Form 8-K

8-K — Matador Resources Co

Accession: 0001104659-26-086469

Filed: 2026-07-24

Period: 2026-07-22

CIK: 0001520006

SIC: 1311 (CRUDE PETROLEUM & NATURAL GAS)

Item: Entry into a Material Definitive Agreement

Item: Regulation FD Disclosure

Item: Financial Statements and Exhibits

Documents

8-K — tm2621144d1_8k.htm (Primary)

EX-2.1 — EXHIBIT 2.1 (tm2621144d1_ex2-1.htm)

EX-99.1 — EXHIBIT 99.1 (tm2621144d1_ex99-1.htm)

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8-K (Primary)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported):

July 22, 2026

Matador Resources Company

(Exact name of registrant as specified in its

charter)

Texas

001-35410

27-4662601

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

5400

LBJ Freeway, Suite 1500

Dallas,

Texas

75240

(Address of principal executive

offices)

(Zip Code)

Registrant’s telephone number, including

area code: (972) 371-5200

Not Applicable

(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)

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))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange

on which registered

Common Stock, par value $0.01 per share

MTDR

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth

company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of

the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate

by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial

accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Item 1.01

Entry Into a Material Definitive Agreement.

On July 22, 2026, wholly-owned subsidiaries of

Matador Resources Company (“Matador”), MRC Ranger, LLC (“Purchaser”) and, solely for the purposes

of guaranteeing the obligations of Purchaser, MRC Energy Company (“MRC Energy”) entered into a Securities Purchase

Agreement (the “Paloma Purchase Agreement”) with Paloma Permian Holdings, LLC (“Paloma Holdings”),

Paloma Permian Intermediate, LLC (“Paloma Intermediate” and, together with Paloma Holdings, each a “Seller”

and collectively, the “Sellers”) and Paloma Permian, LLC (the “Target”). Pursuant to the Paloma

Purchase Agreement, Sellers have agreed to sell to Purchaser, and Purchaser has agreed to purchase from Sellers, all of the issued and

outstanding membership interests (the “Subject Securities”) of the Target, upon the terms and subject to the conditions

of the Paloma Purchase Agreement (such purchase and sale, together with the other transactions contemplated by the Paloma Purchase Agreement,

the “Paloma Acquisition”). Target and its subsidiaries own certain proved undeveloped acreage and oil and natural gas

producing properties located in Eddy and Lea Counties, New Mexico.

The consideration payable by Purchaser for the

Subject Securities will be an amount in cash equal to $1,275,000,000 (the “Unadjusted Purchase Price”), of which $63,750,000

will be deposited into escrow in connection with the execution of the Paloma Purchase Agreement. The Unadjusted Purchase Price is subject

to certain customary adjustments, including for working capital and for title defects and environmental defects.

The consummation of the Paloma Acquisition (the

“Closing”) is subject to the satisfaction or waiver of a number of customary conditions set forth in the Paloma Purchase

Agreement. Subject to the satisfaction of the conditions in the Paloma Purchase Agreement, the Closing is expected to occur early in the

fourth quarter of 2026, with an effective date of June 1, 2026.

The Paloma Purchase Agreement contains representations,

warranties and covenants of the parties customary for a transaction of this nature. Except for certain specified representations and warranties

or in the event of fraud, the representations and warranties of Sellers and the Target will not survive the Closing. Instead, Purchaser

has obtained a representation and warranty insurance policy, under which the issuer of such policy will insure Purchaser against certain

claims, damages or other losses arising from breaches by the Sellers or the Target of their representations and warranties in the Paloma

Purchase Agreement, subject to certain limitations and exclusions and other customary terms and conditions. In addition, Purchaser, on

the one hand, and Sellers, on the other hand, have agreed to indemnify each other and their respective affiliates, shareholders, members,

officers, directors, employees and other representatives for certain losses, including, among other things, losses arising out of breaches

of certain specified representations, warranties and covenants, subject to certain negotiated limitations and survival periods set forth

in the Paloma Purchase Agreement.

The foregoing description of the Paloma Acquisition

and the Paloma Purchase Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of

the Paloma Purchase Agreement, a copy of which is filed as Exhibit 2.1 to this Current Report on Form 8-K (this “Current

Report”) and is incorporated herein by reference. The foregoing summary of the principal terms of the Paloma Purchase Agreement

and the copy of the Paloma Purchase Agreement filed as Exhibit 2.1 have been included to provide investors with information regarding

its terms. It is not intended to provide any other factual information about Matador, Purchaser, MRC Energy, the Sellers, the Target or

any of their respective subsidiaries or affiliates. In particular, the assertions embodied in the representations and warranties contained

in the Paloma Purchase Agreement are qualified by information in confidential disclosure schedules provided by the parties in connection

with the signing of the Paloma Purchase Agreement. These confidential disclosure schedules contain information that modifies, qualifies

and creates exceptions to the representations and warranties and certain covenants set forth in the Paloma Purchase Agreement. Moreover,

the representations, warranties and covenants in the Paloma Purchase Agreement were made as of specific dates, were made solely for the

Paloma Purchase Agreement and for the purposes of allocating risk between the parties to the Paloma Purchase Agreement, rather than establishing

matters as facts, are solely for the benefit of such parties, may be subject to qualifications or limitations agreed upon by such parties

and may be subject to standards of materiality applicable to such parties that differ from those generally applicable to investors and

reports and documents filed with the Securities and Exchange Commission (the “SEC”). Accordingly, investors are not

third-party beneficiaries under the Paloma Purchase Agreement, and the representations, warranties and covenants in the Paloma Purchase

Agreement, and any descriptions thereof, should not be relied on as characterizations of the actual state of facts or circumstances of

Matador, Purchaser, MRC Energy, the Sellers, the Target or any of their respective subsidiaries or affiliates. Moreover, information concerning

the subject matter of such representations, warranties and covenants may change after the date of the Paloma Purchase Agreement, which

subsequent information may or may not be fully reflected in the parties’ public disclosures.

Item 7.01

Regulation FD Disclosure.

On July 22, 2026, MRC Permian Company, a wholly-owned

subsidiary of Matador (“MRC Permian”), and, solely for the purposes of guaranteeing the obligations of Purchaser, MRC

Energy entered into a Purchase and Sale Agreement (the “Ridge Runner Purchase Agreement” and, together with the Paloma

Purchase Agreement, the “Purchase Agreements”) with Ridge Runner Resources II, LLC (“Ridge Runner”),

pursuant to which Ridge Runner has agreed to cause certain of its subsidiaries to sell to MRC Permian, and MRC Permian has agreed to purchase

from such subsidiaries, certain primarily undeveloped acreage and certain oil and natural gas producing properties located in Lea County,

New Mexico and Winkler and Ward Counties, Texas (the “Ridge Runner Acquisition” and, together with the Paloma Acquisition,

the “Acquisitions”). The consummation of

the Ridge Runner Acquisition is subject to the satisfaction or waiver of a number of customary conditions set forth in the Ridge Runner

Purchase Agreement and is expected to occur early in the fourth quarter of 2026, with an effective date of June 1, 2026.

On July 23, 2026, Matador issued a press release

(the “Press Release”) announcing the execution of the Purchase Agreements. A copy of the Press Release is furnished

as Exhibit 99.1 to this Current Report.

In connection with the Press Release, Matador released

a presentation summarizing the Acquisitions, which presentation is available on Matador’s website, www.matadorresources.com, on

the Events and Presentations page under the Investor Relations tab.

The information furnished pursuant to this Item

7.01, including Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange

Act of 1934, as amended (the “Exchange Act”), and will not be incorporated by reference into any filing under the Securities

Act of 1933, as amended (the “Securities Act”), unless specifically identified therein as being incorporated therein

by reference.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING

STATEMENTS

This

report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the

Exchange Act. “Forward-looking statements” are statements related to future, not past, events. Forward-looking statements

are based on current expectations and include any statement that does not directly relate to a current or historical fact. In this context, forward-looking

statements often address expected future business and financial performance, and often contain words such as “could,” “believe,”

“would,” “anticipate,” “intend,” “estimate,” “expect,” “may,”

“should,” “continue,” “plan,” “predict,” “potential,” “project,”

“hypothetical,” “forecasted” and similar expressions that are intended to identify forward-looking statements,

although not all forward-looking statements contain such identifying words. Forward-looking statements in this report include, among

other things, statements about the anticipated timing of closing the Acquisitions. Actual results and future events could differ materially

from those anticipated in such statements, and such forward-looking statements may not prove to be accurate. These forward-looking

statements involve certain risks and uncertainties, including, but not limited to, the following risks and uncertainties related

to the Acquisitions: the ability of the parties to consummate the Acquisitions in the anticipated timeframe or at all; risks related to

the satisfaction or waiver of the conditions to closing the Acquisitions in the anticipated timeframe or at all; risks related to obtaining

the requisite regulatory approvals; disruption from the Acquisitions making it more difficult to maintain business and operational relationships;

significant transaction costs associated with the Acquisitions; the risk of litigation and/or regulatory actions related to the Acquisitions;

other business effects, including the effects of industry, market, economic, political or regulatory conditions; and the other factors

which could cause actual results to differ materially from those anticipated or implied in the forward-looking statements. Matador may

not succeed in addressing these and other risks. For further discussions of risks and uncertainties, you should refer to Matador’s

filings with the SEC, including the “Risk Factors” section of Matador’s most recent Annual Report on Form 10-K and any

subsequent Quarterly Reports on Form 10-Q. Matador undertakes no obligation to update these forward-looking statements to reflect

events or circumstances occurring after the date of this report, except as required by law, including the securities laws of the United

States and the rules and regulations of the SEC. Investors are cautioned not to place undue reliance on these forward-looking statements,

which speak only as of the date of this report. All forward-looking statements are qualified in their entirety by this cautionary

statement.

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits

Exhibit

No.

Description of Exhibit

2.1*

Securities Purchase Agreement, dated July 22, 2026, by and among MRC Ranger, LLC, MRC Energy Company (solely for the limited purposes stated therein), Paloma Permian Holdings, LLC, Paloma Permian Intermediate, LLC and Paloma Permian, LLC

99.1

Press Release issued by Matador Resources Company on July 23, 2026

104

Cover Page Interactive Data File, formatted in Inline XBRL, and included as Exhibit 101

* This filing excludes certain schedules and exhibits pursuant to Item 601(a)(5) of Regulation S-K, which the registrant agrees

to furnish supplementally to the Securities and Exchange Commission upon request by the Commission; provided, however, that the registrant

may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, for any schedules or

exhibits so furnished.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934,

the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

MATADOR RESOURCES COMPANY

Date: July 24, 2026

By:

/s/ Bryan A. Erman

Name:

Bryan A. Erman

Title:

Co-President

EX-2.1 — EXHIBIT 2.1

EX-2.1

Filename: tm2621144d1_ex2-1.htm · Sequence: 2

Exhibit 2.1

Execution Version

SECURITIES PURCHASE AGREEMENT

by and among

Paloma Permian Holdings, LLC,

and

Paloma Permian Intermediate, LLC,

as Sellers,

and

Paloma Permian, LLC,

as Company,

and

MRC Ranger, LLC,

as Purchaser,

and, solely for purposes of ‎Section 14.18,

MRC Energy Company,

as Purchaser Parent,

Dated as of July 22, 2026

TABLE OF CONTENTS

Article 1 Definitions

Section 1.1

Certain Definitions

Section 1.2

Interpretation

Article 2 Purchase and Sale

Section 2.1

Purchase and Sale

Section 2.2

Purchase Price

Section 2.3

Deposit

Section 2.4

Adjustments to the Unadjusted Purchase Price

Section 2.5

Adjustment Procedures

Section 2.6

Closing Date Flow of Funds

Section 2.7

Closing Payment and Post-Closing Adjustments

Section 2.8

Tax Treatment; Allocation of Purchase Price

Article 3 Title and Environmental Matters

Section 3.1

Title and Environmental Matters

Section 3.2

Defects; Adjustments

Article 4 Representations and Warranties of Each Seller

Section 4.1

Organization, Existence and Qualification

Section 4.2

Power

Section 4.3

Authorization and Enforceability

Section 4.4

No Conflicts

Section 4.5

Litigation

Section 4.6

Bankruptcy

Section 4.7

Ownership of Subject Securities

Section 4.8

No Brokers

Article 5 Representations and Warranties Regarding Company Group

Section 5.1

Existence and Qualification

Section 5.2

Power

Section 5.3

Authorization and Enforceability

Section 5.4

No Conflicts

Section 5.5

Capitalization

Section 5.6

Financial Statements

Section 5.7

No Undisclosed Liabilities

Section 5.8

Litigation

Section 5.9

Bankruptcy

Section 5.10

Taxes

Section 5.11

Labor and Employee Benefits

Section 5.12

Compliance with Laws

Section 5.13

Material Contracts

Section 5.14

Outstanding Capital Commitments

Section 5.15

Preferential Rights

Section 5.16

Wells

Section 5.17

Environmental

Section 5.18

Royalties

Section 5.19

Imbalances

Section 5.20

Advance Payments

Section 5.21

Certain Real Property Interests

Section 5.22

Condemnation

Section 5.23

Insurance

Section 5.24

Indebtedness

Section 5.25

Bank Accounts; Officers; Powers of Attorney

Section 5.26

Books and Records

Section 5.27

No Brokers

Section 5.28

Absence of Certain Changes

Section 5.29

Permits

Section 5.30

Suspense Funds

Section 5.31

Payout Balances

Section 5.32

Credit Support Obligations

Section 5.33

Intellectual Property

Section 5.34

Lease Status

Section 5.35

Sufficiency of Assets; No Affiliate Assets

Section 5.37

Consents

Section 5.38

No Casualty Event

Section 5.39

Regulatory Matters

Section 5.40

Specified Matters

Section 5.41

Special Warranty

Section 5.42

Non-Consent Operations

Section 5.43

Anti-Corruption Laws

Section 5.44

Economic Sanctions

Section 5.45

International Trade Laws

Section 5.46

Data Privacy

Section 5.47

Operatorship

Section 5.48

Certain Transfers

Article 6 Representations and Warranties of Purchaser

Section 6.1

Existence and Qualification

Section 6.2

Power

Section 6.3

Authorization and Enforceability

Section 6.4

No Conflicts

Section 6.5

Defense Production Act

Section 6.6

Litigation

Section 6.7

Bankruptcy

Section 6.8

Financing

Section 6.9

Investment Intent

Section 6.10

Independent Evaluation

Section 6.11

No Brokers

Section 6.12

Qualification

Section 6.13

U.S. Person

Article 7 Disclaimers and Acknowledgements

Section 7.1

General Disclaimers

Section 7.2

Environmental Disclaimers

Section 7.3

Calculations, Reporting and Payments

Section 7.4

Changes in Prices; Well Events

Section 7.5

No Fraud Waiver

Section 7.6

Certain Information

Section 7.7

Conspicuousness

Article 8 Covenants of the Parties

Section 8.1

Access

Section 8.2

Operation of Business of Company Group

Section 8.3

Casualty and Condemnation

Section 8.4

Closing Efforts and Further Assurances

Section 8.5

Notifications

Section 8.6

Press Releases

Section 8.7

Expenses

Section 8.8

Records

Section 8.9

Indemnification of Directors and Officers

Section 8.10

Financial Information

Section 8.11

Company Hedges

Section 8.12

Exclusivity

Section 8.13

Confidentiality

Section 8.14

Change of Name; Removal of Name

Section 8.15

R&W Insurance Policy

Section 8.16

Property Trades

Section 8.17

Transition Services

Section 8.18

Data Room Contents

Article 9 Conditions to Closing

Section 9.1

Conditions of Sellers to Closing

Section 9.2

Conditions of Purchaser to Closing

Article 10 Closing

Section 10.1

Time and Place of Closing

Section 10.2

Obligations of Sellers and Company at Closing

Section 10.3

Obligations of Purchaser at Closing

100

iii

Article 11 Tax Matters

101

Section 11.1

Company Taxes

101

Section 11.2

Transfer Taxes and Recording Fees

102

Section 11.3

Tax Returns

102

Section 11.4

Cooperation

103

Section 11.5

Amended Returns

103

Section 11.6

Tax Refunds

103

Section 11.7

Tax Proceedings

104

Section 11.8

Termination of Tax Sharing Agreements

104

Section 11.9

Push Out Elections

104

Article 12 Termination

105

Section 12.1

Termination

105

Section 12.2

Effect of Termination

106

Section 12.3

Return of Documentation and Confidentiality

108

Article 13 Indemnification; Limitations

108

Section 13.1

Sellers’ Indemnification Rights

108

Section 13.2

Purchaser’s Indemnification Rights

109

Section 13.3

Survival; Limitations

109

Section 13.4

Exclusive Remedy and Certain Limitations

112

Section 13.5

Indemnification Actions

114

Section 13.6

Holdback Amount

116

Section 13.7

Express Negligence/Conspicuous Manner

118

Article 14 Miscellaneous

118

Section 14.1

Notices

118

Section 14.2

Governing Law

119

Section 14.3

Arbitration

120

Section 14.4

Headings and Construction

121

Section 14.5

Waivers

121

Section 14.6

Severability

122

Section 14.7

Assignment

122

Section 14.8

Entire Agreement

122

Section 14.9

Amendment

123

Section 14.10

No Third-Person Beneficiaries

123

Section 14.11

Limitation on Damages

123

Section 14.12

Time of the Essence; Calculation of Time

123

Section 14.13

Non-Recourse Persons

124

Section 14.14

Relationship of Sellers; Sellers’ Representative

124

Section 14.15

Certain Waivers

126

Section 14.16

Specific Performance

126

Section 14.17

Counterparts

127

Section 14.18

Guarantee

127

Section 14.19

Further Assurances

128

EXHIBITS:

Exhibit A

Assets

Exhibit A-1

Leases

Exhibit A-2

Wells

Exhibit A-3

Surface Rights and Rights of Way

Exhibit B

Form of Assignment of Subject Securities

Exhibit C

Form of Excluded Asset Assignment

Exhibit D

Illustration of Effective Time Working Capital and Unadjusted Purchase Price Adjustments

Exhibit E

Form of Excluded Asset JOA

Exhibit F

Form of Termination and Release Agreement

Exhibit G

Form of Transition Services Agreement

Exhibit H

Form of AMI and Standstill Agreement

Exhibit I

R&W Conditional Binder

SCHEDULES:

Schedule AC

Acquisition Costs

Schedule 1.1

Company Hedges

Schedule 1.2

Excluded Assets

Schedule 1.3

Knowledge

Part A

Sellers’ and Company’s Knowledge

Part B

Purchaser’s Knowledge

Schedule 1.4

Lease Records

Schedule 1.5

Lease Expirations

Schedule 2.8

Allocated Value

Schedule 4.4

Seller Conflicts

Schedule 5.1

Existence and Qualification

Schedule 5.4

Company Conflicts

Schedule 5.5

Capitalization

Schedule 5.6

Financial Statements

Schedule 5.7

Undisclosed Liabilities

Schedule 5.8

Litigation

Schedule 5.10

Taxes

Schedule 5.12

Compliance with Laws

Schedule 5.13(a)

Material Contracts

Schedule 5.13(b)

Certain Material Contract Matters

Schedule 5.14

Outstanding Capital Commitments

Schedule 5.15

Preferential Rights

Schedule 5.16

Wells

Schedule 5.17

Environmental Matters

Schedule 5.18

Royalties

Schedule 5.19

Imbalances

Schedule 5.20

Advance Payments

Schedule 5.21(a)

Owned Real Property

Schedule 5.21(b)

Leased Real Property

Schedule 5.21(c)

Surface Rights and Rights of Way

Schedule 5.21(d)

Real Property Restrictions

Schedule 5.23

Insurance

Schedule 5.24

Indebtedness

Schedule 5.25(a)

Bank Accounts

Schedule 5.25(b)

Officers; Powers of Attorney

Schedule 5.28

Absence of Certain Changes

Schedule 5.30

Suspense Funds

Schedule 5.31

Payout Balances

Schedule 5.32

Credit Support Obligations

Schedule 5.34

Lease Status

Schedule 5.37

Consents

Schedule 5.40

Specified Matters

Schedule 5.42

Non-Consent Operations

Schedule 5.48

Certain Transfers

Schedule 8.2

Operation of Business of Company Group

Schedule 8.2(e)

Ordinary Course Development Plan

Schedule 8.16

Property Trades

Schedule 10.2(l)

Standstill Agreement Parties

Schedule 13.2(d)

Specified Liability Matters

SECURITIES PURCHASE AGREEMENT

This SECURITIES PURCHASE AGREEMENT

(this “Agreement”), is dated as of July 22, 2026 (the “Execution Date”), by and

among Paloma Permian Holdings, LLC, a Delaware limited liability company (“Paloma Holdings”), Paloma Permian

Intermediate, LLC, a Delaware limited liability company (“Paloma Intermediate” and together with Paloma Holdings,

each a “Seller” and collectively, “Sellers”), Paloma Permian, LLC, a Delaware limited

liability company (the “Company”), MRC Ranger, LLC, a Delaware limited liability company (“Purchaser”),

and, solely for purposes of ‎Section 14.18, MRC Energy Company, a Texas corporation (“Purchaser Parent”,

and together with Purchaser, the “Purchaser Parties”). Each Seller and each of Company, Purchaser and, solely

for purposes of Section 14.18, Purchaser Parent are sometimes referred to individually as a “Party”

and collectively as the “Parties”.

WHEREAS, Sellers collectively

desire to sell, and Purchaser desires to purchase, one hundred percent (100%) of the issued and outstanding Securities (as defined below)

of the Company (the “Subject Securities”), with such Subject Securities being more fully described on Schedule 5.5.

WHEREAS, the Company owns

one hundred percent (100%) of the issued and outstanding Securities of Paloma Permian AssetCo, LLC, a Delaware limited liability company,

and Paloma Permian Nominee Corporation, a Delaware corporation; and

WHEREAS, pursuant to the Agency

Agreement dated as of January 19, 2024 by and between Paloma Permian AssetCo, LLC and Paloma Permian Nominee Corporation, Paloma

Permian Nominee Corporation holds legal title to certain federal oil and gas leases as an agent on behalf of Paloma Permian AssetCo, LLC,

with Paloma Permian AssetCo, LLC retaining all of the economic benefits and burdens of such assets.

NOW, THEREFORE, in consideration

of the premises and of the mutual promises, representations, warranties, covenants, conditions and agreements contained herein, and for

other valuable consideration, the receipt and sufficiency of which are hereby acknowledged and confessed, the Parties agree as follows:

Article 1

Definitions

Section 1.1         Certain

Definitions. As used herein:

“AAA”

means the American Arbitration Association.

“Accounting Principles”

is defined in ‎Section 2.5(a).

“Accounting Referee”

is defined in ‎Section 2.7(b).

“Acquisition Costs”

means any actual and documented direct costs and expenses incurred by the applicable member of the Company Group to fund the consideration

for the acquisition of any interests set forth on Schedule AC, including amounts owed as deferred purchase price or otherwise pursuant

to a contractual obligation with respect to a future payment of consideration.

“Action”

means any action, suit, litigation, proceeding (including any civil, criminal, administrative, investigative or appellate proceeding),

arbitral action, hearing, audit by a Governmental Authority or criminal prosecution.

“Adjusted Purchase

Price” is defined in ‎Section 2.2.

“Affiliate”

means, with respect to any Person, a Person that directly or indirectly controls, is controlled by or is under common control with such

Person, with “control” in such context meaning the ability to direct the management or policies of a Person through ownership

of voting Securities, pursuant to a written agreement, or otherwise; provided, however, each member of Company Group shall

be deemed to be an Affiliate of each Seller (and not of Purchaser or its Affiliates) for all periods prior to the Closing, each member

of Company Group shall be deemed to be an Affiliate of Purchaser (and not of any Seller or its Affiliates) for all periods after the Closing,

and when used with respect to any Seller, except when used in clause ‎(c) of the definition of “Excluded Records”

and in the definition of Seller Group (in which case, such term shall exclude any operating or other portfolio company of EnCap Investments

L.P. or any investment fund managed by EnCap Investments L.P. (other than Paloma Resources and any member of the Company Group) other

than in Article 13 (excluding the last sentence of Section 13.4(a)) and Article 14), the term “Affiliate”

shall not include EnCap Investments L.P., any operating or other portfolio company of EnCap Investments L.P. or any investment fund managed

by EnCap Investments L.P. (other than Paloma Resources and any member of the Company Group).

“Agreement”

is defined in the introductory paragraph hereof.

“Allocated Value”

means, (a) with respect to the applicable Subject Formation as to each Lease and Well, the portion of the Unadjusted Purchase Price

allocated on Schedule 2.8 as to each such Lease and Well and (b) as to the other Assets, if any, listed on Schedule 2.8,

the portion of the Unadjusted Purchase Price allocated to each such Asset on Schedule 2.8, in each case of ‎(a) and

‎(b), as such amounts may be increased or decreased by the portion of each adjustment to the Unadjusted Purchase Price under ‎Section 2.4

applicable to such Asset.

“Allocation”

is defined in ‎Section 2.8.

“Applicable Indemnity

Cap” means (a) with respect to Sellers’ Representative’s obligations and liabilities under ‎Section 13.2:

(i) Overall Indemnity Cap, (ii) with respect to the Specified Representations and the indemnity obligation of Sellers in Section 13.2(b),

the Specified Representation Indemnity Cap, and (iii) with respect to the Specified Liability Matters and the indemnity obligation

of Sellers in Section 13.2(d), the Specified Liability Matters Indemnity Cap, and (b) with respect to Purchaser’s

obligations and liabilities under ‎Section 13.1, the cap specified in ‎Section 13.3(c)(ii).

“Asset Preferential

Right” means any right or agreement that enables any Person to purchase or acquire any Asset with a positive Allocated Value

or portion thereof as a result of or in connection with the transfer of such Asset.

“Assets”

means all of the Company Group’s assets and properties of every kind, nature, character and description (whether real, personal

or mixed, whether tangible or intangible and wherever situated), including (i) all goodwill related thereto and (ii) such Company

Group’s individual or collective right, title, and interest in and to the following:

(a)            all

Hydrocarbon leases, mineral interests, fee mineral interests, overriding royalties, reversionary interests, non-participating royalty

interests, net profit interests, production payments, and any other mineral, royalty or similar interests in or payable out of production

of Hydrocarbons from or allocated to the Hydrocarbon leases or other interests described herein, including those interests set forth on

Exhibit A-1 (collectively, the “Leases”), together with all pooled, communitized, or unitized acreage

which includes all or part of any Leases or any Wells (the “Units”), together with all tenements, hereditaments,

and appurtenances arising out of or derived from any of the Leases or the Units (collectively, the “Lands”);

(b)            any

and all Hydrocarbon, water, CO2, injection, disposal or other wells located on, under, or within the Lands, including those described

on Exhibit A-2, and any related facilities (the “Wells”, and together with the Leases, the Units

and the Lands, the “Oil and Gas Properties”), in each case whether producing, non-producing, or permanently

or temporarily Plugged and Abandoned;

surface fee interests, easements, permits, licenses, servitudes, rights of way, surface leases and other rights to use the surface, in

each case to the extent appurtenant to, and used or held for use in connection with, the ownership or operation of the Oil and Gas Properties,

including the property described on Exhibit A-3 (the “Surface Rights and Rights of Way”); and

(d)            all

other assets and real or personal property owned, leased or licensed by ‎the Company Group, including all of Company Group’s

bank accounts, receivables and Cash and Cash Equivalents, as well as all credits, rebates and refunds;

provided,

however, “Assets”, “Leases”, “Units”, “Wells”, “Surface Rights and Rights

of Way” and “Oil and Gas Properties” shall not include any Excluded Assets.

“Assignment”

is defined in ‎Section 10.2(b).

“Audit Firm”

is defined in Section 8.10(a)‎.

“Balance Sheet

Date” is defined in ‎Section 5.6.

“Bankruptcy Code”

means Title 11 of the United States Code, Sections 101 et seq.

“Barrel”

means forty-two (42) United States standard gallons of two hundred and thirty-one (231) cubic inches per gallon at sixty degrees (60°)

Fahrenheit.

“BTU”

means a British Thermal Unit, which is the amount of energy required to raise the temperature of one pound avoirdupois of water from fifty-nine

degrees (59°) Fahrenheit to sixty degrees (60°) Fahrenheit at a constant pressure of 14.73 pounds per square inch absolute.

“Business”

means the ownership, development and operation by Company Group of the Assets and other activities conducted by Company Group that are

incidental, ancillary or necessary thereto.

“Business Day”

means any day other than a Saturday, a Sunday, or a day on which banks are authorized or required to be closed for business in Houston,

Texas.

“Business Systems”

means all Software, computer hardware (whether general or special purpose), electronic data processing, information, record keeping, communications,

telecommunications, networks, interfaces, platforms, servers, peripherals, and computer systems, including any outsourced systems and

processes that are owned or used by the Company Group.

“CARES Act”

means the Coronavirus Aid, Relief and Economic Security Act of 2020, as amended, and the rules and regulations promulgated thereunder.

“Cash and Cash

Equivalents” means, as of the time of determination, (a) money, currency or a credit balance in a deposit account at

a financial institution (subject to the proviso below), (b) marketable direct obligations issued or unconditionally guaranteed by

the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, (c) marketable

direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality

thereof, (d) commercial paper issued by any bank or any bank holding company owning any bank, and (e) certificates of deposit

or bankers’ acceptances issued by any commercial bank organized under the applicable Laws of the United States of America, in each

case, only to the extent constituting cash equivalents in accordance with GAAP; provided, however, that, Cash and Cash Equivalents

shall be calculated net of (x) restricted balances, that are not freely usable, distributable or transferable (including security

deposits, bond guarantees, collateral reserve accounts and amounts held in escrow or held by the Company Group on behalf of Third Parties

in each case other than the Credit Documents), and (y) outstanding outbound checks, draws, ACH debits and wire transfers.

“Casualty Event”

is defined in ‎Section 8.3.

“CERCLA”

means the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9601 et seq.

“Claim Notice”

is defined in ‎Section 13.5(b).

“Closing”

is defined in ‎Section 10.1.

“Closing Certificate”

means the certificate delivered by Sellers and Company at the Closing pursuant to ‎Section 10.2(d).

“Closing Date”

is defined in ‎Section 10.1.

“Closing Distribution”

means a distribution to be made by the Company Group at or immediately prior to Closing to Sellers in an amount equal to all of the Cash

and Cash Equivalents of the Company Group as of the close of business six (6) Business Days prior to the Closing Date.

“Closing Payment”

means the amount of cash consideration payable by Purchaser at the Closing and disbursed in accordance with ‎Section 2.6(a),

which shall be an amount equal to the remainder of the estimate of the Adjusted Purchase Price as determined pursuant to ‎Section 2.7(a),

minus the Deposit, and minus the Holdback Amount.

“Code”

means the United States Internal Revenue Code of 1986, as amended.

“Company”

is defined in the introductory paragraph hereof.

“Company Group”

means the Company and each of its Subsidiaries.

“Company Hedges”

means the Hedges described on Schedule 1.1.

“Company Indemnified

Parties” is defined in ‎Section 8.9(a).

“Company LLC Agreement”

means the Amended and Restated Limited Liability Company Agreement of Paloma Permian, LLC dated as of January 24, 2024 (as amended

as of the Execution Date).

“Company Taxes”

means (a) any Taxes imposed on or with respect to any member of the Company Group or the Assets or the Business and (b) the

portion of any Taxes imposed on any Seller Consolidated Group for any taxable period that is attributable to any member of the Company

Group, determined as though each member of the Company Group that is a member of such Seller Consolidated Group were members of a Consolidated

Group that only included such members of the Company Group; provided, however, that Company Taxes shall not include (i) Flow-Through

Income Taxes, (ii) Taxes imposed on or with respect to gain recognized by any Seller from the transactions described in this Agreement

or (iii) Transfer Taxes.

“Confidentiality

Agreement” means that certain Confidentiality Agreement, dated as of May 1, 2026, by and between Company and MRC Permian

Company, as amended from time to time.

“Consent”

means any consent, approval, authorization, or permit of, or filing with, or notification to, any Governmental Authority or any other

Person which is required to be obtained, made, or complied with for or in connection with the sale, assignment or transfer of the Subject

Securities or the other transactions contemplated by this Agreement or the other Transaction Documents.

“Consolidated

Group” means any affiliated, combined, consolidated, unitary or similar group with respect to any Taxes, including any affiliated

group within the meaning of Section 1504 of the Code electing to file consolidated U.S. federal Income Tax Returns and any similar

group under foreign, state or local Law.

“Contracts”

means all contracts, agreements and instruments that are binding on any member of the Company Group, the Assets or the Business or that

relate to the ownership, development or operation of the Assets or the Business, including operating agreements, unitization, pooling,

and communitization agreements, declarations and orders, area of mutual interest agreements, joint venture agreements, farmin and farmout

agreements, exchange agreements, purchase and sale agreements, and other contracts pursuant to which Company Group acquired interests

in any other Assets, transportation agreements, agreements for the sale and purchase of Hydrocarbons, recycling agreements, disposal agreements

and processing agreements; provided, however, without limiting the instruments included in the Assets, the defined term

“Contracts” shall not include the Leases, Surface Rights and Rights of Way and other instruments of record constituting

Company Group’s chain of title to the Oil and Gas Properties or Surface Rights and Rights of Way.

“COPAS”

means the COPAS 2005 Accounting Procedure recommended by the Council of Petroleum Accountants Societies, as interpreted by the Council

of Petroleum Accountants Societies of North America under MFI-51 2005 COPAS Accounting Procedure.

“Credit Document

Indebtedness” means all Pre-Effective Time Credit Document Indebtedness and Post-Effective Time Credit Document Indebtedness.

“Credit Documents”

means (a) that certain Credit Agreement dated as of May 23, 2025 (as amended, restated, supplemented or otherwise modified from

time to time prior to the Effective Time, the “Paloma Credit Agreement”), among Paloma Permian Holdings, LLC,

BOKF, NA DBA BANK OF TEXAS, as administrative agent, issuing bank, lead arranger and bookrunner and the lenders party thereto and (b) all

Loan Documents (as defined in the Paloma Credit Agreement described in subpart (a)  of this definition), in each case of subparts

(a)  and (b), together with any amendments, supplements, extensions and/or replacements thereof.

“Credit Support”

is defined in Section 5.32.

“Cure Deadline”

means the date that is one hundred and fifty (150) days after the Closing Date.

“Cut-Off Date”

means the date of the final settlement and determination of the Adjusted Purchase Price in accordance with ‎Section 2.7(b).

“D&O Insurance”

means a directors’ and officers’ insurance and indemnification policy.

“Damages”

means the amount of any actual loss, cost, costs of settlement, damage, fine, penalty, obligation, Taxes, expense, claim, award or judgment

incurred or suffered by any Indemnified Person arising out of or resulting from the indemnified matter, whether attributable to personal

injury or death, property damage, contract claims, torts or otherwise, including reasonable fees and expenses of attorneys, consultants,

accountants or other agents and experts reasonably incident to matters indemnified against, the costs of investigation or monitoring of

such matters, and the costs of enforcement of the indemnity; provided, however, that “Damages”

shall not include (a) any Taxes that may be assessed on payments under Article 13 or (b) any damages that are

waived, released or restricted under ‎Section 14.11.

“Data Room”

means any virtual data room established by or on behalf of Sellers pertaining to the Assets.

“Data Security

Requirements” means collectively, all of the following to the extent relating to the access, collection, use, processing,

storage, sharing, distribution, disclosure, security, or disposal of any personal information or data or otherwise relating to privacy,

security, or security breach notification requirements and applicable to the Company Group: (i) the Company Group’s own published

rules, policies, and procedures; (ii) all applicable Laws; and (iii) Contracts to which any member of the Company Group is party

or by which it is otherwise bound.

“Defect”

means any Environmental Defect or Title Defect.

“Defect Amount”

is defined in ‎Section 3.2(d).

“Defect Deadline”

is defined in ‎Section 3.2(a).

“Defect Escrow

Amount” means an amount equal to the positive remainder, if any, of (a) the aggregate Defect Amounts with respect to

all alleged Defects (after giving effect to ‎Section 3.2(d)(viii) and ‎Section 3.2(f)(i)) asserted

by Purchaser pursuant to one or more valid Defect Notices prior to the Defect Deadline minus (b) the Title Defect Deductible

or the Environmental Defect Deductible, as applicable, minus (c) the aggregate amount of all Defect Amounts with respect to

any and all Defects and Defect Amounts with respect thereto that Sellers and Purchaser have agreed upon prior to Closing and/or that Sellers

and Purchaser have agreed that Sellers have cured prior to Closing minus (d) the aggregate amount of all Title Benefit Amounts

with respect to any and all Title Benefits and Title Benefit Amounts with respect thereto that Sellers and Purchaser have agreed upon

prior to Closing plus (e) the aggregate Title Benefit Amounts with respect to all alleged Title Benefits asserted by Sellers

pursuant to one or more valid Title Benefit Notices prior to the Closing that Sellers and Purchaser have not agreed upon prior to Closing.

“Defect Notice”

is defined in ‎Section 3.2(a).

“Defect Referee”

means the Title Referee or the Environmental Referee, as applicable.

“Deferred Employment

Taxes” means any indebtedness, liability or other obligation for any employment or payroll Taxes deferred pursuant to the

CARES Act, IRS Notice 2020-65 or IRS Notice 2021-11.

“Deposit”

is defined in ‎Section 2.3(a).

“Direct Claim”

is defined in ‎Section 13.5(g).

“Disclosure Schedules”

means the aggregate of all schedules that set forth exceptions, disclosures or otherwise relate to or are referenced in any of the representations

or warranties of each Seller or Company set forth in ‎Article 4 or ‎Article 5.

“Dispute”

is defined in ‎Section 14.3(a).

“Effective Time”

means 12:01 a.m., Central Time, on June 1, 2026.

“Effective Time

Working Capital” means the positive or negative amount of (a) the Working Capital Assets minus (b) the Working

Capital Liabilities. An illustrative example of the calculation of the Effective Time Working Capital, as well as the adjustments contemplated

by ‎Section 2.4 is set forth in Exhibit D; provided, however, that for the avoidance of doubt,

in the event of a contradiction or inconsistency between the definitions of Working Capital Assets and Working Capital Liabilities and

the provisions of ‎Section 2.4, on the one hand, and the illustrative example, on the other hand, such definitions and

provisions shall control.

“Emergency Event”

is defined in ‎Section 8.2(c).

“Environmental

Defect” means any violation of any Environmental Laws or condition with respect to the Assets (including any Release of

Hazardous Substances) that presently requires Remediation under applicable Environmental Laws and, with respect to the Oil and Gas Properties,

any of the costs thereof are or would be chargeable to Company Group’s Working Interest in an Oil and Gas Property; provided,

however, the following conditions, matters, Releases and Environmental Liabilities shall be excluded from and in no event constitute

an “Environmental Defect”: (a) the presence or absence of NORM, (b) Plugging and Abandonment obligations

or liabilities as may be required by any Governmental Authority, (c) the flaring of natural gas or other gaseous hydrocarbons, except

where such flaring is in violation of Environmental Law or a Permit issued thereunder, (d) any condition, matter, Release or Environmental

Liability expressly disclosed in the Disclosure Schedules, (e) the physical condition of any surface or subsurface production equipment

(including water or oil tanks, separators or other ancillary equipment), except with respect to equipment that causes or has caused any

environmental pollution, contamination or degradation where Remediation is presently required (or if known or confirmed, would be presently

required) under Environmental Laws or the use or condition of which is in violation of or presently requires Remediation under Environmental

Law or (f) has been cured or Remediated as of the Closing Date.

“Environmental

Defect Deductible” means an amount equal to one percent (1.0%) of the Unadjusted Purchase Price.

“Environmental

Laws” means the following: CERCLA; the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq.; the

Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; the Clean Air Act, 42 U.S.C. § 7401 et seq.; the

Hazardous Materials Transportation Act, 49 U.S.C. § 5101 et seq.; the Toxic Substances Control Act, 15 U.S.C. §§

2601 through 2629; the Oil Pollution Act, 33 U.S.C. § 2701 et seq.; the Endangered Species Act, 16 U.S.C. § 1531 et

seq.; the Emergency Planning and Community Right to Know Act, 42 U.S.C. § 11001 et seq.; and the Safe Drinking Water Act,

42 U.S.C. §§ 300f through 300j, in each case as amended in effect as of the Execution Date, and all similar Laws in effect as

of the Execution Date of any Governmental Authority having jurisdiction over the property in question addressing (i) pollution or

pollution control; (ii) protection of natural resources, the environment or biological resources; or (iii) the disposal, transportation,

storage, management, Release or threat of Release of Hazardous Substances.

“Environmental

Liabilities” means any and all Damages, Remediation obligations, liabilities, environmental response costs, costs to cure,

cost to investigate or monitor, restoration costs, costs of Remediation or removal, settlements, penalties, and fines arising out of or

related to any violations or non-compliance with or remedial obligations arising under any Environmental Laws, including any contribution

obligation under CERCLA or any other Environmental Law or responsibilities or obligations incurred or imposed pursuant to any claim or

cause of action by a Governmental Authority or other Person, attributable to any Environmental Defects, any failure to comply with Environmental

Laws, any Release of Hazardous Substances or any other environmental condition with respect to the ownership or operation of the Assets.

“Environmental

Referee” is defined in ‎Section 3.2(i)(i).

“ERISA”

means the Employee Retirement Income Security Act of 1974, as amended.

“ERISA Affiliate”

is defined in ‎Section 5.11(f).

“Escrow Agent”

means UMB Bank, National Association.

“Escrow Agreement”

means that certain Escrow Agreement dated as of the Execution Date among each Seller, Purchaser and the Escrow Agent, as such may be amended,

supplemented or replaced from time to time.

“Exchange Act”

means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Excluded Asset

JOA” is defined in Section 3.2(g)(ii).

“Excluded Assets”

means the following: (a) the assets and properties, if any, set forth on Schedule 1.2, (b) the Excluded Records;

attributable to, loss carryforwards with respect to, or similar Tax assets related to Pre-Effective Time Company Taxes and Flow Through

Income Taxes for any Tax period (or portion thereof) ending on or before the Closing Date; (e) to the extent not covered in subclause

(d) of this definition, any and all claims for refunds or credits owed to any member of the Company Group from any Governmental Authority

or Third Party to the extent related or attributable to the period prior to the Effective Time, (f) the Subject Marks, (g) any

proceeds or earnings with respect to any other Excluded Assets, and (h) all computer servers, computer hardware, software (including

software licenses), phones, cellular phones, radios and similar equipment and property (except owned SCADA equipment).

“Excluded Asset

Assignment” means an assignment and conveyance of the Excluded Assets from any member of Company Group to one or more Sellers

or their respective designees in the form attached hereto as Exhibit C.

“Excluded Records”

means: (a) any and all data, correspondence, materials, descriptions, documents and records relating to the auction, marketing, sales

negotiation or sale of the Subject Securities or the Assets, including the existence or identities of any prospective inquirers, bidders

or prospective purchasers of any of the Assets, any bids received from and records of negotiations with any such prospective purchasers

and any analyses of such bids by any Person; (b) corporate, financial, Tax, and legal data and Records that relate primarily to the

businesses of any Affiliate of any Seller other than any member of Company Group or the Business; (c) legal records and legal files

of any member of Company Group with respect to or that relate to this Agreement, any Transaction Document or any of their communications

prior to the Closing with respect to the transactions contemplated thereby or hereby, including all work product of and attorney-client

communications with any Seller’s or any member of Company Group’s legal counsel (other than title opinions); (d) except

for any Contracts that exist or are memorialized or stored only in e-mail format (which Contracts shall not be Excluded Records), all

e-mails on Paloma Resources’ or any member of the Company Group’s servers and networks relating to the Assets or the Excluded

Assets and all other electronic files on Paloma Resources’ or Company Group’s servers and networks constituting any other

Excluded Records; and (e) any personnel or employee records.

“Execution Date”

is defined in the introductory paragraph hereof.

“Final Settlement

Statement” is defined in ‎Section 2.7(b).

“Financial Statements”

is defined in ‎Section 5.6.

“Financing”

is defined in Section 6.8.

“Financing Source”

means each Person (other than the Purchaser or any of its Affiliates) that has committed to provide or arrange any Financing, or that

otherwise is or becomes a party to any agreement in connection with all or part of any Financing, including any Person (other than the

Purchaser or any of its Affiliates) party to any commitment letter, engagement letter, joinder agreement, fee letter, indenture, loan

agreement, credit agreement or other agreement relating to any Financing.

“Flow-Through

Income Taxes” means U.S. federal Income Taxes and any similar Income Taxes imposed by any state or local Laws on the direct

or indirect owners of any entity (e.g., an entity treated as a partnership or disregarded entity for Income Tax purposes) on a flow-through

basis by allocating or attributing to such owners all or certain of such entity’s items of income, gain, loss, deduction and other

relevant tax attributes.

“Fraud”

means, (a) any actual and intentional fraud or misrepresentation by Seller or the Company with respect to the making of any representation

or warranty of any Seller and/or Company set forth in ‎Article 4 or Article 5 or the Special Warranty of Title;

provided, that such actual and intentional fraud or misrepresentation of a Seller and/or Company shall only be deemed to exist if any

of the individuals identified in clause (a) of the definition of “Knowledge” had actual knowledge (as opposed to imputed

or constructive knowledge) that the representations and warranties made by any Seller and/or Company in ‎Article 4 or

Article 5 were actually breached when made, with the intention that Purchaser rely thereon to Purchaser’s detriment

and (b) any actual and intentional fraud or misrepresentation by Purchaser with respect to the making of any representation or warranty

of Purchaser set forth in ‎Article 6; provided, that such actual and intentional fraud or misrepresentation of Purchaser

shall only be deemed to exist if any of the individuals identified in clause (b) of the definition of “Knowledge” had

actual knowledge (as opposed to imputed or constructive knowledge) that the representations and warranties made by Purchaser in Article 6

were actually breached when made, with the intention that a Seller or the Company rely thereon to such Seller’s or the Company’s

detriment. For the avoidance of doubt, “Fraud” (and any claims for aiding and abetting fraud or conspiracy to commit fraud)

does not include (a) constructive fraud, equitable fraud, unfair dealings fraud, promissory fraud, or any torts (including a claim

for fraud) based on negligence or recklessness or (b) any fraud based on constructive knowledge, negligent misrepresentation, recklessness,

or any similar theory. A claim for Fraud may only be made against the Party committing such Fraud.

“Fundamental Representations”

means the representations and warranties set forth in ‎Section 4.1, ‎Section 4.2, ‎Section 4.3,

‎Section 4.4(a), ‎Section 4.7, ‎Section 4.8, ‎Section 5.1, ‎Section 5.2,

‎Section 5.3, Section 5.4, Section 5.5, and Section 5.27 (including the corresponding

representations and warranties given in the Closing Certificate).

“GAAP”

means generally accepted accounting principles in the U.S.

“Governing Documents”

means with respect to any Person that is not a natural person, the articles of incorporation or organization, certificate of formation,

by-laws, the limited partnership agreement, the partnership agreement, the operating agreement or the limited liability company agreement

or such other organizational documents of such Person which govern the formation, operation and governance of such Person.

“Governmental

Authority” means any court, tribunal, arbitrator, authority, agency, commission, official or other instrumentality of the

United States, any foreign country or any domestic or foreign state, county, city, tribe, quasi-governmental entity or other political

subdivision or authority exercising or entitled to exercise any administrative, executive, judicial, legislative, regulatory or taxing

authority or power.

“Government

Official” means any officer or employee of a Governmental Authority, a public international organization, or any department

or agency thereof, or any person acting in an official capacity for such government or organization, including (a) a foreign official

as defined in the U.S. Foreign Corrupt Practices Act of 1977, as amended, (b) an officer or employee of a government-owned,

controlled, operated enterprise, such as a national oil company, and (c) any non-U.S. political party or party official or any candidate

for foreign political office.

“Hazardous Substances”

means any pollutant, contaminant, dangerous or toxic substance, hazardous or extremely hazardous substance or chemical, or otherwise hazardous

material or waste defined as “solid waste”, “hazardous waste”, “hazardous substance”, “hazardous

material” or “toxic substance” under applicable Environmental Laws, including chemicals, pollutants, contaminants, wastes,

toxic substances, which are classified as hazardous, toxic, radioactive, or otherwise are regulated by, or form the basis for Damage or

liability under, any applicable Environmental Law, including hazardous substances under CERCLA.

“Hedge”

means any future hedge, derivative, swap, collar, put, call, cap, option, or other contract that is intended to benefit from, relate to,

or reduce or eliminate the risk of fluctuations in interest rates, basis risk, or the price of commodities, including Hydrocarbons or

securities, to which any member of Company Group is bound.

“Hedge Gains”

means, with respect to the Company Hedges, the amount to which any member of Company Group is entitled to receive under the terms of any

and all such Company Hedges (without offset or netting of amounts under any other Hedge transaction with the counterparty that is a party

to such Company Hedges), including any liquidation and/or termination fees or payments made upon the liquidation or termination of the

same.

“Hedge Losses”

means, with respect to the Company Hedges, the amount any member of Company Group is obligated to pay to the applicable counterparty (under

the terms of such Company Hedges), without offset or netting of amounts under any other Hedge transaction with the counterparty that is

a party to any such Company Hedges, including any liquidation and/or termination fees or payments payable upon the liquidation or termination

of the same.

“Holdback Amount”

means (a) as of the Closing Date, an amount equal to the Specified Representation Indemnity Cap, plus three million dollars ($3,000,000),

and (b) as of the applicable date of determination after the Closing Date, an amount equal to the sum of (i) such amount described

in subpart (a) of this definition plus (ii) any and all interest and earnings accrued on the Holdback Amount under

the Escrow Agreement after the Closing Date as of such date of determination minus (iii) any and all disbursements and distributions

of the Holdback Amount made after Closing pursuant to Section 13.6.

“Holdback Release

Date” means the date that is eighteen (18) months after the Closing Date.

“Hydrocarbons”

means oil and gas and other hydrocarbons produced or processed in association therewith (whether or not such item is in liquid or gaseous

form), or any combination thereof, and any minerals (whether in liquid or gaseous form) produced in association therewith, including all

crude oil, gas, casinghead gas, condensate, natural gas liquids, and other gaseous or liquid hydrocarbons (including ethane, propane,

iso-butane, nor-butane, gasoline, and scrubber liquids) of any type and chemical composition.

