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ARTICLE I

DEFINITIONS

1

ARTICLE II

EFFECTIVE DATE; CLOSING

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2.1

Effective Date; Closing

7

2.2

Proceedings at Closing

8

ARTICLE III

SALE AND PURCHASE OF MEMBERSHIP INTERESTS; CONSIDERATION

8

3.1

Sale and Purchase of Membership Interests

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3.2

Amount and Form of Consideration

8

3.3

Payment of Consideration

8

3.4

Price Adjustments

8

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE SELLER AND THE COMPANY

9

4.1

Organization and Power

9

4.2

Authorizations; Execution and Validity

10

4.3

Capitalization

10

4.4

Financial Statements; Other Financial Data

10

4.5

Consents

11

4.6

No Defaults or Conflicts

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4.7

Agreements, Contracts and Commitments

11

4.8

Litigation

12

4.9

Taxes

12

4.10

Fees

13

4.11

Absence of Certain Changes or Events

13

4.12

Compliance with Laws

14

4.13

Transactions with Related Parties

14

4.14

Books and Records

14

4.15

Information Furnished

14

4.16

Directors and Officers

14

4.17

Bank Accounts

14

4.18

Owned Real Property

15

4.19

Leased Real Property

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4.20

Intentionally left blank

15

4.21

Title to Oil and Gas Properties

15

4.22

Environmental Matters

16

4.23

Bonding Matters

17

4.24

Insurance

17

4.25

ERISA

17

4.26

Condition of Assets

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4.27

Lease Operating Expenses

17

4.28

Hedging Transactions

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4.29

Prepayment Premium; Total Company Debt

18

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF SELLER

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5.1

Organization and Good Standing

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5.2

Authorization of Agreement

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5.3

Conflicts, Consents of Third Parties

18

5.4

Brokers

19

5.5

Litigation

19

5.6

Ownership of Membership Interests

19

5.7

Tax Status

19

5.8

Marketable Title

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ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF BUYER

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6.1

Organization and Good Standing

19

6.2

Authorization of Agreement

20

6.3

Conflicts, Consents of Third Parties

20

6.4

No Default

20

6.5

Litigation

20

6.6

Investment Intent

20

6.7

Disclosure of Information

20

6.8

Funding Commitments

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6.9

Brokers

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ARTICLE VII

ADDITIONAL AGREEMENTS

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7.1

Further Actions

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7.2

Conduct of Business Pending Closing

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7.3

Title Defects

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7.4

Environmental Defects

24

7.5

Gas Imbalances

25

7.6

Access to Information

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7.7

Regulatory Approvals

26

7.8

Agreement to Defend

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7.9

Other Actions

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7.10

LIMITATION AND DISCLAIMER OF IMPLIED REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND SELLER

26