Exhibit 10.7


        


        
        AGREEMENT

        AND

        BILL OF SALE


        


        
             THIS AGREEMENT is made and
        entered into and effective this 10th. day of January 2006, by and between
        Blue Star Energy,
        Inc., whose principal address is 5525 Erindale
        Drive Suite 201, Colorado Springs, CO 80918 hereinafter called “Purchaser”
        and MCM Capital Management, Inc.
        whose address is 5525
        Erindale Drive, Suite 201, Colorado Springs, CO 80918
        “Seller”.

        

             WHEREAS, SELLER owns an interest in certain oil and gas
        properties described in Exhibit “A” attached hereto and made a part hereof
        together with an interest in any wells, well equipment, tank batteries, flow lines,
        machinery, other equipment and supplies, and other related fixtures and personal property
        on said oil and gas properties, together with interests in easements and rights of access
        to said oil and gas properties; and


        


        
             NOW, THEREFORE, SELLER, for and
        in consideration of the sum of twenty-three thousand six hundred twenty-five dollars
        ($23,625.00) to it paid by Purchaser, the receipt, adequacy and sufficiency of which are
        hereby acknowledged, does hereby sell, assign and convey unto Purchaser a seven and
        seven-eighths (7.875%) percent working interest, of its right, title and interest in and to
        the oil and gas properties described in Exhibit “A” together with a seven and
        seven-eighths (7.875%) percent working interest of its right, title and interest in and to
        all wells, permits, easements, licenses, servitude, well equipment, tank batteries, flow
        lines, gathering pipelines, inventory, machinery, equipment and supplies, and all related
        fixtures and personal property used or usable in connection with production of oil or gas
        from said oil and gas properties.


        


        
        THIS BILL OF SALE IS MADE WITHOUT WARRANTIES, EXPRESSED OR
        IMPLIED IN FACT OR IN LAW, WHETHER OF TITLE, MERCHANTABILITY, FITNESS FOR ANY PARTICULAR
        PURPOSE, CONDITION OR SAFETY OF THE PROPERTY, COMPLIANCE WITH REGULATORY AND ENVIRONMENTAL
        REQUIREMENTS OR OTHERWISE.


        


        
             PURCHASER HEREBY AGREES THAT IT
        HAS INSPECTED THE LEASES AND ASSOCIATED AGREEMENTS, WELLS, PERSONAL PROPERTY AND EQUIPMENT
        CONVEYED HEREIN AND THAT IT ACCEPTS THE SAME “AS IS AND WITH ALL
        FAULTS”. 

        


        


        
        Purchaser hereby agrees to assume its proportionate
        responsibility for said wells, the casing and leasehold equipment in and on said wells, and
        all other personal property used in or in connection therewith from and after the effective
        date of this Bill of Sale, and Purchaser agrees to protect, defend, indemnify and hold
        Seller and its employees free and harmless from and against any and all costs, expenses,
        claims, demands and causes of action of every kind and character arising out of, incident
        to, or in connection with the leases, land, wells, casing, leasehold equipment, and other
        personal property hereby conveyed, or Purchaser’s or other parties; operations on
        said leases and said land, arising and occurring on or after the effective date of this
        Assignment and Bill of Sale. Seller agrees to fully indemnify and hold Purchaser harmless
        from any and all such claims or causes of action based upon some alleged act or omission of
        Seller or its employees arising or occurring prior to the effective date of this Bill of
        Sale.


        
         

        
        

        

        
        THIS BILL OF SALE is to be treated as an occasional sale, and
        no sales tax is being collected from Purchaser. If, however, this transaction is later
        deemed to be other than an occasional sale, Purchaser agrees to be solely responsible for
        any and all sales taxes due on equipment, material and property hereby sold, and Purchaser
        shall remit such sales taxes to the proper taxing authority.

        

             ALL TAXES, including but not limited to ad valorem, property,
        severance and windfall profit taxes are paid on the property as of the last sale. It shall
        be the responsibility of Purchaser to pay its proportional share of all taxes accruing
        after the effective date of sale.

        

             PURCHASER agrees to perform all operations in compliance with
        applicable Local, State and Federal laws, rules and regulations, and to observe and perform
        all of the lease terms and provisions, express and implied, applicable to Purchaser’s
        interest in the sale premises. The parties hereto agree to execute such additional
        documents or instruments as necessary to transfer Purchaser’s seven and seven-eighths
        (7.875%) percent interest in any State, Federal, or Indian oil and gas properties sold
        herein to Purchaser.

        

             THIS BILL OF SALE shall be binding upon and inure to the
        benefit of the heirs, successors, personal representatives and assigns of the respective
        parties hereto.


        


        
        Executed this
        10th. day of
        January, 2006.

         

          

          


        	
                	
                
	WITNESS:

                                                


                  

                 /s/ Donna K. Klimas    

                

                

                

                 WITNESS:

                                                


                

                 /s/ Donna K. Klimas     

                
                                                
                	SELLER:

                MCM Capital Management, Inc.

                

                /s/ Bill M. Conrad

                Bill M. Conrad, Secretary & Treasurer

                

                

                PURCHASER:

                Blue Star Energy, Inc.

                

                /s/ Raymond E. McElhaney

                Raymond E. McElhaney, President 



        
         


        
         


        
         


        
         


        
         


        
         


        
        

        

        
        

        

        

        


        

        

        
        EXHIBIT “A”


        


        
        ATTACHED TO AND MADE A PART OF THAT BILL OF SALE AND
        CONVEYANCE FROM MCM CAPITAL MANAGEMENT, INC. EFFECTIVE JANUARY 10TH., 2006


        


        


        	
                	
                    
                    1.     

                	
                    
                    It is Seller’s intent to convey seven and
                    seven-eighths (7.875%) percent of its working interest subject to their
                    burdens, of its right, title and interest in and to the Oil and Gas Leases
                    and/or mineral interests as described below.

                


        

        

        


        


        
        LAND DESCRIPTION:


        
                  
        #1
        Stroh Well


        
                 
         SW/4 of Section 35-T3N-R57W


        
                 
         Morgan County, Colorado


        
                  
        Containing 160 acres, more or less

                  

                    Subject to terms and
        conditions of all prior assignments

         


        


        
         


        
         


        
         


        
         


        
         


        
         


        
         


        
        END OF EXHIBIT “A”