First Amendment of Farmout Agreement dated September 30, 2005, by and between Dragon Energy Corporation and Argyle Energy, Inc

Re:

FIRST AMENDMENT OF FARMOUT AGREEMENT

Barnett Crossroads Prospect (Prospect No. 20)

                                                        A L A B A M A                                                                                                                                

On or before March 31, 2006, Argyle agrees to cause to be commenced, the spudding and actual drilling of a well, utilizing a drilling rig capable of drilling and completing a well to a depth of 14,850 feet TVD, in search of oil or gas at a Mutually acceptable legal location in Section 19, Township 3 North, Range 8 East, Escambia County, Alabama (the "Test Well"). This drilling commencement date will not be extended or delayed for any reason. Such drilling operations to be prosecuted continuously, with diligence and in a workmanlike manner consistent with the practices of a prudent operator, until the Test Well shallhave been drilled to a depth of (a) 14,850 feet TVD below the surface of the earth, or (b) a depth sufficient to test adequately and conclusively the stratigraphic equivalent of the Smackover Formation as seen in the interval between 13,684 feet and 14,016 feet in the Dragon Energy Cotporation-AT1C 23-4 #1 well located in Section 23, Township 3 North, Range 8 East, Escambia County, Alabama, whichever is the shallower depth (the "Objective Depth"), or to such other depth as the parties hereto may agree, as provided hereinafter.

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