ARTICLE I

THE MERGERS

1.1

The Mergers.

1

1.2

Effective Times of the Mergers.

1

1.3

Closing.

2

1.4

Certificate of Incorporation.

2

1.5

Bylaws.

2

1.6

Directors and Officers.

2

ARTICLE II

EFFECT OF THE MERGERS ON THE CAPITAL STOCK
OF THE COMPANY AND MERGER SUB; EXCHANGE OF CERTIFICATES

2.1

Effect of the First Merger on Capital Stock.

3

2.2

Effect of the Second Merger on Capital Stock.

4

2.3

Election Procedures.

4

2.4

Appraisal Rights.

7

2.5

Treatment of Stock Options; Restricted Stock; Company Awards.

7

2.6

Exchange of Certificates.

8

2.7

Stock Transfer Books.

11

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

3.1

Organization.

11

3.2

Capitalization.

12

3.3

Authorization; Validity of Agreement.

13

3.4

No Violations; Consents and Approvals.

14

3.5

SEC Reports and Financial Statements.

15

3.6

Oil and Gas Reserves.

16

3.7

Absence of Certain Changes.

17

3.8

Absence of Undisclosed Liabilities.

17

3.9

Disclosure Documents.

18

3.10

Employee Benefit Plans; ERISA.

18

3.11

Litigation; Compliance with Law.

20

3.12

Intellectual Property.

21

3.13

Material Contracts.

22

3.14

Taxes.

23

3.15

Environmental Matters.

25

3.16

Company Assets.

26

3.17

Insurance.

26

3.18

Labor Matters; Employees.

26

3.19

Affiliate Transactions.

27

3.20

Derivative Transactions and Hedging.

27

3.21

Natural Gas Act.

27

3.22

Disclosure Controls and Procedures.

28

3.23

Investment Company.

28

3.24

Rights Agreement.

28

3.25

Required Vote by Company Stockholders.

28

3.26

Recommendation of Company Board of Directors; Opinion of Financial Advisor.

28

3.27

Brokers.

28

3.28

Section 203 of the DGCL.

29

3.29

Reorganization.

29

3.30

No Other Representations or Warranties.

29

ARTICLE IV

REPRESENTATIONS AND WARRANTIES
OF PARENT AND MERGER SUB

4.1

Organization.

29

4.2

Capitalization.

30

4.3

Authorization; Validity of Agreement.

31

4.4

No Violations; Consents and Approvals.

31

4.5

SEC Reports and Financial Statements.

32

4.6

Oil and Gas Reserves.

34

4.7

Absence of Certain Changes.

34

4.8

Absence of Undisclosed Liabilities.

35

4.9

Disclosure Documents.

35

4.10

Employee Benefit Plans; ERISA.

35

4.11

Litigation; Compliance with Law.

37

4.12

Intellectual Property.

38

4.13

Material Contracts.

39

4.14

Taxes.

40

4.15

Environmental Matters.

42

4.16

Parent Assets.

43

4.17

Insurance.

43

4.18

Labor Matters; Employees.

43

4.19

Affiliate Transactions.

44

4.20

Derivative Transactions and Hedging.

44

4.21

Disclosure Controls and Procedures.

44

4.22

Investment Company.

44

4.23

Rights Agreement.

45

4.24

Recommendation of Parent Board of Directors; Opinion of Financial Advisor.

45

4.25

Required Vote by Parent Shareholders.

45

4.26

Voting Agreements.

45

4.27

Brokers.

45

4.28

Ownership of Company Common Stock.

45

4.29

Reorganization.

46

4.30

Financing.