8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 5, 2008

CHANCELLOR GROUP, INC.

 (Exact Name of Registrant as Specified in Charter)

Nevada	000-30219	87-0438647
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	( I.R.S. Employer Identification No.)

216 South Price Road, Pampa, TX	79065
(Address of Principal Executive Offices)	(Zip Code)

Registrant's telephone number, including area code: (806) 688-9697

Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a -12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c))

ITEM 3.02. Unregistered Sales of Equity Securities

The following table sets forth the sales of unregistered securities since the Company’s last report filed under this item.

Date Title and Amount  (1) Purchaser Principal Underwriter Total Offering Price/Underwriting Discounts

December 11, 2008	260,000 shares of common stock	Former Corporate Director	NA	$5,200/NA
December 11, 2008	170,000 shares of common stock	Former Corporate Director	NA	$3,400/NA

ITEM 5.02.                                Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Resignation of Directors, Appointment of Officer and Election of Director

Effective December 5, 2008, John C.Y. Lee and Peter Harris resigned as directors of the Company, and Thomas H. Grantham, our President, was elected to fill one of the vacancies on the Board of Directors.  The Company has entered into separation agreements with each of the resigning directors. At this Board meeting, Jill A. Orizondo was also appointed as our Secretary.

Jill A. Orizondo,62, our Corporate Secretary, received a B.A. from University of South Florida in Chemistry in 1968, and a J.D. from Ohio State University College of Law in 1978. Ms. Orizondo has had 20 years of varied legal and consulting experience in law department management, employment, diversity, litigation, insurance regulatory and general corporate work, overlapping 14 years corporate executive management experience. From 1999 to the present, Ms. Orizondo has acted as a secondary school level teacher and as a consultant for several businesses in the real estate, entertainment and oil and gas industries.  From 1995 to 1999, she was a Senior Manager at Deloitte and Touche LLP, Los Angeles, California, and from 1982 to 1994 was an Assistant Vice President and General Counsel of AAA Michigan, in Dearborn, Michigan.

Director Settlement Agreements

The Company has entered into Director’s Settlement Agreements with John C. Y. Lee and Peter Harris.  The agreements provide for payment by the Company of $10,000 to each director, and for the issuance of 260,000 shares of our common stock to John C. Y. Lee and 170,000 shares to Peter Harris in lieu of directors fees dating back to 2006 for Mr. Lee and 2007 for Mr. Harris.

FOR THE FULL TERMS OF THE DIRECTOR’S SETTLEMENT AGREEMENTS, PLEASE REFER TO THE COPIES OF THESE AGREEMENTS FILED AS EXHIBITS 10.21 and 10.22 TO THIS CURRENT REPORT ON FORM 8-K.

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Item 9.01.  Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
10.21	Director’s Settlement Agreement, dated December 9, 2008, between the Company and John C. Y. Lee.
10.22	Director’s Settlement Agreement, dated December 9, 2008, between the Company and Peter Harris.

SIGNATURE

      Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CHANCELLOR GROUP, INC.
By:	/s/ Thomas Grantham
	Thomas Grantham, President
	Date: December 11, 2008

Exhibit No.	Description
10.21	Director’s Settlement Agreement, dated December 9, 2008, between the Company and John C. Y. Lee.
10.22	Director’s Settlement Agreement, dated December 9, 2008, between the Company and Peter Harris.

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EX-10.21

EXHIBIT 10.21

DIRECTOR’S SETTLEMENT AGREEMENT

DIRECTOR’S SETTLEMENT AGREEMENT, dated as of the 9th day of December, 2008 (“Agreement”), by and between Chancellor Group, Inc., a Nevada corporation, with offices at 216 South Price Road, Pampa, TX 79065 (“Chancellor ”), and   John C. Y. Lee, of 2/60 Hartwood Street, Kew East, Victoria 3102 Australia ("John Lee”), Chancellor  and John Lee are sometimes referred to herein as the “Parties”, or individually as a “Party”.

WHEREAS, John Lee has agreed to resign a director of Chancellor; and

WHEREAS, John Lee is due  260,000 shares of Chancellor’s  Common Stock, par value $.001 per share (“Common Stock”) for services previously rendered as a director of Chancellor; and

WHEREAS, the Parties wish to provide for settlement of the obligations of each respective Party to the other Party pursuant to the terms of this Agreement; and

WHEREAS, each of the Parties could attempt to assert claims against the other party; and

WHEREAS, the Parties desire to resolve all potential disputes with this Settlement Agreement.

NOW, THEREFORE, in consideration of the agreements and covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is agreed by and between the parties as follows:

1. Settlement of Obligation between the Parties.  The Parties shall make full settlement of obligations due John Lee for his services as a Director:

A. Effective Date. The official date and time of termination of John Lee’s term as a director of Chancellor shall be 5:15 p.m. (Australian Eastern Standard Time), December 5, 2008.

