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PURCHASE AND SALE AGREEMENT

This
Purchase and Sale Agreement (this Agreement) is entered into by and between
King Royalty Corporation, a Texas corporation whose address is 6142 Campbell
Road, Dallas, Texas 75248 (KRC), and Sun Cal Energy (Royalty Purchaser) as
of October 1, 2007 (the Effective Date).

RECITALS:

WHEREAS,
KRC is in active negotiation to acquire royalty interests and overriding royalty
interest in Alabama, Louisiana, Mississippi, Oklahoma and Texas (the
Acquisition Properties), and a percentage of the Acquisition Properties are
the properties being sold to Royalty Purchaser pursuant to this Agreement; and

WHEREAS,
KRC is selling the Interests (as defined below) pursuant to that certain
Confidential Private Placement Memorandum, dated June 27, 2007, offered by KRC
in the amount of $5,500,000 (the Confidential Private Placement Memorandum);
and

WHEREAS,
upon acquisition of Acquisition Properties by KRC, KRC desires to sell, assign
and convey to Royalty Purchaser, and Royalty Purchaser desires to purchase from
KRC, an undivided 5% interest in and to the Interests (as defined below) for the
consideration described in Section 2 below, subject to the remaining
terms and provisions contained herein, to the extent and in the manner
hereinafter set forth.

NOW,
THEREFORE, in consideration of the premises, the mutual benefits to be derived
here from by the parties hereto and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto do
hereby understand, acknowledge and agree as follows:

1.      Definition
of Interests. Subject to any revisionary interests listed herein, the term
Interests shall all of KRCs interest in all of the overriding royalty and/or
royalty interests related to the interests to be acquired by KRC pursuant to the
instruments and documents as described in the King Document Exhibit covering
lands located in Alabama, Louisiana, Mississippi, Oklahoma and Texas (the
Documents), but to the extent, and only to the extent the interest is a
non-expense bearing interest in the nature of a royalty or overriding royalty.
All other interests related to the Documents including, without limitation, fee
simple interests in mineral estates, reversionary interests and working
interests, if any, are reserved in favor of KRC.

2.      Purchase
Price; Trust Account; Acquisition of Properties.

a.     
As consideration for the undivided 5% interest in and to the Interests being
sold hereunder by KRC to Royalty Purchaser, Royalty Purchaser shall deliver to
KRC, the sum of $275,000 ($100,000 per each whole Interest purchased) (the
Purchase Price). The payment of the Purchase Price shall be made in readily
available funds. The term Payment Price Payment as used in this Agreement
shall mean the payment of the Purchase Price in accordance with this Section
2a.

b.     
The funds sent by Royalty Purchaser shall be held in a trust account in the name
of KRC. Royalty Purchaser acknowledges and agrees that KRC may use all or a
portion of the Purchase Price Payment to acquire the Acquisition Properties.

c.      In
the event that KRC does not acquire all of the Acquisition Properties by October
1, 2007, KRC shall notify Royalty Purchaser (a Non-Acquisition Notice), and
Royalty Purchaser shall have the option to (a) be refunded the Purchase Price
Payment within fifteen days after Royalty Purchaser notifies KRC of its option
to be refunded, or (b) use the full amount of the Purchase Price to participate
in other offerings of royalty and overriding royalty interests by KRC as agreed
upon by KRC and Royalty Purchaser in writing. In the event that Royalty
Purchaser has not made an election within thirty (30) days after receiving a
Non-Acquisition Notice, KRC shall return Royalty Purchasers payment of the
Purchase Price within a reasonable period of time.

3.      Assignment
by KRC.

a.     
KRC shall, within a reasonable period of time following the conclusion of the
offering of certain undivided interest in and to the Interests, execute
assignments to convey the Interests to Royalty Purchaser to be recorded of
record in each county where the Acquisition Properties are located (the
Assignments) if the following conditions precedent are met:

PURCHASE AND SALE AGREEMENT - Page 1 of 9
Pages CW1352253.1

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i.      KRC
acquires all of the Acquisition Properties;

ii.      Royalty
Purchaser returns its signature page to this Agreement;

iii.      Royalty
Purchaser compiles with all other conditions given by KRC to Royalty Purchaser
pursuant to that certain Confidential Private Placement Memorandum dated June
27, 2007 which serves as the offering document for the sale of the Interests;

iv.      the
Purchase Price Payment is made in accordance with this Agreement;

v.     
Royalty Purchaser does not elect to terminate this Agreement in accordance with
Section 5;

vi.      all
properly made title defect objections made by Royalty Purchase in accordance
with Section 5 have been either satisfied by KRC or waived in writing by
Royalty Purchaser;

vii.      all
representations and warranties made by Royalty Purchaser in this Agreement are
true and accurate; and

viii.      all
covenants, agreements and conditions necessary to be performed and compiled by
Royalty Purchaser pursuant to the reasonable request of KRC shall have been
performed and complied with by Royalty Purchaser.

b.     
Upon return of Royalty Purchasers signature page to the Assignments and all
other conditions precedent have been satisfied, KRC shall cause each Assignment
to be filed for record in each of the counties in which the Interests are
located. The parties hereto agree that at such time as all the Assignments have
been filed for record, delivery of the Assignments to Royalty Purchaser shall be
deemed for all purposes to have occurred.

