Escrow Agreement with Deposit of Earnest Money

(Deposit of Earnest Money with Escrow Agent in Connection with Planned Purchase of Properties)

This Escrow Agreement (the “Escrow Agreement” or the “Agreement”) is effective (the “Effective Date”). It is between , a corporation (the “Buyer”), whose address is , and , a corporation (the “Seller”), whose address is , and Bank (the “Escrow Agent”), whose address is . Buyer and Seller may be referred to collectively as the “Parties” or individually as a “Party.”

Buyer has requested and Seller has agreed to deposit a certain cash sum in an escrow fund to be maintained pursuant to this Escrow Agreement: (i) to evidence and secure the commitment of Buyer to negotiate in good faith toward execution of a mutually satisfactory written Purchase and Sale Agreement (the “Purchase and Sale Agreement”) with respect to Seller assigning to Buyer those oil and gas properties identified in Exhibit “A”; (ii) upon execution of the Purchase and Sale Agreement, to secure Buyer's performance obligations under the Purchase and Sale Agreement; and, (iii) in consideration of Seller entering into negotiations with Buyer with respect to the Purchase and Sale Agreement.

Buyer and Seller desire Escrow Agent to act in the capacity of Escrow Agent under this Escrow Agreement.

In consideration of the mutual covenants and agreements contained in this Escrow Agreement, the Parties agree as follows:

1. Appointment of Escrow Agent. Buyer and Seller appoint Escrow Agent as the escrow agent and Escrow Agent accepts the appointment.

2. Deposit. Upon execution of this Escrow Agreement, Buyer will deliver to Escrow Agent the sum of Dollars ($ ) (the “Deposit”) to be held by Escrow Agent in accordance with the terms of this Agreement.

3. Investment of the Deposit. Escrow Agent shall invest the Deposit only upon the written request of the Parties specifying the type and identity of the investment to be made. The request shall include all information Escrow Agent may require. Escrow Agent shall not be liable for failure to invest funds absent sufficient written direction. Receipt or investment of the Deposit shall be confirmed by Escrow Agent as soon as practicable by an account statement unless otherwise indicated. Any discrepancies shall be noted by any Party to Escrow Agent within a reasonable time prior to the next account statement. Failure to inform Escrow Agent in writing of any discrepancies shall conclusively be deemed confirmation of the accuracy of the account statement in its entirety. Unless otherwise directed, Escrow Agent may use a broker-dealer of its own selection, including a broker-dealer owned by or affiliated with Escrow Agent or any of its affiliates. The Parties shall be liable for all brokerage costs and related expenses incurred under this Agreement. Escrow Agent shall not be liable for and shall be indemnified by the other Parties from all liability for losses on any investments, market risk due to premature liquidation, or other actions taken in compliance with this Escrow Agreement. Notwithstanding the foregoing, Escrow Agent may, in its discretion, accept directions or instructions whether given orally, by telephone, or by facsimile, which Escrow Agent believe to be genuine, but Escrow Agent shall not be liable for executing, failing to execute, or for any mistake in the execution of any orders except in case of willful default.

4. Disbursement of Deposit. Escrow Agent is authorized to only make disbursements of the Deposit as follows:

a. Upon receipt of a written confirmation from Seller and Buyer stating that a Purchase and Sale Agreement has been executed and the contemplated transactions has closed, the Deposit to Buyer and any interest earned on the Deposit to Buyer.

b. Upon receipt of a written confirmation from Seller and Buyer stating that Buyer has caused the termination of negotiations toward a Purchase and Sale Agreement, the Deposit to Buyer and any interest earned on the Deposit to Seller.

c. Upon receipt of a written confirmation from Seller and Buyer stating that Seller has caused the termination of negotiation toward a Purchase and Sale Agreement, the Deposit to Buyer and any interest earned on the Deposit to Buyer.

d. Upon receipt of a written confirmation from Seller stating that Buyer, through no fault of Seller, fails, refuses, or is unable to close the transactions contemplated by the executed Purchase and Sale Agreement other than as expressly permitted by the Purchase and Sale Agreement, the Deposit and any interest earned on the Deposit to Seller, as agreed liquidated damages and not as a penalty.

e. Upon receipt of a written confirmation from Buyer and Seller stating that Seller, through no fault of Buyer, fails, refuses, or is unable to close the transactions contemplated by the executed Definitive Agreement other than as expressly permitted by the Purchase and Sale Agreement, the Deposit and any interest earned on the Deposit to Buyer, as agreed liquidated damages and not as a penalty.

f. As described on Exhibit “B” to this Escrow Agreement.

g. As permitted by this Escrow Agreement, to Escrow Agent.

