PURCHASE AND SALE AGREEMENT
                            ---------------------------

     THIS AGREEMENT, effective as of the 1st day of January 1997, is made and
entered into by and between NATIONSBANK OF TEXAS, N.A., AS TRUSTEE FOR TRUSTS
#1362, #1363 AND #1364 ("Seller") and TIPPERARY OIL & GAS CORPORATION ("Buyer").

     1.   BASIS OF AGREEMENT.  Seller and Buyer are parties to that certain
Joint Operating Agreement, dated May 15, 1992, by and between Tri-Star Petroleum
Company, as Operator, and Seller, Buyer and others, as non-operators, relative
to the development of the area known as the Comet Ridge Project, State of
Queensland, Australia ("the Operating Agreement"). The Operating Agreement is
attached hereto as Exhibit "A" and incorporated herein by reference for all
purposes.  Seller desires to sell all of its right, title and interest of any
nature under the Operating Agreement, including, without limitation, all
contract rights and any undivided interest in any real or personal property
which Seller owns or has the right to acquire under the terms of the Operating
Agreement presently or in the future, and Buyer desires to purchase all of
Seller's right, title and interest of any nature under the Operating Agreement,
including, without limitation, all contract rights and any undivided interest in
any real or personal property which Seller owns or has the right to acquire
under the terms of the Operating Agreement presently or in the future, all in
accordance with the terms and conditions of this Purchase and Sale Agreement
("the Agreement").

     2.   ASSETS TO BE PURCHASED AND SOLD.  Subject to the terms set forth in
this Agreement, Seller agrees to sell to Buyer and Buyer agrees to buy from
Seller the following interests credited to Seller under the "Percentage Interest
of the Parties" in paragraph 3 of Exhibit "A" to the Operating Agreement, to
wit:

<TABLE>
<CAPTION>                     

                                         B.                      C.
                          A.        In Leasehold          In Acquisition,
                          In      Ownership & Lease    Drilling, Development
                      Production  Operating Expenses  WorkOver & Capital Costs
                         (%)             (%)                     (%)       
                         
<S>                     <C>             <C>                      <C>
Before Project Payout   2.53125         2.8125                   3

After Project Payout    2.16            2.4                      2.4

</TABLE>

in and to the following described Assets, all subject to the terms and
conditions of the Operating Agreement:

          (a)  Seller's undivided interest, if any, in and to, and Seller's
right to acquire an undivided interest in and to, the Authority to Prospect (the
"ATP") listed and described on Exhibit "B" attached hereto, and on Exhibit "B"
attached to the Operating Agreement, and any extension, renewal or replacement
of the ATP, howsoever denominated, and Seller's rights, if any, to any
previously relinquished or lapsed acreage;

          (b)  Seller's undivided interest, if any, in and to, and Seller's
right to acquire an undivided interest in and to the petroleum leases listed and
described on Exhibit "B" attached hereto (the "Leases"), and any additional
petroleum or other oil, gas and mineral leases, all authorities to prospect or
pipeline licenses or other tenements issued in the future covering acreage
described by the ATP or any extension, renewal or replacement of the ATP;

          (c)  Seller's undivided interest, if any, in and to, and Seller's
right to acquire an interest in and to, the wells listed and described on
Exhibit "C" attached hereto (the "Wells"), including all formations and depths
within or below the wellbore, whether or not presently productive;

          (d)  Seller's undivided interest, if any, in and to, and Seller's
right to acquire an undivided interest in and to, all personal and mixed
property located on the lands covered by the ATP and Leases and used in
operations conducted on same, whether located on or off the wellsites, the
Leases or the acreage described by the ATP;

          (e)  Seller's undivided interest, if any, in and to, and Seller's
right to acquire an undivided interest in and to, all permits, licenses or
leases, servitudes, rights-of-way, easements, pipeline licenses (including
pipeline license number 27) and any other tenements or similar rights associated
with the ATP and Leases and or operation of the ATP and Leases, whether
presently existing or created, issued or accrued in the future, and any interest
in (or right to acquire an interest in) any application for any of the foreoing;

