8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or Section 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 19, 2012

HALCÓN RESOURCES CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	001-35467	20-0700684
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
1000 Louisiana St., Suite 6700 Houston, Texas		77002
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (832) 538-0300

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

x Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

Agreement to Acquire Williston Basin Assets

On October 19, 2012, Halcón Energy Properties, Inc., a wholly owned subsidiary of Halcón Resources Corporation (“Halcón”), entered into a Reorganization and Interest Purchase Agreement (the “Purchase Agreement”) with Petro-Hunt, L.L.C. and Pillar Energy, LLC (collectively, the “Petro-Hunt Parties”), pursuant to which Halcón has agreed to acquire two newly formed wholly owned subsidiaries of the Petro-Hunt Parties, which immediately before closing will own a total of approximately 81,000 net acres prospective for the Bakken and Three Forks formations primarily located in Williams, Mountrail, McKenzie and Dunn Counties, North Dakota (the “Williston Basin Assets”). Halcón has agreed to acquire the Williston Basin Assets for a total purchase price of $1.45 billion, consisting of $700 million in cash and $750 million in newly issued Halcón preferred stock that will automatically convert into approximately 100.7 million shares of Halcón common stock at a conversion price of $7.45 per share following stockholder approval of such conversion and an increase in Halcón’s authorized common stock. The shares of preferred stock are to be issued to the Petro-Hunt Parties in a private placement pursuant to the exemptions from registration provided in Regulation D, Rule 506, under Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”).

Immediately following the completion of the Williston Basin Assets acquisition (and the related private placement of Halcón common stock described below), the Petro-Hunt Parties are expected to hold preferred stock representing approximately 22% of Halcón’s outstanding common stock on an as-converted, fully diluted basis. As holders of the preferred stock, the Petro-Hunt Parties will be entitled to vote on all matters submitted to a vote of Halcón’s common stockholders, except for matters required for the conversion of the preferred stock. The voting power attributable to the preferred stock will be limited to 19.99% of the voting power of Halcón’s common stock outstanding immediately prior to the issuance of the preferred stock. The preferred stock will accrue dividends at the rate of 8% per annum from the issue date to the extent not converted into common stock within 121 days following issuance. No dividends will be payable if the preferred stock is converted within that period. The conversion rate of the preferred stock will be subject to anti-dilution adjustments in the event of stock splits, stock dividends and under certain other circumstances.

The effective date of the transaction is June 1, 2012 and Halcón expects to close the transaction in mid-December 2012. The purchase price is subject to adjustments for (i) operating expenses, capital expenditures and revenues between the effective date and the closing date, (ii) title and environmental defects, and (iii) other purchase price adjustments customary in oil and gas purchase and sale agreements. Any adjustments to the purchase price at closing would be applied to the cash and convertible preferred stock components of the purchase price in the same proportions.

The Petro-Hunt Parties and Halcón each make representations and warranties in the Purchase Agreement that are customary for a transaction of this type. The parties have agreed to indemnify one another for breaches of their respective representations and warranties, as well as the operation of the Williston Basin Assets prior to (in the case of the Petro-Hunt Parties) and after (in the case of Halcón) the closing date. Indemnities for breaches of representations and warranties, and any purchase price adjustments attributable to title or environmental defects, are subject to certain threshold limitations. Claims and asserted defects must exceed $75,000 individually and 0.5% of the total purchase price, or $7.25 million, in the aggregate before Halcón or the Petro-Hunt Parties will be entitled to indemnification or a purchase price adjustment. The parties have agreed to indemnify each other up to the full amount of the purchase price for breaches of representations and warranties regarding their organization, existence, authority and ability to enter into the transaction, which representations and warranties survive closing for

the applicable statute of limitations period. All other representations and warranties, including those relating to the ownership and condition of the Williston Basin Assets, survive the closing date for one year, and indemnification for breaches of those representations and warranties is limited to 10% of the purchase price, or $145.0 million.

The Purchase Agreement also includes customary covenants relating to the operation of the Williston Basin Assets and other matters. In addition, Halcón has agreed to cause one individual designated by the Petro-Hunt Parties to be elected or appointed to Halcón’s board of directors, subject to the reasonable approval of Halcón’s Nominating and Corporate Governance Committee, for so long as the Petro-Hunt Parties beneficially own at least 5% of the outstanding shares of Halcón common stock.

The transaction is subject to customary closing conditions, including the expiration or early termination of the waiting period mandated under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as well as the execution and delivery of certain other agreements, including a registration rights agreement, a lock-up agreement and a transition services agreement. The lock-up agreement will prohibit the Petro-Hunt Parties from offering for sale, selling, pledging or otherwise disposing of the shares of Halcón convertible preferred stock (or the underlying shares of Halcón common stock) received as consideration for the transaction for a period of 180 days following the closing of the transaction. Halcón has agreed to file with the Securities and Exchange Commission a shelf registration statement relating to the resale of such shares of Halcón capital stock.

The parties may terminate the Purchase Agreement if any of the above closing conditions have not been satisfied, or if total adjustments to the purchase price exceed $217.5 million or the transaction has not closed on or before December 20, 2012.

The foregoing description of the Purchase Agreement is qualified in its entirety by reference to the full text of such agreement, a copy of which is filed herewith as Exhibit 2.1 and is incorporated herein by reference.

Additional Information About the Transaction

Halcón will file a proxy statement and other documents relating to the proposed transaction described above with the Securities and Exchange Commission (the “SEC”). INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT AND OTHER DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders may obtain these documents free of charge at the SEC’s website at www.sec.gov You may also obtain these documents free of charge at www.halconresources.com. You may also read and copy any reports, statements and other information filed by Halcón with the SEC at the SEC public reference room at 100 F Street N.E., Room 1580, Washington, D.C. 20549. Please call the SEC at (800) 732-0330 or visit the SEC’s website for further information on its public reference room.

Participants in Solicitation

Halcón and its executive officers and directors may be deemed to be participants in the solicitation of proxies in connection with the proposed transaction. Information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement and other relevant materials to be filed with the SEC when they become available.

Common Stock Purchase Agreement

On October 19, 2012, Halcón entered into a Common Stock Purchase Agreement (the “Stock Purchase Agreement”) with CPP Investment Board PMI-2 Inc. (“CPPIB”), pursuant to which CPPIB has agreed to purchase 41,899,441 newly issued shares of Halcón common stock at $7.16 per share for a total purchase price of approximately $300.0 million. Net proceeds to Halcón are expected to be approximately $294.0 million following the payment of an approximate $6.0 million capital commitment payment to CPPIB upon closing of the transaction. The shares of Halcón common stock will be issued to CPPIB in a private placement pursuant to the exemptions from registration provided in Regulation D, Rule 506, under Section 4(2) of the Securities Act. As a result of this transaction, CPPIB is expected to hold approximately 9% of Halcón’s outstanding common stock on a fully diluted basis after giving effect to the completion of the Williston Basin Assets acquisition. CPPIB has agreed to a one-year lock-up period, ending October 19, 2013, during which time it will not offer for sale, sell, pledge or otherwise dispose of the shares of Halcón common stock it acquires pursuant to the Stock Purchase Agreement, subject to certain exceptions.

The Stock Purchase Agreement contains customary representations and warranties by Halcón and CPPIB and the parties have agreed to indemnify each other for losses resulting from the other party’s breach of any representations, warranties or covenants. Closing of the transaction is subject to customary closing conditions, as well as the closing of Halcón’s acquisition of the Williston Basin Assets described above and the execution and delivery of certain other documents, including a stockholders agreement. The stockholders agreement will provide that, for as long as CPPIB beneficially owns at least 5% of Halcón’s common stock, it may designate one individual to serve on Halcón’s board of directors and two individuals for so long as it owns 20% or more of Halcón’s common stock, such individual(s) to be subject to the reasonable approval of Halcón’s Nominating and Corporate Governance Committee. The stockholders agreement will also provide CPPIB with certain pre-emptive rights to acquire additional Halcón securities, as well as shelf registration, demand underwriting and piggyback registration rights.

The foregoing description of the Stock Purchase Agreement is qualified in its entirety by reference to the full text of such agreement, a copy of which is filed herewith as Exhibit 10.1 and is incorporated herein by reference.

The shares of Halcón preferred stock to be issued to the Petro-Hunt Parties and the shares of Halcón common stock to be issued to CPPIB have not been registered under the Securities Act and may not be offered or sold absent registration or an applicable exemption from registration. The information contained in this current report on Form 8-K shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of Halcón securities in any state where such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such state.

Item 3.02 Unregistered Sales of Equity Securities.

The information set forth above, under Item 1.01, is incorporated herein by reference.

Item 7.01 Regulation FD Disclosure.

On October 22, 2012, Halcón issued a press release announcing the acquisition of the Williston Basin Assets and the Stock Purchase Agreement entered into with CPPIB. A copy of the press release issued by the Company is attached hereto as Exhibit 99.1 and is incorporated herein by reference. The information incorporated herein by reference is furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of Section 18, and shall not be incorporated by reference in any filing under the Securities Act, or the Exchange Act.

Item 8.01 Other Events.

Statements of Revenues and Direct Operating Expenses for the Williston Basin Assets

As the pending acquisition of the Williston Basin Assets is considered “probable” within the meaning of Rule 3-05 of Regulation S-X, attached as Exhibit 99.2 and incorporated herein by reference herein, are statements of revenues and direct operating expenses for the Williston Basin Assets for the three years in the period ended December 31, 2011 (the “Audited Statements”), and the three and six months ended June 30, 2012 and 2011, including footnotes thereto. The independent auditors’ report of UHY LLP on the Audited Statements as required under Rule 3-05 of Regulation S-X is also included in Exhibit 99.2.

Bridge Facility Commitment

On October 19, 2012, Wells Fargo Securities, LLC, J.P. Morgan Securities LLC, Barclays Capital Inc. and Goldman, Sachs & Co., and certain affiliates thereof, executed a commitment letter pursuant to which, subject to customary terms and conditions, in connection with Halcón’s acquisition of the Williston Basin Assets, such parties have committed to backstop an increase to $850 million in the borrowing base under Halcón’s revolving credit facility and to provide Halcón with senior unsecured bridge financing of up to $500 million. If utilized, the bridge financing will bear interest initially at 750 basis points over the greater of 1.50% and the London Inter-bank Offer Rate, which will increase by 50 basis points for each three month period it remains outstanding, subject to a cap of 11% per annum that is subject to an increase up to 100 basis points based upon Halcón’s senior unsecured debt rating and market rates for high-yield debt.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
2.1	Reorganization and Interest Purchase Agreement dated October 19, 2012 by and among Halcón Energy Properties, Inc., Petro-Hunt, L.L.C. and Pillar Energy, LLC.
10.1	Common Stock Purchase Agreement dated October 19, 2012, by and between Halcón Resources Corporation and CPP Investment Board PMI-2 Inc.
23.1	Consent of UHY LLP.
99.1	Press release issued by Halcón Resources Corporation dated October 22, 2012.
99.2	Independent Auditors’ Report and Statements of Revenues and Direct Operating Expenses of the Williston Basin Assets for the three years in the period ended December 31, 2011 and the three and six months ended June 30, 2012 and 2011.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	HALCÓN RESOURCES CORPORATION
October 22, 2012	By:	/s/ Mark J. Mize
	Name:	Mark J. Mize
	Title:	Executive Vice President, Chief Financial Officer and Treasurer

EXHIBIT INDEX

Exhibit No.	Description
2.1	Reorganization and Interest Purchase Agreement dated October 19, 2012 by and among Halcón Energy Properties, Inc., Petro-Hunt, L.L.C. and Pillar Energy, LLC.
10.1	Common Stock Purchase Agreement dated October 19, 2012, by and between Halcón Resources Corporation and CPP Investment Board PMI-2 Inc.
23.1	Consent of UHY LLP.
99.1	Press release issued by Halcón Resources Corporation dated October 22, 2012.
99.2	Independent Auditors’ Report and Statements of Revenues and Direct Operating Expenses of the Williston Basin Assets for the three years in the period ended December 31, 2011 and the three and six months ended June 30, 2012 and 2011.

EX-2.1

Exhibit 2.1

EXECUTION VERSION

REORGANIZATION AND

INTEREST PURCHASE

AGREEMENT

BETWEEN

PETRO-HUNT, L.L.C.

AND

PILLAR ENERGY, LLC

(AS PETRO-HUNT PARTIES)

AND

HALCÓN ENERGY PROPERTIES, INC.

(AS BUYER)

DATED AS OF OCTOBER 19, 2012

Table of Contents

ARTICLE I. Properties; Reorganization		1
1.01	Definition of Properties	1
1.02	Excluded Assets	4
1.03	Effective Time	4
1.04	Reorganization	4
ARTICLE II. Purchase and Sale		6
2.01	Purchase and Sale	6
2.02	Adjustments to Purchase Price	7
2.03	Allocation of Purchase Price	10
2.04	Tax Treatment of Purchase of Membership Interests	11
ARTICLE III. Representations and Warranties		11
3.01	Representations and Warranties of the Petro-Hunt Parties	11
3.02	Representations and Warranties of Buyer	20
ARTICLE IV. Covenants		24
4.01	Covenants of Petro-Hunt Parties	24
4.02	Covenants of Buyer and HRC	28
4.03	Covenants of Buyer and Petro-Hunt Parties as to Taxes	31
4.04	Hart-Scott-Rodino; Regulatory Approvals	32
ARTICLE V. Title and Defects		33
5.01	Defensible Title	33
5.02	Permitted Encumbrances	34
5.03	Title Defect	35
5.04	Defective Interests and Environmental Defects	36

5.05	Buyer’s Right of Inspection	38
5.06	Notice of Defective Interests and Environmental Defects	41
5.07	Arbitration Procedures	43
5.08	Effect of Disputed Defective Interests or Environmental Defects on Closing	44
5.09	Preferential Purchase Rights	46
5.10	Casualty Losses	46
5.11	Consents	47
5.12	Upward Adjustment	48
5.13	Exclusive Remedy	49
ARTICLE VI. Conditions to Closing		49
6.01	Petro-Hunt Parties’ Conditions	49
6.02	Buyer’s Conditions	50
ARTICLE VII. Closing		52
7.01	Date of Closing; Specific Performance	52
7.02	Closing Obligations	52
ARTICLE VIII. Obligations After Closing		54
8.01	Post-Closing Adjustments	54
8.02	Transition Services	55
8.03	Further Assurances	55
8.04	Buyer’s Post-Closing Obligations	55
8.05	Post-Closing Obligations of the Petro-Hunt Parties	59
8.06	Files and Records	60
8.07	Disclaimers of Representations and Warranties	61
8.08	Waiver of DTPA	61

8.09	Representations and Warranties; Indemnity as Exclusive Remedy	61
ARTICLE IX. Termination of Agreement		62
9.01	Termination	62
9.02	Effect of Termination	63
ARTICLE X. Indemnification		63
10.01	Notice; Right to Employ Counsel	63
10.02	Claim Reimbursement and Reduction	64
ARTICLE XI. General		64
11.01	Exhibits and Schedules	64
11.02	Expenses	65
11.03	Notices	65
11.04	Amendments	66
11.05	Headings	66
11.06	Counterparts	66
11.07	References	66
11.08	Governing Law	66
11.09	Entire Agreement	66
11.10	Parties in Interest	67
11.11	Assignments	67
11.12	Public Announcements	67
11.13	Notices after Closing	67
11.14	Severability	67
11.15	Time is of the Essence	67
11.16	Limitation on Damages	67

11.17	No Solicitation of the Petro-Hunt Parties’ Employees	68
11.18	Debt Financing Parties	68

Exhibits:

Exhibit “A”, Part I – Leases

Exhibit “A”, Part II – Interests to be Earned or Conveyed

Exhibit “A”, Part III – Map/Plat

Exhibit “B” – Contracts

Exhibit “C” – Wells

Exhibit “D” – Allocation Schedule & Designation of Per Net Mineral Acre Price for Different Areas and Regions

Exhibit “E-1” – Form of Buyer Officer’s Certificate

Exhibit “E-2” – Form of Petro-Hunt Parties Officer’s Certificate

Exhibit “F” – Form of Registration Rights Agreement

Exhibit “G” – Form of Certificate of Designation, Preferences, Rights, and Limitations of 8% Automatically Convertible Preferred Stock

Exhibit “H” – Form of Lock Up Agreement

Exhibit “I” – Form of Assignment of Membership Interests

Schedules:

Schedule 1.02 – Excluded Assets

Schedule 3.01(c) – Necessary Action

Schedule 3.01(d) – Consents, Preferential Purchase Rights

Schedule 3.01(e) – Litigation

Schedule 3.01(f) – AMIs and Non-Competition Agreements

Schedule 3.01(g) – Taxes

Schedule 3.01(k) – AFE’s

Schedule 3.01(l) – Take or Pay Liability and Over Production

Schedule 3.01(m) – Dormant or Excluded Wells

Schedule 3.01(n) – Legal Compliance

Schedule 3.01(o) – Payout Status

Schedule 3.01(p) – Off-Record Encumbrances

Schedule 3.01(q) – Environmental

Schedule 3.01(r) – Suspense Amounts

Schedule 3.01(s) – Lease Maintenance/Earning Requirements

Schedule 3.01(y) – Surface Restrictions

Schedule 3.02(d) – Buyer Approvals

Schedule 6.01(c) – Required Consents

Schedule 6.02(c) – Required Consents

REORGANIZATION AND INTEREST PURCHASE AGREEMENT

This Reorganization and Interest Purchase Agreement (this “Agreement”) dated as of the 19^th day of October, 2012, is between PETRO-HUNT, L.L.C., a Delaware limited liability company (“PH”) and PILLAR ENERGY, LLC, a Texas limited liability company (“Pillar”) (together, jointly and severally, the “Petro-Hunt Parties”), and HALCÓN ENERGY PROPERTIES, INC. (“Buyer”). In addition, HALCÓN RESOURCES CORPORATION, the parent company of Buyer (“HRC”), joins in the execution and delivery of this Agreement for purposes of those provisions hereof relating to the issuance of Preferred Stock (as hereinafter defined).

RECITALS

A. The Petro-Hunt Parties own the Properties (defined below) located in the Fort Berthold area and the Marmon area of North Dakota within the boundaries of the plats or maps set forth as Exhibit “A”, Part III attached hereto.

B. The Petro-Hunt Parties will complete the Reorganization (defined below) whereby after effecting two statutory mergers, the Properties will be owned by Petro-Hunt FB/M Successor (defined below) and Pillar FB/M Successor (defined below).

C. The Petro-Hunt Parties desire to sell and Buyer desires to purchase (1) all of Petro-Hunt Holdings’ (defined below) membership interests in and to Petro-Hunt FB/M Successor and (2) all of Pillar Holdings’ (defined below) membership interests in and to Pillar FB/M Successor, for the Purchase Price.

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, the Petro-Hunt Parties, Buyer and HRC (with regard to the Preferred Stock) agree as follows:

ARTICLE I.

Properties; Reorganization

1.01 Definition of Properties. For the purposes of this Agreement, the term “Properties” means the following, except to the extent constituting Excluded Assets:

(a) The respective undivided Working Interests or WI’s (as these terms are hereinafter defined) and Net Revenue Interests or NRI’s (as these terms are hereinafter defined) in and to, together with any and all of the Petro-Hunt Parties’ other rights, titles and interests in and to, the oil, gas and/or mineral leases, leasehold interests, royalty, and other interests in or relating to interests described in Exhibit “A”, Part I hereto (collectively, the “Leases”), together with corresponding undivided interests in (i) all rights, privileges, benefits, and powers

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conferred upon the holder of the Leases with respect to the use and occupation of the surface or subsurface of the lands covered by the Leases (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 (and, including without limitation all rights derived from any unitization, pooling, operating, communitization or other agreement or from any declaration or order of any governmental authority) (the “Pooled Units”), (iii) all rights, options, titles, and interests of the Petro-Hunt Parties granting the Petro-Hunt Parties the right to obtain, or otherwise earn interests within the Lands no matter how earned, (iv) all easements, rights-of-way, subsurface easements, licenses, permits, servitudes, surface leases, and similar interests insofar and only insofar as the same relate to or are applicable to or used in developing or operating the Leases, the lands unitized or pooled with the Leases, or any of the other Properties described in subparagraphs (b)-(f) below, and (v) all tenements, hereditaments, and appurtenances belonging to any of the foregoing, save and except any fee minerals or overriding royalty interests owned by the Petro-Hunt Parties within the Properties, insofar and only insofar as the exclusion of the mineral fee interests and overriding royalty interests do not reduce the NRI’s allocable to the Properties being sold to Buyer hereunder below those described in Exhibit “A” and Exhibit “C” attached hereto;

(b) All of the right, title and interest of the Petro-Hunt Parties under the contracts, agreements, and other instruments described on Exhibit “B” attached hereto and made a part hereof together with all of the right, title and interest of the Petro-Hunt Parties under any rights-of-way, surface leases, surface use agreements, farmin agreements, farmout agreements, bottom hole agreements, acreage contribution agreements, operating agreements, unit agreements, processing agreements, options, leases of equipment or facilities, and other contracts, agreements, and rights that are owned by the Petro-Hunt Parties in whole or in part, which are not described on Exhibit “B” hereto, and that are appurtenant to the Properties or used or held for use in connection with the ownership or operation of the Properties or with the production, treatment, sale, supply or disposal of water, hydrocarbons and associated substances therefrom or thereon (in the aggregate, the “Contracts”), including, without limitation, all contractual rights to interests that may be earned by or assigned to the Petro-Hunt Parties under term assignments, farmout agreements, farmin agreements, participation agreements and other similar types of agreements, including, without limitation, those rights and interests that may be earned that are described in Exhibit “A”, Part II attached hereto;

(c) All of the right, title and interest of the Petro-Hunt Parties in and to the real, personal and mixed property used in the operation of the Properties owned by the Petro-Hunt Parties in whole or in part or credited to the joint

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account of the Petro-Hunt Parties (the “Equipment”) including, but not limited to (i) all oil, gas and condensate wells (whether producing, not producing or abandoned), water source, water injection and other injection or disposal wells and systems located on the Leases or lands unitized or pooled with the Leases, together with all wellhead equipment, fixtures (including, but not limited to, field separators and liquid extractors), pipe, casing, and tubing in, on or appurtenant to the wells (“Wells”), including, without limitation, those described on Exhibit “C” attached hereto and made a part hereof; (ii) all production, gathering, treating, processing, compression, dehydration, salt water disposal, injection, gathering line and pipeline equipment and facilities; (iii) all tanks, machines, equipment, tools, dies, vessels and other facilities;

(d) All crude oil, natural gas, condensate, distillate, natural gasoline, natural gas liquids, plant products, and other liquid or gaseous hydrocarbons, the right to explore for which, or an interest in which, is granted pursuant to the Leases, or lands unitized or pooled with the Leases (collectively, the “Hydrocarbons”) and that are produced from or allocable to such interests of the Petro-Hunt Parties from and after the Effective Time;

(e) All oil which was produced from the Leases and which was, as of the Effective Time, stored in tanks (located on the Leases or located elsewhere but used to store oil produced from the Leases prior to delivery to oil purchasers) (“Stock Tank Oil”);

(f) It is the intent of the parties that the Properties also include all right, title and interest of the Petro-Hunt Parties in any other real, personal or mixed property interests of the Petro-Hunt Parties located within the boundaries of the plats or maps set forth as Exhibit “A”, Part III attached hereto, and which are used in connection with the ownership or operation of the Properties, and therefore without limiting the generality of the above, this provision does not limit any of the other Properties described herein; and

(g) Subject to the provisions of Section 8.06 hereof, all of the files, records, documents, correspondence and data now in the possession or control of the Petro-Hunt Parties, that relates to the items described in sub-paragraphs (a), (b), (c), (d), (e), and (f) above, without limitation (the “Records”).

For purposes hereof, the following terms shall have the following meanings attributed to them: (i) “Net Revenue Interest” (or “NRI”) means the undivided interest in the oil, gas and other minerals or substances produced from or attributable to a Lease, Pooled Unit or Well (as hereinafter defined), or other Properties, after deducting all of lessor’s royalties, overriding royalties, net profits interests, production payments and other burdens on oil, gas and other minerals or substances produced therefrom, expressed as a percentage or a decimal; and (ii) “Working Interest” (or “WI”) means that share of the costs, expenses, burdens and obligations of any type or nature, along with the right to explore for, develop, produce, and sell Hydrocarbons, attributable to the Petro-Hunt Parties’ interest in the applicable Lease, Pooled Unit or Well (as hereinafter defined), or other Properties, expressed as a percentage or a decimal.

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1.02 Excluded Assets. Notwithstanding anything to the contrary contained herein, the assets and properties to which Petro-Hunt FB/M Successor and Pillar FB/M Successor will succeed as a result of the Mergers do not include, and the Properties do not cover or include, any of the interests described in Schedule 1.02 (the “Excluded Assets”).

1.03 Effective Time. The Properties shall comprise and include (and Petro-Hunt FB/M Successor and Pillar FB/M Successor shall be entitled to) all production, benefits and claims relating to the Properties attributable to periods from and after on June 1, 2012, (herein called the “Effective Time”) (including all Hydrocarbons produced and saved during periods from and after the Effective Time) as part of the assets and properties to which they will succeed as a result of the Mergers; and in connection therewith, Petro-Hunt FB/M Successor and Pillar FB/M Successor shall be responsible for the FB/M Obligations (as hereinafter defined) to which they will succeed as a result of the Mergers. Petro-Hunt Successor and Pillar Successor shall be entitled to all production, benefits and claims relating to the Properties attributable to periods before the Effective Time as part of the assets and properties to which they will succeed as a result of the Mergers. Petro-Hunt Successor and Pillar Successor shall be responsible for the Petro-Hunt Party Obligations (as hereinafter defined) to which they will succeed as a result of the Mergers. To the extent that a party receives production from or attributable to the Properties (or products and proceeds attributable thereto) that is owned by the other party, the receiving party shall fully disclose, account for and remit the same promptly to the party entitled to receive such production (or products and proceeds attributable thereto).

1.04 Reorganization. Prior to the Closing Date, the Petro-Hunt Parties will cause each of the following to occur (collectively, the “Reorganization”):

(a) PH will cause the following:

(1) PH will form a new Delaware limited liability company, Petro-Hunt Holdings LLC (“Petro-Hunt Holdings”) with all of the membership interests in Petro-Hunt Holdings to be owned by the same persons, and in the same proportions, as the membership interests are held in PH.

(2) The members of PH will contribute the membership interests in PH to Petro-Hunt Holdings such that Petro-Hunt Holdings will be the sole member of PH.

(3) PH will be converted into a Texas limited liability company pursuant to the provisions of Texas Business Organizations Code (the “TBOC”) Sections 10.102 and 10.103 (or alternatively, PH will be merged into a Texas limited liability company, with such Texas entity remaining as the surviving successor entity).

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(4) PH will merge (the “Petro-Hunt Merger”), pursuant to Section 10.003 et. seq. of the TBOC resulting in two entities: (A) Petro-Hunt Fort Berthold/Marmon Successor Entity LLC, or a similar name (“Petro-Hunt FB/M Successor”), which will have as its assets and properties the Properties owned by PH immediately prior to the effective time of the Petro-Hunt Merger and will have as its liabilities and obligations the “FB/M Obligations” (defined in Section 8.04(c) below) of PH immediately prior to the Petro-Hunt Merger and (B) Petro-Hunt Successor Entity LLC, or a similar name (“Petro-Hunt Successor”), which will have as its assets and properties all assets and properties of PH immediately prior to the effective time of the Petro-Hunt Merger other than the Properties, and will have as its liabilities and obligations all of the liabilities and obligations of PH immediately prior to the effective time of the Petro-Hunt Merger (including, without limitation, the Petro-Hunt Party Obligations (as defined in Section 8.04(c) below)), other than the FB/M Obligations of PH. Petro-Hunt Successor will also succeed to all of the rights of PH under this Agreement and will be subject to the liabilities and obligations of the PH under this Agreement.

(5) As a result of the Petro-Hunt Merger, all of the membership interests of PH will be canceled and converted into membership interests in Petro-Hunt FB/M Successor; and Petro-Hunt Successor and Petro-Hunt Holdings will thereby own all of the membership interests of Petro-Hunt FB/M Successor and Petro-Hunt Successor.

(b) Pillar will cause the following:

(1) Pillar will form a new Delaware limited liability company, Pillar Holdings LLC (“Pillar Holdings”) with all of the membership interests in Pillar Holdings to be owned by the same persons, and in the same proportions, as the membership interests are held in Pillar.

(2) The members of Pillar will contribute the membership interests in Pillar to Pillar Holdings such that Pillar Holdings will be the sole member of Pillar.

(3) Pillar will merge (the “Pillar Merger”), pursuant to Section 10.003 et. seq. of the TBOC resulting in two entities: (A) Pillar Fort Berthold/Marmon Successor Entity LLC, or a similar name (“Pillar FB/M Successor”), which will have as its assets and properties the Properties owned by Pillar immediately prior to the effective time of the Pillar Merger and will have as its liabilities and obligations the FB/M Obligations (defined in Section 8.04(c) below) of Pillar immediately prior

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to the Pillar Merger and (B) Pillar Energy Successor Entity LLC, or a similar name (“Pillar Successor”), which will have as its assets and properties all assets and properties of Pillar immediately prior to the effective time of the Pillar Merger other than the Properties, and will have as its liabilities and obligations all of the liabilities and obligations of Pillar immediately prior to the effective time of the Pillar Merger (including, without limitation, the Petro-Hunt Party Obligations), other than the FB/M Obligations of Pillar. Pillar Successor will also succeed to all of the rights of Pillar under this Agreement and will be subject to the liabilities and obligations of Pillar under this Agreement.

(4) As a result of the Pillar Merger, all of the membership interests of Pillar will be canceled and converted into membership interests in Pillar FB/M Successor; and Pillar Successor and Pillar Holdings will thereby own all of the membership interests of Pillar FB/M Successor and Pillar Successor.

(c) The Petro-Hunt Parties shall provide Buyer with copies of all documents and instruments related to or used to consummate the Reorganization. For the purposes of this Agreement, the Petro-Hunt Merger and the Pillar Merger are referred to as the “Mergers.”

(d) Notwithstanding anything to the contrary in this Agreement, the Petro-Hunt Parties will not be in breach of any provision of this Agreement, nor will any representation or warranty of the Petro-Hunt Parties be inaccurate in any respect solely by virtue of any secondary liability imposed on Petro-Hunt FB/M Successor or Pillar FB/M Successor under TBOC Section 10.008; provided, however, that notwithstanding anything stated herein to the contrary, the Petro-Hunt Party Obligations shall be deemed to include any obligation or liability that is not expressly included as part of the FB/M Obligations, including, without limitation, any such successor or secondary liability or liabilities and obligations relating to assets, properties and businesses not included as part of the Properties.

ARTICLE II.

Purchase and Sale

2.01 Purchase and Sale.

(a) Subject to the terms and conditions of this Agreement, Buyer agrees to purchase from Petro-Hunt Holdings and Pillar Holdings, and the Petro-Hunt Parties will cause Petro-Hunt Holdings and Pillar Holdings to sell to Buyer, all of the membership interests of Petro-Hunt FB/M Successor and Pillar FB/M Successor (collectively, the “Membership Interests”) for the Purchase Price.

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(b) Purchase Price; Buyer Stock. Subject to the other terms and conditions set forth in this Agreement, the aggregate purchase price payable by Buyer to Petro-Hunt Holdings and Pillar Holdings for the Membership Interests shall be ONE BILLION FOUR HUNDRED FIFTY MILLION and No/100 Dollars ($1,450,000,000), based on an allocation for the Petro-Hunt Parties’ interest in the Wells and the Allocated Units (defined below) associated with the Wells as set forth on Exhibit “D” attached hereto, and the Petro-Hunt Parties’ interest in the Undeveloped Leases (defined below), as set forth on Exhibit “D” (the “Purchase Price”), as the same may be adjusted in accordance with the terms of this Agreement. Subject to adjustments provided herein (relative to both the cash and Preferred Stock portions, applied in the same proportions), Seven Hundred Million Dollars ($700,000,000) of the Purchase Price will be in cash payable via wire transfer of immediately available funds at Closing; and, Seven Hundred Fifty Million Dollars ($750,000,000) of the Purchase Price will be in the form of 10,073.4692 newly issued shares of Automatically Convertible Preferred Stock of HRC (the “Preferred Stock”), evidence of which will be delivered by Buyer to Petro-Hunt Holdings and Pillar Holdings at Closing. The Preferred Stock will have the terms set forth in a Certificate of Designation, Preferences, Rights and Limitations (“Certificate of Designation”), in substantially the form attached hereto as Exhibit “F”. The issuance of Preferred Stock and any shares of common stock of HRC issued upon conversion thereof (the “Conversion Shares”; and the Conversion Shares together with the Preferred Stock are collectively referred to as the “Securities”), will not be registered under the Securities Act of 1933, as amended (the “Securities Act”).

(c) Division of Cash and Preferred Stock Among the Petro-Hunt Parties. The cash and Preferred Stock portions of the adjusted Purchase Price shall be allocated as follows: 95.03% thereof to Petro-Hunt Holdings, and 4.97% thereof to Pillar Holdings; and such parties hereby RELEASE, WAIVE AND FOREVER DISCHARGE any and all claims or liabilities regarding the manner in which such amounts, proceeds or Preferred Stock may be allocated or divided among such parties, REGARDLESS OF THE SOLE, JOINT, CONCURRENT NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT OR RESPONSIBILITY OF SUCH PARTIES, BUYER OR ANY OTHER PERSON.

2.02 Adjustments to Purchase Price. The Purchase Price shall be adjusted as follows:

(a) The Purchase Price shall be adjusted upward by the following:

(1) to the extent actually received by Buyer, the value of all merchantable Stock Tank Oil in storage at the Effective Time, which is sold and which is credited to the Properties and measured by and accurately reflected in the Petro-Hunt Parties’ records as of the Effective Time, such value to be the actual price

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received less taxes deducted. No adjustment to the Purchase Price will be made for Stock Tank Oil sale proceeds received by the Petro-Hunt Parties prior to Closing;

(2) the amount of all verifiable expenditures (including, without limitation, costs, expenses and capital expenditures under applicable operating agreements or other similar arrangements or agreements) actually paid by or that would be owed to the Petro-Hunt Parties (including all costs, expenses, expenditures and charges that would be properly paid to the Petro-Hunt Parties, as operator (if operated by the Petro-Hunt Parties), relating to what would be paid under an applicable joint operating agreement or similar arrangement, as such charges are determined in accordance with Council of Petroleum Accountants Society (COPAS) standards, as relating to the Petro-Hunt Parties’ interests in the Properties or as otherwise agreed by the parties hereto) in accordance with the terms of this Agreement, in connection with the drilling, completing, development, fracture stimulation, equipping and operation of the Properties in accordance with this Agreement for work actually performed and materials, supplies and equipment, solely to the extent attributable to periods on or after the Effective Time;

(3) an amount equal to all paid ad valorem, property, production, severance and similar Taxes (but not including income Taxes) based upon or measured by the ownership of property or the production of hydrocarbons or the receipt of proceeds therefrom, solely to the extent they are attributable to the ownership or operation of the Properties on and after the Effective Time;

(4) an amount equal to the value (based on the price which the Petro-Hunt Parties are entitled to receive on the date(s) that such under production occurred for such production) of the volume of gas less than its ownership percentage which the Petro-Hunt Parties have produced from any of the Wells (“Under Production”);

(5) an amount equal to the actual purchase price paid for any oil, gas and/or other mineral leases, leasehold estates and interests, mineral, royalty, overriding royalty, production payment, reversionary, net profit, contractual leasehold, easements, rights of way and other similar rights, estates, or interests acquired by the Petro-Hunt Parties located within the boundaries of the plat or map set forth as Exhibit “A”, Part III attached hereto after the date of this Agreement but before the Closing (the “Additional

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Properties”) to the extent that the Petro-Hunt Parties have provided Buyer written notice of an offer for the acquisition of Additional Properties and Buyer agreed to accept such Additional Properties within three (3) business days’ notice from receipt of notice from the Petro-Hunt Parties; notwithstanding the above, the parties agree to use commercially reasonable efforts to cooperate in the Petro-Hunt Parties’ efforts to acquire additional interests from joint interest owners in the Properties (provided, however, that notwithstanding the above, none of Buyer, HRC, Petro-Hunt FB/M Successor or Pillar FB/M Successor shall have any liability relating to any failure of the Petro-Hunt Parties to acquire such additional interests); and

(6) any other amount agreed upon by the Petro-Hunt Parties and Buyer.

(b) The Purchase Price shall be adjusted downward by the following:

(1) proceeds and revenues actually received by the Petro-Hunt Parties attributable to the Properties and which are attributable to periods on or after the Effective Time net of royalties and unpaid Property Taxes related to such proceeds and revenues, and that are attributable to the period on or before the Effective Time;

(2) an amount equal to all unpaid Property Taxes based upon or attributable to the Properties prior to the Effective Time, which amount shall be computed based upon such taxes assessed against the applicable portion of the Properties for the preceding calendar year or, if such taxes are assessed on other than a calendar year basis, for the tax related year last ended, but only to the extent liability for such unpaid Taxes is assumed by Buyer;

(3) the aggregate amount of (i) the Title Defect Value (defined below) of the Defective Interests (defined below) and Environmental Defect Value (defined below) of the Environmental Defects (defined below) for which a Purchase Price reduction is elected pursuant to Article V of this Agreement less (ii) any applicable Upward Adjustments (as defined in Section 5.12 hereof), as contemplated in Section 5.12 below;

(4) any amounts paid to the Petro-Hunt Parties, as operator, by other working interest owners under the applicable joint operating agreements (including, without limitation, those amounts determined in accordance with Council of Petroleum Accountants Society (COPAS) standards) as relating to the Properties solely to the extent attributable to the period on or after the Effective Time, or as otherwise agreed by the parties hereto;

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(5) an amount equal to the value of that portion of the Properties with respect to which the Petro-Hunt Parties have produced a share of gas in excess of its ownership percentage and the Petro-Hunt Parties are obligated to reduce their share of production under a gas balancing agreement or similar arrangement to allow under-produced parties to come back into balance (“Over Production”) (the value of such Over Production to be based on the price which could have been received by the Petro-Hunt Parties on the dates(s) that such Over Production occurred; and

(6) any other adjustment provided for under this Agreement, or other amount agreed upon by the Petro-Hunt Parties and Buyer in writing.

(c) Notwithstanding anything to the contrary set forth in this Agreement, any net reduction or net increase in the Purchase Price shall be applied to reduce or increase the amount of cash and shares of Preferred Stock to be delivered according to Section 2.01(b) in the same proportion as set forth in Section 2.01(b) above.

(d) To the extent that any Properties are excluded from the assets and properties to be owned by Petro-Hunt FB/M Successor or Pillar FB/M Successor at the effective time of the Mergers in accordance with the terms and provisions of this Agreement, then any other positive or negative adjustments to the Purchase Price relative to such excluded Properties shall not be applied.

2.03 Allocation of Purchase Price. The Petro-Hunt Parties and Buyer agree that the Purchase Price will be allocated among the Properties as set forth on Exhibit “D” attached hereto and made a part hereof (the “Allocated Value”). For purposes hereof, producing Wells within the Properties will be deemed to include a 180-acre tract allocable to such Well (an “Allocated Unit”); and (i) the “Undeveloped Leases” shall mean the remainder of the Leases (or portions thereof) which are not allocated or included in an Allocated Unit that is attributable to a Well; (ii) “Per Net Mineral Acre Price” is the per net mineral acre price or value set forth for the different areas and regions described in Exhibit “D” attached hereto, and (iii) “net mineral acre” shall mean the Petro-Hunt Parties’ undivided Working Interest in the leasehold estate created by a Lease, multiplied by the number of gross acres covered by such Lease, multiplied by the lessor’s undivided interest in the oil and gas mineral fee estate in the lands covered by such Lease. For the purpose of making the requisite Tax filings under the Internal Revenue Code of 1986, as amended (the “Code”) and the regulations thereunder, the Petro-Hunt Parties and Buyer agree to allocate the Purchase Price (as adjusted pursuant to the provisions hereof) among the assets of the Petro-Hunt FB/M

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Successor and Pillar FB/M Successor, as provided in the Allocated Value. The Petro-Hunt Parties and Buyer each agree to report the federal, state and local income and other Tax consequences of the transactions contemplated herein, and to prepare and file all Tax Returns in a manner consistent with the terms of the Allocated Value and shall not take any position inconsistent therewith upon examination of any such Tax Return, in any refund claim, in any litigation, investigation or otherwise unless required to do so by applicable law. The Petro-Hunt Parties and Buyer shall confer and cooperate on any revisions to the Allocated Value, including reporting any matters that require updating (including adjustments to the Purchase Price) to be consistent with the Allocated Value.