4.     
Right of First Refusal. Notwithstanding anything to the contrary in this
Agreement, if Royalty Purchaser receives a bona fide offer for the purchase of
all or part of the Interests, the Royalty Purchaser shall either refuse such
offer or give KRC written notice setting out full details of such offer, which
notice, among other things, shall specify the name of the offeror, the
percentage of interest in the Interests covered by the offer, the terms of
payment, whether for cash or credit and, if on credit, the time and interest
rate, as well as any and all other considerations being received or paid in
connection with such proposed transaction, as well as any and all other terms,
conditions and details of such offer. A true and correct copy of the contract or
agreement by which the sale will be affected shall accompany such notice. Upon
receipt of notice of any such offer, KRC shall have the exclusive right and
option, exercisable at any time during a period of thirty (30) days from the
date of said notice, to purchase the interest in the Interests covered by the
offer in question at the same price and on the same terms and conditions of the
offer as set out in such notice. If KRC decides to exercise such option, they
shall give written notification to Royalty Purchaser desiring to sell and said
sale and purchase shall be closed within thirty (30) days after the 30-day
option period. If KRC does not elect to exercise such option, Royalty Purchaser
shall be notified in writing and shall be free to sell the interest in the
Interests covered by the offer, subject to the above and foregoing sections of
this Section 4. Notwithstanding the foregoing provisions of this
Section 4, the Royalty Purchaser may transfer or assign all or part of
his Interests, with or without considerations, to his spouse, children,
grandchildren, or to trusts or custodianships for their benefit without
complying with this Section 4, but such Interests in the hands of such
transferee or assignee shall remain subject to the provisions and restrictions
of this Section 4.

5.      No
Representations or Warranties. KRC makes no representations or warranties of
any kind, nature and/or character, either statutory, express or implied, with
respect to the status of title to the undivided interest in and to the Interests
being sold hereunder. Royalty Purchaser shall, within thirty (30) days after
making the Purchase Price Payment, furnish to KRC, in writing, any valid
objections Royalty Purchaser may have to KRCs title to the Interests and any
attorneys opinion of title with respect to the undivided interest in and to the
Interests being purchased by Royalty Purchaser. The failure, for any reason, of
Royalty Purchaser or its attorney(s) to notify KRC of any valid title
objection(s) with the specific timeframe shall be deemed to be a waiver by
Royalty Purchaser of all title objection(s) and shall constitute an acceptance
by Royalty Purchaser of KRCs title to the undivided interest in and to the
Interests being sold. In the event Royalty Purchaser or its attorney(s)
advise(s) KRC, in writing, in a timely manner, of any valid title objection(s),
then Royalty Purchaser, at Royalty Purchasers sole cost and expense, shall have
thirty (30) days to cure the same. If Royalty Purchaser shall fail to cure or
satisfy any such valid title objection(s) with the specific timeframe, then
Royalty Purchaser may, at his option, (a) terminate this Agreement (and in such
event the respective obligations of the parties hereto shall cease and be of no
force or effect), and KRC shall return the Purchase Price Payment to Royalty
Purchaser or (b) waive such title objection(s).

