Summary of LEXINGTON RESOURCES INC

ITEM 1.01 ENTRY INTO A MATERAL DEFINITIVE AGREEMENT.

Disposition of Oak Hills Drilling Rig

During the first quarter of 2006, Lexington Resources, Inc. a Nevada corporation (the "Company") acquired two wholly-owned subsidiaries, Oak Hills Drilling and Operating International Inc., a Nevada corporation, and Oak Hills Drilling and Operating LLC, an Oklahoma limited liability company ("Oak Hills"). Oak Hills Drilling and Operating International Inc. is the private parent company to Oak Hills which has been providing comprehensive well drilling, completion and maintenance services to and on behalf of the Company.

During the fourth quarter of 2006, management of the Company was considering monetizing certain of the Company's assets and those of Oak Hills in order to decrease liabilities and overhead incurred by the Company on a consolidated basis from previous capital expenditures and a lack of current debt and equity resources made available to the Company. In this respect, the Company actively solicited offers from unaffiliated third parties for the purchase of certain assets of Oak Hills, inclusive of Oak Hills' Wilson Giant single draw works drilling rig and related equipment (collectively, the "Drilling Rig"). At the same time, we also requested an independent evaluation report regarding valuation of the Drilling Rig in order to substantiate the consideration to be offered.

On January 2, 2007, the Board of Directors of the Company authorized and approved the execution by Oak Hills of an agreement dated December 29, 2006 (the "Agreement") with Innovative Energy Services ("IES") pertaining to the sale and purchase of the Drilling Rig. In accordance with the Agreement: (i) IES paid to Oak Hills an aggregate amount of $3,100,000; and (ii) Oak Hills shall deliver title to the Drilling Rig to IES (which as of the date of this Current Report Oak Hills is in the process of completing).