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For Petrohawk stockholders: 11:00 a.m., CDT Thursday, July 28, 2005 Four Seasons Hotel, 1300 Lamar St. Houston, Texas 77010		For Mission stockholders: 10:00 a.m., CDT Thursday, July 28, 2005 Four Seasons Hotel, 1300 Lamar St. Houston, Texas 77010

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	1. To elect two nominees to the board of directors to serve as Class I directors until their successors are duly elected or until their earlier death, resignation, or removal.
	2. To consider and vote upon a proposal to approve the issuance of shares of common stock, par value $0.001 per share, of Petrohawk pursuant to the Agreement and Plan of Merger, dated as of April 3, 2005, as amended, by and among Petrohawk, Petrohawk Acquisition Corporation and Mission Resources Corporation.
	3. To consider and vote upon a proposal to amend Petrohawk’s certificate of incorporation to increase the number of authorized shares of common stock from 75 million shares to 125 million shares.
	4. To consider and vote upon a proposal to amend Petrohawk’s Amended and Restated 2004 Employee Incentive Plan to increase the number of authorized shares of common stock under the plan from 2.75 million shares to 4.25 million shares.
	5. To consider and vote upon a proposal to amend Petrohawk’s Amended and Restated 2004 Non-Employee Director Incentive Plan to increase the number of authorized shares of common stock under the plan from 200,000 shares to 400,000 shares.
	6. To ratify the selection of Deloitte & Touche LLP as Petrohawk’s independent auditors for the year ending December 31, 2005.
	7. To transact any other business as may properly be brought before the annual meeting or any adjournment or postponement of the annual meeting.

	By Order of the Board of Directors
	of Petrohawk Energy Corporation
	Floyd C. Wilson
	Chairman, President and Chief Executive Officer

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	1. To consider and vote upon a proposal to adopt the Agreement and Plan of Merger dated as of April 3, 2005, as amended, by and among Petrohawk Energy Corporation, Petrohawk Acquisition Corporation and Mission Resources Corporation, and approve the merger of Petrohawk Acquisition Corporation with and into Mission Resources Corporation and the other transactions contemplated by the merger agreement; and
	2. To transact any other business as may properly be brought before the special meeting or any adjournment or postponement of the special meeting.

	By Order of the Board of Directors
	of Mission Resources Corporation
	Robert L. Cavnar
	Chairman, President and Chief Executive Officer

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Petrohawk Energy Corporation 1100 Louisiana St., Suite 4400 Houston, Texas 77002 (832) 204-2700 Attention: Investor Relations		Mission Resources Corporation 1331 Lamar St., Suite 1455 Houston, Texas 77010-3039 (713) 495-3000 Attention: Investor Relations

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QUESTIONS AND ANSWERS ABOUT VOTING PROCEDURES FOR THE ANNUAL AND SPECIAL MEETINGS				1
SUMMARY				4
	Information about Petrohawk and Mission			4
	The Merger			4
	The Meetings and Voting			8
	Comparative Market Price and Dividend Information			10
	Matters to Be Considered in Deciding How to Vote			10
PETROHAWK ENERGY CORPORATION SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA				15
MISSION RESOURCES CORPORATION SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA				16
SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA				17
	Pro Forma Balance Sheet Data			17
	Pro Forma Statement of Operations Data			17
	Comparative Per Share Data			18
	Petrohawk Historical Per Share Data			18
	Mission Historical Per Share Data			18
	Pro Forma Combined Company Per Share Data			18
RISK FACTORS				19
FORWARD-LOOKING STATEMENTS				23
PETROHAWK ANNUAL MEETING				24
	General			24
	Record Date and Voting			24
	Quorum; Vote Required			24
	Revocability of Proxies			25
	Voting Electronically or by Telephone			25
	Solicitation of Proxies			26
MISSION SPECIAL MEETING				26
	General			26
	Record Date and Voting			26
	Quorum; Vote Required			27
	Revocability of Proxies			28
	Voting Electronically or by Telephone			28
	Solicitation of Proxies			28
INFORMATION ABOUT PETROHAWK				28
INFORMATION ABOUT MISSION				31
THE MERGER				33
	Transaction Structure			33
	Source of Funds for Cash Portion of Merger Consideration			34
	Background of the Merger			34
	Petrohawk’s Reasons for the Merger; Recommendation of the Stock Issuance in the Merger by the Petrohawk Board of Directors			39
	Mission’s Reasons for the Merger; Recommendation of the Merger by the Mission Board of Directors			41
	Opinion of Sanders Morris Harris Inc. to the Petrohawk Board of Directors			43
	Petrie Parkman & Co., Inc.			51
	Opinion of Merrill Lynch, Pierce, Fenner & Smith Incorporated to the Mission Board of Directors			51
	Merger Consideration			58

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	Conversion of Shares; Exchange of Certificates; Elections as to Form of Consideration; Allocations				62
	Treatment of Stock Options				66
	Effective Time				66
	Conditions to the Completion of the Merger				67
	Representations and Warranties				68
	Conduct of Business Pending the Merger				70
	Reasonable Best Efforts to Obtain Required Stockholder Vote				73
	No Solicitation of Alternative Transactions				74
	Termination of the Merger Agreement				76
	Material U.S. Federal Income Tax Consequences				78
	Extension, Waiver and Amendment of the Merger Agreement				84
	Employee Benefit Plans and Existing Agreements				85
	Nasdaq National Market Listing of Petrohawk Common Stock; Delisting and Deregistration of Mission Common Stock				85
	Expenses				86
	Dividends				86
	Appraisal Rights				86
	Regulatory Filings and Approvals Required to Complete the Merger				86
	Accounting Treatment				86
	Financial Interests of Mission’s Directors and Executive Officers in the Merger				86
	Restrictions on Resales by Affiliates				88
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION					90
PRICE RANGE OF COMMON STOCK AND DIVIDENDS					96
COMPARISON OF RIGHTS OF HOLDERS OF PETROHAWK AND MISSION COMMON STOCK					97
DESCRIPTION OF PETROHAWK CAPITAL STOCK					101
PROPOSED AMENDMENT TO PETROHAWK’S CERTIFICATE OF INCORPORATION					104
ELECTION OF PETROHAWK DIRECTORS					105
	Board of Directors; Independence and Corporate Governance				108
	Board Meetings and Committees				108
	Executive Committee				108
	Audit Committee				109
	Compensation Committee				109
	Nominating Committee				110
	Board of Directors; Corporate Governance Matters				110
	Management				112
	Compensation				114
		Compensation of Directors			114
		Summary Executive Compensation Table			115
		Option Grants in 2004			115
		Aggregated Option Exercises in 2004 and Year-End Values			116
		Equity Compensation Plan Information			117
		Employment Agreements, Termination of Employment and Change of Control Arrangements			117
		Compensation Committee Interlocks and Insider Participation			117
	Common Stock Performance Graph				118
	Petrohawk Compensation Committee Report on Executive Compensation				118
		Annual Compensation			119
		Long-Term Compensation			119
		Compensation of Chief Executive Officer			120
		Internal Revenue Code Section 162(m)			120

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	Report of the Petrohawk Audit Committee			120
	Accounting Fees			121
PROPOSED AMENDMENT TO PETROHAWK’S 2004 EMPLOYEE INCENTIVE PLAN				122
PROPOSED AMENDMENT TO PETROHAWK’S 2004 NON-EMPLOYEE DIRECTOR INCENTIVE PLAN				125
SUBMISSION OF STOCKHOLDER PROPOSALS FOR THE 2006 ANNUAL MEETING OF STOCKHOLDERS				127
PETROHAWK TRANSACTIONS WITH RELATED PERSONS				128
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS				129
	Petrohawk Energy Corporation			129
	Mission Resources Corporation			132
	The Combined Company			135
SECTION 16 BENEFICIAL OWNERSHIP REPORTING COMPLIANCE				138
RATIFICATION OF INDEPENDENT AUDITORS				138
LEGAL MATTERS				138
EXPERTS				138
WHERE YOU CAN FIND MORE INFORMATION				139
GLOSSARY OF OIL & GAS TERMS				142
Annex A  Agreement and Plan of Merger, dated as of April 3, 2005, as amended, by and among Petrohawk Energy Corporation, Petrohawk Acquisition Corporation and Mission Resources Corporation				A-1
Annex B  Opinion of Sanders Morris Harris Inc.				B-1
Annex C  Opinion of Merrill Lynch, Pierce, Fenner & Smith Incorporated				C-1
Annex D  Section 262 of the Delaware General Corporation Law				D-1

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Q:		Why is my vote important?
A:		Under the Delaware General Corporation Law (the “DGCL”), which governs Mission, the merger agreement must be adopted by the holders of a majority of the outstanding shares of Mission common stock entitled to vote. Accordingly, if a Mission stockholder fails to vote, or if a Mission stockholder abstains, that will have the same effect as a vote against adoption of the merger agreement and approval of the merger and the other transactions contemplated by the merger agreement.
		Under the rules of the Nasdaq National Market, the issuance of Petrohawk common stock in the merger and the amendments to increase the shares available for issuance under Petrohawk’s Amended and Restated 2004 Employee Incentive Plan (the “2004 Employee Incentive Plan”) and Amended and Restated 2004 Non-Employee Director Incentive Plan (the “2004 Non-Employee Director Incentive Plan”) require the affirmative vote of a majority of the shares of common stock voted at the Petrohawk annual meeting. Accordingly, assuming that a quorum is present, the failure of a Petrohawk stockholder to vote or a decision by a Petrohawk stockholder to abstain will have no effect in determining whether these proposals are approved. Approval of the issuance of Petrohawk common stock is a condition to the merger.
		In addition, under the DGCL, which also governs Petrohawk, the proposed amendment to Petrohawk’s certificate of incorporation must be approved by the holders of a majority of the outstanding shares of Petrohawk common stock and preferred stock entitled to vote. Accordingly, if a Petrohawk stockholder fails to vote, or if a Petrohawk stockholder abstains, that will have the same effect as a vote against approval of the amendment to the certificate of incorporation. The merger is not conditioned on the approval of this amendment.
Q:		What do I need to do now?
A:		After you have carefully read this joint proxy statement/ prospectus, please respond by completing, signing and dating your proxy card and returning it in the enclosed postage-paid envelope or, if available, by submitting your proxy or voting instruction by telephone or through the Internet as soon as possible so that your shares will be represented and voted at your special meeting.
Q:		What do I do if I want to change my vote after I have delivered my proxy card?
A:		You may change your vote at any time before your proxy is voted at your meeting. You can do this in any of the three following ways:
		• by sending a written notice to the Secretary of Petrohawk or Mission, as appropriate, in time to be received before your meeting stating that you would like to revoke your proxy;
		• by completing, signing and dating another proxy card and returning it by mail in time to be received before your annual or special meeting, as appropriate, or, if you submitted your proxy through the Internet or by telephone, you can change your vote by submitting a proxy card at a later date, in which case your later-submitted proxy will be recorded and your earlier proxy revoked; or
		• if you are a holder of record, by attending your annual or special meeting and voting in person.
		If your shares are held in an account at a broker or other nominee, you should contact your broker or other nominee to change your vote.
Q:		If I am a Mission stockholder, should I send in my stock certificates with my proxy card?
A:		No. Please DO NOT send your Mission stock certificates with your proxy card. Rather, prior to the election deadline of 5:00 p.m., CDT, on July 27, 2005, you should send your Mission common stock certificates to the exchange agent, together with your completed, signed election form. If your shares are held in “street name” by your broker or other nominee you should follow your broker’s or other nominee’s instructions for making an election with respect to your shares.

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Q:		What is the amount of cash and/or the number of shares of Petrohawk common stock that I will receive for my shares of Mission common stock?
A:		The actual amount of cash or number of shares of Petrohawk common stock that you will receive for each share of Mission common stock you hold cannot be determined until after the effective time of the merger. Those amounts will be determined based on a formula set forth in the merger agreement and described in this document. There is a table on pages 6 and 61 that sets forth the per share cash consideration and the per share stock consideration that would be received by Mission stockholders based on a range of hypothetical values of Petrohawk common stock (the “Average Petrohawk Common Stock Values”). You may also obtain at any time the hypothetical Average Petrohawk Common Stock Value calculated based upon the actual closing prices of Petrohawk common stock by calling toll-free 1-866-729-6799, or by accessing Petrohawk’s website at www.petrohawk.com/investor.html or Mission’s website at www.mrcorp.com.
Q:		If I am a Mission stockholder, when must I elect the type of merger consideration that I prefer to receive?
A:		Holders of Mission common stock who wish to elect the type of merger consideration they prefer to receive in the merger should carefully review and follow the instructions set forth in the election form provided to Mission stockholders together with this joint proxy statement/ prospectus. These instructions require that a properly completed and signed election form be received by the exchange agent by the election deadline, which is 5:00 p.m., CDT, on July 27, 2005. If a Mission stockholder does not submit a properly completed and signed election form to the exchange agent by the election deadline, then such stockholder will have no control over the type of merger consideration such stockholder may receive, and, consequently, may receive only cash, only Petrohawk common stock, or a combination of cash and Petrohawk common stock in the merger.
Q:		If I am a Mission stockholder, can I change my election after I submit my certificates?
A:		You can revoke your election and submit new election materials prior to the election deadline. You may do so by submitting a written notice to the exchange agent that is received prior to the election deadline at the following address:
		American Stock Transfer & Trust Company
		59 Maiden Lane
		Plaza Level
		New York, New York 10038
		The revocation must specify the account name and such other information as the exchange agent may request; revocations may not be made in part. New elections must be submitted in accordance with the election procedures described in this joint proxy statement/ prospectus. If you instructed a broker to submit an election for your shares, you must follow your broker’s directions for changing those instructions.
Q:		If my shares are held in “street name” by my broker or other nominee, will my broker or other nominee vote my shares for me?
A:		If you are a Mission stockholder, your broker will NOT vote your shares held in “street name” unless you instruct your broker how to vote. The failure to vote will have the same effect as a vote “AGAINST” adoption of the merger agreement and approval of the merger and the other transactions contemplated by the merger agreement.
		If you are a Petrohawk stockholder, your broker will NOT vote your shares held in “street name” on the issuance of Petrohawk common stock in the merger, the amendment of the certificate of incorporation to increase the number of authorized shares of common stock, or the amendment of Petrohawk’s incentive plans to increase the shares of common stock available thereunder unless you instruct your broker how to vote. Accordingly, the failure to vote will have the same effect as a vote “AGAINST” approval of these proposals. You should therefore provide your broker or other nominee with instructions as to how to vote your shares.

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Q:		Do I have dissenters’ rights?
A:		Under the DGCL, if the merger is completed, holders of Mission common stock who do not vote in favor of, or consent in writing to, the adoption of the merger agreement and approval of the merger and the other transactions contemplated by the merger agreement will have the right to seek appraisal of the fair value of their shares, but only if they submit a written demand for such an appraisal prior to the vote on the merger agreement and they comply with the other Delaware law procedures and requirements explained in the accompanying joint proxy statement/ prospectus.
Q:		Who can I call with questions about the annual or special meeting, the merger and the other matters to be voted upon?
A:		If you have any questions about these matters or how to submit your proxy or voting instruction card, or if you need additional copies of this document or the enclosed proxy card or voting instruction card, you should contact:
		• if you are a Petrohawk stockholder:
		Petrohawk Energy Corporation
		1100 Louisiana St., Suite 4400
		Houston, Texas 77002
		(832) 204-2700
		Attention: Investor Relations
		• if you are a Mission stockholder:
		Mission Resources Corporation
		1331 Lamar St., Suite 1455
		Houston, Texas 77010-3039
		(713) 495-3000
		Attention: Investor Relations

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	We may not be able to successfully integrate the businesses of Petrohawk and Mission following the merger.

	The costs of the merger could adversely affect the combined company’s operating results.

	Mission’s directors and executive officers have interests in the merger in addition to those of the Mission stockholders.

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	Failure to complete the merger or delays in completing the merger could negatively impact Petrohawk’s and Mission’s stock prices and future business and operations.

	•	the individual companies will not realize the benefits expected from the merger, including a potentially enhanced financial and competitive position;
	•	under certain circumstances, Mission may be required to pay Petrohawk a termination fee of $12.5 million;
	•	the price of Petrohawk common stock or Mission common stock may decline to the extent that the current market price of the common stock reflects a market assumption that the merger will be completed; and
	•	some costs relating to the merger, such as certain investment banking fees and legal and accounting fees, must be paid even if the merger is not completed.

	Because the market price of Petrohawk common stock will fluctuate, Mission stockholders cannot be sure of the value of the merger consideration they will receive.

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	The market price of the shares of Petrohawk common stock and the results of operations of Petrohawk after the merger may be affected by factors different from those affecting Mission or Petrohawk currently.

	Petrohawk stockholders will be diluted by the merger.

	Mission stockholders may receive a form or combination of consideration different from what they elect.

	If you tender shares of Mission common stock to make an election, you will not be able to sell those shares unless you revoke your election prior to the election deadline.

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	If the merger is completed, the date that you will receive your merger consideration is uncertain.

	If Petrohawk or Mission fails to obtain all required consents and approvals, third parties may terminate or alter existing contracts.

	A significant decline in Petrohawk’s stock price may prevent tax counsel from issuing an opinion that the merger constitutes a reorganization under Section 368(a) of the Internal Revenue Code, which is a condition to closing the merger.

	Foreign persons who own or have owned a significant amount of Mission common stock may be subject to U.S. federal income tax on gain realized upon the exchange of their Mission stock in the merger.

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	•	statements relating to the benefits of the merger, including the cost savings and accretion to reported earnings estimated to result from the merger;
	•	statements relating to revenues, production and expenses of the combined company after the merger; and
	•	statements preceded by, followed by or that include the words “believes,” “anticipates,” “plans,” “predicts,” “expects,” “envisions,” “hopes,” “estimates,” “intends,” “will,” “continue,” “may,” “potential,” “should,” “confident,” “could” or similar expressions.

	•	the possibility that the companies may be unable to obtain stockholder approvals required for the merger;
	•	the possibility that problems may arise in successfully integrating the businesses of the two companies;
	•	the possibility that the merger may involve unexpected costs;
	•	the possibility that the combined company may be unable to achieve cost-cutting synergies;
	•	the possibility that the businesses may suffer as a result of uncertainty surrounding the merger;
	•	the possibility that the industry may be subject to future regulatory or legislative actions;
	•	the volatility in commodity prices for oil and gas;
	•	the presence or recoverability of estimated oil and gas reserves;
	•	the ability to replace oil and gas reserves;
	•	environmental risks;
	•	drilling and operating risks;
	•	exploration and development risks;
	•	competition;
	•	the ability of the combined company’s management to execute its plans to meet its goals;
	•	general economic conditions, whether internationally, nationally or in the regional and local market areas in which Petrohawk and Mission are doing business, may be less favorable than expected; and
	•	other economic, competitive, governmental, legislative, regulatory, geopolitical and technological factors may negatively impact our businesses, operations or pricing.

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	•	Petrohawk directors and executive officers and their affiliates owned and were entitled to vote approximately 3,334,000 shares of Petrohawk common stock, representing approximately 8.3% of the outstanding shares of Petrohawk common stock; and
	•	Mission directors and executive officers and their affiliates did not own any shares of Petrohawk common stock or preferred stock.

	•	submitting a written revocation prior to the annual meeting to David S. Elkouri, Secretary, Petrohawk Energy Corporation, 1100 Louisiana St., Suite 4400, Houston, Texas, 77002;
	•	submitting another proxy prior to the annual meeting by telephone, via the Internet or by mail that is dated later than the original proxy; or
	•	attending the Petrohawk annual meeting and voting in person.

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	•	through the Internet by visiting a website established for that purpose at www.voteproxy.com and following the instructions; or
	•	by telephone by calling the toll-free number 1-800-PROXIES (1-800-776-9437) in the U.S., Puerto Rico, Canada or Mexico on a touch-tone phone and following the recorded instructions.

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	•	Mission directors and executive officers and their affiliates owned and were entitled to vote approximately 258,000 shares of Mission common stock, representing less than 1% of the outstanding shares of Mission common stock.
	•	Petrohawk directors and executive officers and their affiliates did not own and were not entitled to vote any shares of Mission common stock.
	•	Harbert Distressed Investment Master Fund, Ltd., Stellar Funding, Ltd., and Guggenheim Capital, LLC, have entered into separate voting agreements with Petrohawk and Mission pursuant to which they have agreed, among other things, to vote all shares of Mission common stock owned by each of them in favor of the merger. The voting agreements also grant an irrevocable proxy to Petrohawk empowering it to vote all such shares of Mission common stock at any meeting of Mission’s stockholders called for the purpose of voting on the merger. As of April 1, 2005, such stockholders collectively owned 13,264,905 shares, or approximately 32%, of the issued and outstanding common stock of Mission.

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	•	submitting a written revocation prior to the special meeting to Leslee M. Ranly, Secretary, Mission Resources Corporation, 1331 Lamar St., Suite 1455, Houston, Texas 77010;
	•	submitting another proxy prior to the special meeting by telephone, via the Internet or by mail that is dated later than the original proxy; or
	•	attending the special meeting and voting in person.

	•	through the Internet by visiting a website established for that purpose at www.voteproxy.com and following the instructions; or
	•	by telephone by calling the toll-free number 1-800-PROXIES (1-800-776-9437) in the U.S., Puerto Rico, Canada or Mexico on a touch-tone phone and following the recorded instructions.

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	Proton Oil & Gas Corporation Acquisition

	Sale of Royalty Interest Properties

	Wynn-Crosby Acquisition

	PHAWK, LLC Transaction

	Recapitalization by PHAWK, LLC

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	South Texas

	Anadarko Basin

	Permian Basin

	East Texas

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	Arkoma Basin

	Gulf Coast

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	Permian Basin

	Gulf Coast

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	Gulf of Mexico

	South Texas

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	•	Mission’s asset base remained under-exploited;
	•	Mission had a strong menu of internal opportunities to create value for the company;
	•	Potential exists to acquire desirable assets; and
	•	Mission recognized the availability of debt and equity capital to finance attractive growth opportunities.

	•	expand its exploration program in its core areas;
	•	aggressively pursue acquisitions of producing properties;
	•	hedge as appropriate to protect its investments;

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	•	expand its bank facilities as needed while maintaining discipline in its capital structure; and
	•	maintain an opportunistic posture.

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	•	Petrohawk’s management gave a presentation regarding the terms of the proposed transaction and the results of due diligence;
	•	Hinkle Elkouri reviewed the provisions of the proposed merger agreement; and
	•	Sanders Morris Harris presented its analysis and rendered an oral opinion, subsequently confirmed by delivery of its written opinion dated April 3, 2005, that based upon and subject to the

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		assumptions made, matters considered, qualifications, and limitations set forth in the written opinion, as of that date, the financial consideration to be paid by Petrohawk in the merger was fair, from a financial point of view, to Petrohawk (see “Opinion of Sanders Morris Harris”).

	•	Mission’s management gave a presentation regarding the terms of the proposed transaction and the results of due diligence;
	•	Representatives of Porter & Hedges reviewed the provisions of the proposed merger agreement and related agreements, and Mission’s general counsel also reviewed matters related to employee benefits;
	•	Petrie Parkman discussed the negotiation process and the potential market reaction to an announcement of the transaction; and
	•	Merrill Lynch rendered an oral opinion, subsequently confirmed by delivery of its written opinion dated April 3, 2005, that as of such date, and based upon and subject to the factors in the subject set forth in its opinion, the consideration to be received by the holders of Mission common stock (other than Petrohawk and its affiliates) in the merger was fair, from a financial point of view, to such holders (see “Opinion of Merrill Lynch, Pierce, Fenner & Smith”).

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	•	the combined company will be significantly larger than Petrohawk and should have greater financial, operational and technical strengths that should enable it to consider and more effectively pursue additional opportunities;
	•	a substantial number of the combined company’s properties are in the same geographic areas which will permit an integration of those properties and a possible reduction in the combined operating and administrative cost relative to those properties;
	•	the merger will add significantly to Petrohawk’s reserves and production and is in accordance with Petrohawk’s strategy of growth through acquisitions, and it should create a better platform for further consolidation of oil and gas assets in its core operating areas;
	•	the merger will provide Petrohawk with a more balanced portfolio of exploitation and exploratory opportunities, thereby giving management more flexibility in its capital allocation decisions;
	•	the merger will significantly increase Petrohawk’s cash flow and cash flow per share and should permit an acceleration of Petrohawk’s capital program;
	•	the merger will create a larger company that is expected to have more liquidity in its common stock and better access to capital markets, which should provide more financial flexibility;
	•	the merger will give Petrohawk the opportunity to add to its technical and operational expertise by adding employees from Mission and otherwise hiring qualified individuals;
	•	the combined company will have properties that should be attractive candidates for divestment, and given expected market conditions there should be significant opportunities to use the proceeds from the sale of such properties to reduce overall debt of the combined company; and
	•	Sanders Morris Harris presented its analysis and opinion to the effect that, as of April 3, 2005 and based upon and subject to the assumptions made, matters considered, qualifications, and limitations set forth in the written opinion, the financial consideration to be paid by Petrohawk in the merger was fair, from a financial point of view, to Petrohawk.

	•	information concerning the financial condition, results of operations, prospects and businesses of Petrohawk and Mission, including the respective companies’ reserves, production volumes, cash flows from operations, recent performance of common stock and the ratio of Petrohawk’s common stock price to Mission’s common stock price over various periods, as well as current industry, economic and market conditions;
	•	the net asset value per share of the common stock of both Petrohawk and Mission; and
	•	the results of business, legal and financial due diligence investigations of Mission conducted by Petrohawk’s management and legal advisors.