          (f)  Seller's undivided interest in and to, and the right to acquire
an undivided interest in and to, any and all gas purchase and sale agreements,
crude purchase and sale agreements, leases of equipment or facilities and any
and all other agreements and rights which are (i) appurtenant to the ATP, Leases
or Wells, or (ii) used or held for use in connection with the ownership or
operation of the Wells or with the production, treatment, sale or disposal of
water, hydrocarbons or associated substances produced, used or disposed of in
connection with the Wells, ATP or the Leases;

          (g)  All of Seller's tax benefits or tax deductions under the laws of
Australia, the State of Queensland or any municipality thereof, whether or not
presently accrued, owned by or vested in Seller, including, without limitation,
any tax benefits or deductions which may be transferred to Buyer under
Australia's Income Tax Assessment Act.

          (h)  All of Seller's contract rights under the Operating Agreement,
express or implied and presently existing or arising in the future of any nature
whatsoever, including, but not limited to, all choses-in-action, whether or not
presently owned by or vested in Seller.

     The rights and interests described in paragraphs (a) through (h) above are
collectively referred to in this Agreement as "the Assets".

     3.   PURCHASE PRICE AND CLOSING.  The Purchase Price for the Assets shall
be One Million Four Hundred Forty-Eight Thousand Two Hundred Seventy-Three and
66/100 Dollars ($1,448,273.66)(the "Purchase Price").  The sale shall be
completed at a closing (the "Closing") to be held in the offices of Hammett &
Taylor, 5 Post Oak Park, 24th Floor, Houston, TX  77027, or some other location
as agreed by the parties, on or before January 31, 1997, (the "Closing Date"). 
At the Closing, Seller shall deliver to Buyer a fully executed Assignment in the
form attached hereto as Exhibit "D".  The Purchase Price, less Ten Thousand and
no/100 ($10,000.00) Dollars previously paid by Buyer to Seller, the receipt of
which is hereby acknowledged, shall be paid to Seller by wire transfer.

     4.   THE EFFECTIVE DATE.  The Effective Date hereof, for all purposes,
shall be January 1, 1997, at 7:00 a.m., Greenwich Mean Time Plus Ten, local
time, Brisbane Australia.

     5.   POST-CLOSING ADJUSTMENTS.  Within sixty (60) days after the Closing,
the parties shall undertake to agree with respect to the adjustments or payments
that were not finally determined as of the Closing, and the amount due from
Buyer or Seller, as the case may be, pursuant to the Post-closing adjustment.
Seller shall provide Buyer access to such of Seller's records as may be
reasonably necessary to a determination of Post-closing adjustments. Payment by
Buyer or Seller shall be made in immediately available funds within five (5)
days of agreement. If the Post-closing adjustment has not been agreed upon
within the time period set forth herein, either party may seek to enforce any
rights it claims hereunder.  Notwithstanding the above, however, the parties
agree that the Purchase Price is not subject to adjustment.  The parties also
agree that if, as a result of any audit of the joint interest billings under the
Joint Operating Agreement, there is a credit for overpayment of expenses
attributable to the interests conveyed by Seller to Buyer, whether paid before
or after the Effective Date, that credit shall accrue solely to the benefit of
Buyer and shall not be refundable to Seller. 

