2.955560

0.000

FERRELL A-11 - 11

RAMIRENA

MOSBACHER ENERGY COMPANY

LIVE OAK

3.694450

2.828560

0.000

YATES 20-10 #1 - 1

JAYNESVILLE

PALMER PETROLEUM INC.

COVINGTON

0.109810

0.092540

0.000

Page 10 of 11

EXHIBIT B

Attached to and part of that certain Purchase and Sale Agreement by and between Azalea Properties, Ltd., Seller, and RCWI, L.P., Buyer, dated December 18, 2009.

Adjusted Final

Case Name

FIELD

Operator

COUNTY

STATE

WI %

RI %

Value

RABB JA #2 - 002AL

CHOUDRANT SOUTH

PALMER PETROLEUM INC.

LINCOLN

0.640000

0.483200

0.000

WRIGHT 33-3

MUSTANG & YUKON

PREMIER ENERGY LLC

CANADIAN

1.992990

1.497700

0.000

OBENCHAIN A2 - A2

NEWARK EAST

RANGE RESOURCES

DENTON

0.625000

0.462500

0.000

OBENCHAIN E1 - E1

NEWARK EAST

RANGE RESOURCES

DENTON

0.625000

0.462500

0.000

BREEDLOVE LOC B-47

BREEDLOVE

ROFF OPERATING COMPANY

MARTIN

0.229490

0.195810

0.000

MAGPIE #1-4 - 1-4

REYDON

SOUTHERN BAY OPERATING, LLC

ROGER MILLS

1.464840

1.112650

0.000

HANNEMAN #1-36 - 1-36

EL RENO

UNITED PRODUCTION CO

CANADIAN

0.875000

0.652930

0.000

MADBULL #1-35 - 1-35

EL RENO

UNITED PRODUCTION CO

CANADIAN

0.625000

0.467500

0.000

BOUTTE, CHARLIE #2 & YOUNG E #1 - 2

BEACONS GULLY

WAGNER OIL COMPANY

EVANGELINE

1.472650

1.095760

0.000

SEMITROPIC #1 PUD - 1-1

SEMITROPIC

PREMIER ENERGY LLC

MONTREY

3.529410

2.647060

0.000

Total Bid

22000.000

Page 11 of 11

Attached files

Reef Oil & Gas Income & Development Fund III LP Reports

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