	•	the increased amount of debt that the combined company would have compared to Petrohawk on a stand-alone basis and the effect of that debt on Petrohawk’s future operations;
	•	the fact that a decrease in oil and gas prices would make the merger less desirable from a financial point of view;

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	•	a decrease in oil and gas prices would reduce the expected proceeds from expected divestitures and leave the company with a higher than projected debt balance;
	•	the fact that there are significant risks inherent in combining and integrating two companies, including that the companies may not be successfully integrated, and that successful integration of the companies will require the dedication of significant management resources, which will temporarily detract attention from the day-to-day businesses of the combined company;
	•	the fact that Petrohawk has experienced rapid growth and integrating Mission with Petrohawk may be made more difficult because of acquisitions made by Petrohawk in 2004 and early 2005;
	•	the fact that the combined company will be partially reliant upon drilling success on both proven and unproven properties in order to meet its expectations regarding production, cash flow and proven reserves and the fact there is always uncertainty in successfully converting unproven properties into proven reserves;
	•	the fact that the capital requirements necessary to achieve the expected growth of the combined company’s businesses will be significant, and there can be no assurance that the combined company will be able to fund all of its capital requirements from operating cash flows, and the fact that the combined company would have substantially more total long-term debt than Petrohawk on a stand-alone basis; and
	•	other matters described under the caption “Risk Factors.”

	•	the merger consideration represented a premium of approximately 19% above the closing price of Mission’s common stock on the last trading day immediately prior to the board’s approval;
	•	the combined company will be significantly larger than Mission and should have greater financial, operational and technical strengths that should enable it to consider and more effectively pursue additional types of opportunities;
	•	the combined company will have a better balanced portfolio of long-lived assets and near term higher risk, high impact drilling opportunities;

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	•	Mission’s board of directors’ confidence in the ability of Petrohawk’s chief executive officer to lead the combined company and continue to enhance stockholder value;
	•	subject to proration, Mission stockholders may elect to receive cash or stock in the transaction thereby having the opportunity to chose between participation in the combined company or liquidity;
	•	the combined company will have more favorable financing opportunities based on its combined balance sheet and income statement;
	•	attractive acquisition opportunities are becoming increasingly difficult to find at reasonable prices, which limits the ability of Mission to execute its strategic plan of growth through acquisition and exploration and development;
	•	certain of the combined company’s properties are in the same geographic areas which will permit an integration of those properties and a possible reduction in the combined operating cost relative to those properties;
	•	the combined company’s enhanced cash flow should permit an acceleration of the exploration program developed by Mission;
	•	Mission will designate two members to be named to the board of Petrohawk;
	•	the combined company’s larger market capitalization should enhance its stock liquidity;
	•	the opinion of Merrill Lynch delivered orally on April 3, 2005 and subsequently confirmed in writing that, as of such date, and based on and subject to the matters set forth in its opinion, the consideration to be received by holders of Mission common stock (other than Petrohawk and its affiliates) in the merger was fair, from a financial point of view, to such holders;
	•	the execution of voting agreements by holders of approximately 32% of Mission’s common stock pursuant to which they have agreed, among other things, to vote all shares owned by each of them in favor of the merger;
	•	holders of Mission common stock who dissent from the merger will have appraisal rights under Delaware law, providing stockholders who dispute the fairness of the merger an opportunity to have a court determine the fair value of their share;
	•	the financial and other interests in the merger of Mission’s directors and executive officers;
	•	the terms of the merger agreement and the structure of the transaction, including the conditions to each company’s obligations to complete the merger;
	•	the ability of Petrohawk and Mission to complete the merger, including their ability to obtain the necessary regulatory approvals and their obligation to attempt to obtain those approvals; and
	•	the terms of the merger agreement permit Mission’s board of directors to change or withdraw its recommendation of the merger to Mission stockholders, and to terminate the agreement with Petrohawk, if, among other reasons, the board makes the determination as set forth in the merger agreement regarding the nature and terms of a proposed superior offer.

	•	information concerning the financial condition, results of operations, prospects and businesses of Petrohawk and Mission, including the respective company’s reserves, production volumes, cash

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		flows from operations, recent performance of common stock and the ratio of Petrohawk’s common stock price to Mission’s common stock price over various periods, as well as current industry, economic and market conditions;
	•	assessments of the net asset value per share of the common stock of both Petrohawk and Mission; and
	•	the results of business, legal and financial due diligence investigations of Petrohawk conducted by Mission’s management and advisors.

	•	the merger agreement;
	•	such publicly available information concerning Petrohawk and Mission that SMH believed to be relevant to the analysis for each of Petrohawk and Mission;

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	•	certain financial and operating information with respect to the respective businesses, operations, and prospects of Petrohawk and Mission respectively, including financial and operating projections furnished by the management of Petrohawk and of Mission and in particular (a) certain estimates of proved and non-proved reserves from Netherland, Sewell & Associates, Inc. and management, projected future production, revenue, operating costs and capital investments for each of Petrohawk and Mission; (b) impacts of hedging the product prices for the production levels projected by the respective managements of Petrohawk and Mission; and (c) amounts and timing or cost savings and operating synergies expected by the management of Petrohawk resulting from the merger;
	•	the historical market prices and trading volumes of Petrohawk’s and Mission’s publicly traded securities and a comparison of those trading histories with each other and with those of other publicly-traded companies that SMH deemed relevant;
	•	a comparison of the historical financial results and present financial condition of Petrohawk and Mission with each other and with those of other publicly traded companies that SMH deemed relevant;
	•	a comparison of the financial terms of the merger with the financial terms of certain other transactions that SMH deemed relevant;
	•	the potential pro forma impact of the merger on the future financial performance of Petrohawk;
	•	the potential pro forma impact of the merger on the current financial condition of Petrohawk, including the impact on Petrohawk’s leverage levels and ratios;
	•	the relative contributions of Petrohawk and Mission to the current and future financial performance of the combined company on a pro forma basis;
	•	published estimates of independent research analysts with respect to the future financial performance of Petrohawk and Mission;
	•	the views of the management of Petrohawk and of Mission concerning the strategic benefits of the merger and their respective businesses, operations, assets, financial condition, reserves, production levels, hedging levels, exploration programs and prospects; and
	•	such other information, financial studies, analyses and investigations as SMH deemed relevant.

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			Average
			Exchange
Time Frame			Ratio
April 1, 2005				0.63
7-Day Average				0.68
30-Day Average				0.70
90-Day Average				0.68
180 Day Period
	High			0.80
	Low			0.58
	Mean			0.68
	Median			0.68

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	•	Brigham Exploration Co.
	•	Comstock Resources, Inc.
	•	Delta Petroleum Corp.
	•	KCS Energy, Inc.

	•	Stone Energy Corp.
	•	The Houston Exploration Co.
	•	Whiting Petroleum Corp.
	•	St. Mary Land & Exploration Co.

Comparable Public Company Metrics

Maximum

Mean

Median

Minimum

Enterprise Value/ 2005E EBITDAX

7.1

x

6.3

x

6.7

x

4.7x

Enterprise Value/ 2006E EBITDAX

6.2

x

5.4

x

6.1

x

4.1x

Price/ 2005E Cash Flow

8.0

x

6.0

x

5.9

x

4.3x

Price/ 2006E Cash Flow

5.8

x

4.9

x

5.2

x

3.8x

Price/ 2005E Earnings

20.5

x

16.1

x

16.6

x

10.8x

Price/ 2006E Earnings

19.3

x

13.8

x

12.9

x

9.3x

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Acquirer		Target
Cimarex Energy Company			Magnum Hunter Resources Inc.
XTO Energy Incorporated			Antero Resources Corporation
Chesapeake Energy Corporation			BRG Petroleum Corporation
Noble Energy Incorporated			Patina Oil & Gas Corporation
Petro-Canada			Prima Energy Corporation
Forest Oil Corporation			Wiser Oil Company
EnCana Corporation			Tom Brown Incorporated
Kerr-McGee Corporation			Westport Resources Corporation

		Multiple Range
Transaction Value as a Multiple of:		Low				Median				High
Proved Reserves ($Mcfe)		$	0.70			$	1.57			$	2.98
Daily Production ($Mcfe/d)		$	3,292			$	8,200			$	11,417
LTM EBITDAX			6.6	x			7.8	x			9.1x

		Multiple Range
Proved Reserves by Region:		Low				Median				High
Permian Basin		$	0.99			$	1.32			$	1.82
Mid-Continent			1.56				1.79				1.92
Gulf Coast Onshore			0.70				1.40				2.46
Gulf of Mexico			0.93				1.65				1.83
Corporate			1.19				1.88				2.98

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																										Escalation
		2005E				2006E				2007E				2008E				2009E				2010E				Thereafter
Henry Hub ($/MMBtu)
Case #1: Forward Strip Pricing		$	7.69			$	7.48			$	6.91			$	6.45			$	6.08			$	5.72				0	%
Case #2		$	6.50			$	6.50			$	6.50			$	6.50			$	6.50			$	6.50				0	%
Case #3		$	5.50			$	5.50			$	5.50			$	5.50			$	5.50			$	5.50				0	%
West Texas Intermediate ($/Bbl)
Case #1: Forward Strip Pricing		$	54.80			$	52.56			$	50.32			$	49.38			$	48.10			$	47.38				0	%
Case #2		$	45.00			$	45.00			$	45.00			$	45.00			$	45.00			$	45.00				0	%
Case #3		$	40.00			$	40.00			$	40.00			$	40.00			$	40.00			$	40.00				0	%

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Buyer/ Seller		Date Announced
Cimarex Energy Co./ Magnum Hunter Resources Inc.			1/26/2005
Noble Energy Inc./ Patina Oil & Gas Corp.			12/16/2004
Petro-Canada/ Prima Energy Corp.			6/9/2004
Forest Oil Corp./ Wiser Oil Co.			5/24/2004
EnCana Corp./ Tom Brown Inc.			4/15/2004
Kerr-McGee Corp./ Westport Resources Corp.			4/7/2004
Evergreen Resources Inc./ Carbon Energy Corp.			3/31/2003
Plains Exploration & Production Co./ Nuevo Energy Co.			2/12/2004
Devon Energy Corp./ Ocean Energy, Inc.			2/24/2003
Plains Exploration & Production Co./ 3TEC Energy Corp.			2/3/2003

Time Period (Prior to Transaction Announcement)		Low Premium				High Premium				Mean Premium
One day			3.6	%			23.8	%			15.8	%
10 days			6.6	%			26.1	%			16.9	%
20 days			8.3	%			23.2	%			16.8	%
30 days			8.9	%			24.1	%			17.4	%

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	•	Reviewed certain publicly available business and financial information relating to Mission and Petrohawk that it deemed to be relevant;
	•	Reviewed certain information, including financial forecasts, relating to the business, earnings, hydrocarbon production, cash flow, assets, liabilities and prospects of Mission and Petrohawk furnished to it by Mission and Petrohawk, respectively;
	•	Reviewed certain proved oil and gas reserve data furnished to Merrill Lynch by Mission and Petrohawk, including the report of Netherland, Sewell & Associates, Inc. dated February 10, 2005 with respect to the proved oil and gas reserves and related future revenues of Mission as of December 31, 2004 and the report of Netherland, Sewell & Associates, Inc. dated March 1, 2005 with respect to the proved oil and gas reserves and related future revenues of Petrohawk as of

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		December 31, 2004, as well as information relating to potential future drilling sites and probable oil and gas reserves of Mission and the probable and possible oil and gas reserves of Petrohawk furnished to Merrill Lynch by Mission and Petrohawk, respectively;
	•	Conducted discussions with members of senior management and representatives of Mission and Petrohawk concerning the matters described in the three bullet points above, as well as their respective businesses and prospects before and after giving effect to the merger;
	•	Reviewed the market prices and valuation multiples for Mission common stock and Petrohawk common stock and compared them with those of certain publicly traded companies that it deemed to be relevant;
	•	Reviewed the results of operations of Mission and Petrohawk and compared them with those of certain publicly traded companies that it deemed to be relevant;
	•	Compared the proposed financial terms of the merger with the financial terms of certain other transactions that it deemed to be relevant;
	•	Participated in certain discussions and limited negotiations among representatives of Mission and Petrohawk and their financial and legal advisors;
	•	Reviewed the potential pro forma impact of the merger;
	•	Reviewed the merger agreement; and
	•	Reviewed such other financial studies and analyses and took into account such other matters as it deemed necessary, including its assessment of general economic, market and monetary conditions.

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	•	Brigham Exploration Company
	•	Carrizo Oil and Gas, Inc.
	•	Comstock Resources Inc.
	•	KCS Energy, Inc.
	•	Swift Energy Company
	•	Whiting Petroleum Corporation

	•	the ratio of the equity value to projected 2005 discretionary cash flow per share, which is referred to below as “Equity value/2005E CFPS”;
	•	the ratio of the enterprise value, which is defined as equity value plus total long term debt minus cash plus liquidation preference of preferred stock plus minority interest, to projected 2005 earnings before interest, taxes, depreciation and amortization, which is referred to below as “Enterprise value/2005E EBITDA”;
	•	the ratio of the enterprise value to the year end 2004 quantity of estimated proved reserves (adjusted as applicable) on a dollars per thousand cubic feet equivalent (assuming a conversion ratio of six thousand cubic feet of natural gas to one barrel of oil), which is referred to below as “Enterprise value/proven reserves ($/Mcfe)”; and
	•	the ratio of the enterprise value to recently disclosed projected 2005 net daily production on a dollars per thousand cubic feet equivalent per day (assuming a conversion ratio of six thousand cubic feet of natural gas to one barrel of oil), which is referred to below as “Enterprise value/2005E daily production ($/Mcfe/d)”.

Benchmark		High				Low				Mean				Median				Reference Range
Equity value/2005E CFPS			9.5	x			4.0	x			5.7	x			5.0	x			3.8x — 4.3x
Enterprise value/2005E EBITDA			9.1	x			4.7	x			6.2	x			6.0	x			4.5x — 5.0x
Enterprise value/proved reserves ($/Mcfe)		$	4.20			$	1.44			$	2.69			$	2.49			$	1.75 — $2.25
Enterprise value/2005E daily production ($/Mcfe/d)		$	15,101			$	6,577			$	9,994			$	9,662			$	6,000 — $7,000

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		Date
Buyer/Seller		Announced
Forest Oil Corporation/ Undisclosed Private Company			2/28/05
Cimarex Energy Co./ Magnum Hunter Resources, Inc.			1/26/05
XTO Energy Incorporated/ Antero Resources Corporation			1/11/05
Chesapeake Energy Corporation/ BRG Petroleum Corporation			12/27/04
Noble Energy, Inc./ Patina Oil & Gas Corporation			12/16/04
Newfield Exploration Company/ Inland Resources Inc.			8/6/04
Affiliate of Carlyle/ Riverstone Global Energy and Power Fund II, L.P./ Belden & Blake Corporation			6/17/04
Petro-Canada/ Prima Energy Corporation			6/9/04
Forest Oil Corporation/ The Wiser Oil Company			5/23/04
Pioneer Natural Resources Company/ Evergreen Resources, Inc.			5/4/04
EnCana Corporation/ Tom Brown, Inc.			4/15/04
Kerr-McGee/ Westport Resources Corporation			4/7/04
Plains Exploration & Production Company/ Nuevo Energy Company			2/12/04
Devon Energy Corporation/ Ocean Energy, Inc.			2/24/03
Plains Exploration & Production Company/3TEC Energy Corporation			2/3/03

	•	the ratio of the transaction value to latest-twelve-month earnings before interest, taxes, depreciation and amortization, which is referred to below as “Transaction Value/ LTM EBITDA”;
	•	the ratio of the transaction value to the quantity of estimated proven reserves on a dollars per thousand cubic feet equivalent (assuming a conversion ratio of six thousand cubic feet of natural gas to one barrel of oil), which is referred to below as “Transaction Value/ Reserves ($/Mcfe)”;
	•	the ratio of the transaction value to net daily production on a dollars per thousand cubic feet equivalent per day (assuming a conversion ratio of six thousand cubic feet of natural gas to one barrel of oil), which is referred to below as “Transaction Value/ Production ($/Mcfe/d)”;

																		2005				2004				2003
Benchmark		High				Low				Median				Mean				Mean				Mean				Mean				Reference Range
Transaction Value/ LTM EBITDA			13.6	x			5.0	x			8.0	x			7.4	x			8.1	x			7.2	x			7.8	x			6.5x — 7.5x
Transaction Value/ Reserves ($/Mcfe)		$	3.64			$	0.76			$	1.64			$	1.77			$	1.99			$	1.77			$	1.47			$	2.00 — $2.50
Transaction Value/ Production ($/Mcfe/d)		$	12,838			$	3,119			$	7,433			$	7,408			$	7,875			$	7,710			$	5,350			$	8,000 — $8,500

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		Date
Buyer/Seller		Announced
Noble Energy Inc./ Patina Oil & Gas Corp.			12/16/04
Petro-Canada/ Prima Energy Corporation			6/9/04
Forest Oil Corporation/ Wiser Oil Company			5/23/04
Pioneer Natural Resources/ Evergreen Resources			5/4/04
EnCana Corp./ Tom Brown, Inc.			4/15/04
Hawker Resources, Inc./ Southward Energy Ltd.			3/17/03
Cerberus Capital Management, L.P./ Exco Resources Inc.			3/12/03
Plains Exploration & Production Company/3TEC Energy Corporation			2/3/03
Canadian Natural/ Rio Alto Exploration			5/13/02
Paramount Resources/ Summit Resources			5/12/02

Time Period (Prior to
Transaction Announcement)		High Premium				Low Premium				Mean Premium				Median Premium
One day			32.2	%			(4.0	)%			14.5	%			18.7	%
10 days			31.7	%			(3.5	)%			15.3	%			18.8	%
30 days			37.4	%			5.9	%			17.9	%			17.5	%

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	•	the ratio of the equity value to projected 2005 discretionary cash flow per share, which is referred to below as “Equity value/2005E CFPS”;
	•	the ratio of the enterprise value to projected 2005 earnings before interest, taxes, depreciation and amortization, which is referred to below as “Enterprise value/2005E EBITDA”;
	•	the ratio of the enterprise value to the year end 2004 quantity of estimated proved reserves (adjusted as applicable) on a dollars per thousand cubic feet equivalent (assuming a conversion ratio of six thousand cubic feet of natural gas to one barrel of oil), which is referred to below as “Enterprise value/proven reserves ($/Mcfe)”; and
	•	the ratio of the enterprise value to recently disclosed projected 2005 net daily production on a dollars per thousand cubic feet equivalent per day (assuming a conversion ratio of six thousand cubic feet of natural gas to one barrel of oil), which is referred to below as “Enterprise value/2005E daily production ($/Mcfe/d)”.

Benchmark		High				Low				Mean				Median				Reference Range
Equity value/2005E CFPS			9.5	x			4.0	x			5.7	x			5.0	x			4.5x — 5.5x
Enterprise value/2005E EBITDA			9.1	x			4.7	x			6.2	x			6.0	x			5.5x — 6.5x
Enterprise value/proved reserves ($/Mcfe)		$	4.20			$	1.44			$	2.69			$	2.49			$	2.75 — $3.25
Enterprise value/2005E daily production ($/Mcfe/d)		$	15,101			$	6,577			$	9,994			$	9,662			$	9,000 — $10,000

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	•	The “aggregate consideration” is the dollar amount of the sum of:
	•	the product of (1) the aggregate number of shares of Petrohawk common stock that Petrohawk will issue pursuant to the merger (which is the product of 0.7718 and 60% of the “total common stock amount”) and (2) the “Average Petrohawk Common Stock Value” (referred to in the merger agreement as the “final parent stock price”), and
	•	the aggregate amount of cash Petrohawk will pay pursuant to the merger (which is the product of (1) 40% of the total common stock amount and (2) $8.15). We refer to this aggregate amount of cash as the “total cash amount.”
	•	The “Average Petrohawk Common Stock Value” is the volume-weighted average of the closing prices per share of Petrohawk common stock as reported on the Nasdaq National Market during

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		the ten consecutive trading day period during which the shares of Petrohawk common stock are traded on the Nasdaq National Market ending on the third calendar day immediately prior to the effective time of the merger (or, if such calendar day is not a trading day, ending on the trading day immediately preceding such calendar day). We refer to this ten consecutive trading day period as the “valuation period.”
	•	The “total common stock amount” is the total number of shares of Mission common stock outstanding immediately prior to the effective time of the merger; provided that, for purposes of determining the aggregate consideration, the total common stock amount will not exceed the sum of 41,535,088 (the number of shares of Mission common stock outstanding on April 1, 2005) and 5,832,715 (the number of shares of Mission common stock permitted to be issued by Mission prior to the merger pursuant to existing stock options under the terms of the merger agreement).

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						Per Share
						Stock												Percentage of Outstanding
						Consideration												Shares of Mission
Average						(Shares of												Common Stock to Receive:
Petrohawk						Petrohawk				Value of Per				Per Share
Common		Transaction				Common				Share Stock				Cash				Stock				Cash
Stock Value		Value				Stock)				Consideration				Consideration				Consideration				Consideration
$13.00			385,447,278				0.7138				9.2794				9.2800				64.87				35.13
12.75			380,638,761				0.7188				9.1647				9.1643				64.43				35.57
12.50			375,830,244				0.7239				9.0488				9.0485				63.97				36.03
12.25			371,021,727				0.7292				8.9327				8.9327				63.50				36.50
12.00			366,213,209				0.7347				8.8164				8.8170				63.03				36.97
11.75			361,404,692				0.7405				8.7009				8.7012				62.53				37.47
11.50			356,596,175				0.7466				8.5859				8.5854				62.03				37.97
11.25			351,787,658				0.7529				8.4701				8.4696				61.51				38.49
11.00			346,979,141				0.7594				8.3534				8.3539				60.98				39.02
10.75			342,170,624				0.7663				8.2377				8.2381				60.43				39.57
10.50			337,362,107				0.7736				8.1228				8.1223				59.86				40.14
10.25			332,553,590				0.7811				8.0063				8.0066				59.28				40.72
10.00			327,745,072				0.7891				7.8910				7.8908				58.69				41.31
9.75			322,936,555				0.7974				7.7747				7.7750				58.07				41.93
9.50			318,128,038				0.8062				7.6589				7.6593				57.44				42.56
9.25			313,319,521				0.8155				7.5434				7.5435				56.78				43.22
9.00			308,511,004				0.8253				7.4277				7.4277				56.11				43.89
8.75			303,702,487				0.8357				7.3124				7.3119				55.42				44.58
8.50			298,893,970				0.8466				7.1961				7.1962				54.70				45.30
8.25			294,085,452				0.8582				7.0802				7.0804				53.96				46.04
8.00			289,276,935				0.8706				6.9648				6.9646				53.19				46.81
7.75			284,468,418				0.8837				6.8487				6.8489				52.40				47.60
7.50			279,659,901				0.8977				6.7328				6.7331				51.58				48.42

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	Election Procedure

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	•	an all cash election, he or she would receive approximately $835 in cash;
	•	an all stock election, he or she would receive 75 shares of Petrohawk common stock (and cash in lieu of fractional shares); and
	•	an election for a combination of cash and stock, he or she would receive approximately $8.35 for each cash election share and approximately 0.7594 shares of Petrohawk common stock for each stock election share. Assuming 50 cash election shares and 50 stock election shares, the Mission stockholder would receive approximately $417.50 in cash, 37 shares of Petrohawk common stock and cash in lieu of fractional shares.

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	Letter Of Transmittal

	Allocation

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	•	all stock election shares and no election shares will be converted into the right to receive the per share stock consideration;
	•	the exchange agent will then select from among the cash election shares, by a pro rata selection process, a sufficient number of shares such that the aggregate cash amount that will be paid in the merger equals as closely as practicable the total cash amount;
	•	all cash election shares selected by the exchange agent through the pro rata selection process described above will be converted into the right to receive the per share stock consideration; and
	•	the cash election shares that have not been selected by the exchange agent to be converted into the per share stock consideration will be converted into the right to receive the per share cash consideration.

	•	all cash election shares will be converted into the right to receive the per share cash consideration;
	•	the exchange agent will then select from among the non-electing shares and then, if necessary, from among the stock election shares, by a pro rata selection process, a sufficient number of shares such that the aggregate cash amount that will be paid in the merger equals as closely as practicable the total cash amount;
	•	all no election and stock election shares selected by the exchange agent through the pro rata selection process described above will be converted into the right to receive the per share cash consideration; and
	•	the stock election shares and any no election shares that have not been selected by the exchange agent to be converted into the per share cash consideration will be converted into the right to receive the per share stock consideration.

	Dividends and Distributions

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	Withholding

	•	the number of shares of Petrohawk common stock subject to the new Petrohawk stock option will be equal to the product of the number of shares of Mission common stock subject to the Mission stock option and the exchange ratio (determined as described above under the heading “— Merger Consideration”), rounded up or down to the nearest whole share; and
	•	the exercise price per share of Petrohawk common stock subject to the new Petrohawk stock option will be equal to the exercise price per share of Mission common stock under the Mission stock option divided by the exchange ratio, rounded up or down to the nearest whole cent.
	•	in any event, all options to acquire Mission common stock will be adjusted in a manner that satisfies the requirements of Section 424(a) of the Internal Revenue Code and the regulations thereunder. If an option holder ceases to be a director, officer, or employee, or consultant of the combined company or any of its affiliates, such option shall remain exercisable in accordance with the terms of Mission’s stock option plans and employment agreements, if applicable. Additionally, each option plan shall not be amended or modified in a manner that would result in a termination of or have an adverse effect on options previously granted or in a manner that would result in any option becoming deferred compensation under Section 409A of the Internal Revenue Code.

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	Conditions to Each Party’s Obligations

	•	adoption and approval by Mission’s stockholders of the merger agreement and the merger;
	•	approval by Petrohawk’s stockholders of the issuance of Petrohawk shares in the merger;
	•	approval by the Nasdaq National Market of listing of the shares of Petrohawk common stock to be issued in the merger, subject to official notice of issuance;
	•	other than the filing of the certificate of merger in accordance with Delaware law, the receipt of all authorizations, consents and approvals of all governmental entities required to be obtained prior to consummation of the merger, except for such authorizations, consents and approvals the failure of which to be obtained individually or in the aggregate has not had, and would not be reasonably likely to have or result in, a material adverse effect on any party to the merger agreement;
	•	effectiveness of the registration statement, of which this joint proxy statement/ prospectus constitutes a part, and absence of any stop order or proceedings for such purpose pending before or threatened by the SEC; and
	•	absence of any statute, rule, order, decree or regulation, and of any action taken by any court or other governmental entity of competent jurisdiction, which temporarily, preliminarily or permanently restrains, precludes, enjoins or otherwise prohibits the consummation of the merger or makes the merger illegal.