     6.   MUTUAL REPRESENTATIONS AND WARRANTIES.  Each party hereto represents
and warrants to the other that:

          a.   The person executing this Agreement and the transactions
contemplated hereby  has all authority necessary to enter into this Agreement
and to perform all its obligations hereunder;

          b.   The execution, delivery and performance of this Agreement and the
transactions contemplated hereby will not: 

               (i) violate or conflict with any provision of any Certificate of
Incorporation, Corporate By-Laws, trust agreement or other trust instrument or
other governing document of any nature;

              (ii) result in the breach of any term or condition of, or
constitute a default or cause the acceleration of any obligation under any
agreement or instrument to which it is a party or by which it is bound; or 

             (iii) violate or conflict with any applicable judgment, decree,
order, permit, law, rule or regulation, state or federal, of the United States
of America.

          c.   This Agreement has been duly executed and delivered on its
behalf, and at the Closing all documents and instruments required hereunder will
have been duly executed and delivered. This Agreement, and all such documents
and instruments shall constitute legal, valid and binding obligations
enforceable in accordance with their respective terms, except to the extent
enforceability may be impacted by bankruptcy, reorganization, insolvency or
similar laws affecting creditors rights generally; and

          d.   No legal or administrative proceeding is pending or threatened
that would prohibit it from entering into or consummating this Agreement.

     7.   SELLER'S REPRESENTATIONS AND WARRANTIES.

          a.   Seller agrees to convey, assign and transfer its contract,
property and other rights in the Assets to be purchased by Buyer and Seller for
itself, its successors and assigns agrees  to warrant and defend the title of
Buyer, its successors and assigns to the interest and properties against every
person whomsoever claiming the same of any part thereof by, through and under
Seller, but not otherwise. 

          WITH RESPECT TO THE WELLS, EQUIPMENT AND OTHER ITEMS OF PERSONALTY
WHICH MAY BE COVERED HEREBY, THE SAME ARE USED AND ARE SOLD ON "AS IS" AND
"WHERE IS" BASIS WITH ALL FAULTS IF ANY.  SELLER SHALL HAVE NO LIABILITY TO
BUYER FOR ANY CLAIMS, LOSS, OR DAMAGE CAUSED OR ALLEGED TO BE CAUSED DIRECTLY OR
INDIRECTLY, INCIDENTALLY OR CONSEQUENTIALLY BY SAID WELLS, EQUIPMENT OR PERSONAL
PROPERTY, BY ANY INADEQUACY THEREOF OR THEREWITH, ARISING IN STRICT LIABILITY OR
OTHERWISE, OR IN ANY WAY RELATED TO OR ARISING OUT OF THIS AGREEMENT.  SELLER
MAKES NO EXPRESS OR IMPLIED WARRANTIES OF ANY KIND INCLUDING THOSE OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO SAID WELLS,
EQUIPMENT AND PERSONAL PROPERTY AND EXPRESSLY DISCLAIMS ANY WARRANTIES WITH
RESPECT THERETO.

          b.   Seller represents and warrants that the interests which Buyer
shall receive shall include production or the right to proceeds of production
from each well located on the ATP and Leases in an amount which is not less than
the percentage net revenue interest set forth in Paragraph 2 above. In addition,
Seller represents that the interest to be conveyed, assigned and transferred to
Buyer shall not require Buyer to bear a greater percentage of costs and expenses
than the percentage working interest set forth in Paragraph 2 above.  This
representation of warranty is by, through and under Seller, but not otherwise.

          c.   Seller represents that it has full and complete ownership of the
Assets conveyed hereunder and that the Assets to be purchased by Buyer are free
and clear of all liens, judgments, mortgages and other burdens or encumbrances,
created by Seller.  Provided, however, Seller's interest is subject to that
certain Settlement Agreement between it and Tri-Star Petroleum Company dated the
25th day of October, 1996, a copy of which has been furnished to Buyer.

          d.   Seller represents that its contract rights and/or title to
undivided interest in the Assets to be purchased by Buyer has not been forfeited
under the terms of any Joint Operating Agreement covering said interests and
that it is not in arrears with respect to  any joint interest billing account.

          e.    Seller hereby transfers to Buyer the full right of subrogation
to enforce the covenants and warranties, if any, which Seller is entitled to
enforce against Seller's predecessors in title to the subject interest in the
Assets to be purchased by Buyer hereunder.

          f.   Seller represents that, upon request by Buyer, it will execute
and return to Buyer a 124AB Notice under Australia's Income Assessment Act.