“Imbalance”

means any over-production, under-production, over-delivery, under delivery or similar imbalance of Hydrocarbons produced from or allocated

to the Assets, regardless of whether such over-production, under-production, over-delivery, under-delivery, or similar imbalance arises

at the wellhead, pipeline, gathering system, transportation system, processing plant, or other location, including any imbalances under

gas balancing or similar agreements, processing agreements, and gathering or transportation agreements.

“Income Taxes”

means (a) all Taxes based upon, measured by, or calculated with respect to gross or net income, gross or net receipts or profits

(including franchise Taxes and any capital gains, alternative minimum, and net worth Taxes, but excluding ad valorem, property, excise,

severance, production, sales, use, New Mexico gross receipts, New Mexico compensating tax, real or personal property transfer or other

similar Taxes), (b) Taxes based upon, measured by, or calculated with respect to multiple bases (including corporate franchise, doing

business or occupation Taxes) if one or more of the bases upon which such Tax may be based, measured by, or calculated with respect to

is included in clause ‎(a) above (but excluding ad valorem, property, excise, severance, production, sales, use,

New Mexico gross receipts, New Mexico compensating tax, real or personal property transfer or other similar Taxes), or (c) withholding

Taxes measured with reference to or as a substitute for any Tax included in clauses ‎(a) or ‎(b) above.

“Indebtedness”

means, with respect to any Person, at any date, in each case without duplication, (a) all obligations of such Person for borrowed

money, including all principal, interest, premiums, fees, expenses, overdrafts and, to the extent required to be carried on a balance

sheet prepared in accordance with the Accounting Principles, penalties with respect thereto, whether short-term or long-term, and whether

secured or unsecured, or with respect to deposits or advances of any kind (other than deposits and advances of any Person relating to

the purchase of products or services from any member of Company Group in the ordinary course of business), (b) all obligations of

such Person evidenced by loans, bonds, mortgages, debentures, indentures, notes or debt securities or other debt instrument, (c) all

obligations of such Person to reimburse any bank or other Person in respect of amounts paid under a letter of credit or similar instruments,

(d) all obligations of such Person under conditional sale or other title retention agreements relating to property or assets purchased

by such Person, (e) that portion of any obligations of the Company Group under any capital leases (excluding the Leases and any operating

lease liabilities recognized in accordance with Accounting Standards Codification 842) which are recorded as capital leases on the Financial

Statements to the extent not reflected as a current liability on the balance sheet of Company Group, (f) all obligations in respect

of any reimbursement obligations or obligations with respect to letters of credit, bankers’ acceptances, bank guarantees, surety

bonds, and performance bonds, whether or not matured, (g) amounts owing by such Person as deferred purchase price for property or

services (other than any Acquisition Costs), including “earn-out” payments, direct or indirect guarantees in

respect of, any obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise assure a creditor against loss in

respect of, any such indebtedness or obligations referred to in clauses ‎(a) through ‎(f) above or

any indebtedness or obligations of any other Person, (h) any change of control payments or prepayment premiums, penalties, charges

or equivalents thereof with respect to any other Indebtedness that are required to be paid at the time of, or the payment of which would

become due and payable solely as a result of, the execution of this Agreement or the consummation of the transactions contemplated by

this Agreement at such time, and (i) all other obligations of a Person which would be required to be shown as indebtedness on a balance

sheet of such Person prepared in accordance with the Accounting Principles (excluding, in each case, for the avoidance of doubt, Tax obligations).

“Indemnified Person”

is defined in Section 13.5(a).

“Indemnifying

Party” is defined in ‎Section 13.5(a).

“Indemnitors”

is defined in Section 8.9(f).

“Individual Threshold”

means One Hundred Twenty Five Thousand Dollars ($125,000.00).

“Intellectual

Property” means the following intellectual property rights, including both statutory and common law rights, as applicable:

(a) copyrights; (b) trademarks, service marks, trade names, slogans, domain names, logos, and trade dress; (c) patents

and patent applications (including all reissues, divisions, continuations, continuations-in-part, renewals and extensions of the foregoing);

(d) trade secrets, including but not limited to, ideas, designs, concepts, compilations of information, methods, techniques, procedures,

processes and other know-how, whether or not patentable; and (e) registrations and applications for registrations for any of the

foregoing.

“International

Trade Laws” means (a) any economic sanctions Laws administered by the Office of Foreign Assets Control of the U.S.

Treasury Department or the U.S. State Department, (b) all applicable Laws relating to anti-bribery or anti-corruption, including

the U.S. Foreign Corrupt Practices Act of 1977, as amended, (c) all applicable Laws relating to the import, export, re-export, deemed

export, deemed re-export, or transfer of information, data, goods, and technology, including the Export Administration Regulations administered

by the U.S. Department of Commerce, the International Traffic in Arms Regulations administered by the U.S. Department of State, customs

and import Laws administered by U.S. Customs and Border Protection (including the Uyghur Forced Labor Prevention Act), and any other export

or import controls administered by an agency of the U.S. government, and (d) the anti-boycott regulations administered by the U.S.

Department of Commerce and the U.S. Department of the Treasury.

“IRS”

means the U.S. Internal Revenue Service.

“Knowledge”

means (a) as to any Seller and/or Company, the actual knowledge of only those Persons named on Part A of Schedule

1.3, and such knowledge as any such Persons would have obtained, in each case, after reasonable inquiry of their respective direct

reports who, in each case, would reasonably be expected to have actual knowledge of the matter in question and (b) as to Purchaser,

the actual knowledge of only those Persons named on Part B of Schedule 1.3, and such knowledge as any such Persons

would have obtained, in each case, after reasonable inquiry of their respective direct reports who, in each case, would reasonably be

expected to have actual knowledge of the matter in question.

“Lands”

is defined in subsection ‎(a) of the definition of “Assets”.

“Laws”

means all laws, statutes, rules, regulations, ordinances, Orders, decrees, requirements, judgments and codes of Governmental Authorities.

“Leakage”

means any of the following arising after the Effective Time and on or prior to the Closing: (a) any dividend, interest on capital,

advance or distribution (whether in cash or in kind) declared, paid or made (whether actual or deemed), or any return of capital (whether

by reduction of capital or redemption, amortization or purchase of shares or quotas) or other payment made on any Securities of any member

of the Company Group, by any member of the Company Group to or on behalf of or for the benefit of, any Seller or any other member of the

Seller Group (other than a member of the Company Group), including the Closing Distribution but excluding any dividends or distributions

of any Excluded Assets; (b) any sale, transfer or surrender of any assets or rights from any Seller or any other member of the Seller

Group (other than a member of the Company Group) to any member of the Company Group to the extent such sale, transfer or surrender of

assets or rights is in excess of their fair market value; (c) any liabilities assumed, indemnified, guaranteed, incurred or paid

by any member of the Company Group for the benefit of or on behalf of any Seller or any other member of the Seller Group (other than a

member of the Company Group or pursuant to the terms of the Management Services Agreement); (d) any waiver, forgiveness or release

by any member of the Company Group of any amount owed to it by (or any right or any claim against) any Seller or any other member of the

Seller Group (other than a member of the Company Group); and/or (e) any agreement or arrangement entered into by any member of the

Company Group to give effect to any matter referred to in subparts ‎(a) through ‎(d) above. Notwithstanding

anything to the contrary herein and for the avoidance of doubt, the general and administrative expenses and overhead costs of the Company

Group actually incurred on behalf of the Company Group, the Assets or the Business between the Effective Time and Closing up to $800,000

per month plus any amounts with respect to which any member of the Company Group is obligated to provide indemnification pursuant to any

Material Contracts, joint operating agreements or similar agreements shall not constitute Leakage hereunder or otherwise result in any

downward adjustment to the Unadjusted Purchase Price.

“Leased Real Property”

means all of the Company Group’s right, title and interest in and to the leasehold or subleasehold estates and other similar rights

to use or occupy any land, buildings, structures, improvements, fixtures or other interest in real property held by the Company Group

members, in each case, other than any Oil and Gas Properties, and/or Surface Rights and Rights of Way.

“Leases”

is defined in subsection ‎(a) of the definition of “Assets”.

“Lien”

means any lien, encumbrance, mortgage, deed of trust, pledge, charge, collateral assignment, or security interest of any kind (including

any agreement to give any of the foregoing, any conditional sale or other title retention agreement) and any option, trust or other preferential

arrangement having the practical effect of any of the foregoing.

“Lowest Cost Response”

means the response required or allowed under Environmental Laws and any express and applicable environmental remediation or corrective

action requirements contained in any Contract or Lease imposing a legally binding obligation that cures, remediates, removes or remedies

the applicable present condition alleged with respect to an Environmental Defect at the lowest cost (considered as a whole taking into

consideration any material negative impact such response may have on the operations of the relevant Assets and any potential material

additional costs or liabilities that may likely arise as a result of such response as the same would be viewed by a reasonably prudent

operator while complying with all applicable laws, regulations, codes and restrictive covenants and using good workmanlike manners and

methods) sufficient to comply with Environmental Laws and any applicable Contract or Lease imposing a legally binding obligation compared

to any other response that is required or allowed under Environmental Laws and any applicable Contract or Lease imposing a legally binding

obligation. The Lowest Cost Response shall take into account permanent or non-permanent remedies or actions, including mechanisms to contain

or stabilize Hazardous Substances, including monitoring site conditions, natural attenuation, risk based corrective action, institutional

controls, or other appropriate restrictions on the Assets, including caps, dikes, encapsulation or leachate collection systems if such

responses are allowed under Environmental Laws and any applicable Contract or Lease imposing a legally binding obligation. The Lowest

Cost Response shall not include: (a) the costs of Purchaser’s or any of its Affiliate’s employees or attorneys; (b) expenses

for matters that are costs of doing business (e.g., those costs that would ordinarily be incurred in the day-to-day operations of the

Oil and Gas Properties) to the extent such costs are not increased as a result of the Environmental Defect; (c) overhead costs of

Purchaser or its Affiliates; (d) costs and expenses that would not have been required under Environmental Laws and any express and

applicable environmental remediation or corrective action requirements contained in any Contract or Lease as they exist on the Execution

Date; or (e) costs or expenses to the extent incurred in connection with remedial or corrective action that is designed to achieve

standards that are more stringent than those required or that fail to reasonably take advantage of applicable risk reduction or risk assessment

principles allowed under applicable Environmental Laws and any express and applicable environmental remediation or corrective action requirements

contained in any Contract or Lease.

“Malicious Code”

is defined in Section 5.46.

“Management Services

Agreement” means that certain Amended and Restated Management Services Agreement dated effective June 26, 2026, between

the Company and Paloma Resources, as amended, modified and supplemented.

“Material Adverse

Effect” means any event, effect, change, fact or circumstance that, individually or in the aggregate, (a) has had or

would reasonably be expected to have a material adverse effect on the Business, ownership, operation, condition (financial or otherwise),

or results of operations of the Company Group or the Assets, taken as a whole, or (b) prevents or materially impairs or delays, or

would reasonably be expected to prevent or materially impair or delay, the consummation of the transactions contemplated hereby or the

performance of any Seller’s or Company’s obligations and covenants hereunder that are to be performed at Closing; provided,

however, that “Material Adverse Effect” shall not include material adverse effects resulting from (i) general

changes in Hydrocarbon or other commodity prices; (ii) changes in condition or developments generally applicable to the oil and gas

industry in the United States or any area or areas where the Assets are located, including any general increase in operating costs or

capital expenses or any general reduction in drilling activity or production generally applicable to the oil and gas industry in the United

States; (iii) changes in economic, financial, credit or political conditions generally and general changes in markets, including

changes generally in supply, demand, price levels or interest or exchange rates; (iv) acts of God, hurricanes, tornados, meteorological

events, storms and pandemics (including COVID-19); (v) orders, acts or failures to act of Governmental Authorities; (vi) civil

unrest or similar disorder, terrorist acts, embargo, sanctions or interruption of trade, or any outbreak, escalation or worsening of hostilities

or war; (vii) any reclassification or recalculation of reserves in the ordinary course of business consistent with past practices;

(viii) changes in Laws or the Accounting Principles or the interpretation thereof; (ix) effects or changes that are cured or

no longer exist by the earlier of the Closing and the termination of this Agreement pursuant to ‎Article 12; (x) any

effect to the extent resulting from (A) any action taken by Purchaser or any Affiliate of Purchaser, other than those expressly permitted

in accordance with the terms of this Agreement or (B) the omission of an action that was required to be taken by Purchaser or any

of its Affiliates under the express terms of this Agreement; (xi) action taken by a Seller or any Affiliate of a Seller (including

Company Group) with Purchaser’s written consent or that are otherwise expressly permitted or prescribed hereunder; (xii) natural

declines in well performance; (xiii) any change in the financial condition or results of operation of Purchaser or its Affiliates;

or (xiv) entering into this Agreement or the announcement of the transactions contemplated hereby or the performance of the covenants

set forth in ‎Article 8; except to the extent such event, effect, change, fact or circumstance resulting from or arising

from clauses ‎(i) – ‎(ix) above materially and disproportionately affects any member of the

Company Group relative to other participants in the industries in which the Company Group operates; or (xv) any matters, facts or

disclosures readily ascertainable from the face of the Disclosure Schedules.

“Material Contract”

means, to the extent binding on any member of Company Group, the Business or the Assets, any Contract that is one or more of the following

types or that:

(a)            any

Contract (other than joint operating agreements, unit operating agreements, pooling agreements or similar Contracts) that can reasonably

be expected to result in aggregate payments by any member of Company Group of more than $125,000 during the current or any subsequent

calendar year (based solely on the terms thereof and current volumes, without regard to any expected increase in volumes or revenues);

(b)            any

Contract (other than joint operating agreements, unit operating agreements, pooling agreements or similar Contracts) that can reasonably

be expected to result in aggregate revenues to Company Group of more than $125,000 during the current or any subsequent calendar year

(based solely on the terms thereof and current volumes, without regard to any expected increase in volumes or revenues);

Hydrocarbon purchase and sale, marketing, transportation, gathering, processing or similar Contract that (i) is not terminable without

penalty upon sixty (60) days’ or less notice and (ii) can reasonably be expected to result in aggregate payments by or revenues

to any member of Company Group of more than $125,000 during the current or any subsequent calendar year (based solely on the terms thereof

and current volumes, without regard to any expected increase in volumes or revenues);

(d)            any

(i) Credit Document or (ii) Contract that relates to the creation, incurrence, assumption or guarantee of any other Indebtedness

with a value in excess of $125,000;

(e)            any

Contract constituting a farmout agreement, joint operating agreement, participation agreement, exploration agreement, development agreement,

salt water or produced water disposal agreement, bottom hole agreement, acreage contribution agreement, unitization, pooling and other

communitization agreement, transportation, pipeline interconnect, transportation, facility operating agreement, disposal and water injection

agreement or similar Contracts with any remaining drilling or development obligations or unexpired acreage or wellbore earning rights;

(f)            any

Contract that constitutes a lease (other than any Lease) under which any member of Company Group is the lessor or the lessee of real or

personal property which lease (i) cannot be terminated by a member of the Company Group without penalty upon sixty (60) days’

or less notice and (ii) involves an annual base rental of more than $125,000 (net to the Company Group);

(g)            any

Contract that is a drilling contract, Contracts for fraccing or completion services for oil and natural gas wells or Contract that requires

any member of the Company Group to drill any well;

(h)            any

Contract that contains or constitutes an existing area of mutual agreement or an agreement that prohibits or materially restricts a member

of the Company Group from competing in any jurisdiction or from hiring or soliciting any employees;

(i)             any

Contract that (i) requires any member of the Company Group to dispose of or acquire assets or properties (including Oil and Gas Properties),

or (ii) involves any pending or contemplated merger, consolidation or similar business combination transaction in an amount in excess

of $125,000;

(j)             any

Contract between any member of Company Group or any of its directors, managers, officers or consultants, on one hand, and a Seller or

any Affiliate of any Seller (other than a member of the Company Group, but including, for the avoidance of doubt, Paloma Resources), or

any of its directors, managers, officers or consultants, on the other, that will not be terminated prior to Closing;

(k)            any

purchase and sale agreements pursuant to which any Seller, any member of the Company Group or their Affiliates (directly or indirectly)

acquired the Oil and Gas Properties with an aggregate purchase price in excess of $1,000,000 and that contain indemnity obligations or

reversionary rights (other than, for the avoidance of doubt, any such rights that are included in any Lease that is the subject of such

purchase and sale agreement), in each case, that will be binding on Purchaser or its Affiliates (including any member of the Company Group)

following Closing;

(l)             any

settlement agreements (i) wherein obligations remain in the amount, individually or in the aggregate, of more than $125,000, or (ii) that

contain material behavior commitments or restrictions that must continue to be performed, in each case, that will be binding on Purchaser

or Company Group following Closing;

(m)           the

Company Hedges;

(n)            any

Contract that contains any call upon, option to purchase, take or pay payment, advance payment, minimum volume commitment, prepayment

or similar provision, or requiring gas to be gathered, delivered, processed or transported or proceeds from the sale thereof, or options

to purchase Hydrocarbons, carbon dioxide, critical minerals, produced water or other substances from the Wells;

(o)            any

partnership agreement, limited liability company agreement or any other substantially similar Contract (other than the Governing Documents

of any Company Group member) that govern or pursuant to which any member of the Company Group hold any Securities;

(p)            any

Contract (i) for which the primary purpose is to indemnify another Person or (ii) guaranteeing any payment or performance of

any obligation of any Third Party for which the guaranteed obligations have not been fully paid or performed; and

(q)            any

Contract with a Governmental Authority, including any that is a settlement, conciliation or similar agreement with any Governmental Authority

or pursuant to which any member of Company Group will have any material outstanding obligation after the date of this Agreement.

“MMBtu”

means one million (1,000,000) BTU.

“Net Acre”

means, as calculated separately with respect to each Lease as to the Lands described for such Lease on Schedule 2.8, (i) the

number of gross acres of land covered by such Lease, multiplied by, (ii) the undivided interest in the fee or mineral interests

in the Lands burdened by or constituting such Lease, multiplied by (iii) any or all members of the Company Group’s undivided

interest in such Lease.

“Net Revenue Interest”

means, with respect to any Oil and Gas Property, the percentage interest in and to all production of Hydrocarbons saved, produced and

sold from or allocated to such Oil and Gas Property, after giving effect to all Royalties.

“Non-Fundamental

Representations” means all representations and warranties of any Seller and/or Company set forth herein and in the other

Transaction Documents (including the corresponding representations and warranties given in the Closing Certificate), excepting and excluding

any and all Fundamental Representations.

“Non-Recourse

Person” is defined in Section 14.13.

“NORM”

means naturally occurring radioactive material.

“Notice”

is defined in Section 14.1.

“Oil and Gas Properties”

is defined in subsection ‎(b) of the definition of “Assets”.

“Open Property

Trade” is defined in ‎Section 8.16(b).

“Order”

means any order, award, decision, injunction, judgment, ruling, decree, writ, subpoena or verdict entered, issued, made or rendered by

any Governmental Authority or arbitrator.

“Ordinary Course

Development Plan” means the Company Group’s development plan with respect to the Company Group’s ordinary course

drilling and completion operations for the Oil and Gas Properties and the applicable Scheduled Wells, in each case, from the Execution

Date through the Outside Date, which plan is set forth on Schedule 8.2(e).

“Other Party”

means (a) as it relates to any Seller (and any member of the Company Group prior to Closing), Purchaser (and any member of the Company

Group after Closing), and (b) as it relates to Purchaser (and any member of the Company Group after Closing), any Seller (and any

member of the Company Group prior to Closing).

“Outside Date”

is defined in ‎Section 12.1(b).

“Overall Indemnity

Cap” is defined in ‎Section 13.3(c)(i)(D).

“Owned Real Property”

means all of the Company Group’s right, title and interest in and to all real property, together with all buildings, structures,

improvements and fixtures located thereon, and all easements and other rights and interests appurtenant thereto, in each case, other than

any Oil and Gas Properties, and/or Surface Rights and Rights of Way.

“Paloma Holdings”

is defined in the introductory paragraph hereof.

“Paloma Intermediate”

is defined in the introductory paragraph hereof.

“Paloma Resources”

means Paloma Resources, LLC, a Delaware limited liability company.

“Party”

or “Parties” is defined in the introductory paragraph hereof.

“Permits”

means any permits, licenses, authorizations, consents, certificates, registrations, and other approvals granted by any Governmental Authority

(including the rules and regulations of all Governmental Authorities having jurisdiction over the Assets) that pertain or relate

in any way to the Assets.

“Permitted Encumbrances”

means any or all of the following:

(a)            all

Royalties if the net cumulative effect of such burdens do not, individually or in the aggregate, reduce Company Group’s Net Revenue

Interest or Net Acres, as applicable, in the applicable Subject Formations as to each Lease or Well below that shown in Schedule 2.8

or Exhibit A-2, as applicable, for such Lease or Well;

(b)            the

terms of any Contract described on Schedule 5.13(a), Lease, or Surface Rights and Rights of Way, including provisions for

penalties, suspensions, or forfeitures contained therein, in each case to the extent the aggregate effect thereof does not operate: (i) in

the case of any Lease, to reduce the Net Revenue Interest percentage or Net Acres shown for such Subject Formation as to such Lease in

Schedule 2.8; (ii) in the case of any Well, to reduce the Net Revenue Interest percentage shown for such Subject Formation

as to such Well in Exhibit A-2; (iii) in the case of any Well, to increase the Working Interest percentage shown for

such Subject Formation as to such Well in Exhibit A-2; or (iv) to materially interfere with the use, operation, or ownership

of the Assets subject thereto or affected thereby (as operated as of the Execution Date);

(i) Asset Preferential Rights with respect to the Assets; provided, that any Asset Preferential Rights shall not constitute

Permitted Encumbrances to the extent such rights were breached or otherwise not complied with in connection with any prior transfers or

transactions in the chain of title to the Assets (other than in any acquisition by a member of the Company Group) within the last ten

(10) years prior to the Execution Date and (ii) Consents, consents, notice requirements and similar restrictions which are not

applicable to the sale of the Subject Securities contemplated by this Agreement; provided, that Punitive Consents shall not constitute

Permitted Encumbrances to the extent such Punitive Consents were breached or otherwise not complied with in connection with any prior

transfers or transactions in the chain of title to the Assets (other than in any acquisition by a member of the Company Group) within

the last ten (10) years prior to the Execution Date;

(d)            Liens

for Taxes not yet delinquent or Taxes that are being contested in good faith and for which adequate reserves have been established on

the Financial Statements in accordance with GAAP;

(e)            Liens

created under the terms of the Leases, Surface Rights and Rights of Way or the Contracts, materialman’s Liens, warehouseman’s

Liens, workman’s Liens, carrier’s Liens, mechanic’s Liens, vendor’s Liens, repairman’s Liens, employee’s

Liens, contractor’s Liens, operator’s Liens, construction Liens, Liens pursuant to any applicable federal or state securities

Law, and other similar Liens arising in the ordinary course of business that, in each case, secure amounts or obligations (i) owed

by Persons other than any member of Company Group or its Affiliates or any predecessor in interest of any member of Company Group or (ii) not

yet delinquent (including any amounts being withheld as provided by Law), or, if delinquent, being contested in good faith by appropriate

actions;

(f)             to

the extent not yet triggered, rights of reassignment arising upon the expiration or final intention to abandon or release any of the Assets;

(g)            any

easement, right of way, covenant, servitude, permit, surface lease, condition, restriction, and other rights included in or burdening

the Assets for the purpose of surface or subsurface operations, roads, alleys, highways, railways, pipelines, transmission lines, transportation

lines, distribution lines, power lines, telephone lines, removal of timber, grazing, logging operations, canals, ditches, reservoirs,

and other like purposes, or for the joint or common use of real estate, rights of way, facilities, and equipment, in each case, to the

extent recorded in the applicable Governmental Authority recording office as of the Execution Date or that does not, individually or in

the aggregate, (i) materially interfere with the use, operation or ownership of the Assets subject thereto or affected thereby (as

operated as of the Execution Date); (ii) in the case of any Lease, reduce the Net Revenue Interest percentage or Net Acres shown

for such Subject Formation as to such Lease in Schedule 2.8; (iii) in the case of any Well, reduce the Net Revenue Interest

percentage shown for such Subject Formation as to such Well in Exhibit A-2; or (iv) in the case of any Well, increase

the Working Interest percentage shown for such Subject Formation as to such Well in Exhibit A-2;

(h)            all

applicable Laws and rights reserved to or vested in any Governmental Authorities (i) to control or regulate any of the Assets in

any manner, (ii) to assess Tax with respect to the Assets, the ownership, use or operation thereof, or revenue, income, or capital

gains with respect thereto, (iii) by the terms of any right, power, franchise, grant, license, or permit, or by any provision of

Law, to terminate such right, power, franchise grant, license, or permit or to purchase, condemn, expropriate, or recapture or to designate

a purchaser of any of the Assets, (iv) to use any property in a manner which does not materially impair the use of such property

for the purposes for which it is currently owned and operated as of the Execution Date, or (v) to enforce any obligations or duties

affecting the Assets to any Governmental Authority with respect to any franchise, grant, license, or permit, which, in each case, do not,

individually or in the aggregate, (1) materially interfere with the use, operation or ownership of the Assets subject thereto or

affected thereby (as operated as of the Execution Date) (2) in the case of any Lease, reduce the Net Revenue Interest percentage

or Net Acres shown for such Subject Formation as to such Lease in Schedule 2.8; (3) in the case of any Well, reduce the

Net Revenue Interest percentage shown for such Subject Formation as to such Well in Exhibit A-2; or (4) in the case of

any Well, increase the Working Interest percentage shown for such Subject Formation as to such Well in Exhibit A-2;

(i)             rights

of any (i) owner or lessee of any oil and gas interests in formations, strata, horizons or depths other than the Subject Formation

or (ii) common owner of any interest in Assets currently held by any member of Company Group and such common owner as tenants in

common or through common ownership or by contract, if the net cumulative effect of such do not, individually or in the aggregate, (1) materially

interfere with the use, operation or ownership of the Assets subject thereto or affected thereby (as operated as of the Execution Date)

(2) in the case of any Lease, reduce the Net Revenue Interest percentage or Net Acres shown for such Subject Formation as to such

Lease in Schedule 2.8; (3) in the case of any Well, reduce the Net Revenue Interest percentage shown for such Subject

Formation as to such Well in Exhibit A-2; or (4) in the case of any Well, increase the Working Interest percentage shown

for such Subject Formation as to such Well in Exhibit A-2;

(j)             except

for matters set forth on Schedule 1.4, (i) the failure of the records of the State of New Mexico to reflect any member of

the Company Group as the owner of any Leases issued by the State of New Mexico to the extent such failure is due to (A) such Leases

having more than one (1) record owner, or (B) such member of the Company Group’s interest in such Leases being the subject

of a term assignment or other “miscellaneous instrument” (as described in New Mexico Administrative Code § 19.2.100.43),

provided that the instruments evidencing the conveyance of such title to any member of the Company Group from its immediate predecessor

in title are recorded in the real property, conveyance, or other records of the applicable county or counties where the lands burdened

by such Lease are located; (ii) failure to record Leases or Surface Rights and Rights of Way issued by any Governmental Authority

in the real property, conveyance, or other records of the county in which such Leases or Surface Rights and Rights of Way are located,

provided that the instruments evidencing the conveyance of such title to any member of Company Group are recorded with the Governmental

Authority that issued any such Lease or Surface Rights and Rights of Way, and provided further, that evidence of the conveyance of such

Lease or Surface Rights and Rights of Way is not required by applicable Law to be filed in the real property, conveyance or other records

of the county in which such Leases or Surface Rights and Rights of Way are located or (iii) delay or failure of any Governmental

Authority to approve the assignment of any Oil and Gas Property to any member of Company Group or any predecessor in title to any member

of Company Group unless such approval has been expressly denied or rejected in writing by such Governmental Authority, and provided that

the instruments evidencing such assignment to Company Group or any predecessor in title have been submitted for approval to such Governmental

Authority;

(k)            any

other Liens, defects, burdens or irregularities which are based solely on (i) a lack of information in any member of Company Group’s

files or of record or (ii) the inability to locate an unrecorded agreement of which Purchaser has constructive or inquiry notice

by virtue of a reference to such unrecorded agreement in a recorded instrument (or a reference to a further unrecorded agreement in such

unrecorded agreement), if any such unrecorded agreement is dated earlier than ten (10) years prior to the Execution Date and no claim

has been made by a Third Party under such unrecorded instruments within the last ten (10) years;

(l)             lack

of (i) Contracts or rights for the transportation or processing of Hydrocarbons produced from the Assets, (ii) any rights of

way for gathering or transportation pipelines or facilities that do not constitute any of the Assets, or (iii) with respect to any

well or other operation that has not been commenced as of the Closing Date, any permits, easements, rights of way, unit designations,

production sharing agreement, pooling, proration or production or drilling units not yet obtained, formed or created;

(m)           any

Liens, defects, irregularities or other matters (i) set forth or described on Exhibit A or the Disclosure Schedules,

or (ii) that are expressly waived (or deemed to have been waived), cured, assumed, bonded, indemnified for, or otherwise discharged

at or prior to Closing;

(n)            the

terms and conditions of this Agreement, or any other Transaction Document;

(o)            defects

based solely on or arising out of the failure of a Lease to hold after the date set forth on Schedule 1.5 for such Lease a

specified number of Net Acres after the primary term of such Lease has expired based solely on any provision in the Lease providing that

the Lease holds only acreage within the proration units as to wells producing in paying quantities (or that are held payments in lieu

of such production);

(p)            Liens

created under deeds of trust, mortgages, and similar instruments by the lessor or mineral owners under a Lease covering the lessor’s

or mineral owner’s surface and mineral interests in the land covered thereby to the extent (i) such Liens or obligations secured

thereby have expired by their own terms and the enforcement of which are barred by applicable statutes of limitation, but which have not

been released of record or (ii) (A) such Liens do not contain express language that prohibits the lessors from entering into

an oil and gas lease or otherwise invalidates an oil and gas lease and (B) no mortgagee or lienholder of any such Lien has, prior

to the Defect Deadline, initiated foreclosure or similar proceedings against the interest of lessor in such Lease nor has Company received

any written notice of default under any such Lien;

(q)            (i) lack

of a division order, (ii) unless the basis of the member of the Company Group’s title arises from elections under an operating

agreement, lack of an operating agreement covering any Asset (including portions of an Asset that were formerly within a unit but which

have been excluded from the unit as a result of a contraction of the unit) or (iii) failure to obtain waivers of maintenance of uniform

interest or restrictions on zone transfer in operating agreements with respect to assignments in Company Group’s chain of title

to the Asset unless, in each case there is an outstanding and pending unresolved claim from a Third Party with respect to such lack of

division order or operating agreement or the failure to obtain such waiver;

(r)            defects

based on or arising out of the failure of any member of Company Group to enter into, be party to, or be bound by, pooling provisions,

a pooling agreement, production sharing agreement, production handling agreement or other similar agreement with respect to any horizontal

Well that crosses more than one Lease or tract, to the extent (i) such Well has been permitted by the applicable Governmental

Authority and (ii) the Hydrocarbons produced from such Well among such Lease or tracts are being allocated based upon the length

of the “as drilled” horizontal wellbore open for production, the total length of the horizontal wellbore, or other methodology

that is intended to reasonably attribute to each such Lease or leasehold tract its share of such production to the extent such allocation

is not expressly prohibited by the Lease or other Contract applicable to the Well;

(s)            any

Liens, defects, irregularities or other matters that would not constitute a Title Defect under the definition of “Title Defect”

in this Agreement;

(t)            any

Liens, defects, irregularities or other matters which have been terminated, released, waived or otherwise cured under Sections 105(a),

363(b), and 363(f) of the Bankruptcy Code as a result of a final Order within the meaning of 28 U.S.C. § 158(a);

(u)            the

expiration of any Leases by their terms on or after the date set forth on Schedule 1.5 for such Lease;

(v)            any

Liens, defects, irregularities or other matters which do not, individually or in the aggregate, (i) materially interfere with the

use, operation or ownership of the Assets subject thereto or affected thereby, (ii) which would be accepted or waived by a reasonably

prudent and sophisticated purchaser engaged in the business of owning and operating Hydrocarbon producing properties, (iii) in the

case of any Lease, reduce the Net Revenue Interest percentage or Net Acres shown for such Subject Formation as to such Lease in Schedule 2.8;

(iv) in the case of any Well, reduce the Net Revenue Interest percentage shown for such Subject Formation as to such Well in Exhibit A-2;

and (v) in the case of any Well, increase the Working Interest percentage shown for such Subject Formation as to such Well in Exhibit A-2;

(w)           the

failure of the records of the Bureau of Land Management (“BLM”) to reflect any member of the Company Group as

the owner of such interest set forth on Schedule 1.4 to the extent such failure is due to such interest not being of a nature traditionally

recognized by the BLM; provided that the instruments evidencing the conveyance of such title to any member of the Company Group

from its immediate predecessor in title are recorded in the real property, conveyance, or other records of the applicable county or counties

where the lands burdened by such interests are located.

“Permitted Securities

Lien” means Liens or restrictions on transfer: (i) arising under any applicable federal and state securities Laws,

(ii) arising pursuant to, or as otherwise set forth in, the Governing Documents of any members, respectively, of the Company Group,

(iii) created or imposed by Purchaser or its Affiliates at or after Closing, (iv) with respect to pre-Closing periods only,

arising in connection with the Credit Documents or (v) that are released from the Subject Securities as of Closing.

“Person”

means any individual, corporation, partnership, limited liability company, association, trust, estate, unincorporated organization, Governmental

Authority or any other entity.

“Phase I”

is defined in ‎Section 8.1(a).

“Phase II”

is defined in ‎Section 8.1(a).

“Plan”

shall mean: (a) each “employee benefit plan,” as such term is defined in Section 3(3) of ERISA;

and (b) each personnel policy, equity option plan, equity appreciation rights plan, restricted equity plan, phantom equity plan,

equity based compensation arrangement, bonus plan or arrangement, incentive award plan or arrangement, health or welfare plan or arrangement,

vacation policy, severance pay plan, policy or agreement, deferred compensation agreement or arrangement, executive compensation or supplemental

income arrangement, consulting agreement, employment agreement, retention agreement, change of control agreement and each other employee

benefit plan, agreement, arrangement, program, practice or understanding that is not described in clause ‎(a) above.

“Plugging and

Abandonment,” and “Plugged and Abandoned” and “Plug and Abandon” and

its derivatives mean all plugging, replugging, abandonment and re-abandonment, equipment removal, disposal, or restoration associated

with the properties and assets included in or burdened by the Assets, including all plugging and abandonment, dismantling, decommissioning,

Remediation, removal, surface and subsurface restoration, site clearance and disposal of the Wells, well cellars, fixtures, flowlines,

pipelines, structures, and personal property located on or associated with assets and properties included in the Assets and the lands

burdened thereby, the removal and capping of all associated flowlines, field connections, transmission, and gathering lines, pit closures,

the restoration of the surface, site clearance, any disposal of related waste materials, excluding NORM and asbestos, and obligations

to obtain plugging exceptions for any Well with a current plugging exception, all in accordance with all applicable Laws and the requirements

of Governmental Authorities, the terms and conditions of the Leases, Surface Rights and Rights of Way and Contracts.

“Post-Effective

Time Company Taxes” means all Company Taxes attributable to any Post-Effective Time Period and the portion of any Straddle

Period beginning at the Effective Time determined in accordance with ‎Section 11.1.

“Post-Effective

Time Credit Document Indebtedness” means any Indebtedness of Company Group incurred pursuant to the Credit Documents after

the Effective Time, together with any interest accrued thereon after the Effective Time, but excluding, for the avoidance of doubt, any

Company Hedges; provided, however, to the extent any Indebtedness of Company Group incurred pursuant to the Credit Documents

after the Effective Time is used to pay off or replace any Pre-Effective Time Credit Document Indebtedness, then such Indebtedness, together

with any interest accrued thereon after the Effective Time, shall constitute Pre-Effective Time Credit Document Indebtedness.

“Post-Effective

Time Period” means any Tax period beginning at or after the Effective Time.

“Pre-Effective

Time Company Taxes” means all Company Taxes attributable to any Pre-Effective Time Period and the portion of any Straddle

Period ending immediately prior to the Effective Time determined in accordance with ‎Section 11.1.

“Pre-Effective

Time Credit Document Indebtedness” means the Indebtedness of Company Group (a) incurred and outstanding pursuant to

the Credit Documents as of the Effective Time, together with any interest accrued thereon after the Effective Time and (b) any Indebtedness

of Company Group incurred pursuant to any replacement Credit Documents after the Effective Time, together with any interest accrued thereon,

to the extent the proceeds thereof is used to pay off or replace any Pre-Effective Time Credit Document Indebtedness, but excluding in

each case of ‎(a) and ‎(b), for the avoidance of doubt, any Company Hedges.

“Pre-Effective

Time Period” means any Tax period ending before the Effective Time.

“Pre-Effective

Time Tax Contest” is defined in ‎Section 11.7.

“Preferential

Right” means any right or agreement that enables any Person to purchase or acquire any Assets or portion thereof as a result

of or in connection with (a) the transfer of the Subject Securities or direct or indirect change of control of any members of the

Company Group, (b) the indirect transfer of any Assets or (c) the execution of this Agreement or the consummation of the transactions

contemplated herein.

“Preliminary Settlement

Statement” is defined in ‎Section 2.7(a).

“Property Costs”

means all operating expenses (including costs of insurance, overhead, employees, rentals (including office rentals), shut-in payments,

and title examination and curative actions and capital expenditures, and costs of drilling and completing wells, and costs of acquiring

equipment) incurred in the ownership and operation of the Assets and overhead costs charged to the Assets under any applicable Contracts,

but excluding (without limitation) liabilities, losses, costs, and expenses attributable to Taxes; provided, however, solely

for the purposes of ‎Section 2.4(g)(ii) all references in this definition to “Assets” or

the “Business” shall be deemed to be references to the “Excluded Assets”.

“Property Trade”

means any proposed or pending trade or exchange of oil and gas properties of any member of the Company Group between any Seller or any

member of the Company Group, on the one hand, and any Third Party, on the other hand, in each case, that is set forth on Schedule 8.16,

pursuant to which any Seller or any member of the Company Group is entitled to acquire oil and gas properties from such Third Party or

divest Oil and Gas Properties to such Third Party.

“Property Trade

Allocated Value” is defined in ‎Section 8.16(b).

“Property Trade

Termination Date” is defined in Section 8.16(c)‎.

“Public Transaction

Statement” is defined in ‎Section 8.6.

“Punitive Consent”

means any consent of any Third Party that is required to be obtained in connection with the sale, assignment or transfer of all or any

portion of the Oil and Gas Properties, where (a) the failure to obtain such consent would (i) expressly cause the assignment

of an Oil and Gas Property to be void or voidable, (ii) trigger an express termination or right of termination of any Oil and Gas

Property or (iii) expressly provide for the payment of any monetary fee or penalty or provide for liquidated damages in connection

with the breach or failure to obtain such consent or (b) such consent does not expressly provide that such consent cannot be unreasonably

withheld (or words of similar import).

“Purchaser”

is defined in the introductory paragraph hereof.

“Purchaser Financial

Statements” is defined in Section 8.10(b).

“Purchaser Group”

is defined in ‎Section 13.2.

“Purchaser Operating

Affiliate” means Matador Production Company, a Texas corporation.

“Purchaser Parent”

is defined in the introductory paragraph hereof.

“Purchaser Parent

Guarantee” is defined in ‎Section 14.18(a).

“Purchaser Parties”

is defined in the introductory paragraph hereof.

“Purchaser Party

Certificate” means the certificate delivered by Purchaser at the Closing pursuant to ‎Section 10.3(d).

“Purchaser Prepared

Returns” is defined in Section 11.3.

“Purchaser’s

Representatives” is defined in ‎Section 8.1(a).

“R&W Conditional

Binder” means the conditional binder attached hereto as Exhibit I.

“R&W Insurance

Policy” means a representations and warranties insurance policy to be issued by one or more representation and warranty

insurers (or agent to the R&W Conditional Binder) and to be bound for the benefit of Purchaser in accordance with the R&W Conditional

Binder. The term “R&W Insurance Policy” shall also include any excess representations and warranties insurance policies

providing coverage in excess of the policy attached to the R&W Conditional Binder.

“Reasonable Documentation”

means, with respect to any Defect, as applicable, asserted hereunder:

(a)            A

copy of an applicable title opinion or landman’s title report describing the asserted Title Defect;

(b)            A

copy of the relevant document to the extent the alleged Defect is a document;

reasonable description of the assignment preceding and following a gap in the chain of title or a title opinion describing the gap in

reasonable detail, to the extent the basis of the alleged Defect is a gap in any member of Company Group’s chain of title;

(d)            A

copy of the document creating or evidencing the Lien or encumbrance, to the extent the basis of the alleged Defect is a Lien or encumbrance;

(e)            Any

other documents in the possession, custody or control of Purchaser or its Affiliates and Representatives reasonably necessary for Sellers

and the Defect Referee (as well as any title attorney, examiner, or environmental consultant hired by such Persons) to verify or investigate

the existence of and Defect Amount with respect to such alleged Defect.

“Record/Beneficial

Title” means that aggregate record and/or beneficial title of Company Group in and to the Leases and Wells that, as of the

Effective Time and Closing Date and except for and subject to Permitted Encumbrances:

(a)            as

to the applicable Subject Formations, entitles all or any member of Company Group to (1) receive a Net Revenue Interest as to Hydrocarbons

(i) in the case of any Lease during the term of such Lease, not less than the Net Revenue Interest percentage shown for such Subject

Formation as to such Lease in Schedule 2.8; (ii) in the case of any Well, not less than the Net Revenue Interest percentage

shown for such Subject Formation as to such Well in Exhibit A-2 throughout the productive life of such Well; and (2) in

the case of any Lease, during the term of such Lease, ownership of not less than the Net Acres set forth on Schedule 2.8 for

such Lease, except, in each case, (A) any decreases in connection with those operations in which any member of Company Group may

elect after the Execution Date to be a non-consenting co-owner in accordance with the terms hereof, (B) any decreases resulting from

reversion of interest to co-owners with respect to operations in which such co-owners elect, after the Execution Date, not to consent,

(C) any decreases resulting from the establishment or amendment, after the Execution Date, of production sharing agreements, pools

or units in accordance with the terms hereof, (D) any decreases required to allow other Working Interest owners to make up or settle

Imbalances, or (E) as otherwise stated in Exhibit A;

(b)            as

to the applicable Subject Formation, obligates all or any member of Company Group to bear a Working Interest no greater than the Working

Interest shown for such Well without increase throughout the productive life of such Well in Exhibit A-2, except (i) as

stated in Exhibit A-2, (ii) any increases resulting from contribution requirements with respect to defaulting co-owners

under applicable operating agreements or applicable Law or (iii) increases that are accompanied by at least a proportionate increase

in Company Group’s Net Revenue Interest in such Subject Formation; and

free and clear of Liens.

“Records”

means all books, records, files, data, information, drawings and maps to the extent (and only to the extent) related to the Subject Securities,

any member of Company Group, or the Assets, including electronic copies of all computer records where available, contract files, easement

files, well logs, division order files, title opinions and other title information (including abstracts, evidences of rental payments,

maps, surveys and data sheets), hazard data, surveys, production records, engineering files, and environmental records, in each case,

to the extent disclosure or transfer is not restricted, prohibited or subjected to payment of a fee, penalty or other consideration by

any license agreement or other agreement with a Person other than Affiliates of any Seller, or by applicable Law, or for which consent

to transfer has been received or for which Purchaser has agreed in writing to pay such fee, penalty, or other consideration, as applicable,

but excluding, however, in each case, the Excluded Records.

“Records Period”

is defined in Section 8.10.

“Regulation S-X”

is defined in Section 8.10.

“Reimbursement

Expenses” is defined in ‎Section 12.2(b).

“Release”

means any discharge, emission, spilling, leaking, pumping, pouring, placing, depositing, injecting, dumping, burying, leaching, migrating,

abandoning or disposing into or through the environment of any Hazardous Substance, including the abandonment or discarding of barrels,

containers and other closed receptacles containing any Hazardous Substance.

“Remediate”

means any remedial, removal, response, investigation, monitoring, cure, construction, closure, disposal, testing, integrity testing, or

other corrective actions required under applicable Environmental Laws to cure or remove a Release or a violation of Environmental Law;

provided, however, “Remediate” shall not include any obligations with respect to Plugging and

Abandonment. The terms “Remediation” and “Remediated” shall have correlative meanings.

“Retention”

means the retention (or self-insured retention) amount under the R&W Insurance Policy for claims thereunder.

“Representatives”

means the Affiliates, directors, officers, employees, consultants, agents, representatives, accountants, attorneys, investment bankers,

Financing Sources, environmental consultants, advisors and other representatives of a Party.

“Right”

means any option, warrant, convertible or exchangeable security or other right, however denominated, to subscribe for, purchase or otherwise

acquire any Security of any class, with or without payment of additional consideration in cash or property, either immediately or upon

the occurrence of a specified date or a specified event or the satisfaction or happening of any other condition or contingency.

“Royalties”

means all royalties, overriding royalties, reversionary interests, net profit interests, production payments, carried interests, non-participating

royalty interests, reversionary interests and other royalty burdens and other interests payable out of production of Hydrocarbons from

or allocated to the Oil and Gas Properties or the proceeds thereof to Third Parties.

“Sale Transaction”

is defined in ‎Section 8.12(a).

“Scheduled Wells”

means the wells set forth in the Ordinary Course Development Plan.

“SEC”

means the United States Securities and Exchange Commission.

“Securities”

means any equity interests or other security of any class, any option, warrant, convertible or exchangeable security (including any membership

interest, equity unit, partnership interest, trust interest) or other right, however denominated, to subscribe for, purchase or otherwise

acquire any equity interest or other security of any class, with or without payment of additional consideration in cash or property, either

immediately or upon the occurrence of a specified date or a specified event or the satisfaction or happening of any other condition or

contingency; provided, however, “Securities” expressly exclude any real property interests or

interests in any Hydrocarbon leases, fee minerals, reversionary interests, non-participating royalty interests, executive rights, non-executive

rights, royalties and any other similar interests in minerals, overriding royalties, reversionary interests, net profit interests, production

payments, and other royalty burdens and other interests payable out of production of Hydrocarbons, including any Oil and Gas Properties.

“Securities Act”

means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Seller”

and “Sellers” are defined in the introductory paragraph hereof.

“Seller Consolidated

Group” means any Consolidated Group of which each of (a) one or more members of the Company Group and (b) any

Seller or an Affiliate of a Seller (other than the members of the Company Group), is or was a member on or prior to the Closing Date.

“Seller Consolidated

Return” means any Tax Return of a Seller Consolidated Group.

“Seller Group”

is defined in ‎Section 13.1.

“Seller Protected

Parties” is defined in ‎Section 8.15(c).

“Sellers’

Representative” means Paloma Holdings.

“Sellers’

Representative Prepared Returns” is defined in ‎Section 11.3.

“Seller Taxes”

means any and all (a) Pre-Effective Time Company Taxes, (b) Taxes (other than Company Taxes and Transfer Taxes) of or imposed

on Sellers or any of their direct or indirect owners or Affiliates (other than any member of the Company Group) for any Tax period, (c) Taxes

(other than Company Taxes) imposed on any member of the Company Group or for which any member of the Company Group otherwise becomes liable

by reason of having been a member of a Consolidated Group (other than a Consolidated Group of which the Company is the common parent)

on or prior to the Effective Time, (d) Taxes imposed on or with respect to the ownership or operation of Excluded Assets or (e) Taxes

(other than Company Taxes) of a Person (other than a member of the Company Group, Purchaser or an Affiliate of Purchaser) for which a

member of the Company Group is or becomes liable as a transferee or successor or by Contract or other agreement or arrangement (other

than any commercial agreements or arrangements entered into in the ordinary course of business that are not primarily related to Taxes),

assumption, or operation of Law, which Taxes relate to an event or transaction occurring, or a Contract or other agreement or arrangement

entered into, prior to the Effective Time; provided that no such Tax will constitute a Seller Tax to the extent such Tax results

from actions taken by Purchaser, any of its Affiliates or any member of the Company Group after the Closing, was accounted for as a downward

adjustment to the Unadjusted Purchase Price made pursuant to Section 2.4 and/or Section 2.7, as applicable, was

economically borne by Sellers pursuant to Section 13.2, was a Transfer Tax borne by Sellers pursuant to Section 11.2,

or was reimbursed by Sellers pursuant to Section 11.3.

“Settlement Price”

means, with respect to volumes of Hydrocarbons: (a) if such volumes are actually sold on or prior to the date of determination of

the Settlement Price, the actual sale price for such Hydrocarbons; (b) if such volumes have not been sold on or prior to the date

of determination, but are subject to Contracts setting forth pricing terms for the sale of such Hydrocarbons, the Contract price for such

volumes as of the Effective Time; or (c) if neither clause (a) or (b) applies, then, (i) in the case

of gaseous Hydrocarbons, $-2.97/MMBtu, and (ii) in the case of crude oil, $95.11/Barrel.

“Software”

means all computer software (in object code or source code format), data and databases.

“Specified Liability

Matters” means the matters set forth on Schedule 13.2(d).

“Specified Liability

Matters Indemnity Cap” is defined in Section 13.3(c)(i)(C).

“Specified Representation”

means the representations and warranties of Company set forth in Section 5.10, Section 5.28(2), Section 5.40,

and Section 5.41.

“Specified Representation

Indemnity Cap” is defined in ‎Section 13.3(c)(i)(B).

“Special Warranty

of Title” is defined in Section 5.41.

“Standstill Agreements”

is defined in Section 10.2(l).

“Straddle Period”

means any Tax period beginning before and ending after the Effective Time.

“Straddle Period

Tax Contest” is defined in ‎Section 11.7.