	Additional Conditions to Mission’s Obligations

	•	accuracy of Petrohawk’s and Merger Sub’s representations and warranties contained in the merger agreement both at and as of the date of the merger agreement and at and as of the closing date of the merger, as if made at and as of the closing date of the merger (except to the extent expressly made as of an earlier date, in which case as of such date), except where, in the case of all representations and warranties except those regarding Petrohawk’s capitalization, corporate power and authority, tax matters, validity of the merger agreement and SEC reports, the failure to be accurate individually or in the aggregate has not had, and would not be reasonably likely to have or result in, a material adverse effect on Petrohawk;
	•	the performance in all material respects by Petrohawk and Merger Sub of their respective obligations contained in the merger agreement;
	•	absence of any suit, action or proceeding by any court or other governmental entity seeking to restrain, preclude, enjoin or prohibit the merger or any of the other transactions contemplated by the merger agreement; and
	•	the receipt by Mission of an opinion of its counsel, dated as of the date this joint proxy statement/ prospectus is filed and as of the closing date of the merger, to the effect that the integrated transaction (which includes the merger and the immediately subsequent merger of the surviving corporation into Petrohawk) will be treated as a reorganization under Section 368(a) of the

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		Internal Revenue Code and that Petrohawk and Mission each will be a “party to the reorganization” within the meaning of Section 368(b) of the Internal Revenue Code.

	Additional Conditions to Petrohawk’s Obligations

	•	accuracy of Mission’s representations and warranties contained in the merger agreement both at and as of the date of the merger agreement and at and as of the closing date of the merger, as if made at and as of the closing date of the merger (except to the extent expressly made as of an earlier date, in which case as of such date), except where, in the case of all representations and warranties except those regarding Mission’s capitalization, corporate power and authority, tax matters, validity of the merger agreement and SEC reports, the failure to be accurate individually or in the aggregate has not had, and would not be reasonably likely to have or result in, a material adverse effect on Mission;
	•	the performance in all material respects by Mission of its obligations contained in the merger agreement;
	•	absence of any suit, action or proceeding by any court or other governmental entity seeking to (1) restrain, preclude, enjoin or prohibit the merger or any of the other transactions contemplated by the merger agreement, or (2) prohibit or limit in any material respect the ownership or operation of any of the parties to the merger agreement or any of their respective affiliates of a substantial portion of the business or assets of Mission and its subsidiaries, taken as a whole, or to require any person to dispose of or hold separate any material portion of the business or assets of Mission and its subsidiaries, taken as a whole, as a result of the merger or any of the other transactions contemplated by the merger agreement;
	•	the receipt by Petrohawk of an opinion of its counsel, dated as of the date this joint proxy statement/ prospectus is filed and as of the closing date of the merger, to the effect that the integrated transaction (which includes the merger and the immediately subsequent merger of the surviving corporation into Petrohawk) will be treated as a reorganization under Section 368(a) of the Internal Revenue Code and that Petrohawk and Mission each will be a “party to the reorganization” within the meaning of Section 368(b) of the Internal Revenue Code;
	•	the number of dissenting shares not exceeding 10% of the outstanding shares of Mission’s common stock; and
	•	receipt of all material consents and approvals of any person that Mission or any of its subsidiaries are required to obtain in connection with the consummation of the merger, including consents and approvals from parties to loans, contracts, leases or other agreements, except for such consents and approvals the failure of which to be obtained individually or in the aggregate would not be reasonably likely to have or result in a material adverse effect on Mission.

	•	corporate existence, good standing and qualification to conduct business;
	•	capitalization, including ownership of subsidiary capital stock and the absence of restrictions or encumbrances with respect to capital stock of any subsidiary;

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	•	corporate power and authorization to enter into and carry out the obligations of the merger agreement and the enforceability of the merger agreement;
	•	absence of any conflict or violation of organizational documents, third party agreements or law or regulation as a result of entering into and carrying out the obligations of the merger agreement;
	•	governmental, third party and regulatory approvals or consents required to complete the merger;
	•	filings and reports with the SEC, and financial information;
	•	absence of certain changes, events or circumstances;
	•	absence of undisclosed liabilities;
	•	accuracy of the information supplied for inclusion in this joint proxy statement/ prospectus;
	•	employee benefit plans;
	•	litigation, government orders, judgments and decrees;
	•	compliance with laws;
	•	intellectual property;
	•	material contracts;
	•	taxes;
	•	environmental matters;
	•	real property and operating equipment;
	•	insurance;
	•	labor and employment matters;
	•	transactions with affiliates;
	•	derivative and hedging transactions;
	•	disclosure controls and procedures;
	•	oil and gas reserves, assets and operations;
	•	investment company status;
	•	recommendations of merger by boards of directors;
	•	receipt of fairness opinions;
	•	required vote;
	•	fees payable to brokers in connection with the merger;
	•	tax matters relating to the merger; and
	•	no other representations or warranties.

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	Operations of Mission

	•	conduct the business of Mission and its subsidiaries only in the ordinary course consistent with past practice;
	•	use its reasonable best efforts to preserve intact its business organization and goodwill and the business organization and goodwill of its subsidiaries; and
	•	use its reasonable best efforts to keep available the services of its current officers and employees and preserve and maintain existing relations with customers, suppliers, officers, employees and creditors.

	•	enter into any new line of business, incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during calendar year 2005 other than capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than, and during the same time period set forth in, Mission’s current capital budget approved by the board of directors of Mission in December 2004, plus $6 million from Mission’s 2004 capital budget that was not spent; provided that Mission shall provide Petrohawk with advance notice of any and all expenditures made by Mission in excess of $1 million in sufficient time to allow Petrohawk to provide input on such expenditures;
	•	amend its certificate of incorporation or bylaws or similar organizational documents;
	•	declare, set aside or pay any dividend or other distribution, whether payable in cash, stock or any other property or right, with respect to its capital stock, except that Mission may permit any direct or indirect wholly-owned subsidiary to do any of the foregoing;
	•	adjust, split, combine or reclassify any capital stock or issue, grant, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class or of any other such securities or agreements of Mission or any of its subsidiaries, other than issuances by Mission (1) of options to new employees of Mission in the ordinary course of Mission’s business consistent with past practices, (2) pursuant to Mission options (outstanding as of April 3, 2005, or issued thereafter in accordance with the merger agreement);
	•	except as required pursuant to the terms of the Mission benefit plans in effect on the date of the merger agreement, redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or any other securities or agreements of the type described in the preceding paragraph;
	•	except as required pursuant to the terms of the Mission benefit plans in effect on the date of the merger agreement, grant any increase in the compensation or benefits payable or to become payable by Mission or any of its subsidiaries to any former or current director, officer or employee of Mission or any of its subsidiaries;
	•	except as required pursuant to the terms of the Mission benefit plans in effect on the date of the merger agreement, adopt, enter into, amend or otherwise increase, or accelerate the payment or vesting of the amounts, benefits or rights payable or accrued or to become payable or accrued

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		under, any Mission benefit plan (other than entry into employment agreements with new hires in the ordinary course of business consistent with past practice; provided that such employment agreement shall be terminable at will, without penalty (other than severance obligations that accrue under Mission’s amended and restated change in control plan as in effect on the date of the merger agreement) to Mission or any of its subsidiaries);
	•	grant any severance or termination pay to any officer, director or employee of Mission or any of its subsidiaries (other than severance pay to non-contract employees related to termination of such employee’s employment in the ordinary course of Mission’s business consistent with its past practices);
	•	designate any more prospects under the Mission bonus and deferred compensation plan;
	•	change its methods of accounting in effect as of the date of the merger agreement, except in accordance with changes in U.S. generally accepted accounting principles (“GAAP”) as concurred to by Mission’s independent auditors;
	•	acquire any business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner, or acquire any assets (other than in the ordinary course of business consistent with past practice or pursuant to agreements in effect on the date of the merger agreement);
	•	sell, lease, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any material assets (other than the sale of inventory and hydrocarbons in the ordinary course of business consistent with past practice or the sale of any assets pursuant to agreements in effect on the date of the merger agreement);
	•	mortgage, pledge, hypothecate, grant any security interest in, or otherwise subject any of its assets to any liens, subject to limited exceptions;
	•	pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) where such payment, discharge or satisfaction would require any payment except for the payment, discharge or satisfaction of liabilities or obligations in accordance with the terms of agreements in effect on the date of the merger agreement or entered into after the date of the merger agreement in the ordinary course of business consistent with past practice, and except for any payments, discharges or settlements that do not exceed $250,000 individually or $1 million in the aggregate;
	•	compromise, settle or grant any waiver or release relating to any litigation, other than settlements or compromises of litigation where the amount paid or to be paid does not exceed $250,000 individually or $1 million in the aggregate;
	•	engage in any transaction with (except pursuant to agreements in effect at the time of the merger agreement), or enter into any agreement, arrangement, or understanding with, directly or indirectly, any of Mission’s affiliates (not including any employees of Mission or any of its subsidiaries, other than the directors and executive officers thereof);
	•	make or change any material tax election, change any method of tax accounting, grant an extension of time to assess any tax or settle any tax claim, amend any tax return in any material respect or settle or compromise any material tax liability;
	•	take any action that would, or could reasonably be expected to, result in any of its representations and warranties set forth in the merger agreement becoming untrue in a manner that would give rise to the failure of the closing condition relating to the satisfaction of the representations and warranties of Mission (see “— Conditions to the Completion of the Merger”);
	•	adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Mission or any of its subsidiaries (other

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		than the merger or with respect to an inactive wholly-owned subsidiary of Mission) or any agreement relating to an acquisition proposal;
	•	incur or assume any long-term debt or incur or assume any short-term indebtedness (except for short-term indebtedness in the ordinary course of business consistent with past practice and in no event exceeding $10 million in the aggregate);
	•	modify the terms of any indebtedness to increase Mission’s obligations with respect to such indebtedness;
	•	assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, except in the ordinary course of business consistent with past practice and in no event exceeding $250,000 in the aggregate;
	•	make any loans, advances or capital contributions to, or investments in, any other person (other than to wholly-owned subsidiaries of Mission, or by wholly-owned subsidiaries to Mission, or customary loans or advances to employees in accordance with past practice and in no event exceeding $250,000 in the aggregate);
	•	enter into any material commitment or transaction, except in the ordinary course of business consistent with past practice;
	•	enter into any agreement, understanding or commitment that materially restrains, limits or impedes Mission’s or any of its subsidiaries’ ability to compete with or conduct any business or line of business, including geographic limitations on Mission’s or any of its subsidiaries’ activities (other than confidentiality agreements and area of mutual interest agreements in the ordinary course of business consistent with past practice);
	•	modify or amend in any material respect, or terminate, any material contract to which it is a party or waive in any material respect or assign any of its material rights or claims, except in the ordinary course of business consistent with past practice;
	•	fail to maintain in full force and effect the existing insurance policies covering Mission or its subsidiaries or their respective properties, assets and businesses or comparable replacement policies, except to the extent such policies cease to be available on commercially reasonable terms; or
	•	enter into an agreement, contract, commitment or arrangement to take any of the prohibited actions described above.

	Operations of Petrohawk

	•	enter into any new line of business, except as may reasonably relate to Petrohawk’s existing business;

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	•	incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during the calendar year 2005 in excess of $5 million over Petrohawk’s 2005 capital budget;
	•	solely in the case of Petrohawk and any non-wholly owned subsidiary of Petrohawk, declare, set aside, or pay any dividend or other distribution on its capital stock (other than on Petrohawk’s 8% Cumulative Convertible preferred stock);
	•	adjust, split, combine or reclassify any capital stock or issue, grant, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class or of any other such securities or agreements of Petrohawk, other than issuances by Petrohawk (1) of options to new employees of Petrohawk in the ordinary course of Petrohawk’s business consistent with past practices, (2) pursuant to Petrohawk options, warrants, and convertible notes (outstanding as of April 3, 2005, or issued thereafter in accordance with the merger agreement), or except as required under any current plans in effect as of April 3, 2005, redeem purchase or otherwise acquire any Petrohawk capital stock or any other Petrohawk securities;
	•	change its methods of accounting in effect as of the date of the merger agreement, except in accordance with changes in GAAP;
	•	acquire any person or business organization or any assets but only to the extent any such acquisition or the total of such acquisitions exceed $40 million from the date of the merger agreement until December 31, 2005;
	•	other than the sale or consumption of inventory and hydrocarbons in the ordinary course of business, sell, lease, transfer, or dispose of any assets but only to the extent such sales, leases, or transfers do not exceed $40 million in the aggregate from the date of the merger agreement until December 31, 2005;
	•	take any action that would, or could reasonably be expected to, result in any of its representations and warranties set forth in the merger agreement becoming untrue in a manner that would give rise to the failure of the closing condition relating to the satisfaction of the representations and warranties of Petrohawk (see “— Conditions to the Completion of the Merger”);
	•	solely in the case of Petrohawk, amend its certificate of incorporation or bylaws or similar organizational documents in a manner that adversely affects the terms of Petrohawk common stock, other than to increase the number of authorized shares of Petrohawk common stock;
	•	solely in the case of Petrohawk, adopt or enter into a plan of complete or partial liquidation or dissolution; or
	•	enter into an agreement, contract, commitment or arrangement to do any of the foregoing.

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	•	directly or indirectly initiate, solicit, knowingly encourage or facilitate (including by way of furnishing information), or take any other action designed to facilitate or encourage any inquiries or the making of any proposal that constitutes, or is reasonably likely to lead to, any acquisition proposal (as defined below);
	•	participate or engage in any discussions or negotiations with, disclose any non-public information relating to itself or any of its subsidiaries, or afford access to its properties, books or records to any person that has made or is contemplating making an acquisition proposal; or
	•	accept or enter into any agreement that (1) constitutes, relates to, or could reasonably be expected to lead to any acquisition proposal or (2) requires, intends to cause or could reasonably be expected to cause either Mission or Petrohawk to respectively abandon, terminate or fail to consummate the merger.

	•	the acquisition proposal was not solicited, initiated, knowingly encouraged or facilitated by Mission, its subsidiaries, or any of its officers or directors, investment bankers, attorneys, accountants, financial advisors, agents or other representatives;
	•	the proposal constitutes, or the board of directors of Mission determines in good faith, after consultation with its financial advisors and outside legal counsel, that such acquisition proposal could reasonably be expected to lead to a superior proposal (as defined below); and
	•	the person making the acquisition proposal has entered into a confidentiality agreement on specified terms with Mission.

	Mission’s Ability to Make an Adverse Recommendation Change in Response to a Superior Proposal

	•	four business days before making such change, Mission provides written notice to Petrohawk (a “notice of superior proposal”) that:

	•	advises Petrohawk that the board of directors of Mission or any of its committees has received a superior proposal;
	•	specifies the material terms and conditions of the superior proposal;

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	•	identifies the person or group making such superior proposal; and

	•	in the event that Petrohawk proposes any alternative transaction during such four business day period, the board of directors of Mission determines in good faith, after consultation with its financial advisors and outside legal counsel, that such alternative transaction is not at least as favorable to Mission and its stockholders from a financial point of view as the superior proposal, taking into account all financial, legal and regulatory terms and conditions of the alternative transaction proposed by Petrohawk.

	•	advise Petrohawk in writing of any request for information or any acquisition proposal received from any person, or any inquiry, discussions or negotiations with respect to any acquisition proposal, the terms and conditions of any request, acquisition proposal, inquiry, discussions or negotiations, and the identity of the person or group making any request or acquisition proposal or with whom any discussions or negotiations are taking place;
	•	provide Petrohawk any non-public information concerning Mission provided to any other person or group in connection with any acquisition proposal that was not previously provided to Petrohawk and copies of any written materials received from that person or group;
	•	keep Petrohawk fully informed of the status of any acquisition proposals (including any changes to any material terms and conditions); and
	•	not release any third party from, or waive any provisions of, any confidentiality or standstill agreement to which Mission is a party.

	•	direct or indirect acquisition or purchase of a business or assets that constitutes 10% or more of the net revenues, net income or the assets (based on fair market value) of Mission and its subsidiaries, taken as a whole;
	•	direct or indirect acquisition or purchase of 10% or more of any class of equity securities or capital stock of Mission or any of its subsidiaries whose business constitutes 10% or more of the net revenues, net income or assets of Mission and its subsidiaries, taken as a whole; or
	•	merger, consolidation, restructuring, transfer of assets or other business combination, sale of shares of capital stock, tender offer, exchange offer, recapitalization, stock repurchase program or other similar transaction that if consummated would result in any person beneficially owning 10% or more of any class of equity securities of Mission or any of its subsidiaries whose business constitutes 10% or more of the net revenues, net income or assets of Mission and its subsidiaries, taken as a whole, other than the transactions contemplated by the merger agreement.

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	•	withdraw (or amend or modify in a manner adverse to Petrohawk) its approval, recommendation or declaration of advisability of the merger agreement, the merger or the other transactions contemplated by the merger agreement; or
	•	recommend, adopt or approve any acquisition proposal.

	General

	•	by mutual written consent of Petrohawk and Mission;
	•	by either Petrohawk or Mission:

	•	if the merger is not completed on or before December 31, 2005, unless the failure of the closing to occur by this date is due to the failure of the party seeking to terminate the merger agreement to fulfill any material obligation under the merger agreement or a material breach of the merger agreement by such party;
	•	if any court or other governmental entity shall have issued a statute, rule, order, decree or regulation or taken any other action (which Petrohawk and Mission will use their reasonable best efforts to lift), in each case permanently restraining, enjoining or otherwise prohibiting the consummation of the merger or making the merger illegal and such statute, rule, order, decree, regulation or other action has become final and nonappealable, provided that the terminating party is not in breach of its obligation to use reasonable best efforts to complete the merger;
	•	if the Mission stockholders fail to adopt the merger agreement by the requisite vote, provided that this right to terminate is not available to Mission if it has breached any of its obligations relating to non-solicitation of offers described above under “— No Solicitation of Alternative Transactions” or breached any of its obligations relating to completing this joint proxy statement/ prospectus and convening a stockholders meeting described above under “— Reasonable Best Efforts to Obtain Required Stockholder Vote”;
	•	if there has been a material breach of or any inaccuracy in any of the representations or warranties set forth in the merger agreement on the part of any of the other parties, which breach has not been cured within 30 days following receipt by the breaching party of written notice of such breach from the terminating party, or which breach, by its nature, cannot be cured prior to December 31, 2005 (provided that the terminating party is not then in material breach of any representation, warranty, covenant or other agreement contained in the merger agreement); provided, however, that no party will have the right to terminate the merger agreement for the foregoing purposes unless the breach of representation or warranty, together with all other such breaches, would entitle the party receiving such representation not to consummate the transactions contemplated by the merger agreement;
	•	if there has been a material breach of any of the covenants or agreements set forth in the merger agreement on the part of any of the other parties, which breach has not been cured within 30 days following receipt by the breaching party of written notice of such breach from the terminating party, or which breach, by its nature, cannot be cured prior to December 31, 2005 (provided that the terminating party is not then in material breach of any representation, warranty, covenant or other agreement contained in the merger agreement); or

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	•	if the Petrohawk stockholders fail to approve the issuance of Petrohawk shares pursuant to the merger; provided that this right to terminate is not available to Petrohawk if it has breached any of its obligations relating to non-solicitation of offers described above under “— No Solicitation of Alternative Transactions” or breached any of its obligations relating to completing this joint proxy statement/ prospectus and convening a stockholders meeting described above under “— Reasonable Best Efforts to Obtain Required Stockholder Vote”;
	•	if, prior to obtaining the required vote of the Mission stockholders adopting the merger agreement and approving the merger and the other transactions contemplated by the merger agreement (i) Mission or its board of directors has entered into an agreement with respect to an acquisition proposal (other than a permissible confidentiality agreement) or approved or recommended, or, in the case of a committee, proposed to the Mission board of directors to approve or recommend, an acquisition proposal (as defined above under “— No Solicitation of Alternative Transactions”), (ii) Mission or its board of directors or any committee thereof has resolved to do any of the foregoing, or (iii) an adverse recommendation change shall have occurred in response to a superior proposal or Mission’s board of directors, or any committee thereof, has resolved to make an adverse recommendation change.

	Termination Fees

	•	the merger agreement is terminated by Petrohawk or Mission due to an adverse recommendation change by Mission in response to a superior proposal; or
	•	the merger agreement is terminated by Petrohawk or Mission because Mission or its board of directors has entered into an agreement with respect to an acquisition proposal (other than a permissible confidentiality agreement) or, approved or recommended, or, in the case of a committee, proposed to the Mission board of directors to approve or recommend, an acquisition proposal, or Mission or its board of directors or any committees thereof has resolved to do any of the foregoing;
	•	an acquisition proposal with respect to Mission has been proposed by any person (other than by Petrohawk, Merger Sub or any of their respective affiliates) or any person has publicly announced its intention (whether or not conditional) to make such acquisition proposal and such acquisition proposal or such intention has otherwise become publicly known to Mission’s stockholders generally; and

	•	thereafter the merger agreement is terminated by either Petrohawk or Mission for failure to close the merger on or before December 31, 2005 or because the Mission stockholders failed to adopt the merger agreement by the required vote, and
	•	within 12 months after termination of the merger agreement, Mission or any of its subsidiaries enters into any definitive agreement providing for an “acquisition proposal” (as described above under “— No Solicitation of Alternative Transactions”, except that all references to “10%” therein are deemed to be references to “40%” for the purposes of the provision described in this paragraph), or an acquisition proposal with respect to Mission or any of its subsidiaries is consummated.

	Effect of Termination

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	•	entities treated as partnerships for U.S. federal income tax purposes or Mission stockholders that hold their shares through entities treated as partnerships for U.S. federal income tax purposes;
	•	certain former citizens or long-term residents of the U.S.;
	•	persons who hold Mission common stock as part of a straddle, hedging transaction, synthetic security, conversion transaction or other integrated investment or risk reduction transaction;
	•	U.S. persons, as defined below, whose functional currency is not the U.S. dollar;
	•	persons who acquired Mission common stock through the exercise of employee stock options or otherwise as compensation;
	•	persons subject to the U.S. alternative minimum tax;
	•	mutual funds;
	•	banks, insurance companies, and other financial institutions;
	•	regulated investment companies;
	•	tax-exempt organizations;
	•	dealers in securities or foreign currencies; and
	•	traders in securities that mark-to-market.

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	Tax Opinions

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	U.S. Federal Income Tax Consequences to U.S. Persons

	•	If a Mission stockholder exchanges all of his or her shares of Mission common stock solely for shares of Petrohawk common stock in the merger, that Mission stockholder will not recognize (i.e., take into account for income tax purposes) gain or loss, except for any gain or loss recognized with respect to cash received instead of a fractional share of Petrohawk common stock. See “— Cash Received Instead of a Fractional Share” below.
	•	If a Mission stockholder exchanges his or her shares of Mission common stock solely for cash in the merger, that Mission stockholder generally will recognize capital gain or loss equal to the difference between the amount of cash received and his or her tax basis in the Mission common stock. If, however, the Mission stockholder owns shares of Petrohawk common stock actually or constructively after the merger, the stockholder might be subject to dividend treatment. See “— Possible Treatment of Cash as a Dividend” immediately below.
	•	If a Mission stockholder exchanges his or her shares of Mission common stock for a combination of Petrohawk common stock and cash, that Mission stockholder generally will recognize gain (but not loss). Any such gain recognized will equal the lesser of: (1) the amount of cash received by the stockholder in the merger and (2) the excess, if any, of (a) the sum of the amount of cash and the fair market value of the Petrohawk common stock received by the stockholder in the merger over (b) that stockholder’s adjusted tax basis in the Mission common stock exchanged by the stockholder in the merger. For this purpose, a Mission stockholder must calculate gain separately for each identifiable block of Mission common stock exchanged by the stockholder in the merger. Cash received instead of fractional shares of Petrohawk stock is excluded from the calculations discussed in (1) and (2) above, and instead is treated as discussed below under “— Cash Received Instead of a Fractional Share.” Except as discussed under “— Possible Treatment of Cash as a Dividend,” any gain recognized by a Mission stockholder in the merger generally will constitute capital gain.
	•	The aggregate tax basis of the shares of Petrohawk common stock received by a Mission stockholder in exchange for Mission common stock pursuant to the merger will be the same as the aggregate tax basis of the stockholder’s Mission common stock surrendered in the merger, decreased by the amount of cash received by the stockholder in the merger and increased by the amount of gain or dividend income recognized by the stockholder in the merger.
	•	The holding period of the shares of Petrohawk common stock received by a Mission stockholder in the merger generally will include the holding period of the stockholder’s Mission common stock exchanged for Petrohawk common stock.
	•	If a Mission stockholder has differing bases or holding periods in respect of his or her shares of Mission common stock, such stockholder should consult his or her tax advisor prior to the exchange to identify the bases or holding periods of the particular shares of Petrohawk common stock received in the merger.

	Possible Treatment of Cash as a Dividend

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	Cash Received Instead of a Fractional Share

	Capital Gain and Dividend Income of Individuals

	Reporting Requirements

	U.S. Federal Income Tax Consequences to Non-U.S. Persons

	General

	Non-U.S. Persons That Have Not Held More Than 5% of Mission’s Common Stock in the Prior Five Years

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	•	If a non-U.S. person exchanges all of his or her shares of Mission common stock solely for shares of Petrohawk common stock in the merger, that stockholder will not recognize any gain or loss.
	•	If a non-U.S. person exchanges his or her shares of Mission common stock solely for cash or for a combination of cash (including cash instead of a fractional share of Petrohawk common stock) and Petrohawk common stock in the merger, any gain realized by that non-U.S. person will not be subject to U.S. federal income tax.
	•	A non-U.S. person will have an aggregate tax basis in the Petrohawk common stock received in the merger equal to the aggregate tax basis of the stockholder’s Mission common stock surrendered decreased by the amount of cash received by the stockholder in the merger.
	•	A non-U.S. person’s holding period for shares of Petrohawk common stock received in exchange for shares of Mission common stock in the merger will include the holding period of the stockholder’s Mission common stock exchanged for Petrohawk common stock.
	•	If you are a non-U.S. person and you have differing bases or holding periods in your shares of Mission common stock to be exchanged in the merger, you should consult your tax advisor prior to the exchange to identify the bases or holding periods of the particular shares of Petrohawk common stock that you will receive in the merger.