PURCHASE AND SALE AGREEMENT - Page 2 of 9 Pages
CW1352253.1

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6.     
PURCHASE AS IS. KRC HAS NOT MADE, AND KRC HEREBY EXPRESSLY
DISCLAIMS ANDNEGATES, AND ROYALTY PURCHASER HEREBY
EXPRESSLY WAIVES, ANY REPRESENTATION ORWARRANTY, EXPRESS,
IMPLIED, AT COMMON LAW, BY STATUTE OR OTHERWISE RELATING TO (A) THEACCURACY, COMPLETENESS OR MATERIALITY OF ANY INFORMATION, DATA OR
OTHER MATERIALS(WRITTEN OR ORAL) NOW, HERETOFORE OR
HEREAFTER FURNISHED TO ROYALTY PURCHASER BY ORON BEHALF OF
KRC, EXCEPT THAT THE PRODUCTION DATA SUPPLIED WAS ACQUIRED IN GOOD
FAITHFROM RELAIBLE DATA SOURCES, (B) THE ACCURACY OF ANY
DATA OR RECORDS CONCERNING THEQUALITY OR QUANTITY OF OIL,
GAS OR OTHER HYDROCARBON RESERVES, IF ANY, ATTRIBUTABLE TOTHE INTERESTS, (C) THE ENVIRONMENTAL CONDITION OF THE INTERESTS, (D)
ANY STATUTORY,EXPRESS OR IMPLIED WARRANTY OF
MERCHANTABILITY, (E) ANY STATUTORY, EXPRESS OR IMPLIEDWARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, (F) ANY STATUTORY,
EXPRESS OR IMPLIEDWARRANTY OF CONFORMITY TO MODELS OR
SAMPLES OF MATERIALS, AND (G) ANY AND ALLSTATUTORY,
EXPRESS OR IMPLIED WARRANTIES EXISTING UNDER APPLICABLE LAW. IT IS
THEEXPRESS INTENTION OF BOTH KRC AND ROYALTY PURCHASER
THAT THE UNDIVIDED INTEREST INAND TO THE INTERESTS BEING
SOLD HEREUNDER, IS HEREBY SOLD TO ROYALTY PURCHASER IN ITSPRESENT CONDITION AND STATE OF REPAIR AS IS AND WHERE IS AND WITH
ALL FAULTS, THATWITH RESPECT TO SUCH MATTERS ROYALTY
PURCHASER IS RELYING SOLELY UPON ITS OWNINVESTIGATION AND
THAT AT CLOSING ROYALTY PURCHASER WILL HAVE MADE OR CAUSED TO BEMADE SUCH INSPECTIONS AS ROYALTY PURCHASER DEEMS NECESSARY, ADVISABLE
ORAPPROPRIATE. KRC AND ROYALTY PURCHASER AGREE THAT THIS
PROVISION HAS BEENNEGOTIATED AT ARMS-LENGTH AND THAT THE
PURCHASE PRICE REFLECTS THE INCLUSION OF THISPROVISION.
KRC AND ROYALTY PURCHASER AGREE THAT, TO THE EXTENT REQUIRED BYAPPLICABLE LAW TO BE EFFECTIVE, THE DISCLAIMERS OF CERTAIN WARRANTIES
CONTAINEDHEREIN ARE CONSPICUOUS DISCLAIMERS FOR THE
PURPOSE OF ANY APPLICABLE LAW, RULE ORORDER.

7.      Royalty
Purchaser Recognizes Risks. It is understood by the Royalty Purchaser that
the Interests offered by KRC to Royalty Purchaser hereunder have not been
registered with or reviewed by any state or federal securities or any other
regulatory agency. Furthermore, participation in this program involves
significant financial risk and is highly speculative. Moreover, the pricing of
oil, gas and other hydrocarbons is subject to federal regulation and fluctuation
of the world market. By Royalty Purchasers execution of this Agreement, and as
a material inducement to KRC making the offer herein, Royalty Purchaser
understands and/or warrants and/or represents to KRC that:

a.      Royalty
Purchaser has experience and knowledge of finance, securities and investments
generally so that Royalty Purchaser is familiar with and understands the terms,
risks and merits of participation;

b.     
Royalty Purchaser has been advised to and has counseled with all financial,
legal and geological advisers that Royalty Purchaser has deemed requisite,
necessary, advisable and appropriate to evaluate the Interests;

c.      Royalty
Purchaser has received, reviewed and understands all of the information with
respect to the Interest offered herein that Royalty Purchaser received and/or
requested;

d.      The
information contained herein has been obtained from sources deemed reliable, but
that no representation or warranty has been made as to its accuracy or
completeness;

e.     
Except as otherwise stated herein, Royalty Purchaser is entitled to receive from
KRC any other information regarding the Interest offered herein if the same is
reasonably available without undue expense to Royalty Purchaser;

f.      Royalty
Purchaser is participating herein for investment purposes only and not for the
purpose of resale, distribution or redistribution;

g     .
Royalty Purchaser had an opportunity to ask questions of and has received
satisfactory answers from KRC regarding the Interest offered herein;

h.      The
Interest offered herein is the type of investment that Royalty Purchaser wishes
to hold for investment purposes only and that the nature and amount of the
investment is consistent with Royalty Purchasers investment goals and
objectives;

i.      Royalty
Purchaser will not take any action that would bring the Interests offered herein
within the registration requirements of federal or state securities laws, and
Royalty Purchaser agrees to indemnify and hold KRC and its officers, directors,
shareholders, employees, agents, successors and assigns harmless from and
against all losses,