2.04 Tax Treatment of Purchase of Membership Interests. The sale and purchase of the Membership Interests will be treated as a sale of the assets of Petro-Hunt FB/M Successor and Pillar FB/M Successor, as applicable, for United States federal income Tax purposes, as well as all applicable state and local income Tax purposes and shall prepare all Tax Returns in a manner consistent with such Tax treatment and shall not take any Tax position inconsistent therewith.

ARTICLE III.

Representations and Warranties

3.01 Representations and Warranties of the Petro-Hunt Parties. The Petro-Hunt Parties represent and warrant to Buyer the following (provided that the representations and warranties regarding Petro-Hunt Holdings, Pillar Holdings, Petro-Hunt FB/M Successor and Pillar FB/M Successor will be made only at, and as of, the Closing Date; and for purposes hereof, as of Closing, Petro-Hunt FB/M Successor and Pillar FB/M Successor shall not be considered a Petro-Hunt Party making these representations and warranties):

(a) Organization; Membership Interests. The Petro-Hunt Parties are duly organized, validly existing and in good standing under the laws of their respective states of formation and are qualified to do business in the State of North Dakota. As of the Closing, following the Mergers, (i) Petro-Hunt Holdings will be duly organized, validly existing, and in good standing under the laws of the State of Delaware and will own all of the membership interests of Petro-Hunt FB/M Successor and Petro-Hunt Successor, and (ii) Pillar Holdings will be duly organized, validly existing, and in good standing under the laws of the State of Delaware and will own all of the membership interests of Pillar FB/M Successor and Pillar Successor. Each of Petro-Hunt FB/M Successor and Pillar FB/M Successor will be, after the Reorganization, duly organized, validly existing and in good standing under the laws of the State of Texas.

(b) Authority. Each of the Petro-Hunt Parties, Petro-Hunt Holdings and Pillar Holdings have all requisite limited liability company power and authority, to carry on its business as presently conducted, to enter into this Agreement and to perform its obligations under this Agreement.

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(c) Necessary Action; Binding. The execution, delivery and performance of this Agreement has been, and the execution and delivery of all certificates, documents and instruments required to be executed and delivered by the Petro-Hunt Parties, Petro-Hunt Holdings and Pillar Holdings at the Closing, and the consummation of the transactions contemplated hereby shall have been duly authorized by all necessary limited liability company action on the part of such person, and, except as set forth on Schedule 3.01(c), no further authorization is required by any law, statute, regulation, court order or judgment applicable to such person. This Agreement constitutes a legal, valid and binding obligation of the Petro-Hunt Parties, Petro-Hunt Holdings and Pillar Holdings, and each of them, enforceable in accordance with its terms, subject however, to the effects of bankruptcy, insolvency, reorganization, moratorium and similar laws.

(d) No Violation; Consents. Except as set forth on Schedule 3.01(d), the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby will not (i) violate, or be in conflict with, any provisions of the bylaws, limited liability company agreement, partnership agreement, company agreement or other governing documents of the Petro-Hunt Parties, Petro-Hunt Holdings, Pillar Holdings, Petro-Hunt FB/M Successor or Pillar FB/M Successor, (ii) constitute a breach of, or any event of default under, any Contract or agreement to which any of the Petro-Hunt Parties, Petro-Hunt Holdings, Pillar Holdings, Petro-Hunt FB/M Successor or Pillar FB/M Successor, is a party or by which it or its assets or any of the Properties is bound, or constitute the happening of an event or condition upon which any other party to such a contract or agreement may exercise any right or option which will materially adversely affect any of the Properties, and neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby: (A) require consent of any third party or governmental authority to transfer any of the Properties (other than approvals that may be required under the HSR Act, as described below), (B) violate any maintenance of uniform interests provisions, (C) require any other third-party approvals contemplated herein, and (D) trigger any preferential purchase rights, rights of first refusal or other option or rights in favor of third parties, (iii) violate any judgment, decree, order, statute, rule or regulation applicable to the Petro-Hunt Parties, Petro-Hunt Holdings, Pillar Holdings, Petro-Hunt FB/M Successor or Pillar FB/M Successor, or (iv) result in any liability to Buyer under the terms of any Contracts or agreements, comprising duties, liabilities or obligations to which Petro-Hunt FB/M Successor or Pillar FB/M Successor is succeeding as a result of the Mergers.

(e) Litigation; Audits. Except as shown on Schedule 3.01(e), no suit, action or other proceeding to which the Petro-Hunt Parties, Petro-Hunt Holdings, Pillar Holdings, Petro-Hunt FB/M Successor or Pillar FB/M Successor is a party, or which relates to the ownership or operation of the Properties, is pending before any court or governmental agency, or under any arbitration

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proceeding. No other suit, action, demand, proceeding, lawsuit or other litigation is pending or, to the knowledge of the Petro-Hunt Parties, threatened against the Petro-Hunt Parties, Petro-Hunt Holdings, Pillar Holdings, Petro-Hunt FB/M Successor or Pillar FB/M Successor with respect to the Properties. In addition, except as set forth on Schedule 3.01(e), there are no audits currently being conducted by the Petro-Hunt Parties, Petro-Hunt Holdings, Pillar Holdings, Petro-Hunt FB/M Successor or Pillar FB/M Successor or, to the knowledge of the Petro-Hunt Parties, any third person, with respect to, the joint account under any operating or similar agreements related to the Properties.

(f) Royalties; Lease Status; AMIs. Royalties (other than royalties validly held in suspense), rentals and other payments due under the Leases (as amended) or the Properties have been properly and timely paid. Except as disclosed on Schedule 3.01(f), none of the Properties is subject to the terms of any area of mutual interest agreement, most favored nations provisions, or non-competition agreements.

(g) Taxes. The Petro-Hunt Parties have fully and timely paid all Taxes based on or measured by the ownership of the Properties or on the production and severance of oil, gas and other minerals from the Properties or the receipt of proceeds therefrom, that the Petro-Hunt Parties are obligated to pay on or before the date hereof. No taxing authority or agency, domestic or foreign, has asserted or is now asserting or, to the actual knowledge of the Petro-Hunt Parties, threatening to assert against the Properties or the Petro-Hunt Parties any deficiency or claim for additional taxes or interest thereon or penalties in connection therewith. None of the Properties is subject to tax partnership reporting requirements under applicable provisions of the Code or any foreign, state or local law, except to the extent that the Petro-Hunt Parties are or may be taxed as a partnership. Each of Petro-Hunt FB/M Successor and Pillar FB/M Successor is treated for federal tax purposes as disregarded as an entity separate from its owner for purposes of Treasury Regulations Section 301.7701-2(c)(2) and has not made an election to be classified as a corporation for federal, state and local income Tax purposes.

With respect to Taxes and Tax Returns: (i) all material Tax Returns required to be filed by the Petro-Hunt Parties prior to the Effective Time with respect to the Properties have been accurately and completely prepared and timely filed (taking into account all extensions) and all Taxes shown thereon as due have been timely paid, (ii) there are no material liens on any of the Properties that arose in connection with any failure of the Petro-Hunt Parties to pay any Tax, (iii) other than with respect to the tax periods for which Property Taxes (as defined in Section 4.03(b)) are being prorated as between Petro-Hunt FB/M Successor and Pillar FB/M Successor, on the one hand, and Petro-Hunt Successor and Pillar Successor, on the other, pursuant to Section 4.03(b) hereof, for all prior tax periods, all Property Taxes shown as due on such Tax Returns have been timely paid and all other Property Taxes not reported on Tax Returns but that pertain to

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the Properties, which, if not paid, could constitute liens or charges against the Properties, except for Taxes being contested in good faith and by appropriate proceedings, have been paid in the ordinary course, (iv) none of the Petro-Hunt Parties has received any notice of a material claim or inquiry pending by any governmental authority in connection with any Tax or any Tax Return described in clauses (i), (ii) and (iii), (v) no written claim has been made by any governmental authority in a jurisdiction where the Petro-Hunt Parties do not file a Tax Return with respect to the Properties or has previously paid Taxes with respect to the Properties that it is or may be subject to material taxation in that jurisdiction with respect to the Properties, and (vi) except as set forth on Schedule 3.01(g) attached hereto, none of the Properties is held in or subject to an arrangement or agreement that results in any of the Properties being treated as held in or subject to a partnership (or otherwise treated as an interest in any type of entity) for federal, state, or local income tax purposes (with it being acknowledged, for purposes hereof, however, that the Petro-Hunt Parties are or may be treated as a partnership for federal income tax purposes). With respect to Petro-Hunt FB/M Successor and Pillar FB/M Successor, other than Property Taxes, there will be no material amount of Taxes owing by Petro-Hunt FB/M Successor and Pillar FB/M Successor at Closing.

For purposes of this Section 3.01(g) and otherwise in this Agreement, the following terms shall have the meanings described: (1) “Tax Returns” means any report, return, election, document, estimated tax filing, declaration, claim for refund, information returns, or other filing provided to any governmental authority with respect to Taxes including any schedules or attachments thereto and any amendment thereof; and (2) “Taxes”, means all taxes, assessments, charges, duties, levies, imposts, or other similar charges imposed by a governmental authority with respect to ownership of the Properties, including all income, franchise, profits, margins, capital gains, capital stock, transfer, gross receipts, sales, use, transfer, service, occupation, ad valorem, real or personal property, excise, severance, windfall profits, customs, premium, stamp, license, payroll, employment, social security, unemployment, disability, environmental, alternative minimum, add-on, value-added, withholding and other taxes, and assessments, charges, duties, fees, levies, imposts, or other similar charges of any kind, and all estimated taxes, deficiency assessments, additions to tax, penalties and interest with respect to taxes, whether disputed or otherwise, including without limitation transferee liability for any of the preceding described taxes.

(h) Brokers. None of the Petro-Hunt Parties has incurred any 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.

(i) Contracts. Except for those Contracts described on Exhibit “B”, there are no contracts, agreements or commitments that constitute part of the Properties that (x) could reasonably expect to involve aggregate payments by or

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to the Petro-Hunt Parties of $100,000 or more within any 12-month period, or (y) could hinder or restrict any operations or development of the Properties, or (z) is not able to be terminated by the Petro-Hunt Parties upon not more than 90 days prior written notice without penalty or payment for such termination. The Petro-Hunt Parties are not in breach or violation in any material respect of any of such Contracts, and to the knowledge of the Petro-Hunt Parties, neither are any of the counterparties thereto. Each of the Contracts is in full force and effect, enforceable in accordance with its respective terms. The Petro-Hunt Parties have provided to Buyer true, correct and complete copies of or access to all Contracts (including all amendments and supplements thereto) prior to the execution and delivery of this Agreement.

(j) Non-Foreign Status. Neither of the Petro-Hunt Parties is a “foreign person” within the meaning of Section 1445 of the Code.

(k) AFEs and Capital Commitments. The authorities for expenditures, or any other capital commitments, relating to the Properties (collectively, “AFE’s”) set forth on Schedule 3.01(k) attached hereto constitute all of the AFE’s which have been approved by the Petro-Hunt Parties or other working interest owners respecting operations to be conducted on the Properties after the Effective Time; and, to the knowledge of the Petro-Hunt Parties, no other AFE’s, nor other material capital expenditures regarding the Properties have been proposed. All expenses (including all bills for labor, materials and supplies used or furnished for use in connection with the Properties, and all severance, production, ad valorem and other similar taxes) relating to the ownership or operation by the Petro-Hunt Parties of the Properties and for which the Petro-Hunt Parties have received an invoice, have been, and are being, timely paid by the Petro-Hunt Parties (before they become delinquent). The Petro-Hunt Parties are not delinquent in any material respect with regard to their obligations to bear costs and expenses relating to the development and operation of the Properties.

(l) Take or Pay; Imbalances. Schedule 3.01(l) attached hereto sets forth the amount of Take or Pay Liability (as hereinafter defined) and Over Production attributable to the Properties, if any, as of the date of this Agreement. Except as set forth in Schedule 3.01(l), there are no material Hydrocarbon imbalances (whether production, pipeline or deliverable) with respect to the Properties, nor any calls on production or similar obligations, as of the date of this Agreement. For purposes hereof, the term “Take-or-Pay Liability” shall mean any liability pursuant to which the Petro-Hunt Parties are obligated by virtue of any prepayment arrangements under any contract for the sale of hydrocarbons and containing a “take or pay” or similar provision or a production payment or any other arrangement to deliver Hydrocarbons produced from the Properties at some future time without then or thereafter receiving full payment therefor.

(m) Wells. To the knowledge of the Petro-Hunt Parties, except for the Wells described on Exhibit “C”, wellbores and other interests excluded as part of

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the Excluded Assets, and those Wells described on Schedule 3.01(m), there are no dormant, plugged and abandoned (whether temporarily or permanently plugged and abandoned) or other wells located on or allocable to the Properties, and there is no current obligation under applicable laws, regulations, rules of any governmental authorities (including, without limitation, the North Dakota Industrial Commission, Oil & Gas Division) to plug and abandon any Wells or facilities constituting part of the Properties. No Well is subject to penalties on allowable production after the date of this Agreement because of any overproduction or any other violation of applicable laws, rules, regulations or permits or judgments, orders or decrees of any governmental authority that would prevent any Well from being entitled to its full legal and regular allowable production from and after the Effective Time.

(n) Legal Compliance. Except as set forth in Schedule 3.01(n), with regard to the Properties, excluding Environmental Laws (which are the subject of Section 3.01(q) below), the Petro-Hunt Parties are, and the Properties are, in material compliance with all applicable local, state and federal laws, regulations, rules and ordinances, judgments, orders, and decrees (including, without limitation, applicable North Dakota Industrial Commission, Oil & Gas Division, field rules). Excluding Environmental Laws, the Petro-Hunt Parties have received no written notice, whether from a third party or governmental authority, asserting or alleging any material non-compliance with any applicable local, state and federal laws, regulations, rules and ordinances, judgments, orders, or decrees. With respect to those Properties operated by the Petro-Hunt Parties, the Petro-Hunt Parties have (and with respect to those Properties operated by an unaffiliated third party, to the knowledge of the Petro-Hunt Parties, such third party has) obtained all governmental permits necessary for the operation of such Properties as of the Effective Time; and the Petro-Hunt Parties are not (and to the knowledge of the Petro-Hunt Parties, such third party is not) in material default under any such permit, license or agreement relating to the operation and maintenance of the Properties.

(o) Payout Balances. Schedule 3.01(o) contains a complete and accurate list of the status of any “payout” balance (net to the interest of the Petro-Hunt Parties), as of the dates shown in Schedule 3.01(o) for each of the Wells that is subject to a reversion or other adjustment at some level of cost recovery or payout.

(p) Unrecorded Liens and Encumbrances. Except as set forth on Schedule 3.01(p), except for Permitted Encumbrances, none of the Properties are subject to any of the following which are not filed and reflected of record in the real property records of the county where the affected Properties are located: a lien, mortgage, deed of trust, or other claims or encumbrances, in the case of each of the foregoing, created by, through or under the Petro-Hunt Parties, including, without limitation, any carried interests, reversionary interests, production payments, net profits interests, calls on production, or obligations to deliver any

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production from the Properties after the Effective Time without the right to be immediately paid for the same, and to the knowledge of the Petro-Hunt Parties, the Properties are not subject to any such unrecorded interests created by, through, or under any third party.

(q) Environmental. Except as set forth on Schedule 3.01(q):

(i) With regard to the Properties, the Petro-Hunt Parties are, and the Properties are, in material compliance with all applicable Environmental Laws, which compliance includes the possession of all permits and plans required under applicable Environmental Laws and compliance with the terms and conditions thereof, and the making and filing with all applicable governmental entities of all reports, forms and documents and the maintenance of all records required to be made, filed or maintained by Petro-Hunt Parties under any Environmental Law. The Petro-Hunt Parties have not received any written communication (or to its knowledge, oral communication that the Petro-Hunt Parties reasonably believe to be credible) from any person, whether a governmental entity, citizens group, employee or otherwise, that alleges that the Properties are not in compliance with Environmental Laws.

(ii) The Petro-Hunt Parties are not subject to any material liability or material obligation (accrued, contingent or otherwise) to cleanup, correct, abate or to take any response, remedial or corrective action under or pursuant to any Environmental Laws, relating to (i) Environmental Conditions on, under, or about any of the Properties at the present time or, to the knowledge of the Petro-Hunt Parties, in the past, including the air, soil, surface water and groundwater conditions at, on, under, from or near such Properties; or (ii) the past or present use, management, handling, transport, treatment, generation, storage, disposal or release of any Hazardous Materials originating from the Properties, whether on-site at any well within the Properties, or at any off-site location. The Petro-Hunt Parties have not received written notice (or to their knowledge, oral notice that the Petro-Hunt Parties reasonably believe to be credible) of any investigations or actions pending or threatened against the Petro-Hunt Parties (i) alleging the material violation of, or liability or potential liability under, any Environmental Law, or (ii) requiring any action to address Environmental Conditions, with regard to the Properties, in each case, which could reasonably be expected to result in material liability to Petro-Hunt FB/M Successor or Pillar FB/M Successor, and no such investigations or actions are otherwise pending or, to the knowledge of the Petro-Hunt Parties, threatened.

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(iii) Pursuant to Section 4.01(a), the Petro-Hunt Parties have made available to Buyer, or will make available to Buyer, non-confidential studies, assessments, reports, data, results of investigations or audits, analyses and test results, in the possession, custody or control of the Petro-Hunt Parties or any predecessor in interest thereto, relating to (a) past or present Environmental Conditions on, under or about any of the Properties; and (b) any Hazardous Materials used, managed, handled, transported, treated, generated, stored or released by any person on, under, about or from, any of the Properties.

(iv) To the knowledge of the Petro-Hunt Parties, there are no past or present actions, activities, circumstances, conditions, events or incidents (including the release, emission, discharge, presence or disposal of any Hazardous Material), that would be reasonably likely to form the basis of any material environmental liability against the owner or operator of the Properties.

(v) The Petro-Hunt Parties have not placed any underground storage tanks at any of the Properties.

(vi) The representations and warranties made in this Section 3.01(q) are the only representations and warranties of the Petro-Hunt Parties with respect to Environmental Laws, Environmental Conditions, Hazardous Materials and other environmental matters.

(r) Suspense Amounts. Schedule 3.01(r) sets forth a complete and accurate list of the amounts held in suspense relative to the Properties as of the date set forth in such Schedule. To the extent circumstances require, the Petro-Hunt Parties will provide an updated schedule of such suspense amounts to Buyer at Closing.

(s) Lease Maintenance/Earning Requirements. Schedule 3.01(s) sets forth a complete and accurate description of the relevant terms of any Contract or Leases that contains an unusual, unique, exceptional or non-market covenant or condition that must be satisfied in order to earn or avoid forfeiture or loss of any Leases (other than standard lease compliance provisions and “pugh” clauses contained in Leases), or portions thereof.

(t) Accredited Investor. Each of Petro-Hunt Holdings and Pillar Holdings is (i) an “Accredited Investor” as defined in Rule 501(a) of the Securities Act; (ii) acquiring the Preferred Stock and any Conversion Shares only for its own account and not for the account of others, for investment purposes and not on behalf of any other account or person or with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act; and (iii) not an entity formed for the specific purpose of acquiring the Preferred Stock or the Conversion Shares.

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(u) Private Placement of Securities. Each of Petro-Hunt Holdings and Pillar Holdings understands that (i) the Securities are being offered in a transaction not involving any public offering within the meaning of the Securities Act and that the offer and sale of the Securities have not been registered under the Securities Act. Each of Petro-Hunt Holdings and Pillar Holdings understands that the Securities may not be resold or otherwise transferred absent an effective registration statement under the Securities Act except pursuant to an applicable exemption from the registration requirements of the Securities Act and applicable securities laws of the states of the United States; (ii) certificates evidencing the Securities will bear a legend in substantially the following form disclosing the transfer restrictions described above:

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE ACT, OR AN OPINION OF COUNSEL, SATISFACTORY TO THE ISSUER HEREOF, TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT.

As a result of these transfer restrictions, Petro-Hunt Holdings and Pillar Holdings may not be able to readily resell the Securities and may be required to bear the financial risk of an investment in the Securities for an indefinite period of time.

(v) Independent Investigation. Petro-Hunt Holdings and Pillar Holdings have received sufficient information to make an investment decision with respect to the Securities. Petro-Hunt Holdings and Pillar Holdings and their professional advisor(s) have had the full opportunity to ask such questions, receive such answers and obtain such information relevant to making an investment decision with respect to the Securities. To the knowledge of the Petro-Hunt Parties, the Securities have been offered to Petro-Hunt Holdings and Pillar Holdings solely by means of direct contact between Petro-Hunt Holdings, Pillar Holdings, Buyer and HRC.

(w) Risk Factors; Knowledge and Experience. Petro-Hunt Holdings and Pillar Holdings are aware that there are substantial risks incident to accepting the Securities as part of the Purchase Price, including that there is no current market for the Preferred Stock and that the Preferred Stock cannot convert into common shares absent an affirmative vote of the holders of a majority of HRC’s common stock to increase the number of its authorized shares of common stock in an amount sufficient to permit conversion thereof and to approve the issuance of the common stock upon conversion thereof, as well as the risks summarized under

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“Risk Factors” in HRC’s SEC Documents (as hereinafter defined). Petro-Hunt Holdings and Pillar Holdings have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Securities, and Petro-Hunt Holdings and Pillar Holdings have sought such accounting, legal and tax advice as the undersigned has considered necessary to make an informed investment decision. Each of Petro-Hunt Holdings and Pillar Holdings is able at this time and in the foreseeable future to bear the economic risk of a total loss of their investment in the Company represented by the Securities. In making the decision to accept the Securities as part of the Purchase Price, Petro-Hunt Holdings and Pillar Holdings have relied solely upon the representations and covenants of HRC contained in this Agreement, HRC’s SEC Documents (as hereinafter defined), and their independent investigation.

(x) Information; the Reserve Report. The Records and other information concerning the Properties herein comprise files or copies thereof that the Petro-Hunt Parties have used or generated in its normal course of business. To the knowledge of the Petro-Hunt Parties, all historical production and operating information and data provided or made available by or on behalf of the Petro-Hunt Parties to Cawley, Gillespie & Associates, Inc., as reservoir engineers engaged to prepare reserve reports for the Petro-Hunt Parties, is true, correct and complete in all material respects, as of the date such information and data was provided to Cawley, Gillespie & Associate, Inc. To the knowledge of the Petro-Hunt Parties, all such information was prepared and supplied in accordance with customary industry practices, including, without limitation, production reports and historical development and production costs.

(y) Surface Restrictions. Except as set forth in Schedule 3.01(y) (and other than certain standard provisions in Leases which may restrict drilling within certain distances from dwellings and structures), none of the Properties are subject to any written surface waivers or surface or site access restrictions that would prevent Buyer from reasonably enjoying the economic benefits of any Lease.

When used in this Section 3.01, references to “knowledge of the Petro-Hunt Parties” or similar phrases, means the actual knowledge of the Chief Executive Officer, Chief Financial Officer, Chief Legal Officer, Vice President, Operations and Vice President, Land of the Petro-Hunt Parties, after making such reasonable investigation or inquiry as such officer or manager would normally make within the course and scope of his or her duties and responsibilities.

3.02 Representations and Warranties of Buyer. Buyer represents and warrants to the Petro-Hunt Parties, Petro-Hunt Holdings and Pillar Holdings that:

(a) Organization. Each of Buyer and HRC is a duly organized, validly existing corporation organized and in good standing under the laws of the State of its incorporation and is qualified to do business in the State of Texas. Buyer is, or as of the Closing Date, will be qualified to transact business in North Dakota.

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(b) Authority. Each of Buyer and HRC has all requisite power and authority, corporate and otherwise, to carry on its business as presently conducted, to enter into this Agreement, and to perform its obligations under this Agreement.

(c) Necessary Action; Binding. The execution, delivery and performance of this Agreement has been, and the execution and delivery of all certificates, documents and instruments required to be executed and delivered by Buyer or HRC at Closing, and the consummation of the transactions contemplated hereby shall have been duly authorized by all necessary corporate action on the part of the Buyer and HRC and no further authorization is required by any law, statute, regulation, court order or judgment applicable to Buyer or HRC. This Agreement constitutes a legal, valid and binding obligation of Buyer and HRC, in accordance with its terms, subject to the effects of bankruptcy, insolvency, reorganization, moratorium and similar laws.

(d) No Violation. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby will not (i) violate, or be in conflict with, any provisions of Buyer’s or HRC’s articles of incorporation, bylaws or governing documents, (ii) constitute a breach of, or any event of default under, any contract or agreement to which Buyer or HRC is a party or by which it or its assets are bound, or constitute the happening of an event or condition upon which any other party to such a contract or agreement may exercise any right or option which will materially adversely affect the ability of Buyer or HRC to perform its obligations hereunder, and except as set forth in Schedule 3.02(d), neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby: (A) require consent of any third party or governmental authority (other than approvals that may be required under the HSR Act, as described below), or (B) require any other third-party approvals contemplated herein, (iii) violate any judgment, decree, order, statute, rule or regulation applicable to Buyer or HRC, or (iv) result in any liability to the Petro-Hunt Parties, Petro-Hunt Holdings or Pillar Holdings under the terms of any contracts or agreements to which Buyer is a party.

(e) Litigation. No suit, action or other proceeding is pending before any court or governmental agency, or under any arbitration proceeding to which Buyer or HRC is a party and which might materially hinder or impede the ability of Buyer to perform its obligations hereunder. Buyer or HRC shall promptly notify the Petro-Hunt Parties of any such proceeding arising prior to the Closing with respect to which Buyer receives actual written notice.

(f) Brokers. Neither Buyer nor HRC has incurred any liability, contingent or otherwise, for brokers’ or finders’ fees relating to the transactions contemplated by this Agreement for which the Petro-Hunt Parties, Petro-Hunt Holdings or Pillar Holdings shall have any responsibility whatsoever.

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(g) Knowledgeable Buyer. Buyer is a knowledgeable purchaser, owner and operator of oil and gas properties, and has the ability to evaluate (and in fact has evaluated) the Properties and the terms and conditions of this Agreement. In entering into this Agreement, Buyer has relied solely on the express representations and covenants of the Petro-Hunt Parties, Petro-Hunt Holdings and Pillar Holdings in this Agreement, its independent investigation of, and judgment with respect to, the Properties and the terms and conditions of this Agreement and the advice of its own legal, tax, economic, environmental, engineering, land, geological and geophysical advisors and not on any comments or statements of the Petro-Hunt Parties, Petro-Hunt Holdings or Pillar Holdings or any representatives of, or consultants or advisors engaged by the Petro-Hunt Parties, Petro-Hunt Holdings or Pillar Holdings.

(h) Securities. The Preferred Stock to be issued by HRC at Closing will be duly authorized for such issuance and, when issued and delivered by HRC in accordance with the provisions of this Agreement, will be validly issued, fully paid, and non-assessable. At Closing, upon the filing of the Certificate of Designations, the terms and conditions of the Preferred Stock in the Certificate of Designation shall be enforceable in accordance with the terms of the Certificate of Designation. The issuance of the Preferred Stock under this Agreement will not be subject to any preemptive or similar rights. Upon the satisfaction of the conditions to the conversion of the Preferred Stock, the Conversion Shares will be, when issued and delivered by HRC in accordance with the certificate, validly issued, fully paid and non-assessable shares of Common Stock of HRC, not subject to any preemptive or similar rights. Assuming the accuracy of the representations and warranties of the Petro-Hunt Parties set forth in Sections 3.01(t) and 3.01(u) hereof, the Preferred Stock to be issued by HRC at Closing will be issued in a transaction that is exempt from the registration requirements of the Securities Act by virtue of Section 4(2) thereunder.

(i) HRC Documents. As of the date of this Agreement, HRC is current in its obligations to file all periodic reports with the Securities and Exchange Commission (“SEC”) required to be filed by it under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and applicable rules and regulations promulgated thereunder. HRC’s Annual Report on Form-10K for the fiscal year ended December 31, 2011, and any other reports and proxy statements and information filed or furnished by HRC with the SEC since December 31, 2011 (the “SEC Documents”), including any audited or unaudited financial statements and any notes thereto or schedules included therein (the “Financial Statements”), (A) do not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, (B) complied in all material respects with the applicable requirements of the Exchange Act and the Securities Act and the respective rules and regulations promulgated thereunder, (C) the Financial Statements were

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prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto or, in the case of unaudited statements, as permitted by Form 10-Q) and (D) fairly present (subject in the case of unaudited statements to normal, recurring and year-end audit adjustments) in all material respects the consolidated financial position of the business of HRC as of the dates thereof and the consolidated results of its operations and cash flows for the periods then ended. Neither HRC nor any of its material subsidiaries has any liabilities or obligations of any nature (absolute, accrued, contingent or otherwise) that are not properly reflected or reserved against in the Financial Statements to the extent required to be so reflected or reserved against in accordance with GAAP, except for (1) liabilities and obligations that have arisen since December 31, 2011 in the ordinary and usual course of business of an amount and type consistent with past practice, and (2) contractual liabilities and obligations under agreements entered into in the ordinary course of business of an amount and type consistent with past practice or that are disclosed in the SEC Documents.

(j) HRC Capital Stock. As of the date of this Agreement, the authorized capital stock of HRC as of the date hereof consists solely of (a) 336,666,667 shares of HRC’s common stock, of which 216,217,427 shares are issued and outstanding, and (b) 1,000,000 shares of preferred stock, par value $0.0001 per share, no shares of which are issued and outstanding. No other class of capital stock of HRC is authorized, issued, reserved for issuance or outstanding. All outstanding shares of capital stock of HRC are duly authorized, validly issued, fully paid and non-assessable. Except as disclosed in the SEC Documents and for awards under HRC’s 2012 Long-Term Incentive Plan, there are no (i) securities convertible into or exchangeable or exercisable for shares of HRC capital stock, (ii) subscriptions, options, warrants, calls, rights, convertible securities or other contracts, agreements or commitments of any kind or character obligating HRC to issue, transfer or sell any of its capital stock, (iii) any equity equivalents or any agreements, arrangements or understandings granting any person any rights in HRC similar to capital stock. There are no outstanding obligations of HRC to repurchase, redeem or otherwise acquire any HRC capital stock. All securities of HRC have been issued in compliance with all applicable state and federal securities laws.

(k) Anti-Takeover. HRC does not have in effect any stockholder rights plan or similar device or arrangement, commonly or colloquially known as a “poison pill” or “anti-takeover” plan, or other than the provisions of Section 203 of the Delaware General Corporation Law, any similar plan, device or arrangement (a “Rights Plan”), and the board of directors of HRC has not adopted or authorized the adoption of such a plan, device or arrangement.

(l) Controls and Procedures. HRC has implemented and maintains disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) designed to give reasonable assurance that information relating to HRC,

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including its subsidiaries, required to be disclosed in HRC’s SEC Documents is recorded, processed, summarized and reported within the time periods specified by the SEC and is communicated to HRC’s chief executive officer and chief financial officer.

(m) Registration Rights. As of the date hereof, no person has the right, contractual or otherwise, to cause HRC to register under the Securities Act any shares of HRCs common stock or any other HRC capital stock, or to include any such shares in any registration statement of HRC, except pursuant to (i) the Registration Rights Agreement dated as of March 5, 2012 between HRC and Barclays Capital, Inc., (ii) the Registration Rights Agreement dated February 8, 2012 between HRC and HALRES LLC (formerly, Halcón Resources LLC), (iii) the Registration Rights Agreement dated as of August 1, 2012, among CH4 Energy II, LLC, PetroMax Leon, LLC, Petro Texas LLC, and HRC, and which agreement was subsequently amended to add U.S. King King LLC as a party thereto, and (iv) that certain Registration Rights Agreement dated as of June 5, 2008, among the investors party thereto and GeoResources, Inc. Correct and complete copies of the agreements described in (i), (ii) and (iii) have been made available to the Petro-Hunt Parties or are disclosed in the SEC Documents.

(n) Sufficient Funds. Buyer has commitments that ensure it will have prior to the Closing Date, sufficient cash, available lines of credit or other sources of immediately available funds to enable it to timely deliver to the cash portion of the Purchase Price payable hereunder by Buyer at the Closing.

ARTICLE IV.

Covenants

4.01 Covenants of Petro-Hunt Parties. The Petro-Hunt Parties covenant and agree with Buyer that:

(a) Buyer Access. Prior to the Closing, the Petro-Hunt Parties will (i) provide access to the Properties and the Records to Buyer and its representatives, for inspection and evaluation, and (ii) make available to Buyer for examination in a virtual data room or at the office of the Petro-Hunt Parties in Dallas, Texas, title and other records, books, files (including, without limitation, land, lease, title, title opinion, production, operations and regulatory files) and information relating to the Properties, insofar as the same are in possession or reasonable control of the Petro-Hunt Parties. The Petro-Hunt Parties will cooperate with Buyer in Buyer’s efforts to obtain, at Buyer’s sole expense, any additional information relating to the Properties that Buyer may consider useful in this transaction; provided, however, that the Petro-Hunt Parties make no assurances or representations herein to Buyer as to the completeness or accuracy of any of the records of the Petro-Hunt Parties made available to Buyer hereunder. Rather, Buyer should rely entirely on its own examination of the

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records of the Petro-Hunt Parties and its own independent due diligence and other investigations of the Properties, as well as on the representations, warranties and covenants of the Petro Hunt-Parties in this Agreement and the Exhibits and Schedules attached hereto. In the event the Petro-Hunt Parties advise Buyer that it will withhold or be unable to deliver any information as defined herein, the Petro-Hunt Parties will (a) identify to Buyer the general nature or type of information that is being withheld; and (b) use commercially reasonable efforts to obtain consents or approvals necessary to permit disclosure to Buyer, only insofar as the Petro-Hunt Parties may do so without violating legal constraints or any contractual prohibition, obligation, other confidentiality requirement, or other commitment of the Petro-Hunt Parties to a third party. Promptly after execution of this Agreement, the Petro-Hunt Parties will provide to Buyer for inspection any and all historical file information in the possession or control of the Petro-Hunt Parties regarding crude oil, produced water, or Hazardous Materials spilled or disposed of on or off-site of the Properties and the locations thereof; pits and pit closures; substance, materials or equipment burials; land farming; land spreading; underground injection; solid waste disposal sites; and environmental permits and Spill Prevention Control and Countermeasure Plans. The Petro-Hunt Parties are not obligated to commission any updated abstracts, title opinions or additional title information, but shall provide all of the same that is in the possession (or reasonable control) of the Petro-Hunt Parties and shall cooperate with Buyer in Buyer’s efforts to obtain, at Buyer’s reasonable expense, such additional title information as Buyer may reasonably deem prudent. To facilitate Buyer’s full evaluation of the Environmental Condition of any of the subject Properties, as the law or third party rights may dictate, and consistent with Section 5.05 hereof, the Petro-Hunt Parties will permit representatives of Buyer to make such environmental tests on the Properties as may be within immediate dominion, control and authority of the Petro-Hunt Parties, including Phase I environmental assessments. Buyer may not conduct Phase II environmental testing or other invasive surface or subsurface testing on the Properties without the prior written consent of the Petro-Hunt Parties, which consent will not be unreasonably withheld. The Petro-Hunt Parties will cooperate with Buyer in seeking third party operators’ consents to inspect and test on non-operated Properties; provided, however, that there is no assurance that such activities will be permitted by such third party operators. To the extent consent is withheld or refused by Petro-Hunt Parties as to the Properties, the affected Properties may be deemed to be burdened by an Environmental Defect for purposes of this Agreement, and Buyer will have the option to have the affected Properties excluded from this Agreement. If such option is exercised by Buyer, the Purchase Price will be reduced by the Allocated Values of any excluded Properties. The Petro-Hunt Parties shall permit Buyer, at Buyer’s sole expense, to inspect and photocopy all environmental information and records relevant to the Properties under this Section 4.01(a) during reasonable business hours so long as this Agreement is in effect; provided, however, that in the event the Petro-Hunt Parties advise Buyer that it will withhold or be unable to deliver any environmental information hereunder, because the Petro-Hunt Parties cannot do so without violating any legal constraints or contractual prohibition,

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obligation, other confidentiality requirement, or other commitment to a third party; and, as to such withheld environmental information, the Petro-Hunt Parties will (a) identify to Buyer the general nature or type of information that is being withheld; and (b) use commercially reasonable efforts to obtain consents or approvals necessary to permit disclosure to Buyer. Notwithstanding any of the foregoing, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE PETRO-HUNT PARTIES MAKE NO WARRANTY OR REPRESENTATION OF ANY KIND, EITHER EXPRESS OR IMPLIED, WRITTEN OR ORAL, AS TO THE RECORDS, INCLUDING ANY REPRESENTATION OR WARRANTY AS TO THE ACCURACY AND COMPLETENESS OF THE RECORDS. Except with regard to statements, representations and warranties of the Petro-Hunt Parties in this Agreement, Buyer acknowledges that any other conclusions drawn from the Records and other information concerning the Properties are the result of its own independent review and judgment.

(b) Petro-Hunt Parties Cooperation. The Petro-Hunt Parties acknowledge that, following execution of this Agreement, Buyer may enter into debt facilities or engage in offerings of securities requiring registration under the Securities Act and the need for audited financials relating to the Properties. Therefore, from and after the date of this Agreement (including from time to time after the Closing Date), the Petro-Hunt Parties and to the extent appropriate their affiliates, employees, representatives, agents and accountants will promptly provide such cooperation and assistance to Buyer or HRC as they may reasonably request (i) in connection with the preparation of financial statements, reports and filings relating to the transactions contemplated in this Agreement that Buyer or HRC have determined in good faith are required under applicable laws, rules and regulations, including, without limitation, the rules and regulations of the SEC and the New York Stock Exchange (“NYSE”), and (ii) to respond to any inquiries by regulatory authorities, including the SEC and NYSE, relating to the foregoing financial statements, reports and filings. Without limiting the foregoing, such cooperation shall include providing HRC and its employees, representatives, agents and external accountants, with access to, and the right to copy, relevant books, records, files, and documentation in the possession or under control of such the Petro-Hunt Parties or their employees, representatives, agents and accountants (except for those proprietary and confidential tax, engineering and accounting records otherwise excluded from this Agreement). In so doing, the Petro-Hunt Parties will make appropriate persons available to answer questions and execute and deliver or cause to be executed and delivered any reasonable and customary external audit firm representation letters as may be reasonably requested by Buyer or HRC. Buyer will reimburse all reasonable out of pocket expenses incurred in complying with this Section 4.01(b) incurred by the Petro-Hunt Parties or their affiliates.

(c) Certain Pre-Closing Covenants Regarding Properties. From the date of this Agreement and continuing until Closing, the Petro-Hunt Parties (i)

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will cause the Properties to be operated and maintained in a good and workmanlike manner consistent with prior practices, and will pay or cause to be paid all costs and expenses in connection therewith, (ii) will not abandon any Properties, nor will the Petro-Hunt Parties assign, convey, transfer, mortgage or hypothecate any of the Properties (other than the sale of oil and gas from or allocable to the Properties sold in accordance with the applicable Contracts; and other than granting a lien, mortgage or security interest as required under the credit facility of the Petro-Hunt Parties, insofar as such liens, mortgages or security interests are fully released at or prior to Closing), (iii) will maintain insurance now in force applicable to the Properties, (iv) will comply in all material respects with and make filings required by all applicable federal, state and local laws, rules and regulations, including, without limitation, all of the rules, regulations and orders of the North Dakota Industrial Commission (“NDIC”) that are applicable to the Petro-Hunt Parties and the Properties, (v) will perform and comply with all of the material covenants and conditions contained in the Leases, Contracts and agreements relating to the Properties, and (vi) will pay all taxes and assessments due and payable with respect to the Properties prior to the Closing Date. Except for expenditures under AFEs identified on Schedule 3.01(k) hereto or emergency operations (incurred in connection with unforeseen circumstances that the Petro-Hunt Parties in good faith believe involves bodily harm, or imminent loss of life or property), and only insofar as such expenses the Petro-Hunt Parties notify Buyer of in writing within five (5) business days after incurring the same, from the date of this Agreement until the Closing, without Buyer’s written consent (which Buyer will not unreasonably withhold, and to which Buyer will use its commercially reasonable efforts to respond to within three (3) business days of written request by the Petro-Hunt Parties for same), the Petro-Hunt Parties will not conduct or authorize any operation on the Properties with costs in excess of $100,000 as to their portion of any single project on the Properties, or which require AFE approval by working interest owners under applicable operating agreements of an expenditure of, over $100,000 as to their portion thereof.