	Non-U.S. Persons That Currently Hold or Have Held More Than 5% of Mission’s Common Stock

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	•	such stockholder will recognize gain or loss measured by the difference between (1) the sum of the amount of any cash received (including cash instead of a fractional share of Petrohawk common stock) and the fair market value of the Petrohawk common stock received in the merger over (2) that Significant Non-U.S. Person’s tax basis in its Mission common stock surrendered in the merger. Except as discussed under “— U.S. Federal Income Tax Consequences to U.S. Persons — Possible Treatment of Cash as a Dividend,” any gain or loss recognized by a Significant Non-U.S. Person in the merger generally will constitute capital gain or loss effectively connected with the conduct of a U.S. trade or business.
	•	the aggregate tax basis of the Petrohawk common stock received in the merger will equal the fair market value of that Petrohawk common stock as of the effective time of the merger;
	•	such stockholder’s holding period for the Petrohawk common stock received in the merger will begin the day after the effective time of the merger; and
	•	if you are a Significant Non-U.S. Person and you have differing bases or holding periods in your shares of Mission common stock to be exchanged in the merger, you should consult your own tax advisor prior to the exchange to identify the bases or holding periods of the particular shares of Petrohawk common stock that you will receive in the merger.

	•	file a U.S. federal income tax return reporting the gain or loss subject to tax as income effectively connected with the conduct of a trade or business within the U.S. and taxable as either ordinary income or capital gain; and
	•	pay any tax due upon the filing of the return or, depending upon the circumstances, earlier through estimated payments.

	FIRPTA Withholding

	U.S. Federal Income Tax Consequences to Stockholders That Exercise Appraisal Rights

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	Backup Withholding

	Obtain Personal Tax Advice

	Extension and Waiver

	•	extend the time for the performance of any of the obligations or other acts of the other parties under the merger agreement;
	•	waive any inaccuracies in the other parties’ representations and warranties contained in the merger agreement or in any document, certificate or writing delivered pursuant the merger agreement by the other parties; and
	•	waive the other parties’ compliance with any of its agreements or conditions contained in the merger agreement.

	•	any agreement allowing an extension or waiver must be set forth in a written instrument signed on behalf of the party allowing the extension or waiver;
	•	any waiver will only waive the respective matter described in the writing and will not impair the rights of the party granting the waiver in any other respect or at any other time;
	•	neither any waiver by any party to the merger agreement, nor the failure by any party to enforce any provisions of the merger agreement or to exercise any rights will be construed as a waiver of any other breach or default, or as a waiver of any such provisions, rights or privileges under the merger agreement; and

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	•	the rights and remedies provided under the merger agreement are cumulative and none is exclusive of any other, or of any rights or remedies that any party may otherwise have.

	Amendment

	•	the merger consideration to be received by the Mission stockholders in the merger; or
	•	any term of the merger agreement.

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	•	Mission or any of its subsidiaries may not declare, set aside or pay any dividend or other distribution, whether payable in cash, stock or any other property or right, with respect to its capital stock, except that Mission may permit any direct or indirect wholly-owned subsidiary to do any of the foregoing; and
	•	Petrohawk or any of its subsidiaries may not declare, set aside or pay any dividend or other distribution (other than in the case of any wholly owned subsidiary of Petrohawk), whether payable in cash, stock or any other property or right, with respect to its capital stock except that Petrohawk may pay quarterly cash dividends on its preferred stock.

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	Board of Directors

	Stock Options

												Number of
				Number of				Estimated				Shares				Estimated
				Shares Subject				Value of				Subject to				Value of
				to Unvested				Unvested				Vested				Vested
Name		Title		Options				Options				Options				Options
Robert L. Cavnar		Chairman, President and Chief Executive Officer			191,666			$	860,954				2,058,334			$	13,882,296
Richard W. Piacenti		Executive Vice President and Chief Financial Officer			108,333			$	469,039				391,667			$	2,424,211
John (Jack) L. Eells		Senior Vice President — Exploration and Geoscience			75,000			$	332,500				350,000			$	2,255,750
Marshall L. Munsell		Senior Vice President — Land and Land Administration			100,000			$	418,251				250,000			$	1,403,249
Tom C. Langford		Senior Vice President — General Counsel			200,000			$	259,000				100,000			$	129,500
William R. Picquet		Senior Vice President — Operations and Engineering			125,000			$	47,500				125,000			$	47,500
David A. B. Brown		Director			—				—				35,000			$	201,575
Joseph N. Jaggers		Director			—				—				30,000			$	140,525
Robert R. Rooney		Director			—				—				39,000			$	200,300
Herbert C. Williamson, III		Director			—				—				35,000			$	197,575

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	Employment Agreements

	Indemnification and Insurance

	Restrictions on Resales by Affiliates

	•	the further registration under the Securities Act of the Petrohawk common stock to be transferred;
	•	compliance with Rule 145 promulgated under the Securities Act, which permits limited sales under certain circumstances; or
	•	the availability of another exemption from registration.

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																Petrohawk
				Petrohawk				Mission				Merger				Pro Forma
				Historical				Historical				Adjustments				Combined
				(In thousands)
ASSETS
Current Assets:
	Cash and cash equivalents			$	6,359			$	9,171			$	135,000	(3)		$	12,230
													(135,000	)(3)
													(3,300	)(3)
	Accounts receivable				20,972				24,306				—				45,278
	Current deferred income taxes				9,185				7,482				—				16,667
	Prepaid expenses and other				2,940				1,610				—				4,550
		Total Current Assets			39,456				42,569				(3,300	)			78,725
Property and Equipment, at cost
	Oil and gas properties, full cost method
		Subject to amortization			481,042				924,617				(924,617	)(2)			905,042
													424,000	(2)
		Unevaluated properties, not subject to amortization			71,773				16,423				(16,423	)(2)			221,773
													150,000	(2)
Other property and equipment					3,224				6,063				—				9,287
					556,039				947,103				(367,040	)			1,136,102
Less depreciation, depletion and amortization					(60,299	)			(584,507	)			584,507	(2)			(60,299	)
					495,740				362,596				217,467				1,075,803
Goodwill					—				—				198,302	(2)			198,302
Other Assets					7,414				8,042				(7,197	)(3)			9,959
													1,700	(3)
		Total Assets		$	542,610			$	413,207			$	406,972			$	1,362,789
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
	Accounts payable and other			$	21,616			$	12,656			$	—			$	34,272
	Commodity hedging contracts				7,758				21,855				—				29,613
	Current portion of long-term debt				500				—				—				500
	Other accrued liabilities				5,416				39,001				—				44,417
		Total Current Liabilities			35,290				73,512				—				108,802
Long-Term Debt					128,000				18,000				(18,000	)(3)			168,000
													40,000	(3)
Subordinated Note Payable					35,000				—				—				35,000
Term Loan B					49,500				25,000				(25,000	)(3)			49,500
Senior 97/8% Notes					—				130,000				—				130,000
New Debt					—				—				135,000	(3)			135,000
Asset Retirement Obligation					13,523				35,187				—				48,710
Deferred Tax Liability					25,433				19,981				(19,981	)(4)			188,433
													163,000	(4)
Other					20,710				6,047				—				26,757
Stockholders’ Equity:
	Preferred stock				1				—				—				1
	Common stock				40				419				(419	)(3)			59
													19	(3)
	Additional Paid-In Capital				264,469				209,311				(209,311	)(3)			501,883
													206,362	(3)
													31,052	(3)
	Treasury stock				(36	)			(1,937	)			1,937	(3)			(36	)
	Accumulated other comprehensive income				—				(17,866	)			17,866	(1)			—
	Accumulated deficit				(29,320	)			(84,447	)			84,447	(3)			(29,320	)
					235,154				105,480				131,953				472,587
		Total Liabilities and Stockholders’ Equity		$	542,610			$	413,207			$	406,972			$	1,362,789

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																				Petrohawk												Petrohawk
				Petrohawk				Royalty				Proton				Proton				Pro				Mission				Merger				Pro Forma
				Historical				Sale				Historical				Adjustments				Forma				Historical				Adjustments(7)				Combined
				(In thousands)
Revenues:
	Oil and natural gas			$	32,217			$	(1,855	)		$	1,695			$	—			$	32,057			$	34,361			$	3,855	(1)		$	70,273
	Field services and other				109				—				31				—				140				—				—				140
		Total revenue			32,326				(1,855	)			1,726				—				32,197				34,361				3,855				70,413
Costs and Expenses:
	Production:
		Lease operations			5,231				—				296				—				5,527				8,125				—				13,652
		Production, severance and ad valorem taxes			2,326				(98	)			130				—				2,358				2,500				—				4,858
		Gathering, transportation and other			—				—				—				—				—				(43	)			—				(43	)
	Field services				47				—				—				—				47				—				—				47
	General and administrative				3,300				—				165				—				3,465				3,399				—				6,864
	Stock-based compensation				1,579				—				—				—				1,579				—				—				1,579
	Depreciation, depletion and amortization				10,625				(606	)			288			$	(288	)(8)			10,724				10,419				(21,143	)(2)			22,449
																	705	(8)											22,449	(2)
	Accretion of asset retirement obligations				189				—				2				—				191				420				—				611
		Total costs and expenses			23,297				(704	)			881				417				23,891				24,820				1,306				50,017
Income (Loss) From Operations					9,029				(1,151	)			845				(417	)			8,306				9,541				2,549				20,396
Other Income (Expense):
	Net loss on derivative contracts				(28,652	)			—				(60	)			—				(28,712	)			—				(3,855	)(1)			(48,510	)
																													(15,943	)(1)
	Interest expense and other				(3,349	)			419				(21	)			21	(5)			(3,208	)			(5,039	)			4,272	(5)			(9,945	)
																	(278	)(5)											(5,970	)(5)
		Total other income (expense)			(32,001	)			419				(81	)			(257	)			(31,920	)			(5,039	)			(21,496	)			(58,455	)
(Loss) Income Before Income Tax					(22,972	)			(732	)			764				(674	)			(23,614	)			4,502				(18,947	)			(38,059	)
Income Tax Benefit (Provision)					8,720				278				(260	)			260	(6)			8,708				(1,666	)			(7,042	)(6)			14,463
																	(290	)(6)											14,463	(6)
Net (Loss) Income					(14,252	)			(454	)			504				(704	)			(14,906	)			2,836				(11,526	)			(23,596	)
Preferred Dividends					(109	)			—				—				—				(109	)			—				—				(109	)
Net (Loss) Income Applicable to Common Stockholders				$	(14,361	)		$	(454	)		$	504			$	(704	)		$	(15,015	)		$	2,836			$	(11,526	)		$	(23,705	)
Basic Net Loss Per Common Share				$	(0.36	)														$	(0.38	)										$	(0.40	)
Diluted Net Loss Per Common Share				$	(0.36	)														$	(0.38	)										$	(0.40	)
Weighted Average Shares Outstanding:
	Basic				39,980																39,980								19,233(3	)			59,213
	Fully Diluted				39,980																39,980								19,233(3	)			59,213

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																Petrohawk
				Petrohawk				Mission				Merger				Pro Forma
				Pro Forma				Historical				Adjustments(7)				Combined
				(In thousands)
Revenues:
	Oil and natural gas			$	121,952			$	128,707			$	20,656	(1)		$	271,315
	Field services and other				446				—				—				446
		Total revenue			122,398				128,707				20,656				271,761
Costs and Expenses:
	Production:
		Lease operations			32,833				29,060				—				61,893
		Production, severance and ad valorem taxes			808				9,400				—				10,208
		Gathering, transportation and other			—				346				—				346
	Field services				168				—				—				168
	General and administrative				11,829				12,751				—				24,580
	Stock-based compensation				3,529				4,120				—				7,649
	Depreciation, depletion and amortization				37,252				44,229				(81,481	)(2)			78,948
													78,948	(2)
	Accretion of asset retirement obligations				611				1,202				—				1,813
	Other				491				—				—				491
		Total costs and expenses			87,521				101,108				(2,533	)			186,096
Income From Operations					34,877				27,599				23,189				85,665
Other Income (Expense):
	Net gain (loss) on mark-to-market derivative contracts				4,000				—				(23,940	)(1)			(19,940	)
	Equity income of non-affiliates				85				—				—				85
	Investment income				20				—				—				20
	Interest expense				(10,146	)			(19,818	)			19,818	(5)			(34,027	)
													(23,881	)(5)
	Interest income and other				249				(3,067	)			—				(2,818	)
		Total other income (expense)			(5,792	)			(22,885	)			(28,003	)			(56,680	)
Income (Loss) Before Income Tax					29,085				4,714				(4,814	)			28,985
Income Tax Provision					(14,138	)			(1,765	)			15,903	(6)			(10,913	)
													(10,913	)(6)
Net Income					14,947				2,949				176				18,072
Preferred Dividends					(445	)			—				—				(445	)
Net Income Applicable to Common Stockholders				$	14,502			$	2,949			$	176			$	17,627
Basic Net Income Per Common Share				$	1.34											$	0.59
Diluted Net Income Per Common Share				$	0.63											$	0.40
Weighted Average Shares Outstanding:
	Basic				10,809								19,232	(3)			30,042
	Fully Diluted				23,854								21,604	(3)			45,458

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												Petrohawk/
				Petrohawk				Wynn-Crosby				Wynn-Crosby				Royalty				Proton				Proton				Petrohawk
				Historical				Adjustments				Pro Forma				Sale				Historical				Adjustments				Pro Forma
				(In thousands)
Revenues:
	Oil and natural gas			$	33,229			$	92,313			$	125,542			$	(11,230	)		$	7,640			$	—			$	121,952
	Field services and other				348				98				446				—				—				—				446
		Total revenue			33,577				92,411				125,988				(11,230	)			7,640				—				122,398
Costs and Expenses:
	Production:
		Lease operations			5,692				25,286				30,978				—				1,855				—				32,833
		Production, severance and ad valorem taxes			2,319				(1,124	)			1,195				(922	)			535				—				808
		Gathering, transportation and other			—				—				—				—				—				—				—
	Field services				168				—				168				—				—				—				168
	General and administrative				7,802				3,137				10,939				—				890				—				11,829
	Stock-based compensation				3,529				—				3,529				—				—				—				3,529
	Depreciation, depletion and amortization				9,231				28,843				38,074				(3,292	)			1,102				(1,102	)(8)			37,252
																									2,470	(8)
	Accretion of asset retirement obligations				137				456				593				—				18				—				611
	Other				—				491				491				—				—				—				491
		Total costs and expenses			28,878				57,089				85,967				(4,214	)			4,400				1,368				87,521
Income (Loss) From Operations					4,699				35,322				40,021				(7,016	)			3,240				(1,368	)			34,877
Other Income (Expense):
	Net gain (loss) on mark-to-market derivative contracts				7,441				(3,524	)			3,917				—				83				—				4,000
	Equity income of non-affiliates				—				85				85				—				—				—				85
	Investment income				—				20				20				—				—				—				20
	Interest expense				(3,178	)			(7,816	)			(10,994	)			2,512				(292	)			292	(5)			(10,146	)
																									(1,664	)(5)
	Interest income and other				284				(48	)			236				—				13				—				249
		Total other income (expense)			4,547				(11,283	)			(6,736	)			2,512				(196	)			(1,372	)			(5,792	)
Income (Loss) Before Income Tax					9,246				24,039				33,285				(4,504	)			3,044				(2,740	)			29,085
Income Tax Provision					(1,129	)			(11,403	)			(12,532	)			(460	)			(1,035	)			1,035	(6)			(14,138	)
																									(1,146	)(6)
Net Income (Loss)					8,117				12,636				20,753				(4,964	)			2,009				(2,851	)			14,947
Preferred Dividends					(445	)			—				(445	)			—				—				—				(445	)
Net Income (Loss) Applicable to Common Stockholders				$	7,672			$	12,636			$	20,308			$	(4,964	)		$	2,009			$	(2,851	)		$	14,502
Basic Net Income Per Common Share												$	1.88															$	1.34
Diluted Net Income Per Common Share												$	0.87															$	0.63
Weighted Average Shares Outstanding:
	Basic												10,809																10,809
	Fully Diluted												23,854																23,854

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	(1)	To reflect Petrohawk’s recognition of mark-to-market losses associated with derivative liabilities assumed in the merger with Mission. As a result of the business combination, Mission’s costless collars will not qualify for hedge accounting treatment, and, as a result, Petrohawk will continue to recognize mark-to-market gains and losses in future earnings until the collars mature.
	(2)	To record the preliminary purchase price allocation to evaluated and unevaluated property and goodwill. These adjustments also adjust depreciation, depletion and amortization expense to give effect to the purchase price allocation using the unit of production method under the full cost method of accounting.
	(3)	To record the retirement and issuance of debt and equity instruments, and related costs, in connection with the merger.
	(4)	To record the deferred tax position of the combined company, inclusive of the deferred tax gross-up in connection with the merger.
	(5)	To adjust interest expense to give effect to the financing activities in connection with the acquisition of Proton Oil & Gas Corporation and the anticipated financing activities in connection with the Mission merger.
	(6)	To record income tax expense on the combined company results of operations based on a 38.0% combined federal and state tax rate for the three months ended March 31, 2005 and 37.65% for the year ended December 31, 2004.
	(7)	Mission Resources will incur approximately $16.0 million in transaction costs. These costs consist of accounting, consulting and legal fees in addition to costs associated with employee severance. These costs are directly attributable to the transaction and have been excluded from the pro forma financial statements as they represent material nonrecurring charges.
	(8)	To adjust depreciation, depletion and amortization expense to give effect to the acquisition of Proton using the unit of production method under the full cost method of accounting.

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		Petrohawk
		Common Stock
Quarter Ended		High				Low
2003
March 31		$	2.14			$	1.38
June 30			3.30				1.24
September 30			3.04				2.30
December 31			4.72				2.60
2004
March 31		$	7.84			$	3.70
June 30			9.57				5.50
September 30			8.80				6.40
December 31			9.89				7.85
2005
March 31		$	10.98			$	7.45
June 30 (through June 24, 2005)			10.45				9.53

		Mission
		Common Stock
Quarter Ended		High				Low
2003
March 31		$	0.47			$	0.22
June 30			1.88				0.25
September 30			2.45				1.30
December 31			2.99				1.62
2004
March 31		$	3.32			$	2.09
June 30			6.21				3.08
September 30			6.73				4.36
December 31			7.02				5.10
2005
March 31		$	7.98			$	4.85
June 30 (through June 24, 2005)			7.89				7.17

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	Corporate Governance

	Authorized Capital Stock

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	Number and Election of Board of Directors

	Vacancies and Newly Created Directorships

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	Nominations by Stockholders

	Annual Meetings of Stockholders

	(i) the business is brought before the meeting by a stockholder of record entitled to vote at such meeting;
	(ii) written notice of such stockholder’s intent to bring such business before such meeting is received by Petrohawk’s Secretary not later than at the close of business on the 60th day nor earlier than the close of business on the 90th day prior to the first anniversary of the preceding year’s annual meeting of stockholders; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the 90th day prior to such annual meeting and not later than the close of business on the later of the 60th day prior to such annual meeting and the 10th day following the issuance by the Corporation of a press release announcing the meeting date; and
	(iii) the notice sets forth: (A) a brief description of the business desired to be brought before the meeting and the reasons for conducting such business at the meeting; (B) the name and address of the stockholder who intends to propose such business; (C) a representation that the stockholder is a holder of record of Petrohawk’s shares entitled to vote at such meeting and intends to appear in person or by proxy at such meeting to propose such business; (D) any material interest of the stockholder in such business; and (E) as to the stockholder giving the notice and the beneficial owner, if any, or whose behalf the proposal is made: (y) the name and address of such stockholder

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	and of such beneficial owner and (z) the class and number of Petrohawk’s shares which are owned beneficially and of record by such stockholder and such beneficial owner.

	Special Meetings of Stockholders

	Stockholder Action by Written Consent

	Power to Amend the Certificate of Incorporation

	Power to Amend the Bylaws

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	•	a consolidation or merger with or into any other corporation or corporations,
	•	a sale of all or substantially all of its assets, or
	•	a series of related transactions in which more than 50% of its voting power is disposed of.

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	•	modify its certificate of incorporation or bylaws so as to amend or change any of the rights, preferences or privileges of, or applicable to, the 8% cumulative convertible preferred stock;
	•	authorize or issue any other preferred equity security senior to any of the rights or preferences applicable to the 8% cumulative convertible preferred stock; or
	•	purchase or otherwise acquire for value any of its common stock or other equity security while there exists any arrearages in the payment of dividends to the holders of the 8% Cumulative Convertible preferred stock.

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	“The aggregate number of shares of stock the Corporation is authorized to issue is 125,000,000 shares of a class designated as common stock par value $0.001 per share, and 5,000,000 shares of a class designated as preferred stock, par value $0.001 per share, and the relative rights of the shares of each class are as follows:”

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Expiration of

Directors

Since

Age

Position

Term

Floyd C. Wilson

May 2004

58

Chairman of the Board, President Chief Executive Officer, Director and Director Nominee

2005

Tucker S. Bridwell(1)(2)(3)

May 2004

53

Director and Director Nominee

2005

James L. Irish III(1)

May 2004

59

Director

2006

David B. Miller(2)

May 2004

54

Director

2007

D. Martin Phillips(3)

May 2004

50

Director

2007

Daniel A. Rioux(2)(3)

July 2004

36

Director

2007

Robert C. Stone, Jr.(1)

September 2000

55

Director

2006

(1)	Member of the audit committee
(2)	Member of the compensation committee
(3)	Member of the nominating committee

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	Code of Ethics and Code of Conduct

	Nomination Process

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	Communications with the Board

	Executive Sessions

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	Board Attendance of Stockholder Meetings

Executive Officers		Since				Age				Position
Floyd C. Wilson			May 2004				58			Chairman of the Board, President and Chief Executive Officer
Stephen W. Herod			May 2004				46			Vice President — Corporate Development
Shane M. Bayless			May 2004				38			Vice President — Chief Financial Officer and Treasurer
Richard K. Stoneburner			May 2004				51			Vice President — Exploration
Larry L. Helm			July 2004				57			Vice President — Chief Administrative Officer
Richard H. Smith			November 2004				47			Vice President — Land
Mark J. Mize			November 2004				33			Controller

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	Compensation of Directors

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	Summary Executive Compensation Table

																							Matching
															Securities								Contributions
															Underlying				All Other				to Simple IRA
Name and Principal Position			Year				Salary				Bonus				Options				Compensation				Retirement Plan
Floyd C. Wilson(1)				2004			$	150,481			$	250,000	(2)			150,000	(3)		$	3,335			$	16,000
	Chairman of the Board,			2003				—				—				—				—				—
	President, Chief Executive			2002				—				—				—				—				—
	Officer and Director
Stephen W. Herod(1)				2004			$	90,288			$	150,000	(2)			75,000	(3)		$	1,210			$	13,000
	Vice President — Corporate			2003				—				—				—				—				—
	Development			2002				—				—				—				—				—
Shane M. Bayless(1)				2004			$	90,288			$	150,000	(2)			75,000	(3)		$	5,084			$	13,000
	Vice President, Chief Financial			2003				—				—				—				—				—
	Officer and Treasurer			2002				—				—				—				—				—
Larry L. Helm(1)				2004			$	76,731			$	150,000	(2)			75,000	(3)			—			$	7,673
	Vice President — Chief			2003				—				—				—				—				—
	Administrative Officer			2002				—				—				—				—				—
Richard K. Stoneburner(1)				2004			$	90,288			$	150,000	(2)			75,000	(3)		$	6,249			$	5,000
	Vice President — Exploration			2003				—				—				—				—				—
				2002				—				—				—				—				—
David A. Wilkins(1)				2004			$	63,561			$	150,000				—			$	160,769			$	8,220
	Former Chief Executive Officer,			2003			$	160,000			$	400,000				50,000	(4)		$	4,054	(6)		$	8,000
	President and Director			2002			$	32,205			$	50,000				250,000	(5)		$	1,062	(6)		$	966

(1)	Messrs. Wilson, Herod, Bayless and Stoneburner joined Petrohawk on May 25, 2004. Mr. Helm joined Petrohawk on June 28, 2004. Mr. Wilkins resigned his position on May 25, 2004.
(2)	Bonuses earned in 2004 were paid in January 2005.
(3)	Shares of common stock underlying stock options were granted on July 12, 2004 at an exercise price of $7.50 per share and expire on July 11, 2014.
(4)	50,000 shares of common stock underlying stock options were granted on December 31, 2003 at an exercise price of $3.80 per share and expire on December 31, 2013. This number of shares of stock issuable upon exercise of options and the per share option price reflect an adjustment for the one-for-two reverse stock split effective May 26, 2004.
(5)	As partial consideration for the forfeiture of Mr. Wilkins’ incentive common stock options (vested and unvested) with his former employer, he was granted an option to purchase 250,000 shares of our common stock at an exercise price of $2.60 per share. This number of shares of stock issuable upon exercise of options and the per share option price reflects an adjustment for the one-for-two reverse stock split effective May 26, 2004.
(6)	Represents compensation for use of company-owned or leased vehicle.