PURCHASE AND SALE AGREEMENT - Page 3 of 9 Pages
CW1352253.1

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costs, damages, liabilities and
expenses, of any and every kind, nature and/or character, arising out of and/or
in any way pertaining or relating to violation of applicable federal or state
securities laws or any misrepresentation or breach of any representation or
warranty;

j.     
Royalty Purchaser was not solicited by any form of general solicitation or
general advertising, including, but not limited to, the following:

i.      any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio, and

ii.      any
seminar or meeting whose attendees have been invited by any general solicitation
or general advertising;

k.      The
tax aspects which may be expected from the Interests offered herein are not
susceptible to prediction, and new developments in rulings of the Internal
Revenue Service, audit adjustments, court decisions or legislative changes may
have an adverse effect on one or more of the tax consequences;

l.     
Royalty Purchaser will take no actions to file partnership tax returns with
other Royalty Purchasers nor to hold out the existence of a partnership with
respect to Interests nor conduct business under a common name with respect to
the Interests;

m.      It
has never been represented, guaranteed or warranted to Royalty Purchaser by any
person connected with KRC, expressly or by implication, any of the following:

i.      the
approximate or exact length of time required to remain as owner of the Interests
offered herein,

ii     .
the percentage of profit and/or amount or type of consideration, profit or loss,
including tax write-off, and/or tax benefits to be realized, if any, as a result
of this investment, and

iii.      that
the past performance or experience on the part of KRC, or any affiliate of KRC,
in any way indicates the predictable results of the ownership of the Interests
offered herein;

n.      The
obligations and representations of the parties hereto are set forth only in this
Agreement. There are no other agreements regarding co-ownership or management of
Interests;

o.      Any
financial projections provided by KRC are for illustration purposes only, and no
assurance has been given by KRC to Royalty Purchaser that actual results will
correspond with the results described therein;

p.      Royalty
Purchaser is relying solely upon this Agreement, and upon such independent
investigations as either Royalty Purchaser or Royalty Purchasers
representatives made to decide to purchase the Interest offered herein;

q.      The
offering of the Interests offered herein was made only through direct, personal
contact between the undersigned and a representative of KRC and/or its
authorized selling agents;

r.      Royalty
Purchaser received and read a copy of the Confidential Private Placement
Memorandum;

s.     
Royalty Purchaser has completed a Suitability Questionnaire and understands that
KRC will rely on the accuracy and completeness of the information set forth
therein in determining whether to accept this offer and in complying with its
obligations under applicable state and federal securities statutes and
regulations;

t.      Royalty
Purchaser understands that the Confidential Private Placement Memorandum was
prepared by KRC only for the use of persons who are Accredited Investors, and
the Royalty Purchaser agrees not to reproduce, copy or otherwise distribute or
make the Confidential Private Placement Memorandum or information contained
therein available to any other person (other than my purchaser representative
and legal and tax advisors), and, in the event Royalty Purchaser does not
participate, Royalty Purchaser agrees to return the Confidential Private
Placement Memorandum and all other written information to KRC;

u.     
Royalty Purchaser has all requisite legal authority to enter into this Agreement
and to perform all of the obligations required to be performed by Royalty
Purchaser;

PURCHASE AND SALE AGREEMENT - Page 4 of 9 Pages
CW1352253.1

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v.     
Royalty Purchaser is the sole party in interest and is not acquiring the
Interests offered herein as an agent or otherwise for any other person, is a
legal resident of the state which is set forth on the signature page to this
Agreement and, if Royalty Purchaser is a corporation, partnership, trust or
other from of business organization, has its principal office within such state
and was not formed for the specific purpose of purchasing the Interests offered
herein; and

w.      Royalty
Purchaser has relied solely on the information contained in the Confidential
Private Placement Memorandum and the attachments thereto and the answers to
questions with respect thereto furnished to Royalty Purchaser by KRC and
further, Royalty Purchaser warrants that no representations or warranties have
been made to Royalty Purchaser by KRC or its agents as to the tax consequences
of this investment, or as to any profits, losses or cash flow which may be
received or sustained as a result of this investment, other than those contained
in the Confidential Private Placement Memorandum, and that Royalty Purchasers
decision to invest in the properties has been based solely upon the information
found within the Confidential Private Placement Memorandum and no other oral
statements made by KRC, its agents or employees.