“Subject Formation”

means:

(a)            for

each producing (or capable of producing) Well with a positive Allocated Value, the depths from which such Well is producing;

(b)            for

each Well with a positive Allocated Value that has been drilled but has not been completed, the formation identified for such Well on

Schedule 2.8; and

each Lease with a positive Allocated Value located in the Arrowhead Asset Area as designated on Schedule 2.8:

(i)            to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 3,560’ to 6,261’

as observed on the well logs filed with the New Mexico Oil Conservation Division for the Darthrow 19 State 1 (API: 30-015-32873) (the

“Delaware Mountain Group”);

(ii)           to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 6,261’ to 7,335’

as observed on the well logs filed with the New Mexico Oil Conservation Division for the Darthrow 19 State 1 (API: 30-015-32873) (the

“Avalon”);

(iii)          to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 7,335’ to 7,670’

as observed on the well logs filed with the New Mexico Oil Conservation Division for the Darthrow 19 State 1 (API: 30-015-32873) (the

“1st Bone Spring”);

(iv)          to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 7,670’ to 8,142’

as observed on the well logs filed with the New Mexico Oil Conservation Division for the Darthrow 19 State 1 (API: 30-015-32873) (the

“2nd Bone Spring Carb”);

(v)           to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 8,142 to 8,467’ as observed

on the well logs filed with the New Mexico Oil Conservation Division for the Darthrow 19 State 1 (API: 30-015-32873) (the “2nd

Bone Spring”);

(vi)          to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 8,467’ to 9,164’

as observed on the well logs filed with the New Mexico Oil Conservation Division for the Darthrow 19 State 1 (API: 30-015-32873) (the

“3rd Bone Spring Carb”);

(vii)         to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 9,164 to 9,614’ as observed

on the well logs filed with the New Mexico Oil Conservation Division for the Darthrow 19 State 1 (API: 30-015-32873) (the “3rd

Bone Spring”);

(viii)        to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 9,614’ to 10,140’

as observed on the well logs filed with the New Mexico Oil Conservation Division for the Darthrow 19 State 1 (API: 30-015-32873) (the

“Upper Wolfcamp”);

(ix)           to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 10,140’ to 10,653’

as observed on the well logs filed with the New Mexico Oil Conservation Division for the Darthrow 19 State 1 (API: 30-015-32873) (the

“Lower Wolfcamp”);

(x)            to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 10,653’ and below as

observed on the well logs filed with the New Mexico Oil Conservation Division for the Darthrow 19 State 1 (API: 30-015-32873) (the “Deep”);

(d)            for

each Lease with a positive Allocated Value located in the Ranger Asset Area as designated on Schedule 2.8:

(i)            to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 4,949’ to 8,652’

as observed on the well logs filed with the New Mexico Oil Conservation Division for the Hat Mesa #1 (API: 30-025-26427) (the “Delaware

Mountain Group”);

(ii)           to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 8,652’ to 9,678’

as observed on the well logs filed with the New Mexico Oil Conservation Division for the Hat Mesa #1 (API: 30-025-26427) (the “Avalon”);

(iii)          to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 9,678’ to 9,971’

as observed on the well logs filed with the New Mexico Oil Conservation Division for the Hat Mesa #1 (API: 30-025-26427) (the “1st

Bone Spring”);

(iv)          to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 9,971’ to 10,262’

as observed on the well logs filed with the New Mexico Oil Conservation Division for the Hat Mesa #1 (API: 30-025-26427) (the “2nd

Bone Spring Carb”);

(v)           to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 10,262’ to 10,758’

as observed on the well logs filed with the New Mexico Oil Conservation Division for the Hat Mesa #1 (API: 30-025-26427) (the “2nd

Bone Spring”);

(vi)          to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 10,758’ to 11,220’

as observed on the well logs filed with the New Mexico Oil Conservation Division for the Hat Mesa #1 (API: 30-025-26427) (the “3rd

Bone Spring Carb”);

(vii)         to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 11,220’ to 11,515’

as observed on the well logs filed with the New Mexico Oil Conservation Division for the Hat Mesa #1 (API: 30-025-26427) (the “3rd

Bone Spring”);

(viii)        to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 11,515’ to 11,934’

as observed on the well logs filed with the New Mexico Oil Conservation Division for the Hat Mesa #1 (API: 30-025-26427) (the “Upper

Wolfcamp”);

(ix)           to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 11,934’ to 12,753’

as observed on the well logs filed with the New Mexico Oil Conservation Division for the Hat Mesa #1 (API: 30-025-26427) (the “Lower

Wolfcamp”);

(x)            to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 12,753’ and below as

observed on the well logs filed with the New Mexico Oil Conservation Division for the Hat Mesa #1 (API: 30-025-26427) (the “Deep”);

(e)            for

each Lease with a positive Allocated Value located in the Antelope Ridge Asset Area as designated on Schedule 2.8:

(i)            to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 5,416’ to 8,079’

as observed on the well logs filed with the New Mexico Oil Conservation Division for the Independence AGI #1 (API: 30-025-48081) (the

“Delaware Mountain Group”);

(ii)           to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 8,079’ to 9,491’

as observed on the well logs filed with the New Mexico Oil Conservation Division for the Independence AGI #1 (API: 30-025-48081) (the

“Avalon”);

(iii)          to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 9,491’ to 9,692’

as observed on the well logs filed with the New Mexico Oil Conservation Division for the Independence AGI #1 (API: 30-025-48081) (the

“1st Bone Spring”);

(iv)          to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 9,692’ to 9,907’

as observed on the well logs filed with the New Mexico Oil Conservation Division for the Independence AGI #1 (API: 30-025-48081) (the

“2nd Bone Spring Carb”);

(v)           to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 9,907’ to 10,295’

as observed on the well logs filed with the New Mexico Oil Conservation Division for the Independence AGI #1 (API: 30-025-48081) (the

“2nd Bone Spring”);

(vi)          to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 10,295’ to 11,188’

as observed on the well logs filed with the New Mexico Oil Conservation Division for the Independence AGI #1 (API: 30-025-48081) (the

“3rd Bone Spring Carb”);

(vii)         to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 11,188’ to 11,371’

as observed on the well logs filed with the New Mexico Oil Conservation Division for the Independence AGI #1 (API: 30-025-48081) (the

“3rd Bone Spring”);

(viii)        to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 11,371’ to 11,747’

as observed on the well logs filed with the New Mexico Oil Conservation Division for the Independence AGI #1 (API: 30-025-48081) (the

“Upper Wolfcamp”);

(ix)           to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 11,747’ to 11,805’

as observed on the well logs filed with the New Mexico Oil Conservation Division for the Independence AGI #1 (API: 30-025-48081) (the

“Lower Wolfcamp”);

(x)            to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 11,805’ and below as

observed on the well logs filed with the New Mexico Oil Conservation Division for the Independence AGI #1 (API: 30-025-48081) (the “Deep”);

(f)            for

each Lease with a positive Allocated Value located in the Rustler Breaks Asset Area as designated on Schedule 2.8:

(i)            to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 2,042’ to 5,347’

as observed on the well logs filed with the New Mexico Oil Conservation Division for the Pecos River 20 #001 (API: 30-015-34230) (the

“Delaware Mountain Group”);

(ii)           to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 5,347’ to 6,403’

as observed on the well logs filed with the New Mexico Oil Conservation Division for the Pecos River 20 #001 (API: 30-015-34230) (the

“Avalon”);

(iii)          to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 6,403’ to 6,608’

as observed on the well logs filed with the New Mexico Oil Conservation Division for the Pecos River 20 #001 (API: 30-015-34230) (the

“1st Bone Spring”);

(iv)          to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 6,608’ to 6,995’

as observed on the well logs filed with the New Mexico Oil Conservation Division for the Pecos River 20 #001 (API: 30-015-34230) (the

“2nd Bone Spring Carb”);

(v)           to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 6,995’ to 7,167’

as observed on the well logs filed with the New Mexico Oil Conservation Division for the Pecos River 20 #001 (API: 30-015-34230) (the

“2nd Bone Spring”);

(vi)          to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 7,167’ to 8,431’

as observed on the well logs filed with the New Mexico Oil Conservation Division for the Pecos River 20 #001 (API: 30-015-34230) (the

“3rd Bone Spring Carb”);

(vii)         to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 8,431’ to 8,775’

as observed on the well logs filed with the New Mexico Oil Conservation Division for the Pecos River 20 #001 (API: 30-015-34230) (the

“3rd Bone Spring”);

(viii)        to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 8,775’ to 9,789’

as observed on the well logs filed with the New Mexico Oil Conservation Division for the Pecos River 20 #001 (API: 30-015-34230) (the

“Upper Wolfcamp”);

(ix)           to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 9,789’ to 10,182’

as observed on the well logs filed with the New Mexico Oil Conservation Division for the Pecos River 20 #001 (API: 30-015-34230) (the

“Lower Wolfcamp”);

(x)            to

the extent there are positive Allocated Values for such depths, depths from the stratigraphic equivalent of 10,182’ and below as

observed on the well logs filed with the New Mexico Oil Conservation Division for the Pecos River 20 #001 (API: 30-015-34230) (the “Deep”);

provided,

however, as to each Lease, subject to any exceptions, limitations or exclusions as noted on Exhibit A-1, Exhibit A-2

or Schedule 2.8 as to such applicable Well or Lease.

“Subject Marks”

is defined in Section 8.14(a).

“Subject Representation”

is defined in ‎Section 14.15.

“Subject Securities”

is defined in the recitals.

“Subsidiary”

means, with respect to a specified Person, any corporation, partnership, limited liability company, limited liability partnership, joint

venture, or other legal entity of which the specified Person (either alone or through or together with any other Subsidiary) owns, directly

or indirectly, more than fifty percent (50%) of the voting Securities, the holders of which are generally entitled to vote for the election

of the board of directors or other governing body of such legal entity, or of which the specified Person controls the management. Notwithstanding

anything to the contrary in this Agreement, prior to the Closing, each member of Company Group shall be considered a Subsidiary of Sellers,

and after the Closing, each member of Company Group shall be considered a Subsidiary of Purchaser.

“Surface Rights

and Rights of Way” is defined in subsection ‎(c) of the definition of “Assets”.

“Suspense Funds”

means any and all Royalties and other amounts held in suspense by any member of Company Group as of the Closing, and any interest accrued

in escrow accounts for such suspended funds.

“Target Closing

Date” is defined in ‎Section 10.1.

“Tax Return”

means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule

or attachment thereto and any amendment thereof.

“Taxes”

means (a) any taxes, assessments and other governmental charges in the nature of a tax imposed by any Governmental Authority, including

income, profits, gross receipts, employment, stamp, occupation, premium, alternative or add-on minimum, ad valorem, property, transfer,

value added, sales, use, New Mexico gross receipts, New Mexico compensating tax, customs, duties, capital stock, franchise, excise, withholding,

social security (or similar), unemployment, disability, payroll, windfall profit, severance, production, estimated or other tax, including

any interest, penalty or addition thereto, and (b) any liability for any item described in clause ‎(a) above

as a result of being a member of an affiliated, aggregated, combined, consolidated, unitary or similar group (including pursuant to Treasury

Regulations Section 1.1502-6 or any analogous or similar provision of state or local Law), as a transferee or successor, as a result

of assumption, an express obligation to indemnify any Person or any obligation under any Contract or other agreement or arrangement or

by operation of Law.

“Termination Date”

is defined in ‎Section 12.1.

“Third Party”

means any Person other than a Seller, Purchaser, any member of the Company Group or any of their respective Affiliates as of the applicable

date of determination.

“Third Party Claim”

is defined in ‎Section 13.5(c).

“Title Benefit”

means the aggregate beneficial or record title of Company Group which, as of the Closing Date:

(a)            as

to the applicable Subject Formation, entitles Company Group to receive a Net Revenue Interest in the case of any Well throughout the productive

life of such Well or in the case of any Lease throughout the term of such Lease, greater than the Net Revenue Interest shown in Exhibit A-2

for such Well or Schedule 2.8 for such Lease, as applicable, except, in each case, as otherwise stated in Exhibit A;

(b)            as

to the applicable Subject Formation, obligates Company Group to bear a Working Interest, in the case of any Well throughout the productive

life of such Well, less than the “Working Interest” percentage shown in Exhibit A-2 with respect

to such Well, except (i) as stated in Exhibit A and (ii) decreases that are accompanied by no or a less than proportionate

decrease in Company Group’s Net Revenue Interest; or

to the applicable Subject Formation, entitles Company Group to, in the case of any Lease, ownership of more than the Net Acres set forth

on Schedule 2.8 for such Lease;

provided,

however, that in no event shall any oil and gas property that is subject to a Property Trade or listed as an acquisition, trade

or lease on Schedule AC constitute a Title Benefit for purposes of this Agreement.

“Title Benefit

Amount” is defined in ‎Section 3.2(e).

“Title Benefit

Notice” is defined in ‎Section 3.2(b).

“Title Defect”

means (i) any individual Lien, obligation, burden or defect, including a discrepancy in Net Revenue Interest or Working Interest

that results in the failure of the Company Group to collectively have Record/Beneficial Title to any individual Well or Lease with respect

to any Lease listed in Exhibit A-1, or (ii) with respect to each Lease listed in Schedule 1.5 that is still in

its primary term and not held by production or other operations as of the Closing Date, the primary term of such Lease expires prior to

the earlier of (A) the date set forth for such Lease on Schedule 1.5 and (B) the date twelve (12) months after the Closing

Date; provided, however, in no event shall any of the following be considered or constitute a “Title Defect”:

(a) any defect arising out of lack of survey or lack of metes and bounds descriptions, unless a survey is expressly required by applicable

Law; (b) any defect in the chain of the title consisting of the failure to recite marital status in a document, lack of spousal joinder

or omissions of succession or heirship proceedings, unless affirmative evidence shows that such failure or omission results in another

party’s actual and superior claim of title to the Assets; (c) any defects or irregularities resulting from, arising out of

or related to probate proceedings or lack thereof, which defects or irregularities have existed for more than ten (10) years and

no affirmative evidence shows that another Person has asserted a superior claim of title to the Assets; (d) any defect arising out

of lack of corporate or entity authorization, unless affirmative evidence shows that such corporate or entity action was not authorized

and results in another party’s actual and superior claim of title to the Assets; (e) any defect that is cured, released or

waived by any Law of limitation or prescription, including adverse possession and the doctrine of laches (subject to the applicable statute

of limitations related thereto); (f) any defect arising from any change in applicable Law after the Execution Date, including changes

that would raise the minimum landowner royalty; (g) any Lien, obligation, burden, or defect that affects only which Third Party has

the right to receive Royalty payments (rather than the amount of such Royalty) and that does not affect the validity of the underlying

Asset; (h) any defect arising as a consequence of lack of production information, cessation of production, insufficient production,

or failure to conduct operations on any of the Oil and Gas Properties held by production, or lands pooled, communitized, or unitized therewith,

except to the extent the cessation of production, insufficient production or failure to conduct operations (i) is conclusively shown

to exist for more than six (6) consecutive months (unless a shorter period is expressly provided for in the applicable Lease) during

the five (5) year period immediately prior to the Execution Date and (ii) is such that it has given rise to a right of the lessor

or other Third Party to terminate the underlying Lease (or has caused or resulted in the automatic termination of such underlying Lease),

evidence of which shall be included in a Defect Notice; (i) any defects arising from lack of an affidavit of identity or the need

for one if the relevant Person’s name is readily apparent and there is no affirmative evidence that such lack of an affidavit results

in any Third Party’s actual and superior claim of title to the Assets; (j) any defects or irregularities in acknowledgements

to the extent there is no affirmative evidence that such defect or irregularity results in a Third Party’s actual and superior claim

of title to the Assets; or (k) any defects arising from a lack of power of attorney unless affirmative evidence shows that such lack

of a power of attorney results in a Third Party’s actual and superior claim of title to the Assets.

“Title Defect

Deductible” means an amount equal to one percent (1.0%) of the Unadjusted Purchase Price.

“Title Referee”

is defined in ‎Section 3.2(i)(i).

“Transaction Costs”

means, without duplication, to the extent not paid prior to the Closing, whether or not a member of the Company Group has been invoiced,

and which shall include such expenses as are earned or payable only upon the Closing of the transactions hereunder, (a) all fees,

costs and expenses of investment bankers, advisors, consultants, counsel (including Vinson & Elkins LLP), advisors, consultants,

accountants, financial advisors, auditors, data room administrators and any other experts or advisors to the Company Group, and similar

fees, and any transaction bonus, retention payments or change in control bonuses or severance payments (in each case, including any employment,

payroll or other similar Taxes, any Tax withholding and any gross-up or similar payments for another Person’s Taxes required to

be paid in connection therewith), in each case, payable by any member of the Company Group and incurred by the Company Group in connection

with the preparation for, negotiating or consummation of the transactions contemplated by this Agreement and the other Transaction Documents,

including all brokers’, finders’ or similar fees in connection with the transactions contemplated by this Agreement, and (b) any

transaction, retention, or change in control bonus, or severance payments in connection with the transactions contemplated by this Agreement,

or similar compensatory amounts payable to any employees or service providers of the Company Group, in each case, that is payable by any

member of the Company Group pursuant to an agreement with such member of the Company Group, either Seller or any of their respective Affiliates,

and, in each case which become payable in whole or in part as a result of or in combination with the consummation of the transactions

contemplated hereby (including, in each case, any employment, payroll or other similar Taxes, any Tax withholding and any gross-up or

similar payments for another Person’s Taxes required to be paid in connection therewith). “Transaction Costs”

will exclude (i) all costs, fees and expenses and payment obligations to the extent deducted as a Working Capital Liability in the

calculation of the Effective Time Working Capital, (ii) all costs, fees and expenses and payment obligations actually paid by Sellers

or any member of the Company Group at or prior to the Closing and (iii) any costs, fees and expenses and payment obligations incurred

by any member of the Company Group at or after Closing on behalf of or solely at the request of Purchaser.

“Transaction Documents”

means (a) this Agreement, (b) the Assignment, (c) the Excluded Asset Assignment, (d) the Confidentiality Agreement,

(e) the Escrow Agreement, (f) the Transition Services Agreement, (g) the Standstill Agreements, and (h) each other

agreement, document, certificate, or other instrument that is expressly contemplated to be executed by and between the Parties (or their

Affiliates) pursuant to or in connection with any of the foregoing. When Transaction Documents is used with respect to a specific Person,

it means only those Transaction Documents to which such Person is a party.

“Transfer Taxes”

is defined in ‎Section 11.2.

“Transition Services

Agreement” is defined in ‎Section 8.17.

“Treasury Regulations”

means the final or temporary regulations promulgated by the U.S. Department of the Treasury under the Code.

“Unadjusted Purchase

Price” is defined in ‎Section 2.2.

“Units”

is defined in subsection ‎(a) of the definition of “Assets”.

“Wells”

is defined in subsection ‎(b) of the definition of “Assets”.

“Working Capital

Assets” means the current assets of Company Group as of the Effective Time (including all Cash and Cash Equivalents and

the items deemed to constitute Working Capital Assets pursuant to ‎Section 2.5(b)(i)), each determined in accordance with

Accounting Principles, and excluding any (a) Tax assets (other than Taxes paid or otherwise economically borne by Seller or its Affiliates

as operator with respect to revenues or proceeds attributable to interests of Third Parties in Leases, Wells or Units), (b) current

assets constituting Excluded Assets, and/or (c) Company Hedge assets.

“Working Capital

Liabilities” means the current liabilities of Company Group as of the Effective Time (including any Indebtedness and the

items deemed to constitute Working Capital Liabilities pursuant to Section 2.5(b)(ii)), each determined in accordance with

Accounting Principles but excluding any (a) Tax liabilities, (b) Plugging and Abandonment or asset retirement obligations, (c) Environmental

Liabilities, (d) Transaction Costs, (e) Credit Document Indebtedness (including, for the avoidance of doubt, any accrued fees

or interest (in kind or in cash) thereon), (f) liabilities related to Company Hedges, (g) insurance premiums attributable to

the insurance policies held by Company Group after the Effective Time and/or (h) Acquisition Costs for the acquisition of any interests

set forth on Schedule AC, Part A or for which the Purchase Price is adjusted downward pursuant to Section 2.4(k).

“Working Interest”

means, with respect to any Oil and Gas Property, the percentage of costs and expenses associated with the exploration, drilling, development,

operation, maintenance and abandonment on or in connection with such Oil and Gas Property required to be borne with respect thereto, but

without regard to the effect of any Royalties.

Section 1.2         Interpretation.

In this Agreement, unless a clear contrary intention appears: (a) the singular form includes the plural form and vice versa; (b) reference

to any Person includes such Person’s successors and assigns but only if such successors and assigns are not prohibited by this Agreement,

and reference to a Person in a particular capacity excludes such Person in any other capacity or individually; (c) reference to any

gender includes each other gender; (d) reference to any agreement (including this Agreement), document, or instrument means, unless

specifically provided otherwise, such agreement, document, or instrument as amended or modified and in effect from time to time in accordance

with the terms thereof; (e) reference to any Law means, unless specifically provided otherwise, such Law as amended, modified, codified,

replaced, or reenacted, in whole or in part, and in effect from time to time, including rules and regulations promulgated thereunder

and reference to any section or other provision of any Law means, unless specifically provided otherwise, that provision of such Law from

time to time in effect and constituting the substantive amendment, modification, codification, replacement, or reenactment of such section

or other provision; (f) reference in this Agreement to any Article, Section, Appendix, Schedule, or Exhibit means such Article or

Section hereof or Appendix, Schedule or Exhibit hereto; (g) “hereunder”, “hereof”, “hereto”,

and words of similar import shall be deemed references to this Agreement as a whole and not to any particular Article, Section, or other

provision thereof; (h) “including” (and with correlative meaning “include”) means including without limiting

the generality of any description preceding such term; (i) “or” is not exclusive; (j) relative to the determination

of any period of time, “from” means “from and including” and “to” means “to but excluding”;

(k) the Schedules and Exhibits attached to this Agreement shall be construed with and as an integral part of this Agreement to the

same extent as if the same had been set forth verbatim herein; provided that in the event a word or phrase defined in this Agreement is

expressly given a different meaning in any Schedule or Exhibit, such different definition shall apply only to such Schedule or Exhibit defining

such word or phrase independently, and the meaning given such word or phrase in this Agreement shall control for purposes of this Agreement,

and such alternative meaning shall have no bearing or effect on the interpretation of this Agreement; (l) all references to “Dollars”

means United States Dollars; (m) references to “days” shall mean calendar days, unless the term “Business Days”

is used, (n) any reference to the Company Group shall be deemed to refer both to the Company Group collectively and to each member

of the Company Group, (o) all references to “made available” or similar words with respect to the production of documents

shall mean that such documents were produced or made available to Purchaser in the Data Room at least two (2) Business Days prior

to the Execution Date (except as otherwise acknowledged in writing by Purchaser); and (p) except as otherwise provided herein, all

actions which any Person may take and all determinations which any Person may make pursuant to this Agreement may be taken and made at

the sole and absolute discretion of such Person.

Article 2

Purchase

and Sale

Section 2.1         Purchase

and Sale. Subject to the terms and conditions contained in this Agreement, each Seller agrees to sell to Purchaser, and Purchaser

agrees to purchase, accept and pay for, each Seller’s interest in and to the Subject Securities.

Section 2.2         Purchase

Price. The consideration payable by Purchaser for the Subject Securities shall be One Billion Two Hundred and Seventy Five Million

Dollars ($1,275,000,000) (the “Unadjusted Purchase Price”), adjusted as provided in ‎Section 2.4

(as adjusted, the “Adjusted Purchase Price”).

Section 2.3         Deposit.

(a)            No

later than 5:00 p.m. Central Time on the date that is one (1) Business Day after the Execution Date, Purchaser shall deposit

with the Escrow Agent an amount equal to five percent (5%) of the Unadjusted Purchase Price (such amount, together with any and all interest

and earnings accrued thereon under the Escrow Agreement after the Execution Date, the “Deposit”) via wire transfer

of immediately available funds to the account or accounts designated by the Escrow Agreement, such Deposit to be held by the Escrow Agent

in accordance with the terms of the Escrow Agreement.

(b)            If

for any reason this Agreement is terminated in accordance with ‎Section 12.1, then the Deposit shall be disbursed as provided

in ‎Section 12.2.

Section 2.4         Adjustments

to the Unadjusted Purchase Price. The Unadjusted Purchase Price shall be adjusted, without duplication, as follows:

(a)            increased

or decreased with respect to the Effective Time Working Capital as follows:

(i)         increased,

by an amount equal to the Effective Time Working Capital in the event the Effective Time Working Capital is a positive amount;

(ii)        decreased,

by an amount equal to the absolute value of the Effective Time Working Capital in the event the Effective Time Working Capital is a negative

amount;

(b)            increased,

by an amount equal to the aggregate amount, if any, of all Cash and Cash Equivalent capital contributions made by or on behalf of Sellers

after the Effective Time to the Company Group;

or decreased with respect to certain Hedge Losses and/or Hedge Gains as follows:

(i)        decreased,

by an amount equal to the aggregate amount of all Hedge Losses attributable to the Company Hedges paid by any member of the Company Group

on or after the Effective Time, excluding any payments made at the Closing from the proceeds of the Closing Payments;

(ii)        increased,

by an amount equal to the aggregate amount of Hedge Gains attributable to the Company Hedges paid to or received by any member of the

Company Group on or after the Effective Time;

(d)            increased

or decreased with respect to certain Credit Document Indebtedness as follows:

(i)        decreased

by an amount, if any, equal to any Pre-Effective Time Credit Document Indebtedness that is paid or satisfied by Company Group during the

period after the Effective Time and prior to the Closing, excluding any payments made at the Closing from the proceeds of the Closing

Payments;

(ii)        increased

by an amount, if any, equal to any Post-Effective Time Credit Document Indebtedness (including any interest accrued thereon), that is

paid or satisfied out of the proceeds of the Closing Payment or Closing Distribution under Section 2.6;

(e)            decreased

by the amount, if any, of all Leakage occurring on or after the Effective Time and prior to or at the Closing (including, without duplication,

the Closing Distribution);

(f)            increased

or decreased with respect to Defects and Title Benefits as follows:

(i)        decreased,

in accordance with ‎Section 3.2(g)(i) with respect to Defects and/or any Assets excluded pursuant to Section 3.2(g)(ii);

(ii)        increased,

in accordance with ‎Section 3.2(h) with respect to Title Benefits;

(g)            increased

or decreased with respect to Excluded Assets as follows:

(i)         increased,

by an amount equal to the aggregate amounts received by Company Group attributable to or earned from any Excluded Assets during any period

from and after the Effective Time;

(ii)        decreased,

by the amount of all Property Costs paid by Company Group, including all prepaid costs and expenses that are incurred in connection with

the ownership or operation of the Excluded Assets, after the Effective Time;

(h)           decreased,

by an amount equal to the Transaction Costs paid by Company Group after the Effective Time and prior to Closing or that remain outstanding

and the obligation of Company Group as of the Closing (and that are not satisfied out of the proceeds of the Closing Payment or Closing

Distribution under ‎Section 2.6);

(i)            increased

or decreased with respect to Company Taxes as follows:

(i)         increased,

by (A) the amount of all Post-Effective Time Company Taxes that are paid or otherwise economically borne by any Seller, its Affiliates

(other than the Company Group) or any Seller’s direct or indirect owners, and (B) the amount of all Post-Effective Time Company

Taxes that are paid or otherwise economically borne by the Company Group prior to the Effective Time, but only to the extent that the

amount so paid or otherwise economically borne by the Company Group resulted in a reduction in Effective Time Working Capital as compared

to what Effective Time Working Capital would have been had such Post-Effective Time Company Taxes not been paid or otherwise economically

borne by the Company Group;

(ii)        decreased,

by (A) the amount of all Pre-Effective Time Company Taxes that are economically borne by Purchaser, and (B) the amount of all

Pre-Effective Time Company Taxes that are (1)  economically borne by the Company Group after the Effective Time but prior to the

Closing Date or (2) unpaid as of the Closing Date (other than Pre-Effective Time Company Taxes required to be paid (or caused to

be paid) by Sellers or an Affiliate thereof (other than a member of the Company Group) pursuant to Section 11.3(a);

(j)             decreased

by the Property Trade Allocated Value for any Open Property Trades, in accordance with Section 8.16;

(k)            decreased

by the amount of any Acquisition Costs first incurred or arising after the Effective Time and prior to the Closing as consideration for

the acquisition of any interests set forth on Schedule AC, Part B, except for any amounts deducted as a Working Capital

Liability in the calculation of the Effective Time Working Capital (it being understood that no acquisition of interests set forth on

Schedule AC shall constitute a Title Benefit under this Agreement); and

(l)             increased

or decreased, as applicable, by any other amounts expressly provided for elsewhere in this Agreement or otherwise agreed upon in writing

by the Sellers’ Representative and Purchaser.

Section 2.5         Adjustment

Procedures.

(a)            All

adjustments to the Unadjusted Purchase Price shall be made (i) in accordance with the terms of this Agreement and, to the extent

not inconsistent with this Agreement and otherwise applicable, in accordance with GAAP and COPAS (provided, however, in

the event of any conflict between GAAP and COPAS, GAAP shall control), as consistently applied by Company Group prior to Closing (the

“Accounting Principles”) and (ii) without duplication. For the avoidance of doubt, no item that is included

in or taken into account in the determination of the calculation of Effective Time Working Capital shall be subject to any other adjustment

to the Unadjusted Purchase Price. When available, actual figures will be used for the adjustments to the Unadjusted Purchase Price at

Closing. To the extent actual figures are unavailable at Closing, Sellers’ Representative’s estimates will be used subject

to the final adjustments in accordance with the terms hereof.

(b)            Notwithstanding

anything to the contrary in this Agreement, in determining the adjustments contemplated under ‎Section 2.4(a)(i) or

Section 2.4(a)(ii), the following shall apply to the definitions of Working Capital Assets and Working Capital Liabilities,

as applicable:

(i)         the

following shall be deemed to constitute Working Capital Assets (without duplication), each determined in accordance with Accounting Principles:

(A)          all

unpaid refunds on deposits, prepayments or similar items, in each case, that are contractually obligated to be paid, and all insurance

proceeds that are attributable to periods prior to the Effective Time;

(B)           the

amount of all pre-paid or deposited Property Costs and all other costs and expenses (other than Taxes) paid by or on behalf of Company

Group prior to the Effective Time that are attributable to the ownership of the Assets after the Effective Time, including (1) bond

and insurance premiums and deductibles paid or borne by or on behalf of Company Group with respect to any period after the Effective Time

(prorated as applicable), (2) Royalties, (3) cash calls to Third Party operators, (4) bonus, lease extensions, rentals

and other lease maintenance payments not due or payable until after the Effective Time and (5) annual registration fees and/or well

registration fees attributable to any period after the Effective Time (prorated as applicable);

Group’s entitlement of any Hydrocarbons in tanks or storage facilities produced from or credited to the Assets at the Effective

Time based upon the quantities in tanks or storage facilities as of the Effective Time multiplied by the applicable Settlement

Price;

(D)           unpaid

proceeds, receivables and amounts earned as of the Effective Time from the sale of Hydrocarbons produced from or attributable to the Oil

and Gas Properties and any other unpaid amounts receivables earned by or owed to the Company Group, in each case during any period before

the Effective Time;

(E)           if

any member of the Company Group thereof is the operator under an operating agreement covering any of the Assets or assets then owned by

Company Group, an amount equal to the Property Costs and other costs and expenses paid before the Effective Time by the Company Group

on behalf of the other joint interest owners that are attributable to periods after the Effective Time; and

(F)           with

respect to any Imbalances where Company Group is underproduced as to Hydrocarbons or has overdelivered Hydrocarbons, an amount equal to

the aggregate amount owed by Third Parties to Company Group for such Imbalances as of the Effective Time on the basis of the applicable

Settlement Price.

(ii)        the

following shall be deemed to constitute Working Capital Liabilities (without duplication), each determined in accordance with Accounting

Principles:

(A)          the

amount of all Property Costs accrued or otherwise payable by Company Group that are unpaid as of the Effective Time that are attributable

to operations with respect to the Assets that were conducted prior to the Effective Time; and

(B)          with

respect to any Imbalances where Company Group is overproduced as to Hydrocarbons or has underdelivered Hydrocarbons, an amount equal to

the aggregate amount owed by Company Group to Third Parties for such Imbalances as of the Effective Time on the basis of the applicable

Settlement Price.

adjustments and payments made pursuant to this ‎Article 2 shall be without duplication of any other amounts paid, credited,

debited or received under this Agreement.

(d)            For

purposes of allocating Hydrocarbon production (and accounts receivable with respect thereto), (i) liquid Hydrocarbons shall be deemed

to be “from or attributable to” the Oil and Gas Properties when they are produced into the tank batteries related

to each Well and (ii) gaseous Hydrocarbons shall be deemed to be “from or attributable to” the Oil and

Gas Properties when they pass through the delivery point sales meters or similar meters at the point of entry into the pipelines through

which they are transported. The Parties shall use reasonable interpolative procedures to arrive at an allocation of Hydrocarbon production

when exact meter readings, gauging or strapping data are not available.

(e)            Surface

use or damage fees and other Property Costs that are paid periodically shall be prorated based on the number of days in the applicable

period falling on or before, or after, the Effective Time.

(f)            The

terms “earned” and “incurred,” as used in ‎Section 2.4 and this ‎Section 2.5,

shall be interpreted in accordance with accounting recognition guidance under the Accounting Principles.

Section 2.6         Closing

Date Flow of Funds. Contemporaneously with Closing:

(a)            The

Closing Payment shall be disbursed at the Closing as follows:

(i)        First,

to repay the amount of any Credit Document Indebtedness of the Company Group (including any Post-Effective Time Credit Document Indebtedness)

outstanding as of the Closing Date, to the applicable holders of such Credit Document Indebtedness;

(ii)        Second,

to the extent any Hedge Losses amounts are owed by the Company Group at Closing in connection with any Company Hedge liquidations, to

the Persons owed any amounts in connection therewith;

(iii)      Third,

to the extent any Transaction Costs are due and payable or outstanding as of Closing, to the Persons owed any such Transaction Costs;

(iv)      Fourth,

to the extent the Defect Escrow Amount is a positive number at Closing, to the Escrow Agent via wire transfer of immediately available

funds to the account or accounts designated in the Escrow Agreement; and

(v)       Fifth,

the remainder to the Person(s) and account(s) designated by Sellers’ Representative in the Preliminary Settlement Statement.

(b)            Sellers

shall cause the Company Group to make the Closing Distribution to the Person(s) and account(s) designated by Sellers’

Representative in the Preliminary Settlement Statement.

Section 2.7         Closing

Payment and Post-Closing Adjustments.

(a)            Not

later than seven (7) Business Days prior to the Closing Date, Company shall prepare and deliver to Purchaser a draft preliminary

settlement statement (“Preliminary Settlement Statement”) setting forth (i) Company’s good faith

estimate of the Adjusted Purchase Price as of the Closing Date after giving effect to all adjustments set forth in ‎Section 2.4,

(ii) the Persons, accounts and amounts of disbursements that are required to receive such amounts in accordance with ‎Section 2.6

(including the amounts Sellers’ Representative designates and nominates to receive the portions of the Closing Payment and Closing

Distribution under ‎Section 2.6(a)(iv) and ‎Section 2.6(b), if other than a Seller), and (iii) the

wiring instructions for all such payments and disbursements. Company shall supply to Purchaser reasonable documentation in the possession

of Company or any of its Affiliates to support the items for which adjustments are proposed or made in the Preliminary Settlement Statement

delivered by Company and a brief explanation of any such adjustments and the reasons therefor. Company shall cause its representatives

and Sellers’ Representative to be available upon reasonable advance notice and during normal business hours to answer any reasonable

questions that Purchaser may have with respect to the Preliminary Settlement Statement delivered by Company and any adjustments set forth

therein. Within three (3) Business Days after receipt of Company’s draft Preliminary Settlement Statement, Purchaser may deliver

to Sellers and the Company a written report containing all changes that Purchaser proposes to be made to the Preliminary Settlement Statement,

if any, together with a brief explanation of any such changes. The Preliminary Settlement Statement, as agreed upon by the Parties, will

be used to adjust the Unadjusted Purchase Price at Closing; provided that if the Parties cannot agree on all adjustments set forth

in the Preliminary Settlement Statement prior to the Closing, then, subject to ‎Section 3.2(i) with respect to the

Defect Escrow Amount, any such unagreed adjustments as set forth in the Preliminary Settlement Statement as presented by Company will

be used to adjust the Unadjusted Purchase Price at Closing.

(b)            As

soon as reasonably practicable after the Closing, but not later than the later of (i) one hundred eighty (180) days following the

Closing Date and (ii) five (5) Business Days after the date on which the Parties or the applicable Defect Referee finally determines

all Defect Amounts under ‎Section 3.2(i), Purchaser shall prepare and deliver to Sellers’ Representative a draft

final settlement statement (the “Final Settlement Statement”) setting forth the final calculation of the Adjusted

Purchase Price and showing the calculation of each adjustment under ‎Section 2.4, based on the most recent actual figures

for each adjustment. Purchaser shall, at Sellers’ Representative’s request, make reasonable documentation in Purchaser’s

possession available to Sellers’ Representative to support the final figures. Purchaser shall cause its representatives to be available

upon reasonable advance notice and during normal business hours to answer any questions that Sellers may have with respect to the Final

Settlement Statement delivered by Purchaser and any adjustments set forth therein. As soon as reasonably practicable, but not later than

the thirtieth (30th) day following receipt of the Final Settlement Statement, Sellers’ Representative shall deliver to Purchaser

a written report containing any changes that Sellers’ Representative proposes be made in such statement. Any changes not so specified

in such written report shall be deemed waived and Purchaser’s determinations with respect to all such elements of the Final Settlement

Statement that are not addressed specifically in such report shall prevail. If Sellers’ Representative fails to timely deliver a

written report to Purchaser containing changes Sellers’ Representative proposes to be made to the Final Settlement Statement, the

Final Settlement Statement as delivered by Purchaser will be deemed to be correct and mutually agreed upon by the Parties and will be

final and binding on the Parties (without limiting ‎Section 11.1(b)) and not subject to further audit or arbitration.

Purchaser may deliver a written report to Sellers’ Representative during the same thirty (30) day period reflecting any changes

that Purchaser proposes to be made in the Final Settlement Statement as a result of additional information received after the statement

was prepared. The Parties shall undertake to agree on the final statement of the Adjusted Purchase Price no later than thirty (30) days

following Sellers’ Representative’s receipt of Purchaser’s Final Settlement Statement delivered hereunder. In the event

that the Parties cannot reach agreement as to the Final Settlement Statement of the Adjusted Purchase Price within such period of time,

either Party may refer the items of adjustment which are in dispute or the interpretation or effect of this ‎Section 2.7(b) to

a nationally recognized independent accounting firm or consulting firm mutually acceptable to both Purchaser and Sellers’ Representative

(the “Accounting Referee”) for review and final determination by arbitration. The Accounting Referee shall conduct

the arbitration proceedings in Austin, Texas in accordance with the Commercial Arbitration Rules of the AAA, to the extent such rules do

not conflict with the terms of this ‎Section 2.7(b). The Accounting Referee’s determination shall be made as soon

as reasonably practicable after submission of the matters in dispute and shall be final and binding on all Parties (without limiting ‎Section 11.1(b)),

without right of appeal. In determining the amount of any adjustment to the Adjusted Purchase Price, the Accounting Referee shall be bound

by the terms of ‎Section 2.4 and may not increase the Adjusted Purchase Price more than the increase proposed by Sellers

nor decrease the Adjusted Purchase Price more than the decrease proposed by Purchaser, as applicable. The Accounting Referee shall act

as an expert for the limited purpose of determining the specific disputed aspects of the Adjusted Purchase Price adjustments submitted

by any Party and may not award damages, interest (except to the extent expressly provided for in this ‎Section 2.7) or

penalties to any Party with respect to any matter. Each Seller, on the one hand, and Purchaser, on the other hand, shall each bear its

own legal fees and other costs of presenting its case. Sellers shall collectively bear one half and Purchaser shall bear one-half of the

fees, costs and expenses of the Accounting Referee. Within five (5) Business Days after the earlier of (A) the expiration of

Sellers’ Representative’s thirty (30) day review period without delivery of any written report or (B) the date on which

the Parties or the Accounting Referee finally determines the Adjusted Purchase Price, (1) if the Adjusted Purchase Price exceeds

the sum of the Closing Payment plus the Deposit, Purchaser shall pay to the Persons as directed by Sellers’ Representative

by wire transfer of immediately available funds to an account(s) designated by Sellers’ Representative in writing an amount

in cash equal to such excess or (2) if the sum of the Closing Payment plus the Deposit exceeds the Adjusted Purchase Price,

Sellers shall collectively pay to Purchaser by wire transfer of immediately available funds to an account(s) designated by Purchaser

in writing an amount in cash equal to such excess. The post-Closing adjustment of the Adjusted Purchase Price pursuant to the Final Settlement

Statement is not intended to permit the introduction of different accounting principles, methods, policies, practices, procedures, classifications,

conventions, categorizations, definitions, judgments, assumptions, techniques or estimation methods with respect to financial statements

from the Accounting Principles.

shall reasonably assist Purchaser in preparation of the Final Settlement Statement by furnishing invoices, receipts, reasonable access

to personnel and such other assistance as may be reasonably requested by Purchaser to facilitate such process post-Closing.

(d)            All

payments made or to be made under this Agreement to any Seller shall be made by electronic transfer of immediately available funds to

such bank and account as may be specified by Sellers’ Representative in writing.

(e)            All

adjustments and payments made pursuant to this ‎Article 2 shall be without duplication of any other amounts paid, credited,

debited, or received under this Agreement.

Section 2.8         Tax

Treatment; Allocation of Purchase Price. The Parties agree that (a) the transactions contemplated by this Agreement will

be treated for U.S. federal Income Tax purposes as (b) a sale of partnership interests of the Company by the Sellers, which shall,

for the avoidance of doubt, cause the Company’s taxable year as a partnership to close as of the end of the Closing Date for U.S.

federal income tax purposes, and (c) an acquisition of the assets of each member of the Company Group by Purchaser, in each case,

as described in Revenue Ruling 99-6, situation 2. No Party or any Affiliate thereof shall take a position inconsistent with the preceding

sentence for any purpose unless otherwise required pursuant to a “determination” within the meaning of Section 1313(a) of

the Code or corresponding provision of applicable U.S. state or local Law. Each of Sellers’ Representative and Purchaser shall use

commercially reasonable efforts to agree upon an allocation of the Adjusted Purchase Price and any other items properly treated as consideration

for U.S. federal income Tax purposes with respect to the amounts allocated to the Assets, then among the six categories of assets specified

in Part II of IRS Form 8594 (Asset Acquisition Statement under Section 1060), in accordance with Sections 751, 755 and

1060 of the Code and the Treasury Regulations promulgated thereunder within thirty (30) days after the Cut-Off Date (the “Allocation”).

If Sellers’ Representative and Purchaser reach an agreement with respect to the Allocation, (i) Sellers’ Representative

and Purchaser shall use commercially reasonable efforts to update the Allocation in a manner consistent with Sections 751, 755 and 1060

of the Code following any adjustment to the purchase consideration for Tax purposes pursuant to this Agreement, (ii) Sellers and

Purchaser shall, and shall cause their Affiliates to, report consistently with the Allocation, as adjusted, on IRS Form 8594, any

statements required under Treasury Regulations Section 1.751-1(a)(3) and any allocation required under Section 755 of the

Code, which, in each case, Sellers and Purchaser shall timely file with the IRS, as applicable, and neither Sellers nor Purchaser shall

take any position on any Tax Return that is inconsistent with the Allocation, as adjusted, unless otherwise required by a change in applicable

Law occurring after the date the Parties agree to the allocation; provided, however, that (A) if Sellers’ Representative

and Purchaser cannot mutually agree on the Allocation, each Party shall be entitled to determine its own allocation and file its IRS Form 8594

consistent therewith and (B) neither Party shall be unreasonably impeded in its ability and discretion to negotiate, compromise and/or

settle any Tax audit, claim or similar proceedings in connection with such allocation.

Article 3

Title

and Environmental Matters

Section 3.1         Title

and Environmental Matters. Without limitation of Purchaser’s rights under the R&W Insurance Policy and under Article 13

with respect to a breach of the Special Warranty of Title or Section 5.17, the conditions to Closing set forth in ‎Article 9,

and the rights and remedies set forth in ‎Article 12, this ‎Article 3 sets forth Purchaser’s sole

and exclusive remedy against any member of the Seller Group with respect to (a) any Defect, (b) the failure of any member of

Company Group or any other Person to have title to any of the Assets (whether Record/Beneficial Title or otherwise), and (c) the

existence of any Environmental Defect, Environmental Liabilities, Release of Hazardous Substances, or any other environmental condition

or obligation with respect to the Assets.

Section 3.2         Defects;

Adjustments.

(a)            Notice

of Defects. As a condition to Purchaser asserting any claim with respect to any alleged Defect, Purchaser must deliver to Sellers’

Representative a valid Notice or Notices (each a “Defect Notice”) with respect to such alleged Defect on or

before 5:00 p.m. Central Time on the date that is fifty-five (55) days after the Execution Date (the “Defect Deadline”);

provided that Purchaser shall provide to Sellers’ Representative weekly written updates no later than 5:00 p.m. Central

Time on each Friday between the Execution Date and the Defect Deadline (which written updates may be amended or supplemented by a Defect

Notice) with respect to the status of Purchaser’s review and a description of potential Defects and potential issues in respect

thereof identified by or on behalf of Purchaser or Purchaser’s Representatives during the prior calendar week. Each Defect Notice

shall be in writing and include:

(i)         a

description of the alleged Defect;

(ii)       a

description of the Lease or Well and Subject Formation(s) or other Asset subject to such alleged Defect;

(iii)      the

Allocated Value of each Lease or Well or other Asset subject to the alleged Defect;

(iv)      Purchaser’s

good faith reasonable estimate of the Defect Amount attributable to such alleged Defect and the computations and information upon which

Purchaser’s estimate is based;

(v)       Reasonable

Documentation in Purchaser’s or Purchaser’s Representatives’ possession or control supporting Purchaser’s assertion

and claim of such Defect; and

(vi)      with

respect to any alleged Environmental Defect, reference to the specific section of applicable Environmental Laws that have been violated

or that require Remediation with respect to the applicable Assets as of the Effective Time;

provided,

that so long as a Defect Notice includes (A) the information set forth in subparts (i) through (iv) above and (B) such

Reasonable Documentation necessary for the Sellers and the Defect Referee (as well as any title attorney or examiner hired by any such

Persons) to verify or be put on notice as to the existence and nature of the alleged Defect, such Defect Notice shall be valid.

WITHOUT LIMITATION

OF PURCHASER’S RIGHTS UNDER THE R&W INSURANCE POLICY, AND EXCEPT WITH RESPECT TO PURCHASER’S RIGHTS UNDER Article 13

WITH RESPECT TO ANY BREACH OF THE SPECIAL WARRANTY OF TITLE, ANY LIEN THAT SECURES INDEBTEDNESS OF ANY MEMBER OF THE COMPANY GROUP, AND

THE CERTIFICATE TO BE DELIVERED AT THE CLOSING PURSUANT TO ‎Section 10.2(d),

PURCHASER SHALL BE DEEMED TO HAVE WAIVED AND RELEASED, AND COVENANTS THAT IT SHALL WAIVE AND RELEASE, ANY AND ALL DEFECTS (AND ANY ADJUSTMENTS

TO THE UNADJUSTED PURCHASE PRICE ATTRIBUTABLE THERETO) FOR WHICH SELLERS’ REPRESENTATIVE HAS NOT RECEIVED ON OR BEFORE THE DEFECT

DEADLINE A DEFECT NOTICE THAT SATISFIES ALL OF THE CONDITIONS AND REQUIREMENTS SET FORTH IN THIS ‎Section 3.2(a).

(b)            Notice

of Title Benefits. Should any Seller discover any Title Benefit at any time on or prior to the Cut-Off Date, such Seller shall promptly,

but in no event later than the Cut-Off Date, deliver to Purchaser a written notice (each a “Title Benefit Notice”)

including:

(i)         a

description of the alleged Title Benefit;

(ii)        a

description of the Oil and Gas Property subject to such alleged Title Benefit;

(iii)       the

Allocated Value of each Oil and Gas Property subject to the alleged Title Benefit;

(iv)      such

discovering Party’s good faith reasonable estimate of the Title Benefit Amount attributable to such Title Benefit and the computations

and information upon which such Party’s estimate is based; and

(v)       supporting

documents reasonably necessary for the Other Party and the Defect Referee (as well as any title attorney or examiner hired by any such

Persons) to verify or investigate the existence of the alleged Title Benefit;

provided,

that so long as a Title Benefit Notice includes (A) the information set forth in subparts (i) through (iv) above and

(B) such Reasonable Documentation necessary for the Purchaser and the Defect Referee (as well as any title attorney or examiner hired

by any such Persons) to verify or be put on notice as to the existence and nature of the alleged Title Benefit, such Title Benefit Notice

shall be valid.

SELLERS SHALL BE DEEMED TO HAVE WAIVED AND

RELEASED, AND COVENANTS THAT IT SHALL WAIVE AND RELEASE, ANY AND ALL TITLE BENEFITS (AND ANY OFFSETS TO TITLE DEFECTS ATTRIBUTABLE THERETO)

FOR WHICH SELLERS’ REPRESENTATIVE HAS NOT SENT TO PURCHASER ON OR BEFORE THE CUT-OFF Date

A VALID NOTICE THAT SATISFIES ALL OF THE CONDITIONS AND REQUIREMENTS SET FORTH IN THIS ‎Section 3.2(b).

to Cure Defects. Sellers shall have the right, but not the obligation to attempt, at Sellers’ sole cost, to cure or remove,

on or prior to the Cure Deadline, any Defects asserted in a valid Defect Notice. Alleged Defects shall be deemed to have been cured or

removed if the Assets affected by such alleged Defect are free of such Defect as of the Cure Deadline, as agreed by the Parties or determined

by the Defect Referee, as applicable. If any asserted Defect is not cured or removed, or if Sellers’ Representative and Purchaser

cannot agree as to whether such Defect has been cured or removed, and it is determined by the applicable Defect Referee that such Defect

is not cured by the Cure Deadline, the Unadjusted Purchase Price shall be adjusted by the Defect Amount attributable to such Defect. Any

Seller’s attempt to cure or remove a Defect shall not constitute an obligation to cure or attempt to cure such Defect or a waiver

of such Seller’s right to dispute the validity, nature, or value of, or cost to cure, such Defect.