	Option Grants in 2004

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						Percent of
		Number of				Total Options				Exercise
		Securities				Granted to				or Base
		Underlying				Employees in				Price				Expiration				Grant Date
Name		Options				2004(1)				($/Sh)(2)				Date				Present Value $(3)
Floyd C. Wilson			150,000				21%			$	7.50				07/11/2014			$	563,250
Stephen W. Herod			75,000				10%			$	7.50				07/11/2014			$	281,625
Shane M. Bayless			75,000				10%			$	7.50				07/11/2014			$	281,625
Larry L. Helm			75,000				10%			$	7.50				07/11/2014			$	281,625
Richard K. Stoneburner			75,000				10%			$	7.50				07/11/2014			$	281,625

(1)	Based on a total of 717,500 shares underlying options granted to certain employees during the fiscal year 2004.
(2)	The exercise price is the average of the high and low sales prices of our common stock on the date of grant.
(3)	In accordance with the rules of the SEC, this column illustrates one measure of value for the respective options over a ten-year period using the Black-Scholes option-pricing model. This valuation model is hypothetical; the actual amount that will be received by a holder of an option will depend on the excess of the market price of the shares over the exercise price on the date the option is exercised. If the market price does not increase above the exercise price, compensation to the grantee will be zero. The Black-Scholes option-pricing model is a mathematical formula used for estimating option values that incorporates various assumptions. The Grant Date Present Value set out in the column above is based on the following assumptions: (a) a ten-year option term; (b) 73.9% expected future annual stock volatility for the options; (c) a risk-free rate of return of 3.0% for the options granted; and (d) no expected dividend yield. The above model does not include any reduction in value for non-transferability, forfeiture or vesting of options.

	Aggregated Option Exercises in 2004 and Year-End Values

Number of Securities

Value of Unexercised In-

Shares

Underlying Unexercised

The-Money Options at the

Acquired on

Value

Options at Fiscal Year End

Fiscal Year End ($)(1)

Name

Exercise

Realized

Exercisable/Unexercisable

Exercisable/Unexercisable

David A. Wilkins(2)

10,000

90,793

290,000/290,000

1,668,400/1,668,400

(1)	The value of in-the-money options is equal to the fair market value of a share of common stock at fiscal year end, based on the last sale price of our common stock ($8.56 per share), less the exercise price.
(2)	As more fully described in the Summary Compensation Table and in the table under “Option Grants in 2004”, Mr. Wilkins was granted options covering 100,000 shares of common stock during 2003. In 2002, he was granted options covering 500,000 shares of common stock as discussed below under “— Employment Agreements, Termination of Employment and Change of Control Agreements.”

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	Equity Compensation Plan Information

Number of

Securities

Remaining

Available for

Number of

Weighted-

Future Issuance

Securities to be

Average Exercise

Under Equity

Issued Upon

Price of

Compensation

Exercise of

Outstanding

Plans (Excluding

Outstanding

Options,

Securities

Options, Warrants

Warrants and

Reflected in

and Rights

Rights

Column (a))

Plan Category

(a)

(b)

(c)

Equity compensation plans approved by security holders

994,000

$

7.35

2,187,500

Equity compensation plans not approved by security holders

—

—

—

Total

994,000

$

7.35

2,187,500

	Employment Agreements, Termination of Employment and Change of Control Arrangements

	Compensation Committee Interlocks and Insider Participation

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	•	A $100 investment was made in our common stock and each index on December 31, 1999.
	•	All quarterly dividends were reinvested at the average of the closing stock prices at the beginning and end of the quarter.

		1999				2000				2001				2002				2003				2004
Total Return Analysis
Petrohawk		$	100			$	100.63			$	65.48			$	11.56			$	26.49			$	57.55
NASDAQ		$	100			$	60.71			$	47.93			$	32.82			$	49.23			$	53.46
Peer Group		$	100			$	358.08			$	241.26			$	244.95			$	680.02			$	937.75

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	•	Annual compensation, which includes base salary, intended to provide a stable annual salary at a level consistent with individual contributions, and annual performance bonuses intended to link officers’ compensation to Petrohawk’s performance.
	•	Long-term compensation, which includes stock or other equity based compensation intended to encourage actions to maximize stockholder value.

	Base Salary

	Annual Incentive Bonuses

	Equity Based Compensation

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	Respectfully Submitted,
	David B. Miller, Chairman
	Tucker S. Bridwell
	Daniel A. Rioux

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	2004 Audit Committee
	James L. Irish, III, Chairman
	Robert C. Stone, Jr.
	Tucker S. Bridwell

	Audit Fees

	Audit Related Fees

	Tax Fees

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	All Other Fees

	Audit Committee Pre-Approval Policy

	General.

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	“The aggregate number of shares of Restricted Stock, shares of Incentive Stock and Shares which may be issued under Stock Options granted under the Plan shall not exceed 4,250,000. In addition, the aggregate number of shares of Restricted Stock and Incentive Stock combined which may be issued under the Plan shall not exceed 2,125,000.”

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	“The aggregate number of shares of Restricted Stock, shares of Incentive Stock and Shares which may be issued under Stock Options granted under the Plan shall not exceed 400,000.”

	David S. Elkouri, Secretary
	1100 Louisiana St., Suite 4400
	Houston, Texas 77002

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	•	Petrohawk and Mission common stock as of April 1, 2005; and
	•	the combined company common stock as of April 1, 2005 assuming:

	•	that the exchange ratio is 0.7458 shares of Petrohawk common stock for each share of Mission common stock; and
	•	the conversion of all Mission stock options into Petrohawk stock options.

											Shares of
			Shares of								Preferred
			Common Stock								Stock
			Beneficially				Percent of				Beneficially				Percent of
Name and Address of Beneficial Owner			Owned				Class				Owned(1)				Class
Floyd C. Wilson				8,355,090	(1)			18.47	%			0				*
Stephen W. Herod				58,333	(2)			*				0				*
Shane M. Bayless				58,333	(2)			*				0				*
Larry L. Helm				66,666	(2)			*				0				*
Richard K. Stoneburner				58,333	(2)			*				0				*
Richard H. Smith				23,332	(2)			*				0				*
Mark J. Mize				11,751	(3)			*				0				*
David B. Miller				8,262,567	(4)(5)(6)			18.31	%			0				*
	c/o EnCap Investments L.P. 3811 Turtle Creek Blvd., Suite 1080 Dallas, Texas 75219

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											Shares of
			Shares of								Preferred
			Common Stock								Stock
			Beneficially				Percent of				Beneficially				Percent of
Name and Address of Beneficial Owner			Owned				Class				Owned(1)				Class
D. Martin Phillips				8,262,567	(4)(5)(6)			18.31	%			0				*
	c/o EnCap Investments L.P. 1100 Louisiana, Suite 3150 Houston, Texas 77002
Daniel A. Rioux				0				*				0				*
	175 Berkeley Street Boston, MA 02116
Tucker S. Bridwell				8,518				*				0				*
	400 Pine St., Suite 1000 Abilene, Texas 79601
James L. Irish III				8,631				*				0				*
	1700 Pacific Avenue, Suite 3300 Dallas, Texas 75201
Robert C. Stone, Jr.				95,000	(7)			*				0				*
	49 Allard Boulevard New Orleans, Louisiana 70119
PHAWK, LLC				8,245,757	(8)			18.27	%			0				*
	1100 Louisiana, Suite 4400 Houston, Texas 77002
EnCap Energy Capital Fund IV, L.P.				8,262,567	(4)(5)(6)			18.31	%			0				*
	1100 Louisiana, Suite 3150 Houston, Texas 77002
EnCap Energy Capital Fund IV-B, L.P.				8,245,757	(5)(6)(9)			18.27	%			0				*
	1100 Louisiana, Suite 3150 Houston, Texas 77002
EnCap Equity Fund IV GP, L.P.				8,262,567	(4)(5)(6)			18.31	%			0				*
	1100 Louisiana, Suite 3150 Houston, Texas 77002
EnCap Investments L.P.				8,262,567	(4)(5)(6)			18.31	%			0				*
	1100 Louisiana, Suite 3150 Houston, Texas 77002
EnCap Investments GP, L.L.C.				8,262,567	(4)(5)(6)			18.31	%			0				*
	1100 Louisiana, Suite 3150 Houston, Texas 77002
RNBD GP LLC				8,262,567	(4)(5)(6)			18.31	%			0				*
	1100 Louisiana, Suite 3150 Houston, Texas 77002
Gary R. Petersen				8,262,567	(4)(5)(6)			18.31	%			0				*
	1100 Louisiana, Suite 3150 Houston, Texas 77002
Robert L. Zorich				8,262,567	(4)(5)(6)			18.31	%			0				*
	1100 Louisiana, Suite 3150 Houston, Texas 77002
FCW, LLC				8,245,757	(9)(10)			18.27	%			0				*
BBT Fund, L.P.				1,100,000	(11)			2.74	%(13)			0				*
	Concentrated Alpha Partners, L.P. Corporate Center West Bay Road Grand Cayman, Cayman Islands

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											Shares of
			Shares of								Preferred
			Common Stock								Stock
			Beneficially				Percent of				Beneficially				Percent of
Name and Address of Beneficial Owner			Owned				Class				Owned(1)				Class
Ospraie Management, L.P.				2,775,000	(12)			6.91	%(14)			0				*
	Ospraie Management, Inc. Dwight Anderson 780 Third Avenue, 42nd Floor New York, New York 10017
North Sound Capital, LLC				2,300,000	(13)			5.73	%(15)			0				*
	53 Forest Avenue, Suite 202 Old Greenwich, Connecticut 06870
All officers and directors as a group				8,760,797	(14)			19.21	%			0				*

	*	Represents less than 1% of that class of stock outstanding.

(1)	Represents 1,000 shares of common stock and 108,333 shares of common stock underlying stock options and shares owned by PHAWK, LLC. Floyd C. Wilson may be deemed to share the voting and dispositive control over the shares of common stock owned by PHAWK. FCW, LLC, a member of PHAWK, has the contractual right to nominate one of the members of the board of directors of PHAWK pursuant to PHAWK’s governing documents and has nominated Floyd C. Wilson, the majority member of FCW, LLC. There are five directors on the board of directors of PHAWK. Floyd C. Wilson disclaims beneficial ownership of the reported securities in excess of his pecuniary interest in such securities.
(2)	Represents shares of common stock underlying stock options.
(3)	Represents 85 shares of common stock and 11,666 shares of common stock underlying stock options.
(4)	Represents 3,245,757 shares of common stock and warrants to purchase 5,000,000 shares of common stock exercisable within 60 days after the date hereof owned by PHAWK and 16,810 shares of common stock owned by EnCap Energy Capital Fund IV, L.P.
(5)	These entities or persons may be deemed to share voting and dispositive control over the shares of common stock owned by PHAWK and, except with respect to EnCap Energy Capital Fund IV-B, L.P., the shares owned by EnCap Energy Capital Fund IV, L.P. EnCap Energy Capital Fund IV, L.P. and EnCap Energy Capital Fund IV-B, L.P., which are members of PHAWK, have the contractual right to nominate a majority of the members of the board of directors of PHAWK pursuant to PHAWK’s limited liability company agreement. EnCap Energy Capital Fund IV, L.P. and EnCap Energy Capital Fund IV-B, L.P. are controlled indirectly by David B. Miller, Gary R. Petersen, D. Martin Phillips and Robert L. Zorich. In addition, Mr. Miller and Mr. Phillips are members of PHAWK’s board of directors. Messrs. Miller, Petersen, Phillips and Zorich are members of RNBD GP LLC which in turn has management control, directly or indirectly, over the other EnCap entities listed on this beneficial ownership table, including EnCap Investments GP, L.L.C., EnCap Investments L.P., EnCap Equity Fund IV GP, L.P., EnCap Energy Capital Fund IV-B, L.P., and EnCap Energy Capital Fund IV, L.P. EnCap Equity Fund IV GP, L.P., EnCap Investments L.P., EnCap Investments GP, L.L.C., and RNBD GP LLC have management control, directly or indirectly, over EnCap Energy Capital Fund IV, L.P., and EnCap Energy Capital Fund IV-B, L.P.
(6)	Each of EnCap Energy Capital Fund IV, L.P., EnCap Energy Capital Fund IV-B, L.P., EnCap Equity Fund IV GP, L.P., EnCap Investments L.P., EnCap Investments GP, L.L.C., RNBD GP LLC, David B. Miller, Gary R. Petersen, D. Martin Phillips, and Robert L. Zorich disclaim beneficial ownership of the reported securities (except in the instance of EnCap Energy Capital Fund IV, L.P. of the securities owned directly by EnCap Energy Capital Fund IV, L.P.) in excess of such entity’s or person’s respective pecuniary interest in the securities.
(7)	Represents 87,500 shares of common stock underlying stock options and 7,500 shares of common stock.

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(8)	Includes 3,245,757 shares of common stock and warrants to purchase 5,000,000 shares of common stock exercisable within 60 days after the date hereof.
(9)	Represents shares owned by PHAWK.

(10)	FCW, LLC may be deemed to share voting and dispositive control over the shares of common stock owned by PHAWK by virtue of having the contractual right to nominate one of the members of the board of directors of PHAWK pursuant to PHAWK’s governing documents. FCW, LLC disclaims beneficial ownership of the reported securities in excess of its pecuniary interest in the securities.
(11)	Information obtained from a Schedule 13G filed by BBT Fund, L.P. and Concentrated Alpha Partners, L.P. with the Securities and Exchange Commission on December 2, 2004 on behalf of BBT Fund, L.P., Concentrated Alpha Partners, L.P., BBT Genpar, L.P., BBT-FW, Inc., CAP Genpar, L.P., CAP-FW, Inc., Clive Bode and Sid R. Bass. This Schedule 13G provides that such entities and individuals have sole voting and dispositive power over a total of 7.6% of the common stock of Petrohawk.
(12)	Information obtained from a Schedule 13G filed by Ospraie Management, L.P., Ospraie Management, Inc. and Dwight Anderson with the Securities and Exchange Commission on January 24, 2005. This Schedule 13G provides that Ospraie Management, L.P., Ospraie Management, Inc. and Dwight Anderson have shared and voting and dispositive power over 5.7% of the common stock of Petrohawk.
(13)	Information obtained from a Schedule 13G filed by North Sound Capital, LLC with the Securities and Exchange Commission on January 31, 2005. This Schedule 13G provides that North Sound Capital, LLC has shared voting and dispositive power over 5.79% of the common stock of Petrohawk.
(14)	Includes 3,288,301 shares of common stock, 5,000,000 shares of common stock underlying warrants and 472,496 shares of common stock underlying stock options.

			Shares of
			Common Stock
			Beneficially				Percent of
Name and Address of Beneficial Owner			Owned				Class
Harbert Distressed Investment Master Fund, Ltd.(1)				7,700,000				18.5	%
	c/o International Fund Services (Ireland) Limited Third Floor, Bishop’s Square, Redmond’s Hill Dublin 2, Ireland
Guggenheim Investment Management, LLC(2)				6,250,000				15.1	%
	135 East 57th Street, 9th Floor New York, New York 10022
Robert L. Cavnar(3)				2,232,500				5.1	%
Richard W. Piacenti(4)				580,600				1.4	%
John (Jack) L. Eells(5)				434,000				1.0	%
Marshall L. Munsell(6)				293,334				*
William R. Picquet(7)				125,000				*
Tom C. Langford(8)				100,000				*
Robert R. Rooney(9)				72,904				*
David A.B. Brown(10)				47,000				*
Herbert C. Williamson, III(10)				35,000				*
Joseph N. Jaggers(11)				35,000				*
Directors and executive officers as a group (10 persons)				4,114,311				9.1	%

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	*	Less than 1%

(1)	Based on a Schedule 13G/ A filed on February 14, 2005, by Harbert Distressed Investment Master Fund, Ltd. (the “Master Fund”), HMC Distressed Investment Offshore Manager, L.L.C. (“HMC Management”), HMC Investors, L.L.C. (“HMC Investors”), Philip Falcone, Raymond J. Harbert and Michael D. Luce. The Master Fund is a Cayman Islands corporation with its principal business address at c/o International Fund Services (Ireland) Limited, Third Floor, Bishop’s Square, Redmond’s Hill, Dublin 2, Ireland. Each of HMC Management and HMC Investors is a Delaware limited liability company. Each of Messrs. Falcone, Harbert and Luce is a United States citizen. The principal business address for each of HMC Management and Mr. Falcone is 555 Madison Avenue, 16th Floor, New York, New York 10022. The principal business address for each of HMC Investors and Messrs. Harbert and Luce is One Riverchase Parkway South, Birmingham, Alabama 35244. As of the date of the Schedule 13G/ A, the Master Fund, HMC Management, HMC Investors, Mr. Falcone, Mr. Harbert and Mr. Luce may be deemed to beneficially own 7,605,015, 7,605,015, 7,700,000, 7,700,000, 7,700,000 and 7,700,000 shares, respectively. The Master Fund and HMC Management have the shared power to vote or direct the vote of 7,605,015 shares and have shared power to dispose or direct the disposition of 7,605,015 shares. HMC Investors and Messrs. Falcone, Harbert and Luce have the shared power to vote or direct the vote of 7,700,000 shares and have shared power to dispose or direct the disposition of 7,700,000 shares. The Master Fund, HMC Management, HMC Investors and Messrs. Falcone, Harbert and Luce specifically disclaimed beneficial ownership in the shares reported therein except to the extent of its pecuniary interest therein. In addition, in the event that any action is submitted to Mission’s stockholders for their approval, whether at a meeting or by written consent, at a time when the Master Fund and its affiliates collectively own more than 9.9% of Mission’s voting securities, unless otherwise approved in writing in advance by Mission, Master Fund has agreed to vote all voting securities as to which it has the right to vote that exceeds the 9.9% amount in the same manner as (i.e., in favor of, against and abstentions with respect to) and proportionately to the votes cast by all other voting securities that are entitled to vote with respect to such matter. On April 3, 2005, Harbert entered into a voting agreement with Petrohawk and us pursuant to which they have agreed, among other things, to vote all shares of our common stock owned by it in favor of the Merger. The voting agreement also grants an irrevocable proxy to Petrohawk empowering it to vote all such shares of our common stock at any meeting of our stockholders called for the purpose of voting on the Merger.
(2)	Based on a Schedule 13G/ A filed on April 22, 2004 by Stellar Funding, Ltd. (“Stellar”), Guggenheim Investment Management, LLC (“GIM”) and Guggenheim Capital, LLC (“GCL”). The principal business address for each of Seller and GIM is 135 East 57th Street, 9th Floor, New York, New York 10022. The principal business address for GCL is 227 West Monroe Street, Suite 400, Chicago, Illinois 60606. Stellar is a private investment vehicle managed by GIM and has contractually delegated to GIM all investment and voting power over the 6,250,000 shares of common stock beneficially owned by Stellar. As a result, GIM, which is a wholly owned subsidiary of GCL, may be deemed to be the beneficial owner of the shares of common stock owned by Stellar. In addition, as a result of a memorandum signed by Stellar and GC, which contemplates a sale of a portion of the shares owned by Stellar to GC, GC may be considered part of a group with Stellar. Accordingly, GC may be deemed to be the beneficial owner of the shares of common stock owned by Stellar. GIM is a wholly owned subsidiary of GC, and GC may be deemed ultimately to control GIM. GC, its executive officers and directors, and its direct and indirect subsidiaries, may beneficially own shares of common stock and such shares are not reported in the Schedule 13G/ A. Due to the separate management and independent operation of GIM, GC disclaims beneficial ownership of common stock beneficially owned by the reporting persons by reason of its ownership of GIM. Each of Stellar, GC and GCL has disclaimed the beneficial ownership of the shares of common stock owned by the other reporting persons. In addition, in the event that any action is submitted to Mission’s stockholders for their approval, whether at a meeting or by written consent, at a time when Stellar and its affiliates collectively own more than 9.9% of Mission’s voting securities,

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	unless otherwise approved in writing in advance by Mission, Stellar has agreed to vote all voting securities as to which it has the right to vote that exceeds the 9.9% amount in the same manner as (i.e., in favor of, against and abstentions with respect to) and proportionately to the votes cast by all other voting securities that are entitled to vote with respect to such matter. On April 3, 2005, Stellar and GCL entered into a voting agreement with Petrohawk and us pursuant to which they have agreed, among other things, to vote all shares of our common stock owned by them in favor of the Merger. The voting agreement also grants an irrevocable proxy to Petrohawk empowering it to vote all such shares of our common stock at any meeting of our stockholders called for the purpose of voting on the Merger.
(3)	Includes 2,187,500 shares of common stock issuable upon the exercise of vested options.
(4)	Includes 462,500 shares of common stock issuable upon the exercise of vested options.
(5)	Includes 400,000 shares of common stock issuable upon the exercise of vested options.
(6)	Includes 283,334 shares of common stock issuable upon the exercise of vested options.
(7)	Includes 125,000 shares of common stock issuable upon the exercise of vested options.
(8)	Includes 100,000 shares of common stock issuable upon the exercise of vested options.
(9)	Includes 39,000 shares of common stock issuable upon the exercise of vested options.

(10)	Includes 35,000 shares of common stock issuable upon the exercise of vested options.
(11)	Includes 30,000 shares of common stock issuable upon the exercise of vested options.

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											Shares of
			Shares of								Preferred
			Common Stock								Stock
			Beneficially				Percent of				Beneficially				Percent of
Name and Address of Beneficial Owner			Owned				Class				Owned				Class
Floyd C. Wilson				8,355,090	(1)			13.0	%			0				*
Stephen W. Herod				58,333	(2)			*				0				*
Shane M. Bayless				58,333	(2)			*				0				*
Larry L. Helm				66,666	(2)			*				0				*
Richard K. Stoneburner				58,333	(2)			*				0				*
Richard H. Smith				23,332	(2)			*				0				*
Mark J. Mize				11,751	(3)			*				0				*
David B. Miller				8,262,567	(4)(5)(6)			12.8	%			0				*
	c/o EnCap Investments L.P.
	3811 Turtle Creek Blvd., Suite 1080
	Dallas, Texas 75219
D. Martin Phillips				8,262,567	(4)(5)(6)			12.8	%			0				*
	c/o EnCap Investments L.P.
	1100 Louisiana, Suite 3150
	Houston, Texas 77002
Daniel A. Rioux				0				*				0				*
	175 Berkeley Street
	Boston, Massachusetts 02116
Tucker S. Bridwell				8,518				*				0				*
	400 Pine St., Suite 1000
	Abilene, Texas 79601
James L. Irish III				8,631				*				0				*
	1700 Pacific Avenue, Suite 3300
	Dallas, Texas 75201
Robert C. Stone				95,000	(7)			*				0				*
	49 Allard Boulevard
	New Orleans, Louisiana 70119
PHAWK, LLC				8,245,757	(8)			12.8	%			0				*
EnCap Energy Capital Fund IV, L.P.				8,262,567	(4)(5)(6)			12.8	%			0				*
	1100 Louisiana, Suite 3150
	Houston, Texas 77002
EnCap Energy Capital Fund IV-B, L.P.				8,245,757	(5)(6)(9)			12.8	%			0				*
	1100 Louisiana, Suite 3150
	Houston, Texas 77002
EnCap Equity Fund IV GP, L.P.				8,262,567	(4)(5)(6)			12.8	%			0				*
	1100 Louisiana, Suite 3150
	Houston, Texas 77002
EnCap Investments L.P.				8,262,567	(4)(5)(6)			12.8	%			0				*
	1100 Louisiana, Suite 3150
	Houston, Texas 77002
EnCap Investments GP, L.L.C.				8,262,567	(4)(5)(6)			12.8	%			0				*
	1100 Louisiana, Suite 3150
	Houston, Texas 77002
RNBD GP LLC				8,262,567	(4)(5)(6)			12.8	%			0				*
	1100 Louisiana, Suite 3150
	Houston, Texas 77002
Gary R. Petersen				8,262,567	(4)(5)(6)			12.8	%			0				*
	1100 Louisiana, Suite 3150
	Houston, Texas 77002

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											Shares of
			Shares of								Preferred
			Common Stock								Stock
			Beneficially				Percent of				Beneficially				Percent of
Name and Address of Beneficial Owner			Owned				Class				Owned				Class
Robert L. Zorich				8,262,567	(4)(5)(6)			12.8	%			0				*
	1100 Louisiana, Suite 3150
	Houston, Texas 77002
FCW, LLC				8,245,757	(9)(10)			12.8	%			0				*
Harbert Distressed Investment Master Fund, Ltd.				5,742,660	(11)			9.7	%			0				*
	c/o International Fund Services (Ireland) Limited
	Third Floor, Bishop’s Square, Redmond’s Hill
	Dublin 2, Ireland
Guggenheim Investment Management, LLC				4,661,250	(12)			7.9	%			0				*
	135 East 57th Street, 9th Floor
	New York, New York 10022
All officers and directors as a group				8,743,987				12.9	%			0				*

*	less than 1%

(1)	Represents 1,000 shares of common stock and 108,333 shares of common stock underlying stock options and shares owned by PHAWK, LLC. Floyd C. Wilson may be deemed to share the voting and dispositive control over the shares of common stock owned by PHAWK. FCW, LLC, a member of PHAWK, has the contractual right to nominate one of the members of the board of directors of PHAWK pursuant to PHAWK’s governing documents and has nominated Floyd C. Wilson, the majority member of FCW, LLC. There are five directors on the board of directors of PHAWK. Floyd C. Wilson disclaims beneficial ownership of the reported securities in excess of his pecuniary interest in such securities.
(2)	Represents shares of common stock underlying stock options.
(3)	Represents 85 shares of common stock and 11,666 shares of common stock underlying stock options.
(4)	Represents 3,245,757 shares of common stock and warrants to purchase 5,000,000 shares of common stock exercisable within 60 days after the date hereof owned by PHAWK and 16,810 shares of common stock owned by EnCap Energy Capital Fund IV, L.P.
(5)	These entities or persons may be deemed to share voting and dispositive control over the shares of common stock owned by PHAWK and, except with respect to EnCap Energy Capital Fund IV-B, L.P., the shares owned by EnCap Energy Capital Fund IV, L.P. EnCap Energy Capital Fund IV, L.P. and EnCap Energy Capital Fund IV-B, L.P., which are members of PHAWK, have the contractual right to nominate a majority of the members of the board of directors of PHAWK pursuant to PHAWK’s limited liability company agreement. EnCap Energy Capital Fund IV, L.P. and EnCap Energy Capital Fund IV-B, L.P. are controlled indirectly by David B. Miller, Gary R. Petersen, D. Martin Phillips and Robert L. Zorich. In addition, Mr. Miller and Mr. Phillips are members of PHAWK’s board of directors. Messrs. Miller, Petersen, Phillips and Zorich are members of RNBD GP LLC which in turn has management control, directly or indirectly, over the other EnCap entities listed on this beneficial ownership table, including EnCap Investments GP, L.L.C., EnCap Investments L.P., EnCap Equity Fund IV GP, L.P., EnCap Energy Capital Fund IV-B, L.P., and EnCap Energy Capital Fund IV, L.P. EnCap Equity Fund IV GP, L.P., EnCap Investments L.P., EnCap Investments GP, L.L.C., and RNBD GP LLC have management control, directly or indirectly, over EnCap Energy Capital Fund IV, L.P., and EnCap Energy Capital Fund IV-B, L.P.
(6)	Each of EnCap Energy Capital Fund IV, L.P., EnCap Energy Capital Fund IV-B, L.P., EnCap Equity Fund IV GP, L.P., EnCap Investments L.P., EnCap Investments GP, L.L.C., RNBD GP LLC, David B. Miller, Gary R. Petersen, D. Martin Phillips, and Robert L. Zorich disclaim beneficial ownership of the reported securities (except in the instance of EnCap Energy Capital

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	Fund IV, L.P. of the securities owned directly by EnCap Energy Capital Fund IV, L.P.) in excess of such entity’s or person’s respective pecuniary interest in the securities.
(7)	Represents 87,500 shares of common stock underlying stock options and 7,500 shares of common stock.
(8)	Includes 3,245,757 shares of common stock and warrants to purchase 5,000,000 shares of common stock exercisable within 60 days after the date hereof.
(9)	Represents shares owned by PHAWK.