8.      Survival.
All representations and warranties contained in this Agreement shall survive:
(a) the acceptance of the Agreement by KRC and Royalty Purchaser; (b) changes in
the transactions, documents and instruments described in the Confidential
Private Placement Memorandum which are not material or which are to the benefit
of Royalty Purchaser; and (c) the death or disability of Royalty Purchaser. The
Royalty Purchaser acknowledges the meaning and legal consequences of the
representations and warranties in Section 7 hereof and that KRC and/or
its agents have relied upon such representations and warranties in determining
Royalty Purchasers qualification and suitability to purchase the interest
offered herein. Royalty Purchaser hereby agrees to indemnify, defend and hold
harmless KRC, its officers, directors, employees, agents and controlling
persons, from any and all losses, claims, damages, liabilities, expenses
(including attorneys fees and disbursements), judgments or amounts paid in
settlement of actions arising out of or resulting from the untruth of any
representation herein or the breach of any representation or warranty herein.
Notwithstanding the foregoing, however, no representation or warranty made
herein by Royalty Purchaser shall in any manner be deemed to constitute a waiver
of any rights granted to Royalty Purchaser under the federal securities acts or
state securities acts. The obligations of KRC to sell the interest offered
herein to Royalty Purchaser is subject to the condition that the representations
and warranties of Royalty Purchaser contained in Section 7 hereof shall
be true and correct on and as of the acceptance of this Agreement in all
respects with the same effect as though such representations and warranties have
been made on and as of that date.

9.      Not
a Partnership. The liabilities of the parties hereto shall be several and
not joint or collective, and each party shall be responsible only for its
proportionate share of the costs and liabilities incurred. IT IS NOT THE
PURPOSE ORINTENTION OF THE PARTIES HERETO TO CREATE ANY
PARTNERSHIP, JOINT VENTURE, MININGPARTNERSHIP, ASSOCIATION
OR ANY RELATIONSHIP AMONG THE PARTIES, WHETHER LEGAL ORQUASI-LEGAL, FOR PURPOSES OF STATE LAW AND FEDERAL TAX LAW, INCLUDING
ANYRELATIONSHIP WHEREBY ONE PARTY IS HELD LIABLE FOR THE
ACTS OR OMISSIONS OF THE OTHERPARTY, AND THIS AGREEMENT
SHALL NOT BE CONSTRUED OR CONSIDERED AS CREATING ANY SUCHRELATIONSHIP, IT BEING UNDERSTOOD AND AGREED UPON BY AND BETWEEN THE
PARTIES HERETOTHAT THEIR RELATIONSHIP SHALL BE THAT OF
TENANTS-IN-COMMON. NO PARTY HERETO SHALLTAKE ANY ACTION
INCONSISTENT WITH SUCH TREATMENT.

10.     
Power of Attorney Royalty Purchaser hereby makes, constitutes and
appoints KRC, its successors and assigns, with full powers of substitution and
re-substitution, as his or its true and lawful agent and attorney-in-fact,
authorized on Royalty Purchasers behalf and in Royalty Purchasers name, place
and stead, to execute, acknowledge, swear to and/or file with any person or
jurisdiction all instruments necessary to conduct the activities described in
the Confidential Private Placement Memorandum, including, but not limited to,
the right, but not the obligation, to receive all proceeds from the sales of
oil, gas and/or hydrocarbons from and/or revenues from and/or attributable to
the Interests (other than such payments made to Royalty Purchaser pursuant to
Section 18 of this Agreement) and to pay all expenses attributable to the
Interests of Royalty Purchaser, to remit the difference between such revenues
and expenses, if any, to Royalty Purchaser and to execute instruments,
agreements, and documents on behalf of the Royalty Purchaser, including without
limitation, division orders. This Power of Attorney may be exercised by KRC for
Royalty Purchaser by executing such instrument with a single signature, or in
such other manner, including by facsimile signature, as KRC may deem
appropriate. This Power of Attorney will be binding on any assignee of Royalty
Purchaser. Notwithstanding the powers granted to KRC by the foregoing power of
attorney, Royalty Purchaser agrees to execute on Royalty Purchasers own behalf
any appropriate instrument which KRC is authorized to execute for Royalty
Purchaser if requested or required to do so.

11.     
No Amendment. This Agreement may not be amended except in writing signed
by the parties hereto.

12.     
Binding Agreement. The terms and provisions of this Agreement shall
extend to, be binding upon and shall inure to the benefit of the parties hereto,
their respective heirs or successors and assigns. Royalty Purchaser shall not
transfer or

PURCHASE AND SALE AGREEMENT - Page 5 of 9 Pages
CW1352253.1

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assign, in whole or part, Royalty Purchasers interest in this
Agreement or the Interests until after the Purchase Price has been paid to KRC
and the Assignments have been properly executed and recorded.

13.     
Interpretation. If any provision of this Agreement shall be held illegal
or invalid, this Agreement shall be construed and enforced as if such illegal or
invalid provision had not been contained herein.