(d) No New Contracts. From the date of this Agreement and continuing until Closing, without the prior written consent of Buyer (which Buyer will not unreasonably withhold, and to which Buyer will use its commercially reasonable efforts to respond to respond within three (3) business days of written request by the Petro-Hunt Parties for same), and with due consideration of Schedule 3.01(k) hereto, Petro-Hunt Parties shall not enter into any new material agreements or commitments with respect to the Properties, unless such contract is both consistent with past practices and is a contract that can be terminated upon not more than 90 days prior written notice without penalty or payment for such termination; and the Petro-Hunt Parties will not materially modify or terminate any of the Leases, Contracts or other agreements relating to the Properties, and will not voluntarily compromise or waive any amounts or claims payable to the Petro-Hunt Parties due to any casualty loss or any pending or threatened taking related to the Properties.

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(e) Consents. Prior to the Closing Date, the Petro-Hunt Parties will make all necessary requests of third parties to comply with applicable Leases, Contracts and agreements, for consents required to be given or waived, and for preferential rights required to be exercised or waived other than any such consents that are customarily obtained following the closing in transactions of this nature; provided, however, nothing contained in this Section 4.01(e) shall require the Petro-Hunt Parties to pay money in order to obtain such consent.

(f) Maintain Relationships. During the period from the date of this Agreement to the Closing Date, the Petro-Hunt Parties shall use commercially reasonable efforts to maintain its relationships with all suppliers, customers and others having business relationships with the Petro-Hunt Parties with respect to the Properties so that such relationships will be preserved for Buyer on and after the Closing Date.

(g) Notice of Claims. The Petro-Hunt Parties shall give Buyer prompt written notice of any litigation, arbitration or similar legal proceedings initiated by or against the Petro-Hunt Parties, which relates to the Properties or the ability of the Petro-Hunt Parties to proceed to Closing, as well as any threats of litigation, arbitration or similar legal proceedings for which the Petro-Hunt Parties receive written notice (or to the knowledge of the Petro-Hunt Parties, receives oral notice of threatened claims that the Petro-Hunt Parties reasonably believe to be credible).

(h) No Trading. During the period from the date of this Agreement to the Closing Date, or until this Agreement is terminated (as the case may be), the Petro-Hunt Parties, Petro-Hunt Holdings and Pillar Holdings will not engage in any buying, selling, trading or any other transactions related to HRC’s common stock or to any derivatives, options, swaps, hedges, puts, calls, collars or similar instruments relating to HRC’s common stock.

4.02 Covenants of Buyer and HRC. Buyer covenants and agrees with the Petro-Hunt Parties that, prior to Closing:

(a) Buyer shall maintain its corporate status and to assure that as of the Closing, it will not be under any material corporate, legal or contractual restriction that would prohibit or delay the timely consummation of this transaction.

(b) From the date hereof to the Closing, Buyer will conduct its business in a manner consistent with past practice and in material compliance with applicable laws.

(c) Buyer shall give the Petro-Hunt Parties notice of any litigation initiated by or against Buyer, of which Buyer has notice, and which relates to the Properties or the ability of Buyer to proceed to Closing.

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(d) From the date hereof to the Closing, (i) neither Buyer nor HRC will amend or otherwise modify its certificate of incorporation or bylaws in a manner that would hinder or prohibit the transactions contemplated herein, and (ii) HRC will not reclassify, split or subdivide the Common Stock of HRC.

(e) As promptly as practicable after the execution of this Agreement, HRC shall prepare and file with the SEC a proxy statement in preliminary form with all amendments or supplements thereto (the “Proxy Statement”) (together with a supporting recommendation of HRC’s Board of Directors), which includes a solicitation of proxies for the approval of proposals to: (1) increase the authorized Common Stock of HRC in an amount sufficient to permit the conversion of all of the Preferred Stock into Common Stock of HRC in accordance with the terms of the Certificate, and (2) to the extent required under NYSE rules, authorize the issuance of the Common Stock to Petro-Hunt Parties upon conversion of the Preferred Stock (collectively, the “Proposals”). HRC shall use its reasonable best efforts to furnish the information required in and to respond to any comments made by the SEC or the staff of the SEC on the Proxy Statement. HRC shall, as promptly as practicable after filing and the conclusion of SEC review of the Proxy Statement, if any, mail the Proxy Statement to its stockholders and hold a meeting of its stockholder to vote upon the Proposals as soon as practicable after the mailing of the Proxy Statement. Promptly following any approval of the stockholders of HRC of the Proposals, HRC shall prepare and submit to the NYSE (or other principal stock exchange upon which the Common Stock may then be traded) an additional listing application covering the Conversion Shares in accordance with the rules of the exchange and use its reasonable best efforts to obtain the approval of the listing of the Conversion Shares upon such exchange. In the event that the approvals necessary to permit the Preferred Stock to be converted into Common Stock of HRC are not obtained at such special stockholders meeting, HRC shall include a proposal to approve (and the Board of Directors shall recommend approval of) such issuance at a meeting of its stockholders no less than once in each subsequent annual period beginning on January 1, 2013 and ending on the earlier of (1) the date such approval is obtained or made, or (2) December 31, 2020.

(f) Governance Matters.

(i) HRC will, concurrently with the Closing, cause one person designated by the Petro-Hunt Parties (the “Board Representative”) to be elected or appointed to the Board of Directors, subject to satisfaction of all legal and governance requirements regarding service as a director of HRC and to the reasonable approval of the Board of Directors or any committee established by the Board of Directors to address specified governance issues (the “Nominating and Governance Committee”). After such appointment, so long as the Petro-Hunt Parties beneficially own (as determined in accordance with Rule 13d-3 under the

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Exchange Act) at least 5% of the outstanding shares of Common Stock (including for this purpose shares of Common Stock issuable upon conversion of the Preferred Stock), HRC will be required to recommend to its stockholders the election of the Board Representative at HRC’s annual meeting, subject to satisfaction of all legal and governance requirements regarding service as a director of HRC and to the reasonable approval of the Nominating and Governance Committee of the Board of Directors (such approval not to be unreasonably withheld or delayed), to the Board of Directors. If the Petro-Hunt Parties no longer beneficially own (as determined in accordance with Rule 13d-3 under the Exchange Act) the minimum percentage of Common Stock specified in the prior sentence, the Petro-Hunt Parties will have no further rights under this Section 4.02(g), and, at the written request of the Board of Directors, shall use all reasonable best efforts to cause its Board Representative to resign from the Board of Directors as promptly as possible thereafter.

(ii) The Board Representative (including any successor nominee) duly selected in accordance with Section 4.02(g)(ii), shall, subject to applicable law, be HRC’s and HRC’s Nominating and Governance Committee’s nominee to serve on the Board of Directors. HRC shall use all reasonable best efforts to have the Board Representative elected as a director of HRC and HRC shall solicit proxies for each such person to the same extent as it does for any of its other nominees to the Board of Directors.

(iii) The Petro-Hunt Parties shall have the power to designate the Board Representative’s replacement upon the death, resignation, retirement, disqualification or removal from office of such director. The Board of Directors will use its reasonable best efforts to take all action required to fill the vacancy resulting therefrom with such person (including such person, subject to applicable law, being HRC’s and HRC’s Nominating and Governance Committee’s nominee to serve on the Board of Directors, using all reasonable best efforts to have such person elected as director of HRC and HRC soliciting proxies for such person to the same extent as it does for any of its other nominees to the Board of Directors).

(iv) The Board Representative shall be entitled to the same rights, and shall be bound by the same duties and obligations as other non-management members of the Board of Directors of HRC generally.

(g) From the date hereof to the Closing, HRC shall not grant to any other person the right, contractual or otherwise, to cause HRC to register under the Securities Act any shares of HRCs common stock with registration rights that interfere with the registration rights of the Petro-Hunt Parties pursuant to the Registration Rights Agreement in substantially the form attached hereto as Exhibit “F”.

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4.03 Covenants of Buyer and Petro-Hunt Parties as to Taxes

(a) The Petro-Hunt Parties shall timely prepare or cause to be prepared and file or cause to be filed all Tax Returns required to be filed by the Petro-Hunt Parties for Property Taxes (defined below) relating to the Properties due on or before the Closing Date (taking into account valid extensions). All such Tax Returns shall be prepared in accordance with past practices of the Petro-Hunt Parties with respect to Tax Returns for the Properties. Buyer shall timely prepare or cause to be prepared and file or cause to be filed in customary fashion all Tax Returns for Property Taxes relating to the Properties due after the Closing Date (taking into account valid extensions) for any period that ends on, before, or after the Closing Date.

(b) All Property Taxes related to the Properties shall be pro-rated between Petro-Hunt Successor and Pillar Successor, on the one hand, and Petro-Hunt FB/M Successor and Pillar FB/M Successor, on the other, as of the Effective Time. Petro-Hunt Successor and Pillar Successor shall be charged for and obligated to pay and shall indemnify Petro-Hunt FB/M Successor and Pillar FB/M Successor against all such Property Taxes based on ownership of the Properties prior to the Effective Time, as contemplated in the adjustments under Section 2.02(b). Petro-Hunt FB/M Successor and Pillar FB/M Successor shall be charged for and obligated to pay and shall indemnify Petro-Hunt Successor and Pillar Successor against all such Property Taxes based on ownership of the Properties after the Effective Time. For purposes of the provisions of this Section 4.03(b), (i) the proration of Property Taxes shall be computed on a per diem or actual production basis, whichever is applicable, and (ii) the proration of any other Taxes not described in (i) shall be computed on an actual closing of the books basis as of the Closing Date recognizing general federal income tax principles. Each party will be entitled to any refund, credit or offset with respect to Property Taxes paid by that party pursuant to this Section 4.03. If a party receives a refund, credit or offset to which the other party is entitled, the party receiving the refund, credit or offset shall forward payment for same to the party entitled to the refund, credit or offset within 30 business days after receipt. For purposes of this Agreement and this Section 4.03, “Property Taxes” means ad valorem, property, excise, severance, production or similar Taxes (including any interest, fine, penalty, or additions to Tax imposed by a governmental authority in connection with such Taxes) based upon operation or ownership of the Properties or the production of hydrocarbons therefrom, but excluding all other Taxes.

(c) To the extent legally permissible and desirable, the Petro-Hunt Parties and Buyer will reasonably cooperate and cause their respective affiliates, officers, employees, agents, auditors and representatives to reasonably cooperate in preparing and filing all Tax Returns, including maintaining and making available to each other all records necessary in connection with Taxes.

(d) To the extent there may be any, all sales taxes occasioned by the Mergers or the sale of the Membership Interests hereunder and all documentary, filing and recording fees required in connection with the filing and recording of

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any assignments (the “Transfer Taxes”) shall be paid by Buyer. Each party shall reasonably cooperate with the other to help minimize the Transfer Taxes through any reasonable means that conforms to the law.

(e) For purposes of this Section 4.03 and this Agreement, it is specifically understood and agreed that, other than the Transfer Taxes described in Section 4.03(d), above, any and all income, gains, franchise and similar Taxes resulting from the sale by Petro-Hunt Holdings and Pillar Holdings of the Membership Interests at Closing shall be the obligation and liability of the Petro-Hunt Parties and the Petro-Hunt Parties shall indemnify and hold Buyer harmless from all such Taxes.

4.04 Hart-Scott-Rodino; Regulatory Approvals. The parties shall cooperate with each other and use their respective commercially reasonable efforts to promptly prepare and file all necessary documentation (including Notification and Report Forms, if required, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”) (which, if required, shall be filed within ten business days of the date hereof)), to effect all applications, notices, petitions and filings, to obtain as promptly as practicable all permits, consents, approvals, clearances and authorizations of all third parties and governmental authorities that are necessary or advisable to consummate the transactions contemplated by this Agreement, to use reasonable best efforts to cause the expiration or termination of any applicable waiting periods, or receipt of required authorizations, as applicable, under the HSR Act, to supply as promptly as practicable any additional information and documentary material that may be requested pursuant to the HSR Act, and to comply with the terms and conditions of all such permits, consents, approvals, clearances and authorizations of all such governmental authorities. Each of the Petro-Hunt Parties and Buyer shall have the right to review in advance, and, to the extent practicable, each will consult the other on, in each case subject to applicable laws relating to the exchange of information, all the information relating to the Petro-Hunt Parties and Buyer, as the case may be, and any of their respective subsidiaries, which appear in any filing made with, or written materials submitted to, any third party or any governmental authority in connection with the transactions contemplated by this Agreement. In exercising the foregoing right, both parties shall act reasonably and as promptly as practicable. Each of the Petro-Hunt Parties and Buyer shall consult with each other with respect to the obtaining of all permits, consents, approvals, clearances and authorizations of all third parties and governmental authorities necessary or advisable to consummate the transactions contemplated by this Agreement and each will keep the other reasonably apprised of the status of matters relating to completion of the transactions contemplated by this Agreement, including promptly furnishing the other party with copies of notices or other communications received by the Petro-Hunt Parties or Buyer, as the case may be, or any of their respective subsidiaries, from any third party and/or any governmental entity with respect to such transactions. Notwithstanding the foregoing, nothing in this Agreement shall be deemed to require the Petro-Hunt Parties or Buyer to take any action, or commit to take any action, or agree to any condition or restriction, in connection with obtaining the foregoing permits, consents, approvals, clearances and authorizations of third parties

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or governmental authorities, that would reasonably be expected to have a material adverse effect on the Petro-Hunt Parties or Buyer. Each of the Petro-Hunt Parties and Buyer shall promptly advise the other party upon receiving any communication from any governmental authority the consent or approval of which is required for consummation of the transactions contemplated by this Agreement that causes such party to believe that there is a reasonable likelihood that any requisite approval will not be obtained or that the receipt of any such approval may be materially delayed, and, to the extent permitted by applicable law, shall promptly (and in any event within 24 hours) provide the other party with a copy of such communication.

ARTICLE V.

Title and Defects

5.01 Defensible Title.

As used herein, “Defensible Title” means, as to each of the Properties to which an Allocated Value (or which Property has no Allocated Value but affects one or more Properties with Allocated Values) has been assigned in Exhibit “D”, title that:

(1) is free and clear of liens, mortgages, or encumbrances, other than Permitted Encumbrances;

(2) with respect to each Well (and associated Allocated Unit), (i) obligates the Petro-Hunt Parties (throughout the life of the applicable Leases) to bear costs and expenses relating to the maintenance, development and operation of such Well in an amount not greater than the Working Interest set forth on Exhibit “C” with respect to such Well, unless there is a corresponding and proportionately equal increase in the Net Revenue Interest attributable to such Well (and associated Allocated Unit) and (ii) entitles the Petro-Hunt Parties (throughout the life of the Leases) to a Net Revenue Interest of not less than the Net Revenue Interest set forth for such Well on Exhibit “C”;

(3) with respect to each Undeveloped Lease, (i) obligates the Petro-Hunt Parties (throughout the life of such Undeveloped Lease and as to all depths (unless specific depth limitations are otherwise expressly provided in Exhibit “A”, Part I)) to bear costs and expenses relating to the maintenance, development and operation of such Undeveloped Lease in an amount not greater than the Working Interest set forth on Exhibit “A”, Part I with respect to such Undeveloped Leases, unless there is a corresponding and proportionately equal increase in the Net Revenue Interest attributable to such Undeveloped Lease, and (ii) entitles the Petro-Hunt Parties (throughout the life of such Undeveloped Lease and as to all

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depths (unless specific depth limitations are otherwise expressly provided in Exhibit “A”, Part I)) to a Net Revenue Interest of not less than the Net Revenue Interest set forth for such Undeveloped Lease on Exhibit “A”, Part I; and

(4) with respect to each Undeveloped Lease, results in the Petro-Hunt Parties owning not less than the number of net mineral acres attributable to such Undeveloped Lease (as to the depths set forth on Exhibit “A”, Part I, and excluding, for purposes hereof, net mineral acres allocable to the Allocated Units for the Wells) equal to the net mineral acres for such Undeveloped Lease set forth on Exhibit “A”, Part I.

5.02 Permitted Encumbrances.

As used herein “Permitted Encumbrances” means the following items relating to the Properties, provided that they do not operate to (i) increase the Working Interest of Petro-Hunt Parties set forth on Exhibit “C” or Exhibit “A”, Part I, as applicable, for any of the Properties without a corresponding increase in the applicable Net Revenue Interest, or (ii) decrease in the Net Revenue Interest of Petro-Hunt Parties set forth on Exhibit “C” or Exhibit “A”, Part I, as applicable, for any Property:

(a) lessors’ royalties, overriding royalties, net profits interests, production payments, reversionary interests and similar burdens;

(b) preferential rights to purchase and required third party or governmental consents to assignments and similar agreements which are not described in item (e) below with respect to which prior to Closing (i) waivers or consents are obtained from the appropriate parties, or (ii) the appropriate time period for asserting such rights has expired without an exercise of such rights;

(c) liens for taxes or assessments not yet delinquent;

(d) liens, charges, or other encumbrances in favor of operators relating to obligations not yet due or pursuant to which the Petro-Hunt Parties are not in default;

(e) 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 that are customarily obtained after closing;

(f) right of re-assignment in the event of intended release or surrender of an interest;

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(g) easements, rights-of-way, servitudes, permits, surface leases and other rights in respect of surface operations, pipelines, grazing, logging, canals, ditches, reservoirs or the like; and easements for streets, alleys, highways, pipelines, telephone lines, power lines, railways and other easements and rights-of-way, on, over or in respect of any of the Properties, that are not such as to interfere materially with the operation, development, value or use of the Properties;

(h) rights reserved to or vested in any municipality or governmental, statutory or public authority to control or regulate any of the Properties in any manner, and all applicable laws, rules and orders of governmental authority; or

(i) any (1) undetermined or inchoate liens or charges constituting or securing the payment of expenses which were incurred incidental to maintenance, development, production or operation of the Properties or for the purpose of developing, producing or processing Hydrocarbons therefrom or therein and (2) materialman’s, mechanics’, repairman’s, employees’, contractors’ or other similar liens, security interests or charges for liquidated amounts arising in the ordinary course of business incidental to construction, maintenance, development, production or operation of the Properties or the production or processing of Hydrocarbons therefrom, that, in either case, are not delinquent and that will be paid in the ordinary course of business;

(j) any liens or security interests created by law or reserved in oil and gas mineral leases for royalty, bonus or rental or for compliance with the terms of the Properties and any mortgage, lien or security interest affecting any Property that is discharged by the Petro-Hunt Parties at or prior to the Closing;

(k) the terms of all Contracts described on Exhibit “B”; and

(l) such Title Defects or other defects as Buyer has waived in writing.

5.03 Title Defect.

A Property shall be deemed to have a “Title Defect” if the Petro-Hunt Parties do not have Defensible Title thereto. Notwithstanding the foregoing, none of the following shall be considered a Title Defect:

(a) defects in the chain of title consisting of the mere failure to recite marital status in a document or successors of heirship proceedings in a document, unless Buyer provides affirmative evidence that such failure or omission has resulted in another party’s actual and superior claim of title to the relevant Property;

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(b) lack of a survey, unless a survey is expressly required by applicable laws or applicable contracts or agreements;

(c) defects that have been cured by actual adverse possession under applicable statutes of limitation for adverse possession;

(d) defects that have been cured prior to Closing, to Buyer’s reasonable satisfaction;

(e) proof of representative capacity on behalf of a corporation, partnership, limited liability company or trust, unless it is clear from other documentation that a signatory party has not signed a document in the proper representative capacity;

(f) defects or irregularities resulting from or relating to probate proceedings or the lack thereof, which defects or irregularities the Petro-Hunt Parties have cured through the provision of evidence of title that is otherwise reasonably satisfactory in form and substance to Buyer; and

(g) defects based solely on the existence of prior oil and gas leases relating to the Lands that have expired and are no longer in force and legal effect but have not been released of record.

5.04 Defective Interests and Environmental Defects.

(a) As used herein “Defective Interest” means

(1) that portion of a Property affected by a Title Defect; or

(2) that portion of the Properties adversely affected by the default of the Petro-Hunt Parties, or any other party, under an obligation of the Leases or Contracts.

(b) As used herein, “Title Defect Value” shall mean, with respect to a Defective Interest, the amount by which the value of such Defective Interest is impaired as a result of the existence of one or more Title Defects, which amount shall be determined as follows:

(1) If the Title Defect results from the existence of a lien or encumbrance (other than a Permitted Encumbrance), the Title Defect Value shall be an amount sufficient to discharge such lien, not to exceed the Allocated Value of the Defective Interest.

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(2) If the Title Defect is based on a deficiency in the net mineral acres of the Petro-Hunt Parties in an Undeveloped Lease from that set forth on Exhibit “A”, Part I for such Undeveloped Lease, then the Title Defect Value shall be an amount equal to the applicable Per Net Mineral Acre Price for such Undeveloped Lease multiplied by the number of net mineral acres the Petro-Hunt Parties are so deficient in such Undeveloped Lease.

(3) If the Title Defect is based on a deficiency in the Net Revenue Interest of the Petro-Hunt Parties in a Defective Interest from that set forth for such Defective Interest on Exhibit “A”, Part I or Exhibit “C”, as applicable, then the Title Defect Value shall be an amount equal to the Allocated Value for such Defective Interest multiplied by the difference of (a) 1 minus (b) a fraction, the numerator of which is the actual Net Revenue Interest of the Petro-Hunt Parties in such Defective Interest, and the denominator of which is the Net Revenue Interest for such Defective Interest set forth in Exhibit “A”, Part I or Exhibit “C”, as applicable.

(4) If the Title Defect results from any matter not described in paragraphs (1), (2), or (3) above, the Title Defect Value shall be an amount equal to the difference between the value of the Defective Interest with such Title Defect and the value of such Defective Interest without such Title Defect (taking into account the Allocated Value of such Defective Interest); provided, however, that if such Title Defect is reasonably susceptible of being cured as provided in this Agreement, the Title Defect Value shall be the reasonable cost and expense of curing such Title Defect, if less, and such Title Defect Value shall never exceed the Allocated Value of such Defective Interest.

(5) The Title Defect Value with respect to a Defective Interest shall be determined without duplication of any costs or losses included in another Title Defect Value hereunder. For example, but without limitation, if a lien affects more than one Defective Interest or the curative work with respect to one Title Defect results (or is reasonably expected to result) in the curing of any other Title Defect affecting the same or another Defective Interest, the aggregate amount necessary to discharge such lien or the cost and expense of such curative work shall only be considered once with respect to all applicable Title Defect Values and Defective Interests.

(6) The Title Defect Value attributable to a Defective Interest shall not exceed the Allocated Value of such Defective Interest. All Title Defect Values and related Purchase Price adjustments shall be made without duplication.

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(c) Environmental Defects and Environmental Defect Value. As used herein “Environmental Defect” means any of the following conditions associated with a Property: (1) Noncompliance by the Petro-Hunt Parties with applicable Environmental Laws (defined in Section 8.04 below), or (2) any Environmental Condition that exists on, at or under any of the Properties, including, without limitation, those that may be in violation or require action under any Environmental Law. As used herein “Environmental Condition” means any pollution, contamination, degradation, damage or injury caused by, related to, arising from, or in connection with the generation, handling, use, treatment, storage, transportation, disposal, discharge, release, or emission of any Hazardous Materials (defined below) or Contaminants (as defined below) on, at or under the Properties. As used herein “Environmental Defect Value” means, with respect to each Environmental Defect, its Lowest Cost Response. As used herein “Hazardous Materials” means any (i) toxic or hazardous materials or substances; (ii) solid wastes, including asbestos, polychlorinated biphenyls, mercury, flammable or explosive materials; (iii) radioactive materials, including naturally occurring radioactive material (“NORM”); and (iv) any other chemical, pollutant, contaminant, substance or waste that is regulated under any Environmental Laws. As used herein, “Contaminants” means any other contaminant (including, without limitation, any petroleum or petroleum-derived substances or wastes, or chlorides) not otherwise considered to be Hazardous Materials but which would require remediation, clean-up or other action, if spilled or were part of an uncontrolled released. As used herein “Lowest Cost Response” means the response required or allowed under Environmental Laws that cures, remediates, removes or remedies the applicable present condition alleged in a notice of an Environmental Defect at the lowest cost (assuming that the affected Property continues to be used as an oil and gas property) sufficient to comply with Environmental Laws (and is also consistent with general industry standards) and to address any Environmental Condition as compared to any other response that is allowed under Environmental Laws, including, without limitation, costs of remediation and clean-up, the cost of any penalties and fines, and the cost of changes or actions that must be taken (including, without limitation, monitoring, refurbishing, installations, or other actions) to comply with such Environmental Laws and to address any Environmental Condition.

5.05 Buyer’s Right of Inspection. From the date of this Agreement and continuing until Closing, the Petro-Hunt Parties will authorize Buyer and its duly authorized representatives, contractors and subcontractors (collectively “Representatives”) the right of entry to operated and non-operated Properties, subject to the terms of Section 4.01(a) (“Permitted Activities”), subject to obtaining consent of any third party operator, if the Petro-Hunt Parties are not the operator of the Property, and subject further to the following conditions:

(a) Buyer shall notify the Petro-Hunt Parties at least 24 hours prior to such entry of its desire to enter the selected portion(s) of the Properties to conduct Permitted Activities.

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(b) Upon receipt of such notice, the Petro-Hunt Parties shall allow Buyer and its Representatives to enter the Properties during normal business hours to conduct Permitted Activities. The Permitted Activities of Buyer and its Representatives shall not unreasonably interfere with the operations or business of the Petro-Hunt Parties, and Buyer and its Representatives shall not remain on the Properties subsequent to the completion of their Permitted Activities. The Petro-Hunt Parties or a representative of the Petro-Hunt Parties shall have the right to be present for any inspection of the Properties conducted by Buyer or its Representatives.

(c) Upon receipt of notice hereunder, Buyer’s authorized representatives may (i) consult with the Petro-Hunt Parties and their third-party operator’s agents and employees during reasonable business hours concerning those third parties’ operations on the Properties, and (ii) conduct, at Buyer’s sole risk and expense, on-site inspections, environmental assessments, reasonable tests and inventories of the non-operated portions of the Properties.

(d) The Permitted Activities shall be conducted in a manner to not materially interfere with the normal operations of the Petro-Hunt Parties.

(e) The Permitted Activities shall be conducted in accordance with all applicable Environmental Laws, rules and regulations, and commonly accepted standards for conducting such activities. Upon completion of its activity, Buyer and its Representatives shall restore the Property to its condition existing as of Buyer’s entry thereon and remove all equipment and materials that were brought onto the Properties by Buyer and its Representatives. As soon as reasonably possible, Buyer shall provide the Petro-Hunt Parties with a copy of all written reports prepared for Buyer as a result of conducting Permitted Activities.

(f) Buyer will be responsible for the conduct and protection of all of its personnel and representatives involved in the Permitted Activities. The Petro-Hunt Parties shall not have any right to control and shall not exercise any responsibility with respect to the Permitted Activities conducted by Buyer on the Properties, except that the Petro-Hunt Parties shall have the right (but not the obligation) to prevent any damage to its property or disruption to its business. Buyer and its Representatives will undertake all measures reasonably necessary to protect all persons conducting the Permitted Activities on the Properties and any other persons who may enter the Properties during or after completion of the Permitted Activities.

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(g) Neither Buyer nor its Representatives shall contact any federal, state, or local agency with respect to environmental conditions discovered on the Properties without the prior written permission and consent of the Petro-Hunt Parties, except as may be otherwise required by applicable law, rule or regulation. To the extent practicable, any proposal of Buyer or its Representatives to contact any federal, state, or local agency shall be delivered in writing to the Petro-Hunt Parties for review and approval, except as may be otherwise required by applicable law, rule or regulation.

(h) BUYER AGREES TO FULLY INDEMNIFY, DEFEND, AND HOLD THE PETRO-HUNT PARTIES, THEIR AFFILIATES AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, CONTRACTORS, AND THIRD PARTY OPERATORS OF ANY OF THE INTERESTS OF THE PETRO-HUNT PARTIES IN THE PROPERTIES HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, LIABILITIES, CAUSES OF ACTIONS, JUDGMENTS OR DEFENSE EXPENSES (INCLUDING REASONABLE ATTORNEYS FEES AND EXPERT EXPENSES) OF ANY PERSON, INCLUDING BUYER, ITS AFFILIATES AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS AND CONTRACTORS, ATTRIBUTABLE TO OR ARISING FROM THE PERMITTED ACTIVITIES, INCLUDING (I) PERSONAL INJURY OR DEATH OF ANY PERSON, (II) ACTUAL DAMAGE TO THE PROPERTY OF THE PETRO-HUNT PARTIES, BUYER OR ANY OTHER PERSON, AND (III) ALL OTHER ACTUAL DAMAGES, ATTRIBUTABLE TO OR ARISING FROM THE PERMITTED ACTIVITIES, REGARDLESS OF THE NEGLIGENCE OF ANY PARTY, EXCEPT THERE SHALL BE NO LIABILITY OF BUYER TO THE EXTENT ANY SUCH INJURY, DAMAGE, OR LOSS IS CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PETRO-HUNT PARTIES, OR ANY OF THE CONTRACTORS, THIRD PARTY OPERATORS, OR OTHER INVITEES OF THE PETRO-HUNT PARTIES, NOR SHALL THERE BE ANY LIABILITY OF BUYER TO THE PETRO-HUNT PARTIES BASED ON THE INFORMATION OBTAINED; AND PROVIDED, HOWEVER, THAT NOTWITHSTANDING ANYTHING STATED HEREIN TO THE CONTRARY, ANY DAMAGES COVERED HEREBY SHALL BE LIMITED TO ACTUAL DAMAGES, AND SHALL NOT INCLUDE ANY CONSEQUENTIAL, SPECIAL, PUNITIVE, OR INDIRECT DAMAGES, EXCEPT TO THE EXTENT SUCH DAMAGES ARE PAYABLE BY THE PETRO-HUNT PARTIES TO AN UNAFFILIATED THIRD PARTY.

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5.06 Notice of Defective Interests and Environmental Defects

(a) Notice; Thresholds. Buyer shall give the Petro-Hunt Parties notice of Defective Interests and Environmental Defects not later than five (5) business days prior to Closing. Such notice shall be in writing and shall include (i) a description of the Defective Interest or the Environmental Defect, as applicable, (ii) the reason Buyer believes such Properties to be a Defective Interest or affected by an Environmental Defect, and (iii) to the extent known or susceptible to reasonable estimation, the Title Defect Value or Environmental Defect Values asserted by Buyer with respect to the asserted Defective Interest or Environmental Defect, as applicable. Buyer’s notice(s) of Defective Interests shall not be effective unless and until (i) the asserted individual Title Defect Value of any single Defective Interest exceeds $75,000 (and to the extent such threshold is exceeded, the entire Title Defect Value for such Defective Interest shall be recoverable), and (ii) the total of the asserted Title Defect Values for the asserted Defective Interests when combined with the total of the asserted Environmental Defect Values for all asserted Environmental Defects exceeds an aggregate threshold equal to one-half percent (0.5%) of the Purchase Price (and if such aggregate 0.5% threshold is exceeded, the entire Title Defect Value for such Defective Interests shall be recoverable). Buyer’s notice(s) of Environmental Defects shall not be effective unless and until (x) the asserted Environmental Defect Value of any single Environmental Defect exceeds $75,000 (and to the extent such threshold is exceeded, the entire Environmental Defect Value for such Environmental Defect shall be recoverable) and (y) the total of the asserted Environmental Defect Values for all of the asserted Environmental Defects when combined with the total of all of the asserted Title Defect Values for all asserted Defective Interests exceeds an aggregate threshold equal to one-half percent (0.5%) of the Purchase Price (and if such 0.5% threshold is exceeded, the entire Title Defect Value for such Defective Interests shall be recoverable). Buyer shall be deemed to have waived all Defective Interests of which the Petro-Hunt Parties has not been given such notice within the time period prescribed in this Section 5.06(a). Except for claims that Buyer would have for breach of the representations and warranties in Section 3.01(q) and except with regard to any of the Petro-Hunt Party Obligations (as hereinafter defined), Buyer shall be deemed to have waived all Environmental Defects of which the Petro-Hunt Parties have not been given such notice within the time period prescribed in this Section 5.06(a).

(b) Right to Counter-Notice. Upon being notified by Buyer pursuant to Section 5.06(a) of any asserted Defective Interest or Environmental Defect, the Petro-Hunt Parties shall give written counter-notice to Buyer within three (3) business days (i) that the Petro-Hunt Parties either (A) will attempt to correct the asserted Defective Interest or remediate the asserted Environmental Defect or (B) do not intend to attempt to correct the asserted Defective Interest or remediate the asserted Environmental Defect; (ii) whether the Petro-Hunt Parties agree or disagree that the asserted Defective Interest or Environmental Defect exists, and (iii) whether the Petro-Hunt Parties agree or disagree with the Title Defect Value or Environmental Defect Value asserted by the Buyer. If the Petro-Hunt Parties notify Buyer that it does not intend to attempt to correct the asserted

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Defective Interest or remediate the asserted Environmental Defect, then (x) Buyer may elect to reduce the Purchase Price by the Title Defect Value or the Environmental Defect Value asserted by Buyer, or (y) if Buyer does not elect (x) above, then solely as to Properties affected by Environmental Defects, Buyer or the Petro-Hunt Parties may elect to exclude any affected Properties from the properties and assets to which Petro-Hunt FB/M Successor or Pillar FB/M Successor succeeds as a result of the Mergers. If the affected Properties are to be excluded, the Purchase Price at Closing will be reduced by the Allocated Value for such Properties and such Properties shall thereafter be considered Excluded Assets. If the Petro-Hunt Parties fails to give a counter-notice hereunder prior to Closing, the Petro-Hunt Parties will be deemed to have waived any right to dispute or disagree with the Defective Interest or Environmental Defect noticed under this Section 5.06(b), and (x) Buyer may elect to reduce the Purchase Price by the Title Defect Value or the Environmental Defect Value asserted by Buyer or (y) if Buyer does not elect (x) above, then solely as to Properties affected by Environmental Defects, Buyer or the Petro-Hunt Parties may elect to exclude any affected Properties from the properties and assets to which Petro-Hunt FB/M Successor or Pillar FB/M Successor succeeds as a result of the Mergers.

(c) Cure Period. If the Petro-Hunt Parties give counter-notice of intent to attempt to correct any asserted Defective Interest or remediate any asserted Environmental Defect, under 5.06(b) above, and assuming this Agreement is not otherwise terminated in accordance with the terms hereof, the Petro-Hunt Parties shall have a period of 150 days from the receipt of Buyer’s notice (the “Cure Period”) to attempt to correct such asserted Defective Interest or remediate the asserted Environmental Defect at their own expense using the Lowest Cost Response as provided herein. Unless the parties agree otherwise in writing, the Closing shall not be extended, but to the extent and only to the extent that the Title Defect Value allocated to the Defective Interest when combined with the value of all other asserted Defective Interests and Environmental Defects exceeds the aggregate threshold of one-half percent (0.5%) of the Purchase Price (and if the aggregate threshold is met, the entire Title Defect Value for such Defective Interest shall be recoverable), a downward adjustment of the Purchase Price shall be made according to Section 2.02(b)(3), taking into account applicable thresholds. Within the Cure Period, if the Petro-Hunt Parties subsequently cures any asserted Defective Interest or remediates an Environmental Defect, the cured Title Defect Value or Environmental Defect Value will either be credited to the Petro-Hunt Parties in the Final Settlement according to Section 8.01 hereof; or, if an affected Property was excluded from the properties and assets to which Petro-Hunt FB/M Successor or Pillar FB/M Successor succeeds as a result of the Mergers, then subject to the other terms and conditions of this Agreement the affected Property shall be deemed to be included in the properties and assets to which Petro-Hunt FB/M Successor and Pillar FB/M Successor succeed as a result of the Mergers as of the effective date of the Mergers at a supplemental closing held within ten (10) days following the end of the Cure Period (and to the extent requested by Buyer, the parties shall execute such amendments to the articles of merger or execute and deliver such conveyances as may be necessary to accomplish such result).

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(d) Dispute on Existence of Defect. If the Petro-Hunt Parties give counter-notice according to Section 5.06(b) and dispute a Defective Interest or Environmental Defect, then its existence, Title Defect Value, or Environmental Defect Value will be determined by arbitration pursuant to Section 5.07 hereof.

(e) Applicable Portions of Properties. To the extent possible, the parties will only include that portion of the Properties actually affected by the Defective Interests or Environmental Defect in determining how to treat the Properties under this Agreement.

5.07 Arbitration Procedures. If any matter is required by this Article to be arbitrated, such arbitration shall be conducted as set forth in this Section 5.07.

(a) The parties shall jointly select an acceptable, independent person to serve as the sole arbitrator under this Agreement. The arbitrator for any Title Defects submitted for arbitration shall be an oil and gas title attorney licensed in the State of North Dakota and Board Certified by the State Bar of North Dakota in the area of Oil, Gas & Energy Resource Law with at least ten (10) years’ experience with oil and gas title review regarding properties in North Dakota. The arbitrator for any Environmental Defect submitted for arbitration shall be a licensed environmental attorney with at least ten (10) years’ experience, and specific experience regarding environmental issues associated with oil and gas properties. If the parties are unable to agree upon the designation of a person as arbitrator under this Section 5.07, then either the Petro-Hunt Parties or Buyer, or both such parties, may in writing request the American Arbitration Association to appoint a qualified, independent arbitrator, based on the criteria described above.

(b) Any arbitration hearing shall be held at a place acceptable to the arbitrator in Dallas, Texas.

(c) The arbitrator shall settle disputes regarding the existence of Defective Interests and/or the Title Defect Value thereof and of Environmental Defects and/or the Environmental Defect Value thereof and the Petro-Hunt Parties’ attempts to correct any Title Defects or remediate any Environmental Defects in accordance with the then in force Commercial Arbitration Rules of the American Arbitration Association (“AAA Rules”). Such arbitrator shall hear all arbitration matters arising under this Article V. The decision of the arbitrator shall be binding upon the parties, and may be enforced in any court of competent jurisdiction. The Petro-Hunt Parties and Buyer, respectively, shall bear their own legal fees and other costs incurred in presenting their respective cases. The charges and expenses of the arbitrator shall be shared equally by the Petro-Hunt Parties and Buyer.

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(d) The arbitration shall commence within ten days after the arbitrator is selected as set forth in Section 5.07(a) above. In fulfilling his duties hereunder, the arbitrator shall be bound by the terms of this Agreement. In fulfilling any of his arbitration duties, the arbitrator may consider such other matters as in the opinion of the arbitrator are necessary or helpful to make a proper evaluation. Additionally, the arbitrator may consult with and engage disinterested third parties, including, without limitation, petroleum engineers, attorneys and consultants, to advise the arbitrator.

(e) If any arbitrator selected hereunder should die, resign or be unable to perform his duties hereunder, the parties, or if the parties are unable to agree, the American Arbitration Association shall select a replacement arbitrator. The aforesaid procedure shall be followed from time to time as necessary.

5.08 Effect of Disputed Defective Interests or Environmental Defects on Closing. If Buyer asserts any Defective Interests or Environmental Defects that are disputed and referred to arbitration under Section 5.07 hereof, the following shall apply:

(a) If any matter is referred to arbitration under Section 5.07 of this Agreement and the Title Defect Value or Environmental Defect Value asserted by Buyer with respect to the matters under arbitration when combined with all other adjustments described above with regard to asserted Defective Interests and asserted Environmental Defects (together with the values and the adjustments associated with casualty losses, un-obtained consents, exercised preferential purchase rights, disputed Defective Interests or Environmental Defects, or removed and excluded Properties, or other adjustments) totals less than $217,500,000, then, subject to the satisfaction of the other terms and conditions of this Agreement, the parties shall proceed to Closing, and the Properties affected by the asserted Defective Interests and Environmental Defects shall be included within the properties and assets to which Petro-Hunt FB/M Successor or Pillar FB/M Successor succeeds as a result of the Mergers, and the Closing Amount (defined below) shall be reduced by the aggregate amount equal to the asserted Title Defect Values of the asserted Defective Interests and asserted Environmental Defect Values of the asserted Environmental Defects. If the arbitrator decides that any Defective Interest or Environmental Defect asserted by the Buyer is not a Defective Interest or Environmental Defect, then the applicable Title Defect Value or Environmental Defect Value withheld from the Closing Amount for Properties conveyed to Buyer at Closing shall be paid to New DE PH and Pillar Holdings within thirty (30) days after such determination. If the arbitrator decides that any one or more of the Defective Interests or Environmental Defects asserted by the Buyer are in fact Defective Interests or Environmental Defects, and if the Title Defect Value and the Environmental Defect Value of such Defective Interests or Environmental Defects as determined by the arbitrator, when combined with all other Defective Interests and Environmental Defects exceeds one-half percent (0.5%) of the Purchase Price, then Buyer shall retain the applicable Title Defect Value or Environmental Defect Value withheld from the Closing Amount with respect to the applicable Properties.