     8.   ALLOCATION OF LIABILITY AND INDEMNIFICATIONS.

          a.   DEFINITIONS.

          The term "BUYER'S ASSUMED LIABILITIES" shall mean and include:

               (i) All costs, expenses, liabilities and obligations assumed or
otherwise agreed to be paid by Buyer pursuant to the terms of this Agreement;
and

              (ii) All costs, expenses, liabilities, claims and obligations
arising out of, in connection with, or resulting directly or indirectly from the
ownership or operation of the Assets, (excluding Seller's Retained Liabilities),
insofar as such claims relate to periods of time subsequent to the Effective
Date.

          The term "SELLER'S RETAINED LIABILITIES" shall mean and include:

               (i) All costs, expenses, liabilities and obligations assumed or
otherwise agreed to be paid by Seller pursuant to the terms of this Agreement;

              (ii) All costs, expenses, liabilities, claims and obligations,
including all attorney's fees, arising out of, in connection with or resulting
directly or indirectly from the ownership or operation of the assets or
production or sale of hydrocarbons attributable to the Assets, insofar as such
claims relate to periods of time prior to the Effective Date; and

             (iii) All legal fees charged to the joint account and attributable
to the interests purchased and sold hereunder prior to the Effective Date.

          b.   LIABILITIES.  Buyer agrees to assume, pay, perform, fulfill,
discharge and be liable for all of Buyer's Assumed Liabilities, and Seller
agrees to retain, pay, perform, fulfill, discharge and be and remain liable for
all of Seller's Retained Liabilities.

          c.   SELLER'S INDEMNITY.  SUBJECT TO THE PROVISIONS OF SECTION 7(a),
ABOVE, SELLER AGREES TO DEFEND. INDEMNIFY AND HOLD HARMLESS BUYER. ITS OFFICERS,
DIRECTORS, AGENTS AND EMPLOYEES, OR ANY OF THEM. FROM AND AGAINST ANY AND ALL
LOSSES, CLAIMS, SUITS, CONTROVERSIES, LIABILITIES AND EXPENSES (INCLUDING,
WITHOUT LIMITATION, COURT COSTS, REASONABLE EXPENSES OF LITIGATION AND
REASONABLE ATTORNEY'S FEES) ARISING DIRECTLY OUT OF SELLER'S OWNERSHIP OR USE OF
THE INTEREST IN THE ASSETS TO BE PURCHASED HEREUNDER; PROVIDED, HOWEVER, THAT
THIS INDEMNITY SHALL BE LIMITED TO THOSE CLAIMS, RIGHTS, DEMANDS AND CAUSES OF
ACTION ARISING FROM ACTIVITY OCCURRING PRIOR TO THE EFFECTIVE DATE OF THE SALE.

          d.   BUYER'S INDEMNITY.  BUYER AGREES TO DEFEND, INDEMNIFY AND HOLD
HARMLESS SELLER, ITS OFFICERS, DIRECTORS, AGENTS AND EMPLOYEES, OR ANY OF THEM,
FROM AND AGAINST ANY AND ALL LOSSES, CLAIMS, SUITS, CONTROVERSIES, LIABILITIES
AND EXPENSES (INCLUDING, WITHOUT LIMITATION, COURT COSTS, REASONABLE EXPENSES OF
LITIGATION AND REASONABLE ATTORNEY'S FEES) ARISING DIRECTLY OUT OF BUYER'S
OWNERSHIP OR USE OF THE INTEREST IN THE ASSETS TO BE SOLD HEREUNDER; PROVIDED,
HOWEVER, THAT THIS INDEMNITY SHALL BE LIMITED TO THOSE CLAIMS, RIGHTS, DEMANDS
AND CAUSES OF ACTION ARISING FROM ACTIVITY OCCURRING ON OR AFTER THE EFFECTIVE
DATE OF THE SALE.

