Bayshore Exploration L.L.C. 20501 Katy Freeway, Suite 216 Katy, Texas 77450 Phone (281) 646-1919 Fax (281) 647-9448 bayshoreexpl@sbcglobal.net

Bayshore Exploration L.L.C. 00000 Xxxx Xxxxxxx, Xxxxx 000

Katy, Texas 77450

Phone (000) 000-0000

Fax (000) 000-0000

xxxxxxxxxxxx@xxxxxxxxx.xxx

December 30, 2005

Xxxxxx Energy, Inc.

0000 Xxxxx Xxxxxx Xxxxxx

Suite 6232

Carson City, Nevada 89706

RE: Purchase Agreement — 20% Working Interest

Alamo Operating Company, L.C. — Xxxxxxxxxx No. 1 Well

Xxxxx Ranch Prospect — La Salle County, Texas

Gentlemen:

This letter is written to evidence the agreement between Bayshore Exploration L.L.C. (“Bayshore”) and Xxxxxx Energy, Inc. (“Xxxxxx”) pertaining to the Alamo Operating Company, L.C. — Xxxxxxxxxx No. 1 Well located in the X. Xxxxxxxx Survey Xx. 000, X -0000, Xx Xxxxx Xxxxxx, Xxxxx. Bayshore is the owner and holder of a 20% working interest, subject to a 75% net revenue interest, in the Alamo Operating Company, L.C. — Xxxxxxxxxx No. 1 Well. Xxxxxx desires to purchase said 20% working interest from Bayshore with the following terms and conditions:

1. On or before the expiration of 120 days from the date of this Letter Agreement, Xxxxxx agrees to pay to Bayshore the sum of $237,800.00 U.S. dollars which represents the total purchase price for said 20% working interest.

2. On or before the expiration of 120 days from the date of this Letter Agreement, Xxxxxx agrees to pay to Bayshore the sum of $176,800.00 U.S. dollars which represents the total purchase price of 20% of the leasehold and working interest in and to 8,840 acres (“the subject acreage”), more or less, which is illustrated in bold outline on the attached land plat as Exhibit “A” hereto. The purchase of said 20% leasehold interest by Xxxxxx from Bayshore will increase Xxxxxx’x leasehold interest in the subject acreage to a 31.75% leasehold interest.

3. Upon receipt of the above mentioned sums paid to Bayshore by Xxxxxx in a timely manner as set out above, Xxxxxxxx agrees to assign to Xxxxxx a 20% working interest in the Alamo Operating Company, X.X.-Xxxxxxxxxx No. 1 Well (75% NRI). Xxxxxx shall also have the option to participate for said 20% working interest in subsequent well(s) drilled on the subject acreage under the terms of a mutually acceptable Joint Operating Agreement, naming Bayshore as operator.

4. The purchase of said 20% working interest in the Alamo Operating Company, X.X.-Xxxxxxxxxx No. 1 Well by Xxxxxx from Bayshore will increase Xxxxxx’x working interest in the subject acreage to a 31.75% working interest.

5. This Letter Agreement is the entire agreement between the parties hereto pertaining to the purchase of a 20% working interest in the Alamo Operating Company, X.X.-Xxxxxxxxxx

No. 1 Well and supersedes all prior oral and written agreements. Any changes to this agreement must be agreed to in writing between both parties.

6. The parties agree to execute such additional agreements and documents as may be necessary to effectuate the intentions of this Agreement.

7. This Letter Agreement, shall be construed in accordance with and governed by the laws of the State of Texas, shall be binding upon and shall inure to the benefit of the parties hereto and shall extend to and be binding upon their respective successors and assigns.

If the foregoing is your understanding of our agreement, please acknowledge your acceptance by signing in the space provided below and returning one fully executed copy of this Letter Agreement to Bayshore at your earliest convenience.

Sincerely,

BAYSHORE EXPLORATION L.L.C.

/s/ Xxxxx Xxxxxxxx

Xxxxx Xxxxxxxx

President

XXXXXX ENERGY, INC.

/s/ Xxxxxx Xxxxxxxx

Xxxxxx Xxxxxxxx, CEO

Attachment: Exhibit “A” — Land Plat

EXHIBIT “A”