(d)            Defect

Amounts. The diminution of value of the Assets attributable to any valid Defect that actually burdens, encumbers or affects a Lease

or Well (the “Defect Amount”) shall be determined as follows:

(i)        if

Purchaser and Sellers’ Representative agree on the Defect Amount, that amount shall be the Defect Amount;

(ii)        if

a Title Defect is a Lien that is liquidated in amount, then the Defect Amount shall be the amount necessary to be paid to remove the Title

Defect from Company Group’s interest in the affected Lease or Well;

(iii)       if

a Title Defect as to the applicable Subject Formation affecting any Well or Lease represents a negative discrepancy between (A) the

actual Net Revenue Interest for the applicable Subject Formation as to such Well or Lease and (B) the Net Revenue Interest percentage

stated on Exhibit A-2 for such Subject Formation for such Well or Schedule 2.8 for such Subject Formation for

such Lease, as applicable, and in such case there is a proportionate decrease in the actual Working Interest with respect to the applicable

Subject Formation as to such Well, from the Working Interest stated on Exhibit A-2 for such Subject Formation for such Well,

then the Defect Amount shall be equal to the product of (1) the Allocated Value of such Well or Lease, as applicable multiplied

by (2) a fraction, the numerator of which is (x) the remainder of (I) the “Net Revenue Interest” percentage

stated on Exhibit A-2 as to the applicable Subject Formation for such Well or Schedule 2.8 as to the applicable

Subject Formation for such Lease, as applicable, minus (II) the actual Net Revenue Interest as to the applicable Subject Formation

as to such Well or Lease, as applicable, and the denominator of which is (y) the “Net Revenue Interest” percentage stated

on Exhibit A-2 for such Subject Formation for such Well or Schedule 2.8 for such Subject Formation for such Lease,

as applicable; provided that if the Title Defect does not affect the “Net Revenue Interest” percentage stated on Exhibit A-2

for such Subject Formation for such Well or Schedule 2.8 for such Subject Formation for such Lease, as applicable, throughout

its entire productive life, the Defect Amount determined under this ‎Section 3.2(d)(iii) shall be reduced to take

into account the applicable time period only;

(iv)       if

the Title Defect represents a negative discrepancy between (A) Company Group’s aggregate ownership of Net Acres as to a Subject

Formation for any Lease and (B) the amount of Net Acres as to such Subject Formation for such Lease in Schedule 2.8,

and there is no discrepancy between the Net Revenue Interest of Company Group in such Subject Formation as to such Lease and the Net Revenue

Interest set forth for such Subject Formation as to such Lease in Schedule 2.8, then the Defect Amount shall be the product

of the Allocated Value of such Subject Formation as to such Lease multiplied by a fraction, the numerator of which is the difference

between the number of Net Acres owned by Company Group in such Subject Formation as to Lease and the number of Net Acres set forth for

such Subject Formation as to such Lease in Schedule 2.8, and the denominator of which is the Net Acres set forth for such

Subject Formation as to such Lease in Schedule 2.8;

(v)       if

the Title Defect represents an obligation, encumbrance, burden, or charge upon or other defect in title to the applicable Subject Formation

as to a Lease or Well of a type not described in ‎Section 3.2(d)(i) through Section 3.2(d)(iii), the

Defect Amount shall be determined by taking into account the Allocated Value of the Lease or Well so affected, the portion of Company

Group’s interest in the applicable Subject Formation as to such Lease or Well affected by the Title Defect, the legal effect of

the Title Defect, the potential present value economic effect of the Title Defect over the life of the applicable Subject Formation as

to such Lease or Well, the values placed upon the Title Defect by Purchaser and Sellers’ Representative, the estimated capital and

operational costs and expenses (or reduction or increases thereof) attributable to Company Group’s Working Interest, and such other

factors as are necessary to make an evaluation and determination of such value;

(vi)      if

a Defect is an Environmental Defect, the Defect Amount shall be equal to the costs and expenses chargeable to the Company Group’s

Working Interest or other interest (as of the Closing Date) to Remediate the Asset subject to such Environmental Defect (or group of Assets

subject to the same Environmental Defect) using the Lowest Cost Response; provided, however, such Defect Amount shall expressly

exclude (A) the costs, fees and expenses for matters that are ordinary costs of doing business regardless of the presence of an Environmental

Defect (e.g., those costs that would ordinarily be incurred in the day-to-day operations of the Assets or in connection with permit renewal/amendment

activities), (B) the overhead costs of Purchaser or its Affiliates, and (C) any Remediation costs, fees or expenses charged

or chargeable to any other Working Interest owner or co-tenant or joint owner of the underlying Assets burdened by such Environmental

Defect;

(vii)     the

Defect Amount with respect to a Defect shall be determined without duplication of any costs or losses included in another Defect Amount

hereunder, or for which Purchaser otherwise receives credit in the calculation of the Adjusted Purchase Price; and

(viii)    notwithstanding

anything to the contrary in this Agreement, the aggregate adjustment to the Unadjusted Purchase Price for all Defect Amounts attributable

to Defects with respect to each Asset shall not exceed the Allocated Value of such Asset (after giving effect to any applicable adjustments

due to prior Defects).

(e)            Title

Benefit Amounts. The “Title Benefit Amount” for any Title Benefit shall be determined as follows:

(i)         if

a Title Benefit applicable to any Subject Formation as to any Well or Lease represents a positive discrepancy between (A) the actual

Net Revenue Interest for such Subject Formation as to such Well or Lease and (B) the Net Revenue Interest percentage stated on Exhibit A-2

for such Subject Formation as to such Well or Schedule 2.8 for such Lease, then the Title Benefit Amount shall be equal to

(1) the product of the Allocated Value of such Subject Formation as to such Well or Lease multiplied by (2) a fraction,

the numerator of which is (x) the remainder of (I) the actual Net Revenue Interest of such Subject Formation as to such Well

or Lease minus (II) the Net Revenue Interest percentage stated on Exhibit A-2 for such Subject Formation as to such Well

or Schedule 2.8 for such Lease, and the denominator of which is (y) the Net Revenue Interest percentage stated on Exhibit A-2

for such Subject Formation as to such Well or Schedule 2.8 for such Lease; provided that if the Title Benefit does

not affect the Net Revenue Interest percentage stated on Exhibit A-2 for such Subject Formation as to such Well or Schedule 2.8

as to such Lease throughout its entire productive life, the Title Benefit Amount determined under this ‎Section 3.2(e)(i) shall

be reduced to take into account the applicable time period only; and

(ii)        if

the Title Benefit represents a benefit of a type not described in ‎Section 3.2(e)(i) the Title Benefit Amount shall

be determined by taking into account the Allocated Value of the Lease or Well so affected, the portion of Company Group’s interest

in the Lease or Well affected by the Title Benefit, the legal effect of the Title Benefit, the potential positive economic effect of the

Title Benefit over the life of the affected Lease or Well, the values placed upon the Title Benefit by Purchaser and Sellers’ Representative,

and such other factors as are necessary to make an evaluation and determination of such value.

(f)            Individual

Threshold and Defect Deductibles. Notwithstanding anything to the contrary in this Agreement:

(i)        There

shall be no adjustments to the Unadjusted Purchase Price under ‎Section 3.2(g) for any Defect or Defects to the extent

the Defect Amount for any valid individual Defect is less than the Individual Threshold (it being agreed that the Individual Threshold

represents a threshold and not a deductible); and

(ii)        With

respect to all valid Defects where the Defect Amount thereof exceeds the Individual Threshold, there shall be no adjustment to the Unadjusted

Purchase Price under ‎Section 3.2(g) with respect to any and all such Defects unless and until the aggregate Defect

Amounts thereof that exceeds the Individual Threshold also exceeds, in the case of Environmental Defects, the Environmental Defect Deductible

and then only to the extent such aggregate amount exceeds the Environmental Defect Deductible (it being the intention of the Parties that

the Environmental Defect Deductible represents a deductible and not a threshold) and, in the case of Title Defects, the Title Defect Deductible

and then only to the extent such aggregate amount exceeds the Title Defect Deductible (it being the intention of the Parties that the

Title Defect Deductible represents a deductible and not a threshold);

provided,

that, notwithstanding anything herein to the contrary, the Individual Threshold and Title Defect Deductible shall not apply and shall

be disregarded for purposes of calculating any adjustments to the Unadjusted Purchase Price with respect to any Title Defects asserted

prior to the Defect Deadline that, if asserted after the Closing, would constitute a breach of the Special Warranty of Title.

(g)            Remedies

for Defects. Subject to each Seller’s right to cure, or dispute the existence of, a Defect and the Defect Amount asserted with

respect thereto, in the event that any valid Defect is not waived in writing by Purchaser or is not cured or Remediated on or prior to

the Cure Deadline, then:

(i)        subject

to ‎Section 3.2(f) and each Seller’s rights under ‎Section 3.2(g)(ii), with respect to all

uncured Defects for which the Defect Amount with respect thereto exceeds the Individual Threshold, the Unadjusted Purchase Price shall

be decreased by the sum of the aggregate Defect Amounts attributable to all such Defects, but only to the extent such aggregate sum with

respect to Defects exceeds, in the case of Environmental Defects, the Environmental Defect Deductible and then only to the extent such

aggregate amount exceeds the Environmental Defect Deductible (it being the intention of the Parties that the Environmental Defect Deductible

represents a deductible and not a threshold) and, in the case of Title Defects, the Title Defect Deductible and then only to the extent

such aggregate amount exceeds the Title Defect Deductible (it being the intention of the Parties that the Title Defect Deductible represents

a deductible and not a threshold); and

(ii)        notwithstanding

anything herein to the contrary, in lieu of the remedy for Defects set forth in ‎Section 3.2(g)(i), Sellers’ Representative

shall have the right, but not the obligation, to elect in writing delivered to Purchaser no earlier than five (5) days prior to the

Closing Date and no later than three (3) Business Days prior to the Closing Date, to cause the applicable member(s) of Company

Group to exclude any Oil and Gas Property or other Asset subject to any alleged Defect where the Defect Amount equals or exceeds fifty

percent (50%) of the Allocated Value of such Oil and Gas Property or other Asset (along with any other Assets reasonably necessary or

desirable for the ownership or operation of such Assets) from the transactions contemplated hereunder and, in such event, (A) the

Unadjusted Purchase Price shall be decreased by the Allocated Value of such excluded Assets, (B) all such Assets shall be deemed

to be excluded from the definition of Assets and from Exhibit A, (C) such Assets shall be deemed to constitute Excluded

Assets, (D) at Closing, the applicable member(s) of Company Group shall execute and deliver an assignment of such Excluded Assets

in accordance with ‎Section 10.2(h), (E) the applicable member(s) of the Company Group and the applicable assignee

of such Excluded Assets shall, to the extent such Excluded Assets are not subject to an existing operating agreement, execute a joint

operating agreement in the form attached hereto as Exhibit E (“Excluded Asset JOA”) with the “Contract

Area” covering such Excluded Assets and any Oil and Gas Properties of the Company Group that are located within one governmental

section of such Excluded Assets and designating the Party (or its designated Affiliate) that owns a majority of the Working Interests

included in the Leases and Excluded Assets subject to such Excluded Asset JOA as the “operator” under such Excluded Asset

JOA and (F) to the extent a member of the Company Group is designated as “operator” under any existing operating agreement

burdening any such Excluded Assets, the Company Group and the assignee of such Excluded Assets shall vote their interests to designate

the Party (or its designated Affiliate) that owns a majority of the Working Interests included in the Leases and Excluded Assets subject

to such Excluded Asset JOA as the operator of such interests.

(h)            Remedies

for Title Benefits. Subject to Purchaser’s right to dispute the existence of a Title Benefit and the Title Benefit Amount asserted

with respect thereto, Title Benefits shall be used solely for the purpose of offsetting any adjustment to the Unadjusted Purchase Price

on account of Title Defects pursuant to ‎Section 3.2(g)(i), with the amount of offset for each Title Benefit being the

Title Benefit Amount (not to exceed the amount of any Defects resulting in adjustment to the Unadjusted Purchase Price).

(i)             Disputed

Defects.

(i)         Sellers’

Representative and Purchaser shall use good faith efforts to agree prior to and after Closing on the interpretation and effect of this

‎Article 3 and the validity and determination of all Title Benefits, Title Benefit Amounts, Defects and Defect Amounts

(or the cure thereof). If Sellers’ Representative and Purchaser are unable to agree on the scope, interpretation and effect of this

‎Article 3, the existence, cure, or amount of any Title Benefits, Title Benefit Amounts, Defects or Defect Amounts by

the Closing Date, then, subject to ‎Section 3.2(d), Purchaser shall deliver the Defect Escrow Amount to the Escrow Agent

at Closing to be held pursuant to the terms hereof and the terms of the Escrow Agreement. If Sellers’ Representative and Purchaser

are unable to agree on the interpretation and effect of this ‎Article 3, the existence, cure or amount of any Title Benefits,

Title Benefit Amounts, Defects or Defect Amounts, the Allocated Value of any Lease or Well, or any other matter related to title to the

Leases or Wells by the date one hundred (100) days after the Closing Date, then, subject to ‎Section 3.2(f) and ‎Section 3.2(g),

all such disputed interpretations and effect of this ‎Article 3 and all Title Benefits, Title Benefit Amounts, Title Defects,

and Defect Amounts regarding Title Defects, the Allocated Value of any Lease or Well, or any other matter related to title to the Lease

or Well in dispute shall be exclusively and finally resolved pursuant to this ‎Section 3.2(i). During the ten (10) Business

Day period following the date one hundred (100) days after the Closing Date, (A) disputes as to the interpretation and effect of

this ‎Article 3 and all Title Benefits, Title Benefit Amounts, Defects, or Defect Amounts in dispute shall be submitted

to a title attorney that has at least ten (10) years’ experience in oil and gas titles in the state where the applicable Asset

is located as selected by mutual agreement of Purchaser and Sellers’ Representative or absent such agreement during such ten (10) Business

Day period, by the Houston, Texas office of the AAA using customary procedures of the AAA (the “Title Referee”)

and (B) disputes with respect to Environmental Defects or Defect Amounts regarding Environmental Defects in dispute shall be submitted

to a nationally recognized independent environmental consulting firm or environmental attorney experienced in resolving Environmental

Liabilities mutually acceptable to Sellers’ Representative and Purchaser or, absent such agreement during such ten (10) Business

Day period, by the Houston, Texas office of the AAA (the “Environmental Referee” and collectively with the Title

Referee, each a “Defect Referee”). The Defect Referee shall not have worked as an employee, outside counsel

or consultant, or in any other capacity, for any Party or any Affiliate of any Party during the ten (10) year period preceding the

arbitration or have any financial interest in the dispute.

(ii)        The

arbitration proceeding shall be held in Houston, Texas and shall be conducted in accordance with, but not under the auspices or jurisdiction

of, the Commercial Arbitration Rules of the AAA, to the extent such rules do not conflict with the terms of this ‎Section 3.2(i)(ii).

The applicable Defect Referee’s determination shall be made as soon as reasonably practicable after submission of the matters in

dispute and shall be final and binding upon the Parties, without a right of appeal. In making a determination, the applicable Defect Referee

shall be bound by the rules set forth in this ‎Article 3 and may consider such other matters as in the opinion of

the applicable Defect Referee are necessary or helpful to make a determination. Additionally, the applicable Defect Referee may consult

with and engage any disinterested Third Party to advise the Defect Referee, including title attorneys, petroleum engineers, and environmental

consultants.

(iii)      In

no event shall the Defect Referee’s determination of (A) any Defect Amount with respect to any Defect be any lower than the

amount asserted by Sellers’ Representative for such Defect or any greater than the amount asserted by Purchaser for such Defect

or (B) any Title Benefit Amount with respect to any Title Benefit be any lower than the amount asserted by Purchaser for such Title

Benefit or any greater than the amount asserted by Sellers’ Representative for such Title Benefit. Purchaser shall have the burden

of proof in proving the existence of each alleged Defect and Defect Amount with respect thereto. Sellers’ Representative shall have

the burden of proof in proving the existence of each alleged Title Benefit and Title Benefit Amount with respect thereto. Notwithstanding

anything herein to the contrary, the Defect Referee shall have exclusive, final, and binding authority with respect to the scope of the

Defect Referee’s authority with respect to any dispute arising under or related to this ‎Article 3 or any disputed

Title Benefits, Title Benefit Amounts, Defects, or Defect Amounts and in no event shall any dispute as to the authority of the Defect

Referee to determine any such disputes be subject to resolution or the provisions of ‎Section 14.3. The applicable Defect

Referee shall act as an expert for the limited purpose of determining the interpretation and effect of this ‎Article 3

and any and all specific disputed Title Benefit Amounts or Defect Amounts submitted by any Party and may not award any damages, interest,

or penalties to any Party with respect to any matter. Sellers and Purchaser shall each bear their own respective legal fees and other

costs of presenting its case. Purchaser shall bear one-half of the fees, costs, and expenses of the applicable Defect Referee, and Sellers

shall collectively be responsible for the remaining one-half of the fees, costs, and expenses of the applicable Defect Referee.

(iv)      From

time to time after the Closing Date, to the extent the Parties have mutually agreed on any disputed Title Benefit and Title Benefit Amount

with respect thereto and/or any Defect and Defect Amount with respect thereto (or the cure thereof), or such disputed Title Benefit and

Title Benefit Amount with respect thereto and/or any Defect and Defect Amount with respect thereto (or the cure thereof) has been finally

determined by a Defect Referee, then, no later than three (3) Business Days after the date of such agreement or determination, the

Parties shall deliver joint written instructions directing the Escrow Agent to disburse from the Defect Escrow Amount the Title Benefit

Amount or Defect Amount with respect thereto to the Party entitled to such amount pursuant to the terms of this Agreement, together with

any interest accrued on such amount under the terms of the Escrow Agreement.

Article 4

Representations

and Warranties of Each Seller

Subject to the provisions

of this ‎Article 4 and the other terms and conditions of this Agreement and the exceptions and matters set forth on the

Disclosure Schedules, each Seller, severally and not jointly, represents and warrants to Purchaser the matters set out in this ‎Article 4.

Section 4.1         Organization,

Existence and Qualification. Such Seller is duly formed or organized, validly existing and in good standing under the Laws of

the State of Delaware. Such Seller is duly qualified to carry on its business in the states where it is required to do so, except, in

each case, where the failure to do so does not result in a Material Adverse Effect.

Section 4.2         Power.

Such Seller has the requisite limited liability company power and authority to enter into and perform its obligations under this Agreement

and the other Transaction Documents to which it is or will be at Closing a party and to consummate the transactions contemplated by this

Agreement and the other Transaction Documents to which it is or will be at Closing a party.

Section 4.3         Authorization

and Enforceability. The execution, delivery and performance of this Agreement and the other Transaction Documents to which it

is or will be at Closing a party, and the consummation of the transactions contemplated hereby and thereby, have been duly and validly

authorized by all necessary action on the part of such Seller. This Agreement has been duly executed and delivered by such Seller (and

all Transaction Documents required to be executed and delivered by such Seller prior to or at Closing shall be duly executed and delivered

by such Seller) and this Agreement constitutes, and at the Closing such Transaction Documents shall constitute, the valid and binding

obligations of such Seller, enforceable in accordance with their respective terms, except as such enforceability may be limited by applicable

bankruptcy or other similar Laws affecting the rights and remedies of creditors generally as well as to general principles of public policy

and/or equity (regardless of whether such enforceability is considered in an Action in equity or at law).

Section 4.4         No

Conflicts. Except as set forth on Schedule 4.4, the execution, delivery and performance of this Agreement and the

other Transaction Documents by such Seller and the consummation of the transactions contemplated by this Agreement and any other Transaction

Documents, do not (a) violate, conflict with or result in any breach of any provision of the Governing Documents of such Seller,

(b) result in the creation of any Lien (other than any Permitted Securities Liens) on, or result in any Person having the right to

exercise any Right to acquire, the Subject Securities, (c) violate any Order, regulation or decree applicable to such Seller as a

party in interest, (d) violate any Law applicable to such Seller, (e) require that any Consent be obtained, made, or complied

with or (f) violate, conflict with or result in any breach of any provision of, or constitute a default (or an event that with notice

or passage of time or both would give rise to a default) under, or give rise to any right of termination, cancellation or acceleration

under any agreement or instrument to which such Seller is a party, except in each case of the foregoing clauses ‎(c) through

‎(f) for any matters that would not prevent or materially impair or delay, or would not reasonably be expected to prevent or

materially impair or delay, the consummation of the transactions contemplated hereby or by the other Transaction Documents to which it

is, or will be at Closing, a party, or the performance of any of Sellers’ or Company Group’s obligations and covenants hereunder

or under any such Transaction Documents or that would not be reasonably likely to result in any material liability of the Company Group

or otherwise be material to the Subject Securities, Business, Assets or the Company Group.

Section 4.5         Litigation.

There are no Actions pending or, to such Seller’s Knowledge, expressly threatened in writing by any Third Party or Governmental

Authority against such Seller (a) which seeks an Order restraining, enjoining, prohibiting, preventing or making illegal any of the

transactions contemplated by the Transaction Documents to which it is, or will be at Closing, a party or, individually or in the aggregate,

questions or challenges the validity of the Transaction Documents to which it is, or will be at Closing, a party or the transactions contemplated

thereby or any action taken or to be taken by such Seller in connection with, or which seeks to enjoin, the Transaction Documents or the

consummation of the transactions contemplated thereby, or (b) that would prevent or materially impair or delay, or would reasonably

be expected to prevent or materially impair or delay, the consummation of the transactions contemplated hereby or by the other Transaction

Documents to which it is, or will be at Closing, a party, or the performance of any of Sellers’ or Company Group’s obligations

and covenants hereunder or under any such Transaction Documents or that would be reasonably likely to result in any material liability

of the Company Group or otherwise be material to the Subject Securities, Business, Assets or the Company Group.

Section 4.6         Bankruptcy.

There are no bankruptcy, reorganization, or receivership Actions pending against, being contemplated by, or, to such Seller’s Knowledge,

threatened in writing against, such Seller. No Action is contemplated by such Seller in which such Seller would be declared insolvent

or subject to the protection of any bankruptcy or reorganization Laws or procedures. Such Seller (a) is not insolvent, (b) is

not in receivership or dissolution, (c) has not made any assignment for the benefit of creditors, (d) has not admitted in writing

its inability to pay its debts as they mature, (e) has not been adjudicated bankrupt and (f) has not filed a petition in voluntary

bankruptcy, a petition or answer seeking reorganization, or an arrangement with creditors under the federal bankruptcy Laws or any other

similar Laws, nor has any such petition been filed against such Seller. In completing the transactions contemplated by this Agreement,

such Seller does not intend to hinder, delay or defraud any present or future creditors of such Seller.

Section 4.7         Ownership

of Subject Securities. Such Seller is the record and beneficial owner of all of the Subject Securities described on Schedule 5.5

as being owned by such Seller, free and clear of all Liens (other than Permitted Securities Liens). At the Closing, the delivery by such

Seller to Purchaser of the Assignment will vest Purchaser with good and valid title to all of the Subject Securities held by such Seller

(as set forth on Schedule 5.5), free and clear of all Liens (other than Permitted Securities Liens and Liens and other matters

arising by, through or under Purchaser or its Affiliates). Except as set forth in the Governing Documents of the Company, such Seller

is not party to any (i) option, warrant, right, contract, call, pledge, put or other agreement or commitment providing for the disposition

or acquisition of such Seller’s interest in such Subject Securities, as applicable, or (ii) voting trust, proxy or other agreement

or understanding with respect to the voting of any of such Subject Securities.

Section 4.8         No

Brokers. Such Seller nor any of such Seller’s Affiliates (other than the Company Group), has, directly or indirectly, agreed

with or engaged any financial advisor, broker, agent, or finder, or incurred any liability, contingent or otherwise, in favor of any such

other Person, relating to the transactions contemplated by this Agreement for which Purchaser will have any responsibility.

Article 5

Representations

and Warranties Regarding Company Group

Subject to the provisions

of this ‎Article 5 and the other terms and conditions of this Agreement and the exceptions and matters set forth on the

Disclosure Schedules, Company represents and warrants to Purchaser the matters set out in this ‎Article 5.

Section 5.1         Existence

and Qualification. Each member of Company Group is (a) a limited liability company duly formed, validly existing and

in good standing under the Laws of the State of Delaware and has all requisite limited liability company power and authority to own, lease

and operate its properties and to carry on its business as now being conducted and (b) duly qualified to do business as a foreign

limited liability company in good standing in each jurisdiction in which the business it is conducting, or the operation, ownership or

leasing of its properties, makes such qualification necessary (a list of such jurisdictions is set forth on Schedule 5.1),

except in each case of this clause ‎(b) where the failure to be so qualified would not result in a Material Adverse Effect.

Section 5.2         Power.

Company has the requisite limited liability company power and authority to enter into and perform its obligations under this Agreement

and the other Transaction Documents and to consummate the transactions contemplated by this Agreement and the other Transaction Documents.

Section 5.3         Authorization

and Enforceability. The execution, delivery and performance by Company of this Agreement and the other Transaction Documents to

which it is or will be at Closing a party, and the consummation of the transactions contemplated hereby and thereby, have been duly and

validly authorized by all necessary action on the part of Company. This Agreement has been duly executed and delivered by Company (and

all Transaction Documents required to be executed and delivered by Company at the Closing shall be duly executed and delivered by Company)

and this Agreement constitutes, and at the Closing such Transaction Documents shall constitute, the valid and binding obligations of Company,

enforceable in accordance with their respective terms, except as such enforceability may be limited by applicable bankruptcy or other

similar Laws affecting the rights and remedies of creditors generally as well as to general principles of public policy and/or equity

(regardless of whether such enforceability is considered in an Action in equity or at law).

Section 5.4         No

Conflicts. Except as set forth on Schedule 5.4, the execution, delivery, and performance by Company of this Agreement

and the other Transaction Documents to which it is or will be at Closing a party, and the consummation of the transactions contemplated

by this Agreement and any other Transaction Documents, do not (a) violate, conflict with or result in any breach of any provision

of the Governing Documents of any member of Company Group, except for Permitted Securities Liens and/or Permitted Encumbrances, (b) result

in the creation of any Lien on any of the Assets, the Subject Securities or any Securities of any member of Company Group, (c) violate

any Order, regulation or decree applicable to any member of Company Group as a party in interest, (d) violate any Laws applicable

to any member of Company Group or any of the Assets, (e) require that any Consent be obtained, made, or complied with, or (f) violate,

conflict with or result in any breach of any provision of, or constitute a default (or an event that with notice or passage of time or

both would give rise to a default) under, any provision of any agreement or instrument to which any member of Company Group is a party

or by which any of the Assets are bound or affected, except in each case of the foregoing clauses ‎(a) through ‎(f) for

any matters that (i) would not prevent or materially impair or delay, or would not reasonably be expected to prevent or materially

impair or delay, (x) the consummation of the transactions contemplated hereby or by the other Transaction Documents to which it is,

or will be at Closing, a party, or (y) the performance of any of Sellers’ or Company Group’s obligations and covenants

hereunder or under any such Transaction Documents or (ii) that would not be reasonably likely to result in any material liability

of the Company Group or otherwise be material to the Subject Securities, Business, Assets or the Company Group.

Section 5.5         Capitalization.

Schedule 5.5 sets forth the ownership structure of each member of Company Group, including a true and complete description

of the holder(s) of the issued and outstanding Securities of each member of the Company Group as of the Execution Date. No member

of Company Group has Subsidiaries or owns Securities in any Person except as disclosed in Schedule 5.5. Except as expressly

set forth in the Governing Documents of each member of Company Group, as applicable, (a) there are no outstanding preemptive or other

outstanding Rights with respect to the Securities of any member of Company Group, (b) there are no appreciation rights, redemption

rights, repurchase rights, agreements, arrangements, calls, subscription agreements, rights of first offer, rights of first refusal, tag

along rights, drag along rights, subscription rights or commitments or other rights or contracts of any kind or character relating to

or entitling any Person to purchase or otherwise acquire any Securities of any member of Company Group or requiring any member of Company

Group to issue, transfer, convey, assign, redeem or otherwise acquire or sell any Securities and (c) there are no member agreements,

irrevocable proxies, voting trusts or other agreements relating to the voting of any Securities of any member of the Company Group. The

Subject Securities have been duly authorized, are validly issued, fully paid and nonassessable, and no Securities of any member of Company

Group have been offered, issued, sold or transferred in violation of any applicable Law or preemptive or similar rights. Prior to the

Execution Date, Company has made available to Purchaser (or Purchaser’s Representatives) true, correct and complete copies of each

Governing Document of the members of the Company Group and all amendments or modifications made thereto at any time prior to the Execution

Date. No party thereto is in breach in any material respect of the Governing Documents of any member of the Company Group.

Section 5.6         Financial

Statements. Company has delivered to Purchaser complete and accurate copies of (a) the audited consolidated financial statements

of Company and its Subsidiaries as of the date indicated therein, which comprise the consolidated statements of financial position as

of December 31, 2024 and December 31, 2025, and related consolidated statements of operations and cash flows, together with

all related notes thereto and accompanied by reports thereon of the Company’s and such Subsidiaries’ independent auditor and

the unaudited consolidated statement of financial position of Company and such Subsidiaries as of March 31, 2026 (the “Balance

Sheet Date”) and (b) the related statements of operations and cash flows for the three (3) month period then ended

(‎(a) and ‎(b), collectively, the “Financial Statements”). Except as set forth on Schedule 5.6,

each of the Financial Statements (i) has been prepared in accordance with GAAP consistently applied and without modification of the

accounting principles used in the preparation thereof throughout the periods presented, and (ii) presents fairly in all material

respects the financial position, results of operations and cash flows of the Company and its applicable Subsidiaries as of the date and

for the period indicated therein, except that the Financial Statements as of and for the period ended on the Balance Sheet Date do not

contain footnote disclosures and other presentation items required by Accounting Principles and are subject to normal year-end adjustments.

Sellers’ and the Company Group’s systems of internal control over financial reporting are sufficient to provide reasonable

assurance in all material respects (i) that the books, records and accounts accurately and fairly reflect, in reasonable detail,

the transactions and dispositions of the Assets, (ii) that the integrity of the Financial Statements and information is maintained,

(iii) that access to the Assets is permitted only in accordance with management’s general or specific authorizations and (iv) that

such systems are adequate for a business of their size and the industry in which the Company Group operates, taken as a whole, to record

transactions as necessary in order to permit preparation of financial statements in accordance with GAAP, other than as would not reasonably

be expected to be material to the Assets, the Business, Seller or any member of the Company Group.

Section 5.7         No

Undisclosed Liabilities. There are no liabilities of or with respect to Company Group that would be required by GAAP to be reserved,

reflected, or otherwise disclosed on a balance sheet of Company Group of any kind whatsoever, whether accrued, contingent, absolute, determined,

determinable or otherwise, other than (a) as set forth on Schedule 5.7, (b) current liabilities reserved, reflected,

or otherwise disclosed in the balance sheet of Company Group as of the Balance Sheet Date included in the Financial Statements, (c) liabilities

incurred in the ordinary course of business since the Balance Sheet Date (other than such liabilities that relate to or arise from the

breach of any Contract, Permit or Law), (d) liabilities included in the calculation of Effective Time Working Capital or Transaction

Costs, (e) liabilities for Excluded Assets, (f) Company Hedges, (g) any Credit Document Indebtedness, (h) Plugging

and Abandonment or asset retirement obligation, (i) Environmental Liabilities, (j) any insurance premiums attributable to the

insurance policies held by Company Group after the Effective Time and (k) liabilities that would not have, individually or in the

aggregate, a Material Adverse Effect.

Section 5.8         Litigation.

Except as set forth on Schedule 5.8, (i) there are no Actions pending or, to Company’s Knowledge, expressly threatened

in writing by any Third Party or Governmental Authority (A) against any member of Company Group or against any of the Subject Securities

or the Assets or (B) against any member of the Company Group which seeks an Order restraining, enjoining, prohibiting, preventing

or making illegal any of the transactions contemplated by the Transaction Documents to which it is, or will be at Closing, a party, and

(ii) since January 1, 2024, there have been no material Actions against any member of Company Group that are unresolved that

remain in effect as of the Execution Date.

Section 5.9         Bankruptcy.

There are no bankruptcy, reorganization or receivership Actions pending against, being contemplated by, or, to Company’s Knowledge,

threatened in writing against, any member of Company Group. No member of the Company Group (a) is insolvent, (b) is in receivership

or dissolution, (c) has made any assignment for the benefit of creditors, (d) has admitted in writing its inability to pay its

debts as they mature, (e) has been adjudicated bankrupt or (f) has filed a petition in voluntary bankruptcy, a petition or answer

seeking reorganization, or an arrangement with creditors under the federal bankruptcy Laws or any other similar Laws, nor has any such

petition been filed against any member of the Company Group. In completing the transactions contemplated by this Agreement, Company does

not intend to hinder, delay or defraud any present or future creditors of the Company Group.

Section 5.10       Taxes.

Except, in each case, as set forth on Schedule 5.10:

(a)            All

Income Tax Returns and other material Tax Returns required to be filed by or with respect to each member of the Company Group, the Assets

or the Business have been duly and timely filed (taking into account any extension of the due date for filing), all such Tax Returns are

true, correct and complete in all material respects, and all material Taxes owed by each member of the Company Group and with respect

to the Assets or the Business which have become due and payable (whether or not reflected on any Tax Return) have been paid in full.

(b)            No

Tax examinations, audits or administrative or judicial actions are being conducted, pending or threatened in writing with respect to any

member of the Company Group.

for Permitted Securities Liens and/or Permitted Encumbrances, there are no liens or encumbrances for unpaid Taxes on the Securities or

any of the assets of the Company Group.

(d)            No

claim or deficiency for the assessment or collection of any Taxes has been asserted or proposed in writing against any member of the Company

Group or with respect to any of the Assets or the Business which claim or deficiency has not been resolved with all amounts determined

to have been due and payable having been paid in full or otherwise resolved.

(e)            No

member of the Company Group has entered into or requested or is bound by (i) any agreement or other document extending or waiving,

or having the effect of extending or waiving, the period of assessment or collection of any Taxes that is currently in effect, (ii) any

private letter ruling, technical advice memorandum or similar ruling or memorandum with any Governmental Authority with respect to any

Taxes or (iii) any Contract or other agreement or arrangement with any Governmental Authority with respect to Taxes that requires

any Person to take, or refrain from taking, any action after the Closing; and no power of attorney granted by or with respect to any member

of the Company Group in respect of any Taxes is in effect that will not be revoked or cancelled at or prior to the Closing.

(f)            All

material Taxes required to be withheld, collected or deposited by or with respect to each member of the Company Group have been withheld,

collected or deposited as the case may be, and to the extent required, have been paid to the relevant Governmental Authority.

(g)            No

member of the Company Group (i) is a party to or bound by or has any obligation under, and none of the Assets or the Business is

subject to or bound by, any Tax allocation, indemnity or sharing Contract, or any other similar agreement or arrangement relating to Taxes

(other than the Company LLC Agreement and any commercial agreements or arrangements entered into in the ordinary course of business that

are not primarily related to Taxes), (ii) is or has been a member of an affiliated, aggregate, combined, consolidated, unitary or

similar group (other than a group of which the Company is the common parent), (iii) is a partner in a partnership or joint venture,

a party to a Tax partnership agreement or other Contract, agreement or arrangement that is treated, or required to be treated, as a partnership

for U.S. federal income tax purposes or an arrangement requiring a partnership income Tax Return to be filed under Subchapter K of Chapter

1 of Subtitle A of the Code (or any corresponding or similar provision of state or local Law) (other than the Company LLC Agreement) or

(iv) otherwise has any liability for the Taxes of any Person (other than any member of the Company Group) under Treasury Regulations

Section 1.1502-6 (or any similar or corresponding provision of state or local Tax Law), as a transferee or successor, by assumption,

by Contract or other agreement (other than the Company LLC Agreement and any commercial Contract or other agreements or arrangements entered

into in the ordinary course of business that are not primarily related to Taxes) or arrangement or by operation of Law.

(h)            No

claim has been made in writing by any Governmental Authority in a jurisdiction where Tax Returns are not filed by or with respect to any

member of the Company Group, the Assets or the Business that any member of the Company Group or any of the Assets or the Business is or

may be subject to Taxation by that jurisdiction.

(i)             No

member of the Company Group will be required to include any material item of income in, or exclude any material item of deduction from,

taxable income for any Tax period (or portion thereof) ending after the Closing Date as a result of any (i) change in method of accounting

(or any corresponding or similar provision of state or local Tax Law) made prior to Closing, (ii) installment sale or open transaction

made or entered into on or prior to the Closing Date, (iii) prepaid amount received or deferred revenue accrued prior to the Effective

Time, (iv) “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision

of state or local Tax Law) executed on or prior to the Closing Date or (v) use of an improper method of accounting for a Tax period

ending on or prior to the Closing Date.

(j)             No

member of the Company Group has any outstanding liability for unclaimed property or escheat obligations.

(k)            No

member of the Company Group nor any of the Assets is currently entitled or subject to any Tax incentive, deferral, holiday or abatement

Contract or other agreement or arrangement with any Governmental Authority that would be subject to any recapture, clawback, termination

or similar adverse consequence with respect to any Tax incentive, holiday, credits or other Tax reduction, deferral or abatement Contract

or other agreement or arrangement as a result of any of the transactions contemplated by this Agreement.

(l)             No

member of the Company Group has (i) any obligations in respect of Deferred Employment Taxes or (ii) claimed any “employee

retention credit” pursuant to Section 2301 of the CARES Act.

(m)           Paloma

Permian Nominee Corporation has not been a “controlled corporation” or a “distributing corporation” in any distribution

that was purported or intended to be governed by Section 355 of the Code (or any corresponding or similar provision of state or local

Tax Law) occurring during the two-year period ending on the Execution Date or in a distribution which could otherwise constitute part

of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of the Code) in

conjunction with the transactions contemplated by this Agreement.

(n)            For

U.S. federal income tax purposes, Paloma Permian Nominee Corporation has not at any time since its formation owned any assets, had any

gross income or had any activities or operations, apart from holding legal title to certain federal oil and gas leases as an agent on

behalf of Paloma Permian AssetCo, LLC (which was properly treated at all times as the owner of such assets for U.S. federal income tax

purposes).

(o)            Except

for Paloma Permian Nominee Corporation (which is, and at all time since its formation has been, classified as a corporation), each member

of Company Group is, and at all times since its formation has been, classified either as a disregarded entity or as a partnership (in

each case, within the meaning of Treasury Regulations Sections 301.7701-2 and 301.7701-3) for U.S. federal (and applicable state and local)

income Tax purposes.

(p)            No

member of the Company Group is or has been a party to any “reportable transaction,” as defined in Section 6707A(c) of

the Code and Treasury Regulations Section 1.6011-4(b) (or any similar provision of state or local Tax law), other than a loss

transaction described in Treasury Regulations Section 1.6011-4(b).

Notwithstanding any other

provision in this Agreement, the representations and warranties in this ‎Section 5.10 and ‎Section 5.11

are the only representations and warranties of the Company in this Agreement with respect to Tax matters.

Section 5.11       Labor

and Employee Benefits.

(a)            There

are no collective bargaining or other labor union agreements to which any member of the Company Group is, or within the preceding thirty-six

(36) months, has been, a party or by which any of them are, or within the preceding thirty-six (36) months, have been, bound. As of the

date of this Agreement, no member of the Company Group (i) has, or within the preceding thirty-six (36) months, has had, any unfair

labor practice charges or complaints before the National Labor Relations Board pending or, to the Knowledge of Company, threatened against

such member of the Company Group during such period or (ii) has received any written notice of any charges, complaints or proceedings

pending or, to the Knowledge of Company, threatened against such member of the Company Group before the Equal Employment Opportunity Commission,

Department of Labor or any other Governmental Authority responsible for regulating employment practices. No collective bargaining agreement

is currently being, or within the preceding twenty-four (24) months, has been, negotiated by any member of the Company Group.

(b)            No

member of the Company Group is, or since January 1, 2023 has been, the employer of record or W-2 issuing employer of any Person.

No member of the Company Group has misclassified any Person as an independent contractor in respect of any member of the Company Group

rather than as an employee under any applicable Law.

member of the Company Group is, or has ever been, in any material violation of any applicable Laws relating to the employment of labor,

including those related to wages, hours, overtime, classification, discrimination, harassment, retaliation, immigration, occupational

health and safety, and collective bargaining. There are no pending, or to the Knowledge of Company, threatened Actions before any Governmental

Authority by any Person alleging a violation of, or non-compliance with, statutory or common laws relating to employment, employment practices,

or terms and conditions of employment.

(d)            No

member of the Company Group sponsors, maintains, contributes to, is required to contribute to, or has ever sponsored, maintained, contributed

to or been required to contribute to, any Plan for the benefit of any present or former officers, employees, directors or independent

contractors of any member of the Company Group, or under which any member of the Company Group has or may have any liability, or with

respect to which Purchaser or any of its Affiliates would reasonably be expected to have any liability, contingent or otherwise.

(e)            There

are no workers’ compensation claims, insured or uninsured, pending or, to the Knowledge of Company, threatened against any member

of the Company Group, and no member of the Company Group has any material outstanding liability with respect to any workers’ compensation

claims.

(f)            No

member of the Company Group nor any other Person or entity that, together with any member of the Company Group, is treated as a single

employer under Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA (each an “ERISA

Affiliate”) sponsors, maintains, contributes to, is required to contribute to, or, in the six years prior to the Execution

Date, has sponsored, maintained, contributed to or been required to contribute to, or could have any liability (whether contingent or

otherwise) with respect to any “employee benefit plan” (as defined in Section 3(3) of ERISA) that is subject to

Title IV of ERISA or that is subject to Section 412, 430, 431, 432 or 436 of the Code, or any “multiemployer plan” (as

defined in Section 3(37) or 4001(a)(3) of ERISA).

(g)            No

condition or obligation exists with respect to any present or former officers, employees, directors or independent contractors of any

member of the Company Group that could reasonably be expected to result in any member of the Company Group or Purchaser or any of its

Affiliates becoming liable directly, or indirectly, (by indemnification or otherwise) for any material liability, except as has already

been satisfied.

(h)            Neither

the execution of this Agreement nor the occurrence of the Closing will result in any payment in the nature of compensation that would,

either alone or in combination with any other payment, (i) result in an “excess parachute payment” within the meaning

of Section 280G(b) of the Code to any Person, (ii) accelerate the time of payment, funding or vesting of any compensation

or benefit to any Person, or (iii) increase the amount of compensation or benefits due to any Person, in each case, for which Purchaser

or any of its Affiliates (including the Company Group) will have any responsibility.

Section 5.12       Compliance

with Laws. Except as set forth on Schedule 5.12, (a) no member of Company Group, the Business or the Assets is,

or has been in the last three (3) years, in any material violation of any applicable Laws and (b) since January 1, 2023,

no member of Seller Group nor the Company Group has received any written notice alleging any unresolved material violation or material

failure to comply with any applicable Laws or that it is under investigation by any Governmental Authority for potential material non-compliance

with any applicable Law that remains unresolved.

Section 5.13       Material

Contracts.

(a)            Schedule 5.13(a) lists

all Material Contracts as of the Execution Date. Prior to the Execution Date, Company has made available to Purchaser (or Purchaser’s

Representatives) complete and accurate copies of each such Material Contract and all amendments, supplements or modifications thereto.

Except (i) as would not reasonably be expected to be adverse to the Company Group in any material respect and (ii) with respect

to unit operating agreements, pooling agreements and similar Contracts, each Material Contract is a valid and binding obligation of the

member of the Company Group that is party thereto, and is in full force and effect and enforceable in accordance with its terms against

such member of the Company Group and, to the Knowledge of Company, the other parties thereto in accordance with its respective terms,

except as such enforceability may be limited by applicable bankruptcy or other similar Laws affecting the rights and remedies of creditors

generally as well as to general principles of public policy and/or equity (regardless of whether such enforceability is considered in

an Action in equity or at law).

(b)            Except

as disclosed on Schedule 5.13(b), (A) neither any member of Company Group, nor, to Company’s Knowledge, any other

Person, is in material breach or material default under any Material Contract, (B) no written notice of material breach or material

default or to terminate, cancel, amend the terms of, renegotiate, modify, or accelerate or delay the maturity or performance of any Material

Contract (in whole or in part) has been received or delivered by Seller or any member of the Company Group under any such Material Contract,

the resolution of which is outstanding as of the date hereof and (C) no event has occurred nor has any party taken or failed to take

any action that, with the giving of notice or the passage of time or both, would constitute a material breach or material default in any

material respect by any member of the Company Group or any other party to such Material Contract or, to the Knowledge of Company, any

other party to such Material Contract.

Section 5.14       Outstanding

Capital Commitments. Except as set forth on Schedule 5.14, as of the Execution Date, there are no outstanding authorizations

for expenditure or similar requests or invoices for funding or participation under any Contract that are binding on any member of Company

Group or the Oil and Gas Properties and that any member of Company Group reasonably anticipates will individually require expenditures

by the owner of the Oil and Gas Properties attributable to periods on or after the Effective Time in excess of One Hundred Twenty Five

Thousand Dollars ($125,000) (net to Company Group’s Working Interests in such Oil and Gas Properties).

Section 5.15       Preferential

Rights. Except as set forth on Schedule 5.15, (a) there are no Preferential Rights applicable to or triggered

by the sale or transfer of the Subject Securities contemplated by this Agreement and (b) as of the Execution Date, there are no Asset

Preferential Rights or any drag-along right, tag-along right or similar rights in favor of any Person, applicable to the Assets.

Section 5.16       Wells.

Except as set forth on Schedule 5.16, (a) there are no Wells operated by any member of Company Group (or, to Company’s

Knowledge, any other Well) with respect to which (i) there is an unresolved Order or any member of Company Group has received an

unresolved notice from any Governmental Authority requiring that such Well be Plugged and Abandoned, (ii) any member of the Company

Group is as of the Execution Date presently obligated by applicable Law to Plug and Abandon, or (iii) such Well is neither in use

for purposes of production or injection, nor suspended or temporarily abandoned in accordance with applicable Laws, the terms of any applicable

Contract, or the terms of any applicable Lease, that has not been Plugged and Abandoned in accordance with such applicable Laws, Contract,

or Lease, in all material respects, as applicable, (b) no Well is subject to penalties after the Effective Time on allowables under

applicable Laws because of any overproduction occurring prior to the Effective Time, (c) to Company’s Knowledge, all Wells

have been drilled and completed, or are being drilled and completed, in a manner that is within the limits permitted by applicable Leases,

the Contracts and Permits, and (d) to Company’s Knowledge, there are no Wells that have been Plugged and Abandoned, dismantled

or abandoned, in each case, in a manner that does not comply in all material respects with applicable Laws, Contracts, and Leases.

Section 5.17       Environmental.

Except as set forth in Schedule 5.17:

(a)            the

Company Group and the Assets are, and for the past three (3) years have been, in compliance in all material respects with all Environmental

Laws including any Permits required under Environmental Law for the conduct of their operations as currently conducted, which Permits

are in full force and effect (including the timely filing of any required renewal applications) and not subject to any pending or, to

the Company’s Knowledge, threatened adverse modification, revocation or cancellation proceeding; and Company has made available

to Purchaser (or Purchaser’s Representative) true, correct and complete copies of such material Permits;

(b)            no

member of the Company Group has Released any Hazardous Substances at, under, on or from the Owned Real Property or the Leased Real Property

or, to Company’s Knowledge, any real property formerly owned, leased, occupied or operated by any member of the Company Group or

any other location, in each case in material violation of Environmental Laws or in a quantity, concentration or manner that could reasonably

be expected to give rise to any material Liability of the Company Group, including any Remediation obligations, that has not been finally

resolved;

are no Actions pending or, to Company’s Knowledge, threatened in writing against any member of the Company Group, by any Governmental

Authority or any other Person against any member of Company Group relating to any violation of or liability under any Environmental Laws

with respect to any member of Company Group’s ownership or operation of any Asset;

(d)            no

member of the Company Group has entered into any agreements, consents, Orders, decrees or judgments with any Governmental Authorities

based on any violation of Environmental Laws by, or liability under Environmental Laws of, any member of Company Group that relate to

the future use of the Assets and that require any material future Remediation; and

(e)            the

Seller has made available to Purchaser copies of all material environmental, health or safety audits, assessments, investigations, and

reports relating to the Company Group or their Assets that are in the possession or reasonable control of the Seller or any member of

the Company Group.

Section 5.18       Royalties.

Except for Suspense Funds and except as set forth on Schedule 5.18, the applicable member of the Company Group, or to Company’s

Knowledge, the applicable Third Party operator, has properly and timely paid all material Royalties payable by any member of Company Group

in accordance with the terms of the Leases in all material respects.

Section 5.19       Imbalances.

Except as set forth on Schedule 5.19 or for which the Unadjusted Purchase Price shall be adjusted pursuant to ‎Section 2.4,

there are no material Imbalances as of the date set forth on Schedule 5.19.

Section 5.20       Advance

Payments. Except as set forth in Schedule 5.20, and except for any throughput deficiencies attributable to or arising

out of any Imbalances described on Schedule 5.19, (a) with respect to any of the Wells operated by a member of the Company

Group, no member of the Company Group is obligated by virtue of any take or pay payment, advance payment or other similar payment (other

than as established by the terms of the Leases) or under any gathering, transmission or any other similar contract or agreement, or (b) with

respect to any of the Assets not operated by Company, to Company’s Knowledge, no member of the Company Group is obligated to gather,

deliver, process or transport Hydrocarbons, or deliver proceeds from the sale thereof, at some future time without receiving full payment

therefor at or after the time of delivery.

Section 5.21       Certain

Real Property Interests.

(a)            Schedule 5.21(a) identifies

each Owned Real Property held by any member of the Company Group. Each member of the Company Group has good title to all Owned Real Property

held by such member, free and clear of all Liens other than Permitted Encumbrances. As used in this Section 5.21(a), “good

title” means record title or interest that is free and clear of any Lien or defect in title (other than a Permitted Encumbrance)

as is sufficient to enable the Company Group to own, operate and maintain such Owned Real Property and conduct the Business with respect

thereto in all material respects in the ordinary course of business and consistent with past business practices, and in compliance with

applicable Laws.