5. Tax Matters. Each Party shall provide Escrow Agent with its taxpayer identification number documented by an appropriate Form W-8 or W-9 or certification of foreign taxpayer exemption within days after the Effective Date and prior to any investment of the Deposit.

6. Scope of Undertaking. Escrow Agent's duties and responsibilities shall be purely ministerial and shall be limited to those expressly set forth in this Escrow Agreement. Escrow Agent is not a principal, participant, or beneficiary of any transaction underlying this Escrow Agreement and shall have no duty to inquire beyond the terms and provisions of this Agreement. Escrow Agent shall have no responsibility or obligation of any kind in connection with this Escrow Agreement or the Deposit, and shall not be required to deliver all or part of the Deposit or take any action with respect to any matters that might arise in connection with this Agreement or the Deposit, other than to receive, hold, invest, and deliver the Deposit.

7. Reliance and Liability. Escrow Agent may rely on and shall not be liable for acting or refraining from acting upon any written notice, instruction or request or other paper furnished to it and reasonably believed by it to be genuine and to have been signed or presented by the proper Party or Parties.

8. Right of Interpleader. Should any controversy arise involving one or both of the Parties or any other person, firm or entity with respect to this Escrow Agreement or the Deposit, or should a substitute escrow agent fail to be designated as provided in Section 15, or if Escrow Agent should be in doubt as to what action to take, Escrow Agent shall have the right, but not the obligation, either to withhold delivery of the Deposit or institute a bill of interpleader.

9. Indemnification. The other Parties to this Agreement agree to jointly and severally indemnify Escrow Agent, its officers, directors, partners, employees, agents and counsel against, and hold each Indemnified Party harmless from any and all losses, costs, damages, expenses, claims and attorney's fees, including but not limited to costs of investigation, litigation, tax liability or loss on investments.

10. Compensation and Reimbursement of Expenses. Escrow Agent shall be compensated in accordance with the fee schedule attached to this Agreement. The Parties jointly and severally agree to pay the fees of and expenses incurred by Escrow Agent in performing its obligations or enforcing its rights under this Agreement and to reimburse Escrow Agent for all fees and expenses.

11. Lien. Escrow Agent is given a lien on all the rights, title, and interests of the Parties in the Deposit, to protect Escrow Agent's rights, including without limitation, rights of payment and to indemnity and reimbursement, as provided in this Agreement.

12. Notice. Any notice, instrument, or other communications required or permitted to be given by one of the Parties to the other under this Escrow Agreement shall be considered properly given if in writing and delivered, mailed, sent by overnight courier, or sent by facsimile in each case addressed as follows:

If to Escrow Agent:

If to Buyer:

If to Seller:

Any Party to this Escrow Agreement may change the address to which communications are to be directed by giving written notice to the other Party in the manner provided in this section.

13. Consultation with Legal Counsel. Escrow Agent may consult with its own or other counsel satisfactory to it concerning any question relating to its duties or responsibilities or otherwise in connection with this Agreement and shall not be liable for any action taken, suffered, or omitted by it in good faith upon the advice of counsel.

14. Choice of Laws; Cumulative Rights. This Escrow Agreement and the Deposit shall be construed under and governed by the laws of the State of , including its conflict of law rules.

15. Resignation. Escrow Agent may resign upon days' prior notice to the Parties. If the Parties fail to designate a substitute escrow agent within days after the giving of notice, Escrow Agent may institute a bill of interpleader as contemplated by Section 8 above.

16. Severability. If one or more of the provisions of this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect under applicable law, that invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement.

17. Termination. Upon disbursement of all the Deposit as specified in Section 4 above, this Escrow Agreement shall terminate. However, the provisions of Section 9 shall remain in full force and effect for so long as Escrow Agent may have any liability.

18. General. The terms and provisions of this Escrow Agreement constitute the entire agreement between the Parties. This Escrow Agreement may be amended, modified, waived, or terminated only by written instrument duly signed by the Parties or their successors and assigns.

The Parties and Escrow Agent have executed this Escrow Agreement to be effective as of the Effective Date stated above.

EXHIBIT “A”

Description of Properties that are to be the Subject of the Purchase and Sale Agreement.

EXHIBIT “B”

Direction for Disbursement of Deposit (Section 4.f) in Addition to those Provided for in Section 4.a-d)