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(b) If any matter is referred to arbitration under Section 5.07 of this Agreement and the Title Defect Value or Environmental Defect Value asserted by Buyer with respect to the matters under arbitration when combined with all other adjustments to the Purchase Price relating to Defective Interests and Environmental Defects (as well as casualty losses, un-obtained consents, exercised preferential purchase rights, disputed Defective Interests or Environmental Defects, or removed and excluded Properties, or other adjustments) totals $217,500,000 or more, and this Agreement is not terminated by the Petro-Hunt Parties or Buyer pursuant to Article IX hereof, then the Closing shall not be postponed and the parties shall close and consummate the transactions at the closing and only the Properties as to which there is no such dispute related to Defective Interests and Environmental Defects will be included as assets to which Petro-Hunt FB/M Successor or Pillar FB/M Successor succeeds as a result of the Mergers (and the Purchase Price shall be reduced by the Allocated Values for such excluded Properties). If the arbitrator decides that any Defective Interest or Environmental Defect asserted by the Buyer is not a Defective Interest or Environmental Defect, then the parties shall have a supplemental within thirty (30) days of such determination, at which time, such applicable Properties will be deemed to have been included in the Properties to which Petro-Hunt FB/M Successor or Pillar FB/M Successor succeeded as a result of the Mergers as of the effective time of the Mergers in accordance with the terms and provisions of this Agreement (and to the extent requested by Buyer, the parties shall execute such amendments to the articles of merger or execute and deliver such conveyances as may be necessary to accomplish such result), and Buyer shall pay the Allocated Value attributable to such applicable Properties, subject to the adjustments provided for in this Agreement relative thereto. If the arbitrator decides that any one or more of the Defective Interests or Environmental Defects asserted by the Buyer are in fact Defective Interests or Environmental Defects, and if the Title Defect Value and the Environmental Defect Value of such Defective Interests or Environmental Defects as determined by the arbitrator, when combined with all other Defective Interests and Environmental Defects exceed one-half percent (0.5%) of the Purchase Price, then, at Buyer’s election, the affected Properties shall either be deemed to be Excluded Assets or the parties shall schedule a supplemental Closing within thirty (30) days after such determination, at which time, subject to the other terms and conditions of this Agreement, such Properties will be deemed to have been included in the Properties to which Petro-Hunt FB/M Successor or Pillar FB/M Successor succeeded as a result of the Mergers as of the effective time of the Mergers (and to the extent requested by Buyer, the parties shall execute such amendments to the articles of merger or execute and deliver such conveyances as may be necessary to accomplish such result) and Buyer shall pay to the Petro-Hunt Parties the Allocated Value, less the asserted Title Defect Value or Environmental Defect Value, as applicable, and subject to the other adjustments

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contemplated in this Agreement related thereto (and to the extent requested by Buyer, the parties shall execute such amendments to the articles of merger or execute and deliver such conveyances as may be necessary to accomplish such result).

5.09 Preferential Purchase Rights. Within five (5) business days following the execution and delivery of this Agreement, the Petro-Hunt Parties will provide written notice in form and substance satisfactory to Buyer to any persons under the Lease, Contract or agreement requiring a preferential purchase, right of first refusal, or similar option (a “Preferential Right”). Upon receipt of notice hereunder, the Petro-Hunt Parties will notify Buyer within five (5) business days of (a) any Preferential Rights exercised, waived or deemed waived, or (b) lapse of the requisite time periods without exercise of such Preferential Rights. Subject to the conditions in Section 6.02(d) and the right to terminate this Agreement under Section 9.01(c) hereof), if a Preferential Right is duly exercised prior to Closing, the affected Properties shall be deemed Excluded Assets, and the Purchase Price shall be reduced by the Allocated Value thereof. However, five (5) days prior to the Closing Date, if a Preferential Right has not been waived or exercised, and the requisite exercise period for such Preferential Right have not elapsed, then the Petro-Hunt Parties or Buyer may exclude the affected Properties from the assets and properties to which Petro-Hunt FB/M Successor or Pillar FB/M Successor succeeds as a result of the Mergers, adjust the Purchase Price downward by the Allocated Value of such Properties, and such affected Properties shall be deemed to be Excluded Assets; provided, however, that if the required waiver of Preferential Rights is obtained within ninety (90) days after Closing, the affected Properties will be deemed to have been included in the Properties to which Petro-Hunt FB/M Successor or Pillar FB/M Successor succeeded as a result of the Mergers as of the effective time of the Mergers (and to the extent requested by Buyer, the parties shall execute such amendments to the articles of merger or execute and deliver such conveyances as may be necessary to accomplish such result), and Buyer will pay the Allocated Value thereof to Petro-Hunt Holdings and Pillar Holdings (subject to adjustments provided herein), within ten (10) business days of written notice by the Petro-Hunt Parties to Buyer that such Preferential Rights have been waived (with a copy of the evidence thereof).

5.10 Casualty Losses. Prior to Closing Date, if, all or a material part of any of the Properties are damaged or destroyed by fire, flood, storm or other casualty (“Casualty Loss”), or same are taken in condemnation or by eminent domain, or if proceedings for such purposes are pending or threatened (“Government Taking”), the Petro-Hunt Parties must promptly notify Buyer in writing thereof and their estimated cost to repair or replace that portion of the Properties affected by the Casualty Loss or value of the Properties taken by the Government Taking. If all or any portion of the Properties is affected by Casualty Loss or Government Taking, the Purchase Price will be adjusted downward by the agreed dollar amount of the Casualty Loss or Government Taking. If the parties cannot agree on the appropriate amount, and Buyer does not elect the options described below, then the appropriate amount will be determined pursuant to an arbitration procedure similar to the one described in Section 5.07, and the affected Properties will be excluded from the assets and properties to which Petro-Hunt FB/M

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Successor or Pillar FB/M Successor succeeds as a result of the Mergers for purposes of the Closing, and the Purchase Price reduced by the Allocated Value thereof, and the parties will then close, subject to the other terms and conditions of this Agreement. At Buyer’s sole election, in lieu of adjustments to the Purchase Price, Buyer may elect to receive and the Petro-Hunt Parties shall immediately pay over to Buyer when actually received: (i) all insurance proceeds payable to the Petro-Hunt Parties with respect to any Casualty Loss, (ii) all sums paid to the Petro-Hunt Parties by third parties for any such Casualty Loss, (iii) all compensation paid to the Petro-Hunt Parties with respect to any Government Taking. In addition to the remedies set forth hereinabove, the Petro-Hunt Parties and Buyer will have the termination rights in Section 9.01(c) as to Casualty Losses and Government Takings.

5.11 Consents. Within five (5) days following the execution and delivery of this Agreement, the Petro-Hunt Parties will provide written notice in form and substance reasonably satisfactory to Buyer to any persons under any Lease or Contract requiring a right to consent to the conveyance of any Properties hereunder, including, without limitation, those set forth on Schedule 3.01(d). Upon receipt of notice hereunder, the Petro-Hunt Parties will notify Buyer within two (2) business days of (a) any requested consents which are denied, or (b) the lapse of requisite time periods for such consents to be given and received, together with a summary of which required consents, if any, remain outstanding. However, five (5) days prior to the Closing Date, if the requisite time for such consent has not elapsed and the consent is not waived, the Petro-Hunt Parties or Buyer may exclude the affected Properties from the assets and properties to which Petro-Hunt FB/M Successor of Pillar FB/M Successor succeeds as a result of the Mergers, adjust the Purchase Price downward by the Allocated Value of such Properties, and such affected Properties shall be deemed to be Excluded Assets; provided, further, however, that if the required consent is obtained within ninety (90) days after Closing, the affected Properties will be deemed to have been included in the Properties to which Petro-Hunt FB/M Successor of Pillar FB/M Successor succeeded as a result of the Mergers as of the effective time of the Mergers (and to the extent requested by Buyer, the parties shall execute such amendments to the articles of merger or execute and deliver such conveyances as may be necessary to accomplish such result), and Buyer will pay for the Allocated Value thereof to Petro-Hunt Holdings and Pillar Holdings (subject to other adjustments provided herein), within thirty (30) days of written notice by the Petro-Hunt Parties to Buyer that such consent has been waived (with a copy of the evidence thereof).

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5.12 Upward Adjustment. If (a) Petro-Hunt FB/M Successor and Pillar FB/M Successor own more than the net mineral acres set forth on Exhibit “A”, Part I allocable to the Undeveloped Leases (and excluding, for purposes hereof, net mineral acres allocable to the Allocated Unit for a Well) or (b) Petro-Hunt FB/M Successor and Pillar FB/M Successor own a Net Revenue Interest in either the Wells (and the associated Allocated Unit) or the Undeveloped Leases that exceeds the amounts set forth on Exhibit “A”, Part I and Exhibit “C”, respectively for such ell or Undeveloped Lease, then there may be set-off against the Title Defect Value of the Defective Interests, in accordance with the terms hereof (the “Upward Adjustment”), provided, however, that this ability to offset are subject to and limited by the following:

(i) there shall be no Upward Adjustment available for such offset to the extent either: (1) the individual increase available for offset would not exceed $75,000 (and to the extent such threshold is exceeded, or the entire amount will be credited as an Upward Adjustment), or (2) the aggregate value of all such Upward Adjustments, all of which exceed the individual threshold described in subpart (i)(1) above, would not exceed an aggregate threshold equal to 0.5% of the Purchase Price;

(ii) with regard to Upward Adjustments based on additional net mineral acres which are not reflected in Exhibit A, Part I, such additional net mineral acres may only be used to offset deficiencies in net mineral acres attributable to the Undeveloped Leases insofar and only insofar as the additional net mineral acres being used to offset are in the same geographic area and would have the same Per Net Mineral Acre Price as those they are offsetting (and if they are not otherwise in the same geographic area which would be included in the same Per Net Mineral Acre Price, then any ability to use the same to offset or the value thereof shall be based solely on the mutual agreement of the parties on the same);

(iii) with regard to Upward Adjustments relative to increased Net Revenue Interests, the value thereof shall be based on the Allocated Value of the applicable Property and calculated in a manner similar to the calculation of the Title Defect Value, and

(iv) notwithstanding anything stated herein to the contrary, if the aggregate Upward Adjustment (or Acreage Adjustment), or the value thereof, exceeds the aggregate Title Defect Values of all Defective Interests asserted, there shall be no upward adjustment of the Purchase Price, and the same may ONLY be used to offset the Title effect Value of asserted Defective Interests, as described above; and

(v) The Petro-Hunt Parties and Buyer agree that: (1) the net mineral acres reflected on Exhibit A, Part I allocable to the Undeveloped Leases include 1,754 more net mineral acres than have been allocated value for purposes of calculating the Purchase Price (with no upward adjustment to the Purchase Price for the same); and (2) should there be Title Defects discovered that result in a reduction in net mineral acres allocable to the Undeveloped Leases included in the transaction, there shall be no Title Defect Value applied to the aggregate defect threshold of 0.5% of the Purchase Price (as described above), except to the extent that the reduction in net mineral acres exceeds 1,754 net mineral acres (the “Acreage Adjustment”), insofar and only insofar as the net mineral acres attributable to the Acreage Adjustment are in the same geographic area and would have the same Per Net Mineral Acre Price (if such net mineral acres had, in fact,

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been valued for purposes of the calculation of the Purchase Price) as those they are offsetting, as described in subpart (ii) above (and if they are not, then the Acreage Adjustment shall not restrict the application of the Title Defect Value for such Defective Interests as otherwise contemplated in this Agreement).

5.13 Exclusive Remedy. THIS ARTICLE V SHALL, TO THE FULLEST EXTENT PERMITTED PURSUANT TO APPLICABLE LAW, BE THE EXCLUSIVE RIGHT AND REMEDY OF THE PARTIES WITH RESPECT TO ANY CLAIM RELATED TO TITLE MATTERS (INCLUDING TITLE DEFECTS OR ANY CLAIM UNDER SECTION 5.01). IN ADDITION, EXCEPT FOR CLAIMS RELATING TO A BREACH OF THE REPRESENTATIONS AND WARRANTIES IN SECTION 3.01(q) AND EXCEPT FOR MATTERS CONSTITUTING PETRO-HUNT PARTY OBLIGATIONS (AS HEREINAFTER DESCRIBED) THIS ARTICLE V SHALL, TO THE FULLEST EXTENT PERMITTED PURSUANT TO APPLICABLE LAW, BE THE EXCLUSIVE RIGHT AND REMEDY OF THE PARTIES WITH RESPECT TO ANY CLAIM RELATED TO ENVIRONMENTAL MATTERS RELATING TO THE PROPERTIES. FROM AND AFTER CLOSING, AND EXCEPT FOR MATTERS THAT ARE BEING DISPUTED OR WHICH REMEDIES UNDER ARTICLE V HAVE NOT BEEN FULLY RESOLVED AND ADDRESSED IN ACCORDANCE WITH THE PROVISIONS HEREOF, BUYER RELEASES, REMISES, AND FOREVER DISCHARGES THE PETRO-HUNT PARTIES AND THEIR AFFILIATES AND ITS AND THEIR RESPECTIVE EMPLOYEES, AGENTS, ADVISORS AND REPRESENTATIVES FROM ANY AND ALL SUITS, LEGAL OR ADMINISTRATIVE PROCEEDINGS, CLAIMS, DEMANDS, DAMAGES, LOSSES, COSTS, LIABILITIES, INTERESTS, OR CAUSES OF ACTION WHATSOEVER, IN LAW OR IN EQUITY, KNOWN OR UNKNOWN, WHICH BUYER MIGHT NOW OR SUBSEQUENTLY MAY HAVE BASED ON, RELATING TO, OR ARISING OUT OF, ANY CLAIM RELATED TO TITLE MATTERS OR ENVIRONMENTAL MATTERS (EXCEPT FOR CLAIMS RELATING TO A BREACH OF THE REPRESENTATIONS AND WARRANTIES IN SECTION 3.01(q) AND EXCEPT FOR MATTERS CONSTITUTING PETRO-HUNT PARTY OBLIGATIONS OF THE PETRO-HUNT PARTIES).

ARTICLE VI.

Conditions to Closing

6.01 Petro-Hunt Parties’ Conditions. At the option of the Petro-Hunt Parties, the obligations of the Petro-Hunt Parties at Closing are subject to the following conditions:

(a) (i) All representations and warranties of Buyer contained in this Agreement must be true in all respects as if they were made at and as of Closing except for any failure to be true that has not had, and is not reasonably be likely to

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have, a material adverse effect on HRC or on the ability of Buyer or HRC to consummate the transactions contemplated by this Agreement; (ii) Buyer must have performed and satisfied in all material respects their covenants and obligations set forth in this Agreement to be performed at or prior Closing; and (iii) the Petro-Hunt Parties must have received an officer’s certificate confirming the foregoing in the form of Exhibit “E-1”.

For purposes of determining whether this condition to Closing has been satisfied, the representations and warranties and covenants and obligations in question will be read disregarding any materiality qualifications contained therein, and the officer’s certificate referred to in clause (iii) may so reflect. The fulfillment of the condition in this Section 6.01(a) will not affect any rights of indemnification or other remedies available to the Petro-Hunt Parties under this Agreement with regard to any breach or alleged breach of representations, warranties or covenants set forth in this Agreement, and the Petro-Hunt Parties reserve, and do not waive, any such rights and remedies notwithstanding any Closing.

(b) There must not be any suit or proceeding pending before any court or governmental agency or instituted by a third party (that is not Buyer or any affiliate of Buyer) seeking an order to restrain, prohibit or declare illegal the purchase and sale contemplated by this Agreement.

(c) Unless otherwise agreed or waived by the parties, the consents, permissions, novations and approvals by third parties listed on Schedule 6.01(c), in connection with the sale and transfer of the Properties must have been received prior to Closing, except those required consents, permissions, novations and approvals which are Permitted Encumbrances;

(d) All value adjustments to the Purchase Price relating to asserted Title Defects, Environmental Defects, casualty losses, failure to obtain consents exercised preferential purchase rights, Properties in arbitration, excluded or removed under the terms of this Agreement, must not, in the aggregate, exceed $217,500,000.

(e) All applicable waiting periods under the HSR Act must have expired or been terminated.

(f) The HRC board of directors must have taken all necessary action to ensure that the transactions contemplated by this Agreement will be deemed approved the HRC board of directors for the purposes of Section 203 of the Delaware General Corporation Law.

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6.02 Buyer’s Conditions. At the option of Buyer, the obligations of Buyer at Closing are subject to the satisfaction of the following conditions:

(a) (i) All representations and warranties of the Petro-Hunt Parties contained in this Agreement must be true in all respects as if they were made at and as of Closing except for any failure to be true that has not had, and is not reasonably be likely to have, a material adverse effect on the Properties or on the ability of the Petro-Hunt Parties to consummate the transactions contemplated by this Agreement; (ii) the Petro-Hunt Parties must have performed and satisfied in all material respects their covenants and obligations set forth in this Agreement to be performed at or prior Closing; and (iii) Buyer must have received an officer’s certificate confirming the foregoing in the form of Exhibit “E-2”.

For purposes of determining whether this condition to Closing has been satisfied, the representations and warranties, and covenants and obligations in question will be read disregarding any materiality qualifications contained therein, and the officer’s certificate referred to in clause (iii) may so reflect. The fulfillment of the condition in this Section 6.02(a) will not affect any rights of indemnification or other remedies available to Buyer under this Agreement with regard to any breach or alleged breach of representations, warranties or covenants set forth in this Agreement, and Buyer reserves, and does not waive, any such rights and remedies notwithstanding any Closing.

(b) There must not be any suit or other proceeding pending before any court or governmental agency or instituted (or formally threatened in writing) by a third party (that is not the Petro-Hunt Parties or any affiliate of the Petro-Hunt Parties) seeking an order to restrain, prohibit or declare illegal, the purchase and sale contemplated by this Agreement, or which could reasonably be expected to prevent the Buyer (and the Petro-Hunt FB/M Successor and the Pillar FB/M Successor) from its ability to enjoy the economic benefits attributable to the Properties.

(c) Unless otherwise agreed or waived by the parties, all of the consents, permissions, and approvals by third parties listed on Schedule 6.02(c), in connection with the sale and transfer of the Properties must have been received prior to Closing, and copies thereof provided to Buyer, except those required consents, permissions, novations and approvals which are Permitted Encumbrances.

(d) All value adjustments to the Purchase Price relating to asserted Title Defects, Environmental Defects, casualty losses, failure to obtain consents exercised preferential purchase rights, Properties in arbitration, excluded or removed under the terms of this Agreement, must not, in the aggregate, exceed $217,500,000.

(e) All applicable waiting periods under the HSR Act have expired or been terminated.

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(f) The Reorganization and the Mergers must have been consummated and certificates of merger with respect to each of the Petro-Hunt Merger and the Pillar Merger shall have been issued by the Secretary of State of the State of Texas.

(g) The liens and security interests granted in connection with the credit facility of the Petro-Hunt Parties must be fully and finally released and discharged, pursuant to forms of release reasonably acceptable in form and substance to Buyer.

ARTICLE VII.

Closing

7.01 Date of Closing; Specific Performance. Unless the parties hereto mutually agree otherwise, and subject to the conditions stated in this Agreement, the consummation of the transactions contemplated hereby (herein called the “Closing”) shall be held at the offices of Thompson & Knight LLP, in Houston, Texas, on or before December 13, 2012. The date on which closing occurs is referred to herein as the “Closing Date.” Notwithstanding the foregoing, upon written notice delivered to the Petro-Hunt Parties, Buyer may elect to extend the Closing Date until December 20, 2012 (the “Extended Closing Date”), if Buyer has not obtained all requisite financing and regulatory approvals, or if any other condition to Buyer’s obligation to close has not been fulfilled. Absent a breach or unexcused failure to close by a party (“Non-Breaching Party”), if the other party (“Breaching Party”) refuses to close on or before the Closing Date or the Extended Closing Date, under circumstances where all of the conditions to Closing of the Breaching Party have been satisfied, the Non-Breaching Party will have the right to enforce specific performance of this Agreement against the Breaching Party. Each party agrees that irreparable damage would occur to the other party if this Agreement were not performed in accordance with its terms and the Non-Breaching Party shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the performance of the terms and provisions of this Agreement in any court of the United States or any state thereof having jurisdiction, in addition to any other remedy to which Non-Breaching Party is entitled under this Agreement, at law or in equity.

7.02 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) The Mergers will have been effected, and Petro-Hunt Holdings and Pillar Holdings will deliver to Buyer the Membership Interests.

(b) Petro Hunt Holdings shall execute and deliver a conveyance of 100% of the issued and outstanding membership interests (and other equity interests) of Petro-Hunt FB/M Successor and Pillar FB/M Successor, free and clear of any liens, security interests or encumbrances, and substantially in the form of the Assignment of Membership Interests attached hereto as Exhibit “I”.

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(c) The Petro-Hunt Parties shall prepare and deliver to Buyer, and Petro-Hunt Parties and Buyer shall execute and deliver at Closing a settlement statement (herein called the “Preliminary Settlement Statement”) that shall set forth the Closing Amount (as hereinafter defined) and each adjustment and the calculation of such adjustments used to determine such amount. The term “Closing Amount” shall mean the Purchase Price adjusted as provided in Section 2.02, using for such adjustments the best information then available. The Petro-Hunt Parties shall deliver a draft of the Preliminary Settlement Statement to Buyer at least three (3) business days prior to Closing.

(d) Buyer shall pay the cash portion of the adjusted Purchase Price to Petro-Hunt Holdings and Pillar Holdings by wire transfer in immediately available funds, in the proportions described in Section 2.01(b).

(e) Buyer shall deliver to Petro-Hunt Holdings and Pillar Holdings the Preferred Stock to be issued to Petro-Hunt Holdings and Pillar Holdings pursuant to Section 2.01 hereof, and in the proportions described in Section 2.01(b), free and clear of any liens, security interests or encumbrances, except as set forth in this Agreement.

(f) The Petro-Hunt Parties will execute and deliver (or if any of the Petro-Hunt Parties is a disregarded entity, then the Petro-Hunt Parties will cause to be executed by its parent company and delivered) to Buyer an affidavit attesting to non-foreign status and meeting the requirements of Section 1445(b)(2) of the Code and the regulations thereunder.

(g) The Petro-Hunt Parties shall deliver to Buyer all funds held in suspense by the Petro-Hunt Parties with respect to the Properties together with a report in reasonable detail setting forth the reasons such funds are held in suspense.

(h) The Petro-Hunt Parties and Buyer shall execute, acknowledge and deliver such transfer orders or letters in lieu thereof, as may be reasonably requested and prepared by Buyer, directing all purchasers of production to make payment to Petro-Hunt FB/M Successor or Pillar FB/M Successor, as applicable, of proceeds attributable to production from the Properties.

(i) The Petro-Hunt Parties and HRC shall execute the Registration Rights Agreement substantially in the form of Exhibit “F” hereto.

(j) HRC shall execute and file with the Secretary of State of the State of Delaware the Certificate of Designation substantially in the form of Exhibit “G” hereto.

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(k) The Petro-Hunt Parties and HRC shall execute the Lock Up Agreement, in substantially in the form of Exhibit “H” hereto.

(l) The Petro-Hunt Parties and Buyer shall execute and deliver the Transition Services Agreement as described in Section 8.02 below.

(m) To the extent that either Petro-Hunt FB/M Successor and Pillar FB/M Successor have any officers or managers who have not been approved by Buyer to remain as of the Closing, then the Petro-Hunt Parties shall deliver written resignations from such officers and managers, in form and substance reasonably satisfactory to Buyer.

ARTICLE VIII.

Obligations After Closing

8.01 Post-Closing Adjustments.

(a) As soon as practicable after Closing, but not later than 90 days after the Closing, the Petro-Hunt Parties shall prepare and deliver to Buyer, in accordance with this Agreement, a statement (the “Petro-Hunt Parties’ Final Settlement Statement”) setting forth each adjustment to Purchase Price that was not finally determined as of the Closing and showing the calculation of such adjustments. As soon as practicable after receipt of the Petro-Hunt Parties’ Final Settlement Statement, and no later than 120 days after the Closing Date, Buyer shall deliver to the Petro-Hunt Parties a written report containing any changes that Buyer proposes be made to the Petro-Hunt Parties’ Final Settlement Statement. The parties shall undertake to agree with respect to the amounts due pursuant to such Post-Closing adjustment not later than 150 days after the Closing Date. If Buyer fails to propose any changes to the Petro-Hunt Parties’ Final Settlement Statement, Buyer shall be deemed to have agreed therewith. The final agreed price paid by Buyer after all adjustments is hereinafter referred to as the “Final Purchase Price.” The date upon which such agreement is reached or upon which the Final Purchase Price is established, shall be herein called the “Final Settlement Date.”

(b) If the Petro-Hunt Parties and Buyer cannot agree on the Final Purchase Price within 150 days from the Closing Date, independent certified public accountants approved by Buyer and the Petro-Hunt Parties will act as arbitrators to decide all points of disagreement with respect to the Final Purchase Price. Such decision will be binding upon all parties. If the parties cannot agree on independent certified public accountants to use, then Buyer shall select one independent, certified public accountant firm, and the Petro-Hunt Parties shall select one independent, certified public accountant firm, and the two selected by the respective parties shall be charged with selecting one independent, certified

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public accountant firm to be used for such purposes. If no independent certified public accountants are willing or able to serve under this Section 8.01(b), the Petro-Hunt Parties and Buyer will designate in good faith another acceptable independent certified public accountant as the sole arbitrator under this Section. If the parties are unable to agree upon such substitute arbitrator, then the Petro-Hunt Parties or Buyer, or both of them, may request in writing that the American Arbitration Association appoint a substitute independent certified public accountant arbitrator. The arbitration shall be conducted under the rules of the American Arbitration Association to the extent such rules do not conflict with the terms hereof. The costs and expenses of the arbitrator shall be shared equally by the Petro-Hunt Parties and Buyer. Within five (5) business days after the final decision of the arbitrator or agreement of the parties, the Buyer or the Petro-Hunt Parties, as the case may be, shall promptly pay to the other such amount as is due to arrive at the Final Purchase Price, together with interest on the amount of such payment at the rate of 3% per annum, compounded monthly since the Closing Date. Notwithstanding the provisions of this Section 8.01(b), any questions with respect to a Defective Interest, Title Defect Value, Environmental Defect or Environmental Defect Value shall be resolved pursuant to the terms of Article V hereof.

8.02 Transition Services. Before the Closing, the Petro-Hunt Parties and Buyer agree to negotiate in good faith a form of Transition Services Agreement (the “TSA”), whereby the Petro-Hunt Parties will agree to provide certain transition services to Buyer related to the operation and management of the Properties. The TSA shall provide and describe which services that the Petro-Hunt Parties will provide to Buyer, what time frame, and adequate compensation to the Petro-Hunt Parties from Buyer with regard thereto.

8.03 Further Assurances. After Closing, the Petro-Hunt Parties and Buyer shall execute, acknowledge and deliver or cause to be executed, acknowledged and delivered such instruments, certificates, notices, filings, and documents, and each will take such other action including payment of monies, to the extent required hereunder, in each case to carry out their obligations under this Agreement and under any document, certificate or other instrument delivered pursuant hereto or required by law to effect the transactions contemplated by this Agreement and to vest title in any properties, rights, and assets in the proper person upon resolution or cure of any dispute hereunder.

8.04 Buyer’s Post-Closing Obligations.

(a) Environmental Laws. As used in this Agreement, “Environmental Laws” means all laws, as they exist on the date hereof, relating to (i) the control of any pollutant or potential pollutant or protection of the air, water, land or the environment, (ii) solid, gaseous or liquid waste generation, handling, treatment, storage, disposal or transportation, or (iii) exposure to hazardous, toxic, explosive, corrosive or other substances alleged to be harmful, including but not limited to, the Clean Air Act, 42 U.S.C. §7401 et seq., the Clean Water Act 33 U.S.C. §1251 et seq., the Resource Conservation and Recovery Act, 42 U.S.C. §6901 et seq.,

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the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. §11001 et seq., the Safe Drinking Water Act, 42 U.S.C. §300f et seq., and the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. §9601 et seq., together with any corresponding state laws, and any regulations promulgated thereunder, or any amendments thereof.

(b) Environmental Acknowledgement. Buyer acknowledges that the Properties have been used for exploration, development, production, handling, transporting and/or processing of oil and gas and that there may be petroleum, produced water, drilling fluids and chemicals, or other Hazardous Materials located on or under the Properties or associated with the premises in quantities typical for oilfield or gas operations in the areas in which the Properties are located. Some equipment and sites included in the Properties may contain naturally occurring radioactive material (“NORM”), asbestos, or other Hazardous Materials. NORM may affix or attach itself to the inside of wells, materials, and equipment as scale, or in other forms; the wells, materials, and equipment located on the Properties or included in the Properties may contain NORM, asbestos, or other Hazardous Materials; and NORM-containing material and other Hazardous Materials may have been buried or otherwise been disposed of on the Properties. Special procedures may be required for the remediation, removal, transportation, or disposal of NORM or other Hazardous Materials from the Properties. The mere presence of such materials on the Properties shall not, in and of itself, constitute a breach of the Petro-Hunt Parties’ representation made in Section 3.01(q), provided that such materials listed in this paragraph: (i) have been used and managed by the Petro-Hunt Parties in material compliance with all applicable Environmental Laws, and (ii) the presence of such materials does not form the basis for any material environmental liability or material obligation to cleanup, correct, abate, or to take any response, remedial or corrective action under or pursuant to any Environmental Laws. Nothing contained in this Section 8.04(b) shall limit any remedies the parties may otherwise have pursuant to Article V of this Agreement or under this Article VIII.

(c) FB/M Obligations and Petro-Hunt Party Obligations. For the purposes of this Agreement “FB/M Obligations” means: solely with regard to the Properties included within the assets and properties to which Petro-Hunt FB/M Successor or Pillar FB/M Successor succeeds as a result of the Mergers (except for duties, obligations, claims and liabilities arising from a breach of any representation, warranty or covenant of the Petro-Hunt Parties under this Agreement or any agreement or instrument delivered in connection herewith), (i) the following duties, obligations, claims and liabilities, arising from, based upon, related to or associated with the Properties, regardless of whether arising before, at or after the Effective Time: (w) any identified and asserted Environmental Defects which have been cured or for which the Purchase Price has been adjusted, (x) the plugging and abandonment of any existing Wells constituting part of the Properties, (y) responsibility for proper disbursement of any amounts held in suspense by the Petro-Hunt Parties regarding the Properties (expressly limited to

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the amounts paid, attributed, or credited to Buyer for same at Closing), and (z) any matter for which Buyer received an express downward adjustment to the Purchase Price under Sections 2.02(b)(2), 2.02(b)(3) or 2.02(b)(4) (expressly limited to (i) the amounts of adjustment received by Buyer for same at Closing); (ii) Property Taxes attributable to the period and operation of the Properties after the Effective Time; and (iii) all other duties, obligations, claims and liabilities arising from, based upon, related to or associated with the Properties, insofar and only insofar as the same are solely and directly attributable to the periods and operations occurring from and after the Effective Time (including, without limitation, and subject to Sections 8.05(c)(i) and 8.05(c)(ii), any violation of, or the failure to perform any obligation imposed by any Environmental Laws, insofar and only insofar as attributable to periods and operations on the Properties from and after the Closing Date). Notwithstanding anything stated to the contrary, it is the intent of the parties that the Petro-Hunt FB/M Obligations be the only obligations and liabilities assumed or made the responsibility of Petro-Hunt FB/M Successor or Pillar FB/M Successor to which they succeed as a result of the Mergers.

For the purposes of this Agreement, “Petro-Hunt Party Obligations” means: any and all duties, obligations, claims and liabilities, known or unknown, arising from, based upon, related to or associated with the Properties which are not expressed as FB/M Obligations, including, without limitation, any and all other duties, obligations, claims and liabilities relating to the Properties, known or unknown, arising or attributable periods prior to the Effective Time. In addition, the Petro-Hunt Party Obligations shall also be deemed to include any other liabilities or obligations of any kind or character relating to any assets, interests, businesses or items not otherwise included as part of the Properties or part of the Petro-Hunt FB/M Obligations; and Petro-Hunt Successor and Pillar Successor shall assume and be delegated all Petro-Hunt Party Obligations, which they succeed to as a result of the Mergers. Without limiting the generality of the immediately preceding sentence, the following duties, obligations, claims and liabilities are also expressly included as Petro-Hunt Party Obligations:

(1) those attributable to or arising out of the Excluded Assets;

(2) those attributable to any personal injury, bodily injury, illness, property damage or death claims related to the Properties which arose from circumstances occurring prior to the Closing Date;

(3) those attributable to the disposal on or off-site of the Properties of any Hazardous Materials prior to the Closing Date;

(4) those attributable to any violation of, or the failure to perform any obligation imposed by, any Environmental Laws, or as necessary to address any Environmental Conditions, insofar as the same are attributable to periods or operations conducted prior to the Effective Time;

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(5) those attributable to the failure to properly file and pay any Property Taxes attributable to the Properties, or oil, gas, other minerals or substances produced from the same, insofar as they relate to periods prior to the Effective Time;

(6) those attributable to failure to properly pay all royalties, overriding royalties, net profits interests or other burdens attributable to the Properties or any oil, gas or other minerals or substances produced from the same, insofar as they relate to periods prior to the Effective Time;

(7) any pending or threatened litigation, arbitration, audit, or other proceedings regarding the ownership, development, operation or disposition of the Properties existing as of the Closing Date, including, without limitation, any described on Schedule 3.01(e);

(8) any violation of any applicable federal, state or local laws, regulations, rules, or ordinances (other than Environmental Laws), including, without limitation, fines or penalties attributable to the periods prior to the Effective Time;

(9) any liability, claim or damage of any kind arising from or relating to any willful misconduct of the Petro-Hunt Parties, its personnel, employees, representatives, contractors or invitees, attributable to the periods prior to the Closing Date;

(10) any breach or condition that constituted a breach, of any Lease, Contract or other commitment relating to, or constituting part of, the Properties, insofar they are attributable to periods prior to the Effective Time; and

(11) any other liability, claim or damage of any kind arising from or relating to the Properties which is not expressly assumed hereunder by Buyer.

(d) Buyer’s Indemnity. UPON CLOSING, BUYER AGREES TO INDEMNIFY, RELEASE, DEFEND AND HOLD HARMLESS THE PETRO-HUNT PARTIES (EXCLUDING, PETRO-HUNT FB/M SUCCESSOR AND PILLAR FB/M SUCCESSOR, WHICH, UPON THE CLOSING, SHALL NOT BE CONSIDERED TO BE PETRO-HUNT PARTIES FOR PURPOSES OF SUCH INDEMNIFICATION), ITS OFFICERS, DIRECTORS, MANAGERS, MEMBERS, PARTNERS, EMPLOYEES, AGENTS, REPRESENTATIVES, AFFILIATES, SUBSIDIARIES, SUCCESSORS AND PERMITTED ASSIGNS FROM

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AND AGAINST ANY CLAIMS, LIABILITIES, LOSSES, DAMAGES, COSTS AND EXPENSES (INCLUDING WITHOUT LIMITATION, DAMAGE TO PROPERTY, OR INJURY OR DEATH OF PERSONS, COURT COSTS, REASONABLE ATTORNEY’S FEES AND EXPENSES OF EXPERTS) CAUSED BY, ARISING FROM OR ATTRIBUTABLE TO (i) THE FB/M OBLIGATIONS OR (ii) THE BREACH BY BUYER OF ANY OF ITS REPRESENTATIONS, WARRANTIES AND OBLIGATIONS UNDER THIS AGREEMENT, REGARDLESS OF WHETHER SUCH CLAIMS, LIABILITIES, LOSSES, DAMAGES, COSTS OR EXPENSES ARE DUE IN WHOLE OR IN PART TO THE NEGLIGENCE OF PETRO-HUNT PARTIES, BUT EXCLUDING THOSE DERIVED OR RESULTING FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PETRO-HUNT PARTIES.

(e) Petro-Hunt Name. After the Closing, Buyer will not use the name “Petro-Hunt” in the operation of the Properties beyond 120 days after Closing.

8.05 Post-Closing Obligations of the Petro-Hunt Parties.

(a) Discharge of Petro-Hunt Party Obligations. The Petro-Hunt Parties shall be responsible for and discharge all of the Petro-Hunt Party Obligations.

(b) Seismic Data. Upon Closing, the Petro-Hunt Parties will grant to Buyer (or, as requested by Buyer, to Petro-Hunt FB/M Successor and Pillar FB/M Successor) a reasonable and customary non-exclusive license to the Petro-Hunt Parties’ seismic and geophysical data relating to any of the Properties, with such terms and duration as may be consistent with the Petro-Hunt Parties’ rights thereto (but unless Buyer and the Petro-Hunt Parties otherwise mutually agree to further restrictions, such license will to the extent it covers such data that is owned by the Petro-Hunt Parties be a fully paid (royalty free), perpetual license the Petro-Hunt Parties subject to any same restrictions that are applicable to the Petro-Hunt Parties); but, only to the extent that such materials are not restricted from transfer by any legal constraints, obligations of confidence or prior agreements with third parties, and provided that the Petro-Hunt Parties can obtain consent to license where required, without material expense or unreasonable burden.

(c) Seller’s Indemnity. UPON CLOSING, THE PETRO-HUNT PARTIES (EXCLUDING, PETRO-HUNT FB/M SUCCESSOR AND PILLAR FB/M SUCCESSOR, WHICH, UPON THE CLOSING, SHALL NOT BE CONSIDERED TO BE PETRO-HUNT PARTIES FOR PURPOSES OF MAKING SUCH INDEMNIFICATION) AGREE TO INDEMNIFY, RELEASE, DEFEND AND HOLD HARMLESS BUYER, PETRO-HUNT FB/M SUCCESSOR, PILLAR FB/M SUCCESSOR, THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS,

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REPRESENTATIVES, AFFILIATES, SUBSIDIARIES, SUCCESSORS AND PERMITTED ASSIGNS FROM AND AGAINST ANY CLAIMS, LIABILITIES, LOSSES, DAMAGES, COSTS AND EXPENSES (INCLUDING WITHOUT LIMITATION, DAMAGE TO PROPERTY, OR INJURY OR DEATH OF PERSONS, COURT COSTS, REASONABLE ATTORNEY’S FEES AND EXPENSES OF EXPERTS) (“INDEMNIFIABLE LOSS”) CAUSED BY, ARISING FROM OR ATTRIBUTABLE TO (i) THE PETRO-HUNT PARTY OBLIGATIONS, (ii) THE BREACH BY THE PETRO-HUNT PARTIES OF ANY OF THEIR REPRESENTATIONS OR WARRANTIES IN THIS AGREEMENT, OR (iii) THE BREACH OR VIOLATION BY THE PETRO-HUNT PARTIES OF ANY OF THEIR COVENANTS OR OBLIGATIONS UNDER THIS AGREEMENT; PROVIDED, HOWEVER, THAT THE LIABILITY AND OBLIGATION OF THE PETRO-HUNT PARTIES UNDER SECTION 8.05(c)(ii) SHALL NOT APPLY WITH RESPECT TO ANY ENVIRONMENTAL DEFECT FOR WHICH THE PURCHASE PRICE HAS BEEN ADJUSTED; PROVIDED FURTHER THAT THE PETRO-HUNT PARTIES’ LIABILITY AND OBLIGATION UNDER SECTION 8.05(c)(ii) ABOVE (OTHER THAN WITH REGARD TO A BREACH BY THE PETRO-HUNT PARTIES OF THEIR REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTIONS 3.01(a), (b), (c), (d)(i), (g), (h) (t), (u), (v) AND (w)) SHALL NOT EXCEED TEN PERCENT (10%) OF THE PURCHASE PRICE (AND WITH REGARD TO A BREACH BY THE PETRO-HUNT PARTIES OF THEIR REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTIONS 3.01(a), (b), (c), (d)(i), (g), (h) (t), (u), (v) AND (w)) SHALL NOT EXCEED 100% OF THE PURCHASE PRICE); PROVIDED, FURTHER, THAT THE PETRO-HUNT PARTIES SHALL NOT BE OBLIGATED TO INDEMNIFY THE BUYER UNDER SECTION 8.05(c)(ii), EXCEPT TO THE EXTENT, IF ANY, THAT ANY INDIVIDUAL CLAIM EXCEEDS $75,000 (AND IF THEY DO, SUCH INDIVIDUAL CLAIMS SHALL BE FULLY RECOVERABLE) AND IF THE AGGREGATE OF ALL OF SUCH CLAIMS EXCEEDS AN AGGREGATE THRESHOLD EQUAL TO ONE-HALF PERCENT (0.5%) OF THE PURCHASE PRICE (AND IF SUCH AGGREGATE 0.5% THRESHOLD IS EXCEEDED, ALL OF SUCH CLAIMS SHALL BE FULLY RECOVERABLE).