(b)            Schedule 5.21(b) identifies

each Leased Real Property held by any member of the Company Group, including a complete list of all leases for such Leased Real Property.

Except as set forth on Schedule 5.21(b), (i) each member of the Company Group has a valid leasehold interest in all Leased

Real Property held by such member, in each case as to such leasehold interest, free and clear of all Liens other than Permitted Encumbrances,

(ii) as of the Execution Date, no member of the Company Group has received any unresolved written notices alleging any material default

or material breach under any lease with respect to Leased Real Property by any member of the Company Group or any of their Affiliates,

or, to Company’s Knowledge, their predecessors in interest, and (iii) as of the Execution Date, no member of the Company Group

has received any unresolved written notice seeking to terminate any lease with respect to Leased Real Property.

as set forth on Schedule 5.21(c), (i) as of the Execution Date, no member of the Company Group has received any unresolved

written notices alleging any material default or material breach under any Surface Rights and Rights of Way by any member of the Company

Group or any of their Affiliates, or, to Company’s Knowledge, their predecessors in interest, (ii) as of the Execution Date,

no member of the Company Group has received any unresolved written notice seeking to terminate any of the Surface Rights and Rights of

Way, (iii) none of the Surface Rights and Rights of Way contain express provisions that materially impede or restrict operations

(including, but not limited to, seasonal, hunting and well location restrictions) as currently conducted on the lands underlying the Leases,

and (iv) the Surface Rights and Rights of Way (together with any easements, rights of way and other rights to use the surface estate

under the Leases) constitute all of the rights that are necessary for (A) the continued operation of the Wells as currently operated

as of the Execution Date in all material respects and (B) the development of the wells contemplated in the Ordinary Course Development

Plan in all material respects.

(d)            Except

for any Permitted Encumbrances and except as set forth on Schedule 5.21(d), to Company’s Knowledge, (i) there are

no material contractual or legal restrictions that prevent any member of the Company Group from using any Owned Real Property or Leased

Real Property for its current use in all material respects and (ii) all structures and other buildings on the Owned Real Property

and Leased Real Property are in operating condition adequate to maintain normal operations as currently operated and used by the Company

Group in all material respects, and none of such structures or buildings is in need of material maintenance or repairs except for ordinary,

routine maintenance and repairs, in each case, except for ordinary wear and tear.

Section 5.22       Condemnation.

No member of the Company Group has acquired any of the Assets through the use of eminent domain or condemnation. As of the Execution Date,

there is no pending, or threatened in writing, condemnation, expropriation or similar Action (whether permanent, temporary, whole or partial)

against any member of the Company Group with respect to any of the Assets, or any part of the Assets, by any Governmental Authority.

Section 5.23       Insurance.

Set forth on Schedule 5.23 is, as of the Execution Date, a list of all material risk property, general liability, Third Party

offsite pollution liability, automobile liability, workers’ compensation and employers’ liability, umbrella/excess liability

and directors’ and officers’ liability insurance carried by, held by, or maintained for the benefit of, any member of Company

Group. As of the Execution Date, all of such policies are in full force and effect and there is no material claim pending under any such

policies as to which coverage has been denied by the insurer other than customary indications as to reservation of rights by the applicable

insurers listed on Schedule 5.23. The Company Group is not in material default under any provisions of any such insurance

policy (including any obligation to pay premiums due and payable under such policies), nor has any member of the Company Group received

written notice of cancellation of any insurance policy, nor has any member of the Company Group failed to timely report any material claim

or reportable incident under such insurance policies.

Section 5.24       Indebtedness.

Except as set forth on Schedule 5.24 and any Credit Document Indebtedness, as of the Execution Date, no member of the Company

Group has any outstanding Indebtedness.

Section 5.25       Bank

Accounts; Officers; Powers of Attorney. Schedule 5.25(a) sets forth a list of all deposit, demand, savings, passbook,

security or similar accounts maintained by any member of Company Group with any bank or financial institution, the names and addresses

of the banks or financial institutions maintaining each such account and the authorized signatories on each such account. Schedule 5.25(b) sets

forth a true, accurate and complete list of all officers, directors and managers of each member of the Company Group and a complete list

of all Persons holding powers of attorney issued by a member of the Company Group.

Section 5.26        Books

and Records. The minute books of each member of Company Group contain materially accurate and complete records of all meetings

held and action taken by the members of Company Group. Each member of Company Group maintains all books of account and other business

records (including the Records) as required by applicable Law and necessary to conduct the business of such member of Company Group in

accordance with its past practices, consistently applied, in each case, in all material respects.

Section 5.27       No

Brokers. Except for Transaction Costs, no member of the Company Group nor any of their respective Affiliates has, directly or

indirectly, agreed with or engaged any financial advisor, broker, agent, or finder, or incurred any liability, contingent or otherwise,

in favor of any such other Person, relating to the transactions contemplated by this Agreement for which Purchaser will have any responsibility.

Section 5.28       Absence

of Certain Changes. Except for the matters set forth in Schedule 5.28, (1) From the Balance Sheet Date through

the Execution Date, (a) the Business has been conducted in all material respects in the ordinary course of business consistent with

past practice and (b) there has not been any event, change, effect, development or occurrence that has had or would reasonably be

expected to have, individually or in the aggregate, a Material Adverse Effect, and (c) the Company Group has not taken any action

that would require the consent of Purchaser under Section 8.2, and (2) as of the Closing Date, from the Execution Date

through the Closing Date, the Company Group has not taken any action that would require the consent of Purchaser under Section 8.2.

Without limiting the generality of the foregoing, except as set forth in Schedule 5.28, since the Balance Sheet Date, no member

of the Company Group has changed in any material respect the accounting principles, practices or methods of any member of Company Group,

except as required by the Accounting Principles.

Section 5.29       Permits.

Each member of the Company Group holds all material Permits (including such Permits issued by the Bureau of Land Management) as are necessary

to conduct the Business generally and to own and operate the Assets as conducted or owned or operated, as applicable, during the period

in which the Company Group has owned the relevant Assets or as is now being conducted or owned or operated, as applicable. Each such Permit

or waiver is in full force in effect and each member of the Company Group, as applicable, are each in material compliance with all obligations

under such Permits or waivers, except where the failure to be in full force and effect or failure to so comply would not reasonably be

expected to be material to the Company Group.

Section 5.30       Suspense

Funds. To the Company’s Knowledge, as of the Execution Date, (a) Schedule 5.30, Part A lists all Suspense

Funds held by the Company Group as of the dates set forth on such schedule and (b) except as set forth on Schedule 5.30,

Part B, no share of Hydrocarbon proceeds attributable to the Assets to which the Company Group is entitled is currently being held

in suspense by the applicable Third-Party operator or payor thereof.

Section 5.31       Payout

Balances. To the Company’s Knowledge, Schedule 5.31 sets forth the payout balances (and the status thereof)

(net to the Working Interest of the Company Group) as of the date set forth on such schedule, for each Well listed on Exhibit A-2

that is subject to a Working Interest or Net Revenue Interest reversion or other Working Interest or Net Revenue Interest adjustment at

some level of cost recovery or payout (or passage of time or other event other than termination of a Lease, by its terms).

Section 5.32       Credit

Support Obligations. Schedule 5.32 sets forth a complete and accurate list of all cash deposits, guarantees, letters

of credit, surety bonds, and other forms of credit assurance or credit support (collectively, “Credit Support”)

provided by any member of the Company Group, or by any member of the Seller Group or any other Person on behalf of any member of the Company

Group in support of the obligations of the Company Group to any Governmental Authority, contract counterparty, or other Person related

to the ownership or operation of the Assets, including identification of the type and amount of such Credit Support and the date such

Credit Support was provided.

Section 5.33       Intellectual

Property.

(a)            The

Company Group owns, or has valid licenses or other rights to use, all material Intellectual Property (if any) necessary for the operation

of the Business as currently conducted (collectively, the “Company Intellectual Property”), subject to any limitations

contained in the agreements governing the use of the same, free and clear of all Liens (other than Permitted Encumbrances).

(b)            Except

for such matters that are not reasonably expected to be material to the Company Group, no member of the Company Group nor any of their

Affiliates has received any written notice (i) alleging infringement, misappropriation or material violation of the Intellectual

Property of any other Person or challenging the use or validity of any material Intellectual Property by the Company Group, (ii) to

Company’s Knowledge, no Third Party is infringing on any material Intellectual Property owned by the Company and (iii) of any

default or any event that with notice or lapse of time, or both, would constitute a material default under any material Contract governing

Company Intellectual Property.

Section 5.34       Lease

Status. Except as set forth on Schedule 5.34, (a) (i) as of the Execution Date, no member of the Company

Group has received any unresolved written notices alleging any material default or breach under any Lease by any member of the Company

Group or any of their Affiliates, or, to Company’s Knowledge, their predecessors in interest and (ii) no Company Group member

is and, to Company’s Knowledge as of the Execution Date, no other party to any Lease is in material default or material breach of

the terms, provisions or conditions of the Leases; (b) as of the Execution Date, no member of the Company Group has received any

unresolved written notice seeking to terminate any of the Leases; (c) none of the Leases contain express provisions obligating any

member of the Company Group to drill any well on the Assets (other than provisions requiring optional drilling as a condition of maintaining

or earning all or a portion of a presently non-producing Lease and/or offset drilling provisions that require drilling upon actual drainage);

(d) (i) no Lease operated by a member of the Company Group is being maintained in full force and effect by the payment of shut-in

royalties or other payments in lieu of operations or production, (ii) as of the Execution Date, to any Seller’s Knowledge,

no Lease in which the Company owns an interest, and which is operated by a Third Party operator, is being maintained in full force and

effect by the payment of shut-in royalties or other payments in lieu of operations or production and (iii) no Lease operated by a

member of the Company Group is being maintained by virtue of a well on the subject lands of such Lease that is capable of production but

remains uncompleted; and (e) all bonuses, rentals and other similar payments due under the Leases operated by a member of the Company

Group, or, to Company’s Knowledge operated by a Third Party, have been paid in accordance with the terms of such Leases in all material

respects.

Section 5.35       Sufficiency

of Assets; No Affiliate Assets. The Assets, when utilized by a labor force substantially similar to that utilized by the Company

Group and Paloma Resources in connection with the conduct of the Business as of the Execution Date, together with the Excluded Assets

and the rights and services made available under the Management Services Agreement and the Transition Services Agreement, are sufficient

in all material respects for the continued conduct of the Business after the Closing in substantially the same manner as currently conducted

by the Company Group as of the Execution Date, ordinary wear and tear and Casualty Events excepted and taking into account the age, history

and use of such Assets.

Section 5.36       Personal

Property. All of the personal property included in the Assets of the Company Group is in an operable state of repair adequate

to maintain normal operations as currently operated and used by or on behalf of the Company Group, in all material respects, ordinary

wear and tear excepted.

Section 5.37       Consents.

Except (a) as set forth on Schedule 5.37, and (b) Consents that are customarily obtained after the Closing, there

are no Consents required to be obtained applicable to the transactions contemplated by this Agreement.

Section 5.38       No

Casualty Event. As of the Execution Date, no Seller has any Knowledge of the threat, occurrence or pendency of, any Casualty Event

with damages estimated to exceed $125,000 affecting all or any portion of the Assets.

Section 5.39       Regulatory

Matters. No member of the Company Group, is engaged in the transportation of natural gas in interstate commerce under the Natural

Gas Act of 1938 (as amended), or uses any of the Assets in a manner that subjects it or the Assets to the jurisdiction of the Federal

Energy Regulatory Commission under the Natural Gas Act of 1938 (as amended), Natural Gas Policy Act of 1978 (as amended), or Interstate

Commerce Act (as amended).

Section 5.40       Specified

Matters. Except as set forth on Schedule 5.40, there are no losses or liabilities incurred by, suffered by or owing

by the Company Group caused by, arising out of, or resulting from the following matters to the extent attributable to the ownership, use

or operation of the Assets: (a) any personal injury or death resulting from or attributable to any member of the Company Group’s

ownership or operation of the Assets prior to the Closing Date; (b) any material monetary fines or penalties or criminal sanctions

imposed on the Company Group, to the extent resulting from any pre-Closing violation of Law (excluding any Environmental Law); (c) any

transportation or disposal, or arrangement for transport or disposal, of Hazardous Substances (other than Hydrocarbons) from any Asset

of the Company Group to a site that is not an Asset prior to Closing that is (or if known, would be) in material violation of applicable

Environmental Law or that has given or would give rise to a material liability under applicable Environmental Law; (d) in connection

with the Excluded Assets; (e) the failure to pay, underpayment, or incorrect payment of any and all Royalties with respect to any

of the Oil and Gas Properties in each case to the extent (i) not attributable to Suspense Funds (other than resulting from the failure

to escheat such amounts to the applicable Governmental Authority in accordance with applicable Law), (ii) attributable to the period

that Hydrocarbons were produced and marketed from any Oil and Gas Property during any member of Company Group’s period of ownership

of the Assets prior to the Effective Time and (iii) chargeable to any member of Company Group’s Working Interest in the Assets,

but only to the extent not taken into account in the calculation of Effective Time Working Capital; (f) the failure to comply with

any Asset Preferential Right or Punitive Consent in connection with the acquisition of any of the Assets by any member of the Company

Group occurring prior to the Closing Date; (g) the Actions set forth on Part 1 of Schedule 5.8 (or not set forth on Schedule

5.8 but required to be set forth on Schedule 5.8 pursuant to the terms of Section 5.8); and (h) any Third

Party Claims for gross negligence or willful misconduct by the Company Group but only to the extent such Damages, obligations or liabilities

relate or arise in connection with the ownership or operation of the Assets prior to the Closing Date.

Section 5.41       Special

Warranty. As of the Effective Time the Company Group has (and through and until the consummation of the Closing, the Company Group

will have), Record/Beneficial Title to the Assets, solely to the extent that such Assets have a positive Allocated Value, in each case,

unto Purchaser from and against the lawful claims of any Person by, through or under any member of the Company Group or their Affiliates,

but not otherwise, subject however, to Permitted Encumbrances (the warranty set forth in this ‎Section 5.41, the “Special

Warranty of Title”).

Section 5.42       Non-Consent

Operations. Except as set forth on Schedule 5.42 or as reflected in the before- and after-payout Working Interests

and Net Revenue Interests set forth in Exhibit A-2, as of the Execution Date, no material operations are being conducted or

are proposed to be conducted on the Oil and Gas Properties with respect to which any member of the Company Group has, during the period

such member of the Company Group has owned the Oil and Gas Properties, elected to be a nonconsenting party under the applicable operating

agreement or forced pooling order and with respect to which Company’s rights have not yet reverted to the Company Group prior to

the Execution Date.

Section 5.43       Anti-Corruption

Laws. No member of the Company Group, nor any of their directors, officers, employees, or, to Company’s Knowledge, any of

their agents or other Third Party representatives acting on its behalf has, in connection with the Business: (a) used any funds for

unlawful contributions, unlawful gifts, unlawful entertainment, or other unlawful expenses related to political activity; (b) made

or offered to make any unlawful payment or provided or offered to provide anything of value to any Government Official in violation of

applicable Laws in any material respect; or (c) otherwise violated in any material respects any applicable Laws relating to bribery,

public corruption or anti-corruption, including the U.S. Foreign Corrupt Practices Act of 1977.

Section 5.44       Economic

Sanctions. During the five (5) years preceding the Execution Date, no member of the Company Group nor any of their officers,

directors, employees, or to Company’s Knowledge, agents, have transferred any funds to any Person (i) in material violation

of any applicable Law relating to economic sanctions, including but not limited to the laws, regulations, orders and directives administered

by the Office of Foreign Assets Control (“OFAC”) of the U.S. Treasury Department (“Sanctions Laws”);

(ii) who is the subject or target of sanctions prohibitions or restrictions under any Sanctions Laws (including but not limited to

being, or being owned 50% or more by one or more Specially Designated Nationals (as defined by OFAC) or other sanctions targets) in material

violation of applicable Sanctions Laws; or (iii) who is located, organized, or resident in any country or territory subject to a

comprehensive embargo under any Sanctions Laws (currently, Cuba, Iran, North Korea, the Crimea region of Ukraine, the so-called Donetsk

People’s Republic, and the so-called Luhansk People’s Republic) in material violation of applicable Sanctions Laws.

Section 5.45       International

Trade Laws. During the five (5) years preceding the Execution Date, no member of the Company Group nor any of their officers,

directors, employees, or to Company’s Knowledge, agents, have violated and are not in violation of any applicable International

Trade Laws, in each case, in any material respect.

Section 5.46       Data

Privacy.

(a)            The

Company Group owns, leases, licenses, or otherwise has the legal right to use all Business Systems. Except as would not, individually

or in the aggregate, be material to the Company Group, taken as a whole, the Company Group has caused the implementation of commercially

reasonable security, disaster recovery and business continuity procedures and facilities, designed to protect and provide backup, security

and disaster recovery for the Business Systems and the data contained therein or transmitted thereby.

(b)            Except

as would not, individually or in the aggregate, be material to the Company Group, taken as a whole, (i) the Company Group takes commercially

reasonable actions to protect the security and integrity of the Business Systems and the data stored or contained therein or transmitted

thereby including by implementing procedures customary in the industry for preventing unauthorized access and the introduction of any

virus, worm, Trojan horse or similar disabling code or program (“Malicious Code”), and the taking and storing

on-site and off-site of back-up copies of critical data; and (ii) there is no Malicious Code in any of the Business Systems.

member of the Company Group and the conduct of the business of each member of the Company Group are in material compliance with, and,

for the last two (2) years, have been in material compliance with, all Data Security Requirements. Except as would not, individually

or in the aggregate, be material to the Company Group, taken as a whole, for the last two (2) years, (i) there have not been

any material data security breaches, unauthorized access, destruction, damage, disclosure, loss, corruption, or alteration of any Business

System or data; and (ii) there have been no notices received by the Company alleging a material breach by the Company of any Data

Security Requirements; and (iii) the Company has not sent any notices required by Data Security Requirements.

Section 5.47       Operatorship.

No member of the Company Group or Seller has received written notice of any pending vote to have any Company Group member removed as

the “operator” under any joint operating agreement or unit agreement applicable to the Assets for which such Company Group

Member is currently designated as the “operator”.

Section 5.48       Certain

Transfers. With respect to any Oil and Gas Properties for which any member of the Company Group owned any depths other than the

Subject Formations during the twelve (12) month period prior to the Execution Date, except (a) as set forth on Schedule 5.48,

(b) any fee mineral interests that were subsequently leased backed to Seller or its Affiliates pursuant to a Lease set forth on

Exhibit A-1, (c) Permitted Encumbrances, Seller has not intentionally transferred, leased, subleased, assigned or sold

any material portion of such Oil and Gas Properties with respect to depths other than the Subject Formations within such twelve (12)

month period prior to the Execution Date.

Article 6

Representations

and Warranties of Purchaser

Purchaser represents and warrants

to each Seller and Company as of the Execution Date and as of Closing (or, with respect to any representation or warranty made as of specified

date, as of such date) the following:

Section 6.1         Existence

and Qualification. Purchaser is a limited liability company duly organized, validly existing and in good standing under the Laws

of the state of its organization (as set forth in the introductory paragraph) and is duly qualified to carry on its business in the states

where it is required to do so, except in any state where the failure to be so duly qualified and in good standing would not reasonably

be expected to materially delay, impair, make illegal or otherwise interfere with the ability of Purchaser to consummate the transactions

contemplated by the Transaction Documents to which it is a party or otherwise prevent its ability to perform in all material respects

its obligations under the Transaction Documents to which it is or will be at Closing a party.

Section 6.2         Power.

Purchaser has the requisite limited liability company power and authority to enter into and perform its obligations under this Agreement

and the other Transaction Documents to which it is or will be at Closing a party and to consummate the transactions contemplated by this

Agreement and the other Transaction Documents to which it is or will be at Closing a party.

Section 6.3         Authorization

and Enforceability. The execution, delivery and performance of this Agreement and the other Transaction Documents, and the consummation

of the transactions contemplated hereby and thereby, have been duly and validly authorized by all necessary action on the part of Purchaser.

This Agreement has been duly executed and delivered by Purchaser (and all Transaction Documents required to be executed and delivered

by Purchaser at Closing shall be duly executed and delivered by Purchaser) and this Agreement constitutes, and at the Closing such Transaction

Documents shall constitute, the valid and binding obligations of Purchaser, enforceable in accordance with their respective terms, except

as such enforceability may be limited by applicable bankruptcy or other similar Laws affecting the rights and remedies of creditors generally

as well as to general principles of public policy and/or equity (regardless of whether such enforceability is considered in a proceeding

in equity or at law).

Section 6.4         No

Conflicts. The execution, delivery and performance of this Agreement and the other Transaction Documents by Purchaser and the

consummation of the transactions contemplated by this Agreement and any other Transaction Documents, do not (a) violate, conflict

with or result in any breach of any provision of the Governing Documents of Purchaser or its Affiliates, (b) violate any Order, regulation

or decree applicable to Purchaser or its Affiliates as a party in interest, (c) violate any Law applicable to Purchaser or its Affiliate,

(d) require that any Consent be obtained, made, or complied with or (e) violate any provision of any agreement or instrument

to which Purchaser or its Affiliates is a party, except in each case of the foregoing clauses that prevents or materially impairs or delays,

or would reasonably be expected to prevent or materially impair or delay, the consummation of the transactions contemplated hereby or

the performance of any Purchaser’s obligations and covenants hereunder that are to be performed at Closing.

Section 6.5         Defense

Production Act. Purchaser is not a foreign person as such term is defined in Section 721 of the Defense Production Act of

1950, as amended, 50 U.S.C. App. 2170 and the regulations promulgated thereunder, 31 C.F.R. Part 800.

Section 6.6         Litigation.

There are no Actions pending or, to such Purchaser’s Knowledge, expressly threatened in writing by any Third Party or Governmental

Authority against Purchaser (a) which seeks an Order restraining, enjoining, prohibiting, preventing or making illegal any of the

transactions contemplated by the Transaction Documents or (b) that prevents or materially impairs or delays, or would reasonably

be expected to prevent or materially impair or delay, the consummation of the transactions contemplated hereby or the performance of any

Purchaser’s obligations and covenants hereunder that are to be performed at Closing.

Section 6.7         Bankruptcy.

There are no bankruptcy, reorganization or receivership Actions pending against, being contemplated by or, to Purchaser’s Knowledge,

threatened in writing against Purchaser or any Affiliate thereof. No Action is contemplated by Purchaser or its Affiliates in which Purchaser

or any of its Affiliates would be declared insolvent or subject to the protection of any bankruptcy or reorganization Laws or procedures.

Neither Purchaser nor any of its Affiliates (a) is insolvent, (b) is in receivership or dissolution, (c) has made any assignment

for the benefit of creditors, (d) has admitted in writing its inability to pay its debts as they mature, (e) has been adjudicated

bankrupt and (f) has filed a petition in voluntary bankruptcy, a petition or answer seeking reorganization, or an arrangement with

creditors under the federal bankruptcy Laws or any other similar Laws, nor has any such petition been filed against Purchaser or any of

its Affiliates. In completing the transactions contemplated by this Agreement, Purchaser does not intend to hinder, delay or defraud any

present or future creditors of Purchaser or its Affiliates.

Section 6.8         Financing.

Purchaser has, and will at Closing have, sufficient cash, available lines of credit (including funds available pursuant to any debt offering

or other debt financing transaction, the “Financing”) or other sources of immediately available funds to enable

Purchaser to (a) fund the Deposit in accordance with Section 2.3(a), (b) pay the Closing Payment on the Closing

Date to or on behalf of Sellers and (c) pay and perform all other obligations of Purchaser hereunder and under the other Transaction

Documents delivered hereunder by Purchaser.

Section 6.9         Investment

Intent. Purchaser is acquiring the Subject Securities for its own account and not with a view to their sale or distribution in

violation of the Securities Act, any applicable state blue sky Laws, or any other applicable securities Laws. Purchaser has made, independently

and without reliance on Sellers or any member of Company Group (except to the extent that Purchaser has relied on the representations

and warranties in this Agreement or other Transaction Document), its own analysis of the Subject Securities, each member of Company Group,

and the Assets for the purpose of acquiring the Subject Securities, and Purchaser has had reasonable and sufficient access to documents,

other information and materials as it considers appropriate to make its evaluations. Purchaser acknowledges that the Subject Securities

are not registered pursuant to the Securities Act and that none of the Subject Securities may be transferred, except pursuant to an effective

registration statement or an applicable exemption from registration under the Securities Act. Purchaser is an “accredited investor”

as defined under Rule 501 promulgated under the Securities Act.

Section 6.10       Independent

Evaluation.

(a)            Purchaser

is a sophisticated, experienced and knowledgeable investor in the oil and gas business. In entering into this Agreement, Purchaser has

relied solely upon Purchaser’s own expertise and legal, tax, reservoir engineering and other professional counsel concerning this

transaction, the Subject Securities, each member of Company Group and the Assets and the value thereof. Purchaser acknowledges and affirms

that it has completed such independent investigation, verification, analysis and evaluation of the Subject Securities, each member of

Company Group, and the Assets and has made all such reviews and inspections of the Subject Securities, each member of Company Group, and

the Assets as it has deemed necessary or appropriate to enter into this Agreement, at Closing, Purchaser shall have completed, or caused

to be completed, its independent investigation, verification, analysis and evaluation of the Subject Securities, each member of Company

Group, and the Assets and made all such reviews and inspections of the Subject Securities, each member of Company Group, and the Assets

as Purchaser has deemed necessary or appropriate to consummate the transaction.

(b)            Purchaser

understands and acknowledges that neither the SEC nor any federal, state, or foreign agency has passed upon the Subject Securities, any

member of Company Group, and the Assets or made any finding or determination as to the fairness of an investment in the Subject Securities,

any member of Company Group, and the Assets or the accuracy or adequacy of the disclosures made to Purchaser.

Section 6.11       No

Brokers. Neither Purchaser nor any of its Affiliates has, directly or indirectly, agreed with or engaged any financial advisor,

broker, agent, or finder, or incurred any liability, contingent or otherwise, in favor of any other such Person relating to the transactions

contemplated by this Agreement for which any Seller will have any responsibility.

Section 6.12       Qualification.

Purchaser Operating Affiliate is, or as of the Closing will be qualified under all applicable Laws to operate the Assets (if any) operated

by Paloma Resources immediately prior to Closing and own any and all Assets assigned to Purchaser Operating Affiliate at Closing.

Section 6.13       U.S.

Person. Purchaser (or, if Purchaser is treated as an entity disregarded as separate from its regarded tax owner for U.S. federal

Income Tax purposes, the Person that is treated as its regarded tax owner for such purposes) is a “United States person” as

defined in Section 7701(a)(30) of the Code.

Article 7

Disclaimers

and Acknowledgements

Section 7.1         General

Disclaimers. EXCEPT AS EXPRESSLY REPRESENTED OTHERWISE IN ‎Article 4,

‎Article 5, THE SPECIAL WARRANTY OF TITLE, AND THE CERTIFICATE OF SELLERS

TO BE DELIVERED AT THE CLOSING, WITHOUT LIMITING IN ANY RESPECT PURCHASER’S RIGHTS UNDER THE R&W INSURANCE POLICY AND WITHOUT

LIMITING THE GENERALITY OF THE FOREGOING, (a) NO MEMBER OF THE SELLER GROUP NOR COMPANY MAKES, EACH SELLER AND COMPANY EXPRESSLY

DISCLAIM, AND PURCHASER WAIVES AND REPRESENTS AND WARRANTS THAT PURCHASER HAS NOT RELIED UPON, ANY REPRESENTATION OR WARRANTY, EXPRESS

OR IMPLIED, IN THIS AGREEMENT OR ANY OTHER INSTRUMENT, AGREEMENT OR CONTRACT DELIVERED HEREUNDER OR IN CONNECTION WITH THE TRANSACTIONS

CONTEMPLATED HEREUNDER OR THEREUNDER, INCLUDING ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED AS TO (i) ANY MEMBER OF THE

SELLER GROUP, (ii) ANY TITLE TO ANY OF THE ASSETS OR THE EXISTENCE OR NON-EXISTENCE OF ANY TITLE DEFECTS OR OTHER ENCUMBRANCES OR

BURDENS ON THE ASSETS, (iii) THE CONTENTS, CHARACTER OR NATURE OF ANY DESCRIPTIVE MEMORANDUM, ANY REPORT OF ANY PETROLEUM ENGINEERING

CONSULTANT OR ANY GEOLOGICAL, SEISMIC DATA, RESERVE DATA, RESERVE REPORTS OR RESERVE INFORMATION (ANY ANALYSIS OR INTERPRETATION THEREOF)

RELATING TO THE ASSETS, (iv) THE QUANTITY, QUALITY, OR RECOVERABILITY OF HYDROCARBONS IN OR FROM THE ASSETS, (v) THE EXISTENCE

OF ANY PROSPECT, RECOMPLETION, INFILL OR STEP-OUT DRILLING OPPORTUNITIES, (vi) ANY ESTIMATES OF THE VALUE OF THE SUBJECT SECURITIES

OR THE ASSETS OR FUTURE REVENUES GENERATED BY THE ASSETS, (vii) THE PRODUCTION OF PETROLEUM SUBSTANCES FROM THE ASSETS, OR WHETHER

PRODUCTION HAS BEEN CONTINUOUS OR IN PAYING QUANTITIES, OR ANY PRODUCTION OR DECLINE RATES, (viii) THE MAINTENANCE, REPAIR, CONDITION,

QUALITY, SUITABILITY, DESIGN OR MARKETABILITY OF THE ASSETS, (ix) INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHT, (x) ANY BULK

SALES LAWS OR SIMILAR LAWS AND/OR ANY OTHER RECORD, FILES, MATERIALS OR INFORMATION (INCLUDING AS TO THE ACCURACY, COMPLETENESS, OR CONTENTS

OF THE RECORDS) THAT MAY HAVE BEEN MADE AVAILABLE OR COMMUNICATED TO PURCHASER GROUP OR THEIR REPRESENTATIVES IN CONNECTION WITH

THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY DISCUSSION OR PRESENTATION RELATING THERETO, AND (b) EACH SELLER AND COMPANY

FURTHER DISCLAIMS, AND PURCHASER WAIVES, ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, OF MERCHANTABILITY, FITNESS FOR A PARTICULAR

PURPOSE, OR CONFORMITY TO MODELS OR SAMPLES OF MATERIALS OF ANY EQUIPMENT, IT BEING EXPRESSLY UNDERSTOOD AND AGREED BY THE PARTIES

HERETO THAT EXCEPT AS SET FORTH ABOVE, AND SUBJECT TO PURCHASER’S RIGHTS AND REMEDIES PURSUANT TO Article 3

AND THE R&W INSURANCE POLICY, THE SUBJECT SECURITIES AND THE ASSETS ARE BEING TRANSFERRED “AS IS, WHERE IS,” WITH ALL

FAULTS AND DEFECTS, AND THAT PURCHASER HAS MADE OR CAUSED TO BE MADE SUCH INSPECTIONS AS PURCHASER DEEMS APPROPRIATE. PURCHASER SPECIFICALLY

DISCLAIMS ANY OBLIGATION OR DUTY BY ANY SELLER, COMPANY OR ANY MEMBER OF THE SELLER GROUP TO MAKE ANY DISCLOSURES OF FACT NOT REQUIRED

TO BE DISCLOSED PURSUANT TO THE EXPRESS REPRESENTATIONS AND WARRANTIES SET FORTH HEREIN AND PURCHASER EXPRESSLY ACKNOWLEDGES AND COVENANTS

THAT PURCHASER DOES NOT HAVE AND WILL NOT HAVE AND WILL NOT ASSERT ANY CLAIM, DAMAGES, OR EQUITABLE REMEDIES WHATSOEVER AGAINST ANY MEMBER

OF THE SELLER GROUP WITH RESPECT TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY EXCEPT FOR CLAIMS, DAMAGES AND EQUITABLE REMEDIES

AGAINST ANY SELLER OR COMPANY FOR BREACH OF AN EXPRESS REPRESENTATION, WARRANTY OR COVENANT OF ANY SELLER UNDER THIS AGREEMENT AND TO

THE EXTENT PROVIDED HEREIN OR UNDER THE R&W INSURANCE POLICY.

Section 7.2         Environmental

Disclaimers. Purchaser acknowledges that (a) the Assets have been used for exploration, development, production, gathering

and transportation of oil and gas and other Hydrocarbons and there may be petroleum, produced water, wastes, asbestos-containing materials,

scale, NORM, Hazardous Substances or other substances or materials located in, on or under the Assets or associated with the Assets; (b) the

sites included in the Assets may contain asbestos, NORM or other Hazardous Substances; (c) NORM may affix or attach itself to the

inside of wells, pipelines, materials, and equipment as scale, or in other forms; (d) the wells, materials and equipment located

on the Assets or included in the Assets may contain NORM, asbestos and other wastes or Hazardous Substances; (e) NORM-containing

material or other wastes or Hazardous Substances may have come in contact with various environmental media, including water, soils or

sediment; and (f) special procedures may be required for the assessment, Remediation, removal, transportation, or disposal of environmental

media, wastes, asbestos, NORM and other Hazardous Substances from the Assets. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT

OR ANY OTHER TRANSACTION DOCUMENT, BUT WITHOUT LIMITING IN ANY RESPECT PURCHASER’S RIGHTS UNDER Article 3,

PURCHASER’S RIGHTS UNDER THE R&W INSURANCE POLICY, EXCEPT AS EXPRESSLY SET FORTH IN ‎Section 5.17,

NONE OF ANY SELLER OR COMPANY MAKES, AND EACH SELLER AND COMPANY EXPRESSLY DISCLAIMS, AND PURCHASER WAIVES ANY REPRESENTATION OR WARRANTY,

EXPRESS OR IMPLIED, WITH RESPECT TO ANY ENVIRONMENTAL DEFECT, ENVIRONMENTAL LIABILITIES, RELEASE OF HAZARDOUS SUBSTANCES OR ANY OTHER

ENVIRONMENTAL CONDITION, INCLUDING THE PRESENCE OR ABSENCE OF ASBESTOS OR NORM IN OR ON THE ASSETS IN QUANTITIES ALLOWED UNDER APPLICABLE

LAW FOR OILFIELD OPERATIONS IN THE AREAS WHERE THE ASSETS ARE LOCATED. AS OF CLOSING, PURCHASER SHALL HAVE INSPECTED AND WAIVED ITS RIGHT

TO INSPECT THE ASSETS FOR ALL PURPOSES AND SATISFIED ITSELF AS TO THEIR PHYSICAL AND ENVIRONMENTAL CONDITION, BOTH SURFACE AND SUBSURFACE, INCLUDING

CONDITIONS SPECIFICALLY RELATING TO THE PRESENCE, RELEASE OR DISPOSAL OF HAZARDOUS SUBSTANCES, SOLID WASTES, ASBESTOS, OTHER MAN-MADE

FIBERS AND NORM. PURCHASER IS RELYING SOLELY UPON THE TERMS OF THIS AGREEMENT, THE R&W INSURANCE POLICY AND ITS OWN INSPECTION OF

THE ASSETS.

Section 7.3         Calculations,

Reporting and Payments. PURCHASER ACKNOWLEDGES AND AGREES THAT PURCHASER CANNOT RELY ON OR FORM ANY CONCLUSIONS FROM ANY

SELLER’S (OR ITS REPRESENTATIVES’, DIRECT OR INDIRECT OWNERS’ OR AFFILIATES’ (INCLUDING, FOR THIS PURPOSE, THE

COMPANY’S)) METHODOLOGIES FOR THE CALCULATION AND REPORTING OF (A) PRODUCTION OR ROYALTIES ATTRIBUTABLE TO PRODUCTION PRIOR

TO THE EFFECTIVE TIME OR (B) TAXES THAT WERE UTILIZED FOR ANY TAX PERIOD (OR PORTION THEREOF) BEGINNING PRIOR TO THE CLOSING DATE

FOR PURPOSES OF CALCULATING AND REPORTING TAXES ATTRIBUTABLE TO ANY TAX PERIOD (OR PORTION THEREOF) BEGINNING AFTER THE CLOSING DATE, IT

BEING UNDERSTOOD THAT PURCHASER MUST MAKE ITS OWN DETERMINATIONS AS TO THE PROPER METHODOLOGIES THAT CAN OR SHOULD BE USED FOR ANY SUCH

LATER TAX RETURN.

Section 7.4         Changes

in Prices; Well Events. EXCEPT AS OTHERWISE SET FORTH IN THIS AGREEMENT, PURCHASER ACKNOWLEDGES THAT IT SHALL ASSUME ALL RISK

OF LOSS WITH RESPECT TO: (A) CHANGES IN COMMODITY OR PRODUCT PRICES AND ANY OTHER MARKET FACTORS OR CONDITIONS FROM AND AFTER THE

EFFECTIVE TIME; (B) PRODUCTION DECLINES OR ANY ADVERSE CHANGE IN THE PRODUCTION CHARACTERISTICS OR DOWNHOLE CONDITION OF ANY WELL, INCLUDING

ANY WELL WATERING OUT, OR EXPERIENCING A COLLAPSE IN THE CASING OR SAND INFILTRATION, FROM AND AFTER THE EXECUTION DATE AND (C) DEPRECIATION

OF ANY ASSETS THAT CONSTITUTE PERSONAL PROPERTY THROUGH ORDINARY WEAR AND TEAR.

Section 7.5         No

Fraud Waiver. NOTHING CONTAINED IN THIS AGREEMENT SHALL BE DEEMED TO LIMIT OR OTHERWISE PRECLUDE CLAIMS FOR FRAUD (AS DEFINED

IN Section 1.1).

Section 7.6         Certain

Information. EXCEPT AS AND TO THE LIMITED EXTENT EXPRESSLY SET FORTH IN ‎Article 4

OR ‎Article 5, (a) NO SELLER MAKES ANY REPRESENTATIONS OR WARRANTIES,

EXPRESS, STATUTORY OR IMPLIED, AND (b) EACH SELLER EXPRESSLY DISCLAIMS ALL LIABILITY AND RESPONSIBILITY FOR ANY REPRESENTATION, WARRANTY,

STATEMENT OR INFORMATION MADE OR COMMUNICATED (ORALLY OR IN WRITING) TO PURCHASER OR ANY OF ITS AFFILIATES, OR ITS OR THEIR EMPLOYEES,

AGENTS, OFFICERS, CONSULTANTS, ADVISORS OR REPRESENTATIVES (INCLUDING ANY OPINION, INFORMATION, PROJECTION OR ADVICE THAT MAY HAVE

BEEN PROVIDED TO PURCHASER BY ANY MEMBER OF THE SELLER GROUP).

Section 7.7         Conspicuousness.

EACH SELLER, COMPANY AND PURCHASER AGREE THAT, TO THE EXTENT REQUIRED BY APPLICABLE LAW TO BE EFFECTIVE, THE DISCLAIMERS OF CERTAIN REPRESENTATIONS

AND WARRANTIES CONTAINED IN THIS ‎Article 7 AND THE REST OF THIS AGREEMENT

ARE “CONSPICUOUS” DISCLAIMERS FOR THE PURPOSE OF ANY APPLICABLE LAW.

Article 8

Covenants

of the Parties

Section 8.1         Access.

(a)            Upon

execution of this Agreement until the Closing Date, Company shall give Purchaser and its Representatives reasonable access to, and ability

to make copies of, electronic copies of the Records (and to physical copies of such Records to the extent electronic copies are not available)

in any member of Company Group’s possession and any Assets operated by any member of Company Group and knowledgeable personnel who

are familiar with the Assets, in each case during Company Group’s normal business hours, solely for the purpose of conducting a

confirmatory review of the Assets, in each case to the extent that Company Group may provide such access without (i) violating applicable

Laws or breaching any Contracts, (ii) waiving any legal privilege of any Seller or any member of Company Group, any of their respective

Affiliates or their respective counselors, attorneys, accountants or consultants, or (iii) violating any obligations of any Seller

or any member of Company Group to any Third Party. Such access shall be granted to Purchaser virtually to the extent reasonably practicable

and otherwise in the offices of Company located in Houston, Texas and on the premises of the Oil and Gas Properties (if any) that are

operated by any member of Company Group; provided, however, in no event shall any Seller or any member of Company Group

be obligated to provide, and Purchaser and Purchaser’s Representatives shall have no right to receive or review (x) any Excluded

Records, (y) prior to Closing, any emails of any member of Company Group, or (z) any personnel or employee related records.

To the extent that any Third Parties operate the Assets, Company’s obligations to provide Purchaser with access to such Assets shall

be limited to requesting that the applicable Third Party operator provide Purchaser’s Representatives with access to such Assets.

All investigations and due diligence conducted by Purchaser or any of Purchaser’s Representatives with respect to the Assets shall

be conducted at Purchaser’s sole cost, risk and expense and any conclusions made from any examination done by Purchaser or any of

Purchaser’s Representatives shall result from Purchaser’s own independent review and judgment. Each Seller or its designee

shall have the right to accompany Purchaser and Purchaser’s Representatives whenever they are on site on the Assets and are permitted

to collect split test samples if any are collected pursuant to approved invasive activities under this ‎Section 8.1(a).

Purchaser’s investigation and review shall be conducted in a manner that reasonably minimizes interference with the ownership or

operation of the Assets or the Business and Purchaser’s inspection right with respect to the environmental condition of the Assets

shall be limited to conducting a Phase I Environmental Site Assessment in accordance with the ASTM International Standard Practice Environmental

Site Assessments: Phase I Environmental Site Assessment Process (Publication Designation: E1527 or E2247) or a similar visual assessment

that does not include sampling or testing of any environmental media (“Phase I”). No Purchaser Representative

shall be entitled to conduct any sampling or testing of any environmental media in a manner similar to ASTM International Practice Environmental

Site Assessments: Phase II Environmental Site Assessment Process (Publication Designation: E1903), or any other invasive or intrusive

testing, or sampling on or relating to the Assets (“Phase II”), without submitting a justification and proposed

work plan for the proposed Phase II and obtaining the prior written consent of Company, which consent may be granted, conditioned, or

withheld at the sole discretion of Company; provided, however, in the event Purchaser’s Phase I Environmental Site

Assessment has identified a Recognized Environmental Condition (as determined under A.S.T.M. Publication Designation: E1527-13) with respect

to any of the Assets that is reasonably expected to require Remediation with the Lowest Cost Response being in excess of $1,000,000, then

Company’s prior written consent shall not be required. Purchaser shall furnish to each Seller and Company free of costs, a copy

of all draft and final reports and test results prepared by or for Purchaser related to Purchaser’s diligence and investigation

of the Assets, including any and all Phase I, Phase II, or further environmental assessments, intrusive testing or sampling (invasive

or otherwise) on or relating to any of the Assets as soon as reasonably possible after such report is prepared. Purchaser shall obtain

from any applicable Governmental Authorities and Third Parties all permits necessary or required to conduct any approved invasive activities

permitted by Company; provided that, upon request, Company shall provide Purchaser with assistance (at no cost or liability to

any Seller or any member of the Company Group) as reasonably requested by Purchaser that may be necessary to secure such permits. Each

Seller and Company shall have the right, at its option, to split with Purchaser any samples collected pursuant to any permitted invasive

activities authorized under this provision. If the Closing does not occur, Purchaser shall (A) promptly return to Sellers or destroy

all copies of the Records, reports, summaries, evaluations, due diligence memos, and derivative materials related thereto in the possession

or control of Purchaser or any of Purchaser’s Representatives and (B) keep and shall cause each of Purchaser’s Representatives

to keep, any and all information obtained by or on behalf of Purchaser confidential in accordance with the terms of the Confidentiality

Agreement.

(b)            Purchaser

may not contact contractual counterparties, customers or potential customers of any member of Company Group regarding the Assets, without

the prior written consent of Sellers’ Representative (which consent may be withheld by Sellers’ Representative in its sole

discretion); provided, that nothing herein shall preclude Purchaser or its Affiliates from contacting its customer or potential

customers in the ordinary course of business.

agrees to indemnify, defend, and hold harmless each member of the Seller Group, the other owners of interests in the Oil and Gas Properties,

and all such Persons’ stockholders, members, managers, officers, directors, employees, agents, lenders, advisors, representatives,

accountants, attorneys and consultants from and against any and all Damages (including court costs and reasonable attorneys’ fees),

to the extent attributable to or arising out of Purchaser’s or Purchaser’s Representative’s access to the Records, any

offices of any Seller or Company, or the Assets prior to the Closing by Purchaser or any of Purchaser’s Representatives, EVEN

IF SUCH CLAIMS, DAMAGES, LIABILITIES, OBLIGATIONS, LOSSES, COSTS AND EXPENSES ARE CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE (WHETHER

SOLE, JOINT OR CONCURRENT), STRICT LIABILITY, OR OTHER LEGAL FAULT OF ANY MEMBER OF THE SELLER GROUP (BUT EXCLUDING GROSS NEGLIGENCE OR

WILLFUL MISCONDUCT ON THE PART OF COMPANY OR ANY SELLER AND CLAIMS, DAMAGES, LIABILITIES, OBLIGATIONS, LOSSES, COSTS, AND EXPENSES

TO THE EXTENT ATTRIBUTABLE TO PRE-EXISTING CONDITIONS THAT ARE NOT EXACERBATED BY PURCHASER OR PURCHASER’S REPRESENTATIVES).

(d)            Upon

completion of Purchaser’s due diligence, Purchaser shall, at its sole cost and expense and without any cost or expense to any Seller,

any member of Company Group or any of their respective Affiliates, (i) repair all damage done to the Assets in connection with Purchaser’s

or Purchaser’s Representative’s due diligence, (ii) restore the Assets to the approximate same or better condition than

they were prior to commencement of Purchaser’s or Purchaser’s Representative’s due diligence and (iii) remove all

equipment, tools or other property brought onto the Assets in connection with Purchaser’s or Purchaser’s Representative’s

due diligence. Any disturbance to the Assets (including the leasehold associated therewith) resulting from Purchaser’s or Purchaser’s

Representative’s due diligence shall be promptly corrected by Purchaser.

(e)            During

all periods that Purchaser or any of Purchaser’s Representatives are on the Assets or any member of Company Group’s premises,

Purchaser shall maintain, at its sole expense, policies of insurance of the types and in the amounts reasonably requested by Sellers.

Coverage under all insurance required to be carried by Purchaser hereunder shall (i) be primary insurance, (ii) waive subrogation

against the members of the Seller Group, (iii) list the members of the Seller Group as additional insured, and (iv) provide

for five (5) days’ prior notice to Sellers in the event of cancellation or modification of the policy or reduction in coverage.

Upon request by any Seller, Purchaser shall provide evidence of such insurance to Sellers prior to entering the Assets or premises of

any Seller, any member of Company Group or any of their respective Affiliates.

(f)            Purchaser

understands that one or more members of the Seller Group (including Company Group) have had discussions regarding other bids for Company

and/or the Assets and the preparation and negotiation of this Agreement, the Schedules hereto and the other documents contemplated herein,

and that, excluding information related to this Agreement (including the representations and warranties and covenants set forth herein

and the Schedules and Exhibits attached hereto), (i) Purchaser and Company shall not be entitled to use in connection with any disputes

against any Seller or any member of Company Group (before or after Closing) any Seller’s or any member of Company Group’s

internal drafts of this Agreement, copies of (or other information regarding) other bids for any member of Company Group, or emails or

other written information (including in electronic form) relating to any of the foregoing or to the sales process (whether or not related

to Purchaser’s bid or other bids for any member of Company Group), and (ii) Purchaser hereby agrees that (A) it shall

not have any rights to any such information and (B) it shall not request or subpoena any of any member of Seller Group or Company

Group, or any of their Representatives, management or employees to provide to any such information.

Section 8.2         Operation

of Business of Company Group.

(a)            From

the Execution Date until the Closing, except as expressly contemplated by this Agreement or as expressly consented to by Purchaser, no

Seller shall (i) transfer or sell any of the Subject Securities held by such Seller (as set forth on Schedule 5.5); or

(ii) amend or adopt any change to any Governing Documents of any member of Company Group, which consent in the case of this clause ‎(ii) shall

not be unreasonably delayed, withheld or conditioned.