     9.   REVIEW AND INSPECTION OF THE ASSETS.  Prior to the Closing, Buyer
shall have the right to perform due diligence review and inspection of the
Assets.  Seller shall make available, both before and after Closing, to Buyer
all information and data relating to the Assets as they may have and as
reasonably requested by Buyer, including, but not limited to the following (a)
financial and accounting records; (b) production, engineering, geological and
geophysical data and reports for the Leases; (c) copies of engineering,
geological and geophysical studies, subject to any license and non-disclosure
requirements; (d) copies of seismic data across any of the Leases (subject to
any license restriction and non-disclosure requirements); (e) title records,
including, but not limited to, copies of the Leases; (f) material and relevant
information concerning pending litigation (excluding information subject to
attorney-client or attorney work product privilege); (g) regulatory compliance;
(h) contracts between Seller and third parties with regard to the Assets; and
(i) all permits and licenses pertaining to the Assets.  Nothing contained in
this paragraph shall obligate Seller to take any action or expend any money to
acquire anything for Buyer which Seller does not already have in its possession.
Seller does not represent that it has all of the above referenced material in
its possession, nor does Seller warrant the accuracy of any such material. 

     10.  WAIVER.  Seller and Buyer certify that they are not "Consumers" within
the meaning of the Texas Deceptive Trade Practices - Consumer Protection Act,
Subchapter E of Chapter 17, Sections 17.41, et seq., of the Texas Business and
Commerce Code, as amended (the "DTPA").  The parties covenant, for themselves
and for and on behalf of any successors and assignees, that if the DTPA is
applicable (a) the parties are "business consumers" hereunder, (b) each party
hereby waives and releases all of its rights and remedies thereunder (other than
Section 17.555, Texas Business and Commerce Code) as applicable to the other
party and its successors, and (c) each party shall defend and indemnify the
other from and against any and all claims, demands, or causes of action of or by
that party or any successor or any of its affiliates based in whole or in part
on the DTPA, arising out of or in connection with the transaction set forth in
this Agreement.

                             WAIVER OF CONSUMER RIGHTS
                             -------------------------

          PURCHASER WAIVES ITS RIGHTS UNDER THE DECEPTIVE TRADE 
          PRACTICES - CONSUMER PROTECTION ACT, SECTION 17.41 ET 
          SEQ., BUSINESS & COMMERCE CODE, A LAW THAT GIVES 
          CONSUMERS SPECIAL RIGHTS AND PROTECTIONS. AFTER 
          CONSULTATION WITH AN ATTORNEY OF PURCHASER'S OWN 
          SELECTION, PURCHASER VOLUNTARILY CONSENTS TO THIS 
          WAIVER.

     11.  NOTICES.  All communications required or permitted under this
Agreement shall be in writing and any communication or delivery hereunder shall
be deemed to have been fully made if actually delivered, or if mailed by
registered or certified mail, postage prepaid, return receipt requested, to the
address as set forth below:

          SELLER
          NationsBank of Texas, N.A., Trustee
          Trust #1362
          Trust #1363
          Trust #1364
          Attention:  W. H. Bolch
          P. O. Box 830308
          Dallas, TX  75283
          Telephone No.:  214-508-2424
          Telecopier No.:  214-508-3088

          BUYER
          Tipperary Oil & Gas Corporation
          633 Seventeenth Street
          Suite 1550
          Denver, Colorado 80202
          Attention: David L. Bradshaw
          Telephone: (303) 293-9379
          Telecopier: (303) 292-3428

     12.  GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS EXCLUDING, HOWEVER, ANY PROVISION
OF TEXAS LAW THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF A DIFFERENT
JURISDICTION.