14     .
Notice. Any notice required or permitted to be given hereunder shall be
deemed to have been properly given (a) three days after deposited in the United
States Mail, with first-class postage affixed, (b) immediately upon receipt of a
facsimile, provided that a hard copy is thereafter received by regular mail, by
Federal Express or by Express Mail, (c) immediately upon receipt via Federal
Express or by Express Mail, or (d) immediately upon receipt of Certified or
Registered United States Mail, Return Receipt Requested, all of which shall be
addressed to the party to whom notice is intended at the following address of
each party:

KRC:

King Royalty Corporation 6142
Campbell Road Dallas, Texas 75248 Telephone: (214) 420.3000 Fax:
(214) 420-3002

Attn: James R. Young

ROYALTY PURCHASER:

Name:
Sun Cal
Energy

Address:
205 5th Avenue SW, Suite
700

City/State:Calgary,
Alberta

Telephone:  (403)
538-4742

Telefax:(403)
264-1262

Attn: George
Drazenovic

or at such other address as may from time to time be designated
by KRC or Royalty Purchaser in writing.

15.     
Entire Agreement. The provisions hereof constitute the complete Agreement
of the parties hereto with respect to the subject matter hereof and this
Agreement supersedes all previous agreements, whether written or oral, with
respect thereto.

16.      Venue.
This Agreement is made and entered into in Dallas, Texas, is performable in
Dallas County, Texas, and is governed by the laws of the State of Texas. The
exclusive venue of any action arising hereunder is in Dallas County, Texas.

17.     
Arbitration. WITH RESPECT TO THE ARBITRATION OF ANY DISPUTE, THE
UNDERSIGNED HEREBY ACKNOWLEDGES THAT:

a.      ARBITRATION
IS FINAL AND BINDING ON THE PARTIES;

b.      THE
PARTIES ARE WAIVING THEIR RIGHT TO SEEK REMEDIES IN COURT, INCLUDING THEIR RIGHT
TO JURY TRIAL;

c.      PRE-ARBITRATION
DISCOVERY IS GENERALLY MORE LIMITED AND DIFFERENT FROM COURT PROCEEDINGS;

PURCHASE AND SALE AGREEMENT - Page 6 of 9 Pages
CW1352253.1

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d.      THE
ARBITRATORS AWARD IS NOT REQUIRED TO INCLUDE FACTUAL FINDINGS OR LEGAL
REASONING AND ANY PARTYS RIGHT TO APPEAL OR TO SEEK MODIFICATION OF RULINGS BY
THE ARBITRATORS IS STRICTLY LIMITED; AND

e.      THE
PANEL OF ARBITRATORS WILL TYPICALLY INCLUDE A MINORITY OF ARBITRATORS WHO WERE
OR ARE AFFILIATED WITH THE SECURITIES INDUSTRY.

NO PERSON SHALL BRING A PUTATIVE OR CERTIFIED CLASS
ACTION TO ARBITRATION, NOR SEEK TOENFORCE ANY PRE-DISPUTE
ARBITRATION AGREEMENT AGAINST ANY PERSON WHO HAS INITIATEDIN COURT A PUTATIVE CLASS ACTION; OR WHO IS A MEMBER OF A PUTATIVE
CLASS WHO HAS NOTOPTED OUT OF THE CLASS WITH RESPECT TO
ANY CLAIMS ENCOMPASSED BY THE PUTATIVE CLASSACTION UNTIL:
(a) THE CLASS CERTIFICATION IS DENIED; OR (b) THE CLASS IS DECERTIFIED; OR
(c)THE CUSTOMER IS EXCLUDED FROM THE CLASS BY THE COURT.
SUCH FORBEARANCE TO ENFORCEAN AGREEMENT TO ARBITRATE SHALL
NOT CONSTITUTE A WAIVER OF ANY RIGHTS UNDER THISAGREEMENT
EXCEPT TO THE EXTENT STATED HEREIN. IN THE EVENT THAT A DISPUTE
ARISESBETWEEN ROYALTY PURCHASER AND KRC OR ANY OF ITS
LEGAL REPRESENTATIVES, ATTORNEYS,ACCOUNTANTS, AGENTS,
EMPLOYEES OR SECURITIES BROKER-DEALER EMPLOYED BY KRC AS ASELLING AGENT, SAID DISPUTE ARISING OUT OF, IN CONNECTION WITH OR AS A
RESULT OF THESUBSCRIPTION HEREBY MADE, ROYALTY PURCHASER
HEREBY EXPRESSLY AGREES THAT SAIDDISPUTE SHALL BE RESOLVED
THROUGH ARBITRATION RATHER THAN LITIGATION. ROYALTYPURCHASER HEREBY AGREES TO SUBMIT THE DISPUTE FOR RESOLUTION TO THE
AMERICANARBITRATION ASSOCIATION, IN DALLAS, TEXAS, WITHIN
FIVE (5) DAYS AFTER RECEIVING A WRITTENREQUEST TO DO SO
FROM ANY OF THE AFORESAID PARTIES. IF ROYALTY PURCHASER FAILS TOSUBMIT THE DISPUTE TO ARBITRATION AS REQUESTED, THEN THE REQUESTING
PARTY MAYCOMMENCE AN ARBITRATION PROCEEDING. THE FEDERAL
ARBITRATION ACT SHALL GOVERN THEPROCEEDING AND ALL ISSUES
RAISED BY THIS AGREEMENT TO ARBITRATE.