(b)            From

the Execution Date until the Closing, except (v) as reasonably necessary or required in order for any Seller or Company to perform

their respective obligations and covenants set forth herein, (w) as required by the terms of any Lease, Contract or applicable Laws,

(x) as set forth in Schedule 8.2, (y) for the operations covered by the capital commitments described in Schedule 5.14,

and/or (z) as expressly contemplated by this Agreement or as expressly consented to in writing by Purchaser (which consent shall

not be unreasonably delayed, withheld or conditioned), Company shall, and shall cause the Company Group to:

(i)         conduct

the ownership and operation of the Assets in the ordinary course of business in substantially the same manner as conducted by Company

Group, consistent with the standard of care under the A.A.P.L. Form 610 -1989 Model Form Operating Agreement, and use commercially

reasonable efforts to own, operate and maintain the applicable Assets in the usual, regular and ordinary manner consistent with past practice

of the Company Group, including by taking or causing to be taken all actions required to be taken by this ‎Section 8.2(b);

(ii)        not

transfer, sell, hypothecate, encumber, novate or otherwise dispose of any of its Assets, except for (A) sales and dispositions of

Hydrocarbons in the ordinary course of business, (B) the Plugging and Abandonment of any Assets to the extent required under any

applicable Laws or Contracts, (C) sales and dispositions of equipment and materials that are no longer necessary in the operation

of the Assets or for which replacement equipment has been obtained, or (D) the Excluded Assets;

(iii)       not

(A) enter into or consummate any transaction to acquire oil and gas leases or mineral interests via trade, swap or acreage exchange

or (B) otherwise acquire (whether directly or indirectly, through asset purchase, merger, consolidation, share exchange, business

combination or otherwise) any material assets or properties, except for (1) inventory in the ordinary course of business, (2) materials

acquired in connection with capital expenditures consistent with work permitted in accordance with this ‎Section 8.2 or

(3) acquisitions of assets or properties for which the consideration does not exceed $100,000.00 individually, or $1,000,000.00 in

the aggregate;

(iv)       use

commercially reasonable efforts to fund costs, expenses and other capital requirements of the Company Group with cash from operations

or other cash on hand of the Company Group before incurring any indebtedness for borrowed money, including any Post-Effective Time Credit

Document Indebtedness, provided, that Company shall not be obligated to (or cause the Company Group to) (A) fund any such

costs, expenses or capital requirements such that the Company Group would be obligated to hold, in the aggregate and after paying such

costs, expenses or capital requirements, a cash reserve equal to an amount less than $2,500,000.00 in cash or (B) issue any Securities

to, draw on equity commitments from or require capital contributions from, any Person, including any Seller or its Affiliates, in each

case, before incurring any indebtedness for borrowed money, including any Post-Effective Time Credit Document Indebtedness;

(v)       not

mortgage or pledge any of the Assets or create any Lien thereupon (other than Permitted Encumbrances);

(vi)      except

for operations for which Purchaser’s consent is required under Section 8.2(b)(ix) and such consent has not been

granted by Purchaser, not elect to be a non-consenting party as to any material operation proposed by a Third Party on the Assets;

(vii)      not

institute any Action, or enter into, or offer to enter into, any compromise, release or settlement of any Action pertaining to the Assets

or any member of the Company Group, or waive or release any material right of a member of the Company Group, for which the amount in controversy

is reasonably expected to be in excess of $100,000.00 (net to the Working Interest of any member of Company Group) other than any settlement,

release or compromise that involves only a payment from Sellers to a Third Party and does not pertain to the Company Group or the Assets;

(viii)    not

(A) enter into, execute, terminate (other than terminations based on the expiration without any affirmative action by any member

of Company Group), novate, materially amend, or extend any Material Contracts outside the ordinary course of business or as reasonably

required in order to conduct any operations contemplated under the Ordinary Course Development Plan or (B) affirmatively waive, assign

or release any material rights or material claims under any such Material Contracts;

(ix)        except

as set forth in the Ordinary Course Development Plan, not propose, commit to or approve any AFEs for capital expenditures that individually

is reasonably estimated to involve commitments in excess of $270,000 (net to the Working Interest of any member of Company Group) other

than as required on an emergency basis or as required for the safety of individuals or the environment;

(x)        not

resign as operator of any of the Assets (other than assets that are transferred or disposed as permitted under ‎Section 8.2(b)(ii));

(xi)       not

issue any Securities or split, combine or reclassify any of its outstanding Securities;

(xii)      not

make any investment in the Securities of any other Person or form any Subsidiary of any member of the Company Group;

(xiii)     not

grant or create any Asset Preferential Right with respect to the Assets;

(xiv)     not

acquire by merger or consolidation with, or merge or consolidate with, or purchase substantially all of the assets of or otherwise acquire

any business of, or acquire any Securities in any Person;

(xv)      not

change in any material respect the material accounting principles, practices or methods of any member of Company Group, except as required

by the Accounting Principles;

(xvi)     not

adopt a plan or agreement of complete or partial liquidation, dissolution or wind-up of any member of Company Group;

(xvii)    not

hire any employees;

(xviii)   maintain

the books of accounts and Records of the Company Group in the ordinary course of business;

(xix)     not

(A) prepare any Tax Return in a manner which is inconsistent with past practice, (B) file any amendment to a Tax Return, (C) incur

any liability for Taxes other than in the ordinary course of business, (D) settle or compromise any Tax proceeding or enter into

any closing agreement with respect to Tax matters, (E) consent or agree to any extension or waiver of the limitation period applicable

to any claim or assessment in respect of Taxes with any Governmental Authority, (F) change any accounting method or period, (G) make

any Tax election that is inconsistent with past practice or change any Tax election or (H) surrender any right to claim a refund

of Taxes, in each case, except to the extent such action (1) would not reasonably be expected to have a material impact on any Post-Effective

Time Company Taxes or (2) is necessary to comply with a change in applicable Law;

(xx)      use

commercially reasonable efforts to maintain the current insurance policies of the Company Group and not voluntarily reduce or terminate

any existing insurance of the Company Group; and

(xxi)     not

agree or commit to take any of the actions described above for which Seller or the Company Group is prohibited from taking without the

consent of Purchaser.

approval shall be considered granted within ten (10) days (unless a shorter time is reasonably required by the circumstances and

such shorter time is specified in a Seller’s or Company’s Notice) of a Seller’s or Company’s Notice to Purchaser

requesting such consent unless Purchaser notifies a Seller to the contrary during that period. Notwithstanding the foregoing provisions

of this ‎Section 8.2, neither Sellers nor Company shall be in breach of this ‎Section 8.2 in the event

of an emergency or risk of loss, damage, or injury to any person, property or the environment or as otherwise required by Law (an “Emergency

Event”), Sellers and any member of Company Group may take such actions, and cause any member of Company Group to take such

actions, as are reasonably necessary to address such Emergency Event and shall notify Purchaser of such action promptly thereafter; provided

that in the case of any such Emergency Event, Sellers shall, as soon as reasonably practicable and in any event within forty-eight (48)

hours of such event, give Purchaser written notice thereof, including the nature and estimated cost of the response undertaken in response

thereto. Requests for approval of any action restricted by this ‎Section 8.2 shall be delivered to each of the following

individuals, each of whom shall have full authority to grant or deny such requests for approval on behalf of Purchaser:

MRC Ranger, LLC

5400 LBJ Freeway, Suite 1600

Dallas, Texas 75240

Attention: Chief Legal Officer

Email: berman@matadorresources.com

(d)            With

respect to Assets for which any member of Company Group is not designated as the operator under applicable Laws or Contracts, Company’s

obligations under this ‎Section 8.2 with respect to the operation of such Assets shall be limited to voting Company Group’s

Working Interests or other voting interests in a manner consistent with the requirements set forth in this ‎Section 8.2.

(e)            Subject

to and in accordance with the standard of care set forth in ‎Section 8.2(b)(i), from the Execution Date until Closing,

the Company Group shall use commercially reasonable efforts to undertake and complete the operations set forth in the Ordinary Course

Development Plan in accordance with the schedule, operational plan, cost and other operational parameters set forth therein, subject to,

and otherwise operate in accordance with the Ordinary Course Development Plan. Subject to (i) deviations resulting from an Emergency

Event in accordance with ‎Section 8.2(c), (ii) any variance in a cost that does not exceed five percent (5%) of the

applicable cost item set forth in the Ordinary Course Development Plan, and (iii) other deviations in the schedule, operational plan

and other operational parameters set forth in the Ordinary Course Development Plan that would not, individually or in the aggregate, reasonably

be likely to result in a material adverse impact on the Business, Assets or the Company Group, any amendment or other change or

modification to the Ordinary Course Development Plan shall require the prior written consent of Purchaser (which consent shall not be

unreasonably delayed, withheld or conditioned). Without limitation of the foregoing, and including subject to and in accordance with the

standard of care set forth in ‎Section 8.2(b)(i), (A) the Company shall use commercially reasonable efforts to obtain

all Permits necessary to drill, complete and equip the Scheduled Wells in accordance with the Ordinary Course Development Plan, including

obtaining any applicable seasonal lesser prairie chicken waivers and (B) the Company Group agrees to (i) provide drafts of the

documentation with respect to the request for such Permits and waivers for Purchaser’s reasonable review and comments, (ii) provide

copies of documents evidencing receipt of such Permits and waivers, and (iii) keep Purchaser reasonably apprised of the status and

progress of the pursuit of such Permits and waivers.

(f)            Subject

to the terms and conditions of Section 8.1(c) and the standard of care set forth in Section 8.2(b)(i), the

Company Group shall further provide: (i) following reasonable prior notice to Company and with Company’s prior written consent

(not to be unreasonably withheld, conditioned or delayed), reasonable access rights for the Representatives of Purchaser to the applicable

Oil and Gas Properties for purposes of observing such development operations, which access shall be subject to compliance with Company’s

customary qualification and safety rules and procedures and be conducted in a manner that reasonably minimizes interference with

the ownership or operation of the Assets or the Business, (ii) daily operations reports in the connection with such development operations

that are customarily prepared by or on behalf of the Company Group in the ordinary course of business, (iii) weekly progress reports

regarding the results of such development operations during the prior week, as soon as reasonably practicable following such reports becoming

available, to the extent such reports are customarily prepared by or on behalf of the Company Group in the ordinary course of business,

(iv) upon Purchaser’s reasonable request, weekly meetings with the knowledgeable personnel of Paloma Resources. Subject to

and in accordance with the standard of care set forth in Section 8.2(b)(i), Sellers shall make available their Representatives,

including individuals at the Company Group or Paloma Resources, as reasonably requested by Purchaser, to review and discuss any results

of operations (including production or performance results from any Well drilled or completed after the Execution Date), technical issues,

planned development operations and estimated development and other costs related to the Ordinary Course Development Plan.

Section 8.3         Casualty

and Condemnation. Notwithstanding anything herein to the contrary from and after the Effective Time, if Closing occurs, Purchaser

shall assume all risk of loss with respect to the depreciation of the Assets due to ordinary wear and tear, in each case, with respect

to the Assets. If, after the Execution Date but prior to or on the Closing Date, any portion of the Assets are destroyed or damaged by

any act of God, fire, explosion, wild well, hurricane, storm, weather event, earthquake, landslide, act of nature, civil unrest, or similar

disorder, terrorist acts, war or any other hostilities or any other casualty or is expropriated or taken in condemnation or under right

of eminent domain (each a “Casualty Event”), Sellers and Company shall use commercially reasonable efforts,

prior to Closing, to repair or, in the case of a Casualty Event affecting personal property or equipment, replace with items of equivalent

quality and value, any Asset damaged or taken by the relevant Casualty Event at the cost and expense of Seller, Sellers shall cause the

Company Group to file all permissible claims under all applicable insurance policies with respect to such Casualty Event, Purchaser and

Sellers shall, subject to the satisfaction (or waiver) of the conditions to the Closing set forth in ‎Section 9.1 and

‎Section 9.2, nevertheless be required to proceed with Closing and Company Group shall be entitled to retain any and all

insurance proceeds and proceeds and rights as to any Third Party Claims arising out of any and all such Casualty Events. Notwithstanding

the foregoing or anything herein to the contrary, if any Casualty Event results in uninsured losses or damages to Assets exceeding $1,000,000,

the Unadjusted Purchase Price shall be decreased by the lesser of (a) the amount of the cost (determined as of the Closing Date)

to cause the Assets affected by such Casualty Event to be repaired, restored or replaced (to substantially the same condition as immediately

preceding such Casualty Event) and (b) the Allocated Value of such affected Assets.

Section 8.4         Closing

Efforts and Further Assurances. Subject to the terms and conditions of this Agreement, Sellers, the Company and Purchaser shall

use their reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper

or advisable under applicable Law to consummate the transactions contemplated hereby, including by using their respective reasonable best

efforts to (i) cause the conditions precedent of each Seller (in the case of Purchaser) and of Purchaser (in the case of each Seller)

set forth in ‎Article 9 to be satisfied, (ii) obtain all necessary Consents, (including the expiration or termination of

any waiting periods) from Governmental Authorities and the making of all necessary registrations, declarations and filings with Governmental

Authorities, and (iii) avoid any Action by any Governmental Authority by the Target Closing Date; provided that the obligations in

this ‎Section 8.4 shall not require any Party or any of its Affiliates to sell, divest, hold separate, transfer or dispose

of, or commit to any behavioral remedy with respect to, any assets, securities, operations, rights, product lines, businesses or interest

therein of such Party or any of their Affiliates (or consent to any of the foregoing actions); or litigate or otherwise formally oppose

any determination (whether judicial or administrative in nature) by a Governmental Authority seeking to impose any of the restrictions

referenced in clause ‎(iv).

Section 8.5         Notifications.

Each Party shall notify the Other Party in writing promptly after obtaining Knowledge of (a) any event, condition, fact or circumstance

that would make the timely satisfaction of any of the conditions set forth in ‎‎Article 9 impossible or unlikely and

(b) any notice or other communication from any Person alleging that the Consent of such Person is required in connection with the

execution and delivery of this Agreement or the other Transaction Documents or the consummation of the transactions contemplated hereby

or thereby. It is understood and agreed that the delivery of any Notice required under this ‎Section 8.5 shall not in

any manner constitute a waiver by any Party, or a cure of the failure by such Party, of any conditions precedent to the Closing hereunder

or otherwise limit or affect the remedies available hereunder to any Party hereunder (including any right to indemnification under ‎Article 13).

Section 8.6         Press

Releases. The Parties shall consult with each other and shall mutually agree upon any press release or other public statements

with respect to the Transaction Documents or the transactions contemplated by this Agreement (a “Public Transaction Statement”).

The Parties shall not, and shall cause their respective Affiliates not to, issue any such Public Transaction Statement without the prior

written consent of the Other Party (which consent shall not be unreasonably withheld, conditioned or delayed), other than any Public Transaction

Statement that only contains information and statements regarding the Transaction Documents or the transactions contemplated by this Agreement

that are consistent with those that have been previously approved for disclosure by the Parties pursuant to this ‎Section 8.6;

provided that any Party may issue a Public Transaction Statement without such prior consent or agreement (a) to the extent

that such disclosures are required by applicable securities or other Laws or the applicable rules of any stock exchange having jurisdiction

over Purchaser or an Affiliate of Purchaser, (b) to Governmental Authorities or any Third Party holding preferential rights to purchase,

rights of consent or other rights that may be applicable to the transactions contemplated by this Agreement, as reasonably necessary to

provide notices, seek waivers, amendments or terminations of such rights, or seek such consents or (c) to any Non-Recourse Person.

Purchaser shall be liable for the compliance of Purchaser’s Affiliates with the terms of this ‎Section 8.6.

Section 8.7         Expenses.

Except as otherwise expressly provided in this Agreement, all expenses incurred by Sellers in connection with or related to the authorization,

preparation, or execution of this Agreement, and the Exhibits and Schedules hereto and thereto, and all other matters related to the Closing,

including all fees and expenses of counsel, accountants and financial advisers employed by Sellers, shall be borne solely and entirely

by Sellers, and all such expenses incurred by Purchaser shall be borne solely and entirely by Purchaser.

Section 8.8         Records.

At and after Closing, Sellers may retain, at their sole cost and expense, copies of any and all Records; provided that such Records

shall remain subject to the confidentiality obligations of Sellers in ‎Section 8.13. At and after Closing, Purchaser and

Company shall, and shall cause each member of the Company Group to preserve and keep a copy of all Records in any member of Company Group’s

and Purchaser’s possession for a period of at least seven (7) years after the Closing Date. From and after Closing, Purchaser

and Company shall make available to such Seller upon reasonable notice, for examination and copying at such Seller’s cost or expense,

reasonable access to such Records as remain in Purchaser’s and/or each member of Company Group’s possession or control, to

the extent not retained by such Seller in accordance with this ‎Section 8.8, in connection with any reasonable business

purpose, including the preparation of financial statements and Tax Returns, or in connection with matters relating to any claims or disputes

(a) relating to this Agreement, (b) among any members of the Seller Group or (c) with any Third Parties.

Section 8.9         Indemnification

of Directors and Officers.

(a)            Purchaser

agrees that all rights to indemnification, advancement of expenses and exculpation from liabilities for acts or omissions occurring prior

to the Closing now existing in favor of any present and former director, manager, officer and employee of each member of Company Group

and members of Company (in all of their capacities) (collectively, the “Company Indemnified Parties”) will remain

obligations of the Company Group and will survive the Closing and continue in full force and effect in accordance with their terms for

a period of six ‎(6) years from and after the Closing Date.

(b)            Purchaser

and Company agree that, until the six (6) year anniversary date of the Closing Date, the Governing Documents of Company and each

member of the Company Group shall contain provisions no less favorable with respect to indemnification of Company Indemnified Parties

than are provided in the Governing Documents of the applicable members of Company Indemnified Parties in existence on the Execution Date,

which provisions shall not be amended, repealed or otherwise modified in any manner that would adversely affect the rights thereunder

of any such individuals until the expiration of the statutes of limitations applicable to such matters or unless such amendment, modification

or repeal is required by applicable Law.

to the Closing, Purchaser and/or Company shall have purchased a “tail” policy for the benefit of the Company

Indemnified Parties from an insurer with substantially the same or better credit rating as the current carrier for the existing D&O

Insurance of Company Group on terms with respect to coverage and in amounts no less favorable in the aggregate than those included in

the D&O Insurance of Company Group in effect on the Execution Date, which (i) has an effective term of six (6) years from

the Closing Date, (ii) covers each person covered by the D&O Insurance of Company Group in effect on the Execution Date or on

the Closing Date for actions and omissions occurring prior to the Closing Date, and (iii) contains terms that are no less favorable

in the aggregate than those of the D&O Insurance of Company Group in effect on the Execution Date. The costs of the “tail”

policy shall be borne by Purchaser; provided, that, to the extent costs of the “tail” policy exceed $200,000, such costs shall

be borne by Seller. From and after the Closing, Purchaser and Company shall cause such policy to be maintained in full force and effect,

for its full term, and cause all obligations thereunder to be honored by Purchaser.

(d)            The

provisions of this ‎Section 8.9 are (i) intended to be for the benefit of, and will be enforceable by, each Company

Indemnified Party and (ii) in addition to, and not in substitution for, any other rights to indemnification or contribution that

any such Person may have by Contract or otherwise. Purchaser shall pay all reasonable out-of-pocket expenses, including reasonable attorneys’

fees, that may be incurred by any Company Indemnified Party in enforcing the indemnity obligations provided in this ‎Section 8.9

unless it is ultimately determined that such Company Indemnified Party is not entitled to such indemnity.

(e)            For

a period of six (6) years after the Closing Date, if Purchaser, Company or any member of the Company Group, or any of its or their

respective successors or assigns, (i) consolidates with or merges into any other Person and will not be the continuing or surviving

corporation or entity in such consolidation or merger or (ii) transfers all or substantially all of its properties and assets to

any Person, then Purchaser and Company shall cause, and in each case, proper provision shall be made so that the successors and assigns

of such Person honor the indemnification obligations set forth in this ‎Section 8.9.

(f)            Purchaser

hereby acknowledges that certain Company Indemnified Parties may have rights to indemnification, advancement of expenses and/or insurance

provided by Persons other than the Company and the Subsidiaries (collectively, the “Indemnitors”). Purchaser

hereby agrees (i) that Purchaser and the Company are the indemnitors of first resort (i.e., their obligations to the Company Indemnified

Party are primary and any obligation of the Indemnitors are secondary), (ii) Purchaser and the Company shall be required to advance

the full amount of expenses incurred by any Company Indemnified Party and shall be liable for the full amount of all expenses, judgments,

penalties, fines and amounts paid in settlement to the extent legally permitted and as required by the terms of this Agreement or the

Company’s or its Subsidiaries’ respective certificate of incorporation, by-laws or comparable organizational documents (or

any other agreement between the Company or any of the Subsidiaries and any such Company Indemnified Party), without regard to any rights

the Company Indemnified Party may have against the Indemnitors, and (iii) Purchaser and the Company irrevocably waive, relinquish

and release the Indemnitors from any and all claims against the Indemnitors for contribution, subrogation or any other recovery of any

kind in respect thereof. Each of Purchaser and the Company further agree that no advancement or payment by an Indemnitor on behalf of

a Company Indemnified Party with respect to any claim for which a Company Indemnified Party has sought indemnification from the Company

shall affect the foregoing and the applicable Indemnitor shall have a right of contribution and/or be subrogated to the extent of such

advancement or payment to all of the rights of recovery of the Company Indemnified Party against the Company. Purchaser and the Company

Indemnified Parties agree that the Indemnitors are express third party beneficiaries of the terms of this Section 8.9(f).

(g)            Notwithstanding

anything to the contrary herein, Purchaser (and, following the Closing, the Company Group), shall have no obligations with respect to

matters contemplated in this Section 8.9 in connection with any claim or Action directed against any Company Indemnified Party

by any member of the Seller Group to the extent such Company Indemnified Party was a director, officer, employee, member, manager, equity

holder or partner of any member of the Seller Group (excluding the Company Group).

Section 8.10       Financial

Information.

(a)            From

and after the Execution Date, including for the avoidance of doubt, as soon as reasonably practicable following the Execution Date, until

the date that is seventy-five (75) days after the Closing Date (the “Records Period”):

(i)         Company

(and after Closing, Sellers) shall, and shall cause its Representatives to, use commercially reasonable efforts to cause the external

audit firm or any applicable Third Parties that audit the Financial Statements (the “Audit Firm”) to cooperate

with Purchaser and its Representatives to (A) revise the Financial Statements or otherwise cause the Financial Statements to comply

or (B) prepare audited consolidated financial statements of Company Group as of and for the year ended December 31, 2025 and

unaudited financial statements of Company Group as of and for the six (6) months ended June 30, 2026, together with all related

notes thereto, in order to comply, in each case, with Regulation S-X promulgated by the SEC (“Regulation S-X”)

and other rules and regulations of the SEC with respect to reporting obligations of Purchaser and its Affiliates under the Exchange

Act, any registration of securities under the Securities Act or otherwise in connection with a Financing;

(ii)        (A) Company

shall, and shall cause its Representatives to, use commercially reasonable efforts to prepare or cause to be prepared, and Sellers shall,

and shall cause their Representatives to, use commercially reasonable efforts to assist the Company (and after Closing, Purchaser) in

the preparation of, unaudited consolidated statements of the financial position of Company Group as of September 30, 2026 and the

related statements of operations and cash flows for the nine (9) month period then ended, in each case, in accordance with GAAP consistently

applied, and (B) Company shall, and shall cause its Representatives to, use commercially reasonable efforts to cause, and Sellers

shall, and shall cause its Representatives to, use commercially reasonable efforts to assist Company (and after Closing Purchaser) in

causing, the Audit Firm to cooperate with Purchaser and its Representatives to cause such unaudited financial statements to comply with

Regulation S-X and other rules and regulations of the SEC with respect to reporting obligations of Purchaser and its Affiliates under

the Exchange Act, any registration of securities under the Securities Act or otherwise in connection with a Financing; and

(iii)       to

the extent Closing occurs after December 31, 2026, (A) Company shall, and shall cause its Representatives to, use commercially

reasonable efforts to prepare or cause to be prepared, and Sellers shall, and shall cause their Representatives to, use commercially reasonable

efforts to assist the Company (and after Closing Purchaser) in the preparation of, the audited consolidated statements of the financial

position of Company Group as of December 31, 2026 and the related statements of operations and cash flows for the year then ended,

in each case, in accordance with GAAP consistently applied and (B) Company shall, and shall cause its Representatives to, use commercially

reasonable efforts to cause, and Sellers shall, and shall cause their Representatives to, use commercially reasonable efforts to assist

Company (and after Closing Purchaser) in causing, the Audit Firm to cooperate with Purchaser and its Representatives to cause such financial

statements to comply with Regulation S-X and other rules and regulations of the SEC with respect to reporting obligations of Purchaser

and its Affiliates under the Exchange Act, any registration of securities under the Securities Act or otherwise in connection with a Financing.

(b)            During

the Records Period, Company and Sellers, as applicable, agree to use commercially reasonable efforts to make available to Purchaser and

its Representatives any and all Records (to the extent in Company’s, Sellers’ or their respective Affiliates’ possession

or control) and to give Purchaser and its Representatives reasonable access to such Parties and their Affiliates’ personnel who

were responsible for preparing or maintaining such Records, in each case as reasonably required by Purchaser or its Representatives in

order to prepare financial statements in connection with a Financing or Purchaser’s or its Affiliates’ filings, if any, that

are required by the SEC, under securities Laws applicable to Purchaser and its Affiliates, or financial statements meeting the requirements

of Regulation S-X under the Securities Act (“Purchaser Financial Statements”).

the Records Period, Sellers and Company shall use commercially reasonable efforts to cause their respective Representatives and other

Third Parties to cooperate with Purchaser and their Representatives in connection with the preparation by Purchaser of Purchaser Financial

Statements that are required to be included in any filing by Purchaser or its Affiliates with the SEC or are otherwise reasonably requested

by Purchaser in connection with any registration of securities under the Securities Act or a Financing, including to use their commercially

reasonable efforts to cause the Audit Firm to provide its consent or customary “comfort letters” from time to time as reasonably

requested by Purchaser or its Representatives with respect to any such filing, registration or Financing. If requested, Sellers and Company

shall use commercially reasonable efforts to execute and deliver to the Audit Firm such representation letters, in form and substance

customary for representation letters provided to external audit firms by management of the company whose financial statements are the

subject of an audit, as may be reasonably requested by the Audit Firm, with respect to the Purchaser Financial Statements, including,

as requested, representations regarding internal accounting controls and disclosure controls.

(d)            During

the Records Period, Sellers and Company shall, and shall cause their respective Representatives to, use commercially reasonable efforts

to (i) furnish information (other than Excluded Records) to Purchaser and its Representatives with respect to the Company Group or

Seller (as applicable) as may be reasonably requested by Purchaser or such Representative in order to arrange, market or consummate any

such Financing, (ii) provide Purchaser or its Representatives access to information included in the Records with respect to property

descriptions of the Company Group’s Assets necessary for Purchaser or its Affiliates to execute and record deeds of trust, mortgages

and other collateral documents for any such Financing (including any related schedules, annexes and exhibits thereto), it being understood

that such documents will not be recorded or take effect until Closing and the Company and its Representatives will not be obligated to

execute any agreements, documents or solvency or similar certificate, (iii) provide Purchaser or its Representatives access to information

included in the Records as reasonably requested by Purchaser in connection with the preparation of materials for rating agency presentations,

customary offering documents, private placement memoranda, bank information memoranda and similar documents required in connection with

any such Financing, (iv) cause the Company Group to facilitate payoff letter(s) and the release of liens securing Credit Document

Indebtedness of the Company Group for delivery at the Closing, as reasonably requested by Purchaser, and (v) provide, at least ten

(10) Business Days prior to the Closing, all documentation and other information included in the Records about the Company Group

as is reasonably requested by Purchaser which relates to applicable “know your customer” and anti-money laundering rules and

regulations including without limitation the USA PATRIOT ACT. Notwithstanding the foregoing, nothing herein shall expand Seller’s

representations, warranties, covenants or agreements set forth in this Agreement or give Purchaser, its Affiliates, or any Third Party

any rights to which it is not entitled hereunder.

(e)            In

no event shall Sellers, any member of the Company Group or any of their respective Affiliates or other Representatives be required to

bear any cost or expense or pay any fee (other than reasonable out-of-pocket costs and expenses for which they are promptly reimbursed

or indemnified) in connection with any action taken pursuant to ‎Section 8.10(a) through ‎(d). Purchaser shall

be responsible for all fees and expenses related to the actions contemplated by this ‎Section 8.10(a) through (d),

including the compensation of any contractor or advisor of any Seller or any member of the Company Group. Accordingly, notwithstanding

anything to the contrary herein, Purchaser shall promptly, upon written request by a Seller, reimburse such Seller for all reasonable

and documented out-of-pocket costs and expenses (including reasonable and documented compensation or other fees of any contractor or advisor)

incurred in connection with the cooperation of such Seller contemplated by this ‎Section 8.10. Further, the Purchaser

shall indemnify and hold harmless the Sellers, the Company Group and their respective Affiliates from and against any and all losses or

damages actually incurred or suffered by them in connection with the obligations of Sellers, the Company Group and their respective Affiliates

under ‎Section 8.10(a) through (d)‎ (other than to the extent resulting from the gross negligence, bad

faith or willful misconduct of any Seller, the Company or any of their respective Affiliates). Notwithstanding anything to the contrary

contained in this Agreement, none of the Seller’s, the Company Group’s or any of their respective Affiliates’ performance

under this ‎Section 8.10 shall be taken into account with respect to whether any condition to Closing set forth in ‎Article 9

shall have been satisfied.

Section 8.11       Company

Hedges. At Closing, (a) Company shall cause the termination, liquidation and unwinding of any remaining Company Hedges, (b) the

Unadjusted Purchase Price shall be adjusted pursuant to ‎Section 2.4(c) with respect to the Company Hedges and (c) a

portion of the Closing Payment shall be disbursed to the applicable Hedge counterparties in an amount equal to the Hedge Losses attributable

to such Company Hedges, if any, payable in connection with such termination, liquidation and unwinding.

Section 8.12       Exclusivity.

From the Execution Date through the earlier of the Closing or the date that this Agreement is terminated in accordance with ‎Section 12.1:

(a)            Sellers

and Company shall, and shall cause their respective Representatives and each member of the Seller Group and their respective Representatives

to, deal exclusively with Purchaser and the Purchaser Group with respect to a transaction involving the sale of (i) any member of

the Company Group, the Subject Securities, any Securities in any member of the Company Group or (ii) all of the Assets or any portion

of the Assets the disposition of which would impede or preclude the transactions contemplated by this Agreement being consummated with

Purchaser (in each case, including any merger or similar transaction or any other transaction having substantially the same economic effect)

(in any case, a “Sale Transaction”), and, without the written consent of Purchaser, the Sellers and Company

shall not, and shall cause each member of the Seller Group not to, directly or indirectly, facilitate, encourage, solicit or entertain

offers or inquiries from, participate in negotiations or discussions with, enter into any agreement or letter of intent with, or disclose

any non-public information to, any other Person, in each case, with respect to any Sale Transaction.

(b)            Sellers

and Company shall, and shall cause their respective Representatives and each member of the Seller Group and their respective Representatives

to, (i) cease any discussions or negotiations with any Person other than Purchaser and the Purchaser Group in connection with any

Sale Transaction and (ii) discontinue any access afforded to such Persons to information relating to a Sale Transaction.

Section 8.13       Confidentiality.

(a)            The

terms of the Confidentiality Agreement are hereby incorporated by reference, and the Confidentiality Agreement shall continue in full

force and effect in accordance with its terms until the Closing, at which time the Confidentiality Agreement shall terminate. In the event

a provision contained in the Confidentiality Agreement conflicts with a provision contained in this Agreement, the provision contained

in this Agreement shall control.

(b)            Sellers,

for themselves and on behalf of their Affiliates, acknowledge that, after the Closing, Purchaser and its Affiliates would be irreparably

damaged if any confidential information regarding Purchaser, its Affiliates, the Company Group, the Business, the Assets and the operation

thereof (including information regarding the activities, finances, properties and other assets, marketing, pricing, suppliers, customers,

licensors and licensees) were disclosed to or utilized on behalf of any other Person. Sellers, for themselves and on behalf of their Affiliates,

covenant and agree that, for a period of eighteen (18) months following the Closing, they will not, without the prior written consent

of Purchaser, disclose or permit to be disclosed or use or permit to be used in any way any such confidential information unless (i) it

receives a request or is compelled to disclose such confidential information by judicial or administrative process or by other Order issued

by a Governmental Authority, (ii) such disclosure is required by the rules of any applicable stock exchange or regulatory or

self-regulatory organization or other applicable Law; (iii) such disclosure is to its accountants, attorneys, advisors and other

professional consultants (in each case, to the extent that each is subject to similar confidentiality obligations with such Seller); (iv) such

disclosure is necessary in connection with the filing of Tax Returns or claims for refund or in defending, prosecuting or otherwise conducting

any examination, audit or administrative or judicial Action regarding any Tax Return or Taxes; (v) such disclosure is made in connection

with the enforcement, defense or settlement of such Seller’s rights and obligations under this Agreement or as may be reasonably

necessary to effect the transactions under this Agreement; (vi) such information is lawfully in the possession of the Third Party

recipient other than as a result of a breach of this ‎Section 8.13 or (vii) such information is generally available

to Third Parties other than as a result of a breach of this ‎Section 8.13. Sellers, for themselves and on behalf of their

Affiliates, as applicable, shall give Purchaser prior written notice of any disclosure pursuant to clause (i) above and cooperate

with Purchaser, at Purchaser’s expense, to limit or obtain confidential treatment of the information so required to be disclosed.

Section 8.14       Change

of Name; Removal of Name.

(a)            Notwithstanding

any other provision of this Agreement to the contrary, from and after Closing, Purchaser agrees, on behalf of the Company Group and the

Purchaser Group, that they (i) shall have no right to use the name “Paloma” or any similar name or any Intellectual

Property related thereto or containing or compromising the foregoing, including any name or mark confusingly similar thereto or a derivative

thereof (collectively, the “Subject Marks”) and (ii) will not at any time hold themselves out as having

any affiliation with any Seller or any of its Affiliates. In furtherance thereof, Purchaser shall (A) within sixty (60) days after

the Closing Date, file all documentation reasonably necessary to change the legal name of each member of the Company Group with all applicable

Governmental Authorities in all applicable jurisdictions and (B) within one hundred twenty (120) days after the Closing Date, remove,

strike over or otherwise obliterate all Subject Marks from all Assets and materials, including, without limitation, any Oil and Gas Properties,

vehicles, business cards, schedules, stationary, packaging materials, displays, signs, promotional materials, manuals, forms, computer

software and other materials; provided, however, that Purchaser shall have one hundred eighty (180) days after the Closing Date to remove

any Subject Marks required to be on the Assets pursuant to any Environmental Law, health or safety Law or state or federal statutory law.

(b)            From

and after the Closing: (A) Purchaser shall not object to (1) the formation by any Seller or its Affiliates of an entity with

the word “Paloma”, or any of the other Subject Marks in its name or (2) the use by any Seller or its Affiliates of the

logo used by any member of the Company Group prior to the Closing as the logo for any other Person and (B) Purchaser and each member

of the Company Group shall provide such consents as may be reasonably requested in connection with the formation of such new Persons.

Section 8.15       R&W

Insurance Policy.

(a)            The

Parties acknowledge and agree that, as of the Execution Date, Purchaser has procured the R&W Conditional Binder in connection with

the R&W Insurance Policy. Following the Execution Date, Purchaser shall use commercially reasonable efforts to satisfy the conditions

set forth in the R&W Conditional Binder to cause the R&W Insurance Policy to be issued on the terms and in the form attached hereto

as Exhibit I as soon as reasonably practicable following the Closing, including payment of all costs of such R&W Insurance

Policy, which, for the avoidance of doubt, shall become effective as of the Closing. The costs of procuring the R&W Insurance Policy

(including the total premium, underwriting costs, Taxes, brokerage commission, and other costs, fees and expenses of such policy) shall

be fifty percent (50%) borne by Purchaser and fifty percent (50%) borne by Sellers. Each Seller agrees to use commercially reasonable

efforts to assist Purchaser in its efforts to satisfy the conditions set forth in the R&W Conditional Binder, including providing

such information, data, Records, or other reasonable information reasonably requested by the underwriters of such R&W Insurance Policy.

Upon request, Purchaser shall provide Sellers’ Representative with a true and complete copy of the final and issued R&W Insurance

Policy as soon as reasonably practicable following the Closing.

(b)            The

Parties acknowledge and agree that any failure by Purchaser to obtain or maintain the R&W Insurance Policy in accordance with this

Section shall not in any manner increase any liability of any Seller or any of its Affiliates or any of its or their respective representatives

under this Agreement, including if (x) the R&W Insurance Policy is disputed, invalidated or deemed ineffective, in whole or in

part, (y) the coverage provided under the R&W Insurance Policy is denied, disputed, exhausted or otherwise made unavailable to

Purchaser or its Affiliates, in whole or in part, or (z) there is otherwise an absence of coverage thereunder for any reason, including

due to exclusions.

Parties acknowledge and agree that Purchaser has provided to Sellers a reasonable opportunity to review the R&W Insurance Policy and

provide reasonable comments in advance of binding coverage, which R&W Insurance Policy expressly provides that (i) the insurer(s) issuing

such policy irrevocably and unconditionally waives and agrees not to, directly or indirectly through any other Person, pursue any rights

of subrogation, indemnification or contribution or otherwise make or bring any claim against, via subrogation, contribution, indemnification

or otherwise, against Sellers or any of their Affiliates and/or any of their respective Representatives (the “Seller Protected

Parties”), except subrogation rights against Sellers in the case of losses resulting from Fraud by Sellers; (ii) the

Fraud of any Person(s) shall not be imputed to any other Person(s); (iii) the Seller Protected Parties are express third-party

beneficiaries of the R&W Insurance Policy with the right to enforce the foregoing; and (iv) no Person shall amend, waive, restate,

modify or otherwise revise the R&W Insurance Policy in a manner that is adverse or prejudicial in any respect to any Seller Protected

Party, or allow any such subrogation waiver to be amended, waived, restated, modified or otherwise revised without the prior written consent

of the Sellers (which may be withheld in their sole and absolute discretion). From and after the date hereof, Purchaser shall not (and

shall cause its Affiliates to not) grant any right of subrogation or otherwise amend, modify, terminate, or waive any term or condition

of the R&W Insurance Policy in a manner (i) inconsistent with the immediately preceding sentence or (ii) materially adverse

to any of the Seller Protected Parties, without the prior written consent of Sellers (which may be withheld in their sole and absolute

discretion).

Section 8.16       Property

Trades.

(a)            Schedule 8.16

sets forth a list of all Property Trades as of the Execution Date. The Parties acknowledge and agree that they have allocated value to

each Property Trade as set forth on Schedule 8.16. During the period from the Execution Date until the Closing, Sellers shall,

and shall cause the Company Group to, use commercially reasonable efforts to consummate each Property Trade.

(b)            To

the extent that any Property Trade has not been consummated by the Company Group prior to the date that is two (2) Business Days

prior to the Target Closing Date (such Property Trade, an “Open Property Trade”), the Unadjusted Purchase Price

shall be decreased by an amount equal to the amount set forth on Schedule 8.16 as the allocated value for such Property Trade

(the “Property Trade Allocated Value”).

the Closing and until the Property Trade Termination Date, (i) Purchaser shall, and shall cause the Company Group to, use commercially

reasonable efforts to consummate each Open Property Trade and (ii) Sellers shall use commercially reasonable efforts to assist and

cooperate with Purchaser and the Company Group in connection with Purchaser’s and the Company Group’s efforts to consummate

each Open Property Trade, including by providing such reasonable information, documentation, and assistance as may be reasonably requested

by Purchaser. If any Open Property Trade is consummated after the Closing but on or prior to the Property Trade Termination Date, promptly

(and in any event within five (5) Business Days) following such consummation, Purchaser shall pay to Sellers’ Representative

(on behalf of Sellers) an amount equal to the Property Trade Allocated Value for such Property Trade (as adjusted mutatis mutandis

by the adjustments set forth in Section 2.4), by wire transfer of immediately available funds to an account designated by

Sellers’ Representative. With respect to each Property Trade, the obligations of the Parties under this Section 8.16

with respect to such Property Trade shall terminate on the earlier of (i) the date on which the letter(s) of intent governing

such Property Trade (as such date in such letter(s) may be extended) have expired or otherwise terminated pursuant to their terms

and (ii) the date on which the counterparty to such Property Trade indicates in writing that it no longer intends to consummate such

Property Trade (such earlier date, the “Property Trade Termination Date”).

(d)            Any

properties acquired by the Company Group pursuant to a Property Trade shall be deemed “Assets” under this Agreement.

Section 8.17       Transition

Services. Within sixty (60) days after the Execution Date, the Parties shall cooperate in good faith to (i) determine whether

any transition services shall be provided by Paloma Resources or another Affiliate of Sellers to the Company Group after the Closing,

and if applicable, (ii) prepare and mutually agree to the schedule of transition services to be attached to the form of Transition

Services Agreement, substantially in the form attached hereto as Exhibit G (the “Transition Services Agreement”),

with respect to the applicable services the Parties have mutually agreed are to be provided thereunder; provided, however,

in no event shall the failure of the Parties to agree to a form of a transition services agreement be deemed a breach of this Agreement

by any Party.

Section 8.18       Data

Room Contents. Within five (5) Business Days after the Closing Date, Seller shall deliver or cause to be delivered to Purchaser

a digital copy of the complete contents of the Data Room as of the Closing Date.

Article 9

Conditions

to Closing

Section 9.1         Conditions

of Sellers to Closing. The obligations of each Seller to consummate the transactions contemplated by this Agreement (except for

the obligations of such Seller to be performed prior to the Closing and obligations that survive termination of this Agreement), including

the obligations of such Seller to consummate the Closing, at the option of such Seller, are subject to the satisfaction on or prior to

Closing of each of the conditions set forth in this ‎Section 9.1, unless waived in writing by Sellers’ Representative:

(a)            Representations.

Each representation and warranty of Purchaser in this Agreement shall be true and correct in all respects, other than de minimis

failures to be true and correct, as of the Closing, as though made on and as of the Closing (other than representations and warranties

that refer to a specified date, which need only be true and correct on and as of such specified date);

(b)            Performance.

Purchaser shall have performed, in all material respects, all covenants and agreements to be performed by Purchaser under this Agreement

prior to or on the Closing Date;

Injunction. On the Closing Date, no Order restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated

by this Agreement shall have been issued and remain in force;

(d)            Certain

Adjustments. The aggregate amount of the sum of (i) the aggregate downward adjustments to the Unadjusted Purchase Price under

‎Section 3.2(g) with respect to Defects, minus (ii) the aggregate offsets to such downward adjustments

with respect to Defects under ‎Section 3.2(h) with respect to Title Benefits, plus (iii) the downward

adjustments to the Unadjusted Purchase Price for any Asset(s) affected by a Casualty Event in accordance with ‎Section 8.3,

does not exceed an amount equal to fifteen percent (15%) of the Unadjusted Purchase Price;

(e)            Closing

Deliverables. Purchaser shall (i) have delivered to Sellers the Purchaser Party Certificate and (ii) be ready, willing,

and able to deliver to Sellers at the Closing the other documents and items required to be delivered by Purchaser under Section 10.3;

and

(f)            Sellers’

Representative Termination. Sellers’ Representative has not elected to terminate this Agreement pursuant to ‎Section 12.1(f).

Section 9.2         Conditions

of Purchaser to Closing. The obligations of Purchaser to consummate the transactions contemplated by this Agreement (except for

the obligations of Purchaser to be performed prior to the Closing and obligations that survive termination of this Agreement), including

the obligations of Purchaser to consummate the Closing, at the option of Purchaser, are subject to the satisfaction on or prior to Closing

of each of the conditions set forth in this ‎Section 9.2, unless waived in writing by Purchaser:

(a)            Representations.

Each of (i) the Fundamental Representations shall be true and correct in all respects, other than de minimis failures to be

true and correct, as of the Closing, as though made on and as of the Closing (other than representations and warranties that refer to

a specified date, which need only be true and correct on and as of such specified date) and (ii) the Non-Fundamental Representations

of each Seller and Company in this Agreement shall be true and correct in all respects as of the Closing, as though made on and as of

the Closing (other than representations and warranties that refer to a specified date, which need only be true and correct on and as of

such specified date) (without regard to any Material Adverse Effect or other materiality qualifier set forth therein), except to the extent

the failure of any such representations or warranties to be so true and correct would not have, individually or in the aggregate, a Material

Adverse Effect;

(b)            Performance.

Each Seller and Company shall have performed, in all material respects, each covenant and agreement to be performed by Sellers and/or

Company under this Agreement prior to or on the Closing;

Injunction. On the Closing Date, no Order restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated

by this Agreement shall have been issued and remain in force;

(d)            Certain

Adjustments. The aggregate amount of the sum of (i) the aggregate downward adjustments to the Unadjusted Purchase Price under

‎Section 3.2(g) with respect to Defects, minus (ii) the aggregate offsets to such downward adjustments

with respect to Defects under ‎Section 3.2(h) with respect to Title Benefits, plus (iii) the downward

adjustments to the Unadjusted Purchase Price for any Asset(s) affected by a Casualty Event in accordance with ‎Section 8.3,

does not exceed an amount equal to fifteen percent (15%) of the Unadjusted Purchase Price;

(e)            No

Material Adverse Effect. Company shall not have experienced a Material Adverse Effect on or after the Execution Date; and

(f)            Closing

Deliverables. Each Seller and/or Company shall (i) have delivered to Purchaser the Closing Certificate and (ii) be ready,

willing, and able to deliver to Purchaser at the Closing the other documents and items required to be delivered by such Seller and/or

Company under ‎Section 10.2.

Article 10

Closing

Section 10.1       Time

and Place of Closing. The consummation of the purchase and sale of the Subject Securities contemplated by this Agreement (“Closing”)

shall, unless otherwise agreed to in writing by Purchaser and Sellers’ Representative, take place at the offices of Vinson &

Elkins LLP located at 845 Texas Avenue, Houston, Texas 77002-2947 at 10:00 a.m., Central Time, on October 1, 2026 (the “Target

Closing Date”), or if all conditions in ‎Article 9 to be satisfied prior to Closing have not yet been satisfied

or waived, as soon thereafter as such conditions have been satisfied or waived, subject to the provisions of ‎Article 12.

The date on which Closing occurs is referred to herein as the “Closing Date”. All actions to be taken and all

documents and instruments to be executed and delivered at Closing shall be deemed to have been taken, executed and delivered simultaneously

and, except as permitted hereunder, no actions shall be deemed taken nor any document and instruments executed or delivered until all

actions have been taken and all documents and instruments have been executed and delivered. Upon the occurrence of the Closing, the Closing

shall be effective for all purposes at 12:01 a.m., Central Time, on the Closing Date.

Section 10.2       Obligations

of Sellers and Company at Closing. At Closing, upon the terms and subject to the conditions of this Agreement, and subject to

the simultaneous performance by Purchaser of its obligations pursuant to ‎Section 10.3, each Seller and/or Company shall

deliver or cause to be delivered to Purchaser, among other things, the following:

(a)            the

Preliminary Settlement Statement, duly executed by Sellers’ Representative;

(b)            assignment

of the Subject Securities in the form attached hereto as Exhibit B (the “Assignment”), duly executed

by each Seller;

valid, properly completed and duly executed IRS Form W-9 of each Seller (or, if a Seller is treated as an entity disregarded as separate

from its regarded tax owner for U.S. federal Income Tax purposes, the Person that is treated as its regarded tax owner for such purposes);

(d)            a

certificate duly executed by an authorized officer of each Seller, dated as of the Closing, certifying that the conditions set forth in

‎Section 9.2(a) and ‎Section 9.2(b) as it relates to each Seller have been fulfilled;

(e)            evidence

of the payment in full of all Credit Document Indebtedness outstanding as of the Closing;

(f)            (i) releases

of all Liens securing Credit Document Indebtedness and obligations under Company Hedges that are burdening the Subject Securities and/or

the Assets, (ii) authorizations to file UCC-3 termination statements releases in all applicable jurisdictions to evidence the release

of all Liens securing such Credit Document Indebtedness and obligations under Company Hedges that are burdening the Subject Securities

and/or the Assets and (iii) all instruments and agreements reasonably required to effect and file of record the release of all Liens

securing Credit Document Indebtedness and obligations under Company Hedges that are burdening the Subject Securities and/or the Assets;

(g)            the

resignation or removal (effective as of Closing) of all managers, officers and directors, as applicable, of Company Group;

(h)            an

Excluded Asset Assignment from the applicable members of the Company Group to a Seller or one or more of its designees, duly executed

by each such member of the Company Group and such Seller (or its designee);

(i)             a

Termination and Release Agreement in the form attached hereto as Exhibit F, providing for the termination of the Management

Services Agreement and release of certain rights and obligations thereunder among the Company Group and the other Persons party thereto,

duly executed by the applicable members of the Company Group and such other Persons;

(j)             joint

written instructions, duly executed by Seller, instructing the Escrow Agent to release the Deposit minus the Holdback Amount to

Seller;

(k)            if

applicable in accordance with Section 8.17, a counterpart of the Transition Services Agreement, duly executed by Paloma Resources;

(l)             counterparts

of the AMI and Standstill Agreements, in the form attached hereto as Exhibit H, from Sellers and each of the individuals set

forth on Schedule 10.2(l) (the “Standstill Agreements”), duly executed by each Seller and each such

individual; and

(m)           all

other documents and instruments which are required by the other terms of this Agreement to be executed and/or delivered at Closing by

any Seller, or any of their respective Affiliates.

Section 10.3       Obligations

of Purchaser at Closing. At the Closing, upon the terms and subject to the conditions of this Agreement, and subject to the simultaneous

performance by Sellers and Company of their obligations pursuant to ‎Section 10.2, Purchaser shall deliver or cause to

be delivered to Sellers, among other things, the following:

(a)            the

Preliminary Settlement Statement, duly executed by Purchaser;

(b)            a

wire transfer of the Closing Payment in same-day funds to the account(s) designated in the Preliminary Settlement Statement;

Assignment, duly executed by Purchaser;

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(d)            a

certificate, duly executed by an authorized officer of Purchaser, dated as of the Closing, certifying on behalf of Purchaser that the

conditions set forth in ‎Section 9.1(a) and ‎Section 9.1(b) have been fulfilled;

(e)            if

applicable in accordance with Section 8.17, a counterpart of the Transition Services Agreement, duly executed by Purchaser

Parent (or its designated Affiliate);

(f)             counterparts

of the Standstill Agreements, each duly executed by Purchaser;

(g)            joint

written instructions, duly executed by Purchaser, instructing the Escrow Agent to release the Deposit minus the Holdback Amount

to Seller; and

(h)           all

other documents and instruments which are required by the other terms of this Agreement to be executed and/or delivered at the Closing

by Purchaser.

Article 11

Tax

Matters

Section 11.1       Company

Taxes.

(a)            Solely

for purposes of determining the amounts of any Pre-Effective Time Company Taxes and any Post-Effective Time Company Taxes in connection

with the definition of “Seller Taxes” and the application of Section 2.4, Section 2.5, Section 2.7,

Section 11.6, Section 13.1 and Section 13.2: (i) Company Taxes that are attributable to the severance

or production of Hydrocarbons (other than such Company Taxes that are Income Taxes or that are ad valorem, property or similar Company

Taxes imposed on a periodic basis) shall be allocated to the Tax period (or portion of any Straddle Period) in which the severance or

production giving rise to such Company Taxes occurred; (ii) Company Taxes that are based upon or related to sales or receipts or

imposed on a transactional basis (other than such Company Taxes that are Income Taxes, are ad valorem, property or similar Company Taxes

imposed on a periodic basis, or described in clause ‎(i)), shall be allocated to the Tax period (or portion of any Straddle Period)

in which the transaction giving rise to such Company Taxes occurred; (iii) Company Taxes that are ad valorem, property or other similar

Company Taxes imposed on a periodic basis pertaining to a Straddle Period shall be allocated between the portion of such Straddle Period

ending immediately prior to the Effective Time and the portion of such Straddle Period beginning at the Effective Time by prorating each

such Company Tax based on the number of days in the applicable Straddle Period that occur before the date on which the Effective Time

occurs, on the one hand, and the number of days in such Straddle Period that occur on or after the date on which the Effective Time occurs,

on the other hand; and (iv) Company Taxes that are Income Taxes payable with respect to any Straddle Period shall be allocated between

the portion of such Straddle Period ending immediately prior to the Effective Time and the portion of such Straddle Period beginning at

the Effective Time by determining (A) the amount of such Company Taxes that would be payable if the Straddle Period ended on the

date immediately preceding the date on which the Effective Time occurs, which amount shall be a Pre-Effective Time Company Tax, and (B) the

amount of such Company Taxes that would be payable if the Straddle Period began on the date on which the Effective Time occurs, which

amount shall be a Post-Effective Time Company Tax.