(10)	FCW, LLC may be deemed to share voting and dispositive control over the shares of common stock owned by PHAWK by virtue of having the contractual right to nominate one of the members of the board of directors of PHAWK pursuant to PHAWK’s governing documents. FCW, LLC disclaims beneficial ownership of the reported securities in excess of its pecuniary interest in the securities.
(11)	Assumes Harbert Distressed Investment Master Fund, Ltd. elects to receive the Per Share Stock Consideration for each share of Mission common stock it owns.
(12)	Assumes Guggenheim Investment Management, LLC elects to receive the Per Share Stock Consideration for each share of Mission common stock it owns.

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	•	Annual Report on Form 10-K for the year ended December 31, 2004;
	•	Quarterly Report on Form 10-Q for the quarter ended March 31, 2005;
	•	Current Report on 8-K/A filed on December 1, 2004;
	•	Current Reports on Form 8-K filed on January 6, 2005, January 21, 2005, February 10, 2005, February 22, 2005, March 3, 2005, two reports filed on April 4, 2005, April 18, 2005 and two reports filed on May 12, 2005 (excluding any information furnished pursuant to Item 2.02 or Item 7.01 on any Current Report on Form 8-K); and
	•	The description of Petrohawk’s common stock set forth in Petrohawk’s registration statements filed pursuant to Section 12 of the Exchange Act, including any amendment or report filed for the purpose of updating such description.

	•	Annual Report on Form 10-K/A for the year ended December 31, 2004;
	•	Quarterly Report on Form 10-Q for the quarter ended March 31, 2005;
	•	Current Reports on Form 8-K filed on January 28, 2005, February 7, 2005, March 2, 2005, two reports filed on March 8, 2005, March 9, 2005, March 16, 2005, March 29, April 4, 2005, April 18, 2005, May 10, 2005 and May 20, 2005 (excluding any information furnished pursuant to Item 2.02 or Item 7.01 on any Current Report on Form 8-K); and
	•	The description of Mission’s common stock set forth in Mission’s registration statements filed pursuant to Section 12 of the Exchange Act, including any amendment or report filed for purposes of updating any such description.

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Petrohawk Energy Corporation		Mission Resources Corporation
1100 Louisiana St., Suite 4400		1331 Lamar St., Suite 1455
Houston, Texas 77002		Houston, Texas 77010
(832) 204-2700		(713) 495-3000
Attention: Investor Relations		Attention: Investor Relations

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	“Aggregate Consideration” shall mean the sum of (x) the Total Stock Consideration and (y) the Total Cash Amount.
	“Deemed Stock Amount” shall mean the Total Common Stock Amount; provided, however, that regardless of the actual number of shares of Company Common Stock outstanding immediately prior to the Effective Time, in no event shall the Deemed Stock Amount exceed the sum of (i) 41,535,088, (ii) the aggregate number of shares of Company Common Stock, if any, issued by the Company after the Cut-off Time and prior to the date of this Agreement upon the exercise of the Company Options outstanding as of the Cut-off Time and disclosed in Section 3.2(a) of the Company Disclosure Letter in accordance with the terms of such options and (iii) the aggregate number of shares of Company Common Stock, if any, issued by the Company after the date of this Agreement and prior to the Effective Time as permitted by Section 5.1(e).
	“Exchange Ratio” shall mean the quotient, rounded to the nearest ten-thousandth, obtained by dividing the Per Share Consideration by the Final Parent Stock Price.
	“Final Parent Stock Price” shall mean the volume-weighted average of the closing prices per share of Parent Common Stock as reported on the Nasdaq National Market (“Nasdaq”) during the Valuation Period.
	“Per Share Consideration” shall mean the quotient, rounded to the nearest ten-thousandth, obtained by dividing the Aggregate Consideration by the Total Common Stock Amount.
	“Per Share Stock Consideration” shall mean a number of shares (which need not be a whole number) of Parent Common Stock equal to the Exchange Ratio.
	“Total Cash Amount” shall mean the product obtained by multiplying (x) $8.15 by (y) 40% of the Deemed Stock Amount.
	“Total Common Stock Amount” shall mean the total number of shares of Company Common Stock outstanding immediately prior to the Effective Time.
	“Total Stock Amount” shall mean the product obtained by multiplying (x) 0.7718 by (y) 60% of the Deemed Stock Amount.
	“Total Stock Consideration” shall mean the product obtained by multiplying (x) the Total Stock Amount by (y) the Final Parent Stock Price.
	“Valuation Period” shall mean the ten consecutive trading days during which the shares of Parent Common Stock are traded on Nasdaq ending on the third calendar day immediately prior to the Effective Time, or if such calendar day is not a trading day, then ending on the trading day immediately preceding such calendar day.

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	(i) Cash Election Shares More Than Total Cash Amount. If the aggregate cash amount that would be paid upon the conversion of the Cash Election Shares in the Merger is greater than the Total Cash Amount, then:

	(1) all Stock Election Shares and No Election Shares shall be converted into the right to receive the Per Share Stock Consideration,
	(2) the Exchange Agent shall then select from among the Cash Election Shares, by a pro rata selection process, a sufficient number of shares (“Stock Designated Shares”) such that the aggregate cash amount that will be paid in the Merger equals as closely as practicable the Total Cash Amount, and all Stock Designated Shares shall be converted into the right to receive the Per Share Stock Consideration, and
	(3) the Cash Election Shares that are not Stock Designated Shares will be converted into the right to receive the Per Share Cash Consideration.

	(ii) Cash Election Shares Less Than Total Cash Amount. If the aggregate cash amount that would be paid upon conversion of the Cash Election Shares in the Merger is less than the Total Cash Amount, then:

	(1) all Cash Election Shares shall be converted into the right to receive the Per Share Cash Consideration,
	(2) the Exchange Agent shall then select first from among the No Election Shares and then (if necessary) from among the Stock Election Shares, by a pro rata selection process, a sufficient number of shares (“Cash Designated Shares”) such that the aggregate cash amount that will be paid in the Merger equals as closely as practicable the Total Cash Amount, and all Cash Designated Shares shall be converted into the right to receive the Per Share Cash Consideration, and
	(3) the Stock Election Shares and the No Election shares that are not Cash Designated Shares shall be converted into the right to receive the Per Share Stock Consideration.

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(iii) Cash Election Shares Equal to Total Cash Amount. If the aggregate cash amount that would be paid upon conversion of the Cash Election Shares in the Merger is equal to the Total Cash Amount, then subparagraphs (i) and (ii) above shall not apply and all Cash Election Shares shall be converted into the right to receive the Per Share Cash Consideration and all Stock Election Shares and No Election Shares shall be converted into the right to receive the Per Share Stock Consideration.

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	(i) the Company Plan or a written description of any Company Plan not in writing;
	(ii) a copy of the most recent annual report or Internal Revenue Service Form 5500 Series, including all related reports required therewith;
	(iii) a copy of the most recent Summary Company Plan Description (“SPD”), together with all Summaries of Material Modification issued with respect to such SPD and all other material employee communications relating to each Company Plan distributed by the Company or any of its Subsidiaries from December 31, 2004 to the date of this Agreement;
	(iv) if the Company Plan or any obligations thereunder are funded through a trust or any other funding vehicle or through insurance, the trust or other funding agreement and the latest financial statements thereof or evidence of insurance coverage thereof;
	(v) all contracts relating to the Company Plan with respect to which the Company or any ERISA Affiliate may have any material liability, including insurance contracts, investment management agreements, subscription and participation agreements and record keeping agreements;
	(vi) if the Company Plan is intended to qualify under Section 401(a) of the Code, the most recent determination letter received from the Internal Revenue Service; and
	(vii) all material communications between the Company or any ERISA Affiliate and any Governmental Entity.

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	(a) The Merger will be carried out strictly in accordance with this Agreement and the Company is not a party to any other written or oral agreements regarding the Merger other than those expressly referred to in this Agreement.
	(b) The Acquisition Merger and the Upstream Merger are part of an integrated plan for Parent to acquire the assets of the Company. The parties intend that the Acquisition Merger and the Upstream Merger will be treated, for federal income tax purposes, as if Parent had directly acquired the Company’s assets through a “statutory merger” as that term is used in Section 368(a)(1)(A) of the Code.
	(c) The fair market value of the Aggregate Consideration will be approximately equal to the fair market value of the shares of Company Common Stock surrendered in the exchange.
	(d) The aggregate fair market value, determined at the Effective Time, of the Total Stock Consideration will not be less than forty percent (40%) of the value, determined at the Effective Time, of the shares of Company Common Stock outstanding immediately before the Effective Time. For this purpose, it is assumed that the fair market value of the outstanding shares of Company Common Stock will equal the fair market value of the Aggregate Consideration, except that the Final Parent Stock Price shall mean the closing price per share of Parent Common Stock as reported on the NASDAQ on the date on which the Effective Time occurs.
	(e) Prior to the Effective Time and in connection with or anticipation of the Merger, (i) none of the shares of Company Common Stock will be redeemed, (ii) no extraordinary dividends will be made with respect to the shares of Company Common Stock, and (iii) none of the shares of Company Common Stock will be acquired by the Company or any Related Person.
	(f) The only capital stock of the Company issued and outstanding is Company Common Stock.

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	(g) The Company and Company stockholders will each pay their respective expenses, if any, incurred in connection with the Merger.
	(h) Any compensation paid to the Company stockholders who enter (or have entered) into employment, consulting or noncompetitive contracts, if any, with Parent, Purchaser, or the Surviving Corporation (a) will be for services actually rendered or to be rendered, (b) will be commensurate with amounts paid to third parties bargaining at arm’s length for similar services, and (c) will not represent consideration for the surrender of the shares of the Company Common Stock in the Merger.
	(i) No debt of the Company is guaranteed by any Company stockholder.
	(j) The Company owns no stock of Parent.
	(k) No assets of the Company have been sold, transferred or otherwise disposed of which would prevent Parent and the Surviving Corporation from continuing the historic business of the Company or from using a significant portion of the Company’s historic business assets in a business following the Integrated Transaction.
	(l) The Company is not an investment company as defined in Section 368(a)(2)(F) of the Code. An investment company is (a) a regulated investment company; (b) a real estate investment trust; or (c) a corporation (i) fifty percent (50%) or more of the value of whose total assets are stock and securities, and (ii) eighty percent (80%) or more of the value of whose total assets are held for investment. For this purpose, “total assets” shall not include cash and cash items (including receivables) and government securities.
	(m) The fair market value of the assets of the Company will equal or exceed the sum of its liabilities, plus the amount of liabilities, if any, to which the assets are subject.
	(n) The total adjusted basis of the assets of the Company will equal or exceed the sum of the liabilities, plus the amount of liabilities, if any, to which the assets are subject.
	(o) The Company is not under the jurisdiction of a court in a title 11 or similar case within the meaning of Section 368(a)(3)(A) of the Code.
	(p) There is no indebtedness existing between Parent and the Company, or between Purchaser and the Company, that was or will be issued, acquired, or settled at a discount in connection with the Merger.
	(q) The Company has substantial non-tax business purposes and reasons for the Integrated Transaction, and the terms of the Merger are the product of arm’s length negotiations.
	(r) The Company will not take, and the Company is not aware of any plan or intention of any of the Company stockholders to take, any position on any Return, or take any other Tax reporting position, that is inconsistent with the treatment of the Integrated Transaction as a reorganization within the meaning of Section 368(a) of the Code, unless otherwise required by a “determination” (as defined in Code Section 1313(a)(1)).
	(s) No stock or securities of the Company will be issued to any Company stockholder for services rendered to or for the benefit of Parent, Purchaser, or the Company in connection with the Merger (except to the extent of outstanding Company Options described in Section 1.8).
	(t) No stock or securities of Parent or of the Company will be issued to any Company stockholder for any indebtedness owed to any Company stockholder in connection with the Merger.
	(u) The liabilities of Purchaser to be assumed or paid by the Company and the liabilities to which the transferred assets of Purchaser are subject were incurred by Purchaser in the ordinary course of its business.
	(v) No assets were transferred to the Company, nor did the Company assume any liabilities, in anticipation of the Merger.

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	(w) The Company has not distributed the stock of any corporation in a transaction satisfying the requirements of Section 355 of the Code since April 16, 1997. The stock of the Company has not been distributed in a transaction satisfying the requirements of Section 355 of the Code since April 16, 1997.
	(x) At any time during the five-year period leading up to and ending as of the Effective Time of the Merger, the Company will have been a “United States real property holding corporation” within the meaning of Section 897(c)(2) of the Code (a “USRPHC”). For this purpose, the Company would be a USRPHC if the fair market value of its interests in United States real property (including any interest in a mine, well, or other natural deposit) shall have equaled or exceeded fifty percent (50%) of the sum of the fair market value of its worldwide real property interests plus any other assets used or held for use in its trade or business.
	(y) The Company is taxed as a corporation for tax purposes.
	(z) The Company has no plan or intention to issue additional shares of its stock that would result in Parent owning stock possessing less than eighty percent (80%) of the total combined voting power of all classes of stock entitled to vote or less than eighty percent (80%) of the total number of shares of all other classes of stock of the Company.
	(aa) At the Effective Time, the Company will not have outstanding any warrants, options, convertible securities, or any other type of right pursuant to which any Person could acquire stock in the Company.

	(i) a corporation that, immediately before or immediately after a purchase, exchange, redemption, or other acquisition of Parent Common Stock, is a member of an Affiliated Group (as defined herein) of which Parent (or any successor corporation) is a member, or
	(ii) a corporation in which Parent (or any successor corporation), owns, or which owns with respect to Parent (or any successor corporation), directly or indirectly, immediately before or immediately after such purchase, exchange, redemption, or other acquisition, at least 50% of the total combined voting power of all classes of stock entitled to vote or at least 50% of the total value of shares of all classes of stock, taking into account for purposes of this clause (ii) any stock owned by 5% or greater stockholders of Parent (or any successor) or such corporation, a proportionate share of the stock owned by entities in which Parent (or any successor) or such corporation owns an interest, and any stock which may be acquired pursuant to the exercise of options.

	(x) the common parent owns directly stock that possesses at least 80% of the total voting power, and has a value at least equal to 80% of the total value, of the stock in at least one of the other corporations, and
	(y) stock possessing at least 80% of the total voting power, and having a value at least equal to 80% of the total value, of the stock in each corporation (except the common parent) is owned directly by one or more of the other corporations.

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	(i) the Parent Plan or a written description of any Parent Plan not in writing;
	(ii) a copy of the most recent annual report or Internal Revenue Service Form 5500 Series, including all related reports required therewith;
	(iii) a copy of the most recent Summary Parent Plan Description (“Parent SPD”), together with all Summaries of Material Modification issued with respect to such Parent SPD and all other material employee communications relating to each Parent Plan distributed by Parent or any of its Subsidiaries from December 31, 2004 to the date of this Agreement;
	(iv) if the Parent Plan or any obligations thereunder are funded through a trust or any other funding vehicle or through insurance, the trust or other funding agreement and the latest financial statements thereof or evidence of insurance coverage thereof;
	(v) all contracts relating to the Parent Plan with respect to which Parent or any Parent ERISA Affiliate may have any material liability, including insurance contracts, investment management agreements, subscription and participation agreements and record keeping agreements;
	(vi) if the Parent Plan is intended to qualify under Section 401(a) of the Code, the most recent determination letter received from the Internal Revenue Service; and
	(vii) all material communications between Parent or any Parent ERISA Affiliate and any Governmental Entity.

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	(a) The Acquisition Merger and Upstream Merger will be carried out strictly in accordance with this Agreement, and there are no other written or oral agreements relating to the Acquisition Merger or Upstream Merger other than those expressly referred to in this Agreement.
	(b) The Acquisition Merger and the Upstream Merger are part of an integrated plan for Parent to acquire the assets of the Company. The parties intend that the Acquisition Merger and the Upstream Merger will be treated, for federal income tax purposes, as if Parent had directly acquired the Company’s assets through a “statutory merger” as that term is used in Section 368(a)(1)(A) of the Code.
	(c) In connection with the Merger, no shares of Company Common Stock will be acquired by Parent or a Related Person for consideration other than shares of Parent Common Stock, except for the Per Share Cash Consideration, payments to holders of Dissenting Shares, if any, and any cash received in lieu of fractional share interests in Shares of Parent Common Stock.
	(d) The fair market value of the Aggregate Consideration will be approximately equal to the fair market value of the shares of Company Common Stock surrendered in the exchange.
	(e) Other than cash paid in lieu of fractional shares of Parent Common Stock, neither Parent nor any Related Person has any plan or intention to redeem or otherwise reacquire, directly or indirectly, any shares of Parent Common Stock to be issued in the Merger.
	(f) Parent has no stock repurchase program and has no current plan or intention to adopt such a plan.
	(g) The aggregate fair market value, determined at the Effective Time, of the Total Stock Consideration will not be less than forty percent (40%) of the value, determined at the Effective Time, of the shares of Company Common Stock outstanding immediately before the Effective Time. For this purpose, it is assumed that the fair market value of the outstanding shares of Company Common Stock will equal the fair market value of the Aggregate Consideration, except that the Final Parent Stock Price shall mean the closing price per share of Parent Common Stock as reported on the NASDAQ on the date on which the Effective Time occurs.
	(h) Neither Parent nor any Related Person owns, nor has it owned during the past five years, any shares of stock of the Company. Neither Parent nor any Related Person has caused any other Person to acquire stock of the Company on behalf of Parent or a Related Person, or will directly or

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	indirectly acquire any stock of the Company in connection with the Merger, except as described in this Agreement.
	(i) Parent has not, directly or indirectly, transferred any cash or property to the Company (or any entity controlled directly or indirectly by the Company) for less than full and adequate consideration and has not made any loan to the Company (or any entity controlled directly or indirectly by the Company) in anticipation of the Merger.
	(j) There is no intercompany indebtedness existing between Parent and Company, or between Purchaser and Company, that was or will be issued, acquired, or settled at a discount in connection with the Merger.
	(k) Parent and Purchaser will each pay their own expenses incurred in connection with or as part of the Merger or related transactions. Parent has not paid and will not pay, directly or indirectly, any expenses (including transfer taxes) incurred by any holder of shares of Company Common Stock in connection with or as part of the Merger or any related transactions (except with respect to Parent’s own expenses incurred in connection with the Upstream Merger). Parent has not agreed to assume, nor will it directly or indirectly assume, any expense or other liability, whether fixed or contingent, of any holder of shares of Company Common Stock.
	(l) Any compensation paid to the holders of shares of Company Common Stock who enter (or have entered) into employment, consulting or noncompetitive contracts, if any, with Parent or the Surviving Corporation (a) will be for services actually rendered or to be rendered, (b) will be commensurate with amounts paid to third parties bargaining at arm’s length for similar services, and (c) will not represent consideration for the surrender of the shares of Company Common Stock in the Merger.
	(m) Purchaser is a Delaware corporation wholly and directly owned by Parent and has been newly formed solely to consummate the Merger. Prior to the Effective Time, Purchaser will have no assets other than cash to satisfy capital requirements under state law and has not, and will not, conduct any business activities or other operations of any kind other than the issuance of its stock to Parent or as otherwise expressly required by this Agreement.
	(n) At the Effective Time, Purchaser will not have or issue any warrants, options, convertible securities, or any other type of right pursuant to which any Person could acquire any stock in Purchaser.
	(o) Following the Integrated Transaction, Parent will continue the historic business of Company or use a significant portion of its assets in a business, within the meaning of Treasury Regulation Section 1.368-1(d).
	(p) Parent has no plan or intention to liquidate or merge the Company with or into another corporation (other than with and into Parent); to sell or otherwise dispose of the stock of the Company or any of the assets of the Company or to cause or permit the Company to sell or otherwise dispose of any of its assets or any of the assets acquired from Purchaser, except for dispositions made in the ordinary course of business.
	(q) Parent is paying no consideration for the shares of the Company Common Stock other than the Aggregate Consideration.
	(r) Any Company liabilities assumed or paid by Parent or Purchaser and the liabilities to which the assets of the Company are subject were incurred by the Company in the ordinary course of its business.
	(s) Neither Parent nor Purchaser is an investment company within the meaning of Sections 368(a)(2)(F) of the Code. An investment company is (1) a regulated investment company; (2) a real estate investment trust; or (3) a corporation (i) fifty percent (50%) or more of the value of whose total assets are stock and securities, and (ii) eighty percent (80%) or more of the value of

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	whose total assets are held for investment. For this purpose, “total assets” shall not include cash and cash items (including receivables) and government securities.
	(t) Parent has substantial non-tax business purposes and reasons for the Integrated Transaction, and the terms of the Merger are the product of arm’s length negotiations.
	(u) Neither Parent nor the Surviving Corporation will take any position on any Return, or take any other Tax reporting position that is inconsistent with the treatment of the Integrated Transaction as a reorganization within the meaning of Section 368(a) of the Code, unless otherwise required by a “determination” (as defined in Code Section 1313(a)(1)).
	(v) No stock or securities of Parent will be issued to any Company stockholder for services rendered to or for the benefit of Parent, Purchaser, or the Company in connection with the Merger.
	(w) No stock or securities of Parent will be issued for any indebtedness owed to any Company stockholder in connection with the Merger.
	(x) The payment of cash in lieu of fractional shares of Parent Common Stock is solely for the purpose of avoiding the expense and inconvenience to Parent of issuing fractional shares and does not represent separately bargained for consideration. The total cash that will be paid in the Merger to the holders of Common Company Stock instead of issuing fractional shares of Parent Common Stock will not exceed one percent (1%) of the total consideration that will be paid in the Merger to the Company stockholders in exchange for their Company Common Stock.
	(y) No stock of Purchaser will be issued in connection with the Merger.
	(z) Parent has not distributed the stock of any corporation in a transaction satisfying the requirements of Section 355 of the Code since April 16, 1997. The stock of Parent has not been distributed in a transaction satisfying the requirements of Section 355 of the Code since April 16, 1997.
	(aa) After the Effective Time, and at all times prior to and as of the effective time of the Upstream Merger (the “Second Effective Time”), Parent will be a corporation duly incorporated, validly existing and in good standing under the laws of Delaware. After the Effective Time, and at all times prior to the Second Effective Time, the Surviving Corporation will be a corporation duly incorporated, validly existing and in good standing under the laws of Delaware.
	(bb) After the Effective Time, and at all times prior to the Second Effective Time, the Surviving Corporation’s issued and outstanding capital stock will consist solely of 1,000 shares of common stock, all of which will be owned directly by Parent.
	(cc) After the Effective Time, and at all times prior to the Second Effective Time, the Surviving Corporation will not dispose of any assets held by the Surviving Corporation.
	(dd) After the Effective Time, and at all times prior to the Second Effective Time, the Surviving Corporation will not incur any additional liabilities, other than liabilities incurred in the ordinary course of business.
	(ee) After the Second Effective Time, Parent will not transfer any of the former assets of the Surviving Corporation to a corporation or other entity as part of a plan that includes either the Acquisition Merger or the Upstream Merger.
	(ff) The fair market value of the assets of the Surviving Corporation to be received by Parent as a result of the Upstream Merger is intended to be approximately equal to the fair market value of the 1,000 shares of the Surviving Corporation common stock that will be cancelled in connection with the Upstream Merger.
	(gg) After the Effective Time, and at all times prior to the Second Effective Time, there will be no indebtedness existing between the Surviving Corporation and Parent.

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	(hh) Following the Merger, Parent has no plan or intention to cause Surviving Corporation to issue additional shares of Surviving Corporation stock that would result in Parent owning stock possessing less than eighty percent (80%) of the total combined voting power of all classes of stock entitled to vote or less than eighty percent (80%) of the total number of shares of all other classes of stock of Surviving Corporation.
	(ii) At one or more times during the five-year period leading up to and ending as of the Effective Time of the Merger, Parent was a “United States real property holding corporation” within the meaning of Section 897(c)(2) of the Code (“USRPHC”). For this purpose, Parent would be a USRPHC if the fair market value of its interests in United States real property (including any interest in a mine, well, or other natural deposit) shall have equaled or exceeded fifty percent (50%) of the sum of the fair market value of its worldwide real property interests plus any other assets used or held for use in its trade or business.
	(jj) Immediately after the Effective Time of the Merger, Parent expects that it will continue to be treated as a USRPHC, taking into account the United States real property owned by Company or Surviving Corporation.
	(kk) Parent and Purchaser are each taxed as a corporation for tax purposes.