8.06 Files and Records. As soon as practicable after Closing (but not later than ten (10) days after the Closing), Buyer and the Petro-Hunt Parties shall arrange for the delivery of the Records to Buyer. For a period of two years after the Closing Date Buyer shall allow the Petro-Hunt Parties access to the Records during Buyer’s normal business hours for the purpose of filing or amending a tax return or for any other legitimate business purpose; provided, however, that the Petro-Hunt Parties may retain copies of any or all Records made at their sole expense.

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8.07 Disclaimers of Representations and Warranties. The express representation and warranties of the Petro-Hunt Parties contained in this Agreement and in any certificate delivered in connection herewith are exclusive and are in lieu of all other representations and warranties, express, implied or statutory. BUYER ACKNOWLEDGES THAT, EXCEPT FOR THE EXPRESS REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE PETRO-HUNT PARTIES CONTAINED HEREIN OR IN ANY CERTIFICATE DELIVERED IN CONNECTION HEREWITH, THE PETRO-HUNT PARTIES HAVE NOT MADE, AND THE PETRO-HUNT PARTIES HEREBY EXPRESSLY DISCLAIM AND NEGATE, AND BUYER HEREBY EXPRESSLY WAIVES ANY REPRESENTATION OR WARRANTY, EXPRESS, IMPLIED, AT COMMON LAW, BY STATUTE OR OTHERWISE, INCLUDING ANY RELATING TO (I) ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY, (II) ANY IMPLIED OR EXPRESS WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, (III) ANY RIGHTS OF PURCHASERS UNDER APPROPRIATE STATUTES TO CLAIM DIMINUTION OF CONSIDERATION, (IV) ANY AND ALL IMPLIED WARRANTIES EXISTING UNDER APPLICABLE LAW AND (V) THE QUALITY, QUANTITY OR VOLUME OF ANY OIL, AND GAS RESERVES; IT BEING THE EXPRESS INTENTION OF BOTH BUYER AND THE PETRO-HUNT PARTIES THAT EXCEPT AS QUALIFIED HEREIN ABOVE, THE WELLS, WELLBORES, PERSONAL PROPERTY, EQUIPMENT AND FIXTURES INCLUDED WITHIN THE PROPERTIES ARE IN THEIR PRESENT CONDITION AND STATE OF REPAIR, “AS IS” AND “WHERE IS” WITH ALL FAULTS, AND THAT BUYER HAS MADE OR CAUSED TO BE MADE SUCH INSPECTIONS AS BUYER DEEMS APPROPRIATE. THE PETRO-HUNT PARTIES AND BUYER AGREE THAT, TO THE EXTENT REQUIRED BY APPLICABLE LAW TO BE EFFECTIVE, THE DISCLAIMERS OF CERTAIN WARRANTIES CONTAINED IN THIS SECTION ARE “CONSPICUOUS” DISCLAIMERS FOR THE PURPOSES OF ANY APPLICABLE LAW, RULE OR ORDER.

8.08 Waiver of DTPA. Buyer hereby waives the applicability of the Texas Deceptive Trade Practices - Consumer Protection Act, Tex. Bus. & Ann. §17.41 et seq. (Vernon 1987 and Supp. 1994) (the “DTPA”) to this transaction and any and all duties, rights or remedies that might be imposed by the DTPA; provided, however, Buyer does not waive Section 17.555 of the DTPA. Buyer expressly recognizes that the price for which the Petro-Hunt Parties have agreed to sell the Membership Interests and perform its obligations under this Agreement has been predicated upon the inapplicability of the DTPA and this waiver of the DTPA. Buyer further recognizes that the Petro-Hunt Parties, in determining to proceed with the entering into of this Agreement have expressly relied on the provisions of this Section 8.08.

8.09 Representations and Warranties; Indemnity as Exclusive Remedy. The representations, warranties, covenants and agreements set forth in this Agreement and in the assignments, certificates and agreements to be delivered at the Closing shall survive the Closing indefinitely; provided that (a) the indemnity obligations

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of the Petro-Hunt Parties in Section 8.05(c)(ii) (other than with regard to any indemnity regarding a breach of the representations and warranties set forth in Sections 3.01(a), (b), (c), (d)(i), (g), (h) (t), (u), (v) and (w)) shall survive Closing for a period of twelve (12) months after the Closing Date; provided further, however, that the indemnity obligations of the Petro-Hunt Parties in Section 8.05(c)(ii) with regard to a breach by the Petro-Hunt Parties of the representations and warranties in Sections 3.01(a), (b), (c), (d)(i), (g), (h) (t), (u), (v) and (w) shall survive for the applicable statute of limitations. The indemnities set forth in this Article VIII shall be the parties’ sole and exclusive remedy with respect to the matters addressed thereby (subject to the specific remedies provided in Section 7.01). Any indemnity paid by a party to another party pursuant to this Agreement shall be treated, for federal, state, and local income Tax purposes, as an adjustment to the Purchase Price, unless otherwise required by Law or as agreed by the parties.

ARTICLE IX.

Termination of Agreement

9.01 Termination. This Agreement and the transactions contemplated hereby may be terminated as follows:

(a) by the Petro-Hunt Parties, if the conditions set forth in Section 6.01 are not satisfied or waived on or prior to the Extended Closing Date, so long as the Petro-Hunt Parties are not in material breach of this Agreement;

(b) by Buyer, if the conditions set forth in Section 6.02 are not satisfied or waived on or prior to the Extended Closing Date, so long as Buyer is not in material breach of this Agreement;

(c) by Buyer or the Petro-Hunt Parties if the adjustment to the Purchase Price on account of actual Title Defects, Environmental Defects, casualty losses, failure to obtain consents, exercised preferential purchase rights, matters in arbitration, or Properties excluded from the assets of Petro-Hunt FB/M Successor or Pillar FB/M Successor in the Mergers as provided in this Agreement, exceed $217,500,000;

(d) by either Buyer or the Petro-Hunt Parties, so long as such party is not in material breach of this Agreement, upon written notice to the other, if the Closing has not occurred on or before 5:00 pm, CDT, on or by December 20, 2012; provided, however, that in lieu of terminating, Buyer or the Petro-Hunt Parties, as applicable, may compel specific performance of the terms of this Agreement; and

(e) at any time prior to Closing by the mutual written agreement of Buyer and the Petro-Hunt Parties.

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9.02 Effect of Termination. If either Buyer or the Petro-Hunt Parties terminates this Agreement in accordance with the terms hereof, then this Agreement shall become void, and have no effect whereby either party would have any further duty, obligation or liability to the other with regard to this Agreement, except that the agreements contained in this Article IX and in Article XI shall survive the termination hereof and except that termination will not relieve any party of any liability arising out of the breach of any covenant herein or the inaccuracy of any representation or warranty herein.

ARTICLE X.

Indemnification

10.01 Notice; Right to Employ Counsel.

(a) When any indemnifiable claim, action, or suit relative to this Agreement is filed or asserted in writing against any party hereto, the indemnified party shall promptly notify the indemnifying party of the same in writing, specifying in detail the basis of such claim and the facts pertaining thereto, and the indemnifying party shall, at its option, have the right to assume the defense thereof or participate in the defense thereof and to employ its own legal counsel in connection with such defense. Failure of the indemnified party to notify the indemnifying party of such claim, action, or suit within twenty (20) calendar days after notice to the indemnified party of such claim, action, or suit shall constitute a waiver of its rights under this Article, unless such failure to notify within such time period will not prejudice the rights of the indemnifying party in respect of such claim, action or suit, in which case prompt notification as provided above shall be sufficient.

(b) The indemnified party shall have the right to employ counsel separate from counsel employed by the indemnifying party in any such action and to participate in the defense thereof, but the fees and expenses of such counsel employed by the indemnified party shall be at the sole expense of the indemnified party unless (i) the indemnifying party shall have elected not or shall have failed to assume or participate in the defense thereof, (ii) the employment of such counsel has been specifically authorized by the indemnifying party in writing, or (iii) the parties to any such action (including any impleaded parties) include both the indemnifying and indemnified party, and the indemnified party shall have been advised by its counsel that there may be one or more legal defenses available to it which are different from or additional to those available to the indemnifying party, and the indemnifying party or its counsel would be prohibited from asserting such defenses under applicable ethical or procedural rules. In any of (i), (ii), or (iii) above, the indemnifying party shall not have the right to assume the defense of such action on behalf of the indemnified party and the fees and expenses of such counsel employed by the indemnified party shall be at the sole expense of the indemnifying party).

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(c) Prior to effectuating any settlement of any action or proceeding under this Section 10.01, the indemnified party shall furnish the indemnifying party with written notice of any proposed settlement in sufficient time to allow the indemnifying party to act thereon. The indemnifying party shall not be liable for any settlement of any such action or proceeding effected without the written consent of the indemnifying party. Absent the written consent of the indemnified party, the indemnifying party shall not effect a settlement of any claim without incorporating the complete release of the indemnified party as a part of such settlement.

10.02 Claim Reimbursement and Reduction.

(a) Should the indemnified party realize any benefit, including any tax benefit, resulting from any loss, liability, cost or damage for which such indemnified party has been indemnified under this Article, at the time such benefit is realized the indemnified party shall reimburse the indemnifying party the dollar amount of the benefit realized.

(b) Any claim shall be reduced to the extent of any third party insurance or condemnation payment actually received by the indemnified party or, alternatively, at the option of the indemnified party, the rights of the indemnified party against any insurer or governmental unit with respect to such claim shall be assigned to the indemnifying party.

ARTICLE XI.

General

11.01 Exhibits and Schedules. All Exhibits and Schedules attached hereto are hereby incorporated in this Agreement by reference and constitute a part of this Agreement. Each party to this Agreement and its counsel has received a complete set of Exhibits and Schedules prior to and as of the execution of this Agreement. The Petro-Hunt Parties may be permitted to update the Exhibits and Schedules before Closing and shall deliver any updated Exhibits or Schedules to Buyer prior to Closing, solely to the extent that such updates are necessary to reflect actions or matters that were either expressly permitted under the terms of this Agreement or which Buyer has approved or consented to in writing as a change to the terms of the Agreement, in which case such updates shall be incorporated in this Agreement by reference and constitute a part of this Agreement. The Petro-Hunt Parties shall have the right to update or modify the Exhibits or Schedules without the prior written consent of Buyer, provided such updates shall not be deemed to amend or become a change to this Agreement, and such updates may be the basis for claim by Buyer of a breach of the representations, warranties or covenants of the Petro-Hunt Parties and/or may be asserted as an Environmental Defect, Defective Interest or Title Defect.

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11.02 Expenses. All fees, costs and expenses incurred by Buyer or the Petro-Hunt Parties 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.

11.03 Notices. All notices or communications required or permitted under this Agreement shall be in writing, and any notices or communications hereunder shall be deemed to have been duly made if delivered by (i) hand, (ii) overnight delivery service, (iii) telecopy or electronic mail (email), or (iv) three days after being placed in first class certified mail, postage prepaid, with return receipt requested to the following addresses:

All notices to the Petro-Hunt Parties, Petro-Hunt Holdings or Pillar Holdings shall be delivered to:

Petro-Hunt, L.L.C.

1601 Elm Street, Suite 3400

Dallas, TX 75201-7201

Attention: Bruce W. Hunt, President

E-mail: bwhunt@petrohunt.com

Pillar Energy, LLC

1601 Elm Street, Suite 3400

Dallas, TX 75201-7201

Attention: Marshall T. Hunt, Vice President

Email: mthunt@petrohunt.com

With a copy to:

R. Fred Hosey, General Counsel

1601 Elm Street, Suite 3400

Dallas, TX 75201-7201

Email: fhosey@petrohunt.com

All notices to Buyer shall be delivered to:

Halcón Energy Properties, Inc.

1000 Louisiana, Suite 6700

Houston, Texas 77002

Attention: Steve W. Herod, President

Email: sherod@halconresources.com

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With a copy to:

Halcón Resources Corporation

1000 Louisiana, Suite 6700

Houston, Texas 77002

Attention: David Elkouri, Executive Vice President

and General Counsel

Email: delkouri@halconresources.com

The address at which any party hereto is to receive notice may be changed from time to time by such party by giving notice of the new address to all other parties hereto. Any notice or communication given by telecopy shall be promptly confirmed by delivery of a copy of such notice or communication by hand or overnight delivery service.

11.04 Amendments. This Agreement may not be amended nor any rights hereunder altered, changed, or waived except by an instrument in writing signed by all parties hereto.

11.05 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.

11.06 Counterparts. This Agreement may be executed by Buyer and the Petro-Hunt Parties in any number of counterparts, each of which shall be deemed an original instrument, but all of which together shall constitute but one and the same instrument.

11.07 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.

11.08 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 reference to any law that would require the application of the laws of any other jurisdiction.

11.09 Entire Agreement. This Agreement (including the Exhibits and Schedules hereto) constitutes the entire understanding among the parties with respect to the subject matter hereof, superseding all prior written, and prior and contemporaneous oral, negotiations, prior discussions and prior agreements and understandings relating to such subject matter; provided, however, that except as provided for herein any confidentiality agreement executed by Buyer and the Petro-Hunt Parties, or any representative of the Petro-Hunt Parties, in connection with the transaction contemplated hereby remains in full force and effect and is not superseded or modified by this Agreement, and such confidentiality agreement shall survive this Agreement until the Closing.

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11.10 Parties in Interest. This Agreement shall be binding upon and shall inure to the benefit of, the parties hereto and, except as otherwise prohibited, their respective successors and permitted assigns; and except as otherwise stated herein, nothing contained or implied in this Agreement is intended to confer upon any other person any benefits, rights or remedies.

11.11 Assignments. Neither Buyer nor the Petro-Hunt Parties may assign all or any portion of their respective rights or delegate any portion of their duties hereunder without the prior written consent of the other, which consent shall not be unreasonably delayed or withheld; provided, however, that Buyer, without the consent or approval of the Petro-Hunt Parties, may assign this Agreement, but not delegate its duties hereunder, to any direct or indirect wholly owned subsidiary of HRC, in which case, Buyer and HRC shall remain liable for its obligations hereunder, and no assignment shall affect HRC’s obligations under this Agreement with regard to the issuance and delivery of the Preferred Stock.

11.12 Public Announcements. The parties hereto agree that prior to making any public announcement or statement with respect to the transactions contemplated by this Agreement, the party desiring to make such public announcement or statement shall consult with the other party hereto; and, the parties will exercise all reasonable efforts to agree upon the text of a joint public announcement or statement to be made solely by either party; provided, however, if the Petro-Hunt Parties or Buyer is required by law to make such public announcement or statement, then the same may be made without the approval of the other party. The opinion of counsel of either party shall be conclusive evidence of such requirement by law.

11.13 Notices after Closing. Buyer and the Petro-Hunt Parties hereby agree that each party shall notify the other of its receipt, after the Closing Date, of any instrument, notification or other document affecting the Properties while owned, directly or indirectly, by such other party.

11.14 Severability. If a court of competent jurisdiction determines that any clause or provision of this agreement is void, illegal or unenforceable, the other clauses and provisions of this Agreement shall remain in full force and effect and the clauses and provisions that are determined to be void, illegal or unenforceable shall be limited so that they shall remain in effect to the extent permissible by law.

11.15 Time is of the Essence. Time is of the essence in this Agreement.

11.16 Limitation on Damages. NEITHER BUYER NOR THE PETRO-HUNT PARTIES SHALL BE ENTITLED TO RECOVER FROM THE OTHER (OR FROM THEIR RESPECTIVE AFFILIATES), ANY INDIRECT, CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES OR DAMAGES FOR LOST PROFITS OF

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ANY KIND SUFFERED BY SUCH PARTY ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, EXCEPT TO THE EXTENT SUCH DAMAGES ARE PAYABLE BY SUCH PARTY TO AN UNAFFILIATED THIRD PARTY FOR WHICH A PARTY HAS AGREED TO INDEMNIFY THE OTHER UNDER THE TERMS OF THIS AGREEMENT.

11.17 No Solicitation of the Petro-Hunt Parties’ Employees. In consideration of transactions contemplated by this Agreement for a period of eighteen (18) months after Execution Date of this Agreement, none of Buyer, HRC, or any of their subsidiaries, nor any employee, agent or representative of any of them will contact, approach or solicit in any manner the Dallas office personnel, Bismarck, North Dakota office staff or field employees of the Petro-Hunt Parties working regarding employment with Buyer, HRC or any of their subsidiaries affiliates; provided, however, that the foregoing shall not prohibit general solicitations or advertisements, or similar solicitations for employment by Buyer or HRC or any of their subsidiaries that do not involve the direct solicitation of the personnel of the Petro-Hunt Parties and it shall not violate or breach this Agreement for Buyer, HRC or any of their subsidiaries to employ or engage any person who approaches Buyer, HRC or any of their subsidiaries regarding employment or who responds to any such general solicitation, advertisements or similar solicitations.

11.18 Debt Financing Parties.

(a) “Debt Financing Sources” means any commercial bank, investment bank or other financial institution providing financing to Buyer for all or any portion of the Purchase Price or provide working capital to Buyer.

(b) Notwithstanding any provision to the contrary herein, the parties hereto expressly acknowledge and agree that the Debt Financing Sources and their partners, stockholders, managers, members, directors, officers, employees and affiliates, to the extent that they are acting on behalf of the Debt Financing Sources (the “Debt Financing Related Parties”) are express third party beneficiaries of, and may enforce the provisions of Section 11.16. No Debt Financing Related Party shall have any liability for any obligations or liabilities of the parties to this Agreement or for any claim (whether in tort, contract or otherwise) based on or by reason of, the transactions contemplated hereby or in respect of any oral representations made or alleged to be made in connection herewith. Without limiting the rights of the Petro-Hunt Parties against Buyer hereunder, the Petro-Hunt Parties agree not to seek to enforce this Agreement against, make any claims for breach of this Agreement against, or seek to recover monetary damages from, any Debt Financing Related Party in connection with this Agreement and the transactions contemplated by this Agreement. Any claim against the Debt Financing Related Parties relating to this Agreement and the transactions contemplated hereby will be brought in the exclusive jurisdiction of courts sitting in the Borough of Manhattan, City of New York.

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IN WITNESS WHEREOF, the parties have executed or caused this Agreement to be executed as of the day and year first above written.

THE PETRO-HUNT PARTIES:
PETRO-HUNT, L.L.C.
By:	/s/ Bruce W. Hunt
Name:	Bruce W. Hunt
Title:	President
PILLAR ENERGY, LLC
By:	/s/ Casey H. Hunt
Name:	Casey H. Hunt
Title:	President

BUYER:
HALCÓN ENERGY PROPERTIES, INC.
By:	/s/ Floyd C. Wilson
Name:	Floyd C. Wilson
Title:	Chairman and Chief Executive Officer
Executing this Agreement solely for purposes of those provisions relating to the issuance of Preferred Stock:
HRC:
HALCÓN RESOURCES CORPORATION
By:	/s/ Floyd C. Wilson
Name:	Floyd C. Wilson
Title:	Chairman and Chief Executive Officer

EX-10.1

Exhibit 10.1

Execution Version

COMMON STOCK

PURCHASE AGREEMENT

by and among

HALCÓN RESOURCES CORPORATION

and

CPP INVESTMENT BOARD PMI-2 INC.

TABLE OF CONTENTS

		Page
ARTICLE I DEFINITIONS
Section 1.1	Definitions		1
ARTICLE II AGREEMENT TO SELL AND PURCHASE
Section 2.1	Sale and Purchase		5
Section 2.2	Capital Commitment Payment		5
Section 2.3	Closing		5
Section 2.4	Mutual Conditions		5
Section 2.5	Investor’s Conditions		6
Section 2.6	Company’s Conditions		7
Section 2.7	Company Deliveries		8
Section 2.8	Investor Deliveries		9
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.1	Existence		9
Section 3.2	Shares; Capitalization		10
Section 3.3	No Conflict		10
Section 3.4	No Default		10
Section 3.5	Authority		11
Section 3.6	Minute Books		11
Section 3.7	Private Placement		11
Section 3.8	Approvals		11
Section 3.9	Compliance with Laws		12
Section 3.10	Due Authorization		13
Section 3.11	Legal Proceedings		13
Section 3.12	No Registration Rights		14
Section 3.13	No Indemnity Claims		14
Section 3.14	Company SEC Documents		14
Section 3.15	Internal Controls		15
Section 3.16	Insurance		16
Section 3.17	No Material Adverse Effect		16
Section 3.18	Certain Fees		16
Section 3.19	No Integration		16
Section 3.20	Labor and Employment Matters		17
Section 3.21	Tax Matters		17
Section 3.22	Investment Company Status		18
Section 3.23	Financial Statements		18
Section 3.24	Oil and Gas Matters		19
Section 3.25	Permits		21

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Section 3.26	Intellectual Property	21
Section 3.27	Acquisition Agreement	21
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE INVESTOR
Section 4.1	Existence	22
Section 4.2	Authorization, Enforceability	22
Section 4.3	No Conflict	22
Section 4.4	No Side Agreements	22
Section 4.5	Investment	23
Section 4.6	Restricted Securities	23
Section 4.7	Legend	23
ARTICLE V COVENANTS
Section 5.1	Taking of Necessary Action	23
Section 5.2	Other Actions	24
Section 5.3	Company Cooperation	24
Section 5.4	Access to Information	24
Section 5.5	Use of Proceeds	24
Section 5.6	Acquisition Agreement	24
Section 5.7	Investor Lock-Up Period	24
ARTICLE VI INDEMNIFICATION
Section 6.1	Indemnification by the Company	25
Section 6.2	Indemnification by the Investor	25
Section 6.3	Indemnification Procedure	25
ARTICLE VII MISCELLANEOUS
Section 7.1	Interpretation and Survival of Provisions	26
Section 7.2	Survival of Provisions	27
Section 7.3	No Waiver; Modifications in Writing	27
Section 7.4	Binding Effect; Assignment	27
Section 7.5	Communications	28
Section 7.6	Removal of Legend	29
Section 7.7	Entire Agreement	29
Section 7.8	Governing Law	29
Section 7.9	Execution in Counterparts	29
Section 7.10	Termination	30
Section 7.11	Recapitalization, Exchanges, Etc.	30

Exhibit A	—	Form of Notice of Effectiveness
Exhibit B	—	Form of Stockholders Agreement
Exhibit C	—	Form of Opinion of Thompson & Knight
Schedule 3.1	—	Subsidiaries of the Company

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COMMON STOCK PURCHASE AGREEMENT

This COMMON STOCK PURCHASE AGREEMENT, dated as of October 19, 2012 (this “Agreement”), is by and among HALCÓN RESOURCES CORPORATION, a Delaware Corporation (the “Company”), and CPP INVESTMENT BOARD PMI-2 INC. (the “Investor”).

WHEREAS, to fund a portion of the purchase price for the Acquisition (as defined below), the Company desires to sell to the Investor, and the Investor desires to purchase from the Company, 41,899,441 shares (the “Shares”) of common stock, par value $.0001 per share (the “Common Stock”), in accordance with the provisions of this Agreement; and

WHEREAS, the Company and the Investor will enter into a stockholders agreement (the “Stockholders Agreement”), substantially in the form attached hereto as Exhibit B, pursuant to which the Company will provide the Investor with certain registration rights and other rights with respect to the Shares acquired pursuant hereto.

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and the Investor hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions. As used in this Agreement, and unless the context requires a different meaning, the following terms have the meanings indicated:

“Acquired Assets” means certain oil and gas assets of Petro-Hunt and Pillar Energy as further described in the Acquisition Agreement.

“Acquired Asset Reservoir Engineer” has the meaning set forth in Section 3.24(c).

“Acquired Subsidiaries” means the wholly-owned subsidiaries of Petro-Hunt and Pillar Energy that are formed in connection with a divisive merger of Petro-Hunt and Pillar Energy and that upon the closing of the Acquisition Agreement will own the Acquired Assets.

“Acquisition” means the acquisition by the Company of all of the membership interests of the Acquired Subsidiaries pursuant to the terms and conditions of the Acquisition Agreement.

“Acquisition Agreement” means the Reorganization and Interest Purchase Agreement by and among Petro-Hunt, Pillar Energy and Halcón Energy Properties, dated as of October 19, 2012.

“Affiliate” means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with, the Person in question. As used herein, the term “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

“Agreement” has the meaning set forth in the introductory paragraph.

“Business Day” means a day other than (a) a Saturday or Sunday or (b) any day on which banks located in New York, New York, U.S.A. or Toronto, Ontario, Canada are authorized or obligated to close.

“Capital Commitment Payment” means a payment to be paid in cash on the Closing Date by the Company to the Investor equal to 2% of the aggregate Purchase Price.

“Closing” has the meaning specified in Section 2.3.

“Closing Date” has the meaning specified in Section 2.3.

“Code” has the meaning specified in Section 3.21(b).

“Commission” means the United States Securities and Exchange Commission.

“Common Stock” means shares of common stock of the Company.

“Company” has the meaning set forth in the introductory paragraph.

“Company Related Parties” has the meaning specified in Section 6.2.

“Company Reservoir Engineer” has the meaning specified in Section 3.25(b).

“Company SEC Documents” has the meaning specified in Section 3.14(a).

“Controlled Group” has the meaning specified in Section 3.21(b).

“Convertible Note” has the meaning specified in Section 2.5(e).

“DGCL” means the Delaware General Corporation Law.

“Effectiveness Notice” has the meaning specified in Section 2.5(a).

“Environmental Laws” has the meaning specified in Section 3.9(a).

“ERISA” has the meaning specified in Section 3.21(b).

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations of the Commission promulgated thereunder.

“GeoResources” has the meaning specified in Section 3.14(d).

“GeoResources Reservoir Engineer” has the meaning specified in Section 3.25(c).

“Governmental Authority” means, with respect to a particular Person, any country, state, county, city and political subdivision in which such Person or such Person’s Property is located or that exercises valid jurisdiction over any such Person or such Person’s Property, and any

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court, agency, department, commission, board, bureau or instrumentality of any of them and any monetary authority that exercises valid jurisdiction over any such Person or such Person’s Property. Unless otherwise specified, all references to Governmental Authority herein with respect to the Company mean a Governmental Authority having jurisdiction over the Company, its Subsidiaries or any of their respective properties.

“Halcón Energy Properties” means Halcón Energy Properties, Inc., a wholly-owned subsidiary of the Company and the buyer under the Acquisition Agreement.

“HALRES” means HALRES, LLC, a Delaware limited liability company.

“HSR Act” has the meaning specified in Section 2.4(c).

“Indemnified Party” has the meaning specified in Section 6.3.

“Indemnifying Party” has the meaning specified in Section 6.3.

“Investor” has the meaning set forth in the introductory paragraph.

“Investor Related Parties” has the meaning specified in Section 6.1.

“Knowledge” of the Company (or any of its Subsidiaries) (or similar references to the Company’s Knowledge) means (i) all information actually known by Floyd C. Wilson, Stephen W. Herod, Mark J. Mize, David S. Elkouri, and Robert J. Anderson and (ii) information that the individuals listed above could be expected to discover or otherwise become aware in the course of conducting a reasonable investigation regarding the accuracy of any representation or warranty contained in this Agreement.

“Law” means any federal, state, local or foreign order, writ, injunction, judgment, settlement, award, decree, statute, law, rule or regulation.

“Lien” means any interest in Property securing an obligation owed to, or a claim by, a Person other than the owner of the Property, whether such interest is based on the common law, statute or contract, and whether such obligation or claim is fixed or contingent, and including the lien or security interest arising from a mortgage, encumbrance, pledge, security agreement, conditional sale or trust receipt or a lease, consignment or bailment for security purposes. For the purpose of this Agreement, a Person shall be deemed to be the owner of any Property that it has acquired or holds subject to a conditional sale agreement, or leases under a financing lease or other arrangement pursuant to which title to the Property has been retained by or vested in some other Person in a transaction intended to create a financing.

“Lock-Up Period” has the meaning specified in Section 5.7.

“Material Adverse Effect” means any event, change, effect, circumstance, condition, development or occurrence, individually or in the aggregate, causing, resulting in or having (or with the passage of time likely to cause, result in or have) a material adverse effect on the financial condition, business, assets, stockholders’ equity, properties, prospects or results of operations of the Company and its subsidiaries taken as a whole. Notwithstanding the foregoing,

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“Material Adverse Effect” shall not include any event, circumstance, condition, development or occurrence resulting from (i) changes in the price or trading volume of the Company’s Common Stock (but not any fact, change, event, occurrence or effect underlying or contributing to such change in prices or trading volume), (ii) any failure to meet analysts projections, in and of itself, (but not any fact, change, event, occurrence or effect underlying or contributing to such failure) (iii) any changes in general United States or global economic conditions or (iv) any changes affecting the oil and gas industry in general (including changes to commodity prices); provided, however, that (iii) and (iv) shall not apply to the extent that any such change, effect, event, circumstance, condition, development or occurrence disproportionately impacts the Company and its subsidiaries as compared to a majority of other participants principally engaged in the exploration and development of oil and natural gas within the United States.

“Money Laundering Laws” has the meaning specified in Section 3.9(b).

“NYSE” means The New York Stock Exchange, Inc.

“OFAC” has the meaning specified in Section 3.9(c).

“Operative Documents” means, collectively, this Agreement, the Stockholders Agreement and any amendments, supplements, continuations or modifications thereto.

“PCAOB” has the meaning specified in Section 3.24(c).

“Percentage Ownership” means a fraction, set forth as a percentage, the numerator of which is the number of shares of Common Stock beneficially owned by the Investor (as determined in accordance with Rule 13d-3 under the Exchange Act, but excluding for this purpose any attribution of ownership of securities held by persons who are not affiliates of the Investor), and the denominator of which is (i) the total number of shares of Common Stock issued and outstanding, plus (ii) the shares of Common Stock that are not outstanding but that are included in the numerator.

“Permits” has the meaning specified in Section 3.26(a).

“Person” means an individual or a corporation, limited liability company, partnership, joint venture, trust, unincorporated organization, association, government agency or political subdivision thereof or other form of entity.

“Petro-Hunt” means Petro-Hunt, L.L.C., a Delaware limited liability company.

“Pillar Energy” means Pillar Energy LLC, a Texas limited liability company.

“Plan” has the meaning specified in Section 3.21(b).

“Pro Forma Material Adverse Effect” has the meaning specified in Section 3.27(c).

“Purchase Price” has the meaning specified in Section 2.1(b).

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“Representatives” of any Person means the Affiliates, officers, directors, managers, employees, agents, counsel, accountants, investment bankers and other representatives of such Person.

“Securities Act” means the Securities Act of 1933, as amended from time to time, and the rules and regulations of the Commission promulgated thereunder.

“Shares” has the meaning set forth in the recitals hereto.

“Stockholders Agreement” has the meaning set forth in the recitals hereto.

“Subsidiary” has the meaning set forth in Section 3.1.

ARTICLE II

AGREEMENT TO SELL AND PURCHASE

Section 2.1 Sale and Purchase.

(a) Subject to the terms and conditions hereof, the Company hereby agrees to issue and sell to the Investor and the Investor hereby agrees to purchase from the Company, the Shares, and the Investor agrees to pay the Company the Purchase Price for the Shares as set forth in paragraph (b) below.

(b) The amount per Share the Investor will pay to the Company to purchase the Shares (the “Purchase Price”) hereunder shall be $7.16 per share for an aggregate purchase price of $299,999,997.56.

Section 2.2 Capital Commitment Payment. On the Closing date, the Company shall pay to the Investor the Capital Commitment Payment, which payment shall be netted against and reduce the Purchase Price payable by the Investor.

Section 2.3 Closing. Subject to the terms and conditions hereof, the consummation of the purchase and sale of the Shares hereunder (the “Closing”) shall take place at the offices of Thompson & Knight L.L.P., 333 Clay Street, Suite 3300, Houston, Texas, or such other location as mutually agreed by the parties, and upon the later to occur of (a) the first Business Day following the satisfaction or waiver of the conditions set forth in Sections 2.4, 2.5 and 2.6 (other than those conditions that are by their terms to be satisfied at the Closing) and (b) the closing of the Acquisition; provided, however, that if such later event is the closing of the Acquisition, then the Closing shall occur concurrently therewith (the date of such closing, the “Closing Date”).

Section 2.4 Mutual Conditions. The respective obligations of each party to consummate the purchase and issuance and sale of the Shares shall be subject to the satisfaction on or prior to the Closing Date of each of the following conditions (any or all of which may be waived by a party on behalf of itself in writing, in whole or in part, to the extent permitted by applicable Law):

(a) no Law shall have been enacted or promulgated, and no action shall have been taken, by any Governmental Authority of competent jurisdiction that temporarily,

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preliminarily or permanently restrains, precludes, enjoins or otherwise prohibits the consummation of the transactions contemplated hereby or makes the transactions contemplated hereby illegal;

(b) there shall not be pending any suit, action or proceeding by any Governmental Authority seeking to restrain, preclude, enjoin or prohibit the transactions contemplated by this Agreement;

(c) all necessary filings and notifications under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”) shall have been made, including the filing of any required additional information or documents, and the waiting period referred to in the HSR Act applicable to the transactions contemplated herein shall have expired or been terminated; and

(d) the closing of the Acquisition shall have occurred, or shall occur concurrently with the Closing in which case all conditions set forth in Article VI of the Acquisition Agreement shall have been satisfied in all material respects or the fulfillment of any such conditions to the Company’s obligations shall have been waived, except for those conditions which, by their nature, will be satisfied concurrently with the Closing.

Section 2.5 Investor’s Conditions. The obligation of the Investor to consummate the purchase of the Shares shall be subject to the satisfaction on or prior to the Closing Date of each of the following conditions (any or all of which may be waived by the Investor on behalf of itself in writing with respect to the Shares, in whole or in part, to the extent permitted by applicable Law):

(a) The Company shall have delivered to the Investor a notice of effectiveness substantially in the form set forth in Exhibit A hereto (the “Effectiveness Notice”). Prior to delivery by the Company to the Investor of the Effectiveness Notice, this agreement shall not be enforceable against the Company, with the exception of Section 5.4, Section 6.1, Section 7.8 and Section 7.10(d) hereof, which shall be enforceable against the Company immediately upon the execution and delivery of this Agreement.

(b) The Company shall have performed and complied with the covenants and agreements contained in this Agreement that are required to be performed and complied with by the Company on or prior to the Closing Date.

(c) (i) The representations and warranties of the Company (A) set forth in Sections 3.1, 3.2(a) and 3.5 and (B) contained in this Agreement that are qualified by materiality or a Material Adverse Effect shall be true and correct when made and as of the Closing Date, (ii) the representations and warranties of the Company set forth in Section 3.2(b) shall be true and correct (except for any de minimis inaccuracies therein) when made and as of the Closing Date and (iii) all other representations and warranties of the Company shall be true and correct in all material respects when made and as of the Closing Date, in each case as though made at and as of the Closing Date (except that representations and warranties made as of a specific date shall be required to be true and correct as of such date only);

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(d) The Acquisition Agreement shall not have been amended or modified in any material respect and no material condition to the closing of the Acquisition Agreement shall have been waived by the Company without the consent of the Investor (it being understood and agreed that any (i) change in the consideration payable shall be deemed to be adverse to the interests of the Investor (other than a reduction of the purchase price of less than ten percent (10%) of the total consideration or an increase in the purchase price pursuant to the purchase price adjustment mechanism set forth in the Acquisition Agreement) or (ii) waiver of any condition to closing that no “Material Adverse Change” (or any similar definition) has occurred involving the Acquired Assets and/or the Acquired Subsidiaries shall be deemed to be material and shall require the prior consent of the Investor (which consent shall not be unreasonably withheld).

(e) HALRES shall have delivered to the Company evidence of its waiver of the Company’s obligations under that certain $275 million Convertible Promissory Note to HALRES (the “Convertible Note”) and that certain Securities Purchase Agreement between HALRES and RAM Energy Resources, Inc., dated December 21, 2011 in order to allow for the release of a sufficient number of shares reserved for issuance thereunder in order to facilitate the sale of the Shares pursuant to this Agreement.

(f) Since the date of the Agreement, no event has occurred or condition exists which has a Material Adverse Effect.

(g) The NYSE shall have authorized, upon official notice of issuance, the listing of the Shares.

(h) No notice of delisting from the NYSE shall have been received by the Company with respect to the Common Stock;

(i) The Company shall have delivered, or caused to be delivered, to the Investor at the Closing, the Company’s closing deliveries described in Section 2.7; and

(j) The Company shall have executed and delivered the Stockholders Agreement.

Section 2.6 Company’s Conditions. The obligation of the Company to consummate the sale of the Shares to the Investor shall be subject to the satisfaction on or prior to the Closing Date of each of the following conditions with respect to the Investor (any or all of which may be waived by the Company in writing, in whole or in part, to the extent permitted by applicable Law):

(a) the representations and warranties of the Investor contained in this Agreement that are qualified by materiality shall be true and correct when made and as of the Closing Date and all other representations and warranties of the Investor shall be true and correct in all material respects as of the Closing Date (except that representations of the Investor made as of a specific date shall be required to be true and correct as of such date only); and

(b) the Investor shall have delivered, or caused to be delivered, to the Company at the Closing the Investor’s closing deliveries described in Section 2.8.

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By acceptance of the Shares, the Investor shall be deemed to have represented to the Company that it has performed and complied with the covenants and agreements contained in this Agreement that are required to be performed and complied with by it on or prior to the Closing Date; and the representations and warranties of the Investor contained in this Agreement that are qualified by materiality are true and correct as of the Closing Date and all other representations and warranties of such Investor are true and correct in all material respects as of the Closing Date (except that representations and warranties made as of a specific date shall be required to be true and correct as of such date only).

Section 2.7 Company Deliveries. At the Closing, subject to the terms and conditions hereof, the Company will deliver, or cause to be delivered, to the Investor:

(a) The Shares, which shall be delivered to the Investor in book-entry form and registered in the name of the Investor with the transfer agent of the Company. The Shares shall bear the legend set forth in Section 4.8 and shall be free and clear of any Liens, other than transfer restrictions under applicable federal and state securities laws;

(b) A certificate of the Secretary of State of the State of Delaware, dated a recent date, to the effect that the Company, Petro-Hunt, Pillar Energy and each of the Acquired Subsidiaries is in good standing;

(c) A cross-receipt executed by the Company and delivered to the Investor certifying that it has received the Purchase Price from the Investor as of the Closing Date;

(d) An opinion addressed to the Investor from Thompson & Knight LLP legal counsel to the Company, dated as of the Closing, in the form and substance attached hereto as Exhibit C;

(e) A certificate, dated the Closing Date and signed by the Chief Executive Officer and the Chief Financial Officer of the Company, in their capacities as such, stating that:

(i) The Company has performed and complied with the covenants and agreements contained in this Agreement that are required to be performed and complied with by the Company on or prior to the Closing Date; and

(ii) The representations and warranties of the Company contained in this Agreement that are qualified by materiality or Material Adverse Effect are true and correct as of the Closing Date and all other representations and warranties of the Company are, individually and in the aggregate, true and correct in all material respects as of the Closing Date (except that representations and warranties made as of a specific date shall be required to be true and correct as of such date only); and

(f) A certificate of the Secretary or an Assistant Secretary of the Company, certifying as to (1) the Amended and Restated Certificate of Incorporation of the Company and all amendments thereto, (2) the Amended and Restated Bylaws of the Company, as amended, as in effect on the Closing Date, (3) board resolutions authorizing the execution and delivery of the Operative Documents and the Acquisition Agreement and the consummation of the transactions contemplated thereby, including the issuance of the Shares and (4) its incumbent officers authorized to execute the Operative Documents and the Acquisition Agreement, setting forth the name and title and bearing the signatures of such officers; and

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(g) A certificate of the President of HALRES, certifying as to the approval by the members or board of managers of HALRES of any actions taken by HALRES to facilitate the matters contemplated by this Agreement and the Operative Agreements.