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(b)            To

the extent the actual amount of a Company Tax is not known at the time an adjustment is to be made with respect to such Company Tax pursuant

to ‎Section 2.4, Section 2.5 or ‎Section 2.7, as applicable, the Parties shall utilize the

most recent information available in estimating the amount of such Company Tax for purposes of such adjustment.

Section 11.2       Transfer

Taxes and Recording Fees. (a) Sellers shall bear and pay fifty percent (50%), and Purchaser shall bear and pay fifty percent

(50%), of any sales, use, transfer, stamp, documentary, registration, excise, or similar Taxes incurred or imposed with respect to the

transactions described in this Agreement (“Transfer Taxes”), and (b) Purchaser shall bear and pay one hundred

percent (100%) of all required filing and recording fees and expenses in connection with the filing and recording of the assignments,

conveyances, or other instruments required to convey the Subject Securities to Purchaser. Each Seller and Purchaser shall reasonably cooperate

in good faith to minimize, to the extent permissible under applicable Law, the amount of any such Transfer Taxes.

Section 11.3       Tax

Returns. Sellers’ Representative shall prepare or cause to be prepared all Tax Returns of any member of Company Group with

respect to Flow-Through Income Taxes for any Tax period ending on or before the Closing Date and all Seller Consolidated Returns (collectively,

the “Sellers’ Representative Prepared Returns”), and timely pay (or cause to be paid) all Taxes with respect

to Seller Consolidated Returns. Subject to the provisions of the Transition Services Agreement and excluding any Tax Returns and Company

Taxes required to be filed and/or paid by a Third Party operator, Purchaser shall prepare or cause to be prepared all Tax Returns of any

member of the Company Group with respect to Company Taxes for all Pre-Effective Time Periods and Straddle Periods, in each case, that

are required to be filed after the Closing Date, other than the Sellers’ Representative Prepared Returns (collectively, “Purchaser

Prepared Returns”). Each Purchaser Prepared Return and Seller Consolidated Return shall be prepared on a basis consistent

with past practice except to the extent otherwise required by applicable Laws. Purchaser shall, reasonably in advance of the due date

of each Purchaser Prepared Return (taking into account any applicable extensions), deliver a draft of such Purchaser Prepared Return,

together with all supporting documentation and workpapers, to Sellers’ Representative for its review and comment, and Purchaser

will cause such Purchaser Prepared Return (as revised to incorporate Sellers’ Representative’s reasonable comments) to be

timely filed and provide a copy thereof to Sellers’ Representative. Purchaser shall, or shall cause the applicable members of the

Company Group to, pay or cause to be paid all Taxes shown as due and owing on such Tax Returns to the appropriate Governmental Authority,

and Sellers shall, subject to the Specified Representation Indemnity Cap set forth in Section 13.3(c)(i)(B) and the source

of recovery pursuant to Section 13.6, reimburse Purchaser for the amount of any such Taxes that are Pre-Effective Time Company

Taxes within ten (10) days after such payment (but only to the extent such Pre-Effective Time Company Taxes have not been taken into

account as a reduction in the Unadjusted Purchase Price pursuant to ‎Section 2.4 or ‎Section 2.7, was

economically borne by Sellers pursuant to ‎Section 13.2, or was a Transfer Tax borne by Sellers pursuant to ‎Section 11.2).

For the purposes of preparing all Tax Returns with respect to Flow-Through Income Taxes, all Transaction Costs (regardless of whether

included in the calculation of Effective Time Working Capital) shall be treated as accruing on or before the Closing Date unless otherwise

required by applicable Tax Law.

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Section 11.4       Cooperation.

The Parties shall cooperate fully, as and to the extent reasonably requested by the Other Party, in connection with the filing of Tax

Returns and any audit, litigation or other Action with respect to Taxes imposed on or with respect to the assets, operations or activities

of any member of the Company Group. Such cooperation shall include the retention and (upon the Other Party’s request) the provision

of records and information that are reasonably relevant to any such Tax Return or audit, litigation or other Action and making employees

available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder.

Section 11.5       Amended

Returns. No amended Tax Return relating to a Tax period beginning prior to the Closing Date shall be filed by or with respect

to any member of the Company Group without the prior written consent of Sellers’ Representative (such consent not to be unreasonably

withheld, conditioned or delayed).

Section 11.6       Tax

Refunds. Subject to the final sentence of this paragraph, Sellers shall be entitled to any and all refunds and credits attributable

to Company Taxes allocated to Sellers pursuant to Section 11.1 that are received or realized prior to the Holdback Release

Date, and Purchaser shall be entitled to any and all refunds and credits attributable to Company Taxes allocated to Purchaser pursuant

to Section 11.1 that are received or realized prior to the Holdback Release Date, in each case, to the extent such Company

Taxes were economically borne by the Party seeking payment for such refund or credit pursuant to this ‎Section 11.6, provided,

however, that Sellers shall not be entitled to any such refund or credit to the extent such refund or credit (1) results from

the carryback of any net operating loss, credit or other Tax attribute from any Tax period (or portion of any Straddle Period) beginning

after the Closing Date or (2) is of Seller Taxes that were paid by Purchaser or any of its Affiliates after the Closing and that

have not been indemnified by Sellers. If a Party or its Affiliate receives a refund of Company Taxes or receives or realizes a Tax benefit

attributable to any credit, in each case, to which another Party is entitled pursuant to this ‎Section 11.6, such recipient

Party shall forward to the entitled Party the amount of such refund or Tax benefit within thirty (30) days after such refund is received

or such Tax benefit is received or realized, as applicable, net of any reasonable costs or expenses incurred by such recipient Party in

procuring such refund or Tax benefit. To the extent any Tax refund or benefit which has been paid to Sellers pursuant to this Section 11.6

is subsequently disallowed or otherwise reduced, Sellers shall promptly pay to Purchaser the amount of such disallowance or reduction,

including any interest, penalties, fines, additions to Tax or additional amounts imposed with respect thereto. Notwithstanding anything

to the contrary in this Agreement, neither Party shall have any obligations pursuant to this Section 11.6 after the Holdback Release

Date.

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Section 11.7       Tax

Proceedings. If, after the Closing Date, a Party or an Affiliate of such Party (including a member of the Company Group) receives

notice of an audit or administrative or judicial Action with respect to any Company Tax or Tax Return with respect to Company Taxes related

to any taxable period ending prior to the Effective Time (a “Pre-Effective Time Tax Contest”), such Party shall

notify the Other Party within ten (10) days of receipt of such notice; provided that the failure to provide such notice shall

not relieve the first Party of its obligations under this Agreement with respect to Company Taxes, as applicable, except to the extent

such failure results in insufficient time being available to permit the Other Party to effectively defend against such Pre-Effective Time

Tax Contest. Sellers’ Representative shall have the option, at Sellers’ sole cost and expense, to control any such Pre-Effective

Time Tax Contest and may exercise such option by providing written notice to Purchaser within fifteen (15) days of receiving notice of

such Pre-Effective Time Tax Contest from Purchaser; provided that Sellers’ Representative shall, to the extent such Pre-Effective

Time Tax Contest is reasonably expected to have a material impact on the amount of any Post-Effective Time Company Taxes, (i) keep

Purchaser reasonably informed of the progress of such Pre-Effective Time Tax Contest, (ii) permit Purchaser (or Purchaser’s

counsel) to participate, at Purchaser’s sole cost and expense, in such Pre-Effective Time Tax Contest, including in meetings with

the applicable Governmental Authority and (iii) not settle, compromise and/or concede such portion of such Pre-Effective Time Tax

Contest without the prior written consent of Purchaser, which consent shall not be unreasonably withheld, conditioned or delayed. If,

after the Closing Date, a Party or an Affiliate of such Party (including any member of the Company Group) receives notice of an audit

or administrative or judicial proceeding with respect to any Company Tax or Tax Return with respect to Company Taxes related to a Straddle

Period (a “Straddle Period Tax Contest”), such Party shall notify the Other Party within ten (10) days

of receipt of such notice; provided that the failure to provide such notice shall not relieve the first Party of its obligations

under this Agreement with respect to Company Taxes, except to the extent such failure results in insufficient time being available to

permit the Other Party to effectively participate in the defense against such Straddle Period Tax Contest. Purchaser shall control any

Straddle Period Tax Contest; provided that, solely with respect to any Straddle Period Tax Contest for which any Seller may be required

to economically bear any Taxes (pursuant to this Agreement or Applicable Law) in the event of an adverse determination, Purchaser shall

(x) keep Sellers’ Representative reasonably informed of the progress of such Straddle Period Tax Contest, (y) permit Sellers’

Representative (or Sellers’ Representative’s counsel) to participate, at Sellers’ sole cost and expense, in such Straddle

Period Tax Contest, including in meetings with the applicable Governmental Authority, and (z) not settle, compromise and/or concede

any portion of such Straddle Period Tax Contest without the prior written consent of Sellers’ Representative, which consent shall

not be unreasonably withheld, conditioned or delayed.

Section 11.8       Termination

of Tax Sharing Agreements. At or prior to the Closing, Sellers shall, and shall cause their Affiliates to, terminate any and all

Tax allocation, sharing or indemnity Contracts, agreements or arrangements and any other similar Contract (other than the Company LLC

Agreement and any commercial agreements or arrangements entered into in the ordinary course of business that are not primarily related

to Taxes) between any member of the Company Group, on the one hand, and Sellers or any of their Affiliates (other than members of the

Company Group), on the other hand. After such termination, no member of the Company Group shall have any further rights or liabilities

thereunder.

Section 11.9       Push

Out Elections.

(a)            Notwithstanding

anything contained in this Agreement to the contrary, if a member of the Company Group (or any predecessor thereof) is, or since 2015

has been, classified as a partnership for U.S. federal income tax purposes (or applicable state or local Tax purposes) and becomes the

subject of an adjustment to any tax item resulting from any income tax audit, examination, administrative or judicial proceeding with

respect to any taxable period or portion thereof ending on or prior to the Closing Date, then, except as otherwise agreed by the Parties,

to the extent permitted by applicable Law, Sellers shall, and shall cause their Affiliates to, take such actions as are needed to cause

such member of the Company Group (or such predecessor) to make a “push out” election under Section 6226(a) of the

Code (and any corresponding or similar provision of state or local Tax Law) for such taxable period or portion thereof ending on or prior

to the Closing Date.

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(b)            Notwithstanding

anything in this Agreement to the contrary, if, after the Closing Date, any Party receives notice of an audit or administrative or judicial

proceeding that relates to Flow-Through Income Taxes attributable to the Company with respect to any Tax period (or portion thereof) ending

on or prior to the Closing Date, such Party shall notify the other Parties within ten (10) days of receipt of such notice. Sellers

shall be entitled to control, in their sole discretion and at their sole expense, any audit or administrative or judicial proceeding that

relates to Flow-Through Income Taxes attributable to the Company for any Tax period (or portion thereof) ending on or prior to the Closing

Date, including having the ability to appoint and replace the “partnership representative” and “designated individual”

of the Company.

anything in this Agreement to the contrary, with respect to Flow-Through Income Taxes attributable to the Company, Purchaser shall not

(i) initiate any voluntary disclosures with any Governmental Authority regarding Flow-Through Income Taxes with respect to any Tax

period (or portion thereof) ending on or prior to the Closing Date, (ii) agree to extend or waive the statute of limitations with

respect to Flow-Through Income Taxes attributable to the Company for any Tax period (or portion thereof) ending on or prior to the Closing

Date, (iii) make any other Tax election or change any accounting method after the Closing Date (including any entity classification

election under Treasury Regulation Section 301.7701-3 but excluding, for the avoidance of doubt, any election under Section 6226

of the Code) that would have effect prior to the Closing Date or (iv) cause the Company to effect or engage in any transaction or

other action occurring on the Closing Date after the Closing that is outside of its ordinary course of business and not otherwise contemplated

by this Agreement, if such action would reasonably be expected to increase the amount of Taxes for which Seller is economically responsible

pursuant to this Agreement or applicable Law.

Article 12

Termination

Section 12.1       Termination.

This Agreement may be terminated at any time prior to the Closing (the date of any permitted termination of this Agreement under this

‎Section 12.1, the “Termination Date”):

(a)            by

the mutual prior written consent of Sellers’ Representative and Purchaser;

(b)            by

Sellers’ Representative or Purchaser upon written Notice to the Other Party, if Closing has not occurred on or before the date that

is thirty (30) days after the Target Closing Date (as may be extended pursuant to the following proviso, the “Outside Date”);

Sellers’ Representative or Purchaser upon written Notice to the Other Party, if a final non-appealable Order has been entered restraining,

enjoining or otherwise prohibiting the consummation of the transactions contemplated by this Agreement;

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(d)            by

Purchaser upon written notice to Sellers’ Representative, if Purchaser is not then in material breach of any provision of this Agreement

that would give rise to the failure of any of the conditions specified in ‎Section 9.1 and there has been a material breach,

inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by any Seller or Company pursuant to this

Agreement that would give rise to the failure of any of the conditions specified in ‎Section 9.2 and such breach, inaccuracy

or failure cannot be cured by any Seller or Company by the Target Closing Date;

(e)            by

Sellers’ Representative upon written notice to Purchaser, if no Seller or Company is then in material breach of any provision of

this Agreement that would give rise to the failure of any of the conditions specified in ‎Section 9.2 and there has been

a material breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by Purchaser pursuant

to this Agreement that would give rise to the failure of any of the conditions specified in ‎Section 9.1 and such breach,

inaccuracy or failure cannot be cured by Purchaser by the Target Closing Date;

(f)            by

Sellers’ Representative upon written notice to Purchaser, if the aggregate amount of the sum of (i) the aggregate Defect Amounts

with respect to all Title Defects and Environmental Defects asserted by Purchaser, minus (ii) the Title Defect Deductible

minus (iii) the Environmental Defect Deductible equals or exceeds an amount equal to seven and one-half percent (7.5%) of

the Unadjusted Purchase Price; or

(g)            by

Sellers’ Representative upon written notice to Purchaser, if Purchaser has not delivered the Deposit to the Escrow Agent in accordance

with Section 2.3(a) by 5:00 p.m. Central Time on July 23, 2026;

provided,

however, that no Party shall be entitled to terminate this Agreement under ‎Section 12.1(b) or ‎Section 12.1(c) if

(A) the Closing has failed to occur as a result of the breach or failure of any of such Party’s representations, warranties,

or covenants hereunder that would give rise to the failure of any of the conditions specified in ‎Article 9, including,

if and when required, such Party’s obligations to consummate the transactions contemplated hereunder at Closing or (B) a Party

is entitled to and is enforcing its right to specific performance of this Agreement under ‎Section 12.2(b) or ‎Section 12.2(c) below.

Section 12.2       Effect

of Termination.

(a)            If

this Agreement is terminated pursuant to ‎Section 12.1, this Agreement shall become void and of no further force or effect

(except for the provisions of ‎Article 1, ‎Section 2.3(b), ‎Article 7, ‎Section 8.1(b),

‎Section 8.1(c), ‎Section 8.1(d), ‎Section 8.1(e), ‎Article 12, and ‎Article 14,

all of which shall survive and continue in full force and effect indefinitely). The Confidentiality Agreement shall survive any termination

of this Agreement.

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(b)            In

the event that (i) all conditions precedent to the obligations of each Seller set forth in ‎Section 9.1 have been

satisfied or waived in writing by Sellers’ Representative (or would have been satisfied except for the breach described in clause

(ii) of this ‎Section 12.2(b)) and (ii) the Closing has not occurred solely as a result of the material breach

of any Seller’s or Company’s representations or warranties, such that the condition to Closing set forth in Section 9.2(a) is

not satisfied, or the material breach or failure of covenants hereunder, such that the condition to Closing set forth in Section 9.2(b) is

not satisfied, including, if and when required, any Seller’s or Company’s obligations to consummate the transactions contemplated

hereunder at the Closing, then Purchaser shall be entitled, as the sole and exclusive remedy of the Purchaser Group against any member

of the Seller Group for the failure to consummate the transactions contemplated hereunder at the Closing, to either (A) seek specific

performance of this Agreement under ‎Section 14.16, or (B) terminate this Agreement and receive (1) the entirety

of the Deposit for the sole account and use of Purchaser and (2) the reimbursement of documented out-of-pocket fees and expenses

paid to Third Parties incurred by Purchaser and its Affiliates in connection with the transactions contemplated by this Agreement, including

fees and expenses of accountants, land brokers, environmental consultants or other representatives or consultants, and reasonable fees

and expenses of outside counsel, in each case, up to a maximum reimbursement of four million Dollars ($4,000,000) (collectively, the “Reimbursement

Expenses”) as liquidated damages hereunder. Each Seller and Purchaser acknowledge and agree that (x) Purchaser’s

actual damages upon the event of such a termination are difficult to ascertain with any certainty, (y) the Reimbursement Expenses

are a fair and reasonable estimate by the Parties of such aggregate actual damages of Purchaser and (z) such liquidated damages do

not constitute a penalty.

the event that (i) all conditions precedent to the obligations of Purchaser set forth in ‎Section 9.2 have been satisfied

or waived in writing by Purchaser (or would have been satisfied except for the breach described in clause (ii) of this ‎Section 12.2(c))

and (ii) the Closing has not occurred solely as a result of the material breach of any of the Purchaser Parties’ representations

or warranties, such that the condition to Closing set forth in ‎‎Section 9.1(a) is not satisfied, or the material

breach or failure of covenants hereunder, such that the condition to Closing set forth in ‎‎Section 9.1(b) is

not satisfied, including, if and when required, the Purchaser Parties’ obligations to consummate the transactions contemplated hereunder

at the Closing, then Sellers shall be entitled, as the sole and exclusive remedy of the Seller Group against any member of the Purchaser

Group or any Financing Source for the failure to consummate the transactions contemplated hereunder at the Closing, to either (A) seek

specific performance of this Agreement under ‎Section 14.16 or (B) terminate this Agreement and receive the entirety

of the Deposit for the sole account and use of Sellers as liquidated damages hereunder. Each Seller, Purchaser and Purchaser Parent acknowledge

and agree that (1) Sellers’ actual damages upon the event of such a termination are difficult to ascertain with any certainty,

(2) the Deposit is a fair and reasonable estimate by the Parties of such aggregate actual damages of Sellers and (3) such liquidated

damages do not constitute a penalty.

(d)            In

the event that this Agreement is terminated under ‎Section 12.1 (except for any termination under Section 12.1(g))

and Sellers are not entitled or required to receive the Deposit under ‎Section 12.2(c), Purchaser shall

be entitled to receive the entirety of the Deposit for the account of Purchaser.

(e)            Promptly,

but in no event later than three (3) Business Days after the Termination Date, (i) Sellers’ Representative and Purchaser

shall execute and deliver to the Escrow Agent written instructions instructing the Escrow Agent to disburse via wire transfer of immediately

available funds the entirety of the Deposit to the Party or Parties entitled to receive the Deposit and/or (ii) to the extent required

under ‎Section 12.2(b), Sellers’ Representative shall cause the Reimbursement Expenses to be paid to Purchaser via

wire transfer of immediately available funds, in each case, as provided in this ‎Section 12.2. To the extent any Party

is entitled to receive any amounts (including the Deposit and/or Reimbursement Expenses) under this ‎Section 12.2, such

amounts shall be disbursed to the Persons and account(s) as designated by Sellers’ Representative or Purchaser, as applicable.

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Section 12.3       Return

of Documentation and Confidentiality. Promptly following the termination of this Agreement, Purchaser shall destroy or return

to Sellers and the Company all title, engineering, geological and geophysical data, environmental assessments and/or reports, maps and

other information furnished by or on behalf of Company or any Seller to Purchaser or prepared by or on behalf of Purchaser in connection

with its due diligence investigation of Company, the Subject Securities or the Assets, in each case, in accordance with the Confidentiality

Agreement and, if Purchaser elects to destroy any such information, an officer of Purchaser shall certify the destruction of such information

to Sellers and the Company in writing.

Article 13

Indemnification;

Limitations

Section 13.1       Sellers’

Indemnification Rights. Subject to the terms hereof, from and after the Closing, Purchaser and Company shall be jointly and severally

responsible for, shall pay, and shall jointly and severally indemnify, defend and hold harmless each Seller, Paloma Resources, each Affiliate

of each such Person, and each of such Person’s respective shareholders, members, officers, directors, employees, agents, advisors,

representatives, accountants, attorneys and consultants (“Seller Group”) from and against all obligations, liabilities,

claims, causes of action and Damages caused by, arising out of, attributable to or resulting from:

(a)            the

failure or breach of any Purchaser Party’s covenants or agreements contained in this Agreement or in any Transaction Document;

(b)            the

failure or breach of Company’s covenants or agreements contained in this Agreement, in each case to the extent required to be performed

after Closing;

breach or inaccuracy of any representation or warranty made by a Purchaser Party contained in ‎Article 6 of this Agreement

or in the Purchaser Party Certificate;

(d)            any

Post-Effective Time Company Taxes, except any Damages against which Purchaser is entitled to indemnity from Sellers’ Representative

under ‎Section 13.2, and except any Post-Effective Time Company Taxes that (i) result from actions taken outside

the ordinary course of business by Sellers, any of their Affiliates or any member of the Company Group prior to the Closing, (ii) were

economically borne by the Purchaser pursuant to the adjustments to the Unadjusted Purchase Price made pursuant to ‎Section 2.4

and/or ‎Section 2.7, as applicable or (iii) were economically borne by Purchaser pursuant to ‎Section 11.1(b);

and/or

(e)            the

conduct, ownership or operation of the Subject Securities, Company Group, the Business and/or the Assets, excepting and excluding any

Damages against which Purchaser is entitled to indemnity from Sellers’ Representative under ‎Section 13.2;

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EVEN IF ANY SUCH

DAMAGES ARE CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE (WHETHER SOLE, JOINT, ACTIVE, PASSIVE, COMPARATIVE OR CONCURRENT), STRICT

LIABILITY OR OTHER LEGAL FAULT OF ANY INDEMNIFIED PERSON, INVITEES OR THIRD PARTIES (BUT EXCLUDING THE GROSS NEGLIGENCE OR WILLFUL

MISCONDUCT OF ANY INDEMNIFIED PERSON).

Section 13.2       Purchaser’s

Indemnification Rights. Subject to the terms hereof, from and after the Closing, Sellers’ Representative shall be responsible

for, shall pay, and shall indemnify, defend and hold harmless Purchaser, the Affiliates of Purchaser (including the Company Group) and

each of their respective shareholders, members, officers, directors, employees, agents, advisors, representatives, accountants, attorneys

and consultants (“Purchaser Group”) from and against all obligations, liabilities, claims, causes of action,

and Damages caused by, arising out of, attributable to, or resulting from:

(a)            the

failure or breach of any of Sellers’ covenants or agreements contained in this Agreement, in each case to the extent required to

be performed after Closing;

(b)            any

Seller Taxes;

breach of any Specified Representation; and/or

(d)            the

Specified Liability Matters.

Section 13.3       Survival;

Limitations.

(a)            Subject

to ‎Section 13.3(b) and ‎Section 13.3(c): (i) all representations and warranties of each Seller

and/or Company set forth herein (other than the Specified Representations) and in the other Transaction Documents (including the corresponding

representations and warranties given in the Closing Certificate) shall terminate and expire at Closing; provided, however, solely

for the purposes of the R&W Insurance Policy, (x) this Section 13.3(a) shall not affect the time periods during

which any claim by Purchaser may be made under the R&W Insurance Policy and (y) all such representations and warranties shall

survive until the expiration of the R&W Insurance Policy pursuant to its terms; (ii) the Specified Representations shall survive

Closing and terminate upon the expiration of the applicable survival period of the insurance with respect to such Specified Representations

under the R&W Insurance Policy; (iii) the covenants and agreements of each Seller, Company and the Purchaser to be performed

on or prior to Closing shall terminate and expire at Closing; (iv) the covenants and agreements of each Seller or Purchaser to be

performed, in whole or in part, after Closing shall survive the Closing to such extent and terminate when fully performed (other than

(A) in the case of the Sellers’ Representative, the covenants in Section 13.2, or (B) in the case of Purchaser,

the covenants in Section 13.1, in each case, which shall terminate on the date the applicable representations, warranties

and covenants that is subject to indemnification thereunder terminates); (v) the representations, and warranties of Purchaser set

forth in this Agreement and the Purchaser Party Certificate shall survive Closing and terminate on the date that is thirty (30) days after

the expiration of the statutes of limitations applicable to such matters; (vi) Sellers' indemnification obligations set forth in

Section 13.2(b) shall survive until thirty (30) days after the expiration of the statutes of limitations applicable to

such matters; and (vii) Seller’s indemnification obligations set forth in Section 13.2(d) shall survive the

Closing (x) with respect to the Action set forth on Schedule 13.2(d), until the occurrence of a final, non-appealable decision

from a Governmental Authority or a final settlement that contains a full and complete dismissal or release of claims against each member

of the Company Group applicable to such Action and (y) with respect to the other matters set forth on Schedule 13.2(d), until

the date that is thirty (30) days after the expiration of the statutes of limitations applicable to such matters. Notwithstanding anything

in this Article 13 to the contrary, there shall be no expiration or termination of any bona fide claim validly asserted pursuant

to a valid Claim Notice pursuant to this Agreement with respect to such a representation, warranty, covenant, or agreement prior to the

expiration or termination date of the applicable survival period thereof.

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(b)            As

a condition to making any claims for indemnification, defense, or to be held harmless under this ‎Article 13, the Party

seeking indemnification must deliver to the Other Party a valid Claim Notice pursuant to this Agreement prior to the expiration or termination

date of the applicable survival period (if any) thereof or the date it is otherwise required to be delivered hereunder. All rights of

each member of the Purchaser Group or the Seller Group to indemnification and/or reimbursement under ‎Section 13.2 or

‎Section 13.1, respectively, shall survive Closing and terminate and expire on the earlier to occur of (i) the termination

date of each respective representation, warranty, covenant or agreement, as applicable, for which any member of the Purchaser Group or

the Seller Group is entitled to indemnification or reimbursement hereunder, except in each case as to matters for which a specific written

Claim Notice has been validly delivered to the Other Party, as applicable, on or before the earlier of such termination date or the date

otherwise required to be delivered hereunder or (ii) the date the Purchaser Group or the Seller Group has received indemnification

and/or reimbursement from the Other Party, as applicable, in an aggregate amount equal to the Applicable Indemnity Cap.

to ‎Section 14.11 and ‎Section 13.3(c)(iii), and notwithstanding anything to the contrary contained elsewhere

in this Agreement after Closing:

(i)            neither

Purchaser nor any member of the Purchaser Group shall be entitled to indemnity or reimbursement:

(A)          for

any breach or inaccuracy of any representation or warranty made by any Seller or Company (other than the Specified Representations) (Purchaser’s

sole and exclusive remedy with respect thereto being the R&W Insurance Policy);

(B)           for

(i) any breach or inaccuracy of any Specified Representations or (ii) Sellers’ indemnity obligations under Section 13.2(b),

in either case, ‎in excess of an amount equal to $5,737,500 (such amount, the “Specified Representation Indemnity Cap”);

Sellers’ indemnity obligations under Section 13.2(d) in any amount in excess of ten million dollars ($10,000,000)

(the “Specified Liability Matters Indemnity Cap”); and

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(D)           for

aggregate Damages that Purchaser Group is entitled to indemnity and reimbursement under this Agreement or any other Transaction Document

‎in excess of an amount equal to one-hundred percent (100%) of the Adjusted Purchase Price (such amount, the “Overall

Indemnity Cap”).

(ii)        Subject

to ‎Article 12 and ‎Section 14.11, the aggregate liability of Purchaser (and Company after Closing) under

this Agreement or any Transaction Document shall not exceed the Adjusted Purchase Price.

(iii)       Notwithstanding

anything to the contrary in this Agreement, nothing in this Agreement will limit the liability of a Party for Fraud.

(d)            Each

Seller, Company and Purchaser each acknowledge and agree that except as expressly set forth in ‎Article 12 or under ‎Section 14.16,

(i) the payment of money, as limited by the terms of this Agreement, and the rights to the proceeds of the R&W Insurance Policy,

shall be adequate compensation for the breach of any representation, warranty, covenant or agreement contained herein or for any other

claim arising in connection with or with respect to the transactions contemplated by this Agreement and (ii) Purchaser, Company and

each Seller hereby waive any and all rights to rescind, reform, cancel, terminate, revoke or void this Agreement or any of the transactions

contemplated hereby; provided, however, each Party shall have the non-exclusive right to specific performance under ‎Section 14.16

and other equitable remedies available at law or equity (including injunctive relief) for the breach or failure of the Other Party to

perform its obligations hereunder required to be performed after Closing.

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Section 13.4       Exclusive

Remedy and Certain Limitations.

(a)            Notwithstanding

anything to the contrary contained in this Agreement, from and after Closing, except in respect of claims of Fraud, Purchaser’s

and Purchaser Group’s sole and exclusive remedy against any member of the Seller Group with respect to the Assets, the Business,

the Subject Securities, Company Group, the negotiation, performance and consummation of the transactions contemplated hereunder, any breach

of the representations, warranties, covenants and agreements of any member of the Seller Group contained herein, and the affirmations

of such representations, warranties, covenants and agreements contained in the Closing Certificate are the rights to indemnity from Sellers

set forth in ‎Section 13.2, as limited by the terms of this ‎Article 13, the rights to the proceeds of

the R&W Insurance Policy, and the right to seek specific performance under ‎Section 14.16 for the breach or failure

of a Seller to perform any covenants required to be performed after Closing. Notwithstanding any other provision to the contrary, with

respect to any liability for breach or inaccuracy of any representation or warranty made by any Seller or Company or any breach of any

Seller’s or Company’s covenants or agreements to be performed on or prior to Closing that is covered and collectible (in whole

or in part) under the R&W Insurance Policy, Purchaser shall, and shall instruct each Purchaser Group member to, submit such claim

for coverage under the R&W Insurance Policy and use commercially reasonable efforts in order to pursue such claim under the R&W

Insurance Policy; provided, however, that for the avoidance of doubt, this sentence shall not limit Sellers’ indemnification

obligations under Section 13.2 so long as Purchaser complies with the foregoing obligations in this sentence (it being understood

that Purchaser’s pursuit of any such claim under the R&W Insurance Policy includes the pursuit of the reduction or erosion of

the Retention with respect to such claim). Except for the remedies for indemnification or defense from Sellers contained in this ‎Article 13,

and except for the rights to proceeds of the R&W Insurance Policy upon Closing, Purchaser waives, releases, remises and forever discharges,

and shall cause each member of the Purchaser Group to waive, release, remise and forever discharge, each member of the Seller Group from

any and all Damages, suits, legal or administrative Actions, claims, demands, losses, costs, obligations, liabilities, interest, charges

or causes of action whatsoever, in law or in equity, known or unknown, which any member of the Purchaser Group might now or subsequently

may have, based on, relating to or arising out of the Assets, the Business, the Subject Securities, Company Group, the negotiation, performance,

and consummation of this Agreement or the other Transaction Documents or the transactions contemplated hereunder or thereunder, or any

member of the Seller Group’s ownership, use or operation of the Assets, or the condition, quality, status or nature of any Assets,

or any matter relating to any member of the Seller Group in their capacity as direct or indirect shareholders, members, officers, directors

or employees, including any actions taken by managers or officers of Company prior to the Closing Date, INCLUDING RIGHTS TO CONTRIBUTION

UNDER CERCLA OR ANY OTHER ENVIRONMENTAL LAW, BREACHES OF STATUTORY AND IMPLIED WARRANTIES, NUISANCE OR OTHER TORT ACTIONS, RIGHTS TO PUNITIVE

DAMAGES, COMMON LAW RIGHTS OF CONTRIBUTION, ANY RIGHTS UNDER INSURANCE POLICIES ISSUED OR UNDERWRITTEN BY ANY MEMBER OF THE PURCHASER

GROUP (OTHER THAN THE R&W INSURANCE POLICY), AND ANY RIGHTS UNDER AGREEMENTS AMONG ANY MEMBERS OF THE SELLER GROUP, EVEN IF CAUSED

IN WHOLE OR IN PART BY THE NEGLIGENCE (WHETHER GROSS, SOLE, JOINT, ACTIVE, PASSIVE, COMPARATIVE OR CONCURRENT), STRICT LIABILITY

OR OTHER LEGAL FAULT OF ANY RELEASED PERSON, INVITEES OR THIRD PARTIES.

(b)            Notwithstanding

anything to the contrary contained in this Agreement, from and after Closing, except in respect of claims of Fraud, Sellers’ and

Seller Group’s sole and exclusive remedy against any member of the Purchaser Group with respect to the negotiation, performance

and consummation of the transactions contemplated hereunder, any breach of the representations, warranties, covenants and agreements of

any member of the Purchaser Group contained herein, and the affirmations of such representations, warranties, covenants and agreements

contained in the Purchaser Party Certificate are (i) the rights to indemnity from Purchaser set forth in ‎Section 13.1,

as limited by the terms of this ‎Article 13, and (ii) the right to seek specific performance under ‎Section 14.16

for the breach or failure of Purchaser or Purchaser Parent to perform any covenants required to be performed after Closing. Except for

the remedies for indemnification or defense from Purchaser contained in this ‎Article 13 or in ‎Section 8.9,

upon Closing, each Seller waives, releases, remises and forever discharges, and shall cause each member of the Seller Group to waive,

release, remise and forever discharge, each member of the Company Group from any and all Damages, suits, legal or administrative Actions,

claims, demands, losses, costs, obligations, liabilities, interest, charges or causes of action whatsoever, in law or in equity, known

or unknown, which any member of the Seller Group might now or subsequently may have, based on, relating to or arising out of actions or

omissions (including any actions taken by managers or officers of the Company), facts or circumstances occurring, arising or existing

at or prior to the Closing, EVEN IF CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE (WHETHER GROSS, SOLE, JOINT, ACTIVE, PASSIVE,

COMPARATIVE OR CONCURRENT), STRICT LIABILITY OR OTHER LEGAL FAULT OF ANY RELEASED PERSON, INVITEES OR THIRD PARTIES.

112

claim for indemnity under this ‎Article 13 by any current or former Affiliate, stockholder, member, officer, director,

employee, agent, lender, advisor, representative, accountant, attorney and consultant of any Party must be brought and administered by

the applicable Party to this Agreement. No Indemnified Person other than a Seller and Purchaser shall have any rights against a Seller,

Purchaser or Company under the terms of this ‎Article 13, except as may be exercised on its behalf by Purchaser or a Seller,

as applicable, pursuant to this ‎Article 13. Each Seller and Purchaser may elect to exercise or not exercise indemnification

rights under this Agreement on behalf of the other Indemnified Persons affiliated with it in its sole discretion and shall have no liability

to any such other Indemnified Person for any action or inaction under this ‎Section 13.4.

(d)            The

amount of any Damages for which an Indemnified Person is entitled to indemnity under this ‎Article 13 shall be reduced

by the amount of insurance or other Third Party proceeds, recoupment, reimbursements or claims actually received or realized, with respect

to such Damages, costs or expenses incurred in connection with securing or obtaining such proceeds, recoupment, reimbursements or claims.

Purchaser shall, and shall cause the Purchaser Group, and Sellers shall, and shall cause the Seller Group, as applicable, to, use commercially

reasonable efforts to collect any amounts available under such insurance coverage or from the applicable Third Party; provided

that the foregoing obligation to use commercially reasonable efforts is not a condition precedent to an Indemnified Person’s rights

to indemnification hereunder. In the event that any member of the Purchaser Group or Seller Group receives funds or proceeds from any

insurance carrier or any other Third Party with respect to any Damages, Purchaser or Sellers’ Representative, as applicable, shall,

regardless of when received by such member of the Purchaser Group or Seller Group, respectively, promptly pay and reimburse the Other

Party such funds or proceeds to the extent of any funds previously paid by Sellers or Purchaser, as applicable, to or received by any

member of the Purchaser Group or Seller Group, as applicable, with respect to such Damages.

(e)            Each

Indemnified Person shall use commercially reasonable efforts to mitigate or minimize all Damages upon and after becoming aware of any

event or condition which would reasonably be expected to give rise to any Damages that are indemnifiable hereunder. If an Indemnified

Person fails to use commercially reasonable efforts to so mitigate any indemnifiable Damages under the preceding sentence, (i) such

Indemnified Person shall have no right to indemnity hereunder and (ii) the Indemnifying Party shall have no liability, in each case,

for any portion of such Damages that reasonably could have been avoided, reduced or mitigated had the Indemnified Person made such commercially

reasonable efforts.

(f)             The

Parties shall treat, for U.S. federal and applicable state and local Income Tax purposes, any amounts paid under this ‎Article 13

as an adjustment to the Adjusted Purchase Price, unless otherwise required by applicable Laws.

(g)            To

the extent of the indemnification obligations in this Agreement, Purchaser and Company, on behalf of itself and Company Group, and each

Seller hereby waive for itself and its successors and assigns, including any insurers, any rights to subrogation for Damages for which

such Party is liable or against which such Party indemnifies any other Person under this Agreement. If required by applicable insurance

policies, each Party shall obtain a waiver of such subrogation from its insurers.

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(h)            For

purposes of this ‎Article 13, the amount of Damages resulting from any inaccuracy or breach of a representation or warranty

(but not the existence of an inaccuracy or breach of such representation or warranty), shall be determined without regard to and as if

all qualifications as to materiality, Material Adverse Effect or similar qualifiers contained in or applicable to such representation

or warranty were deleted therefrom.

Section 13.5       Indemnification

Actions. All claims for indemnification under this ‎Article 13 shall be asserted and resolved as follows:

(a)            For

purposes of this ‎Article 13, the term “Indemnifying Party” when used in connection with particular

Damages means (i) Sellers’ Representative in the event any member of the Purchaser Group is entitled to indemnification under

‎Section 13.2 and (ii) Purchaser in the event any member of the Seller Group is entitled to indemnification under

this Agreement. For purposes of this ‎Article 13, the term “Indemnified Person” when used in

connection with particular Damages means (A) Purchaser in the event any member of the Purchaser Group is entitled to indemnity under

‎Section 13.2 and (B) each Seller in the event any member of the Seller Group is entitled to indemnification under

this Agreement.

(b)            To

make a claim for indemnification, defense or reimbursement under this ‎Article 13, an Indemnified Person shall notify

the Indemnifying Party of its claim, including reasonably specific details (including supporting documentation in such Indemnified Person’s

possession or control of the alleged Damages and such Indemnified Person’s good faith estimate of the applicable claim) of and specific

basis under this Agreement for its claim (the “Claim Notice”).

the event that any claim for indemnification set forth in any Claim Notice is based upon a claim by a Third Party against the Indemnified

Person (a “Third Party Claim”), the Indemnified Person shall provide its Claim Notice promptly after the Indemnified

Person has actual knowledge of the Third Party Claim and shall enclose a copy of all papers (if any) served with respect to the Third

Party Claim in such Indemnified Person’s possession or control; provided that the failure of any Indemnified Person to provide

a Claim Notice with respect to any Third Party Claim as provided in this ‎Section 13.5 shall not relieve the Indemnifying

Party of its obligations under this ‎Article 13 except to the extent such failure materially prejudices the Indemnifying

Party’s ability to defend against the Third Party Claim. In the event that the claim for indemnification is based upon an alleged

inaccuracy or breach of a representation, warranty, covenant, or agreement, the Claim Notice shall specify the representation, warranty,

covenant, or agreement that was allegedly inaccurate or breached.

(d)            In

the case of a claim for indemnification based upon any Third Party Claim, the Indemnifying Party shall have thirty (30) days from its

receipt of the Claim Notice to notify the Indemnified Person whether it admits or denies the Indemnifying Party’s obligation to

defend the Indemnified Person against such Third Party Claim under this Agreement. The Indemnified Person is authorized, prior to and

during such thirty (30) day period, to file any motion, answer, or other pleading that it shall deem necessary or appropriate to protect

its interests or those of the Indemnifying Party and that is not prejudicial to the Indemnifying Party. If the Indemnifying Party fails

to notify the Indemnified Person within such thirty (30) day period regarding whether the Indemnifying Party admits or denies (i) the

Indemnified Person’s right to indemnity from the Indemnifying Party in respect of such Third Party Claim as provided in this ‎Article 13

or (ii) the Indemnifying Party’s obligation to defend the Indemnified Person against such Third Party Claim under this Agreement,

then until such date as the Indemnifying Party admits or it is finally determined by a non-appealable judgment that such right or obligation

exists, the Indemnified Person may file any motion, answer or other pleading, settle any Third Party Claim or take any other action that

the Indemnified Person deems necessary or appropriate to protect its interest, regardless of whether the Indemnifying Party is prejudiced

or adversely impacted by any such actions.

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(e)            If

the Indemnifying Party admits its obligation to defend the Indemnified Person against such Third Party Claim under this Agreement, then

the applicable Indemnifying Party shall have (i) the right and obligation to diligently prosecute and control the defense of such

Third Party Claim, if Purchaser is the Indemnifying Party, at the sole cost and expense of Purchaser, and if Sellers’ Representative

is the Indemnifying Party, at the sole cost and expense of Sellers’ Representative, and (ii) have full control of such defense

and proceedings, including any compromise or settlement thereof unless the compromise or settlement (A) does not include an unconditional

written release of the Indemnified Person or (B) includes the payment of any amount by, the performance of any obligation by, or

the limitation of any right or benefit of, the Indemnified Person, in either case, which settlement or compromise shall not be effective

without the consent of the Indemnified Person, which shall not be unreasonably withheld or delayed. If requested by the Indemnifying Party,

the Indemnified Person agrees at the cost and expense of the Indemnifying Party to cooperate in contesting any Third Party Claim which

the Indemnifying Party elects to contest; provided, however, that the Indemnified Person shall not be required to bring

any counterclaim or cross-complaint against any Person. The Indemnified Person may participate in, but not control, any defense or settlement

of any Third Party Claim controlled by the Indemnifying Party pursuant to this ‎Section 13.5(e) (provided that

the Indemnified Person may file initial pleadings as described in the last sentence of subsection ‎(d) above if required

by court or procedural rules to do so within the thirty (30) day period in subsection ‎(d) above) and to employ

a single separate counsel of its choosing. The Indemnified Person’s participation in any such defense shall be at its expense unless

the Indemnifying Party and the Indemnified Person are both named parties to the proceedings and the Indemnified Person shall have reasonably

concluded that representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests

between them, in which case the Indemnified Person shall participate in such defense and employ separate counsel, which counsel must be

reasonably acceptable to the Indemnifying Party, at the Indemnifying Party’s expense. An Indemnifying Party shall not, without the

written consent of the Indemnified Person, settle any Third Party Claim or consent to the entry of any judgment with respect thereto that

(A) does not result in a final resolution of the Indemnified Person’s liability with respect to the Third Party Claim (including,

in the case of a settlement, an unconditional written release of the Indemnified Person from all further liability in respect of such

Third Party Claim) or (B) may materially and adversely affect the Indemnified Person (other than as a result of money Damages covered

by the indemnity).

(f)            If

an Indemnifying Party does not admit its obligation to defend the Indemnified Person against such Third Party Claim under this Agreement

or admits its obligation but thereafter fails to diligently defend or settle the Third Party Claim, as applicable, then the Indemnified

Person shall have the right, but not the obligation, to defend and control the defense against the Third Party Claim (at the sole cost

and expense of the Indemnifying Party if the Indemnified Person is entitled to indemnification hereunder), with counsel of the Indemnified

Person’s choosing. The Indemnified Person shall not settle a Third Party Claim without the consent of the Indemnifying Party, which

consent shall not be unreasonably withheld, delayed or conditioned.

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(g)            In

the case of a claim for indemnification not based upon a Third Party Claim (a “Direct Claim”), such Direct Claim

shall be asserted by giving the Indemnifying Party a reasonably prompt Claim Notice thereof, but in any event not later than sixty (60)

days after the Indemnified Person becomes aware of (i) the events that gave rise to such Direct Claim and (ii) the fact that

such events give rise to a Direct Claim. Such Claim Notice by the Indemnified Person shall describe the Direct Claim in reasonable detail,

shall include copies of all available material written evidence in such Indemnified Person’s possession or control thereof, and

shall indicate the good faith estimated amount, if reasonably practicable, of Damages that have been or may be sustained by the Indemnified

Person. The Indemnifying Party shall have thirty (30) days from its receipt of the Claim Notice to (i) cure the Damages complained

of, admit its obligation to defend the Indemnified Person against such Direct Claim under this Agreement and ‎Article 13

or (ii) dispute the claim for such Damages. If the Indemnifying Party does not notify the Indemnified Person within such thirty (30)

day period that it has cured the Damages or that it disputes the claim for such Damages, the Indemnifying Party shall be deemed to have

disputed its obligation to defend the Indemnified Person against such Direct Claim under this Agreement.

(h)            To

the extent the provisions of this ‎Section 13.5 are inconsistent with Section 11.7, ‎Section 11.7

shall control with respect to any Pre-Effective Time Tax Contest or Straddle Period Tax Contest.

Section 13.6       Holdback

Amount. Notwithstanding anything in this Agreement or the Escrow Agreement to the contrary, the terms and provisions set forth

in this Section 13.6 shall control as to the Parties.

(a)            At

Closing, a portion of the Deposit equal to the Holdback Amount shall automatically be converted into, and become, the Holdback Amount,

which shall be held by the Escrow Agent in accordance with the Escrow Agreement and paid out in accordance with the provisions of this

Section 13.6 and the Escrow Agreement, as security against, and to support the satisfaction of the obligation to defend and

indemnify or otherwise pay any amounts to any member of the Purchaser Group pursuant to Section 13.2. The Holdback Amount

shall be the Purchaser Indemnified Persons’ sole and exclusive source of funds for satisfaction of all claims by Purchaser Indemnified

Persons for Damages with respect to Sellers’ indemnity obligations under Section 13.2(b) and Section 13.2(c).

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(b)            If

at any time on or prior to the Holdback Release Date, Purchaser delivers to Sellers’ Representative a Claim Notice that any member

of Purchaser Group is entitled under Section 13.2, to indemnity, payment and reimbursement for any alleged Damages, Sellers’

Representative shall, within thirty (30) days after the receipt of any such Claim Notice, deliver to Purchaser (i) a written response

to the Claim Notice, and Purchaser and Sellers’ Representative shall promptly deliver to the Escrow Agent joint written instructions

instructing the Escrow Agent to disburse to Purchaser from the Holdback Amount an amount equal to all or a stipulated amount of such alleged

Damages set forth in such Claim Notice to such account(s) as Purchaser designates in such Claim Notice, (ii) a written notice

to Purchaser that Sellers’ Representative disputes that Purchaser Group is entitled to indemnity, payment and reimbursement of all

or any portion (which shall be stipulated in Sellers’ Representative’s notice) of the amount of the alleged Damages in Purchaser’s

Claim Notice, or (iii) any combination of the foregoing. Timely delivery of Sellers’ Representative’s written notice

stipulating that Sellers’ Representative disputes any portion of the amount of damages to which Purchaser claims the Purchaser Group

is entitled shall constitute notice that such amount in dispute shall not be released by the Escrow Agent to Purchaser and that the Escrow

Agent shall continue to hold such amount in accordance with the Escrow Agreement until the dispute has been fully resolved by final non-appealable

court order, arbitrator’s decision, settlement or otherwise. The failure of Sellers’ Representative to deliver a written notice

that Sellers’ Representative disputes any portion of the amount of damages to which Purchaser claims the Purchaser Group is entitled

shall constitute notice that Sellers’ Representative disputes such indemnity obligations hereunder with respect to such Claim Notice

and all such amounts asserted by Purchaser Group in such Claim Notice shall be retained by the Escrow Agent.

Sellers’ Representative timely delivers to Purchaser a notice that Sellers’ Representative (i) does not dispute any of

the alleged Damages specified in Purchaser’s Claim Notice or (ii) disputes only a portion of the Damages alleged in Purchaser’s

Claim Notice, then Purchaser and Sellers’ Representative shall promptly (but in no event later than three (3) Business Days

after such occurrence) execute and deliver to the Escrow Agent joint written instructions authorizing the Escrow Agent to disburse to

Purchaser (A) in the case of Section 13.6(c)(i), the entire amount of the alleged Damages specified in the applicable

Claim Notice and (B) in the case of Section 13.6(c)(ii), the amount of the alleged Damages specified in such Sellers’

Representative’s notice that are not in dispute.

(d)            On

the Holdback Release Date, Purchaser and Sellers’ Representative shall deliver joint written instructions to the Escrow Agent to

disburse to Sellers’ Representative or its designees from the Holdback Amount an amount equal to the positive remainder (if any)

of (i) the remaining Holdback Amount minus (ii) the aggregate amount of all undisbursed or unpaid alleged Damages asserted by

Purchaser in any and all applicable unresolved Claim Notices delivered by Purchaser on or prior to the Holdback Release Date.

(e)            From

and after the Holdback Release Date, upon resolution of each dispute of the Purchaser Group’s entitlement to such Damages from the

Holdback Amount in accordance with the terms hereof, Purchaser and Sellers’ Representative shall promptly (but in no event more

than three (3) Business Days after such resolution) execute and deliver joint written instructions to the Escrow Agent for the release

from the Holdback Amount (i) to Purchaser any amounts to which Purchaser Group is entitled upon resolution of such dispute and (ii) to

Sellers’ Representative or its designee any amounts to which Sellers are entitled upon resolution of such dispute.

(f)             To

the extent necessary to release any portion of the Holdback Amount to any Party (or its designee) entitled to receive any portion of the

Holdback Amount hereunder, Purchaser and Sellers’ Representative shall promptly (but in no event more than three (3) Business

Days) take such reasonable actions as necessary to cause the release of such amount(s) from the Holdback Amount to the applicable

Party or Parties, including executing and delivering joint written instructions to the Escrow Agent for the release of such amount(s) from

the Holdback Amount.