18.      Unleased
Mineral Interests. It is recognized and understood by the parties hereto
that a portion of the Interests may be comprised, now or in the future, of
unleased mineral interests, which unleased mineral interests are hereinafter
sometimes referred to individually as an unleased mineral interest and
collectively as the unleased mineral interests. From and after the Effective
Date, in the event KRC is approached by any third party to lease any unleased
mineral interest owned by KRC and KRC thereafter negotiates for, executes and
delivers a lease covering such unleased mineral interest to a third party, then
KRC shall have the right, but not the obligation, to notify Royalty Purchaser of
the existence of such lease, the terms under which such lease was granted and
may provide a copy of such lease to Royalty Purchaser. Thereafter, Royalty
Purchaser shall have the right, but not the obligation, to enter into a lease
with said third party or any other third party covering Royalty Purchasers
unleased mineral interest under such terms as Royalty Purchaser and said third
party may mutually agree. All bonus consideration, if any, paid by virtue of
Royalty Purchasers execution of any future lease to a third party covering any
of Royalty Purchasers unleased mineral interests shall be paid directly to
Royalty Purchaser. Furthermore, Royalty Purchaser agrees that any lease covering
any unleased mineral interest hereafter executed by Royalty Purchaser in favor
of any third party shall be subject to the terms and provisions of the
Assignments under which Royalty Purchaser acquired its undivided interest in the
Interests thereunder.

[Rest of Page Left Intentionally Blank; Signature Pages to
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PURCHASE AND SALE AGREEMENT - Page 7 of 9 Pages
CW1352253.1

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I
WAIVE MY 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 MY OWN
SELECTION, I VOLUNTARILY CONSENT TO THIS WAIVER.

IN
WITNESS WHEREOF, this Agreement is executed by the parties hereto on the
respective dates set beneath their names below, but shall be effective as of the
Effective Date.

King Royalty Corporation:

By:  
__________________________________________        
James R. Young, President

Date:
_________________________________________

Royalty Purchaser:

Sun Cal
EnergyName:

By: G.
Drazenovic

Print/Type Name,
Title:George Drazenovic,
CFO

Date:July 30,
2007

Tax I.D. # or S.S. #
______________________________

PURCHASE AND SALE AGREEMENT - Page 8 of 9
Pages CW1352253.1

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KING DOCUMENT EXHIBIT

Assignment of Royalty Interest by Essex Royalty Joint Venture
and Essex Royalty Joint Venture II in favor of King Royalty Corporation, dated
________, 2007 but effective as of July 1, 2007 and recorded in Book ____,
Volume ____, Page _____and assigned Document Number ______________ in the
Records of Covington County, Alabama

Assignment of Royalty Interest by Essex Royalty Joint Venture
and Essex Royalty Joint Venture II in favor of King Royalty Corporation, dated
________, 2007 but effective as of July 1, 2007 and recorded in Book ____,
Volume ____, Page _____and assigned Document Number ______________ in the
Records of Escambia County, Alabama

Assignment of Royalty Interest by Essex Royalty Joint Venture
and Essex Royalty Joint Venture II in favor of King Royalty Corporation, dated
________, 2007 but effective as of July 1, 2007 and recorded in Book ____,
Volume ____, Page _____and assigned Document Number ______________ in the
Records of Monroe County, Alabama

Assignment of Royalty Interest by Essex Royalty Joint Venture
and Essex Royalty Joint Venture II in favor of King Royalty Corporation, dated
________, 2007 but effective as of July 1, 2007 and recorded in Book ____,
Volume ____, Page _____ and assigned Document Number ______________ in the
Records of Acadia Parish, Louisiana

Assignment of Royalty Interest by Essex Royalty Joint Venture
and Essex Royalty Joint Venture II in favor of King Royalty Corporation, dated
________, 2007 but effective as of July 1, 2007 and recorded in Book ____,
Volume ____, Page _____ and assigned Document Number ______________ in the
Records of Cameron Parish, Louisiana

Assignment of Royalty Interest by Essex Royalty Joint Venture
and Essex Royalty Joint Venture II in favor of King Royalty Corporation, dated
________, 2007 but effective as of July 1, 2007 and recorded in Book ____,
Volume ____, Page _____ and assigned Document Number ______________ in the
Records of Jefferson Davis Parish, Louisiana