(h) Evidence of the amendment of that certain Registration Rights Agreement between the Company and HALRES, dated February 8, 2012 in order to (i) waive the HALRES piggy-back registration rights with respect to the registration rights of the Investor under the Stockholders Agreement and (ii) allow the Investor to exercise its piggy-back registration rights pursuant to the Stockholders Agreement pro rata with the piggy-back registration rights of HALRES pursuant to its Registration Rights Agreement.

Section 2.8 Investor Deliveries. At the Closing, subject to the terms and conditions hereof, the Investor will deliver, or cause to be delivered, to the Company:

(a) Payment to the Company of the Purchase Price, less the Capital Commitment Payment, by wire transfer of immediately available funds to an account designated by the Company in writing at least two Business Days prior to the Closing Date; and

(b) A cross-receipt executed by the Investor and delivered to the Company certifying that it has received the Shares as of the Closing Date.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to the Investor as follows:

Section 3.1 Existence. The Company has been duly incorporated, is validly existing and is in good standing under the laws of State of Delaware, with corporate power and authority to own, lease and operate its properties and conduct its business as described in the Company SEC Documents (as hereinafter defined); the Company is duly qualified as a foreign corporation to transact business and is in good standing in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to qualify or to be in good standing would not have a Material Adverse Effect; each subsidiary of the Company other than those subsidiaries which would not, individually or in the aggregate, constitute a “significant subsidiary” as defined in Item 1-02(w) of Regulation S-X (each such “significant subsidiary” a “Subsidiary”) is a corporation, partnership, limited liability company or business trust duly incorporated or organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite entity power and authority to own, lease and operate its properties. The Company does not own or control, directly or indirectly, any corporation, association or other corporate entity that, individually or in the aggregate would constitute a Subsidiary, other than the subsidiaries listed on Schedule 3.1 hereto. On a consolidated basis, the Company and its Subsidiaries conduct their business as described in the Company SEC Documents and each Subsidiary is duly qualified as a foreign corporation, partnership, limited liability company, business trust or other organization to transact business and is in good

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standing in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to qualify or to be in good standing would not result in a Material Adverse Effect.

Section 3.2 Shares; Capitalization.

(a) The Company has the authorized equity capitalization as set forth in the Company SEC Documents, and all of the issued and outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable. Except as otherwise disclosed in the Company SEC Documents, all of the issued and outstanding capital stock or other ownership interests of each Subsidiary of the Company (i) have been duly authorized and validly issued, (ii) are fully paid and non-assessable and (iii) are owned by the Company directly or through Subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance, claim or equity except as described in the Company SEC Documents and except for such security interests, mortgages, pledges, liens, encumbrances, claims or equities that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(b) As of the date hereof, (i) the Company has 216,217,427 shares of Common Stock issued and outstanding, and (ii) the Company has options, warrants or other rights to acquire 104,254,087 shares of Common Stock issued and outstanding.

Section 3.3 No Conflict. The issue and sale of the Shares, the execution, delivery and performance by the Company and the Subsidiaries of the Stockholders Agreement and this Agreement, the application of the proceeds from the sale of the Shares, the consummation of the transactions contemplated hereby and thereby and the execution, delivery and performance of the Acquisition Agreement (assuming the satisfaction of all conditions to closing set forth therein), will not (a) conflict with or result in a breach or violation of any of the terms or provisions of, impose any lien, charge or encumbrance upon any property or assets of the Company or any of the Subsidiaries, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement, license, lease or other agreement or instrument to which the Company or any of the Subsidiaries is a party or by which the Company or any of the Subsidiaries is bound or to which any of the property or assets of the Company or any of the Subsidiaries is subject, (b) result in any violation of the provisions of the charter or by-laws (or similar organizational documents) of the Company or any of the Subsidiaries, or (c) result in any violation of any statute or any judgment, order, decree, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of the Subsidiaries or any of their properties or assets, except, with respect to clauses (a) and (c), conflicts or violations that would not reasonably be expected to have a Material Adverse Effect.

Section 3.4 No Default. Neither the Company nor any of the Subsidiaries (a) is in violation of its charter or by-laws (or similar organizational documents), (b) is in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant, condition or other obligation contained in any indenture, mortgage, deed of trust, loan agreement, license or other agreement or instrument to which it is a party or by which it is bound or to which any of its properties or assets is subject, or (c) is in violation of any statute or any order, rule or regulation of any court

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or governmental agency or body having jurisdiction over it or its property or assets or has failed to obtain any license, permit, certificate, franchise or other governmental authorization or permit necessary to the ownership of its property or to the conduct of its business, except in the case of clauses (a), (b) and (c), to the extent any such conflict, breach, violation or default could not, in the aggregate, reasonably be expected to have a Material Adverse Effect or would not materially impair the ability of the Company or any Subsidiary to perform their obligations under this Agreement or the transactions contemplated by the Acquisition Agreement.

Section 3.5 Authority. On the Closing Date, the Company will have all requisite corporate, partnership or limited liability company power and authority, as applicable, to issue, sell and deliver the Shares, in accordance with and upon the terms and conditions set forth in this Agreement. The Shares have been duly authorized and, upon their issuance pursuant to the terms hereof, each Share shall be validly issued and outstanding, free of all liens, charges and encumbrances as fully paid and non-assessable. On the Closing Date, all corporate action required to be taken by the Company for the authorization, issuance, sale and delivery of the Shares, the execution and delivery of the Operative Documents and the consummation of the transactions contemplated hereby and thereby shall have been validly taken. On the Closing Date, all corporate action required to be taken by the Company and Halcón Energy Properties for the execution and delivery of the Acquisition Agreement and the consummation of the transactions contemplated thereby shall have been taken. No approval from the holders of outstanding shares of Common Stock is required in connection with the Company’s issuance and sale of the Shares to the Investor or the consummation of the transactions contemplated pursuant to the Acquisition Agreement (other than as contemplated in the Acquisition Agreement).

Section 3.6 Minute Books. The minute books of the Company and of each of the Subsidiaries contain the minutes of all meetings and all resolutions of their respective directors and shareholders since February 8, 2012; and, to the Company’s Knowledge, the minute books of the Company and each of the Subsidiaries contain the minutes of all meetings and all resolutions of their respective directors and shareholders prior to February 8, 2012.

Section 3.7 Private Placement. Assuming the accuracy of the Investor’s representations and warranties set forth in Section 4.5, the issuance and sale of the Shares pursuant hereto are exempt from the registration requirements of the Securities Act. No form of general solicitation or general advertising within the meaning of Regulation D (including, but not limited to, advertisements, articles, notices or other communications published in any newspaper, magazine or similar medium or broadcast over television or radio, or any seminar or meeting whose attendees have been invited by any general solicitation or general advertising) was used by the Company, or any Person acting on behalf of the Company in connection with the offer and sale of the Shares.

Section 3.8 Approvals. No consent, approval, authorization or order of, or filing, registration or qualification with, any court or governmental agency or body, domestic or foreign, having jurisdiction over the Company is required for the offering and sale of the Shares or the consummation by the Company of the other transactions contemplated by this Agreement or the Stockholders Agreement, except for the filing of the registration statement by the Company with the Commission pursuant to the Securities Act, as required by the Stockholders Agreement, and such consents, approvals, authorizations, orders, registrations, filings or

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qualifications which shall have been obtained or made prior to the Closing Date as described in this Agreement or as may be required by the securities or blue sky laws of the various states, the Securities Act and the securities laws of any jurisdiction outside the United States in which the Shares are offered.

Section 3.9 Compliance with Laws.

(a) The Company and each of the Subsidiaries (i) are, and at all times prior hereto were, in compliance with all laws, regulations, ordinances, rules, orders, judgments, decrees, permits or other legal requirements of any governmental authority, including without limitation any international, national, state, provincial, regional, or local authority, relating to the protection of human health or safety, the environment, or natural resources, or to hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”) applicable to such entity, which compliance includes, without limitation, obtaining, maintaining and complying with all permits and authorizations and approvals required by Environmental Laws to conduct their respective businesses, and (ii) have not received notice of any actual or alleged violation of Environmental Laws, or of any potential liability for or other obligation concerning the presence, disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants, except in the case of clause (i) or (ii) where such non-compliance, violation, liability, or other obligation could not, in the aggregate, reasonably be expected to have a Material Adverse Effect. Except as described in the Company SEC Documents, (A) there are no proceedings that are pending, or to the Company’s Knowledge contemplated, against the Company or any of the Subsidiaries under Environmental Laws in which a governmental authority is also a party, other than such proceedings regarding which it is reasonably believed no monetary sanctions of $100,000 or more will be imposed, (B) to the Company’s Knowledge there are no issues regarding compliance with Environmental Laws, or liabilities or other obligations under Environmental Laws or concerning hazardous or toxic substances or wastes, pollutants or contaminants, that could reasonably be expected to have a Material Adverse Effect, and (C) none of the Company or its Subsidiaries anticipates material capital expenditures other than in the ordinary course of business relating to Environmental Laws.

(b) To the Company’s Knowledge, the operations of the Company and the Subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the Company’s Knowledge, threatened, except, in each case, as would not reasonably be expected to have a Material Adverse Effect.

(c) Neither the Company nor the Subsidiaries nor, to the Company’s Knowledge, any director, officer, agent, employee or affiliate of the Company or any of the Subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly use the proceeds of the offering, or lend, contribute or otherwise make available

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such proceeds to any subsidiary, joint venture partner or other Person, for the purpose of financing the activities of any Person currently subject to any U.S. sanctions administered by OFAC.

(d) Neither the Company nor any of the Subsidiaries, nor, to the Company’s Knowledge, any director, officer, agent, employee or other Person authorized to act on behalf of the Company or any of the Subsidiaries, has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment.

(e) There is and has been no failure on the part of the Company and any of the Company’s directors or officers, in their capacities as such, to comply with the applicable provisions of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith.

(f) The Company and its affiliates have not taken, directly or indirectly, any action designed to or that has constituted or that could reasonably be expected to cause or result in the stabilization or manipulation of the price of any security of the Company or the Subsidiaries in connection with the transactions contemplated by this Agreement.

Section 3.10 Due Authorization. Each of the Operative Documents has been duly and validly authorized and has been or, with respect to the Operative Documents to be delivered at the Closing Date, will be, validly executed and delivered by the Company and constitutes, or will constitute, the legal, valid and binding obligations of the Company, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights and by general principles of equity.

Section 3.11 Legal Proceedings.

(a) Except as described in the Company SEC Documents, there are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or of which any property of the Company or any of its subsidiaries is the subject which if determined adversely to the Company, or subsidiary, would individually or in the aggregate, have a Material Adverse Effect or which would materially and adversely affect the consummation of the transactions contemplated under this Agreement, the Stockholders Agreement, the Acquisition Agreement or the performance by the Company of their obligations hereunder or thereunder; and, to the Company’s Knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others.

(b) To the Company’s Knowledge, there are no legal or governmental proceedings pending to which Petro-Hunt, Pillar Energy or any of their respective subsidiaries is a party or of which any of the Acquired Assets or Acquired Subsidiaries is the subject which if determined adversely to such party, would individually or in the aggregate, have a Pro Forma

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Material Adverse Effect (as hereinafter defined) or which would materially and adversely affect the consummation of the transactions contemplated under this Agreement, the Stockholders Agreement, the Acquisition Agreement or the performance by the Company, Petro-Hunt or Pillar Energy or any of their respective subsidiaries of their obligations hereunder or thereunder; and, no such proceedings are threatened or contemplated by governmental authorities or threatened by others

Section 3.12 No Registration Rights. Except for the Stockholders Agreement, the Petro-Hunt Registration Rights Agreement or as described in the Company SEC Documents, there are no contracts, agreements or understandings between the Company or any of its subsidiaries and any Person granting such Person the right to require the Company or any of its subsidiaries to file a registration statement under the Securities Act with respect to any securities of the Company or of its subsidiaries owned or to be owned by such Person or to require the Company or any of its subsidiaries to include such securities in the securities registered pursuant to the Stockholders Agreement or in any securities being registered pursuant to any other registration statement filed by the Company or any of its subsidiaries under the Securities Act.

Section 3.13 No Indemnity Claims. As of the date hereof, there are no indemnity claims pursuant to the provisions of any agreement to which any of the Company or its subsidiaries is a party or to which any Property or asset of the Company or any of its subsidiaries is subject that could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and, to the Company’s Knowledge, no such indemnity claims are threatened or contemplated. As of the date hereof, there are no indemnity claims pursuant to the provisions of any agreement between HALRES and any of the Company or its subsidiaries, and, to the Company’s Knowledge, no such indemnity claims are threatened or contemplated.

Section 3.14 Company SEC Documents.

(a) The Company’s forms, registration statements, reports, schedules and statements required to be filed by it under the Exchange Act or the Securities Act (all such documents, collectively the “Company SEC Documents”) since February 8, 2012 have been filed with the Commission on a timely basis. The Company SEC Documents, including, without limitation, any audited or unaudited financial statements and any notes thereto or schedules included therein, at the time filed (or in the case of registration statements, solely on the dates of effectiveness) (except to the extent corrected by a subsequent Company SEC Document) (i) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, (ii) complied in all material respects with the applicable requirements of the Exchange Act and the Securities Act, as the case may be, (iii) complied as to form in all material respects with applicable accounting requirements and with the published rules and regulations of the Commission with respect thereto, (iv) were prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto or, in the case of unaudited statements, as permitted by Form 10-Q of the Commission), and (v) fairly present (subject in the case of unaudited statements to normal and recurring audit adjustments) in all material respects the consolidated financial position of the Company and its consolidated subsidiaries as of the dates thereof and the consolidated results of its operations and cash flows for the periods then ended.

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(b) There are no contracts or other documents that would be required to be described in a registration statement filed under the Securities Act that have not been described in the Company SEC Documents. The statements made in the Company SEC Documents, insofar as they purport to constitute summaries of the terms of the contracts and other documents that are so described, constitute accurate summaries of the terms of such contracts and documents in all material respects. Neither the Company nor any of the Subsidiaries has knowledge that any other party to any such contract or other document has any intention not to render full performance as contemplated by the terms thereof, except to the extent any nonperformance could not reasonably be expected to have a Material Adverse Effect.

(c) No relationship, direct or indirect, that would be required to be described in a registration statement of the Company pursuant to Item 404 of Regulation S-K, exists between or among the Company or any of the Subsidiaries, on the one hand, and the directors, officers, stockholders, customers or suppliers of the Company any of the Subsidiaries, on the other hand, that has not been described in the Company SEC Documents.

(d) The statistical and market-related data relating to the Company included in the Company SEC Documents and the consolidated financial statements of the Company and its subsidiaries, the financial statements of GeoResources, Inc. (“GeoResources”) and the financial statements of the East Texas Assets (as defined in the Company SEC Documents) included in the Company SEC Documents are based on or derived from sources that the Company believes to be reliable in all material respects.

(e) Since June 30, 2012 and except as may otherwise be described in the Company SEC Documents, neither the Company nor any Subsidiary has (i) incurred any liability or obligation, direct or contingent, other than liabilities and obligations that were incurred in the ordinary course of business, (ii) entered into any material transaction that is required to be described in the Company SEC Documents or (iii) declared or paid any dividend on its capital stock.

Section 3.15 Internal Controls.

(a) The Company and the Subsidiaries maintain a system of internal control over financial reporting (as such term is defined in Rule 13a-15(f) of the Exchange Act) that complies with the requirements of the Exchange Act and that has been designed by, or under the supervision of, the Company’s principal executive and principal financial officers, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States. The Company and the Subsidiaries maintains internal accounting controls that are sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorization, (ii) transactions are recorded as necessary to permit preparation of the Company’s financial statements in conformity with accounting principles generally accepted in the United States and to maintain accountability for its assets, (iii) access to the Company’s assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for the Company’s assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

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(b) (i) The Company and each of the Subsidiaries have established and maintain disclosure controls and procedures (as such term is defined in Rule 13a-15 under the Exchange Act), (ii) such disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by the Company in the reports they file or submit under the Exchange Act (assuming the Company was required to file or submit such reports under the Exchange Act) is accumulated and communicated to management of the Company and its subsidiaries, including their respective principal executive officers and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure to be made; and (iii) such disclosure controls and procedures were effective in all material respects to perform the functions for which they were established as of the periods covered by such reports.

(c) The section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in the Company SEC Documents accurately and fully describes in all material respects (i) the accounting policies that the Company believed as of the date thereof were the most important in the portrayal of the Company’s financial condition and results of operations and that required management’s most difficult, subjective or complex judgments; (ii) the judgments and uncertainties affecting the application of critical accounting policies; and (iii) the likelihood that materially different amounts would be reported under different conditions or using different assumptions and an explanation thereof.

Section 3.16 Insurance. The Company maintains policies of insurance of the type and in the amounts customarily carried by persons conducting a business similar to the Company and are sufficient for compliance with all applicable laws and contracts to which the Company is a party or by which it is bound, except to the extent any failure to maintain such insurance could not reasonably be expected to have a Material Adverse Effect.

Section 3.17 No Material Adverse Effect. Except as set forth in the Company SEC Documents filed with the Commission on or prior to the date hereof, since December 31, 2011, no event has occurred or condition exists which has a Material Adverse Effect.

Section 3.18 Certain Fees. Neither the Company nor any of its subsidiaries is a party to any contract, agreement or understanding with any Person that could give rise to a valid claim against the Investor for a brokerage commission, finder’s fee or like payment in connection with the offering and sale of the Shares.

Section 3.19 No Integration. Neither the Company or any of its subsidiaries nor any other Person acting on behalf of the Company or any of its subsidiaries has sold or issued any securities that would be integrated with the offering of the Shares contemplated by this Agreement pursuant to the Securities Act, the rules and regulations thereunder or the interpretations thereof by the Commission.

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Section 3.20 Labor and Employment Matters.

(a) No labor disturbance by or dispute with the employees of the Company or any of its subsidiaries exists or, to the Company’s Knowledge, is imminent that could reasonably be expected to have a Material Adverse Effect.

(b) Except as could not reasonably be expected to have a Material Adverse Effect, (i) Each “employee benefit plan” (within the meaning of Section 3(3) of the Employee Retirement Security Act of 1974, as amended (“ERISA”)) for which the Company or any member of its “Controlled Group” (defined as any organization which is a member of a controlled group of corporations within the meaning of Section 414 of the Internal Revenue Code of 1986, as amended (the “Code”)) would have any liability (each a “Plan”) has been maintained in compliance with its terms and with the requirements of all applicable statutes, rules and regulations including ERISA and the Code; (ii) with respect to each Plan subject to Title IV of ERISA (A) no “reportable event” (within the meaning of Section 4043(c) of ERISA) has occurred or is reasonably expected to occur, (B) no “accumulated funding deficiency” (within the meaning of Section 302 of ERISA or Section 412 of the Code), whether or not waived, has occurred or is reasonably expected to occur, (C) the fair market value of the assets under each Plan exceeds the present value of all benefits accrued under such Plan (determined based on those assumptions used to fund such Plan) and (D) neither the Company or any member of its Controlled Group has incurred, or reasonably expects to incur, any liability under Title IV of ERISA (other than contributions to the Plan or premiums to the PBGC in the ordinary course and without default) in respect of a Plan (including a “multiemployer plan”, within the meaning of Section 4001(c)(3) of ERISA); and (iii) each Plan that is intended to be qualified under Section 401(a) of the Code is so qualified and nothing has occurred, whether by action or by failure to act, which would cause the loss of such qualification.

(c) Neither the Company nor any of the Subsidiaries is in violation of or has received notice of any violation with respect to any federal or state law relating to discrimination in the hiring, promotion or pay of employees, nor any applicable federal or state wage and hour laws, the violation of any of which could reasonably be expected to have a Material Adverse Effect.

Section 3.21 Tax Matters.

(a) The Company and its Subsidiaries have filed all federal, state, local and foreign income and franchise tax returns required to be filed through the date hereof, subject to permitted extensions, and paid all taxes due thereon, and (i) no tax deficiency has been determined adversely to the Company or any of the Subsidiaries, nor (ii) does the Company or any Subsidiary have any Knowledge of any tax deficiencies that could, in the case of clause (i) or (ii) in the aggregate, reasonably be expected to have a Material Adverse Effect.

(b) There are no transfer taxes or other similar fees or charges under U.S. federal law or the laws of any state, or any political subdivision thereof, required to be paid in connection with the execution and delivery of this Agreement or the issuance by the Company or sale by the Company of the Shares.

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Section 3.22 Investment Company Status. Neither the Company nor any subsidiary of the Company is or, after giving effect to the offer and sale of the Shares and the application of the proceeds therefrom, will be an “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission thereunder.

Section 3.23 Financial Statements.

(a) The historical financial statements (including the related notes and supporting schedules) of each of the Company, GeoResources and the East Texas Assets included in the Company SEC Documents present fairly in all material respects the financial condition, results of operations and cash flows of the Company and GeoResources and the revenues and direct operating expenses of the East Texas Assets, as applicable, at the dates and for the periods indicated, and have been prepared in conformity with accounting principles generally accepted in the United States applied on a consistent basis throughout the periods involved.

(b) Upon filing with the Securities and Exchange Commission, the historical financial statements of the Acquired Assets included in the Company SEC Documents will present fairly in all material respects the revenues and direct operating expenses of the Acquired Assets, at the dates and for the periods indicated, and will have been prepared in conformity with accounting principles generally accepted in the United States applied on a consistent basis throughout the periods involved.

(c) The pro forma financial statements included in the Company SEC Documents include assumptions that provide a reasonable basis for presenting the significant effects directly attributable to the transactions and events described therein, the related pro forma adjustments give appropriate effect to those assumptions, and the pro forma adjustments reflect the proper application of those adjustments to the historical financial statement amounts in the pro forma financial statements included in the Company SEC Documents. The pro forma financial statements included in the Company SEC Documents have been prepared in all material respects in accordance with the Commission’s rules and guidance with respect to pro forma financial information. The pro forma financial statements included in the Company SEC Documents have been prepared on the basis consistent with such historical financial statements, except for the pro forma adjustments specified therein, and include all material adjustments to the historical financial data required by Rule 11-02 of Regulation S-X to reflect the GeoResources Merger (as defined therein), the acquisition of the East Texas Assets (as defined therein) and, when such pro forma financial statements have been prepared and filed with the SEC, the acquisition of the Acquired Assets and give effect to assumptions made on a reasonable basis and in good faith and present fairly in all material respects the historical and proposed transactions reflected therein.

(d) Deloitte & Touche LLP, who are the independent auditors of the Company, are, to the Company’s Knowledge, independent registered public accountants as required by the Securities Act and the rules and regulations thereunder and the rules and regulations of the Public Company Accounting Oversight Board (the “PCAOB”) during the periods covered by the financial statements which they reviewed contained in the Company SEC Documents.

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(e) Grant Thornton LLP, who have certified certain financial statements of GeoResources, whose report appears in the Company SEC Documents were, to the Company’s Knowledge, independent registered public accountants as required by the Securities Act and the rules and regulations thereunder and the rules and regulations of the PCAOB during the periods covered by the financial statements on which they reported contained in the Company SEC Documents.

(f) UHY LLP, who have certified certain financial statements of the Company and the East Texas Assets and who will certify certain financial statements of the Acquired Assets, whose reports appear or will appear in the Company SEC Documents are, to the Company’s Knowledge, independent registered public accountants as required by the Securities Act and the rules and regulations thereunder and the rules and regulations of the PCAOB during the periods covered by the financial statements on which they reported or will report contained in the Company SEC Documents.

(g) Neither the Company nor any of the Subsidiaries has sustained, since the date of the latest audited financial statements included in the Company SEC Documents, any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, in each case except as could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 3.24 Oil and Gas Matters.

(a) The Company and the Subsidiaries have defensible title to all of their interests in oil and gas properties (other than interests earned under farm-out, participation or similar agreements in which an assignment or transfer is pending) and all their interests in other real property and good title to all other properties owned by them, in each case, free and clear of all mortgages, pledges, liens, security interests, claims, restrictions or encumbrances of any kind except such as (i) are described in the Company SEC Documents, (ii) liens and encumbrances under operating agreements, unitization and pooling agreements, production sales contracts, farm-out agreements and other oil and gas exploration participation and production agreements, in each case that secure payment of amounts not yet due and payable for the performance of other unmatured obligations and are of a scope and nature customary in the oil and gas industry or arise in connection with drilling and production operations, or (iii) would not have a Material Adverse Effect; except as described in the Company SEC Documents or as would not have a Material Adverse Effect, all of the leases and subleases of real property of the Company or any of its subsidiaries and under which the Company or any of the Subsidiaries holds properties described in the Company SEC Documents, are in full force and effect.

(b) Forrest A. Garb & Associates (the “Company Reservoir Engineer), whose report dated February 7, 2012, is summarized or excerpted in reports included in the Company SEC Documents, was, as of the date of the report, an independent petroleum engineer with respect to the Company. The written engineering report prepared by the Company Reservoir

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Engineer dated February 7, 2012 setting forth the proved reserves attributed to the oil and gas properties of the Company and its subsidiaries accurately reflects in all material respects the interests of the Company its subsidiaries in the properties therein as of December 31, 2011 and was prepared in accordance with the Commission’s rules and regulations relating to the reporting of oil and natural gas reserves; the information furnished by the Company to the Company Reservoir Engineer for purposes of preparing its report, including, without limitation, production, costs of operation and development, current prices for production, agreements relating to current and future operations and sales of production, was true, correct and complete in all material respects on the date supplied and was prepared in accordance with customary industry practices, as indicated in the letter of the Company Reservoir Engineer dated February 7, 2012. The estimates of proved reserves and related information relating to the East Texas Assets (as defined in the Company SEC Documents) prepared by the Company’s internal reserve engineering staff as of December 31, 2011 accurately reflect in all material respects the interests that the Company acquired in connection with the closing of such acquisition and were prepared in a manner consistent with the rules and regulations of the SEC relating to the reporting of oil and gas reserves; the information used by the Company’s internal reserve engineers for purposes of preparing such estimates of proved reserves, including, without limitation, production, costs of operation and development, current prices for production, agreements relating to current and future operations and sales of production, was true, correct and complete in all material respects as of the date of such reserves.

(c) Cawley, Gillespie & Associates, Inc. (the “GeoResources Reservoir Engineer”) prepared a report dated February 27, 2012 and was, as of the date of such report, an independent petroleum engineer with respect to GeoResources. The written engineering report prepared by the GeoResources Reservoir Engineer dated February 27, 2012 setting forth the proved reserves attributed to the oil and gas properties of GeoResources and its subsidiaries accurately reflects in all material respects the interests of GeoResources and its subsidiaries in the properties therein as of December 31, 2011 and was prepared in accordance with the SEC’s rules and regulations relating to the reporting of oil and natural gas reserves; the information furnished by GeoResources to the GeoResources Reservoir Engineer for purposes of preparing its report, including, without limitation, production, costs of operation and development, current prices for production, agreements relating to current and future operations and sales of production, was true, correct and complete in all material respects on the date supplied and was prepared in accordance with customary industry practices, as indicated in the letter of the GeoResources Reservoir Engineer dated February 27, 2012.

(d) To the Company’s Knowledge, W. D. Von Gonten & Co. (the “Acquired Asset Reservoir Engineer”), was, as of the date that it prepared the estimate as of August 1, 2012, an independent petroleum engineer with respect to Petro-Hunt, Pillar Energy and the Acquired Subsidiaries. To the Company’s Knowledge, the engineering report prepared by the Acquired Asset Reservoir Engineer setting forth the proved reserves attributed to the Acquired Assets accurately reflects in all material respects the interests of Petro-Hunt, Pillar Energy and the Acquired Subsidiaries and their respective subsidiaries in the properties therein as of August 1, 2012 and was prepared in accordance with the SEC’s rules and regulations relating to the reporting of oil and natural gas reserves; to the Company’s Knowledge, the information furnished by Petro-Hunt, Pillar Energy and their respective subsidiaries to the Acquired Asset Reservoir Engineer for purposes of preparing its report, including, without limitation,

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production, costs of operation and development, current prices for production, agreements relating to current and future operations and sales of production, was true, correct and complete in all material respects on the date supplied and was prepared in accordance with customary industry practices.

(e) As of the date hereof, (i) all royalties, rentals, deposits and other amounts owed under the oil and gas leases constituting the oil and gas properties of the Company, the Subsidiaries, the Acquired Subsidiaries and relating to the Acquired Assets have been properly and timely paid (other than amounts held in suspense accounts pending routine payments or related to disputes about the proper identification of royalty owners), and no amount of proceeds from the sale or production attributable to the oil and gas properties of the Company and the Subsidiaries are currently being held in suspense by any purchaser thereof, except where such amounts due could not, individually or in the aggregate, have a Material Adverse Effect, and (ii) there are no claims under take-or-pay contracts pursuant to which natural gas purchasers have any make-up rights affecting the interests of the Company or the Subsidiaries in their oil and gas properties, except where such claims could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect

Section 3.25 Permits.

(a) The Company and the Subsidiaries have such permits, licenses, patents, franchises, certificates of need and other approvals or authorizations of governmental or regulatory authorities (“Permits”) as are necessary under applicable law to own their properties and conduct their businesses in the manner described in the Company SEC Documents, except for any of the foregoing that could not, in the aggregate, reasonably be expected to have a Material Adverse Effect; each of the Company and the Subsidiaries has fulfilled and performed all of its obligations with respect to the Permits, and no event has occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or results in any other impairment of the rights of the holder or any such Permits, except for any of the foregoing that could not reasonably be expected to have a Material Adverse Effect.

Section 3.26 Intellectual Property. The Company and the Subsidiaries own or possess adequate rights to use all material patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses, know-how, software, systems and technology (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures) necessary for the conduct of their respective businesses and have no reason to believe that the conduct of their respective businesses will conflict with, and have not received any notice of any claim of conflict with, any such rights of others, except for conflicts that could not reasonably be expected to have a Material Adverse Effect.

Section 3.27 Acquisition Agreement.

(a) The representations and warranties of the Company and Halcón Energy Properties in the Acquisition Agreement, are true, complete and correct, except as such would not have a Material Adverse Effect or would not adversely affect the ability of the Company and Halcón Energy Properties to complete the Acquisition.

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(b) To the Company’s Knowledge, there is no condition under the Acquisition Agreement that is not expected to be satisfied prior to the Termination Date (as defined in the Acquisition Agreement).

(c) To the Company’s Knowledge, the representations and warranties of Petro-Hunt and Pillar Energy in the Acquisition Agreement are true and correct, except such as would not have a material adverse effect on the financial condition, business, assets, properties or results of operations of the Company, the Company’s subsidiaries and the Acquired Subsidiaries taken as a whole (a “Pro Form Material Adverse Effect”).

(d) To the Company’s Knowledge, there is no material breach of any representation under the Acquisition Agreement by Petro-Hunt.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE INVESTOR

The Investor hereby represents and warrants to the Company that:

Section 4.1 Existence. The Investor is duly organized and validly existing and in good standing under the Laws of the Canada, with all requisite power and authority to conduct its business as currently conducted.

Section 4.2 Authorization, Enforceability. The Investor has all necessary corporate, limited liability company or partnership power and authority to execute, deliver and perform its obligations under this Agreement and the Stockholders Agreement and to consummate the transactions contemplated thereby, and the execution, delivery and performance by the Investor of this Agreement and the Stockholders Agreement has been duly authorized by all necessary action on the part of Investor; and this Agreement and the Stockholders Agreement constitute the legal, valid and binding obligations of the Investor; and the Stockholders Agreement is enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer and similar laws affecting creditors’ rights generally or by general principles of equity, including principles of commercial reasonableness, fair dealing and good faith.

Section 4.3 No Conflict. The execution, delivery and performance of this Agreement and the Stockholders Agreement by the Investor and the consummation by the Investor of the transactions contemplated hereby and thereby will not (a) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any material agreement to which the Investor is a party or by which the Investor is bound or to which any of the property or assets of the Investor is subject, (b) conflict with or result in any violation of the provisions of the organizational documents of the Investor, or (c) violate any statute, order, rule or regulation of any court or governmental agency or body having jurisdiction over the Investor or the property or assets of the Investor, except in the cases of clauses (a) and (c), for such conflicts, breaches, violations or defaults as would not prevent the consummation of the transactions contemplated by this Agreement and the Stockholders Agreement.

Section 4.4 No Side Agreements. There are no other agreements by, among or between the Investor and any of its Affiliates, on the one hand, and the Company or any of its

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Affiliates, on the other hand, with respect to the transactions contemplated hereby other than the Operative Documents nor promises or inducements for future transactions between or among any of such parties.

Section 4.5 Investment. The Investor is an “accredited investor” (as defined in Rule 501 promulgated under the Securities Act) and is knowledgeable and experienced in finance, securities and investments and has had sufficient experience analyzing and investing in securities similar to the Shares so as to be capable of evaluating the merits and risks of an investment in the Shares. The Shares are being acquired for the Investor’s own account or the account of its Affiliates, not as a nominee or agent, and with no present intention of distributing the Shares or any part thereof, and the Investor has no present intention of selling or granting any participation in or otherwise distributing the same in any transaction in violation of the securities laws of the United States or any state, without prejudice, however, to the Investor’s right at all times to sell or otherwise dispose of all or any part of the Shares under a registration statement under the Securities Act and applicable state securities laws or under an exemption from such registration available thereunder (including, without limitation, if available, Rule 144 promulgated thereunder). If the Investor should in the future decide to dispose of any of the Shares, the Investor understands and agrees (a) that it may do so only in compliance with the Securities Act and applicable state securities law, as then in effect, including a sale contemplated by any registration statement pursuant to which such securities are being offered, or pursuant to an exemption from the Securities Act, and (b) that stop-transfer instructions to that effect will be in effect with respect to such securities.

Section 4.6 Restricted Securities. The Investor understands that the Shares are characterized as “restricted securities” under the federal securities Laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such Laws and applicable regulations such securities may be resold without registration under the Securities Act only in certain limited circumstances. In this connection, the Investor represents that it is knowledgeable with respect to Rule 144 of the Commission promulgated under the Securities Act.

Section 4.7 Legend. The Investor understands that the Shares will bear the following legend: “These securities have not been registered under the Securities Act of 1933, as amended (the “Securities Act”). These securities may not be sold or offered for sale except pursuant to an effective registration statement under the Securities Act or pursuant to an exemption from registration thereunder, in each case in accordance with all applicable securities laws of the states or other jurisdictions, and in the case of a transaction exempt from registration, such securities may only be transferred if the transfer agent for such securities has received documentation satisfactory to it that such transaction does not require registration under the Securities Act.”

ARTICLE V

COVENANTS

Section 5.1 Taking of Necessary Action. Each of the parties hereto shall use its reasonable best efforts promptly to take or cause to be taken all action and promptly to do or cause to be done all things necessary, proper or advisable under applicable Law and regulations to consummate and make effective the transactions contemplated by this Agreement and the

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Acquisition Agreement. Without limiting the foregoing, the Company and the Investor shall use its reasonable best efforts to make all filings and obtain all consents of Governmental Authorities that may be necessary or, in the reasonable opinion of the other parties, as the case may be, advisable for the consummation of the transactions contemplated by the Operative Documents.

Section 5.2 Other Actions. The Company shall file prior to the Closing a supplemental listing application with the NYSE to list the Shares.

Section 5.3 Company Cooperation. The Company agrees that it will cooperate with the Investor and use reasonable efforts to provide such information or certifications as may reasonably be required by the Investor in the event the Investor makes an application to the Ontario Securities Commission for a discretionary order providing a prospectus exemption from applicable Canadian securities laws to facilitate the resale of the Shares.

Section 5.4 Access to Information. At all times prior to Closing, the Company will (and will cause any of its subsidiaries to) afford the Investor and its Representatives such access, during normal business hours throughout the period prior to the Closing Date, to the Company’s books, records, properties, personnel and to such other information, as Investor may reasonably request and will permit Investor to make such inspections as Investor may reasonably request and will cause the officers of the Company and those of any of its subsidiaries to furnish Investor with such financial and operating data and other information with respect to the business, properties and personnel of the Company and its subsidiaries and the Acquired Assets as Investor may from time to time reasonably request, provided, however, that no investigation pursuant to this section will affect or be deemed to modify any of the representations or warranties made by the Company in this Agreement.

Section 5.5 Use of Proceeds. The Company shall use the collective proceeds from the sale of the Shares to partially fund the Acquisition or to provide additional working capital for the Company or to fund the Company’s capital expenditure budget.

Section 5.6 Acquisition Agreement. The Company shall use its reasonable best efforts to ensure that the conditions precedent to the closing of the Acquisition have been satisfied, and the Company shall not amend the Acquisition Agreement in any material respect without the Investor’s prior consent (which consent shall not be unreasonably withheld).

Section 5.7 Investor Lock-Up Period. For a period commencing on the date hereof and ending on October 19, 2013 (the “Lock-Up Period”), the Investor agrees not to, directly or indirectly, (a) offer for sale, sell, pledge or otherwise dispose of (or enter into any transaction or device that is designed to, or could be expected to, result in the disposition by any person at any time in the future of) the Shares, (b) enter into any swap or other derivatives transaction that transfers to another, in whole or in part, any of the economic benefits or risks of ownership of the Shares, whether any such transaction described in clause (a) or (b) above is to be settled by delivery of Common Stock or other securities, in cash or otherwise or (c) publicly disclose the intention to do any of the foregoing. Notwithstanding the foregoing, during the Lock-Up Period, the Investor may sell, dispose of or agree to sell or dispose of the Shares in connection with a bona fide third-party tender offer pursuant to which any Person proposes to purchase more than twenty percent (20%) of the shares of Common Stock of the Company.

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ARTICLE VI

INDEMNIFICATION

Section 6.1 Indemnification by the Company. The Company agrees to indemnify the Investor and its Representatives (collectively, “Investor Related Parties”) from, and hold each of them harmless against, any and all actions, suits, proceedings (including any investigations, litigation or inquiries), demands, and causes of action, and, in connection therewith, and promptly upon demand, pay or reimburse each of them for all costs, losses, liabilities, damages, or expenses of any kind or nature whatsoever, including, without limitation, the reasonable fees and disbursements of counsel and all other reasonable expenses incurred (collectively, “Losses”) in connection with investigating, defending or preparing to defend any such matter that may be incurred by them or asserted against or involve any of them as a result of, arising out of, or in any way related to the breach of any of the representations, warranties or covenants of the Company contained herein, provided that such claim for indemnification relating to a breach of the representations or warranties is made prior to the expiration of such representations or warranties; and provided, further, that to the extent that the Losses incurred by the Investor Related Parties as a result of a breach by the Company of the representations and warranties contained herein are the result of Losses incurred by the Company, the maximum aggregate amount for which the Company may be liable for indemnification of the Investor Related Parties relating to such breach shall be limited to the amount of such Losses incurred by the Company, but excluding any amounts paid to the Investor pursuant to the provisions of this Article VI, multiplied by the Investor’s Percentage Ownership.

Section 6.2 Indemnification by the Investor. The Investor agrees to indemnify the Company and its Representatives (collectively, “Company Related Parties”) from, and hold each of them harmless against, any and all actions, suits, proceedings (including any investigations, litigation or inquiries), demands, and causes of action, and, in connection therewith, and promptly upon demand, pay or reimburse each of them for all costs, losses, liabilities, damages, or expenses of any kind or nature whatsoever, including, without limitation, the reasonable fees and disbursements of counsel and all other reasonable expenses incurred in connection with investigating, defending or preparing to defend any such matter that may be incurred by them or asserted against or involve any of them as a result of, arising out of, or in any way related to the breach of any of the representations, warranties or covenants of the Investor contained herein, provided that such claim for indemnification relating to a breach of the representations and warranties is made prior to the expiration of such representations and warranties.