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Section 13.7       Express

Negligence/Conspicuous Manner. WITH RESPECT TO THIS AGREEMENT, THE PARTIES AGREE THAT THE PROVISIONS SET OUT IN THIS ‎Article 13

AND ELSEWHERE IN THIS AGREEMENT COMPLY WITH THE REQUIREMENT, KNOWN AS THE EXPRESS NEGLIGENCE RULE, TO EXPRESSLY STATE IN A CONSPICUOUS

MANNER TO AFFORD FAIR AND ADEQUATE NOTICE THAT THIS AGREEMENT HAS PROVISIONS REQUIRING PURCHASER (AND COMPANY FROM AND AFTER CLOSING)

TO BE RESPONSIBLE FOR THE NEGLIGENCE (WHETHER GROSS, SOLE, JOINT, ACTIVE, PASSIVE, COMPARATIVE OR CONCURRENT), STRICT LIABILITY, OR OTHER

FAULT OF MEMBERS OF THE SELLER GROUP. PURCHASER REPRESENTS TO THE SELLER GROUP (A) THAT PURCHASER HAS CONSULTED AN ATTORNEY CONCERNING

THIS AGREEMENT OR, IF IT HAS NOT CONSULTED AN ATTORNEY, THAT PURCHASER WAS PROVIDED THE OPPORTUNITY AND HAD THE ABILITY TO SO CONSULT,

BUT MADE AN INFORMED DECISION NOT TO DO SO AND (B) THAT PURCHASER FULLY UNDERSTANDS ITS OBLIGATIONS UNDER THIS AGREEMENT.

Article 14

Miscellaneous

Section 14.1       Notices.

Any notice, request, instruction, correspondence, or other document to be given hereunder by any Party to the Other Party (herein collectively

called “Notice”) shall be in writing and delivered in person by courier service or U.S. mail requiring acknowledgement

of receipt or mailed by certified mail, postage prepaid, and return receipt requested, or by e-mail requesting the recipient to confirm

receipt, as follows:

To any Seller (or Company prior to Closing):

Paloma Permian Intermediate, LLC

c/o EnCap Investments L.P.

9651 Katy Fwy

Sixth Floor

Houston, TX 77024

Attn: Bryan Stahl

Email: BStahl@encapinvestments.com

with a copy (that shall not constitute Notice) to:

Paloma Permian Intermediate, LLC

1100 Louisiana Street, Suite 5100

Attn: Andrew N. Keck

Email: AKeck@PalomaResources.com

Vinson & Elkins LLP

845 Texas Avenue, Suite 4700

Houston, Texas 77002

Attn: Bryan Edward Loocke

Email: bloocke@velaw.com

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To Purchaser (or Company after Closing):

MRC Ranger, LLC

One Lincoln Centre

5400 LBJ Freeway, Suite 1600

Dallas, Texas 75240

Attention: Chief Legal Officer

Email: berman@matadorresources.com

with a copy (that shall not constitute Notice) to:

Baker Botts L.L.P.

2001 Ross Avenue, Suite 1100

Dallas, Texas 75201

Attn: Preston Bernhisel

Email: preston.bernhisel@bakerbotts.com

Baker Botts L.L.P.

910 Louisiana St.

Houston, Texas 77002

Attn: Alia Y. Heintz

Email: alia.heintz@bakerbotts.com

Notice shall be effective upon actual receipt;

provided, however, that Notice by e-mail shall be effective as of the date of confirmed delivery if delivered before 5:00 P.M. Central

Time on any Business Day at the place of receipt or the next succeeding Business Day if confirmed delivery is after 5:00 P.M. Central

Time on any Business Day or during any non-Business Day at the place of receipt. Any Party may change any address to which Notice is to

be given to it by giving Notice as provided above of such change of address.

Section 14.2       Governing

Law. This Agreement and the documents delivered pursuant hereto and the legal relations between the Parties shall be governed

by, construed and enforced in accordance with the Laws of the State of Texas, without regard to principles of conflicts of Laws that would

direct the application of the Laws of another jurisdiction; provided, however, (a) in connection with the determination of the existence

of any Title Defect or Title Benefit or with respect to conveyancing matters as to any Oil and Gas Property, the Laws of the state where

such Oil and Gas Property is located shall govern and control such determination and (b) in connection with the determination of

the existence of any Environmental Defect, the federal Laws of the United States and the Laws of the state where such Oil and Gas Property

is located shall govern and control such determination. Notwithstanding anything in this Agreement to the contrary, each of the Parties

and each of their respective Affiliates hereby: (i) agrees that all Actions (whether in law or in equity and whether in tort, contract

or otherwise) that may be based upon, arise out of or relate to this Agreement involving any Financing Source shall be subject to the

exclusive jurisdiction of any federal or state court located in Dallas County, Texas and any appellate court thereof and each party hereto

irrevocably submits itself and its property with respect to any such action to the exclusive jurisdiction of such court, and such action

shall be governed by the laws of the State of Texas, regardless of the laws that might otherwise govern under applicable principles of

conflicts of laws and (ii) irrevocably and unconditionally waives to the fullest extent permitted by applicable law any right it

may have to a trial by jury in any action brought against any Financing Source directly or indirectly arising out of, under or in connection

with this Agreement.

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Section 14.3       Arbitration.

(a)            Except

as to any dispute, controversy, matters or claim arising out of or in relation to or in connection with (i) the calculation or determination

of the Adjusted Purchase Price pursuant to ‎Section 2.4, ‎Section 2.5 or ‎Section 2.8

(which shall be resolved exclusively in accordance with ‎Section 2.7(b)), (ii) the determination of the scope, interpretation

and effect of ‎Article 3 or (iii) the existence, cure or amount of any Title Benefits, Title Benefit Amounts, Defects

or Defect Amounts (which shall be resolved exclusively in accordance with ‎Section 3.2(i)), any dispute, controversy,

matter or claim between the Parties arising out of or relating to this Agreement (each, subject to such exceptions, a “Dispute”),

that is not resolved between the Parties, will be submitted to and settled by arbitration in accordance with this Section 14.3.

The arbitration proceeding shall be held in Austin, Texas and shall be conducted in accordance with the Commercial Arbitration Rules of

the AAA, to the extent such rules do not conflict with the terms of this ‎Section 14.3.

(b)            Within

thirty (30) days after submission of a Dispute to arbitration, each of Purchaser and Sellers’ Representative shall have the right

to select one arbitrator. Within fifteen (15) days after the selection of an arbitrator by each of Purchaser and Sellers’ Representative,

the two arbitrators selected shall select a third arbitrator. All arbitrators must be independent from each Party and its Affiliates.

If either of Purchaser or Sellers’ Representative fails to appoint an arbitrator or the appointed arbitrators fail to agree upon

the selection of the third arbitrator within the prescribed fifteen (15)-day period then, on reasonable notice to the Other Party, either

Purchaser or Sellers’ Representative may ask the AAA to appoint such arbitrators within fifteen (15) days of the request therefor

with due regard for the selection criteria herein. The arbitrators selected pursuant to this Section 14.3(b) shall be

qualified by education, experience or training to render a decision upon the issues of the Dispute. Unless otherwise determined by the

arbitrators in accordance with Section 14.3(c) below, each Party shall bear the costs incurred by such Party in connection

with the procedures described in this Section 14.3 and Purchaser shall bear one-half of the fees, costs, and expenses of the

arbitrators, and Sellers shall collectively be responsible for the remaining one-half of the fees, costs, and expenses of the arbitrators.

Purchaser and Sellers’ Representative shall request that the arbitrators make a decision within thirty (30) days after the hearing.

decision of a majority of the arbitrators shall be final and binding upon the parties to the arbitration, and not subject to any appeal.

The arbitration award may, at the discretion of the arbitrators, include an equitable allocation of the costs of the arbitration, including

the fees of the arbitrators and the reasonable attorneys’ fees of, and other expenses reasonably incurred during the arbitration

by the Parties, taking into account the merits (or lack thereof) of the Parties’ claims and defenses and the decisions of the arbitrators

in respect thereof. Judgment on any arbitral award may be entered in any court having jurisdiction. The Parties shall keep the arbitration

proceedings and the terms of any arbitration award confidential, however, nothing in this Section 14.3 shall prohibit a party

from compelling arbitration or moving to enforce, confirm, or vacate an arbitral award or order of the arbitrators.

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(d)            The

procedures specified in this Section 14.3 shall be the sole and exclusive procedures for the resolution of Disputes; provided,

however, either Purchaser or Sellers’ Representative, without prejudice to the mandatory procedures of this Section 14.3,

may file a complaint for purposes of tolling the statute of limitations or seek injunctive or other provisional judicial relief, if in

its sole judgment such action is necessary to avoid irreparable damage or to preserve the status quo. Venue for such action shall be exclusively

in Travis County, Texas. Notwithstanding such action, the Parties will continue to participate in good faith in the procedures specified

in this Section 14.3.

(e)            The

Parties agree that a Dispute under this Agreement may raise issues that are common with one or more of the other Transaction Documents

or other documents executed by the Parties in connection herewith or which are substantially the same or interdependent and interrelated

or connected with issues raised in a related dispute, controversy or claim between or among the Parties and their Affiliates. Accordingly,

any Party to a new Dispute under this Agreement may elect in writing within fifteen (15) days after the initiation of a new Dispute to

refer such new Dispute for resolution by arbitration under this Section 14.3 together with any existing Dispute arising under

this Agreement, other Transaction Documents or other documents executed by the Parties in connection herewith or which are substantially

the same or interdependent and interrelated or connected. If the arbitrators do not determine to consolidate such new Dispute with the

existing Dispute within thirty (30) days of receipt of written request, then the new Dispute shall not be consolidated, and the resolution

of the new Dispute shall proceed separately.

Section 14.4       Headings

and Construction. The headings and captions herein are inserted for convenience of reference only and are not intended to govern,

limit, or aid in the construction of any term or provision hereof. The rights and obligations of each Party shall be determined pursuant

to this Agreement. Each Party has had the opportunity to exercise business discretion in relation to the negotiation of the details and

terms of the transaction contemplated hereby. This Agreement is the result of arm’s length negotiations from equal bargaining positions.

It is the intention of the Parties that every covenant, term, and provision of this Agreement shall be construed simply according to its

fair meaning and not strictly for or against any Party (notwithstanding any rule of Law requiring an agreement to be strictly construed

against the drafting Party) and no consideration shall be given or presumption made, on the basis of who drafted this Agreement or any

particular provision thereof, it being understood that the Parties to this Agreement are sophisticated and have had adequate opportunity

and means to exercise business discretion in relation to the negotiation of the details of the transaction contemplated hereby and retain

counsel to represent their interests and to otherwise negotiate the provisions of this Agreement.

Section 14.5       Waivers.

Any failure by any Party to comply with any of its obligations, agreements or conditions herein contained may be waived by the Party to

whom such compliance is owed by the application of the express terms hereof by an instrument signed by the Party to whom compliance is

owed and expressly identified as a waiver, but not in any other manner. No course of dealing on the part of any Party or its respective

officers, employees, agents, or representatives and no failure by any Party to exercise any of its rights under this Agreement shall,

in each case, operate as a waiver thereof or affect in any way the right of such Party at a later time to enforce the performance of such

provision. Except as otherwise expressly provided herein, no waiver of, or consent to a change in or modification of, any of the provisions

of this Agreement shall be deemed or shall constitute a waiver of, or consent to a change in or modification of, other provisions hereof

(whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expressly provided herein. The rights

of each Party under this Agreement shall be cumulative and the exercise or partial exercise of any such right shall not preclude the exercise

by such Party of any other right. No consent under this Agreement shall be valid unless set forth in an instrument in writing signed on

behalf of such Party.

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Section 14.6       Severability.

It is the intent of the Parties that the provisions contained in this Agreement shall be severable and should any terms or provisions,

in whole or in part, be held invalid, illegal, or incapable of being enforced as a matter of law, such holding shall not affect the other

portions of this Agreement, and such portions that are not invalid shall be given effect without the invalid portion. Upon such determination

that any term or provision is invalid, illegal, or incapable of being enforced, the Parties shall negotiate in good faith to modify this

Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions

contemplated hereby are fulfilled to the extent possible.

Section 14.7       Assignment.

No Party shall assign or otherwise transfer all or any part of this Agreement, nor shall any Party delegate any of its rights or duties

hereunder, without the prior written consent of Purchaser, each Seller and Company and any transfer or delegation made without such consent

shall be null and void; provided, however, that following the Closing, Purchaser may, upon prior written notice to Sellers, assign all

or any portion of this Agreement to any wholly-owned Subsidiary of Matador Resources Company without the consent of either Seller, provided

that such assignment shall not relieve Purchaser from its obligations hereunder and Purchaser and such assignee shall be jointly and severally

liable for all obligations of Purchaser hereunder. Unless expressly agreed to in writing by Purchaser each Seller and Company, no permitted

assignment of any Party’s rights or duties that is subject to the consent of Purchaser, each Seller and Company shall relieve or

release the assigning Party from the performance of such Party’s rights or obligations hereunder and such assigning Party shall

be fully liable for the performance of all such rights and duties. Subject to the foregoing, this Agreement shall be binding upon and

inure to the benefit of the Parties hereto and their respective permitted successors and assigns.

Section 14.8       Entire

Agreement. This Agreement and the other Transaction Documents constitute the entire agreement between the Parties pertaining to

the subject matter hereof, and supersede all prior agreements, understandings, negotiations and discussions, whether oral or written,

of the Parties pertaining to the subject matter hereof. IN THE EVENT OF A CONFLICT BETWEEN THE TERMS AND PROVISIONS OF THIS AGREEMENT

AND THE TERMS AND PROVISIONS OF ANY SCHEDULE OR EXHIBIT HERETO, THE TERMS AND PROVISIONS OF THIS AGREEMENT SHALL GOVERN AND CONTROL;

PROVIDED, HOWEVER THAT THE INCLUSION IN ANY OF THE SCHEDULES AND EXHIBITS HERETO OF TERMS AND PROVISIONS NOT ADDRESSED IN THIS AGREEMENT

SHALL NOT BE DEEMED A CONFLICT, AND ALL SUCH ADDITIONAL PROVISIONS SHALL BE GIVEN FULL FORCE AND EFFECT, SUBJECT TO THE PROVISIONS OF

THIS ‎Section 14.8.

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Section 14.9       Amendment.

This Agreement may be amended or modified only by an agreement in writing signed by each Seller, Company and Purchaser and expressly identified

as an amendment or modification; provided, that Section 12.2(c), 14.2, 14.10 and 14.13 shall not

be amended, supplemented, waived or otherwise modified in a manner adverse to any Financing Source without the prior written consent of

each such Financing Source.

Section 14.10     No

Third-Person Beneficiaries. Nothing in this Agreement shall entitle any Person other than a Party to any claim, cause of action,

remedy, or right of any kind, except the rights expressly provided to the Persons described in ‎Section 8.1, ‎Section 8.9,

Section 12.2(c), ‎Article 13 and/or ‎Section 14.13, in each case, only to the extent such

rights are exercised or pursued, if at all, by the applicable Seller, Company or Purchaser acting on behalf of such Person (which rights

may be exercised in the sole discretion of the applicable Party hereunder). Notwithstanding the foregoing, (a) the Parties reserve

the right to amend, modify, terminate, supplement or waive any provision of this Agreement or this entire Agreement without the consent

or approval of any other Person (including any Indemnified Person) and (b) no Party hereunder shall have any direct liability to

any permitted Third Party beneficiary, nor shall any permitted Third Party beneficiary have any right to exercise any rights hereunder

for such Third Party beneficiary’s benefit except to the extent such rights are brought, exercised and administered by a Party hereto

in accordance with Section 13.4(c) or by a Non-Recourse Person in connection with the enforcement of ‎Section 14.13.

Section 14.11     Limitation

on Damages. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, NO PERSON SHALL BE ENTITLED TO LOST PROFITS, DIMINUTION

IN VALUE, LOSS OF BUSINESS OPPORTUNITY, INDIRECT, CONSEQUENTIAL, SPECIAL, OR PUNITIVE DAMAGES IN CONNECTION WITH THIS AGREEMENT AND

THE TRANSACTIONS CONTEMPLATED HEREBY AND PURCHASER, COMPANY AND EACH SELLER, FOR ITSELF AND ON BEHALF OF ITS RESPECTIVE MEMBERS OF THE

PURCHASER GROUP AND SELLER GROUP, RESPECTIVELY, HEREBY EXPRESSLY WAIVES ANY RIGHT TO LOST PROFITS, INDIRECT, CONSEQUENTIAL, SPECIAL,

OR PUNITIVE DAMAGES IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY, OTHER THAN LOST PROFITS, LOSS OF BUSINESS

OPPORTUNITY, INDIRECT, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES SUFFERED BY ANY THIRD PARTY FOR WHICH RESPONSIBILITY IS ALLOCATED

AMONG THE PARTIES UNDER THE TERMS HEREOF.

Section 14.12     Time

of the Essence; Calculation of Time. Time is of the essence in this Agreement. If the date specified in this Agreement for giving

any notice or taking any action is not a Business Day (or if the period during which any notice is required to be given or any action

taken expires on a date that is not a Business Day), then the date for giving such notice or taking such action (and the expiration date

of such period during which notice is required to be given or action taken) shall be the next day that is a Business Day. This Agreement

contains a number of dates and times by which performance or the exercise of rights is due, and the Parties intend that each and every

such date and time be the firm and final date and time, as agreed. For this reason, except as expressly contemplated in this Agreement,

each Party hereby waives and relinquishes any right it might otherwise have to challenge its failure to meet any performance or rights

election date applicable to it on the basis that its late action constitutes substantial performance, to require the Other Party to show

prejudice, or on any equitable grounds.

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Section 14.13     Non-Recourse

Persons. The Parties acknowledge and agree (i) that no past, present, or future director, manager, officer, employee, incorporator,

member, partner, stockholder, agent, attorney, representative, Affiliate (including, without limitation, EnCap Investments L.P. and any

investment fund managed by EnCap Investments L.P.) or Financing Source, and any of the foregoing Persons’ respective past, present,

or future directors, managers, officers, employees, incorporators, members, partners, stockholders, agents, attorneys, representatives,

Affiliates (in each case other than any of the Parties), or financing sources of any of the Parties to this Agreement (each, a “Non-Recourse

Person”), in such capacity, shall have any liability or responsibility (in contract, tort, or otherwise) for any Damages,

suits, legal or administrative Actions, claims, demands, losses, costs, obligations, liabilities, interests, charges or causes of action

whatsoever, in law or in equity, known or unknown, which are based on, related to, or arise out of the negotiation, performance, and consummation

of this Agreement or the other Transaction Documents or the transactions contemplated hereunder or thereunder and (ii) not to commence

any Action against any Financing Source in connection with such Financing whether under law or equity (whether in tort, contract or otherwise);

provided, that Purchaser (including its permitted successors and assigns under any Financing) at its own direction shall be permitted

to bring any claim against a Financing Source for failing to satisfy any obligation to fund the Financing pursuant to the terms thereof.

This Agreement may only be enforced against, and any dispute, controversy, matter or claim based on, related to, or arising out of this

Agreement, or the negotiation, performance or consummation of this Agreement, may only be brought against the entities that are expressly

named as Parties, and then only with respect to the specific obligations set forth herein with respect to such Party. Each Non-Recourse

Person is expressly intended as a third-party beneficiary of this ‎Section 14.13. Notwithstanding anything to the contrary

in this Agreement, this Section 14.13 may not be amended or modified in a manner that adversely impacts in any respect any

Financing Source without the prior written consent of the applicable Financing Source.

Section 14.14     Relationship

of Sellers; Sellers’ Representative.

(a)            Notwithstanding

anything herein to the contrary, each Seller shall be severally and not jointly liable for the duties and obligations of each other Seller

under this Agreement and any other Transaction Documents and notwithstanding anything herein to the contrary, in no event shall any Seller

have, and Purchaser hereby waives and releases any rights and remedies against any Seller hereunder, for any Damages, losses or liabilities

arising out of any breach or failure of this Agreement or any other Transaction Document by any other Seller.

124

(b)            Each

Seller hereby irrevocably constitutes and appoints Paloma Holdings as its true and lawful agent and attorney-in-fact with full power of

substitution to do any and all things and execute any and all documents which may be necessary, convenient or appropriate to facilitate

the consummation of the transactions contemplated hereby and the exercise of all rights and the performance of all obligations hereunder,

including: (i) receiving payments under or pursuant to this Agreement and disbursements thereof to Sellers, as contemplated by this

Agreement, and setting aside portions of such payments reasonably determined by Sellers’ Representative to be necessary or appropriate

as a reserve to make payments required under this Agreement or to fund out-of-pocket expenses (including the fees and expenses of counsel)

incurred in connection with the performance of its duties under this Agreement; (ii) receiving and forwarding of Notices and communications

pursuant to this Agreement and accepting service of process; (iii) giving or agreeing to, on behalf of all the Sellers or any Sellers,

any and all consents, waivers and amendments deemed by the Sellers’ Representative, in its reasonable and good faith discretion,

to be necessary or appropriate under this Agreement and the execution or delivery of any documents that may be necessary or appropriate

in connection therewith; (iv) with respect to any indemnification claims, purchase price adjustment provisions, title and environmental

defect processes and all other matters arising under this Agreement, (A) disputing or refraining from disputing, on behalf of any

Seller relative to any amounts to be received by any Seller under this Agreement or any agreements contemplated hereby, or any claim made

by Purchaser under this Agreement, (B) negotiating and compromising, on behalf of each Seller, any dispute, controversy or dispute

that may arise under, and exercise or refrain from exercising any rights or remedies available under, this Agreement, and (C) executing,

on behalf of each Seller, any settlement agreement, release or other document with respect to such dispute or remedy, except in each case

with respect to a dispute between any Seller on the one hand and the Sellers’ Representative on the other hand; and (v) performing

those actions or exercising those powers otherwise specifically provided to the Sellers’ Representative pursuant to the terms of

this Agreement; provided, however, that, in each case, the Sellers’ Representative shall not take any action adverse

to any Seller unless such action is also taken proportionately with respect to all the Sellers (other than the reduction of any portions

of the Holdback Amount that would otherwise be distributed to an individual Seller on a proportionate basis to the extent that such Seller

is in breach of any of its representations, warranties or covenants hereunder and such breaches resulted in the reduction of any amounts

of the Holdback Amount that would otherwise been made to the Sellers or Sellers’ Representative hereunder in the absence of any

such breaches). Subject to the foregoing, any disbursements of the Closing Payment, Deposit, Holdback Amount or any other amount received

hereunder, Sellers’ Representative shall disburse such amounts to the Sellers as such Sellers would otherwise be entitled under

the terms of the Governing Documents of the Company immediately prior to the Closing Date. Notices and communications to or from the Sellers’

Representative shall constitute Notice to or from each of the Sellers. Any decision, act, consent or instruction of the Sellers’

Representative (acting in its capacity as the Sellers’ Representative) shall constitute a decision of all Sellers and shall be final,

binding and conclusive upon each Seller, and Purchaser may rely upon any such decision, act, consent or instruction. Each Seller hereby

agrees that: (1) in all matters in which action by the Sellers’ Representative is required or permitted, the Sellers’

Representative is authorized to act on behalf of such Seller, notwithstanding any dispute or disagreement among the Sellers, and each

member of the Purchaser Group shall be entitled to rely on any and all action taken by the Sellers’ Representative under this Agreement

without any liability to, or obligation to inquire of, any Seller, notwithstanding any knowledge on the part of any member of the Purchaser

Group of any such dispute or disagreement; and (2) the appointment of the Sellers’ Representative is coupled with an interest

and shall be irrevocable by each Seller in any manner or for any reason. Each Seller hereby agrees indemnify, defend, and hold harmless

and release Sellers’ Representative from any and all Damages (known or unknown, actual or contingent, or existing or arising hereinafter)

incurred or claimed against Sellers’ Representative in connection with its actions (and any inactions) taken or refrained to be

taken by Sellers’ Representative in its capacity as agent of such Seller, regardless of fault of Sellers’ Representative.

125

Section 14.15     Certain

Waivers. Purchaser and Company agree, on their own behalf and on behalf of the other Purchaser Group (including Company Group

following Closing), that, following the Closing, Vinson & Elkins LLP may serve as counsel to any Seller and its Affiliates in

connection with any matters related to this Agreement and the transactions contemplated hereby, including any dispute arising out of or

relating to this Agreement and the transactions contemplated hereby, notwithstanding any representation by Vinson & Elkins LLP

of Company Group prior to the Closing Date. Purchaser, on behalf of itself and the other members of the Purchaser Group (including Company

Group after the Closing) hereby (a) consents to Vinson & Elkins LLP’s representation of any Seller or its Affiliates

in connection with any matters related to this Agreement and the transactions contemplated hereby (the “Subject Representation”),

(b) waives any claim it has or may have that Vinson & Elkins LLP has a conflict of interest or is otherwise prohibited from

engaging in such Subject Representation based on its representation of Company Group prior to the Closing and (c) agrees that, in

the event that a dispute arises between Purchaser, Company Group or any of their respective Affiliates, on the one hand, and any Seller

and/or its Affiliates, on the other hand, none of Purchaser, Company Group or any of their respective Affiliates will object to Vinson &

Elkins LLP representing any Seller and/or its Affiliates in such dispute due to the interests of any Seller and its Affiliates being directly

adverse to Purchaser, Company Group or any of their respective Affiliates or due to Vinson & Elkins LLP having represented Company

Group in a matter substantially related to such dispute. Purchaser further agrees that, as to all communications among Vinson &

Elkins LLP, Company Group, any Seller or their respective Affiliates and representatives prior to the Closing that relate in any way to

the Subject Representation, the attorney-client privilege belongs, to the extent such privilege exists, to Sellers and their respective

Affiliates and may be controlled by any Seller and each of its Affiliates and will not, with respect to such privileged communications,

pass to or be claimed by Purchaser, Company Group, or any of their respective Affiliates. To the extent that Purchaser, Company Group,

or any of their respective Affiliates has or maintains any ownership of the privilege with respect to these communications, they agree,

except as may be required by applicable Law, not to waive or to attempt to waive the privilege without the express written approval of

the applicable Seller. Notwithstanding the foregoing, in the event that a dispute arises between Purchaser, any member of Company Group

and a Third Party (other than a Seller and its Affiliates) or any Governmental Authority after the Closing, any member of Company Group

may assert the attorney-client privilege against such Third Party to prevent disclosure of confidential communications by or with Vinson &

Elkins LLP.

Section 14.16     Specific

Performance. Each Party hereby acknowledges and agrees that the rights of each Party to consummate the transactions contemplated

hereby are special, unique and of extraordinary character and that, if any Party violates or fails or refuses to perform any covenant

or agreement made by it herein, the non-breaching Party may be without an adequate remedy at law. If any Party violates or fails or refuses

to perform any covenant or agreement made by such Party herein, the non-breaching Party, subject to the terms hereof and in addition to

any remedy at law for damages or other relief, may (at any time prior to the earlier of valid termination of this Agreement pursuant to

‎Article 12 and Closing) institute and prosecute an action in accordance with ‎Section 14.3 to enforce

specific performance of such covenant or agreement or seek any other equitable relief (without the posting of any bond and without proof

of actual damages). Accordingly, each Party waives any defenses in any action for specific performance pursuant to this Agreement that

a remedy at law would be adequate and any requirement for the security or posting of any bond in connection with the remedies described

in this ‎Section 14.16. To the extent any Party brings an action to enforce specifically the performance of the terms

and provisions of this Agreement (other than an action to enforce specifically any provision that expressly survives termination of this

Agreement), the Outside Date shall automatically be extended to (a) the tenth (10th) Business Day following the final resolution

of such action or (b) such other time period established by the court presiding over such action.

126

Section 14.17     Counterparts.

This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which together shall constitute

one and the same instrument. Facsimile, .pdf or other electronic transmission of copies of signatures shall constitute original signatures

for all purposes of this Agreement and any enforcement hereof.

Section 14.18     Guarantee.

(a)            Purchaser

Parent hereby absolutely, unconditionally and irrevocably guarantees, as primary obligor and not merely as surety, all of Purchaser’s

obligations hereunder (the “Purchaser Parent Guarantee”), including, for the avoidance of doubt, Purchaser’s

obligations under ‎Article 2 and ‎Article 10. The Purchaser Parent Guarantee is valid and in full force

and effect and constitutes the valid and binding obligation of Purchaser Parent, enforceable in accordance with its terms, except as such

enforceability may be limited by applicable bankruptcy or other similar Laws affecting the rights and remedies of creditors generally

as well as to general principles of public policy and/or equity (regardless of whether such enforceability is considered in a proceeding

in equity or at law), in each case, with respect to Purchaser Parent. The Purchaser Parent Guarantee is an irrevocable guarantee of payment

(and not just of collection) and shall continue in effect notwithstanding any extension or modification of the terms of this Agreement

(except to the extent such extension or modification affects Purchaser’s or Purchaser Parent’s obligations hereunder) or any

assumption without the consent of Sellers and the Company of any such guaranteed obligation by any other party. The obligations of Purchaser

Parent hereunder shall not be affected by or contingent upon (i) the liquidation or dissolution of, or the merger or consolidation

of Purchaser with or into any Person or any sale or transfer by Purchaser of all or any part of its property or assets, (ii) the

bankruptcy, receivership, insolvency, reorganization or similar proceedings involving or affecting Purchaser, (iii) any modification,

alteration, amendment or addition of or to this Agreement (except to the extent such modification, alteration, amendment or addition affects

Purchaser’s or Purchaser Parent’s obligations hereunder and then only to such extent) or (iv) any disability or any other

defense of Purchaser or any other Person (with or without notice) which might otherwise constitute a legal or equitable discharge of a

surety or a guarantor or otherwise. In connection with the foregoing, Purchaser Parent waives all defenses and discharges it may have

or otherwise be entitled to as a guarantor or surety and further waives presentment for payment or performance, notice of nonpayment or

nonperformance, demand, diligence or protest. Sellers entered into this Agreement in reliance upon this Section 14.18. Purchaser

Parent acknowledges that it will receive substantial direct and indirect benefits from the transactions contemplated hereby and that the

waivers and agreements by Purchaser Parent set forth in this Section 14.18 are knowingly made in contemplation of such benefits.

127

(b)            Purchaser

Parent hereby represents and warrants as follows: (i) Purchaser Parent is a corporation duly formed and validly existing under the

Laws of the State of Texas, and has the requisite corporate power and authority to execute, deliver and perform obligations created by

this Section 14.18; (ii) the execution, delivery and performance of this Agreement by Purchaser Parent has been duly

and validly authorized and approved by all necessary corporate action; (iii) this Agreement has been duly executed and delivered

by Purchaser Parent and constitutes a valid and legally binding obligation of Purchaser Parent, enforceable against Purchaser Parent in

accordance with its terms, except as such enforceability may be limited by applicable bankruptcy or other similar Laws affecting the rights

and remedies of creditors generally as well as to general principles of public policy and/or equity (regardless of whether such enforceability

is considered in a proceeding in equity or at law), in each case, with respect to Purchaser Parent; (iv) all consents, approvals,

authorizations of, or filings with, any Governmental Authority necessary for the due execution, delivery and performance of this Section 14.18

by Purchaser Parent have been obtained or made, except as would not prevent or materially impair or delay, or would not reasonably be

expected to prevent or materially impair or delay, the performance of Purchaser Parent’s obligations and covenants under this Section 14.18;

(v) the execution, delivery and performance by Purchaser Parent of this Agreement do not and will not violate (A) its Governing

Documents, (B) any applicable Law or (C) any material contractual restriction binding on Purchaser Parent or its assets, except

in the case of clauses (B) and (C), as would not prevent or materially impair or delay, or would not reasonably be expected to prevent

or materially impair or delay, the performance of Purchaser Parent’s obligations and covenants under this Section 14.18;

and (vi) Purchaser Parent has, and, for so long as this Section 14.18 shall remain in effect in accordance with its terms,

Purchaser Parent shall have, funds sufficient to satisfy all of its obligations hereunder.

anything to the contrary herein, in the event of an action by any party entitled to enforce the provisions of this Section 14.18,

Purchaser Parent shall have available to it all defenses that Purchaser would have under and in respect of this Agreement (other than

any defenses arising from bankruptcy, receivership, insolvency, reorganization or similar proceedings involving or affecting Purchaser).

Section 14.19     Further

Assurances. Subject to the terms and conditions of this Agreement, from time to time, at either Party’s written request

and without further consideration, the other Party shall execute and deliver to such Party such other instruments of sale, transfer, conveyance,

assignment and confirmation and provide such materials and information and take such other actions as such Party may reasonably request

in writing in order to consummate the transactions contemplated under this Agreement.

[Remainder of Page Intentionally Left Blank.

Signature Pages Follow.]

128

IN WITNESS WHEREOF, this Agreement

has been signed by each of the Parties as of the Execution Date.

PALOMA HOLDINGS:

PALOMA PERMIAN HOLDINGS, LLC

By:

/s/ Mark J. Gabrisch

Name:

Mark J. Gabrisch

Title:

Executive Vice President, Land and Legal

PALOMA INTERMEDIATE:

PALOMA PERMIAN INTERMEDIATE, LLC

By:

/s/ Mark J. Gabrisch

Name:

Mark J. Gabrisch

Title:

Executive Vice President, Land and Legal

COMPANY:

PALOMA PERMIAN, LLC

By:

/s/ Mark J. Gabrisch

Name:

Mark J. Gabrisch

Title:

Executive Vice President, Land and Legal

Signature

Page to Securities Purchase Agreement

PURCHASER:

MRC RANGER, LLC

By:

/s/ Joseph Wm. Foran

Name:

Joseph Wm. Foran

Title:

Chairman and Chief Executive Officer

Solely for purposes of Section 14.18:

PURCHASER PARENT:

MRC ENERGY COMPANY

By:

/s/ Joseph Wm. Foran

Name:

Joseph Wm. Foran

Title:

Chairman and Chief Executive Officer

Signature

Page to Securities Purchase Agreement

EX-99.1 — EXHIBIT 99.1

EX-99.1

Filename: tm2621144d1_ex99-1.htm · Sequence: 3

Exhibit 99.1

NEWS RELEASE

MATADOR RESOURCES COMPANY ANNOUNCES

STRATEGIC DELAWARE BASIN ACQUISITIONS AND

SUCCESSFUL WOODFORD EXPLORATION WELL RESULTS

DALLAS,

Texas, July 23, 2026 -- Matador Resources Company (NYSE: MTDR) (“Matador” or the “Company”) announced

today two of its catalysts for this year. First, a wholly-owned subsidiary of Matador has entered into a definitive agreement to acquire

Paloma Permian LLC (“Paloma”), a portfolio company of EnCap Investments L.P. (“EnCap”), including certain proved

undeveloped acreage and oil and natural gas producing properties located in Southeast New Mexico (the “Paloma Acquisition”).

Subject to customary closing adjustments, the consideration for the Paloma Acquisition will consist of a cash payment of $1.275 billion.

The Paloma Acquisition includes 16,235 net undeveloped acres in Eddy and Lea Counties, New Mexico and third quarter estimated production

of approximately 11,100 barrels of oil equivalent (“BOE”) per day (57% oil). The Paloma Acquisition is expected to close in

the fourth quarter of 2026.

Secondly, Matador agreed to acquire primarily undeveloped acreage in

what it believes to be the heart of the Woodford play in West Texas and Southeast New Mexico from Ridge Runner Resources II, LLC (“Ridge

Runner”), another portfolio company of EnCap (the “Ridge Runner Acquisition”). As a result of the Ridge Runner Acquisition,

prior acreage additions and Matador’s ongoing “brick-by-brick” land strategy, Matador will have acquired approximately

50,000 contiguous, undeveloped net acres in the Woodford formation, primarily located in its Antelope Ridge asset area in Lea County,

New Mexico and in West Texas. These additional contiguous net acres, together with the Paloma Acquisition, will bring Matador’s

corporate acreage total to approximately 240,000 net acres in the Delaware Basin.

Matador’s confidence in the Woodford play is reinforced by the

successful test results announced today from Matador’s first exploratory well in the Woodford formation in Southeast Lea County,

New Mexico, the “Rae’s Creek” well. Accordingly, Matador is pleased to announce that the Rae’s Creek well recorded

initial production rates exceeding 2,200 BOE per day (72% oil) during its official 24-hour test on June 29, 2026. The Rae’s Creek

well is still producing approximately 20% better than the average production of Woodford formation wells in Texas on a 60-day cumulative

oil production basis. The Rae’s Creek well test results serve to validate the commercial viability of the Woodford formation in

this area of the Delaware Basin.

More details and highlights on the Woodford test follow the Paloma

announcement below. A short slide presentation summarizing the Paloma Acquisition, acreage additions, including acreage acquired in the

Ridge Runner Acquisition, and well results in the Woodford formation, is also included on the Company’s website at www.matadorresources.com

on the Events and Presentations page under the Investor Relations tab.

Paloma Transaction

Joseph Wm. Foran, Matador’s Founder, Chairman and CEO, commented,

“Matador is excited to announce this catalyst and the expansion of our Delaware Basin asset base with these assets from Paloma,

a successful and respected exploration firm in the Permian Basin and other oil and gas areas. Similar to Matador’s previous transactions

with EnCap, and its portfolio companies, we anticipate this acquisition will be integrated efficiently into Matador’s operating

plan, contribute to Matador’s cash flow generation and deliver significant efficiency gains, increases in oil and natural gas production,

and reserve growth.”

Highlights

· Adds 16,235 net undeveloped acres in Eddy and Lea Counties, New Mexico, the majority of which is held by production

· Adds over 156 net locations (normalized to two-mile laterals), primarily in the Bone Spring and Wolfcamp formations, and is expected

to add significant value to Matador’s inventory

· Adds $816 million of PV-101 as of May

31, 2026, and total proved oil and natural gas reserves of 55 million BOE

· Estimated third quarter 2026 production of approximately 10,600 to 11,600 BOE per day (57% oil) attributable to the acquired properties

· Improved finding and development (“F&D”) costs estimated for 2027/2028 turn-in-line wells from acquired properties

driven by below-average well costs and reserve estimates that meet or exceed Matador’s corporate average

Ridge Runner Acquisition and Woodford Results

Mr. Foran further commented, “We are also excited to announce

the expansion of our acreage position in the emerging Woodford play of the Delaware Basin and the results of our Rae’s Creek Woodford

well. Ridge Runner is another successful and respected EnCap sponsored company Matador has interacted with in the past and appreciates

greatly the ongoing relationship.

“I also would like to commend our land, geology, operations,

and field teams for their roles in what we believe is one of the first commercially successful horizontal Woodford test wells drilled

in New Mexico and look forward to future developments in our Woodford position in upcoming years. We anticipate our drilling and completions

teams will work quickly to integrate efficiencies across this development area to reduce well costs between 30 to 40% in the next 12 to

18 months, similar to the incremental improvements we made at both our Stateline and Rodney Robinson assets acquired in 2018.”

1PV-10 (present value discounted at 10%) at May 31, 2026

utilizing $70.00 per barrel of oil and $3.00 per MMBtu of natural gas adjusted for energy content, transportation fees, and marketing

differentials. PV-10 is a non-GAAP financial measure, which differs from the GAAP financial measure of “Standardized Measure”

because PV-10 does not include the effects of income taxes on future income. The income taxes related to the acquired properties is unknown

at this time because the Company’s tax basis in such properties will not be known until the closing of the transaction and is subject

to many variables. As such, the Company has not provided the Standardized Measure of the acquired properties or a reconciliation of PV-10

to Standardized Measure.

Highlights

· Optionality for extended reach laterals, large batch developments and multi-well completion capabilities are expected to lead to 2027

drilling and completion capital efficiencies

· Adds over 150 net operated Woodford locations (normalized to two-mile laterals), acquired at approximately $1.3 million per net location,

which is highly competitive as compared to recent industry transactions

· Ridge Runner Acquisition combined with Matador’s previous acquisitions and “brick-by-brick” strategy creates a Woodford

position of approximately 50,000 net acres, acquired at an average cost of $4,000 per acre

Financing and Balance Sheet Impact

The Paloma and Ridge Runner Acquisitions are expected to be funded

through cash on hand and borrowings under Matador’s existing reserve-based lending (“RBL”) credit facility which was

fully repaid in May 2026 (providing the Company ample liquidity to complete both the 5,154 acre acquisition in the Federal lease sale

and the pending Paloma and Ridge Runner Acquisitions). Matador anticipates it will generate approximately $1 billion in adjusted free

cash flow2 for full-year 2026 (based on May 2026 corporate guidance and strip oil and natural gas pricing as of July 2026).

Additional production volumes associated with the acquired properties are expected to accelerate the Company’s ability to repay

the borrowings to finance the acquisitions and return its corporate leverage ratio closer to 1.0x within 12 to 18 months of closing. Such

prepayments will be a top priority for Matador.

Second Quarter 2026 Earnings Conference Call Information

Management will host a live conference call to discuss the Company’s

second quarter 2026 company results and these acquisitions on Thursday, August 6, 2026 at 10:00 am Central Time. To access

the live conference call by phone, you can use the following link https://register-conf.media-server.com/register/BI194b69303d544ff39708c28901d41150

and you will be provided with dial in details. To avoid delays, it is recommended that participants dial into the conference call 15

minutes ahead of the scheduled start time.

2 Adjusted free cash flow is a non-GAAP financial measure.

The most comparable GAAP measure to adjusted free cash flow is net cash provided by operating activities. The Company has not provided

such GAAP measure or a reconciliation to such GAAP measure because it would be preliminary and prospective in nature and would not be

able to be prepared without estimation of a number of variables that are unknown at this time.

Advisors

Baker Botts L.L.P. served as legal advisor to Matador for the Paloma

Acquisition and Ridge Runner Acquisition. Vinson & Elkins LLP served as legal advisor and RBC Richardson Barr served as financial

advisor to Paloma, Ridge Runner and EnCap.

About Matador Resources Company

Matador is an independent energy company engaged in the exploration,

development, production and acquisition of oil and natural gas resources in the United States, with an emphasis on oil and natural gas

shale and other unconventional plays. Founded in 2003 with friends and family investments, and a public company since 2012, Matador’s

current operations are focused primarily on the oil and liquids-rich portion of the Wolfcamp and Bone Spring plays in the Delaware Basin

in Southeast New Mexico and West Texas. Matador also operates in the Haynesville shale and Cotton Valley plays in Northwest Louisiana.

Additionally, Matador conducts midstream operations in support of its exploration, development and production operations and provides

natural gas processing, oil transportation services, oil, natural gas and produced water gathering services and produced water disposal

services to third parties.

For more information, visit Matador Resources Company at www.matadorresources.com.

Forward-Looking Statements

This press release includes “forward-looking statements”

within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as

amended. “Forward-looking statements” are statements related to future, not past, events. Forward-looking statements are based

on current expectations and include any statement that does not directly relate to a current or historical fact. In this context, forward-looking

statements often address expected future business and financial performance, and often contain words such as “could,” “believe,”

“would,” “anticipate,” “intend,” “estimate,” “expect,” “may,”

“should,” “continue,” “plan,” “predict,” “potential,” “project,”

“hypothetical,” “forecasted” and similar expressions that are intended to identify forward-looking statements,

although not all forward-looking statements contain such identifying words. Such forward-looking statements include, but are not limited

to, statements about the consummation and timing of the Paloma Acquisition and the Ridge Runner Acquisition (collectively, the “Acquisitions”),

the anticipated benefits, opportunities and results with respect to the Acquisitions, including the expected value creation, reserves

additions, inventory additions, midstream opportunities and other anticipated impacts from the Acquisitions, the expected results and

commercial viability of the Company’s Woodford acreage and future development thereof, as well as other aspects of the Acquisitions,

guidance, projected or forecasted financial and operating results, future liquidity, the repayment of debt, the payment of dividends,

results in certain basins, objectives, project timing, expectations and intentions, regulatory and governmental actions and other statements

that are not historical facts. Actual results and future events could differ materially from those anticipated in such statements, and

such forward-looking statements may not prove to be accurate. These forward-looking statements involve certain risks and uncertainties,

including, but not limited to, the ability of the parties to consummate the Acquisitions in the anticipated timeframe or at all; risks

related to the satisfaction or waiver of the conditions to closing the Acquisitions in the anticipated timeframe or at all; risks related

to obtaining the requisite regulatory approvals; disruption from the Acquisitions making it more difficult to maintain business and operational

relationships; significant transaction costs associated with the Acquisitions; the risk of litigation and/or regulatory actions related

to the Acquisitions, as well as the following risks related to financial and operational performance: general economic conditions including

the effects of inflation; interest rates; tariffs and trade tensions; the Company’s ability to execute its business plan, including

whether its drilling program is successful; changes in oil, natural gas and natural gas liquids prices and the demand for oil, natural

gas and natural gas liquids; its ability to replace reserves and efficiently develop current reserves; the operating results of the Company’s

midstream oil, natural gas and water gathering and transportation systems, pipelines and facilities, the acquiring of third-party business

and the drilling of any additional salt water disposal wells; costs of operations; delays and other difficulties related to producing

oil, natural gas and natural gas liquids or the construction, expansion or operation of the Company’s midstream assets; delays and

other difficulties related to regulatory and governmental approvals and restrictions; impact on the Company’s operations due to

seismic events; its ability to make acquisitions on economically acceptable terms; its ability to integrate acquisitions; disruption from

the Company’s acquisitions making it more difficult to maintain business and operational relationships; significant transaction

costs associated with the Company’s acquisitions; the risk of litigation and/or regulatory actions related to the Company’s

acquisitions; availability of sufficient capital to execute its business plan, including from future cash flows, capital markets, available

borrowing capacity under its revolving credit facilities and otherwise; the operating results of and the availability of any potential

distributions from our joint ventures; weather conditions, environmental conditions and natural disasters; evolving cybersecurity risks;

and the other factors that could cause actual results to differ materially from those anticipated or implied in the forward-looking statements.

For further discussions of risks and uncertainties, you should refer to Matador’s filings with the Securities and Exchange Commission

(“SEC”), including the “Risk Factors” section of Matador’s most recent Annual Report on Form 10-K and any

subsequent Quarterly Reports on Form 10-Q. Matador undertakes no obligation to update these forward-looking statements to reflect events

or circumstances occurring after the date of this press release, except as required by law, including the securities laws of the United

States and the rules and regulations of the SEC. You are cautioned not to place undue reliance on these forward-looking statements, which

speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement.

Contact Information

Mac Schmitz

Senior Vice President – Investor Relations

(972) 371-5225

investors@matadorresources.com

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Period Type:

duration

- Definition

Area code of city

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No definition available.

+ Details

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- Definition

Cover page.

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No definition available.

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- Definition

For the EDGAR submission types of Form 8-K: the date of the report, the date of the earliest event reported; for the EDGAR submission types of Form N-1A: the filing date; for all other submission types: the end of the reporting or transition period. The format of the date is YYYY-MM-DD.

+ References

No definition available.

+ Details

Name:

dei_DocumentPeriodEndDate

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dei_

Data Type:

xbrli:dateItemType

Balance Type:

Period Type:

duration

- Definition

The type of document being provided (such as 10-K, 10-Q, 485BPOS, etc). The document type is limited to the same value as the supporting SEC submission type, or the word 'Other'.

+ References

No definition available.

+ Details

Name:

dei_DocumentType

Namespace Prefix:

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Data Type:

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Balance Type:

Period Type:

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- Definition

Address Line 1 such as Attn, Building Name, Street Name

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No definition available.

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Namespace Prefix:

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Balance Type:

Period Type:

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- Definition

Address Line 2 such as Street or Suite number

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No definition available.

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Name:

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Namespace Prefix:

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- Definition

Name of the City or Town

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No definition available.

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Name:

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Namespace Prefix:

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Balance Type:

Period Type:

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- Definition

Code for the postal or zip code

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No definition available.

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- Definition

Name of the state or province.

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No definition available.

+ Details

Name:

dei_EntityAddressStateOrProvince

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Data Type:

dei:stateOrProvinceItemType

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- Definition

A unique 10-digit SEC-issued value to identify entities that have filed disclosures with the SEC. It is commonly abbreviated as CIK.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 12

-Subsection b-2

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Period Type:

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- Definition

Indicate if registrant meets the emerging growth company criteria.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 12

-Subsection b-2

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Name:

dei_EntityEmergingGrowthCompany

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- Definition

Commission file number. The field allows up to 17 characters. The prefix may contain 1-3 digits, the sequence number may contain 1-8 digits, the optional suffix may contain 1-4 characters, and the fields are separated with a hyphen.

+ References

No definition available.

+ Details

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Balance Type:

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- Definition

Two-character EDGAR code representing the state or country of incorporation.

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No definition available.

+ Details

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Data Type:

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- Definition

The exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 12

-Subsection b-2

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Name:

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- Definition

The Tax Identification Number (TIN), also known as an Employer Identification Number (EIN), is a unique 9-digit value assigned by the IRS.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 12

-Subsection b-2

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Name:

dei_EntityTaxIdentificationNumber

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- Definition

Local phone number for entity.

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No definition available.

+ Details

Name:

dei_LocalPhoneNumber

Namespace Prefix:

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xbrli:normalizedStringItemType

Balance Type:

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- Definition

Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 13e

-Subsection 4c

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Name:

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Namespace Prefix:

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Balance Type:

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- Definition

Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 14d

-Subsection 2b

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Name:

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Namespace Prefix:

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Data Type:

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Balance Type:

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- Definition

Title of a 12(b) registered security.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 12

-Subsection b

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Name:

dei_Security12bTitle

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Data Type:

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Balance Type:

Period Type:

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- Definition

Name of the Exchange on which a security is registered.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 12

-Subsection d1-1

+ Details

Name:

dei_SecurityExchangeName

Namespace Prefix:

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Data Type:

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Balance Type:

Period Type:

duration

- Definition

Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Exchange Act

-Number 240

-Section 14a

-Subsection 12

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Name:

dei_SolicitingMaterial

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Data Type:

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Balance Type:

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- Definition

Trading symbol of an instrument as listed on an exchange.

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No definition available.

+ Details

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- Definition

Boolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Securities Act

-Number 230

-Section 425

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