	(a) the business of the Company and its Subsidiaries shall be conducted only in the ordinary course consistent with past practice, and the Company shall use its reasonable best efforts to preserve intact its business organization and goodwill and the business organization and goodwill of its Subsidiaries and keep available the services of their current officers and employees and preserve and maintain existing relations with customers, suppliers, officers, employees and creditors;
	(b) the Company shall not, nor shall it permit any of its Subsidiaries to, (i) enter into any new line of business, (ii) incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during calendar year 2005 other than capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than, and during the same time period set forth in, and generally on the same specific items included in the Company’s total capital budget for calendar year 2005 approved by the Company Board in December 2004, which has been furnished to Parent prior to the date of this Agreement, plus $6 million from the 2004 budget that was not spent; provided however, with respect to any and all expenditures and commitments made by the Company after the date of this Agreement which are in excess of $1,000,000, the Company shall provide Parent reasonable notice and an opportunity to give input regarding any such expenditures.
	(c) the Company shall not, nor shall it permit any of its Subsidiaries to, amend its certificate of incorporation or bylaws or similar organizational documents;

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	(d) the Company shall not, nor shall it permit any of its Subsidiaries (other than direct or indirect wholly owned Subsidiaries) to, declare, set aside or pay any dividend or other distribution, whether payable in cash, stock or any other property or right, with respect to its capital stock;
	(e) the Company shall not, nor shall it permit any of its Subsidiaries to (i) adjust, split, combine or reclassify any capital stock or issue, grant, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class or of any other such securities or agreements of the Company or any of its Subsidiaries, other than issuances of Stock and Company Rights pursuant to the Company Options outstanding on the date of this Agreement except with respect to issuances of Company stock options prior to the Election Deadline to new employees in the ordinary course of business and consistent with past practice, or (ii) except as required pursuant to the terms of the Company Plans in effect on the date of this Agreement, redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or any other securities or agreements of the type described in clause (i) of this Section 5.1(e);
	(f) except as required pursuant to the terms of the Company Plans in effect on the date of this Agreement or except as specifically described on Section 5.1(f) of the Company Disclosure Letter, the Company shall not, nor shall it permit any of its Subsidiaries to, (i) grant any increase in the compensation or benefits payable or to become payable by the Company or any of its Subsidiaries to any former or current director, officer or employee of the Company or any of its Subsidiaries, (ii) adopt, enter into, amend or otherwise increase, or accelerate the payment or vesting of the amounts, benefits or rights payable or accrued or to become payable or accrued under, any Company Plan (other than entry into employment agreements with new hires in the ordinary course of business consistent with past practice; provided that such employment agreement shall be terminable at will, without penalty to the Company or any of its Subsidiaries, (iii) grant any severance or termination pay to any officer, director or employee of the Company or any of its Subsidiaries except termination amounts paid to non-contract employees related to termination of such employee’s employment in Company’s ordinary course of business and consistent with Company’s past practices, or (iv) designate any more prospects under the Mission Resources Corporation Bonus and Deferred Compensation Plan;
	(g) the Company shall not, nor shall it permit any of its Subsidiaries to, change its methods of accounting in effect as of the date of this Agreement, except in accordance with changes in GAAP as concurred to by the Company’s independent auditors;
	(h) the Company shall not, nor shall it permit any of its Subsidiaries to (i) acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner, or (ii) other than in the ordinary course of business consistent with past practice or pursuant to agreements in effect on the date of this Agreement and set forth in Section 5.1(h) of the Company Disclosure Letter, acquire any assets;
	(i) other than the sale or consumption of inventory and Hydrocarbons in the ordinary course of business consistent with past practice or the sale of any assets pursuant to agreements in effect on the date of this Agreement and set forth in Section 5.1(i) of the Company Disclosure Letter, the Company shall not, nor shall it permit any of its Subsidiaries to, sell, lease, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any material Company Assets and shall not, nor shall it permit any of its Subsidiaries to sell, lease exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of any material Company Assets;
	(j) the Company shall not, nor shall it permit any of its Subsidiaries to, mortgage, pledge, hypothecate, grant any security interest in, or otherwise subject to any other Lien other than Permitted Liens, any of the Company Assets;

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	(k) except as set forth on Schedule 5.1(k) of the Company Disclosure Letter, the Company shall not, nor shall it permit any of its Subsidiaries to, (i) except as set forth in clause (ii) below, and except for payment of current accounts payable in the ordinary course of business, pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) where such payment, discharge or satisfaction would require any payment except for the payment, discharge or satisfaction of liabilities or obligations in accordance with the terms of agreements in effect on the date of this Agreement or entered into after the date of this Agreement in the ordinary course of business consistent with past practice and not in violation of this Agreement, in each case to which the Company or any of its Subsidiaries is bound and except for any payments, discharges or settlements that do not exceed $250,000 individually or $1,000,000 in the aggregate, or (ii) compromise, settle, grant any waiver or release relating to any Litigation, other than settlements or compromises of litigation where the amount paid or to be paid does not exceed $250,000 individually or $1,000,000 in the aggregate;
	(l) the Company shall not, nor shall it permit any of its Subsidiaries to, engage in any transaction with (except pursuant to agreements in effect at the time of this Agreement and set forth in Section 3.9(a) or 3.18 of the Company Disclosure Letter), or enter into any agreement, arrangement, or understanding with, directly or indirectly, any of the Company’s affiliates; provided, that for the avoidance of doubt, for purposes of this clause (l), the term “affiliates” shall not include any employees of the Company or any of its Subsidiaries, other than the directors and executive officers thereof;
	(m) except as set forth in Section 5.1(m) of the Company Disclosure Letter, the Company shall not, nor shall it permit any of its Subsidiaries to, make or change any material Tax election, change any method of Tax accounting, grant any extension of time to assess any Tax or settle any Tax claim, amend any Return in any material respect or settle or compromise any material Tax liability;
	(n) the Company shall not, nor shall it permit any of its Subsidiaries to, take any action that would, or could reasonably be expected to, result in any of its representations and warranties set forth in this Agreement becoming untrue in a manner that would give rise to the failure of the closing condition set forth in Section 6.3(a);
	(o) the Company shall not, nor shall it permit any of its Subsidiaries to, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries (other than the Merger or with respect to an inactive wholly-owned Subsidiary of the Company) or any agreement relating to an Acquisition Proposal, except as provided for in Section 5.3;
	(p) the Company shall not, nor shall it permit any of its Subsidiaries to, (i) incur or assume any long-term debt, or except in the ordinary course of business consistent with past practice and in no event exceeding $10,000,000 in the aggregate, incur or assume any short-term indebtedness, (ii) modify the terms of any indebtedness to increase the Company’s obligations with respect thereto (iii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than a Subsidiary of the Company), except in the ordinary course of business consistent with past practice and in no event exceeding $250,000 in the aggregate, (iv) make any loans, advances or capital contributions to, or investments in, any other Person (other than to wholly owned Subsidiaries of the Company, or by such Subsidiaries to the Company, or customary loans or advances to employees in accordance with past practice and in no event exceeding $250,000) in the aggregate, or (v) enter into any material commitment or transaction, except in the ordinary course of business consistent with past practice;
	(q) the Company shall not, nor shall it permit any of its Subsidiaries to, enter into any agreement, understanding or commitment that materially restrains, limits or impedes the Company’s or any of its Subsidiaries’ ability to compete with or conduct any business or line of business, including geographic limitations on the Company’s or any of its Subsidiaries’ activities (other than

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	confidentiality agreements and area of mutual interest agreements entered into in the ordinary course of business);
	(r) except in the ordinary course of business consistent with past practice or as contemplated by this Agreement, the Company shall not, nor shall it permit any of its Subsidiaries to, modify or amend in any material respect, or terminate, any material contract to which it is a party or waive in any material respect or assign any of its material rights or claims;
	(s) the Company shall not, nor shall it permit any of its Subsidiaries to, fail to maintain in full force and effect the existing insurance policies covering the Company or its Subsidiaries or their respective properties, assets and businesses or comparable replacement policies, except to the extent such policies cease to be available on commercially reasonable terms; and
	(t) the Company shall not, nor shall it permit any of its Subsidiaries to, enter into an agreement, contract, commitment or arrangement to do any of the foregoing.

	(a) the business of Parent and its Subsidiaries shall be conducted only in the ordinary course consistent with past practice;
	(b) the Parent shall not, nor shall it permit any of its Subsidiaries to, (i) enter into any new line of business, or (ii) incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during calendar year 2005 other than capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than, and during the same time period set forth in, the Parent’s total capital budget for calendar year 2005 approved by the Board of Directors of Parent in February 2005, which has been furnished to the Company prior to the date of this Agreement, plus $5 million;
	(c) solely in the case of Parent and any non-wholly owned Subsidiary of Parent, Parent shall not declare, set aside or pay any dividend or other distribution, whether payable in cash, stock or any other property or right, with respect to its capital stock; provided, however, that nothing contained herein shall prohibit Parent from paying the quarterly cash dividend on Parent Preferred Stock;
	(d) Parent shall not (i) adjust, split, combine or reclassify any capital stock or issue, grant, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class or of any other such securities or agreements of Parent, other than issuances of stock pursuant to the Parent Plans and with respect to Parent Stock Options and warrants and convertible notes outstanding on the date of this Agreement or issuance of stock options to new employees consistent with Parent’s ordinary course of business consistent with past practice, or (ii) except as required pursuant to the terms of the Parent Plans in effect on the date of this Agreement, redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or any other securities or agreements of the type described in clause (i) of this Section 6.1(d);

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	(e) Parent shall not, nor shall it permit any of its Subsidiaries to, change its methods of accounting in effect as of the date of this Agreement, except in accordance with changes in GAAP as concurred to by Parent’s independent auditors;
	(f) Parent shall not, nor shall it permit any of its Subsidiaries to (i) acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner, or (ii) other than in the ordinary course of business consistent with past practice or pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter, acquire any assets, provided however, to the extent the total value of such acquisitions subsequent to the date of this Agreement during calendar year 2005 do not exceed $40 million, such restrictions shall not apply;
	(g) other than the sale or consumption of inventory and Hydrocarbons in the ordinary course of business consistent with past practice or the sale of any assets pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter, Parent shall not, nor shall it permit any of its Subsidiaries to, sell, lease, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any material Parent Assets; provided Parent shall be permitted to take any such actions provided the total value of all assets subject to the activities set forth herein shall not exceed $40 million subsequent to the date of this Agreement during calendar year 2005;
	(h) Parent shall not, nor shall it permit any of its Subsidiaries to, take any action that would, or could reasonably be expected to, result in any of its representations and warranties set forth in this Agreement becoming untrue in a manner that would give rise to the failure of the closing condition set forth in Section 6.2(a);
	(i) solely in the case of Parent, Parent shall not amend its certificate of incorporation or bylaws or similar organizational documents in a manner that adversely affects the terms of the Parent Common Stock, provided, Parent shall be permitted to amend its Certificate of Incorporation to increase the number of its authorized shares of Company Common Stock;
	(j) solely in the case of Parent, Parent shall not adopt or enter into a plan of complete or partial liquidation or dissolution;
	(k) Parent shall not, nor shall it permit any of its Subsidiaries to, enter into any new line of business, except as may reasonably relate to Parent’s existing businesses; and
	(l) Parent shall not, nor shall it permit any of its Subsidiaries to, enter into an agreement, contract, commitment or arrangement to do any of the foregoing.

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	(a) (i) This Agreement and the Merger shall have been adopted and approved by the Company Required Vote and (ii) the Parent Proposal shall have been approved and adopted by the Required Parent Vote;
	(b) No statute, rule, order, decree or regulation shall have been enacted or promulgated, and no action shall have been taken, by any Governmental Entity of competent jurisdiction which temporarily, preliminarily or permanently restrains, precludes, enjoins or otherwise prohibits the consummation of the Merger or makes the Merger illegal;
	(c) Other than filing the Certificate of Merger in accordance with the DGCL, all authorizations, consents and approvals of all Governmental Entities required to be obtained prior to consummation of the Merger shall have been obtained, except for such authorizations, consents, and approvals the failure of which to be obtained individually or in the aggregate has not had, and would not be reasonably likely to have or result in, a Material Adverse Effect on any party to this Agreement;
	(d) The S-4 shall have been declared effective, and no stop order suspending the effectiveness of the S-4 shall be in effect and no proceedings for such purpose shall be pending before or threatened by the SEC; and
	(e) The shares of Parent Common Stock issuable to the stockholders of the Company in the Merger and to the holders of the Company Options shall have been authorized for listing on Nasdaq, subject to official notice of issuance.

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	(a) (i) The representations and warranties of each of Parent and Purchaser set forth in Sections 4.2, 4.3, 4.5(a) and all statements set forth in Section 4.27 (relating to Taxes) shall be true and correct in all material respects both at and as of the date of this Agreement and at and as of the Closing Date, as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such date); and (ii) the representations and warranties of each of Parent and Purchaser set forth in this Agreement (other than the representations and warranties set forth in Sections 4.2, 4.3, 4.5(a) and all statements set forth in Section 4.27 (relating to Taxes), shall be true and correct (without giving effect to any limitation as to “materiality” or “Material Adverse Effect” set forth therein) both at and as of the date of this Agreement and at and as of the Closing Date, as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such date), except where the failure of such representations and warranties to be so true and correct (without giving effect to any limitation as to “materiality” or “Material Adverse Effect” set forth therein) individually or in the aggregate has not had, and would not be reasonably likely to have or result in, a Material Adverse Effect on Parent. The Company shall have received a certificate signed on behalf of Parent by each of two senior executive officers of Parent to the foregoing effect;
	(b) Each of Parent and Purchaser shall have performed in all material respects its obligations under this Agreement required to be performed by it at or prior to the Effective Time pursuant to the terms of this Agreement, and the Company shall have received a certificate signed on behalf of each of Parent and Purchaser by the Chief Executive Officer of each of Parent and Purchaser to such effect;
	(c) There shall not be pending any suit, action or proceeding by any Governmental Entity seeking to restrain, preclude, enjoin or prohibit the Merger or any of the other transactions contemplated by this Agreement; and
	(d) The Company shall have received the opinion of Porter & Hedges, L.L.P., counsel to the Company, in form and substance reasonably satisfactory to the Company, on the date on which the Form S-4 is filed and on the Closing Date, in each case dated as of such respective date, rendered on the basis of facts, representations and assumptions set forth in such opinion and the certificates obtained from officers of Parent, Purchaser and the Company, all of which are consistent with the state of facts existing as of the date on which the Form S-4 is filed and the Effective Time, as applicable, to the effect that (i) the Integrated Transaction will qualify as a reorganization within the meaning of Section 368(a) of the Code and (ii) the Company and Parent will each be a “party to the reorganization” within the meaning of Section 368 of the Code. In rendering the opinion described in this Section 6.2(d), Porter & Hedges, L.L.P. shall have received and may rely upon the certificates and representations referred to in Section 5.14(d).
	(e) Parent must have delivered to its counsel, the Company and the Company’s counsel a certificate signed on behalf of Parent by a duly authorized officer of Parent certifying the representations set forth in Section 4.27 and as otherwise reasonably requested by Parent’s tax counsel.

(a) (i) The representations and warranties of the Company set forth in Sections 3.2, 3.3 and 3.5(a) and all statements set forth in Section 3.26 (relating to Taxes) shall be true and correct in all material respects both at and as of the date of this Agreement and at and as of the Closing Date, as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such date); and (ii) the representations and warranties of the Company set forth in this Agreement (other than the representations and warranties set forth in Sections 3.2, 3.3 and 3.5(a)

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	and the statements set forth in Section 3.26) shall be true and correct (without giving effect to any limitation as to “materiality” or “Material Adverse Effect” set forth therein) both at and as of the date of this Agreement and at and as of the Closing Date, as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such date), except where the failure of such representations and warranties to be so true and correct (without giving effect to any limitation as to “materiality” or “Material Adverse Effect” set forth therein) individually or in the aggregate has not had, and would not be reasonably likely to have or result in, a Material Adverse Effect on the Company. Parent shall have received a certificate signed on behalf of the Company by each of two senior executive officers of the Company to the foregoing effect;
	(b) The Company shall have performed in all material respects each of its obligations under this Agreement required to be performed by it at or prior to the Effective Time pursuant to the terms of this Agreement, and Parent shall have received a certificate signed on behalf of the Company by the Chief Executive Officer or Chief Financial Officer to such effect;
	(c) There shall not be pending any suit, action or proceeding by any Governmental Entity seeking to (i) prohibit or limit in any material respect the ownership or operation by the Company, Parent, Purchaser or any of their respective affiliates of a substantial portion of the business or assets of the Company and its Subsidiaries, taken as a whole, or to require any such Person to dispose of or hold separate any material portion of the business or assets of the Company and its Subsidiaries, taken as a whole, as a result of the Merger or any of the other transactions contemplated by this Agreement or (ii) restrain, preclude, enjoin or prohibit the Merger or any of the other transactions contemplated by this Agreement;
	(d) Parent shall have received the opinion of Thompson & Knight, LLP, counsel to Parent, in form and substance reasonably satisfactory to Parent, on the date on which the Form S-4 is filed and on the Closing Date, in each case dated as of such respective date, rendered on the basis of facts, representations and assumptions set forth in such opinion and the certificates obtained from officers of Parent, Purchaser and the Company, all of which are consistent with the state of facts existing as of the date on which the Form S-4 is filed or the Effective Time, as applicable, to the effect that (i) the Integrated Transaction will qualify as a reorganization within the meaning of Section 368(a) of the Code and (ii) the Company and Parent will each be a “party to the reorganization” within the meaning of Section 368 of the Code. In rendering the opinion described in this Section 6.3(d), Thompson & Knight, LLP, shall have received and may rely upon the affiliate letters, certificates and representations referred to in Section 5.14(d);
	(e) The number of Dissenting Shares shall not exceed 10% of the outstanding shares of Company Common Stock; and
	(f) All material consents and approvals of any Person that the Company or any of its Subsidiaries are required to obtain in connection with the consummation of the Merger, including consents and approvals from parties to loans, contracts, leases or other agreements, shall have been obtained, and a copy of each such consent and approval shall have been provided to Parent at or prior to the Closing, except for such consents and approvals the failure of which to be obtained individually or in the aggregate would not be reasonably likely to have or result in a Material Adverse Effect on the Company.
	(g) The Company must have delivered to its counsel, Parent and Parent’s counsel a certificate signed on behalf of the Company by a duly authorized officer of the Company certifying the representations set forth in Section 3.26 and as otherwise reasonably requested by the Company’s tax counsel.

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	(a) By the mutual consent of Parent and the Company in a written instrument.
	(b) By either the Company or Parent upon written notice to the other, if:

	(i) the Merger shall not have been consummated on or before December 31, 2005 (the “Termination Date”); provided that the right to terminate this Agreement pursuant to this Section 7.1(b)(i) shall not be available to a party whose failure to fulfill any material obligation under this Agreement or other material breach of this Agreement has been the cause of, or resulted in, the failure of the Merger to have been consummated on or before such date;
	(ii) any Governmental Entity shall have issued a statute, rule, order, decree or regulation or taken any other action (which statute, rule, order, decree, regulation or other action the parties hereto shall have used their reasonable best efforts to lift), in each case permanently restraining, enjoining or otherwise prohibiting the consummation of the Merger or making the Merger illegal and such statute, rule, order, decree, regulation or other action shall have become final and nonappealable (provided that the terminating party is not then in breach of Section 5.5);
	(iii) the stockholders of the Company fail to adopt this Agreement by the Company Required Vote at the Company Special Meeting; provided that the Company shall not be entitled to terminate this Agreement pursuant to this Section 7.1(b)(iii) if it has breached any of its obligations under Section 5.3 or Section 5.6;
	(iv) there shall have been a material breach of or any inaccuracy in any of the representations or warranties set forth in this Agreement on the part of any of the other parties, which breach is not cured within 30 days following receipt by the breaching party of written notice of such breach from the terminating party, or which breach, by its nature, cannot be cured prior to the Termination Date (provided that the terminating party is not then in material breach of any representation, warranty, covenant or other agreement contained herein); provided, however, that no party shall have the right to terminate this Agreement pursuant to this Section 7.1(b)(iv) unless the breach of representation or warranty, together with all other such breaches, would entitle the party receiving such representation not to consummate the transactions contemplated by this Agreement under Section 6.3(a) (in the case of a breach of representation or warranty by the Company) or Section 6.2(a) (in the case of a breach of representation or warranty by Parent or Purchaser);
	(v) if there shall have been a material breach of any of the covenants or agreements set forth in this Agreement on the part of any of the other parties, which breach shall not have been cured within 30 days following receipt by the breaching party of written notice of such breach from the terminating party, or which breach, by its nature, cannot be cured prior to the Termination Date (provided that the terminating party is not then in material breach of any representation, warranty, covenant or other agreement contained herein); or
	(vi) the Parent Proposal shall not have been approved and adopted by the Required Parent Vote at the Parent Stockholders’ Meeting; provided that Parent shall not be entitled to terminate this Agreement pursuant to this Section 7.1(b)(vi) if it has breached any of its obligations under Section 5.3 or 5.6.

	(c) By Parent, upon written notice to the Company, if prior to obtaining the Company Required Vote (i) the Company, or the Company Board, as the case may be, shall have (A) entered into any Acquisition Agreement or (B) approved or recommended, or, in the case of a committee, proposed to

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	the Company Board, to approve or recommend, any Acquisition Proposal, (ii) the Company or the Company Board or any committee thereof shall have resolved to do any of the foregoing, or (iii) a Company Adverse Recommendation Change shall have occurred in response to a Superior Proposal or the Company Board or any committee thereof shall have resolved to make such Company Adverse Recommendation Change.
	(d) By the Company, upon written notice to Parent, if prior to obtaining the Required Company Vote (i) the Company, or the Company Board, as the case may be, shall have (A) entered into any Acquisition Agreement or (B) approved or recommended, or, in the case of a committee, proposed to the Company Board, to approve or recommend, any Acquisition Proposal, (ii) the Company Board or any committee thereof shall have resolved to do any of the foregoing, or (iii) a Company Adverse Recommendation Change shall have occurred in response to a Superior Proposal or the Company Board or any committee thereof shall have resolved to make such Company Adverse Recommendation Change.

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	Mission Resources Corporation
	1331 Lamar, Suite 1455
	Houston, Texas 77010-3039
	Facsimile: 713-495-3103
	Attn: Robert L. Cavnar

	Porter & Hedges, L.L.P.
	1000 Main Street, 36th Floor
	Houston, Texas 77002
	Facsimile: (713) 226-6274
	Attn: Robert G. Reedy

	Petrohawk Energy Corporation
	1100 Louisiana, Suite 4400
	Houston, Texas 77002
	Facsimile: 832-204-2800
	Attn: Floyd C. Wilson

	Hinkle Elkouri Law Firm L.L.C.
	301 N.Main, Suite 2000
	Wichita, KS 67202
	Facsimile: 316-660-6011
	Attn: David S. Elkouri

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	“Acceptable Confidentiality Agreement” means, with respect to the Company or Parent, an agreement that imposes obligations and restrictions on the counterparty thereto which are substantially similar to the terms that are binding on the other party to this Agreement, as applicable, under the Confidentiality Agreement.
	“Acquisition Agreement” has the meaning given such term on page 48 of this Agreement.
	“Acquisition Proposal” has the meaning given such term on page 49 of this Agreement.
	“Advisers Act” has the meaning given such term on page 23 of this Agreement.
	“Affiliated Group” has the meaning given such term on page 26 of this Agreement.