B. Payment.  Chancellor  shall pay John Lee the sum of $10,000 in full settlement of Chancellor ’s obligations to John Lee for unreimbursed expenses with regard to John Lee’s service as a director or otherwise.   Chancellor  shall not be required to pay John Lee any further fees or expense reimbursements, except as provided in C immediately below.

C. Issuance of Common Stock. Chancellor shall issue to John Lee 260,000 shares of Common Stock in full settlement of Chancellor’s obligation to John Lee to issue shares of Chancellor Common Stock to John Lee for director’s fees.

2. Release by John Lee.  In consideration for settlement of the termination of John Lee’s employment as provided hereinabove and the agreements of Chancellor  made as provided herein, John Lee, as releasor, remises, releases and forever discharges Chancellor, its respective subsidiaries, officers, directors, agents, representatives, successors and assigns, jointly and severally, from any and all debts, demands, actions, causes of action, suits, damages, claims and liabilities based on matters relating to John Lee’s service as a director of Chancellor or any other matter of whatever kind or nature, known or unknown, suspected or unsuspected, accrued or unaccrued, whether in law, equity or otherwise, and whether under contract, warranty, tort or otherwise, which John Lee ever had, now has or may have, claim or assert from the beginning of the world to the date of this Settlement Agreement, excepting for the obligations of Chancellor  under this Settlement Agreement.

3. Release by Chancellor .  In consideration of the agreements of John Lee made as provided herein, Chancellor , as releasor, remises, releases and forever discharges John Lee, his respective, agents, representatives, heirs, successors and assigns, jointly and severally, from any and all debts, demands, actions, causes of action, suits, damages, claims and liabilities based on matters relating to John Lee’s service as a director of Chancellor or any other matter of whatever kind or nature, known or unknown, suspected or unsuspected, accrued or unaccrued, whether in law, equity or otherwise, and whether under contract, warranty, tort or otherwise, which Chancellor  ever had, now has or may have, claim or assert from the beginning of the world to the date of this Settlement Agreement, excepting for the obligations of John Lee under this Settlement Agreement.

4. Confidential Treatment.  Except as required by law or applicable regulation, all business, customer, technology and financial information concerning Chancellor  (“Confidential Business Information”) shall be maintained in confidence by John Lee and shall not be disclosed to any third party, except for Confidential Business Information that is publicly available through Chancellor ’s filings under the Securities Exchange Act of 1934, as amended, or otherwise made public by Chancellor  or its licensor.  This Settlement Agreement, and the terms hereof, shall be maintained in confidence by the parties and shall not be disclosed to any third party.  Neither Chancellor  nor John Lee shall discuss this Settlement Agreement nor any of the transactions leading up to this Settlement Agreement with any other person, other than their respective counsel.

5.

Agreement Represents Compromise.  This Settlement Agreement represents a compromise of disputed claims and is not to be deemed or construed to be an admission of liability or of the truth of any fact on the part of any party.  By this Settlement Agreement, the parties intend merely to avoid the potential for protracted dispute.

6.

Governing Law and Venue. This Settlement Agreement shall be construed under the laws of the State of Texas pertaining to contracts made and to be performed in Texas, without giving effect to its choice of law provisions. The Parties hereto hereby consent to venue in any state or federal court within the State of Texas having jurisdiction over Gray County for all purposes in connection with this Agreement.

7. Entire Agreement.  This Settlement Agreement embodies the entire agreement of the parties on the subject matter hereof and supersedes and replaces all prior agreements between the parties regarding these matters. It may not be changed or modified orally, but only by a writing signed by each of the parties to be bound by such changes or modification.

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8.  Counterparts.  This Settlement Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same instrument.

9. Attorney’s Fees.  In any litigation arising out of this Agreement, the prevailing party shall be entitled to reimbursement of reasonable attorney’s and costs associated with such litigation through all levels of appeals.

IN WITNESS WHEREOF, the parties have set their hands and seals to this Director’s Settlement Agreement which is effective as of the day and year first above written.

CHANCELLOR  GROUP, INC.
By:	/s/ Thomas H. Grantham 12/11/08
	Title: President
	/s/ John C. Y. Lee
	John C. Y. Lee

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EX-10.22

EXHIBIT 10.22

DIRECTOR’S SETTLEMENT AGREEMENT

DIRECTOR’S SETTLEMENT AGREEMENT, dated as of the 9th day of December, 2008 (“Agreement”), by and between Chancellor Group, Inc., a Nevada corporation, with offices at 216 South Price Road, Pampa, TX 79065 (“Chancellor ”), and   Peter Harris, of 162/299 Queen St., Melbourne, Victoria 3000 Australia ("Peter Harris”), Chancellor  and Peter Harris are sometimes referred to herein as the “Parties”, or individually as a “Party”.

