X0304 4 2011-10-03 0 0001502012 QR Energy, LP QRE 0001508337 Quantum Resources A1, LP 1401 MCKINNEY STREET SUITE 2400 HOUSTON TX 77010 1 0 1 1 Director By Deputization 0001508333 Quantum Resources B, LP 1401 MCKINNEY STREET SUITE 2400 HOUSTON TX 77010 1 0 1 1 Director By Deputization 0001508335 Quantum Resources C, LP 1401 MCKINNEY STREET SUITE 2400 HOUSTON TX 77010 1 0 1 1 Director By Deputization 0001508336 QAB Carried WI, LP 1401 MCKINNEY STREET SUITE 2400 HOUSTON TX 77010 1 0 1 1 Director By Deputization 0001508340 QAC Carried WI, LP 1401 MCKINNEY STREET SUITE 2400 HOUSTON TX 77010 1 0 1 1 Director By Deputization 0001507927 QA Global GP, LLC 1401 MCKINNEY STREET SUITE 2400 HOUSTON TX 77010 1 0 1 1 Director By Deputization 0001507929 Quantum Aspect Partnership, LP 1401 MCKINNEY STREET SUITE 2400 HOUSTON TX 77010 1 0 1 1 Director By Deputization 0001507885 QA GP, LLC 1401 MCKINNEY STREET SUITE 2400 HOUSTON TX 77010 1 0 1 1 Director By Deputization 0001507928 QA Holdings, LP 1401 MCKINNEY STREET SUITE 2400 HOUSTON TX 77010 1 0 1 1 Director By Deputization 0001508338 Black Diamond Resources, LLC 1401 MCKINNEY STREET SUITE 2400 HOUSTON TX 77010 1 0 1 1 Director By Deputization Class C Convertible Preferred Units 21.00 2011-10-03 4 D 0 16666667 A Common Units 16666667 16666667 I See Footnote The Class C Convertible Preferred Units will receive a quarterly cash distribution equal to a 4.0% annual coupon on the par value of $21 for the first three years following the date of issuance of the Class C Convertible Preferred Units. After 3 years, the quarterly cash distribution will be equal to the greater of (a) $0.475 per unit or (b) the cash distribution payable on each Common Unit for such quarter. Holders may convert the Class C Convertible Preferred Units to Common Units on a 1-to-1 basis during the first two years after the issuance date following 30 consecutive trading days during which the volume-weighted average price for Common Units equals or exceeds $27.30 per Common Unit. In addition, holders may convert the Class C Convertible Preferred Units to Common Units on a 1-to-1 basis anytime after two years from the issuance date. Solely for the purposes of Section 16 of the Securities Exchange Act of 1934, as amended, each of the Reporting Persons may be deemed a director-by-deputization because QRE GP, LLC, the general partner (the "General Partner") of QR Energy, LP (the "Partner"), is owned and controlled by entities that are controlled by the Reporting Persons. Specifically, the General Partner is owned 50% by an entity controlled by Toby R. Neugebauer and S. Wil VanLoh, each directors of the General Partner and also managing partners of an affiliate of the Reporting Persons, and 50% by an entity controlled by Alan L. Smith, Chief Executive Officer and a director of the General Partner, and Chief Executive Officer and director of Quantum Resources Management, LLC ("QRM") and John H. Campbell, Jr., President and Chief Operating Officer and director of the General Partner, and President and Chief Operating Officer and director of QRM. QRM provides management services to the Reporting Persons. In connection with that certain Purchase and Sale Agreement dated September 12, 2011, by and between Quantum Resources A1, LP, QAB Carried WI, LP,QAC Carried WI, LP and Black Diamond Resources, LLC (collectively, the "Fund Entities"), QRE Operating, LLC ("Purchaser") and QR Energy, LP ("Partnership"), the Fund Entities contributed certain oil and natural gas properties to the Purchaser in exchange for (i) the assumption and pay down of $227 Million of the Fund Entities' debt and (ii)a Unit consideration consisting of 16,666,667 Class C Convertible Preferred Units. /s/ Gregory S. Roden on behalf of each of the Reporting Persons 2011-10-07