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	“Aggregate Consideration” has the meaning given such term on page 3 of this Agreement.
	“Antitrust Division” has the meaning given such term on page 51 of this Agreement.
	“Business Day” means any day other than Saturday and Sunday and any day on which banks are not required or authorized to close in the State of Texas.
	“Cash Designated Shares” has the meaning given such term on page 5 of this Agreement.
	“Cash Election Shares” has the meaning given such term on page 4 of this Agreement.
	“Certificate” has the meaning given such term on page 4 of this Agreement.
	“Certificate of Merger” has the meaning given such term on page 2 of this Agreement.
	“Closing” has the meaning given such term on page 2 of this Agreement.
	“Closing Date” has the meaning given such term on page 2 of this Agreement.
	“Code” means the Internal Revenue Code of 1986, as amended.
	“Company” has the meaning given such term on page 1 of this Agreement.
	“Company Adverse Recommendation Change” has the meaning given such term on page 48 of this Agreement.
	“Company Assets” means all of the properties and assets (real, personal or mixed, tangible or intangible) of the Company and its Subsidiaries.
	“Company Balance Sheet” has the meaning given such term on page 18 of this Agreement.
	“Company Board” has the meaning given such term on page 11 of this Agreement.
	“Company Common Stock” has the meaning given such term on page 10 of this Agreement.
	“Company Consolidated Group” means any affiliated group within the meaning of Section 1504(a) of the Code, in which the Company (or any Subsidiary of the Company) is or has ever been a member or any group of corporations with which Company files, has filed or is or was required to file an affiliated, consolidated, combined, unitary or aggregate Tax return.
	“Company Designated Directors” means two individuals that if serving on Parent’s Board of Directors would qualify as “independent directors” under Nasdaq and SEC definitions and who are proposed by the Company to serve on the Board of Directors of Parent and who are reasonably acceptable to Parent.
	“Company Disclosure Letter” has the meaning given such term on page 9 of this Agreement.
	“Company Leased Real Property” means all interests in real property pursuant to the Company Leases other than the Company Oil and Gas Properties and other oil, gas and mineral rights of the Company and its Subsidiaries.
	“Company Leases” means the real property leases, subleases, licenses and use or occupancy agreements pursuant to which Company or any of its Subsidiaries is the lessee, sublessee, licensee, user, operator or occupant of real property, or interests therein other than such leases, subleases, licenses and use or occupancy agreements relating to the Company Oil and Gas Properties and other oil, gas and mineral rights of the Company and its Subsidiaries.
	“Company Material Contract” has the meaning given such term on page 18 of this Agreement.
	“Company Notice” has the meaning given such term on page 48 of this Agreement.
	“Company Oil and Gas Properties” means all of the Company’s or any of its Subsidiaries’ right, title and interest in, to and under, or derived from oil and gas leases and rights, Wells and Units,

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	including all land, facilities, personal property and equipment, Contracts and information pertaining or relating thereto.
	“Company Option” has the meaning given such term on page 6 of this Agreement.
	“Company Option Plans” has the meaning given such term on page 6 of this Agreement.
	“Company Owned Real Property” means the material real property and interests in real property owned by the Company and its Subsidiaries other than the Company Oil and Gas Properties and other oil, gas and mineral rights of the Company and its Subsidiaries.
	“Company Permits” has the meaning given such term on page 17 of this Agreement.
	“Company Plans” has the meaning given such term on page 15 of this Agreement.
	“Company Preferred Stock” has the meaning given such term on page 10 of this Agreement.
	“Company Real Property” means the Company Owned Real Property and the Company Leased Real Property.
	“Company Required Vote” has the meaning given such term on page 24 of this Agreement.
	“Company Reserve Report” has the meaning given such term on page 23 of this Agreement.
	“Company Rights” has the meaning given such term on page 10 of this Agreement.
	“Company Rights Agreement” has the meaning given such term on page 11 of this Agreement.
	“Company SEC Documents” has the meaning given such term on page 12 of this Agreement.
	“Company Special Meeting” has the meaning given such term on page 52 of this Agreement.
	“Competition Laws” means Laws that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization, lessening of competition or restraint of trade and includes the HSR Act.
	“Confidentiality Agreement” has the meaning given such term on page 50 of this Agreement.
	“Cut-off Time” has the meaning given such term on page 10 of this Agreement.
	“Deemed Stock Amount” has the meaning given such term on page 3 of this Agreement.
	“Derivative Transaction” means any swap transaction, option, warrant, forward purchase or sale transaction, futures transaction, cap transaction, floor transaction or collar transaction relating to one or more currencies, commodities, bonds, equity securities, loans, interest rates, catastrophe events, weather-related events, credit-related events or conditions or any indexes, or any other similar transaction (including any option with respect to any of these transactions) or combination of any of these transactions, including collateralized mortgage obligations or other similar instruments or any debt or equity instruments evidencing or embedding any such types of transactions, and any related credit support, collateral or other similar arrangements related to such transactions.
	“DGCL” has the meaning given such term on page 1 of this Agreement.
	“Dissenting Share” has the meaning given such term on page 6 of this Agreement.
	“Effective Time” has the meaning given such term on page 2 of this Agreement.
	“Election Deadline” has the meaning given such term on page 4 of this Agreement.
	“Election Form” has the meaning given such term on page 4 of this Agreement.
	“Election Form Record Date” has the meaning given such term on page 4 of this Agreement.
	“Employment and Withholding Taxes” means any federal, state, local, foreign or other employment, unemployment, insurance, social security, disability, workers’ compensation, payroll,

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	health care or other similar Tax and all Taxes required to be withheld by or on behalf of each of the Company and any of its Subsidiaries or the Parent or any of its Subsidiaries, as the case may be, in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder or other party, in each case, on or in respect of the business or assets thereof.
	“Environmental Claim” means any claim, demand, suit, action, cause of action, proceeding, investigation or notice to the Company or any of its Subsidiaries by any Person or entity alleging any potential liability (including potential liability for investigatory costs, cleanup costs, governmental response costs, natural resource damages, personal injuries, or penalties) arising out of, based on, or resulting from (i) the presence, or Release into the environment, of any Hazardous Substance (as hereinafter defined) at any location, whether or not owned, leased, operated or used by the Company or its Subsidiaries, or the Parent or any of its Subsidiaries, as the case may be, (ii) circumstances forming the basis of any violation, or alleged violation, of any applicable Environmental Law.
	“Environmental Laws” means all Laws, including common law, relating to pollution, cleanup, restoration or protection of the environment (including ambient air, surface water, groundwater, land surface or subsurface strata and natural resources) or to the protection of flora or fauna or their habitat or to human or public health or safety, including (i) Laws relating to emissions, discharges, Releases or threatened Releases of Hazardous Substances, or otherwise relating to the manufacture, generation, processing, distribution, use, sale, treatment, receipt, storage, disposal, transport or handling of Hazardous Substances, including the Comprehensive Environmental Response, Compensation, and Liability Act and the Resource Conservation and Recovery Act, and (ii) the Occupational Safety and Health Act.
	“ERISA” has the meaning given such term on page 14 of this Agreement.
	“ERISA Affiliate” has the meaning given such term on page 14 of this Agreement.
	“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
	“Exchange Agent” has the meaning given such term on page 7 of this Agreement.
	“Exchange Fund” has the meaning given such term on page 7 of this Agreement.
	“Exchange Ratio” has the meaning given such term on page 3 of this Agreement.
	“FTC” has the meaning given such term on page 51 of this Agreement.
	“GAAP” has the meaning given such term on page 13 of this Agreement.
	“Governmental Entity” has the meaning given such term on page 12 of this Agreement.
	“Hazardous Substance” means (i) chemicals, pollutants, contaminants, wastes, toxic and hazardous substances, and oil and petroleum products, (ii) any substance that is or contains asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum or petroleum-derived substances or wastes, chlorides, radon gas or related materials or lead or lead-based paint or materials, (iii) any substance, material or waste that requires investigation, removal or remediation under any Environmental Law, or is defined, listed or identified as hazardous, toxic or otherwise dangerous under any Environmental Laws or (iv) any substance that is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic, or otherwise hazardous.
	“HSR Act” has the meaning given such term on page 12 of this Agreement.
	“Hydrocarbons” has the meaning given such term on page 23 of this Agreement.
	“Indemnified Parties” has the meaning given such term on page 53 of this Agreement.
	“Intellectual Property” has the meaning given such term on page 17 of this Agreement.
	“Investigation” has the meaning given such term on page 50 of this Agreement.
	“Investment Company Act” has the meaning given such term on page 23 of this Agreement.

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	“Knowledge” means, with respect to the Company, the actual knowledge of the individuals listed in Section 3.17(f) of the Company Disclosure Letter, after due inquiry and (ii) with respect to Parent, the actual knowledge of the individuals listed in Section 4.17(f) of the Parent Disclosure Letter, after due inquiry.
	“Laws” has the meaning given such term on page 12 of this Agreement.
	“Liens” means any mortgage, pledge, deed of trust, hypothecation, right of others, claim, security interest, encumbrance, burden, title defect, title retention agreement, lease, sublease, license, occupancy agreement, easement, covenant, condition, encroachment, voting trust agreement, interest, option, right of first offer, negotiation or refusal, proxy, lien, charge or other restrictions or limitations of any nature whatsoever.
	“Litigation” means any action, claim, suit, proceeding, audit, citation, summons, subpoena, inquiry or investigation of any nature, civil, criminal or regulatory, in law or in equity, by or before any Governmental Entity or arbitrator (including worker’s compensation claims).
	“Mailing Date” has the meaning given such term on page 4 of this Agreement.
	“Material Adverse Effect” means, with respect to Parent or the Company, as the case may be, (i) a material adverse effect on the business, results of operations or financial condition of such party and its Subsidiaries taken as a whole or (ii) any change or effect that prevents or materially impedes or delays the consummation by such party of the Merger and the other transactions contemplated hereby; provided, that none of the following shall be deemed, either alone or in combination, to constitute, and none of the following shall be taken into account in determining whether there has been or will be, a Material Adverse Effect: (A) changes and effects attributable to changes in Laws of general applicability or interpretations thereof by courts or governmental authorities, (B) changes and effects attributable to or resulting from changes in general industry conditions or general economic conditions, including changes in commodity prices, except, in each case, to the extent any such changes or effects disproportionately affect such party in comparison to other companies in the same industry and (C) changes and effects attributable to the announcement or pendency of this Agreement or the Merger.
	“Merger” has the meaning given such term on page 1 of this Agreement.
	“Merger Consideration” has the meaning given such term on page 3 of this Agreement.
	“Merrill Lynch” has the meaning given such term on page 24 of this Agreement.
	“Nasdaq” has the meaning given such term on page 3 of this Agreement.
	“No Election Shares” has the meaning given such term on page 4 of this Agreement.
	“Non-U.S. Stockholder” means a stockholder who is not (i) an individual who is a citizen or resident of the United States, (ii) a corporation, or other Person taxable as a corporation, created or organized in or under the Laws of the United States, any state thereof or the District of Columbia, (iii) an estate, the income of which is subject to U.S. federal income taxation regardless of its source, (iv) a trust if (x) a court within the United States is able to exercise primary supervision over the administration of the trust and (y) one or more U.S. Persons have the authority to control all substantial decisions of the trust or if the trust has made a valid election to be treated as a U.S. Person or (v) a partnership, or other Person treated as a partnership for United States federal income Tax purposes, to the extent that the beneficial ownership of the Company Common Stock is attributed to its partners who fall into the categories described in clauses (i)-(iv) above.
	“Non-Solicitation Agreements” has the meaning set forth on page 1 of this Agreement.
	“Parent” has the meaning given such term on page 1 of this Agreement.
	“Parent Assets” means all of the properties and assets (real, personal or mixed, tangible or intangible) of Parent and its Subsidiaries.

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	“Parent Balance Sheet” has the meaning given such term on page 34 of this Agreement.
	“Parent Common Stock” has the meaning given such term on page 27 of this Agreement.
	“Parent Consolidated Group” means any affiliated group within the meaning of Section 1504(a) of the Code, in which Parent (or any Subsidiary of Parent) is or has ever been a member or any group of corporations with which Parent files, has filed or is or was required to file an affiliated, consolidated, combined, unitary or aggregate Tax return.
	“Parent Disclosure Letter” has the meaning given such term on page 27 of this Agreement.
	“Parent Leased Real Property” means all interests in real property pursuant to the Parent Leases other than the Parent Oil and Gas Properties and other oil, gas and mineral rights of Parent and its Subsidiaries.
	“Parent Leases” means the real property leases, subleases, licenses and use or occupancy agreements pursuant to which Parent or any of its Subsidiaries is the lessee, sublessee, licensee, user, operator or occupant of real property, or interests therein other than such leases, subleases, licenses and use or occupancy agreements relating to the Parent Oil and Gas Properties and other oil, gas and mineral rights of Parent and its Subsidiaries.
	“Parent ERISA Affiliate” has the meaning given such term on page 31 of this Agreement.
	“Parent Material Contract” has the meaning given such term on page 34 of this Agreement.
	“Parent Oil and Gas Properties” means, with respect to Parent or any of its Subsidiaries, all of Parent’s or any of its Subsidiaries’ right, title and interest in, to and under, or derived from oil and gas leases and rights, Wells and Units, including all land, facilities, personal property and equipment, Contracts and information pertaining or relating thereto.
	“Parent Owned Real Property” means the material real property and interests in real property owned by Parent and its Subsidiaries other than the Parent Oil and Gas Properties and other oil, gas and mineral rights of Parent and its Subsidiaries.
	“Parent Permits” has the meaning given such term on page 33 of this Agreement.
	“Parent Plans” has the meaning given such term on page 31 of this Agreement.
	“Parent Preferred Stock” has the meaning given such term on page 27 of this Agreement.
	“Parent Proposal” has the meaning given such term on page 40 of this Agreement.
	“Parent Real Property” means the Parent Owned Real Property and the Parent Leased Real Property.
	“Parent Reserve Report” has the meaning given such term on page 39 of this Agreement.
	“Parent SEC Documents” has the meaning given such term on page 29 of this Agreement.
	“Parent SPD” has the meaning given such term on page 31 of this Agreement.
	“Parent Stock Options” has the meaning given such term on page 28 of this Agreement.
	“Parent Stockholders’ Meeting” has the meaning given such term on page 52 of this Agreement.
	“Per Share Cash Consideration” has the meaning given such term on page 3 of this Agreement.
	“Per Share Consideration” has the meaning given such term on page 3 of this Agreement.
	“Per Share Stock Consideration” has the meaning given such term on page 3 of this Agreement.
	“Permit” means any permit, license, waiver, concession, grant, registration, variance, exemption, authorization, operating certificate, franchise, order or approval issued by any Governmental Entity.

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	“Permitted Liens” means (i) Liens reserved against or identified in the Company SEC Documents or the Company Balance Sheet or the Parent Balance Sheet, as the case may be, to the extent so reserved or reflected or described in the notes thereto, (ii) Liens for Taxes not yet due and payable, (iii) in the case of oil and gas leases, the lessor’s royalty interest(s), and (iv) those Liens that, individually or in the aggregate with all other Permitted Liens, do not and would not be reasonably likely to materially interfere with the use or value of the properties or assets of the Company and its Subsidiaries or Parent and its Subsidiaries, as the case may be, and in each case taken as a whole as currently used, or otherwise individually or in the aggregate have not had, and would not reasonably be likely to have or result in, a Material Adverse Effect on the Company or Parent, as the case may be.
	“Person” means any natural person, firm, individual, partnership, joint venture, business trust, trust, association, corporation, company, unincorporated entity or Governmental Entity.
	“Petrie Parkman” has the meaning given such term on page 24 of this Agreement.
	“Proxy Statement” has the meaning given such term on page 51 of this Agreement.
	“Purchaser” has the meaning given such term on page 1 of this Agreement.
	“Related Person” has the meaning given such term on page 26 of this Agreement.
	“Release” means any releasing, disposing, discharging, injecting, spilling, leaking, pumping, dumping, emitting, escaping, emptying, dispersal, leaching, migration or placing into, through or upon the environment, including any land, soil, surface water, ground water or air.
	“Required Parent Vote” has the meaning given such term on page 39 of this Agreement.
	“Return” means any return, estimated Tax return, report, declaration, form, claim for refund or information statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.
	“S-4” has the meaning given such term on page 12 of this Agreement.
	“SEC” means the U.S. Securities and Exchange Commission.
	“Secretary of State” has the meaning given such term on page 2 of this Agreement.
	“Securities Act” has the meaning given such term on page 13 of this Agreement.
	“SOX” has the meaning given such term on page 13 of this Agreement.
	“SPD” has the meaning given such term on page 15 of this Agreement.
	“Specified Company SEC Documents” has the meaning given such term on page 13 of this Agreement.
	“Specified Parent SEC Documents” has the meaning given such term on page 30 of this Agreement.
	“Stock Designated Shares” has the meaning given such term on page 5 of this Agreement.
	“Stock Election Shares” has the meaning given such term on page 4 of this Agreement.
	“Subsidiary” means with respect to any Person, any other Person of which 50% or more of the securities or other interests having by their terms ordinary voting power for the election of directors or others performing similar functions are directly or indirectly owned by such Person.
	“Superior Proposal” has the meaning given such term on page 49 of this Agreement.
	“Surviving Corporation” has the meaning given such term on page 2 of this Agreement.
	“Tax” means (i) any federal, state, local, foreign or other tax, import, duty or other governmental charge or assessment or deficiencies thereof, including income, alternative, minimum,

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	accumulated earnings, personal holding company, franchise, capital stock, net worth, capital, profits, windfall profits, gross receipts, value added, sales, use, excise, custom duties, transfer, conveyance, mortgage, registration, stamp, documentary, recording, premium, severance, environmental, real and personal property, ad valorem, intangibles, rent, occupancy, license, occupational, employment, unemployment insurance, social security, disability, workers’ compensation, payroll, health care, withholding, estimated or other similar tax and including all interest and penalties thereon and additions to tax; (ii) any liability for the payment of any amounts described in clauses (i), (ii) or (iii) as a result of being a member of an affiliated, consolidated, combined, unitary or similar group or as a result of transferor, successor or similar liability; and (iii) any liability for the payments of any amounts as a result of being a party to any Tax sharing agreement or as a result of any express or implied obligation to indemnify any other Person with respect to the payment of any amounts of the type described in clause (i) or (ii).
	“Technology” has the meaning given such term on page 17 of this Agreement.
	“Termination Date” has the meaning given such term on page 59 of this Agreement.
	“Termination Fee” has the meaning given such term on page 60 of this Agreement.
	“Total Cash Amount” has the meaning given such term on page 3 of this Agreement.
	“Total Common Stock Amount” has the meaning given such term on page 3 of this Agreement.
	“Total Stock Amount” has the meaning given such term on page 3 of this Agreement.
	“Total Stock Consideration” has the meaning given such term on page 3 of this Agreement.
	“Treasury Regulations” means the regulations promulgated by the United States Treasury Department under the Code.
	“Unit” means the area covered by a unitization, communitization or pooling agreement or order applicable to Wells, but only as to those formations in which a Well or Wells are currently completed and producing Hydrocarbons.
	“Upstream Merger Agreement” shall mean the agreement and plan of merger between the Surviving Corporation and the Parent regarding the Upstream Merger.
	“Voting Agreements” has the meaning given such term on page 1 of this Agreement.
	“WARN Act” has the meaning given such term on page 22 of this Agreement.
	“Well” means a well for the purpose of discovering or producing Hydrocarbons or disposing of fluids produced in connection with the production of Hydrocarbons.

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	PETROHAWK ENERGY CORPORATION

	By:	/s/ Floyd C. Wilson

	Name:        Floyd C. Wilson

	Title:	Chairman, President and Chief Executive Officer

	PETROHAWK ACQUISITION CORPORATION

	By:	/s/ Floyd C. Wilson

	Name:        Floyd C. Wilson

	Title:	Chairman, President and Chief Executive Officer

	MISSION RESOURCES CORPORATION

	By:	/s/ Robert L. Cavnar

	Name:        Robert L. Cavnar

	Title:	Chairman, President and Chief Executive Officer

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	1. The Agreement;
	2. Such publicly available information concerning Petrohawk and Mission that we believe to be relevant to our analysis, including, without limitation, the Annual Reports on Form 10-K for the years ended December 31, 2004 for each of Petrohawk and Mission;
	3. Certain financial and operating information with respect to the respective businesses, operations, and prospects of Petrohawk and Mission respectively, including financial and operating projections furnished by the managements Petrohawk and Mission and in particular (a) certain estimates of proved and non-proved reserves from Netherland, Sewell & Associates, Inc. and management, projected future production, revenue, operating costs and capital investments for each of Petrohawk and Mission; (b) impacts of hedging of production levels projected by the respective

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	management Petrohawk and Mission; and (c) amounts and timing or cost savings and operating synergies expected by the management of Petrohawk resulting from the Merger;
	4. The historical market prices and trading volumes of Petrohawk’s and Mission’s publicly traded securities from May 26, 2004 to the present and a comparison of those trading histories with each other and with those of other publicly-traded companies that we deemed relevant;
	5. A comparison of the historical financial results and present financial condition of Petrohawk and Mission with each other and with those of other publicly-traded companies that we deemed relevant;
	6. A comparison of the financial terms of the Merger with the financial terms of certain other transactions that we deemed relevant;
	7. The potential pro forma impact of the Merger on the future financial performance of Petrohawk;
	8. The potential pro forma impact of the Merger on the current financial condition of Petrohawk, including the impact on Petrohawk’s leverage levels and ratios;
	9. The relative contributions of Petrohawk and Mission to the current and future financial performance of the combined company on a pro forma basis;
	10. Published estimates of independent research analysts with respect to the future financial performance of Petrohawk and Mission;
	11. The views of the managements of Petrohawk and Mission concerning the strategic benefits of the Merger and their respective businesses, operations, assets, financial condition, reserves, production levels, hedging levels, exploration programs and prospects; and
	12. Such other information, financial studies, analyses and investigations as we deemed relevant.

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	Sanders Morris Harris Inc.

	By:	/s/ G. Clyde Buck

	G. Clyde Buck
	Managing Director

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	(1) Reviewed certain publicly available business and financial information relating to the Company and the Acquiror that we deemed to be relevant;
	(2) Reviewed certain information, including financial forecasts, relating to the business, earnings, hydrocarbon production, cash flow, assets, liabilities and prospects of the Company and the Acquiror furnished to us by the Company and the Acquiror, respectively;
	(3) Reviewed certain proved oil and gas reserve data furnished to us by the Company and the Acquiror, including the report of Netherland, Sewell & Associates, Inc. dated February 10, 2005 with respect to the proved oil and gas reserves and related future revenues of the Company as of December 31, 2004 and the report of Netherland, Sewell & Associates, Inc. dated March 1, 2005 with respect to the proved oil and gas reserves and related future revenues of the Acquiror as of December 31, 2004, as well as information relating to potential future drilling sites and probable oil and gas reserves of the Company and the probable and possible oil and gas reserves of the Acquiror furnished to us by the Company and the Acquiror, respectively;
	(4) Conducted discussions with members of senior management and representatives of the Company and the Acquiror concerning the matters described in clauses 1, 2 and 3 above, as well as their respective businesses and prospects before and after giving effect to the Merger;
	(5) Reviewed the market prices and valuation multiples for the Company Shares and the Acquiror Shares and compared them with those of certain publicly traded companies that we deemed to be relevant;

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	(6) Reviewed the results of operations of the Company and the Acquiror and compared them with those of certain publicly traded companies that we deemed to be relevant;
	(7) Compared the proposed financial terms of the Merger with the financial terms of certain other transactions that we deemed to be relevant;
	(8) Participated in certain discussions and limited negotiations concerning the Merger among representatives of the Company and the Acquiror and their financial and legal advisors;
	(9) Reviewed the potential pro forma impact of the Merger;
	(10) Reviewed the Agreement dated April 3, 2005; and
	(11) Reviewed such other financial studies and analyses and took into account such other matters as we deemed necessary, including our assessment of general economic, market and monetary conditions.

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	Very truly yours,

	/s/	MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

	MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

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	(1) Provided, however, that no appraisal rights under this section shall be available for the shares of any class or series of stock, which stock, or depository receipts in respect thereof, at the record date fixed to determine the stockholders entitled to receive notice of and to vote at the meeting of stockholders to act upon the agreement of merger or consolidation, were either (i) listed on a national securities exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc. or (ii) held of record by more than 2,000 holders; and further provided that no appraisal rights shall be available for any shares of stock of the constituent corporation surviving a merger if the merger did not require for its approval the vote of the stockholders of the surviving corporation as provided in subsection (f) of § 251 of this title.
	(2) Notwithstanding paragraph (1) of this subsection, appraisal rights under this section shall be available for the shares of any class or series of stock of a constituent corporation if the holders thereof are required by the terms of an agreement of merger or consolidation pursuant to §§ 251, 252, 254, 257, 258, 263 and 264 of this title to accept for such stock anything except:

	a. Shares of stock of the corporation surviving or resulting from such merger or consolidation, or depository receipts in respect thereof;
	b. Shares of stock of any other corporation, or depository receipts in respect thereof, which shares of stock (or depository receipts in respect thereof) or depository receipts at the effective date of the merger or consolidation will be either listed on a national securities exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc. or held of record by more than 2,000 holders;
	c. Cash in lieu of fractional shares or fractional depository receipts described in the foregoing subparagraphs a. and b. of this paragraph; or
	d. Any combination of the shares of stock, depository receipts and cash in lieu of fractional shares or fractional depository receipts described in the foregoing subparagraphs a., b. and c. of this paragraph.

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	(3) In the event all of the stock of a subsidiary Delaware corporation party to a merger effected under § 253 of this title is not owned by the parent corporation immediately prior to the merger, appraisal rights shall be available for the shares of the subsidiary Delaware corporation.

	(1) If a proposed merger or consolidation for which appraisal rights are provided under this section is to be submitted for approval at a meeting of stockholders, the corporation, not less than 20 days prior to the meeting, shall notify each of its stockholders who was such on the record date for such meeting with respect to shares for which appraisal rights are available pursuant to subsection (b) or (c) hereof that appraisal rights are available for any or all of the shares of the constituent corporations, and shall include in such notice a copy of this section. Each stockholder electing to demand the appraisal of such stockholder’s shares shall deliver to the corporation, before the taking of the vote on the merger or consolidation, a written demand for appraisal of such stockholder’s shares. Such demand will be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such stockholder’s shares. A proxy or vote against the merger or consolidation shall not constitute such a demand. A stockholder electing to take such action must do so by a separate written demand as herein provided. Within 10 days after the effective date of such merger or consolidation, the surviving or resulting corporation shall notify each stockholder of each constituent corporation who has complied with this subsection and has not voted in favor of or consented to the merger or consolidation of the date that the merger or consolidation has become effective; or
	(2) If the merger or consolidation was approved pursuant to § 228 or § 253 of this title, then, either a constituent corporation before the effective date of the merger or consolidation, or the surviving or resulting corporation within ten days thereafter, shall notify each of the holders of any class or series of stock of such constituent corporation who are entitled to appraisal rights of the approval of the merger or consolidation and that appraisal rights are available for any or all shares of such class or series of stock of such constituent corporation, and shall include in such notice a copy of this section. Such notice may, and, if given on or after the effective date of the merger or consolidation, shall, also notify such stockholders of the effective date of the merger or consolidation. Any stockholder entitled to appraisal rights may, within 20 days after the date of mailing of such notice, demand in writing from the surviving or resulting corporation the appraisal of such holder’s shares. Such demand will be sufficient if it reasonably informs the corporation of the identity of the stockholder and that the stockholder intends thereby to demand the appraisal of such holder’s shares. If such notice did not notify stockholders of the effective date of the merger or consolidation, either (i) each such constituent corporation shall send a second notice before the effective date of the merger or consolidation notifying each of the holders of any class or series of stock of such constituent corporation that are entitled to appraisal rights of the effective date of the merger or consolidation or (ii) the surviving or resulting corporation shall send such a second notice to all such holders on or within 10 days after such effective date; provided, however, that if such second notice is sent more than 20 days following the sending of the first notice, such second notice need only be sent to each stockholder who is entitled to appraisal rights and who has demanded appraisal of such holder’s shares in accordance with this subsection. An affidavit of the secretary or assistant secretary or of the transfer agent of the corporation that is required to give either notice that such notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. For purposes of determining the stockholders entitled to receive either notice, each constituent corporation may fix, in advance, a record date that shall be not more than 10 days prior to the date the notice is given,

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	provided, that if the notice is given on or after the effective date of the merger or consolidation, the record date shall be such effective date. If no record date is fixed and the notice is given prior to the effective date, the record date shall be the close of business on the day next preceding the day on which the notice is given.

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