     13.  GOVERNMENTAL APPROVALS.  Subsequent to the Closing, Seller agrees to
cooperate fully with Buyer in obtaining any desired consents or approvals of the
Government of Australia, or any State thereof, including the taking of any steps
necessary to seek the consent or approval of any transfer into, or any minister
or other governmental official of any of the foregoing, Seller of any part of
the interests in the Assets acquired hereunder, together with the execution of
any document necessary, in the judgment of Buyer, or its counsel, to obtain any
such consent or approval, or to perfect the title of Seller or Buyer or obtain
any necessary sanction of the Operating Agreement.

     14.  FURTHER ASSURANCES.  Incidental and subsequent to Closing, each of the
parties shall execute, acknowledge, and deliver to the other such further
instruments (including any stamp duty or other form necessary for, or incident
to, the notation, sanction, approval or transfer to Buyer of any title or
interest in either the Assets or the Operating Agreement), and to take such
other actions as may be reasonably necessary to carry out the provisions of this
Agreement.

     15.  EXPENSES.  Whether or not the transactions contemplated by this
Agreement are consummated, each of the parties hereto shall pay its own fees and
expenses incident to the negotiation, preparation and execution of this
Agreement, including attorneys' and accountants' fees.

     16.  EXISTING RELATIONSHIP.  Seller and Buyer are co-working interest
owners in the Assets. As a result of this relationship, Buyer acknowledges that
it is thoroughly familiar with the condition of the interests and properties to
be sold to it, and that it has extensive and personal knowledge of all
operations which have been conducted by the working interest owners on and with
respect to the interests and properties which are the subject of this Agreement.

     17.  ARBITRATION.  Seller and Buyer agree that all disputes or
disagreements arising under the terms of this Agreement or arising with respect
to any obligations assumed by the parties hereto shall be submitted to binding
arbitration subject to the rules of the American Arbitration Association, except
as to the choice of arbitrators. The arbitrators shall be chosen by each party
choosing an arbitrator who shall select a third arbitrator. If the chosen
arbitrators fail to agree on a third arbitrator, either party may petition any
state District Court in Midland County, Texas, to select a third arbitrator.

     18.  EXHIBITS.  All exhibits to this Agreement are incorporated herein by
reference.

     19.  SUCCESSORS AND ASSIGNS.  The terms, covenants and conditions hereof
bind and inure to the benefit of Buyer and Seller and their respective
successors and assigns.

     20.  CONFLICTS.  In the event of a conflict between this Agreement and the
terms and conditions of the Operating Agreement, the provisions of this
Agreement shall prevail.  In all other respects, this Agreement shall supersede
all prior agreements between the parties hereto regarding the subject matter
hereof, whether written or oral.

     21.  SURVIVAL.  The covenants, obligations, indemnities, representations
and warranties included in this Agreement shall survive the Closing and remain
actionable thereafter.

     22.  PRODUCT OF NEGOTIATION.  This Agreement is the product of negotiation
between Buyer and Seller. No fiduciary duty owed by Buyer and Seller in any
prior agreement between Buyer and Seller shall apply to the process of
negotiation of this Agreement.

     IN WITNESS WHEREOF, this Agreement has been executed by the parties before
the undersigned competent witnesses as of the date first written above.

WITNESSES:                         SELLER:

                                   NATIONSBANK OF TEXAS, N.A., 
                                   as Trustee for Trusts #1190 and #1191

/s/ Jeanne Davis                   By:  /s/ W. H. Bolch
------------------------------          ----------------------------------------
                                        W. H. BOLCH
/s/ Billy N. Henson
------------------------------
                                   Its:   Vice President
                                   DATE:  January 30, 1997



                                   BUYER:

/s/ James V. Hammett, Jr.          TIPPERARY OIL & GAS CORPORATION
------------------------------

/s/ Helen Pal
------------------------------
                                   By:  /s/ David L. Bradshaw
                                        ----------------------------------------
                                        DAVID L. BRADSHAW
                                   Its: President and Chief Executive Officer
                                   
                                   DATE:  January 29, 1997