Section 6.3 Indemnification Procedure. Promptly after any Company Related Party or Investor Related Party (hereinafter, the “Indemnified Party”) has received notice of any indemnifiable claim hereunder, or the commencement of any action, suit or proceeding by a third Person, which the Indemnified Party believes in good faith is an indemnifiable claim under this Agreement, the Indemnified Party shall give the indemnitor hereunder (the “Indemnifying Party”) written notice of such claim or the commencement of such action, suit or proceeding, but failure to so notify the Indemnifying Party will not relieve the Indemnifying Party from any liability it may have to such Indemnified Party hereunder except to the extent that the Indemnifying Party is materially prejudiced by such failure. Such notice shall state the nature and the basis of such claim to the extent then known. The Indemnifying Party shall have the right to defend and settle, at its own expense and by its own counsel who shall be reasonably

25

acceptable to the Indemnified Party, any such matter as long as the Indemnifying Party pursues the same diligently and in good faith. If the Indemnifying Party undertakes to defend or settle, it shall promptly notify the Indemnified Party of its intention to do so, and the Indemnified Party shall cooperate with the Indemnifying Party and its counsel in all commercially reasonable respects in the defense thereof and the settlement thereof. Such cooperation shall include, but shall not be limited to, furnishing the Indemnifying Party with any books, records and other information reasonably requested by the Indemnifying Party and in the Indemnified Party’s possession or control. Such cooperation of the Indemnified Party shall be at the cost of the Indemnifying Party. After the Indemnifying Party has notified the Indemnified Party of its intention to undertake to defend or settle any such asserted liability, and for so long as the Indemnifying Party diligently pursues such defense, the Indemnifying Party shall not be liable for any additional legal expenses incurred by the Indemnified Party in connection with any defense or settlement of such asserted liability; provided, however, that the Indemnified Party shall be entitled (a) at its expense, to participate in the defense of such asserted liability and the negotiations of the settlement thereof and (b) if (i) the Indemnifying Party has failed to assume the defense or employ counsel reasonably acceptable to the Indemnified Party or (ii) if the defendants in any such action include both the Indemnified Party and the Indemnifying Party and counsel to the Indemnified Party shall have concluded that there may be reasonable defenses available to the Indemnified Party that are different from or in addition to those available to the Indemnifying Party or if the interests of the Indemnified Party reasonably may be deemed to conflict with the interests of the Indemnifying Party, then the Indemnified Party shall have the right to select a separate counsel and to assume such legal defense and otherwise to participate in the defense of such action, with the expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the Indemnifying Party as incurred. Notwithstanding any other provision of this Agreement, the Indemnifying Party shall not settle any indemnified claim without the consent of the Indemnified Party, unless the settlement thereof imposes no liability or obligation on, and includes a complete release from liability of, and does not include any admission of wrongdoing or malfeasance by, the Indemnified Party.

ARTICLE VII

MISCELLANEOUS

Section 7.1 Interpretation and Survival of Provisions. Article, Section, Schedule, and Exhibit references are to this Agreement, unless otherwise specified. All references to instruments, documents, contracts, and agreements are references to such instruments, documents, contracts, and agreements as the same may be amended, supplemented, and otherwise modified from time to time, unless otherwise specified. The word “including” shall mean “including but not limited to.” Whenever any party has an obligation under the Operative Documents, the expense of complying with that obligation shall be an expense of such party unless otherwise specified. Whenever any determination, consent, or approval is to be made or given by the Investor, such action shall be in the Investor’s sole discretion unless otherwise specified in this Agreement. If any provision in the Operative Documents is held to be illegal, invalid, not binding, or unenforceable, such provision shall be fully severable and the Operative Documents shall be construed and enforced as if such illegal, invalid, not binding, or unenforceable provision had never comprised a part of the Operative Documents, and the remaining provisions shall remain in full force and effect. The Operative Documents have been reviewed and negotiated by sophisticated parties with access to legal counsel and shall not be construed against the drafter.

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Section 7.2 Survival of Provisions. The representations and warranties set forth herein shall survive for a period of twelve (12) months following the Closing Date regardless of any investigation made by or on behalf of the Company or the Investor. The covenants made in this Agreement shall survive the Closing of the transactions described herein and remain operative and in full force and effect regardless of acceptance of any of the Shares and payment therefor and repayment, conversion, exercise or repurchase thereof. All indemnification obligations of the Company and the Investor pursuant to this Agreement and the provisions of Article VI shall remain operative and in full force and effect unless such obligations are expressly terminated in a writing by the parties, regardless of any purported general termination of this Agreement.

Section 7.3 No Waiver; Modifications in Writing.

(a) Delay. No failure or delay on the part of any party in exercising any right, power, or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power, or remedy preclude any other or further exercise thereof or the exercise of any other right, power, or remedy. The remedies provided for herein are cumulative and are not exclusive of any remedies that may be available to a party at law or in equity or otherwise.

(b) Specific Waiver. Except as otherwise provided herein, no amendment, waiver, consent, modification, or termination of any provision of this Agreement or any other Operative Document shall be effective unless signed by each of the parties hereto or thereto affected by such amendment, waiver, consent, modification, or termination. Any amendment, supplement or modification of or to any provision of this Agreement or any other Operative Document, any waiver of any provision of this Agreement or any other Operative Document, and any consent to any departure by the Company from the terms of any provision of this Agreement or any other Operative Document shall be effective only in the specific instance and for the specific purpose for which made or given. Except where notice is specifically required by this Agreement, no notice to or demand on the Company in any case shall entitle the Company to any other or further notice or demand in similar or other circumstances.

Section 7.4 Binding Effect; Assignment.

(a) Binding Effect. This Agreement shall be binding upon the Company, the Investor, and their respective successors and permitted assigns. Except as expressly provided in this Agreement, this Agreement shall not be construed so as to confer any right or benefit upon any Person other than the parties to this Agreement and their respective successors and permitted assigns.

(b) Assignment of Rights. All or any portion of the rights and obligations of the Investor under this Agreement may be transferred by the Investor to any Affiliate without the consent of the Company. No portion of the rights and obligations of the Investor under this Agreement may be transferred by the Investor to a non-Affiliate without the written consent of the Company (which consent shall not be unreasonably withheld by the Company).

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Section 7.5 Communications. All notices and demands provided for hereunder shall be in writing and shall be given by registered or certified mail, return receipt requested, telecopy, air courier guaranteeing overnight delivery or personal delivery to the following addresses:

(a) If to the Investor:

CPP Investment Board PMI-2 Inc.

One Queen St. East

Suite 2500

P.O. Box 101

Toronto, Ontario M5C 2W5

Attention: Scott Lawrence, Authorized Signatory

Facsimile: (416) 868-8690

with a copies to:

CPP Investment Board PMI-2 Inc.

One Queen St. East

Suite 2500

P.O. Box 101

Toronto, Ontario M5C 2W5

Attention: John Butler, Director and Secretary

Facsimile: (416) 868-4760

and

Vinson & Elkins L.L.P.

1001 Fannin Street, Suite 2500

Houston, Texas 77002

Attention: Keith R. Fullenweider

(b) If to the Company:

Halcón Resources Corporation

1000 Louisiana Street

Suite 6700

Houston, Texas 77002

Attention: General Counsel

with a copy to:

Thompson & Knight LLP

333 Clay Street

Suite 3300

Houston, Texas 77002

Attention: William Heller

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or to such other address as the Company or the Investor may designate in writing. All notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; at the time of transmittal, if sent via electronic mail; upon actual receipt if sent by certified mail, return receipt requested, or regular mail, if mailed; when receipt acknowledged, if sent via facsimile; and upon actual receipt when delivered to an air courier guaranteeing overnight delivery.

Section 7.6 Removal of Legend. In connection with a sale of the Shares by the Investor in reliance on Rule 144, the Investor or its broker shall deliver to the transfer agent and the Company a broker representation letter providing to the transfer agent and the Company any information the Company deems necessary to determine that the sale of the Shares is made in compliance with Rule 144, including, as may be appropriate, a certification that the Investor is not an Affiliate of the Company and regarding the length of time the Shares have been held. Upon receipt of such representation letter, the Company shall promptly direct its transfer agent to credit such shares to book-entry accounts maintained by the transfer agent without a restrictive legend, including the legend referred to in Section 4.7, and the Company shall bear all costs associated therewith. After the Investor or its permitted assigns have held the Shares for one year, the Company agrees, upon request of the Investor or permitted assignee, to take all steps necessary to promptly effect the removal of the legend described in Section 4.7 from the Shares, and the Company shall bear all costs associated therewith, regardless of whether the request is made in connection with a sale or otherwise, so long as the Investor or its permitted assigns provide to the Company any information the Company deems necessary to determine that the legend is no longer required under the Securities Act or applicable state laws, including a certification that the holder is not, and has not been for the preceding 90 days, an Affiliate of the Company (and a covenant to inform the Company if it should thereafter become an Affiliate and to consent to exchange its shares for shares bearing an appropriate restrictive legend) and regarding the length of time the Shares have been held.

Section 7.7 Entire Agreement. This Agreement, the other Operative Documents and the other agreements and documents referred to herein are intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and therein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein or the other Operative Documents with respect to the rights granted by the Company or any of its Affiliates or the Investor or any of its Affiliates set forth herein or therein. This Agreement, the other Operative Documents and the other agreements and documents referred to herein or therein supersede all prior agreements and understandings between the parties with respect to such subject matter.

Section 7.8 Governing Law. This Agreement will be construed in accordance with and governed by the laws of the State of New York.

Section 7.9 Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same Agreement.

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Section 7.10 Termination.

(a) Notwithstanding anything herein to the contrary, this Agreement may be terminated at any time at or prior to the Closing by the written consent of the Investor, upon a breach in any material respect by the Company of any covenant or agreement set forth in this Agreement and any such breach has not been cured with ten (10) days of the company receiving written notice thereof.

(b) Notwithstanding anything herein to the contrary, this Agreement shall automatically terminate at any time at or prior to the Closing:

(i) if a statute, rule, order, decree or regulation shall have been enacted or promulgated, or if any action shall have been taken by any Governmental Authority of competent jurisdiction that permanently restrains, permanently precludes, permanently enjoins or otherwise permanently prohibits the consummation of the transactions contemplated by this Agreement or makes the transactions contemplated by this Agreement illegal;

(ii) if, under the HSR Act or otherwise, the U.S. Federal Trade Commission or the U.S. Department of Justice shall have commenced or threatened to commence any proceeding to delay or enjoin or seek damages in connection with the transactions contemplated by this Agreement or the Acquisition Agreement;

(iii) upon the termination of the Acquisition Agreement; or

(iv) if the Closing of the Acquisition shall not have occurred by December 20, 2012.

(c) In the event of the termination of this Agreement as provided in this Section 7.10, this Agreement shall forthwith become null and void. In the event of such termination, there shall be no liability on the part of any party hereto, except as set forth in Article VI of this Agreement and this Section 7.10; provided that nothing herein shall relieve any party from any liability or obligation with respect to any willful breach of this Agreement.

(d) If (a) the Company for any reason fails to tender the Shares for delivery to the Investor, or (b) the Investor shall decline to purchase the Shares for any reason permitted under this Agreement, the Company shall promptly reimburse the Investor for one-half of the actual out-of-pocket expenses (including fees and disbursements of counsel for the Investor) incurred by the Investor in connection with this Agreement and the proposed purchase of the Shares in an amount up to $500,000.

Section 7.11 Recapitalization, Exchanges, Etc. The provisions of this Agreement shall apply to the full extent set forth herein with respect to any and all equity interests of the Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise) which may be issued in respect of, in exchange for or in substitution of, the Shares, and shall be appropriately adjusted for combinations, recapitalizations and the like occurring after the date of this Agreement and prior to the Closing.

[Signature pages follow.]

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IN WITNESS WHEREOF, the parties hereto execute this Agreement, effective as of the date first above written.

HALCÓN RESOURCES CORPORATION
By:	/s/ Floyd C. Wilson
	Floyd C. Wilson
	Chief Executive Officer

Signature Page to Common Stock Purchase Agreement

CPP INVESTMENT BOARD PMI-2 INC.
By:	/s/ Eric M. Wetlaufer
Name:	Eric M. Wetlaufer
Title:	Authorized Signatory
By:	/s/ R. Scott Lawrence
Name:	R. Scott Lawrence
Title:	Authorized Signatory

Signature Page to Common Stock Purchase Agreement

EXHIBIT A

FORM OF NOTICE OF EFFECTIVENESS

[    ], 2012

CPP Investment Board PMI-2 Inc

One Queen St. East

Suite 2500

Toronto, Ontario M5C 2W5.

Attention: R. Scott Lawrence

Vice President, Head of Relationship Investments

Re: Effectiveness of Subscription Agreement

Ladies and Gentlemen:

Halcón Resources Corporation (the “Company”) is delivering this notice of effectiveness (“Effectiveness Notice”) pursuant to Section 2.5(a) of the Common Stock Purchase Agreement, dated as of October 19, 2012, by and between the Company and CPP Investment Board PMI-2 Inc. (the “Purchase Agreement”). The Company acknowledges that as a result of this delivery of the Effectiveness Notice, all provisions of the Purchase Agreement are now enforceable against the Company in accordance with its terms.

Yours Truly,

HALCÓN RESOURCES CORPORATION
By:
	Name:
	Title:

Exhibit A to Common Stock Purchase Agreement

EXHIBIT B

FORM OF STOCKHOLDERS AGREEMENT

[See Attached]

Exhibit B to Common Stock Purchase Agreement

EXHIBIT C

FORM OF OPINION OF THOMPSON & KNIGHT

1. The Company is a corporation validly existing and in good standing under the laws of the State of Delaware.

2. The Company (a) has the corporate power to execute, deliver and perform the Purchase Agreement, (b) has taken all corporate action necessary to authorize the execution, delivery and performance of the Purchase Agreement and (c) has duly executed and delivered the Purchase Agreement.

3. The execution and delivery by the Company of the Purchase Agreement do not, and the performance by it of its obligations thereunder will not:

(a) violate its certificate of incorporation or bylaws;

(b) breach or result in a default or the creation of any lien under any agreement or instrument listed in Schedule I.B (the “Applicable Contracts”) (except that we express no opinion with respect to financial covenants and other similar provisions in any Applicable Contract requiring financial calculations or determinations to ascertain compliance) or any order, writ, judgment, injunction, decree, determination or award listed in Schedule I.C; or

(c) result in a violation by it of any Applicable Laws or the Delaware General Corporation Law.

4. No authorization, approval or other action by, and no notice to or filing with, any United States federal or New York governmental authority or regulatory body, or any third party that is a party to an Applicable Contract, is required for the due execution, delivery or performance by the Company of the Purchase Agreement, except that we express no opinion with respect to authorizations, approvals, actions, notices and filings that may be required in connection with financial covenants and other similar provisions in any Applicable Contract requiring financial calculations or determinations to ascertain compliance.

5. The Company is not, and as a result of the transactions contemplated by the Purchase Agreement will not be, required to register as an investment company under the Investment Company Act.

6. Based upon the representations, warranties and agreements of the Company and the you in the Purchase Agreement, it is not necessary in connection with the offer and sale of the Shares to you under the Purchase Agreement to register the Shares under the Securities Act of 1933, as amended (the “Securities Act”), it being understood that no opinion is expressed as to any subsequent resale of the Shares.

7. The Shares have been duly authorized and, when issued to you against payment therefore as provided in the Purchase Agreement, will be validly issued, fully paid and non-assessable.

Exhibit C to Common Stock Purchase Agreement

8. The issuance of the Shares is not subject to preemptive rights under the Delaware General Corporation Law, the certificate of incorporation or by-laws of the Company or any Applicable Contract.

9. We are not representing the Company in any pending litigation in which it is a named defendant that challenges the validity or enforceability of, or seeks to enjoin the performance of, the Purchase Agreement.

Exhibit C to Common Stock Purchase Agreement

SCHEDULE 3.1

SUBSIDIARIES OF THE COMPANY

SUBSIDIARY	JURISDICTION OF FORMATION
Great Plains Pipeline Company	Delaware
Halcón Energy Properties, Inc.	Delaware
Halcón Field Services, LLC	Delaware
Halcón Holdings, Inc.	Delaware
Halcón Operating Co., Inc.	Texas
Halcón Resources Operating, Inc.	Delaware
Halcón Louisiana Operating, L.P.	Delaware
HLP Gulf States, LLC	Oklahoma
HRC Energy Holdings (LA), Inc.	Delaware
HRC Energy Louisiana, LLC	Delaware
HRC Energy Resources (LaFourche), Inc.	Louisiana
HRC Energy Resources (WV), Inc.	Delaware
Halcón GEO Holdings, LLC	Delaware
Pontotoc Production Company, Inc.	Texas
AROC (Texas), Inc.	Texas
Catena Oil & Gas LLC	Texas
G3 Energy, LLC	Colorado
G3 Operating, LLC	Colorado
Southern Bay Operating, L.L.C.	Texas
Southern Bay Energy, LLC	Texas
Southern Bay Louisiana, LLC	Texas
Western Star Drilling Company	North Dakota

Schedule 3.1 to Common Stock Purchase Agreement

FORM OF STOCKHOLDERS AGREEMENT

This Stockholders Agreement (this “Agreement”) dated as of [—], 2012, is entered into by and between HALCÓN RESOURCES CORPORATION, a Delaware corporation (the “Company”), and CPP Investment Board PMI-2 Inc. (“CPPIB”).

RECITALS

WHEREAS, pursuant to that certain Common Stock Purchase Agreement by and between the Company and CPPIB executed on October 19, 2012 (the “Purchase Agreement”), CPPIB will receive the number of shares of Common Stock set forth on Schedule 1 attached hereto; and

WHEREAS, as a condition to CPPIB’s obligation to consummate the investment contemplated by the Purchase Agreement, the Company has agreed to grant to CPPIB certain rights with respect to their shares as set forth herein.

NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1. Definitions.

For purposes of this Agreement, the following terms shall have the respective meanings assigned to them in this Section 1. All capitalized terms used but not defined in this Agreement shall have the meanings assigned to them in the Purchase Agreement.

“Barclays RRA” means that certain Registration Rights Agreement dated as of March 5, 2012, as supplemented or amended, by and between the Company and Barclays Capital, Inc., as lead placement agent.

“Board” shall mean the Board of Directors of the Company.

“Business Day” means a day other than (i) a Saturday or Sunday or (ii) any day on which banks located in New York, New York, U.S.A. or Toronto, Ontario, Canada are authorized or obligated to close.

“Closing” shall mean the closing of the transactions contemplated by the Purchase Agreement.

“Common Stock” means the common stock of the Company, par value $.0001 per share.

“Covered Shares” shall mean (i) the shares of Common Stock issued to CPPIB pursuant to the Purchase Agreement, (ii) any other shares of Common Stock of the Company held by any Holder and (iii) any securities issued or issuable with respect to the shares described in clauses (i) and (ii) above by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization.

“Director” means a member of the Board.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Equity Securities” means any and all shares of Common Stock and any securities of the Company convertible into or exercisable for, shares of Common Stock, and options, warrants or other rights to acquire shares of Common Stock.

“Excluded Securities” means Equity Securities issued in connection with: (a) a grant to any existing or prospective consultants, employees, officers or Directors pursuant to any stock option plan or other compensation agreement; (b) the conversion or exchange of any securities of the Company into shares of Common Stock or the exercise of any options, warrants or other rights to acquire shares of Common Stock; (c) any acquisition by the Company of the stock, assets, properties or business of any person; (d) any merger, consolidation or other business combination transaction involving the Company; (e) securities issued in connection with any issuance of debt by the Company, and (f) securities issued as a dividend or upon any split or other pro-rata distribution in respect of the outstanding shares of Common Stock.

“HALRES RRA” means the Registration Rights Agreement dated as of February 8, 2012 by and between the Company and HALRES, LLC.

“Holders” shall mean CPPIB and all affiliates of CPPIB that become holders of Registrable Securities or Covered Shares, as the case may be.

“Necessary Action” shall mean, with respect to a specified result, all actions (to the extent such actions are permitted by law and, in the case of any action by the Company that requires a vote or other action on the part of the Board, to the extent such action is consistent with the fiduciary duties that the Directors may have in such capacity) reasonably necessary to cause such result, including causing the adoption of amendments to the Company’s Bylaws to increase the size of the Board; provided, however, that in no event shall Necessary Action include any action that requires approval by the Company’s stockholders or any action that cannot be taken exclusively by the Board under applicable law, NYSE listing standards or the Company’s organizational documents.

“Petro-Hunt RRA” means the Registration Rights Agreement to be entered into upon the closing of the Acquisition (as defined in the Purchase Agreement).

“Registrable Securities” shall mean (i) the shares of Common Stock issued to CPPIB pursuant to the Purchase Agreement, (ii) any other shares of Common Stock of the Company held by any Holder and (iii) any securities issued or issuable with respect to the shares described in clauses (i) and (ii) above by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization, provided, however, that as to any particular Registrable Securities, such securities shall cease to be Registrable Securities when (A) a registration statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been disposed of in accordance with such registration statement, (B) such securities shall have been sold to the public pursuant to Rule 144 (or any successor provision) under the Securities Act, or (C) such

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securities have been sold in a private transaction in which the transferor’s rights under this Agreement are not assigned to the transferee of the securities in accordance with Section 7 hereof.

“Securities Act” means the Securities Act of 1933, as amended.

Section 2. Stockholder Board Nomination, Pre-emptive Rights and Voting Agreement.

(a) The Company will, concurrently with the Closing, or within a reasonable time thereafter, cause one person designated in writing by CPPIB (the “CPPIB Board Representative”) to be elected or appointed to the Board as a Class B Director, subject to the satisfaction of all legal and governance requirements regarding service as a Director and to the reasonable approval of the Board or any committee established by the Board to address specified governance issues (the “Nominating and Governance Committee”). After such appointment, so long as the Holders beneficially own (as determined in accordance with Rule 13d-3 under the Exchange Act, but excluding for this purpose any attribution of ownership of securities held by persons who are not affiliates of CPPIB), in the aggregate, at least 5.0% of the outstanding shares of Common Stock, the Company will be required to recommend to its stockholders the election of the CPPIB Board Representative at the Company’s annual meeting, subject to the satisfaction of all legal and governance requirements regarding service as a Director and to the reasonable approval of the Nominating and Governance Committee of the Board (such approval not to be unreasonably withheld or delayed), to the Board. If the Holders no longer beneficially own (as determined in accordance with Rule 13d-3 under the Exchange Act, but excluding for this purpose any attribution of ownership of securities held by persons who are not affiliates of CPPIB), in the aggregate, at least 5.0% of the outstanding shares of Common Stock, CPPIB will have no further rights under this Section 2(a), and, at the written request of the Board, shall use its reasonable best efforts to cause the CPPIB Board Representative to resign from the Board as promptly as possible thereafter; provided, however, that upon the occurrence of any event which results in the Holders beneficially owning less than 5.0% of the outstanding shares of Common Stock, other than the sale of shares of Common Stock by the Holders, the Holders shall have 45 days after being advised in writing by the Company of the occurrence of such event or otherwise becoming aware that it beneficially owns (as determined in accordance with Rule 13d-3 under the Exchange Act, but excluding for this purpose any attribution of ownership of securities held by persons who are not affiliates of CPPIB) less than 5.0% of the outstanding shares of Common Stock, within which to buy (in accordance with applicable laws) additional shares of Common Stock in the market in order to increase the number of shares of Common Stock it beneficially owns (as determined in accordance with Rule 13d-3 under the Exchange Act, but excluding for this purpose any attribution of ownership of securities held by persons who are not affiliates of CPPIB) to at least 5.0% of the outstanding shares of Common Stock.

(b) If, at any time, the Holders beneficially own (as determined in accordance with Rule 13d-3 under the Exchange Act, but excluding for this purpose any attribution of ownership of securities held by persons who are not affiliates of CPPIB), in the aggregate, at least 20.0% of the outstanding shares of Common Stock, the Company will cause one additional person designated in writing by CPPIB (the “Additional CPPIB Board Representative” and, together with the CPPIB Board Representative, the “CPPIB Board Representatives”) to be elected or

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appointed to the Board subject to the satisfaction of all legal and governance requirements regarding service as a Director and to the reasonable approval of the Board or the Nominating and Governance Committee; provided, however, that CPPIB shall only have the right to appoint the Additional CPPIB Representative if the Board consists of 10 or more persons (after giving effect to the addition of the Additional CPPIB Board Representative). After such appointment, so long as the Holders beneficially own (as determined in accordance with Rule 13d-3 under the Exchange Act, but excluding for this purpose any attribution of ownership of securities held by persons who are not affiliates of CPPIB), in the aggregate, at least 20.0% of the outstanding shares of Common Stock, the Company will be required to recommend to its stockholders the election of the Additional CPPIB Board Representative at the Company’s annual meeting, subject to the satisfaction of all legal and governance requirements regarding service as a Director and to the reasonable approval of the Nominating and Governance Committee of the Board (such approval not to be unreasonably withheld or delayed), to the Board. If the Holders no longer beneficially own (as determined in accordance with Rule 13d-3 under the Exchange Act, but excluding for this purpose any attribution of ownership of securities held by persons who are not affiliates of CPPIB), in the aggregate, at least 20.0% of Common Stock, CPPIB will have no further rights under this Section 2(b), and, at the written request of the Board, shall use all reasonable best efforts to cause the Additional CPPIB Board Representative to resign from the Board as promptly as possible thereafter; provided, however, that upon the occurrence of any event which results in the Holders beneficially owning less than 20.0% of the outstanding shares of Common Stock, other than the sale of shares of Common Stock by the Holders, the Holders shall have 45 days after being advised in writing by the Company of the occurrence of such event or otherwise becoming aware that it beneficially owns (as determined in accordance with Rule 13d-3 under the Exchange Act, but excluding for this purpose any attribution of ownership of securities held by persons who are not affiliates of CPPIB) less than 20.0% of the outstanding shares of Common Stock, within which to buy (in accordance with applicable laws) additional shares of Common Stock in the market in order to increase the number of shares of Common Stock it beneficially owns (as determined in accordance with Rule 13d-3 under the Exchange Act, but excluding for this purpose any attribution of ownership of securities held by persons who are not affiliates of CPPIB) to at least 20.0% of the outstanding shares of Common Stock.

(c) The CPPIB Board Representatives (including any successor nominees) duly selected in accordance with Sections 2(a) and 2(b), shall, subject to applicable law, be the Company’s and the Nominating and Governance Committee’s nominees to serve on the Board. The Company shall take all Necessary Actions to cause the CPPIB Board Representatives to be elected as Directors of the Company.

(d) CPPIB shall have the power to designate the CPPIB Board Representatives’ replacements upon the death, resignation, retirement, disqualification or removal from office of such Directors. Such replacement CPPIB Board Representative shall be subject to the satisfaction of all legal and governance requirements regarding service as a Director and to the reasonable approval of the Nominating and Governance Committee of the Board (such approval not to be unreasonably withheld or delayed). The Board shall take all Necessary Actions to cause the Company to fill the vacancy resulting therefrom with such person (including such person, subject to applicable law, being the Company’s and the Nominating and Governance Committee’s nominee to serve on the Board, using all reasonable best efforts to have such person elected as a Director and the Company soliciting proxies for such person to the same extent as it does for any of its other nominees to the Board).

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(e) The CPPIB Board Representatives shall be entitled to the same rights, and shall be bound by the same duties and obligations as other non-management members of the Board generally.

(f) So long as the Holders beneficially own (as determined in accordance with Rule 13d-3 under the Exchange Act, but excluding for this purpose any attribution of ownership of securities held by persons who are not affiliates of CPPIB), in the aggregate, greater than 5.0% of the outstanding shares of Common Stock of the Company, the Holders shall have the pre-emptive right to purchase their pro rata portion of any Equity Securities (other than Excluded Securities) (the “New Securities”) that the Company may, from time to time, propose to issue or sell to any party, whether by way of a public offering or private placement (each, an “Offering”). In order for the Holders to assess such an Offering, the Company shall provide written notice to the Holders when the Company considers a possible Offering in which the Investor would have the right to participate pursuant to this Section 2(f), which notice shall reflect the type of Offering proposed (e.g. marketed deal or private placement). The Company shall provide the Holders with at least four (4) Business Days prior notice of the Company announcing that it is conducting an Offering and the Holders shall, within three (3) Business Days of receipt of the Company’s notice, advise whether the Holders wish to participate in the Offering and the extent of such participation; provided, however, that in the case of a “bought” deal, the Company shall provide the Investor at least 24 hours’ notice of the Company announcing that it is conducting such an Offering and the Holders shall, prior to one-half hour before the Company’s announcement of the Offering, advise the Company as to whether it wishes to participate in the Offering and the extent of such participation. If the Holders do not respond to notice of an Offering received from the Company within the time periods provided for in this Section 2(f), the Holders shall be deemed to have elected not to participate in such Offering. Notwithstanding the foregoing, if issuance of New Securities to the Holders pursuant to this Section 2(f) would require the Company to seek approval of its stockholders under the rules of the New York Stock Exchange, the Company shall not be required to seek approval of its stockholders for such issuance, and the pro rata portion of New Securities that the Holders may purchase shall be limited to the maximum amount of New Securities that the Holders would be able to purchase without stockholder approval; provided, however, that if the Company is seeking its approval of its stockholders for any other reason in connection with the Company’s proposed issuance of New Securities, then the Company shall also seek stockholder approval of the issuance to the Holders of their pro rata portion of the New Securities pursuant to this Section 2(f), and if, such stockholder approval is obtained, the Holders shall be entitled to purchase their full pro rata portion of the New Securities.

(g) CPPIB hereby irrevocably and unconditionally agrees that at any meeting of the stockholders of the Company at which action is to be taken by the stockholders with respect to the transactions contemplated by the Acquisition Agreement, including, without limitation, (i) the approval of an amendment to the Company’s Certificate of Incorporation to increase the number of shares of Common Stock authorized for issuance thereunder and (ii) approval of the conversion of the Company’s convertible preferred stock issued to Petro-Hunt and Pillar Energy (the “Transactions”), however called, including any adjournment or postponement thereof, and in

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connection with any written consent of the stockholders of the Company relating to the Transactions, CPPIB shall, in each case to the fullest extent that the Covered Shares are entitled to vote thereon or consent thereto (x) appear at each such meeting or otherwise cause the Covered Shares to be counted as present thereat for purposes of calculating a quorum, and (y) vote (or cause to be voted), in person or by proxy, or deliver (or cause to be delivered) a written consent covering, all of the Covered Shares in favor of the Transactions and any other action reasonably requested by the Company in furtherance thereof, submitted for the vote or written consent of stockholders.

Section 3. Mandatory Shelf Registration.

(a) The Company agrees to file with the Commission a shelf registration statement on Form S-3 or such other form under the Securities Act then available to the Company providing for the resale pursuant to Rule 415 from time to time by the Holders of any and all Registrable Securities (including a prospectus, any amendments and supplements to such registration statement or prospectus, including pre- and post-effective amendments, all exhibits thereto and all material incorporated by reference or deemed to be incorporated by reference, if any, in such registration statement, the “Mandatory Shelf Registration Statement”). The Company agrees to use its reasonable best efforts to cause any Mandatory Shelf Registration Statement to be declared effective by the Commission within 365 days following the Closing Date.

(b) The Company shall use its reasonable best efforts to cause any Mandatory Shelf Registration Statement to remain continuously effective until the earlier of (i) the sale pursuant to a registration statement of all of the Registrable Securities covered by the Mandatory Shelf Registration Statement, (ii) the sale, transfer or other disposition pursuant to Rule 144 of all of the Registrable Securities covered by the Mandatory Shelf Registration Statement or (iii) the second anniversary of the effective date of the initial Mandatory Shelf Registration Statement (subject to extension pursuant to Section 12 below); provided, however, that in the event that CPPIB has the right, pursuant to Section 2 hereof, to designate at least one (1) Director, such period under this clause (iii) shall be extended for as long as CPPIB retains such right to designate at least one director. Any Mandatory Shelf Registration Statement shall provide for the resale from time to time, and pursuant to any method or combination of methods legally available to, and requested by, the Holders of the Registrable Securities.

Section 4. Underwritten Public Offerings.

(a) Following the expiration of the Lock-Up Period and for so long as CPPIB retains the right to designate at least one Director pursuant to Section 2 of this Agreement, the Holders shall have the right to require the Company to conduct one (1) underwritten public offering of all or a portion of the Holders’ Registrable Securities in accordance with this Section 4 (an “Underwritten Offering”); provided, however, that in no event shall the Company be required to conduct an Underwritten Offering for less than a minimum of $10 million of Registrable Securities, in the aggregate (determined by multiplying the number of Registrable Securities held by the Holders requesting the Underwritten Offering (the “Requesting Holders”) by the average of the closing price on the NYSE for the Common Stock for the ten trading days preceding the date of such notice). In addition, if at any time and for so long as the Holders beneficially own

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(as determined in accordance with Rule 13d-3 under the Exchange Act, but excluding for this purpose any attribution of ownership of securities held by persons who are not affiliates of CPPIB)), in the aggregate, over 15.0% of the issued and outstanding shares of Common Stock of the Company, the Holders shall be entitled to require the Company to conduct one (1) additional Underwritten Offering pursuant to the terms of this Agreement; provided, however, that the Company shall not be required to effect more than two (2) Underwritten Offerings pursuant to this Section 4; and provided, further, that the Company shall not be required to effect more than one (1) Underwritten Offering in any twelve (12) month period.

(b) Upon the request of the Requesting Holders (which request shall specify the Registrable Securities intended to be included in such Underwritten Offering), the Company will use its reasonable best efforts to effect such Underwritten Offering in accordance with the procedures set forth in Section 11 below; provided, however, that the Company shall have the right to defer such Underwritten Offering in accordance with Section 12 below.

(c) In addition, the Requesting Holders shall give notice to the Company of the managing underwriters for such proposed Underwritten Offering, such managing underwriters to be subject to the approval of the Company, not to be unreasonably withheld.

(d) If an Underwritten Offering pursuant to this Section 4 is commenced, but not completed for any reason (other than as a result of the Requesting Holders’ (i) determination not to complete the Underwritten Offering, (ii) failure to provide all necessary information regarding the Requesting Holders to the Company or the underwriters or (iii) failure to satisfy any of the covenants or conditions contained in the underwriting agreement relating to such Underwritten Offering), such Underwritten Offering will not count as one of the Underwritten Offerings that the Company is obligated to effect pursuant to this Section 4.

Section 5. Piggy-Back Registration Rights.

(a) If the Company proposes to file, on its own behalf, a Registration Statement under the Securities Act on Form S-1 or S-3 or similar forms available for use by the Company, other than pursuant to Section 3 of this Agreement or on Form S-8 in connection with a dividend reinvestment, employee stock purchase, option or similar plan or on Form S-4 in connection with a merger, consolidation or reorganization, the Company shall give written notice to CPPIB at least ten (10) days before the filing with the Commission of such Registration Statement. Such notice shall offer to include in such filing all or a portion of the Registrable Securities owned by the Holders. If any Holder desires to include all or a portion of its Registrable Securities in such Registration Statement, it shall give written notice to the Company within three (3) business days after the date of receipt of such offer specifying the amount of Registrable Securities to be registered (for purposes of this Section 5, “Specified Shares”). The Company shall thereupon include in such filing the Specified Shares, subject to priorities in registration set forth in this Agreement, and subject to its right to withdraw such filing, and shall use its reasonable best efforts to effect the registration under the Securities Act of the Specified Shares.

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(b) The right of any Holder to have Specified Shares included in any Registration Statement in accordance with the provisions of this Section 5 shall be subject to the following conditions:

(1) The Company shall have the right to require that the Holders agree to refrain from offering or selling any shares of Common Stock that it owns which are not included in any such Registration Statement in accordance with this Section 5 for any reasonable time period, not to exceed ninety (90) days, as may be specified by any managing underwriter of the offering to which such Registration Statement relates.

(2) If (A) a registration pursuant to this Section 5 involves an underwritten offering of the securities being registered to be distributed (on a firm commitment basis) by or through one or more underwriters of recognized standing under underwriting terms appropriate for such a transaction and (B) the managing underwriter of such underwritten offering shall inform the Company and the Holders by letter of its belief that the amount of Specified Shares requested to be included in such registration exceeds the amount which can be sold in (or during the time of) such offering within a price range acceptable to the Company or a majority of such requesting stockholders, including the Holders, then the Company will include in such registration such amount of securities which the Company is so advised can be sold in (or during the time of) such offering as follows: first, the securities being offered by the Company for its own account; second, any shares of common stock requested to be included in such Registration Statement pursuant to the Barclays RRA; third, the Specified Shares and any shares of common stock requested to be included in such Registration Statement pursuant to the HALRES RRA and the Petro-Hunt RRA, pro rata on the basis of the amount of shares of Common Stock so proposed to be sold and so requested to be included by all such stockholders, including the Holders; and fourth, the securities of the Company, if any, proposed to be included in the registration by any other holders of the Company’s securities (whether or not such holders have contractual rights to include such securities in the registration).

The Company shall furnish the Holders with such number of copies of the Prospectus as the Holders may reasonably request in order to facilitate the sale and distribution of their Specified Shares.

(c) Notwithstanding the foregoing, the Company in its sole discretion may determine not to file the Registration Statement or proceed with the offering as to which the notice specified in Section 5(a) is given without liability to the Holders.

Section 6. Participation in Underwritten Offering. No Holder may participate in any Underwritten Offering unless such Holder (a) agrees to sell its Registrable Securities included in such registration on the basis provided in any underwriting arrangements approved by the holders of at least a majority of the Registrable Securities to be included in such registration, or by a Person appointed by such holders to act on their behalf to approve such arrangements, and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements, provided, however, that no Holder shall be required to make any representations or warranties to, or agreements with, the Company or any underwriters other than such representations, warranties or agreements as are customary and reasonably requested by the underwriters.

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Section 7. Exclusive Registration Rights and Transfer.

The rights of CPPIB, as the initial Holder under this Agreement, may upon notice to the Company be transferred to any of CPPIB’s affiliates to which any Registrable Securities are transferred; provided that any such transferee shall have executed and delivered to the Company an agreement in form and substance reasonably acceptable to the Company whereby such transferee agrees to be bound by the terms and conditions of this Agreement as if such transferee were an original party hereto. Except as provided in this Section 7, the rights granted under this Agreement are granted specifically to and for the benefit of CPPIB and shall not pass to any other transferee of Registrable Securities. From and after the date of this Agreement, the Company will not, without the prior written consent of CPPIB, enter into any agreement with respect to its securities that violates the rights granted to CPPIB in this Agreement. The foregoing shall not restrict or prevent the Company from entering into any other agreement with any party pertaining to the registration by the Company of such party’s Common Stock, provided, however, that no such agreement shall grant to any Person registration rights that are superior or preferential to the rights granted to the Holders hereunder or that would otherwise frustrate the purposes of this Agreement. Except as set forth in Schedule 2 attached hereto, the Company represents and warrants to CPPIB that, as of the date hereof, the Company is not a party to any agreement, other than this Agreement, pertaining to the registration by the Company of Common Stock.

Section 8. Expenses. The Company shall bear all the expenses in connection with any Registration Statement under this Agreement, other than transfer taxes payable on the sale of Shares, the fees and expenses of counsel engaged by the Holders and fees, commissions and discounts of brokers, dealers and underwriters.

Section 9. Recall of Prospectuses, etc. With respect to a Registration Statement or amendment thereto filed pursuant to this Agreement, if, at any time, the Company notifies the Holders that an amendment to such Registration Statement or an amendment or supplement to the prospectus included therein is necessary or appropriate, the Holders will forthwith cease selling and distributing Shares thereunder and will, upon the Company’s request, forthwith redeliver to the Company all copies of such Registration Statement and prospectuses then in its possession or under its control. The Company will use its reasonable best efforts to cause any such amendment or supplement to become effective as soon as practicable and will furnish the Holders with a reasonable number of copies of such amended or supplemented prospectus (and the period during which the Company is required to use its best efforts to maintain such Registration Statement in effect pursuant to this Agreement will be increased by a number of days equal to the number of days in the period from the date on which any Holder was required to cease selling and distributing Shares thereunder to the date on which the Company delivers copies of such effective amendment or supplement to each Holder).

Section 10. Cooperation. The Company shall be entitled to require the Holders to cooperate with the Company in connection with a registration of Registrable Securities pursuant to this Agreement and each Holder will furnish (i) such information concerning such Holder as may be required by the Company or the Commission in connection therewith and (ii) such representations, undertakings and agreements as may be required by the Commission in connection therewith.