WHEREAS, Peter Harris has agreed to resign a director of Chancellor; and

WHEREAS, Peter Harris is due  170,000 shares of Chancellor’s  Common Stock, par value USD$.001 per share (“Common Stock”) for services previously rendered as a director of Chancellor; and

WHEREAS, the Parties wish to provide for settlement of the obligations of each respective Party to the other Party pursuant to the terms of this Agreement; and

WHEREAS, each of the Parties could attempt to assert claims against the other party; and

WHEREAS, the Parties desire to resolve all potential disputes with this Settlement Agreement.

NOW, THEREFORE, in consideration of the agreements and covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is agreed by and between the parties as follows:

1. Settlement of Obligation between the Parties.  The Parties shall make full settlement of obligations due Peter Harris for his services as a Director:

A. Effective Date. The official date and time of termination of Peter Harris’s term as a director of Chancellor shall be 5:15 p.m. (Australian Eastern Standard Time), December 5, 2008.

B. Payment.  Chancellor  shall pay Peter Harris upon the signing hereof the sum of $10,000 in full settlement of Chancellor ’s obligations to Peter Harris for unreimbursed expenses with regard to Peter Harris’s service as a director or otherwise.   Chancellor  shall not be required to pay Peter Harris any further fees or expense reimbursements, except as provided in C immediately below.

C. Issuance of Common Stock. Chancellor shall issue to Peter Harris upon the signing hereof 170,000 shares of Common Stock in full settlement of Chancellor’s obligation to Peter Harris to issue shares of Chancellor Common Stock to Peter Harris for director’s fees.

2. Release by Peter Harris.  In consideration for settlement of the termination of Peter Harris’s employment as provided hereinabove and the agreements of Chancellor  made as provided herein, Peter Harris, as releasor, remises, releases and forever discharges Chancellor, its respective subsidiaries, officers, directors, agents, representatives, successors and assigns, jointly and severally, from any and all debts, demands, actions, causes of action, suits, damages, claims and liabilities based on matters relating to Peter Harris’s service as a director of Chancellor or any other matter of whatever kind or nature, known or unknown, suspected or unsuspected, accrued or unaccrued, whether in law, equity or otherwise, and whether under contract, warranty, tort or otherwise, which Peter Harris ever had, now has or may have, claim or assert from the beginning of the world to the date of this Settlement Agreement, excepting for the obligations of Chancellor  under this Settlement Agreement.

3. Release by Chancellor .  In consideration of the agreements of Peter Harris made as provided herein, Chancellor , as releasor, remises, releases and forever discharges Peter Harris, his respective, agents, representatives, heirs, successors and assigns, jointly and severally, from any and all debts, demands, actions, causes of action, suits, damages, claims and liabilities based on matters relating to Peter Harris’s service as a director of Chancellor or any other matter of whatever kind or nature, known or unknown, suspected or unsuspected, accrued or unaccrued, whether in law, equity or otherwise, and whether under contract, warranty, tort or otherwise, which Chancellor  ever had, now has or may have, claim or assert from the beginning of the world to the date of this Settlement Agreement, excepting for the obligations of Peter Harris under this Settlement Agreement.

4. Confidential Treatment.  Except as required by law or applicable regulation, all business, customer, technology and financial information concerning Chancellor  (“Confidential Business Information”) shall be maintained in confidence by Peter Harris and shall not be disclosed to any third party, except for Confidential Business Information that is publicly available through Chancellor ’s filings under the Securities Exchange Act of 1934, as amended, or otherwise made public by Chancellor  or its licensor.  This Settlement Agreement, and the terms hereof, shall be maintained in confidence by the parties and shall not be disclosed to any third party.  Neither Chancellor  nor Peter Harris shall discuss this Settlement Agreement nor any of the transactions leading up to this Settlement Agreement with any other person, other than their respective counsel.

5.

Agreement Represents Compromise.  This Settlement Agreement represents a compromise of disputed claims and is not to be deemed or construed to be an admission of liability or of the truth of any fact on the part of any party.  By this Settlement Agreement, the parties intend merely to avoid the potential for protracted dispute.

6.

Governing Law and Venue. This Settlement Agreement shall be construed under the laws of the State of Texas pertaining to contracts made and to be performed in Texas, without giving effect to its choice of law provisions. The Parties hereto hereby consent to venue in any state or federal court within the State of Texas having jurisdiction over Gray County for all purposes in connection with this Agreement.

7. Entire Agreement.  This Settlement Agreement embodies the entire agreement of the parties on the subject matter hereof and supersedes and replaces all prior agreements between the parties regarding these matters. It may not be changed or modified orally, but only by a writing signed by each of the parties to be bound by such changes or modification.

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8. Counterparts.  This Settlement Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same instrument.

9. Attorney’s Fees.  In any litigation arising out of this Agreement, the prevailing party shall be entitled to reimbursement of reasonable attorney’s and costs associated with such litigation through all levels of appeals.

IN WITNESS WHEREOF, the parties have set their hands and seals to this Director’s Settlement Agreement which is effective as of the day and year first above written.

CHANCELLOR  GROUP, INC.
By:	/s/ Thomas H. Grantham 12/11/08
	Title: President
	/s/ Peter Harris
	Peter Harris

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