Assignment of Royalty Interest by Essex Royalty Joint Venture
and Essex Royalty Joint Venture II in favor of King Royalty Corporation, dated
________, 2007 but effective as of July 1, 2007 and recorded in Book ____,
Volume ____, Page _____ and assigned Document Number ______________ in the
Records of Lafayette Parish, Louisiana

Assignment of Royalty Interest by Essex Royalty Joint Venture
and Essex Royalty Joint Venture II in favor of King Royalty Corporation, dated
________, 2007 but effective as of July 1, 2007 and recorded in Book ____,
Volume ____, Page _____ and assigned Document Number ______________ in the
Records of Terrebonne Parish, Louisiana

Assignment of Royalty Interest by Essex Royalty Joint Venture
and Essex Royalty Joint Venture II in favor of King Royalty Corporation, dated
________, 2007 but effective as of July 1, 2007 and recorded in Book ____,
Volume ____, Page _____and assigned Document Number ______________ in the
Records of Vermillion Parish, Louisiana

Assignment of Royalty Interest by Essex Royalty Joint Venture
and Essex Royalty Joint Venture II in favor of King Royalty Corporation, dated
________, 2007 but effective as of July 1, 2007 and recorded in Book ____,
Volume ____, Page _____ and assigned Document Number ______________ in the
Records of Smith County, Mississippi

Assignment of Royalty Interest by Essex Royalty Joint Venture
and Essex Royalty Joint Venture II in favor of King Royalty Corporation, dated
________, 2007 but effective as of July 1, 2007 and recorded in Book ____,
Volume ____, Page _____ and assigned Document Number ______________ in the
Records of Wayne County, Louisiana

Assignment of Royalty Interest by Essex Royalty Joint Venture
and Essex Royalty Joint Venture II in favor of King Royalty Corporation, dated
________, 2007 but effective as of July 1, 2007 and recorded in Book ____,
Volume ____, Page _____ and assigned Document Number ______________ in the
Records of Howard County, Texas

Assignment of Royalty Interest by Thomas A. & Joni A. Moore
in favor of King Royalty Corporation, dated ________, 2007 but effective as of
July 1, 2007 and recorded in Book ____, Volume ____, Page _____ and assigned
Document Number ______________ in the Records of Logan County, Oklahoma

Assignment of Royalty Interest by Thomas A. & Joni A. Moore
in favor of King Royalty Corporation, dated ________, 2007 but effective as of
July 1, 2007 and recorded in Book ____, Volume ____, Page _____ and assigned
Document Number ______________ in the Records of McClain County, Oklahoma

Assignment of Royalty Interest by Northridge Energy Company in
favor of King Royalty Corporation, dated ________, 2007 but effective as of July
1, 2007 and recorded in Book ____, Volume ____, Page _____ and assigned Document
Number ______________ in the Records of Logan County, Oklahoma

KING DOCUMENT EXHIBIT  Page 1of 2 CW1352253.1

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Assignment of Overriding Royalty Interest by T. Larry Smith in
favor of King Royalty Corporation, dated as of May 1, 2007 but effective as of
May 1, 2007 and recorded as Document Number ________________ in the records of
Colorado County, Texas

Assignment of Overriding Royalty Interest by T. Larry Smith in
favor of King Royalty Corporation, dated as of May 1, 2007 but effective as of
May 1, 2007 and recorded as Document Number ________________ in the records of
Harris County, Texas

Assignment of Overriding Royalty Interest by T. Larry Smith in
favor of King Royalty Corporation, dated as of May 1, 2007 but effective as of
May 1, 2007 and recorded as Document Number ________________ in the records of
Lavaca County, Texas

Assignment of Overriding Royalty Interest by T. Larry Smith in
favor of King Royalty Corporation, dated as of May 1, 2007 but effective as of
May 1, 2007 and recorded as Document Number ________________ in the records of
Matagorda County, Texas

Assignment of Overriding Royalty Interest by T. Larry Smith in
favor of King Royalty Corporation, dated as of May 1, 2007 but effective as of
May 1, 2007 and recorded as Document Number ________________ in the records of
Calcasieu Parish, Louisiana

Assignment and Conveyance of Royalty Interest by T. Larry Smith
in favor of King Royalty Corporation, dated as of May 1, 2007 and recorded as
Document Number ________________ in the records of St. Mary Parish, Louisiana

Assignment of Royalty Interest and Overriding Royalty Interests
by Sandhill Operating Company in favor of King Royalty Corporation, dated
_____________, 2007 but effective as of April 1, 2007 and recorded as Document
Number ________________in the records of Matagorda County, Texas

KING DOCUMENT EXHIBIT  Page 2of 2 CW1352253.1

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