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Section 11. Underwritten Offering Procedures. Upon the receipt of a request for any Underwritten Offering pursuant to Section 4 of this Agreement, the Company will use its reasonable best efforts to effect such Underwritten Offering, and pursuant thereto the Company will as expeditiously as possible:

(a) To the extent necessary to register any Registrable Securities that are not registered under the Mandatory Shelf Registration Statement, amend the Mandatory Shelf Registration Statement to add such Registrable Securities or prepare and file with the Commission a new registration statement on an appropriate form under the Securities Act (an “Additional Registration Statement” and, together with the Mandatory Shelf Registration Statement, a “Registration Statement”)) and use its reasonable best efforts to cause such Additional Registration Statement to become effective at the earliest practicable date, but in no event later than thirty (30) days from the Company’s receipt of the Holder’s request to have Registrable Securities included such Registration Statement; provided, that before filing any Additional Registration Statement or any prospectus or any amendments or supplements to any Registration Statement or any prospectus, including documents incorporated by reference after the initial filing of any Registration Statement, the Company will promptly furnish to the Requesting Holders and the underwriters copies of all such documents proposed to be filed, which documents will be subject to the review of the Requesting Holders and the underwriters, and the Company will not file any Registration Statement or amendment thereto, or any prospectus or any supplement thereto (including such documents incorporated by reference) to which the Requesting Holders or the underwriters shall reasonably object in light of the requirements of the Securities Act and any other applicable laws and regulations.

(b) Prepare and file with the Commission such amendments and post-effective amendments to any Registration Statement as may be necessary to keep such Registration Statement effective for the applicable period set forth in Section 3(b) or, with respect to any Additional Registration Statement, for such period of time as is necessary to complete an Underwritten Offering pursuant to this Agreement; cause the related prospectus to be filed pursuant to Rule 424(b) (or any successor provision) under the Securities Act; cause such prospectus to be supplemented by any required prospectus supplement and, as so supplemented, to be filed pursuant to Rule 424(b) (or any successor provision) under the Securities Act; and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement during the applicable period in accordance with the intended methods of disposition set forth in such Registration Statement or prospectus or supplement to such prospectus.

(c) Notify the Requesting Holders and the managing underwriters promptly, and (if requested by any such Person) confirm such advice in writing, (i) when a prospectus or any prospectus supplement or post-effective amendment has been filed, and, with respect to a Registration Statement or any post-effective amendment, when the same has become effective, (ii) of any request by the Commission for amendments or supplements to a Registration Statement or related prospectus or for additional information, (iii) of the issuance by the Commission of any stop order suspending the effectiveness of a Registration Statement or the initiation of any proceeding for that purpose, (iv) if at any time the representations and warranties of the Company contemplated by paragraph (j) cease to be true and correct, (v) of the receipt by the Company of any notification with respect to the suspension of qualification of any

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of the Registrable Securities for sale in any jurisdiction or the initiation of any proceeding for such purpose, (vi) of the happening of any event which requires the making of any changes in a Registration Statement or related prospectus so that such documents will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and (vii) of the Company’s reasonable determination that a post-effective amendment to a Registration Statement would be appropriate or that there exist circumstances not yet disclosed to the public which make further sales under such Registration Statement inadvisable pending such disclosures and post-effective amendment.

(d) Make reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement, or the lifting of any suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction, at the earliest possible moment.

(e) If requested by the managing underwriters or the Requesting Holders, immediately incorporate in a prospectus supplement or post-effective amendment such information as the managing underwriters and the Requesting Holders reasonably request be included therein relating to such sale and distribution of Registrable Securities, including, without limitation, information with respect to the number of shares of Registrable Securities being sold to such underwriters and the purchase price being paid therefor by such underwriters and with respect to any other terms of the Underwritten Offering; make all required filings of such prospectus supplement or post-effective amendment as soon as practicable after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and supplement or make amendments to any Registration Statement to the extent reasonably requested by the Requesting Holders or any underwriter of such Registrable Securities.

(f) Furnish to the Requesting Holders and each managing underwriter without charge, at least one signed copy of the Registration Statement, any post-effective amendment thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits (including those incorporated by reference).

(g) Deliver without charge to the Requesting Holders and the underwriters as many copies of the prospectus or prospectuses (including each preliminary prospectus) and any amendment or supplement thereto as such Persons may reasonably request; and the Company consents to the use of such prospectus or any amendment or supplement thereto by such Requesting Holders and the underwriters, if any, in connection with the offer and sale of the Registrable Securities covered by such prospectus or any amendment or supplement thereto.

(h) Prior to any public offering of Registrable Securities, register or qualify or cooperate with the Requesting Holders, the underwriters, if any, and respective counsel in connection with the registration or qualification of such Registrable Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Requesting Holders or an underwriter reasonably requests in writing; keep each such registration or qualification effective during the period the Registration Statement is required to be kept effective and do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by the applicable Registration Statement; provided, however, that the Company will not be required in connection therewith or as a condition thereto to qualify generally to do business or subject itself to general service of process in any such jurisdiction where it is not then so subject.

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(i) Upon the occurrence of any events described in paragraph (c)(ii) through (c)(vii) above, prepare, to the extent required, a supplement or post-effective amendment to the applicable Registration Statement or related prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchaser of the Registrable Securities being sold thereunder, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

(j) Enter into such customary and reasonable agreements (including an underwriting agreement) and take all such other actions reasonably necessary in connection therewith in order to expedite or facilitate the disposition of such Registrable Securities and in such connection, whether or not an underwriting agreement is entered into and whether or not the Registrable Securities to be covered by such registration are to be offered in an underwritten offering: (i) make such representations and warranties to the Requesting Holders as to the Registration Statement, prospectus and documents incorporated by reference, if any, in form, substance and scope as are customarily made by issuers to underwriters in underwritten offerings and confirm the same if and when requested; (ii) use reasonable best efforts to obtain opinions of counsel to the Company and updates thereof with respect to the Registration Statement and the prospectus in the form, scope and substance which are customarily delivered in underwritten offerings; (iii) in the case of an underwritten offering, enter into an underwriting agreement in form, scope and substance as is customary in underwritten offerings and obtain opinions of counsel to the Company and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the managing underwriters and the Requesting Holders) addressed to the Requesting Holders and the underwriters covering the matters customarily covered in opinions delivered in underwritten offerings and such other matters as may be reasonably requested by the Requesting Holders and such underwriters; (iv) use reasonable best efforts to obtain comfort letters and updates thereof from the Company’s independent certified public accountants addressed to the Requesting Holders and the underwriters such letters to be in customary form and covering matters of the type customarily covered in comfort letters by accountants in connection with underwritten offerings; (v) any underwriting agreement entered into shall set forth in full the indemnification provisions and procedures customarily included in underwriting agreements in underwritten offerings; and (vi) the Company shall deliver such documents and certificates as may be reasonably requested by the Requesting Holders and the managing underwriters to evidence compliance with clause (i) above and with any customary conditions contained in the underwriting agreement or other agreement entered into by the Company. The above shall be done at each closing under such underwriting or similar agreement or as and to the extent required thereunder.

(k) Make available for inspection by a representative of the Requesting Holders, any underwriter participating in any disposition pursuant to such registration, and any attorney or accountant retained by the Requesting Holders or such underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company’s officers, directors and employees to supply all information reasonably requested by any such representative, underwriter, attorney or accountant in connection with such registration;

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provided, that any records, information or documents that are designated by the Company in writing as confidential shall be kept confidential by such Persons unless disclosures of such records, information or documents is required by court or administrative order after prior written notice to the Company and cooperation with it in seeking a protective order.

(l) Otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the Commission and make generally available to its security holders earning statements satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder, no later than 90 days after the end of any 12-month period (i) commencing at the end of any fiscal quarter in which Registrable Securities are sold to underwriters in a firm or best efforts underwritten offering and (ii) beginning with the first day of the Company’s first fiscal quarter next succeeding each sale of Registrable Securities after the effective date of a Registration Statement, which statements shall cover said 12-month periods.

(m) Use its reasonable best efforts to list all Registrable Securities covered by the Registration Statement on the New York Stock Exchange and any other securities exchange or trading market on which any of the equity securities of the Company of the same class as the Registrable Securities are then listed.

(n) For so long as either (i) CPPIB retains the right to designate at least one Director pursuant to Section 2 or (ii) the Company is required to maintain the effectiveness of the Mandatory Shelf Registration Statement pursuant to Section 3 hereof, maintain the effectiveness of the registration of the Common Stock under the Exchange Act and use its reasonable best efforts to prepare and file in a timely manner all documents and reports required by such Act.

(o) If the Company, in the exercise of its reasonable judgment, objects to any change requested by the Requesting Holders or the underwriters to any Registration Statement or prospectus or any amendments or supplements thereto (including documents incorporated or to be incorporated therein by reference) as provided for in this Section 11, the Company shall not be obligated to make any such change and such Requesting Holders may withdraw their Registrable Securities from such registration or Underwritten Offering, in which event (i) the Company shall pay all registration expenses (including its counsel fees and expenses) incurred in connection with such Registration Statement or amendment thereto or prospectus or supplement thereto, and (ii) in the case of an Underwritten Offering being effected pursuant to Section 4, such registration shall not count as one of the Underwritten Offerings the Company is obligated to effect pursuant to Section 4.

Section 12. Suspension Period.

(a) Subject to the to the provisions of this Section 12 and a good faith determination by a majority of the Board that it is in the best interests of the Company to suspend the use of the Mandatory Shelf Registration Statement, following the effectiveness of such Mandatory Shelf Registration Statement (and the filings with any international, federal or state securities commissions), the Company, by written notice to the Holders, may direct the Holders to suspend sales of the Registrable Securities pursuant to such Mandatory Shelf Registration Statement for such times as the Company reasonably may determine is necessary and advisable (but in no event for more than 60 days in any 90-day period or more than 120 days in any 12-month

13

period), if any of the following events shall occur: (i) an underwritten public offering of Common Stock by the Company if the Company is advised by the underwriters that the concurrent resale of the Registrable Securities by the Holders pursuant to the Mandatory Shelf Registration Statement would have a material adverse effect on the Company’s offering, or (ii) pending discussions relating to a transaction or the occurrence of an event (1) that would require additional disclosure of material information by the Company in the Mandatory Shelf Registration Statement and that has not been so disclosed, and (2) as to which the Company has a bona fide business purpose for preserving confidentiality. Upon the earlier to occur of (A) the Company delivering to the Holders an End of Suspension Notice, as hereinafter defined, or (B) the end of the maximum permissible suspension period, the Company shall use its commercially reasonable efforts to promptly amend or supplement the Mandatory Shelf Registration Statement on a post-effective basis, if necessary, or to take such action as is necessary to make resumed use of the Mandatory Shelf Registration Statement compatible with the Company’s best interests, as applicable, so as to permit the Holders to resume sales of the Registrable Securities as soon as possible.

(b) In the case of an event that causes the Company to suspend the use of a Mandatory Shelf Registration Statement (a “Suspension Event”), the Company shall give written notice (a “Suspension Notice”) to the Holders to suspend sales of the Registrable Securities, and such notice shall state that such suspension shall continue only for so long as the Suspension Event or its effect is continuing and the Company is taking all reasonable steps to terminate suspension of the effectiveness of the Mandatory Shelf Registration Statement as promptly as possible. The Holders shall not effect any sales of the Registrable Securities pursuant to any Mandatory Shelf Registration Statement at any time after it has received a Suspension Notice from the Company and prior to receipt of an End of Suspension Notice (as defined below). If so directed by the Company, each Holder will deliver to the Company (at the expense of the Company) all copies other than permanent file copies then in such Holder’s possession of the Prospectus covering the Registrable Securities at the time of receipt of the Suspension Notice. The Holders may recommence effecting sales of the Registrable Securities pursuant to the Mandatory Shelf Registration Statement (or such filings) following further notice to such effect (an “End of Suspension Notice”) from the Company, which End of Suspension Notice shall be given by the Company to the Holders in the manner described above promptly following the conclusion of any Suspension Event and its effect.

(c) Notwithstanding any provision herein to the contrary, if the Company shall give a Suspension Notice pursuant to this Section 12 with respect to the Mandatory Shelf Registration Statement, the Company agrees that it shall extend the period of time during which such Mandatory Shelf Registration Statement shall be maintained effective pursuant to this Agreement by the number of days during the period from the date of the giving of the Suspension Notice to and including the date when Holders shall have received the End of Suspension Notice and copies of the supplemented or amended Prospectus necessary to resume sales; provided such period of time shall not be extended beyond the date that Shares or Additional Shares are not Registrable Securities.

(d) In addition, upon the occurrence of any Suspension Event, the Company may defer any Underwritten Offering requested pursuant to Section 4 of this Agreement for a period of up to sixty (60) days upon written notice to the Requesting Holders; provided, however, that the Company may not utilize this right with respect to a request under Section 4 of this Agreement more than once in any twelve (12) month period.

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Section 13. Indemnification.

(a) In the event of any registration of any securities under the Securities Act pursuant to this Agreement, the Company will indemnify and hold harmless each Holder, any underwriter and each other Person, if any, who controls any Holder or an underwriter within the meaning of the Securities Act, and the respective officers, directors, partners, members and employees of any Holder, any underwriters and controlling Persons, from and against any and all losses, claims, damages or liabilities, joint or several, to which any such indemnified Person may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or action in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in a Registration Statement or preliminary prospectus or final or summary prospectus contained therein, or any amendment or supplement thereto, and any other document prepared by the Company and provided to Holders for their use in connection with the registered offering, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements made therein (in the case of a prospectus or preliminary prospectus, in the light of the circumstances under which they were made) not misleading, and will reimburse such indemnified Persons for any reasonable legal and other expenses incurred by them in connection with investigating or defending any such action or claim, excluding any amounts paid in settlement of any litigation, commenced or threatened, if such settlement is effected without the prior written consent of the Company; provided, however, that the Company will not be liable to an indemnified Person in any such case to the extent that any such loss, claim, damage, liability or expense arises out of or is based upon an untrue statement or omission or alleged untrue statement or omission made in a Registration Statement, preliminary prospectus or final or summary prospectus or any amendment or supplement thereto or other document, in reliance upon and in conformity with written information furnished to the Company by or on behalf of such indemnified Person, specifically for use in the preparation thereof.

(b) In the event of any registration of securities under the Securities Act pursuant to this Agreement, each Holder will indemnify and hold harmless the Company, each of its directors and officers, any underwriter and each other Person, if any, who controls the Company or such underwriter within the meaning of the Securities Act, against any losses, claims, damages or liabilities to which any such indemnified Person may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or action in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in such Registration Statement or preliminary prospectus or final or summary prospectus contained therein, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements made therein (in the case of a prospectus or preliminary prospectus, in light of the circumstances under which they were made) not misleading, and will reimburse such indemnified Persons for any reasonable legal and other expenses incurred by them in connection with investigating or defending any such action or claim, excluding any amounts paid in settlement of any litigation, commenced or threatened, if

15

such settlement is effected without the prior written consent of the Holders; provided, however, that any liability or obligation of the Holders under this Section 13(b) shall only apply if, and to the extent that any such loss, claim, damage, liability or expense arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission therein made in reliance upon and in conformity with written information furnished to the Company by or on behalf of the Holders specifically for use in the preparation thereof. Notwithstanding the foregoing, the amount of the indemnity provided by the Holders pursuant to this Section 13 shall not exceed the net proceeds received by the Holders in the related registration and sale.

(c) Promptly after receipt by a party entitled to indemnification under Section 13(a) or 13(b) hereof of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under either of such subsections, notify the indemnifying party in writing of the commencement thereof. In case any such action is brought against the indemnified party and it shall so notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate in, and, to the extent that it so chooses, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party, and, after notice from the indemnifying party that it so chooses, such indemnifying party shall not be liable for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof, provided, however, that (i) if the indemnifying party fails to take reasonable steps necessary to diligently defend such claim within twenty (20) days after receiving notice from the indemnified party that the indemnified party believes the indemnifying party has failed to take such steps or (ii) if the defendants in any such action include the indemnifying party and counsel to the indemnified party shall have concluded that there may be reasonable defenses available to the indemnified party that are different from or additional to the indemnifying party, then the indemnified party shall have the right to select a separate counsel and to assume its own legal defense and otherwise to participate in the defense of such action, with any expenses and fees related to such participation to be reimbursed by the indemnifying party. The indemnity and contribution agreements in this Section 13 are in addition to any liabilities which the indemnifying parties may have pursuant to law.

(d) If the indemnification provided for in this Section 13 from the indemnifying party is unavailable to an indemnified party hereunder in respect of any losses, claims, damages, liabilities or expenses referred to herein, or is insufficient to hold the indemnified party harmless therefrom, then the indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and indemnified parties in connection with the actions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative fault of such indemnifying party and indemnified parties shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, such indemnifying party or indemnified parties, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in this Section 13, any legal or other fees or expenses reasonably incurred by such party in connection with any investigation or proceeding.

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The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 13 were determined by pro rata allocation or by any other method of allocation which does not take into account the equitable considerations referred to in the immediately preceding paragraph. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

Section 14. Sales under Rule 144. With a view to making available to the Holders the benefits of Rule 144 promulgated under the Securities Act and any other similar rule or regulation of the Commission that may at any time permit the Holders to sell the Registrable Securities without registration, the Company agrees for so long as either (i) CPPIB retains the right to designate at least one Director pursuant to Section 2 of this Agreement or (ii) the Company is required to maintain the effectiveness of the Mandatory Shelf Registration Statement pursuant to Section 3 hereof to:

(a) make and keep available adequate current public information, as those terms are understood and defined in Rule 144 (or any successor provision);

(b) use its reasonable best efforts to file with the Commission in a timely manner all reports and other documents required to be filed by the Company under the Securities Act and the Exchange Act; and

(c) furnish to the Holders forthwith upon request (i) a written statement by the Company that it has complied with the foregoing requirements and (ii) such other information as may be reasonably requested by any Holder in availing itself of any rule or regulation of the Commission which permits the selling of any such securities without registration.

Section 15. Removal of Legend. The Company agrees, to the extent allowed by law, to remove any legends describing transfer restrictions applicable to the Registrable Securities (i) upon the sale of such securities pursuant to an effective Registration Statement under the Securities Act or in accordance with the provisions of Rule 144 under the Securities Act, or (ii) upon the written request of any holder of Registrable Securities if the Holders have held the Registrable Securities for at least one year and such securities may then be sold without restriction under Rule 144 and such Holders provide to the Company any information that the Company deems necessary to determine that the legend is no longer required under the Securities Act or applicable state laws.

Section 16. Notices. Any notice to be given by any party hereunder to any other shall be in writing, mailed by certified or registered mail, return receipt requested, or via overnight delivery service and shall be addressed to the other parties at the addresses listed on the signature pages hereof. Notice shall be deemed effective upon receipt or refusal.

Section 17. Modification. Notwithstanding anything to the contrary in this Agreement or otherwise, no modification, amendment or waiver of any of the provisions of this Agreement

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shall be effective unless in writing and signed by the Company and CPPIB. Any such modification, amendment or waiver shall be binding on all holders of Registrable Securities and all Persons who may thereafter acquire any Registrable Securities.

Section 18. Non-Waiver. The failure to enforce at any time any of the provisions of this Agreement, or to require at any time performance by any other party of any of the provisions hereof, shall in no way be construed to be a waiver of such provisions.

Section 19. Partial Invalidity. If any clause, sentence, paragraph, section or part of this Agreement shall be deemed invalid, unenforceable or against public policy, the part that is invalid, unenforceable or contrary to public policy shall not affect, impair, invalidate or nullify the remainder of this Agreement, but the invalidity, unenforceability or contrariness to public policy shall be confined only to the clause, sentence, paragraph, section or part of this Agreement so invalidated, unenforceable or against public policy.

Section 20. Construction. The language in all parts of this Agreement shall in all cases be construed simply, according to its fair meaning, and shall not be construed strictly for or against either of the parties hereto.

Section 21. Governing Law. This Agreement shall be governed and construed according to the laws of the State of New York, without regard to its conflicts of law principles.

Section 22. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall constitute an original and all of which together shall constitute but one and the same instrument.

Section 23. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns.

Section 24. Termination. The provisions of Sections 2, 3, 4, 5, and 6 of this Agreement shall terminate upon the time that the Holders no longer hold Registrable Securities.

Section 25. Specific Performance. The parties agree that, to the extent permitted by law, (i) the obligations imposed on them in this Agreement are special, unique and of an extraordinary character, and that in the event of a breach by any such party damages would not be an adequate remedy and (ii) the other party shall be entitled to specific performance and injunctive and equitable relief in addition to any other remedy to which it may be entitled at law or in equity.

[Signature Pages Follow]

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

HALCÓN RESOURCES CORPORATION

By:

Name:

Title:

Halcon Resources Corporation

1000 Louisiana, Suite 6905

Houston, Texas 77002

Attention: Floyd C. Wilson

Fax: (832) 538-0220

With a copy (which shall not constitute notice) to:

Thompson & Knight LLP

333 Clay Street

Suite 3300

Houston, Texas 77002

Attention: William T. Heller IV

Fax: (713) 654-1871

Signature Page to Stockholders Agreement

CPP INVESTMENT BOARD PMI-2 INC.
By:
Name:	Eric M. Wetlaufer
Title:	Authorized Signatory
By:
Name:	Scott Lawrence
Title:	Authorized Signatory
Address for Notice:
One Queen St. East
Suite 2500
P.O. Box 101
Toronto, Ontario M5C 2W5
Attention: R. Scott Lawrence, Vice-President, Head of Relationship Investments
Fax: (416) 868-8690
With copies (which shall not constitute notice) to:
CPP Investment Board PMI-2 Inc.
Suite 2500
P.O. Box 101
Toronto, Ontario M5C 2W5
Attention: John Butler, Senior Vice-President, General Counsel and Corporate Secretary
Fax: (416) 868-4760
and
Vinson & Elkins, L.L.P.
1001 Fannin, Suite 2500
Houston, Texas 77002
Attention: Keith R. Fullenweider
Fax: (713) 615-5085

Signature Page to Stockholders Agreement

Schedule 1

Securities to be Purchased by CPPIB Pursuant to the Purchase Agreement

1. 41,899,441 shares of Common Stock

Schedule 1

Schedule 2

Other Agreements Pertaining to Registration of Common Stock

1. Registration Rights Agreement, dated February 8, 2012, between the Company and HALRES, LLC.

2. Registration Rights Agreement, dated March 5, 2012, between the Company and Barclays Capital, Inc.

3. Registration Rights Agreement, dated August 1, 2012 by and between the Company and the parties listed on Exhibit A thereto.

4. Registration Rights Agreement by and between the Company and Petro-Hunt Holdings LLC and Pillar Energy Holdings LLC, dated on or about the date of the Acquisition Agreement.

Schedule 2

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in Amendment No. 2 to the Registration Statement on Form S-3 (File No. 333-180243) and in the Registration Statements on Form S-8 (File Nos. 333-137311, 333-151428, 333-166893 and 333-180099) and on Form S-3 (File Nos. 333-149319, 333-164346, 333-182996 and 333-183560) of Halcón Resources Corporation (formerly RAM Energy Resources, Inc., a Delaware corporation) of our report dated October 15, 2012, with respect to the statement of revenues and direct operating expenses of the Williston Basin Assets purchased by Halcón Resources Corporation for the three years in the period ended December 31, 2011, included in the Current Report on Form 8-K filed with the Commission on October 22, 2012.

We also consent to the reference to our Firm under the caption “Experts” in each of the Registration Statements.

/s/ UHY LLP

Houston, Texas

October 22, 2012

EX-99.1

Exhibit 99.1

NEWS RELEASE

Halcón Resources to Acquire Williston Basin Assets

Company Adds 81,000 Net Acres and Over 10,500 Boe/d in Core Area

HOUSTON, TEXAS – October 22, 2012 – Halcón Resources Corporation (NYSE: HK) (“Halcón” or the “Company”) today announced that it has entered into a privately negotiated definitive agreement with Petro-Hunt, L.L.C. and an affiliated entity, to acquire producing and undeveloped oil and gas assets in the Williston Basin (“Williston Basin Assets”) for an aggregate purchase price of approximately $1.45 billion, consisting of $700 million in cash and $750 million in equity.

The Williston Basin Assets are comprised of approximately 81,000 net acres (~95% operated) prospective for the Bakken and Three Forks formations primarily located in Williams, Mountrail, McKenzie and Dunn Counties, North Dakota. Current average net production from these assets is in excess of 10,500 barrels of oil equivalent per day (Boe/d) and total proved reserves, as estimated by third party reserve engineers, are approximately 42.4 million barrels of oil equivalent (MMBoe), 88% oil, with an internally estimated resource potential of greater than 100 MMBoe. Currently there are five operated drilling rigs running on the properties.

On a pro forma basis for this transaction, the Company has over 135,000 net acres in the Williston Basin and company-wide current average net production is approximately 26,500 Boe/d.

Additionally, Halcón has entered into an agreement pursuant to which Canada Pension Plan Investment Board (“CPPIB”) has agreed to purchase $300 million of the Company’s common stock at $7.16 per share, subject to customary closing conditions and the successful closing of the acquisition of the Williston Basin Assets.

Halcón has secured financing commitments from Wells Fargo, J.P. Morgan, Goldman Sachs and Barclays pursuant to which the borrowing base under the Company’s senior secured revolving credit facility will be increased to $850 million and such banks have agreed to provide a $500 million bridge loan commitment.

Floyd C. Wilson, Halcón’s Chairman and Chief Executive Officer, stated, “This acquisition is immediately accretive on all measures and is consistent with our strategy of building an oil company with a multi-year drilling inventory in several liquids-rich basins. The assets we are acquiring are located in what is arguably the most attractive oil producing basin in the lower 48, on a risk adjusted basis. This transaction improves our leverage profile and will effectively increase our estimated proved reserves on a pro forma basis by over 58% to approximately 115 million barrels of oil equivalent, 79% of which is liquids.”

Bruce W. Hunt, President of Petro-Hunt, L.L.C., commented, “We are pleased to become a significant Halcón shareholder through this transaction. The track record of Halcón’s management team speaks for itself and we are confident they will do a great job of developing these solid assets. Petro-Hunt has a long history of operating oil and gas properties in the Williston Basin. We will continue to operate production of approximately 24,000 Boe/d and develop our 600,000 plus acres of oil and gas leasehold in the Williston Basin with the full attention of our existing staff.”

R. Scott Lawrence, CPPIB’s Vice-President, Head of Relationship Investments, remarked, “CPPIB’s investment aligns with our strategy to provide strategic, long-term capital to well-positioned companies like Halcón and work with management to help create value now and in the future.”

The $750 million equity consideration will initially be issued as preferred stock that will automatically convert into common stock at $7.45 per share following an increase in Halcón’s authorized common shares to accommodate conversion and obtaining certain regulatory approvals.

Terms and Conditions

The Company’s board of directors has unanimously approved the transaction, which is subject to customary closing conditions, including approval of listing of the Halcón common stock to be issued in the transaction on the New York Stock Exchange and regulatory clearance. The effective date of the transaction is June 1, 2012, and Halcón anticipates completing the transaction in December 2012.

Mitchell Energy Advisors acted as financial advisor to Halcón.

Tudor, Pickering, Holt & Co. acted as financial advisor to CPPIB.

Investor Conference Call

Halcón will host a conference call on October 22, 2012 to discuss the proposed transaction at 9:00 a.m. EDT (8:00 a.m. CDT). Investors may participate in the conference call via telephone by dialing (877) 810-3368 for domestic callers or (914) 495-8561 for international callers, in both cases using conference ID 43905963, and asking for the Halcón call a few minutes prior to the start time. An accompanying slide presentation and a link to the live audio webcast will be available on Halcón’s website at http://www.halconresources.com on the day of the presentation.

About Halcón Resources

Halcón Resources Corporation is an independent energy company engaged in the acquisition, production, exploration and development of onshore oil and natural gas properties in the United States.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities and Exchange Act of 1934 as amended. Statements that are not strictly historical statements constitute forward-looking statements and may often, but not always, be identified by the use of such words such as “expects”, “believes”, “intends”, “anticipates”, “plans”, “estimates”, “potential”, “possible”, or “probable” or statements that certain actions, events or results “may”, “will”, “should”, or “could” be taken, occur or be achieved. The forward-looking statements include statements about future operations, estimates of reserve and production volumes and the anticipated timing for closing the proposed transaction. Forward-looking statements are based on current expectations and assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However, whether actual results and developments will conform with expectations is subject to a number of risks and uncertainties, including but not limited to: the possibility that Halcón may be unable to satisfy the conditions to closing; that the acquisition may involve unexpected costs; the risks of the oil and gas industry (for example, operational risks in exploring for, developing and producing crude oil and natural gas; risks and uncertainties involving geology of oil and gas deposits; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to future production, costs and expenses; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; health, safety and environmental risks and risks related to weather such as hurricanes and other natural disasters); uncertainties as to the availability and cost of financing; fluctuations in oil and gas prices; inability to timely integrate and realize expected value from acquisitions; inability of management to execute its plans to meet its goals; shortages of drilling equipment, oil field personnel and services;

unavailability of gathering systems, pipelines and processing facilities; and the possibility that government policies may change or governmental approvals may be delayed or withheld. Halcón’s annual report on Form 10-K for the year ended December 31, 2011, subsequent quarterly reports on Form 10-Q and current reports on Form 8-K, and other Securities and Exchange Commission filings discuss some of the important risk factors identified that may affect the business, results of operations, and financial condition. Halcón undertakes no obligation to revise or update publicly any forward-looking statements for any reason.

Contact:

Scott M. Zuehlke

VP, Investor Relations

Halcón Resources

(832) 538-0314

EX-99.2

Exhibit 99.2

STATEMENTS OF REVENUES AND DIRECT OPERATING EXPENSES

OF THE WILLISTON BASIN ASSETS PURCHASED BY

HALCÓN RESOURCES CORPORATION

FOR THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2011 AND

THE THREE AND SIX MONTHS ENDED JUNE 30, 2012 AND 2011

STATEMENTS OF REVENUES AND DIRECT OPERATING EXPENSES

OF THE WILLISTON BASIN ASSETS PURCHASED BY

HALCÓN RESOURCES CORPORATION

FOR THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2011 AND

THE THREE AND SIX MONTHS ENDED JUNE 30, 2012 AND 2011

C O N T E N T S

	Page
Independent Auditors’ Report		2
Statements of Revenues and Direct Operating Expenses		3
Notes to Statements of Revenues and Direct Operating Expenses		4

INDEPENDENT AUDITORS’ REPORT

To the Board of Directors of Halcón Resources Corporation:

We have audited the accompanying statements of revenues and direct operating expenses of the Williston Basin Assets purchased by Halcón Resources Corporation (the “Company”), from Petro-Hunt, L.L.C. and Pillar Energy, LLC (the “Sellers”) for each of the three years in the period ended December 31, 2011. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

The accompanying statements were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for inclusion in Halcón Resources Corporation’s Form 8-K and are not intended to be a complete financial presentation of the acquired assets described above.

In our opinion, the financial statements referred to above present fairly, in all material respects, the revenues and direct operating expenses of the Williston Basin Assets purchased by Halcón Resources Corporation from the Sellers for each of the three years in the period ended December 31, 2011 in conformity with accounting principles generally accepted in the United States.

/s/ UHY LLP

Houston, Texas

October 15, 2012

2

STATEMENTS OF REVENUES AND DIRECT OPERATING EXPENSES

OF THE WILLISTON BASIN ASSETS PURCHASED BY

HALCÓN RESOURCES CORPORATION

(in thousands)

	Three months ended June 30,				Six months ended June 30,				Year ended December 31,
	2012		2011		2012		2011		2011		2010		2009
	(Unaudited)				(Unaudited)
REVENUES
Oil	$	42,939	$	14,707	$	83,605	$	24,891	$	69,025	$	11,286	$	571
Gas		401		62		908		143		483		155		43
TOTAL REVENUES		43,340		14,769		84,513		25,034		69,508		11,441		614
DIRECT OPERATING EXPENSES
Production Taxes		4,731		1,649		9,088		2,791		7,773		1,273		40
Lease Operating Expenses		3,095		916		5,592		1,299		4,410		413		13
TOTAL DIRECT OPERATING EXPENSES		7,826		2,565		14,680		4,090		12,183		1,686		53
EXCESS OF REVENUES OVER DIRECT OPERATING EXPENSES	$	35,514	$	12,204	$	69,833	$	20,944	$	57,325	$	9,755	$	561

See accompanying Notes to Statements of Revenues and Direct Operating Expenses.

3

NOTES TO STATEMENTS OF REVENUES AND DIRECT OPERATING EXPENSES

OF THE WILLISTON BASIN ASSETS PURCHASED BY HALCÓN RESOURCES CORPORATION

FOR THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2011 AND

THE THREE AND SIX MONTHS ENDED JUNE 30, 2012 AND 2011

NOTE 1 - BASIS OF PRESENTATION

In October 2012 Halcón Resources Corporation (the “Company”), signed an agreement to acquire the operating interests in approximately 80,000 net acres of oil and natural gas leaseholds in North Dakota from Petro-Hunt, L.L.C. and Pillar Energy, LLC (the “Sellers”). The total interests acquired from the Sellers are collectively referred to as the “Williston Basin Assets”. The purchase consideration for the Williston Basin Assets involves approximately $700 million in cash and the issuance of approximately $750 million of automatically convertible preferred stock, subject to normal closing adjustments, with an effective date of June 1^st, 2012, and an anticipated closing date in mid December 2012, subject to the satisfactory completion of due diligence and title reviews by the Company. The accompanying statements of revenues and direct operating expenses relate to the operations of the oil and gas properties acquired by the Company.

The statements of revenues and direct operating expenses associated with the Williston Basin Assets were derived from the Sellers’ accounting records. During the periods presented, the Williston Basin Assets were not accounted for or operated as a consolidated entity or as a separate division by the Sellers. Revenues and direct operating expenses for the Williston Basin Assets included in the accompanying statements represent the net collective working and revenue interests acquired by the Company. The revenues and direct operating expenses presented herein relate only to the interests in the producing oil and natural gas properties which will be acquired and do not represent all of the oil and natural gas operations of the Sellers. Direct operating expenses include lease operating expenses and production and other related taxes. General and administrative expenses, depreciation, depletion and amortization (“DD&A”) of oil and gas properties and federal and state taxes have been excluded from direct operating expenses in the accompanying statements of revenues and direct operating expenses because the allocation of certain expenses would be arbitrary and would not be indicative of what such costs would have been had the Williston Basin Assets been operated as a stand-alone entity. Exploration expenses and dry hole costs are not applicable to this presentation. Full separate financial statements prepared in accordance with accounting principles generally accepted in the United States of America do not exist for the Williston Basin Assets and are not practicable to prepare in these circumstances. The statements of revenues and direct operating expenses presented are not indicative of the financial condition or results of operations of the Williston Basin Assets on a go forward basis due to changes in the business and the omission of various operating expenses.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates: The preparation of statements of revenues and direct operating expenses in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting periods. Although these estimates are based on management’s best available knowledge of current and future events, actual results could be different from those estimates.

Revenue Recognition: Revenues are recognized for oil and natural gas sales under the sales method of accounting. Under this method, revenues are recognized on production as it is taken and delivered to the purchasers. The volumes sold may be more or less than the volumes entitled to, based on the owner’s net interest in the Williston Basin Assets. These differences result from production imbalances, which are not significant, and are reflected as adjustments to proved reserves and future cash flows in the unaudited supplementary oil and gas information included herein.

4

NOTES TO STATEMENTS OF REVENUES AND DIRECT OPERATING EXPENSES

OF THE WILLISTON BASIN ASSETS PURCHASED BY HALCÓN RESOURCES CORPORATION

FOR THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2011 AND

THE THREE AND SIX MONTHS ENDED JUNE 30, 2012 AND 2011

NOTE 3 - SUPPLEMENTARY OIL AND GAS INFORMATION - (UNAUDITED)

Estimated Net Quantities of Oil and Natural Gas Reserves

The following are estimates of the net proved oil and natural gas reserves of the Williston Basin Assets. Reserve volumes and values were determined by the Sellers’ reserve engineers under definitions and guidelines of the U.S. Securities and Exchange Commission (“SEC”) and, with the exception of the exclusion of future income taxes, conform to the FASB Accounting Standards Codification Topic 932, Extractive Activities-Oil and Gas. Reserve estimates are inherently imprecise and estimates of new discoveries are more imprecise than those of producing oil and gas properties. Accordingly, reserve estimates are expected to change as additional performance data becomes available.

Estimated quantities of proved domestic oil and gas reserves and changes in quantities of proved developed and undeveloped reserves in barrels (“Bbls”), thousand cubic feet (“Mcf”) and barrels of oil equivalent (“BOE”) in which six Mcf of natural gas equals one Bbl of oil were as follows:

	Crude Oil (MBbls)			Natural Gas (MMcf)			Total (MBOE)
Proved reserves at December 31, 2008		6			—			6
Production		(9	)		(6	)		(10	)
Extensions and discoveries		150			33			156
Revisions of previous estimates		(1	)		—			(1	)
Proved reserves at December 31, 2009		146			27			151
Production		(163	)		(27	)		(168	)
Extensions and discoveries		2,585			2,051			2,927
Revisions of previous estimates		16			24			20
Proved reserves at December 31, 2010		2,584			2,075			2,930
Production		(799	)		(82	)		(813	)
Extensions and discoveries		13,278			8,686			14,726
Revisions of previous estimates		878			389			943
Proved reserves at December 31, 2011		15,941			11,068			17,786
Proved developed reserves
December 31, 2008		6			—			6
December 31, 2009		146			27			151
December 31, 2010		1,067			865			1,211
December 31, 2011		6,688			5,442			7,595
Proved undeveloped reserves
December 31, 2008		—			—			—
December 31, 2009		—			—			—
December 31, 2010		1,517			1,210			1,719
December 31, 2011		9,253			5,626			10,191

5

NOTES TO STATEMENTS OF REVENUES AND DIRECT OPERATING EXPENSES

OF THE WILLISTON BASIN ASSETS PURCHASED BY HALCÓN RESOURCES CORPORATION

FOR THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2011 AND

THE THREE AND SIX MONTHS ENDED JUNE 30, 2012 AND 2011

NOTE 3 - SUPPLEMENTARY OIL AND GAS INFORMATION – (UNAUDITED) (Continued)

Discounted Future Net Cash Flows

A summary of the discounted future net cash flows related to proved crude oil and natural gas reserves is shown below. Future net cash flows calculated at December 31, 2011, 2010 and 2009 are based on the 12-month unweighted arithmetic average of the first-day-of-the-month price for each month within the 12-month prior period. Future net cash flows calculated at December 31, 2008 were computed using year-end commodity prices that relate to the properties’ existing proved crude oil and natural gas reserves.

	December 31,
	2011				2010				2009
	Oil (Bbl)		Gas (MMBtu)		Oil (Bbl)		Gas (MMBtu)		Oil (Bbl)		Gas (MMBtu)
Commodity index prices used in determining future cash flows (prior to differentials)	$	96.19	$	4.11	$	79.43	$	4.37	$	61.18	$	3.83

The discounted future net cash flows related to proved oil and gas reserves as of December 31, 2011, 2010 and 2009 are as follows (in thousands):

	December 31,
	2011		2010		2009
Future cash inflows	$	1,458,207	$	185,772	$	7,721
Less related future
Production costs		366,071		55,138		2,421
Development and abandonment costs		234,973		37,711		648
Future net cash flows		857,163		92,923		4,652
Ten percent annual discount for estimated timing of cash flows		474,887		38,056		1,322
Standardized measure of discounted future net cash flows	$	382,276	$	54,867	$	3,330

Changes in Discounted Future Net Cash Flows

A summary of the changes in the discounted future net cash flows applicable to proved crude oil and natural gas reserves for the period ended December 31, 2011, 2010 and 2009 are as follows (in thousands):

	Twelve Months Ended December 31,
	2011			2010			2009
Beginning of period	$	54,867		$	3,330		$	97
Revisions of previous estimates
Changes in prices and costs		42,844			2,777			214
Changes in quantities		24,815			496			(15	)
Additions to proved reserves resulting from extensions, discoveries and improved recovery, less related costs		403,272			77,065			3,928
Changes in future development costs		(87,975	)		(21,884	)		(464	)
Accretion of discount		5,487			333			10
Sales, net of production costs		(57,325	)		(9,755	)		(562	)
Changes in rate of production and other		(3,709	)		2,505			122
Net change		327,409			51,537			3,233
End of period	$	382,276		$	54,867		$	3,330

6