LETTEROF INTENT

1.  

APH agrees to acquire 16/64ths or twenty five percent (25%) working interest in the Prospect for a cash payment to be determined on cash call. S&W will issue 16 units representing the twenty five percent (25%) working interest, to APH after receiving the payment.

2.  

In the event S&W or its representatives determine that the drill stem tests and or logs support commercial production, an additional payment per 1/64th will be due from APH for completion of the oil well and for the purchase of necessary equipment.

3.  

If any party hereto decides to not pursue the transactions contemplated by this LOI, all funds advanced by APH pursuant to this LOI will be due immediately and shall be repaid in full to APH.  Any outstanding balance shall be subject to a late charge interest rate of one percent (1%) per month.

(a)  

it is validly incorporated and is in good standing with all regulatory agencies;

(b)  

there are no legal actions against S&W or its directors or officers nor does S&W know of any intended legal actions against it or any of its officers or directors and S&W is not engaged in any legal actions against other parties, and is current in all filings with tax and regulatory authorities;

(c)  

it owns one hundred percent (100%) of the working interest in and the exclusive rights to drill an oil well in the Colby Prospect , subject to any liens, charges, securitizations, UCC filings or debts disclosed to APH prior to the execution of this LOI; and

(d)  

it has the authority and is not precluded by law or contract from issuing the twenty five percent (25%) working interest in the Prospect contemplated under this LOI.

5.

Neither APH, on the one hand, nor S&W on the other, will make any disclosure or public announcements of the proposed transactions, this LOI, or the terms hereof without the prior knowledge of the other, which shall not be unreasonably withheld.

6.

Each party agrees and acknowledges that such party and its directors, officers, employees, agents and representatives will and may disclose business information and information about the proposed transaction in the course of securing financings for APH and S&W and that both parties and their representatives may be required to disclose that information under applicable regulatory requirements, if any.

7.

This LOI shall be construed in accordance with, and governed by, the laws of the State of Nevada, and each party separately and unconditionally subjects to the jurisdiction of any court of competent authority in the State of Nevada, and the rules and regulations thereof, for all purposes related to this agreement and/or their respective performance hereunder and regardless of whether or not any business, transaction of business or other connection to the State of Nevada is absent.

8.

This LOI sets forth the entire understanding of the parties with respect to the subject matter hereof and may be modified only by a written document signed by all parties.

9.

If any term or provision hereof shall be held illegal or invalid, this LOI shall be construed and enforced as if such illegal or invalid term or provision had not been contained herein.

10.

All references to currency in this LOI are references to the lawful currency of the United States of America.

11.

APH, and its successors, assigns or affiliates may, at any time upon prior consent of S&W, which consent shall not be unreasonably withheld, at their sole discretion, assign any or all of their interest in and to this LOI.  The purpose of this paragraph is to permit APH to engage in a going public, financing or similar transaction.