PARTIAL ASSIGNMENT OF OIL, GAS AND MINERAL LEASES AND BILL OF SALE FOR WELLS STATE OF TEXASKNOW ALL BY THESE PRESENTS:COUNTY OF BORDEN

WHEREAS, ApCLARK, LLC, a Delaware limited liability company, the mailing address of which is 800 Bering, Suite 250, Houston, TX 77057 (hereinafter referred to as "Assignor") is a partial owner and designated operator of:

Well 5-1, Well 7-2 and Well 18-2 are sometimes collectively referred to herein as the “Wells”, and the 5-1 Leases, the 7-2 Leases and the 18-2 Leases are sometimes collectively referred to herein as the “Leases”; and

           WHEREAS, Assignor desires to convey and Assignee desires to acquire the following gross leasehold working interests, net revenue interests and wellbore interest in the Wells and Leases (“Assigned Interests”), as summarized in Exhibit “D” attached hereto:

NOW, THEREFORE, for and in consideration of the premises and the sum of Ten Dollars ($10.00) cash in hand paid by Assignee and other good and valuable consideration, including the covenants contained herein, the receipt and sufficiency of which are hereby acknowledged, Assignor and Assignee (the “Parties”), by acceptance of this Partial Assignment of Oil, Gas and Mineral Leases and Bill of Sale For Wells (the "Assignment"), hereby agree to the following terms and conditions:

1.	CONVEYANCE:

 

A.	Subject to all burdens of record as of the effective date hereof, Assignor does hereby transfer, assign and convey unto Assignee, its heirs, successors and assigns all of its right, title and interest in and to the Assigned Interests in and to:

 

(i)

the Leases and all oil, gas and mineral leasehold interests, contractual interests in minerals, and all other interests of every kind and character, including without limitation after acquired title, reversionary and other similar interests therein;

 

(ii)

the Wells and production therefrom, and a like interest in all personal property, fixtures and equipment and personal properties located on and used or obtained in connection therewith; and

 

(iii)

to the maximum extent assignable, all assignments, contracts, contractual rights, and other instruments or agreements relating to the Leases and Wells, including without limitation, unitization and pooling agreements; operating agreements, farm-out and farm-in agreements; bottom-hole agreements; crude oil, condensate, and natural gas purchase and sale, exchange, gathering, transportation, and marketing agreements; salt water disposal agreements; participation agreements; unitization, pooling and communitization agreements; processing agreements; options; permits; licenses; servitudes; easements; rights-of-way; and facilities or equipment leases, whether or not included herein.

 

C.	The Effective Date for this Assignment shall be 7:00 a.m. local time on March ___, 2014 (the “Effective Date”), regardless of the date of execution hereof.

 

2.	COVENANTS:

 

A.

The Wells and the Leases are subject to the terms and conditions of the Operating Agreement dated 1 August 2007 between Westerly Exploration, Inc., and Lucas Energy, Inc., as amended (the “JOA”), to which Assignor and Assignee are parties as successors in interest. This Assignment is executed by Assignor and Assignee under and pursuant to the JOA. Concurrently with this Assignment, the Parties are executing an amendment to the JOA and completing a Texas Railroad Commission form P4 for each Well to designate Assignee’s affiliate as operator of the Wells, among other things.

 

B.

Assignee agrees to observe, perform and comply with the terms, provisions, covenants and conditions, express or implied, of the JOA and other agreements applicable to the interests conveyed hereunder and will comply with all local, state and federal laws, rules, regulations and orders applicable to ownership and enjoyment of the rights herein assigned.

 

C.	Assignor certifies that this transaction does not conflict with or violate any contract, agreement, law, regulation, decree or court order to which Assignor is a party.

 

D.	Assignor warrants title to the 5-1 Lease, Well 5-1, the 7-2 Lease, Well 7-2 and all related properties as described in this Assignment with full rights of substitution and subrogation in and to all warranties of Assignor's predecessors in interest.

 

E.	Assignor warrants title to the 7-2 Lease, Well 7-2, and all related property as described in this Assignment by, through and under Assignor but not otherwise, but with full rights of substitution and subrogation in and to all warranties of Assignor’s predecessors in interest.

BEFORE ME, the undersigned authority, on this _____ day of ___________________, 2014 personally appeared ______________________, known to me to be the person whose name is subscribed to the foregoing instrument, as _____________ of ApCLARK, LLC, a Delaware limited liability company, and acknowledged to me that s/he executed the same for the purposes and considerations therein expressed, in the capacity therein stated, and as the act and deed of said company.

Given under my hand and seal of office, this ______ day of ___________________, 2014.

BEFORE ME, the undersigned authority, on this day personally appeared ______________________, known to me to be the person whose name is subscribed to the foregoing instrument, as ____________________ of PIE HOLDING, LP, a Nevada limited partnership, and acknowledged to me that he executed the same for the purposes and considerations therein expressed, in the capacity therein stated, and as the act and deed of said limited partnership.

* SAVE AND EXCEPT the 80 acres associated with the Beaver Valley Ranch # 6-1 well (API 42-033-32110) located in the Southeast part of Section 6, such 80 acres being defined as follows:

 

Beginning at a point being the South East corner of Section 6 (Block 34, T-4-N, T. & P. RR. CO.) and the South West corner of Section 5 (Block 34, T-4-N, T. & P. RR. CO.), being the South East corner of the herein described tract of land (“Starting Point”); Thence, commencing in a West/South Western direction approximately 2,260’ feet along the southern boundary line of Section 6 to a point on the Southern boundary line of Section 6, being the South West corner of the herein described tract of land; Thence, commencing in a North/North Western direction along a line being parallel with the Eastern boundary line of Section 6 approximately 1,541.94’ feet to a point, being the North West corner of the herein described tract of land. Thence, commencing East/North Eastern direction along a line being parallel with the Southern boundary line of Section 6 approximately 2,260’ feet to a point intersecting and ending at the Eastern boundary line of Section 6, being the North East corner of the herein described tract of land. Thence, south approximately 1,541.94’ feet along the Eastern boundary line of Section 6 to the Starting Point;

 

and, two 40 acre proration units around the Beaverhead #1 well (API 42-033-31948) and the Beaverhead #2 well (API 42-033-31340) located in the Southeast part of Section 5.

*SAVE AND EXCEPT 80 acres associated with the Livestock #7-1 well ( API 42-033-32299), being the E/2 of the SW/4 of Section 7, Block 31, T-4-N, T. & P. RR. Co. Survey.

 

Under this Assignment, Assignee acquires 13.6% of 80 gross acres, more or less, associated with the 7-2 Well. These acres are in addition to Assignee’s current ownership of 11.40%, for a total ownership by Assignee of 25% of 80 gross acres, more or less, associated with the 7-2 Well.

*SAVE AND EXCEPT 80 acres associated with the Livestock 18-1 well (API 42-033-32196), being the NE/4 of the NE/4 of Section 18 and the NW/4 of the NW/4 of Section 17, Block 31, T-4-N, T. & P. RR. Co. Survey, and 160 acres associated with the Everett #3 well (API 42-033-32132) of Section 17, Block 31, T-4-N, T. & P. RR. Co. Survey.

Under this Assignment, Assignee acquires 16.45% of 1,070 gross acres, more or less, associated with the 18-2 Well. These acres are in addition to Assignee’s current ownership of 8.55%, for a total ownership by Assignee of 25% of 1070 gross acres, more or less, associated with the 18-2 Well.