Exhibit 10.8


        
        PURCHASE AND SALE AGREEMENT


        


        
             This Purchase and Sale Agreement (the
        “Agreement“) is entered into and effective this 21st day of September 2006, by
        and between PROSPECTOR CAPITAL, INC. a Colorado corporation with its principal place of
        business located at 7750 North Union Blvd., Suite 201, Colorado Springs, Colorado 80920
        (herein referred to as the “Seller”) and BLUE STAR ENERGY, INC. a Colorado
        Corporation with its principal place of business located at 5525 Erindale Drive, Suite 201,
        Colorado Springs, CO 80918 (herein referred to as the “Purchaser”).


        


        
        RECITALS:


        


        
             WHEREAS, the Seller is the owner of certain oil and
        gas assets located in Logan County and Morgan County, Colorado and are more particularly
        described in Exhibit “A”, attached hereto and incorporated by reference herein;
        and


        


        
             WHEREAS, the Seller desires to sell, and Purchaser
        desires to purchase an eleven and seven-eighths percent (11.875%) Working Interest in the
        properties described in Exhibit “A”, and the parties desire to memorialize the
        terms and conditions of the purchase and the sale thereof.

         


        
        WHEREAS, the Seller is selling an eleven and seven-eighths percent (11.875%) Working
        Interest, associated equipment and mineral leases in certain properties as described in
        Exhibit “A”, and Purchaser desires to purchase an eleven and seven-eighths
        percent (11.875%) Working Interest in said properties described in Exhibit
        “A”.


        


        
             NOW THEREFORE, in consideration of mutual promises and
        conditions hereinafter set forth, and for other good and valuable consideration, receipt
        and sufficiency of which is hereby acknowledged, Seller and Purchaser hereby agree as
        follows:


        


        
        ARTICLE I


        
        Definitions


        


        
        1.01     “Seller” shall mean Prospector Capital, Inc.,
        a Colorado corporation.


         


        
        1.02     “Purchaser” shall mean Blue Star Energy,
        Inc., a Colorado corporation.


         


        
        1.03     “Assets” shall mean those items described in
        Exhibit "A".


        


        
        ARTICLE II


        
        Purchase and Sale


        


        
        2.01     Conveyance. Subject to the terms, conditions and
        consideration hereinafter set forth, Seller agrees to sell, and Purchaser agrees to
        purchase, the Assets on the Closing Date.


        


        
        2.02     Purchase Price.      The
        total Purchase Price to be paid to the Seller by the Purchaser for the Assets is two
        hundred fifty thousand dollars ($250,000.00) of which one hundred thousand dollars
        ($100,000.00) shall be paid in cash at closing, one hundred thousand dollars ($100,000.00)
        shall be in the form of a convertible note payable due on or before December 31, 2006 (See
        Exhibit “D”) and fifty thousand dollars ($50,000.00) shall be in the form of
        two hundred thousand shares (200,000) of Blue Star Energy, Inc’s. restricted common
        stock.


        


        
        2.03     Area of Mutual Interest. To facilitate the
        development of oil, gas and other minerals under and around the assets described in Exhibit
        “A”, Seller conveys and Purchaser hereby acquires the area of mutual interest
        (AMI) previously established, covering lands within the outline set forth as a 3 mile
        radius from each of the wells (Exhibit “B”.) The term of the AMI shall be in
        full force and effect and shall terminate only by mutual agreement of the working interest
        partners.

        
        


        

        

        
        ARTICLE III


        
        Representations and Warranties


        


        
        3.01     Representations of Seller. Seller represents and
        warrants to Purchaser as follows:


         


        
        A.     Authority. Seller has full and lawful authority to
        execute and deliver this Agreement. This Agreement has been duly and validly executed and
        delivered on behalf of the Seller and constitutes a valid obligation of the Seller,
        enforceable in accordance with its terms.


         


        
        B.     No Violation. Neither the execution nor delivery of
        this Agreement and the consummation of the transactions completed hereby will result in a
        violation of, or be in conflict with, or accelerate the performance required by any order,
        judgment, injunction, decree, statute, rule or regulation applicable to Seller.


         


        
        C.     Consents and Approvals. No consent, approval, or
        authorization of, or declaration, filing, registration with, any governmental or regulatory
        authority or other third party is required in connection with the execution, delivery and
        performance of this Agreement and the consummation of the transaction contemplated
        hereby.


         


        
        D.     Seller Action. All action required by Seller to
        authorize and approve the transactions contemplated hereby shall have been taken, including
        approval by the shareholders of the Seller if necessary.


         


        
        E.     Finders Fee. Seller will indemnify and hold harmless
        Purchaser against and in respect of any claim for finder’s fee or other commission
        relative to this agreement or to the transactions contemplated hereby, based in any way on
        agreements, arrangements or understandings made or claimed to have been made by Seller with
        any third party.


         


        
        F.     Title. At the time of closing, with the exception of
        all accrued balances owed pertaining to the installation and operations of the Assets
        described in Exhibit “A”, assignment of the Assets from Seller to Purchaser
        shall be clear of any encumbrances. The assignment of the Assets shall be made subject to
        all royalties and overriding royalty interests.


        


        
        3.02     Representations of Purchaser. Purchaser
        represents, warrants, and agrees as follows:


         


        
        A.     Authority. Purchaser has full and lawful authority
        to execute and deliver this Agreement. This Agreement has been duly and validly executed on
        behalf of the Purchaser and constitutes a valid obligation of the Purchaser, enforceable in
        accordance with its terms.


        


        
        ARTICLE IV


        
        Conditions Precedent


        


        
        4.01     Conditions Precedent to Obligations of Seller. The
        obligations of Seller to effect the transactions contemplated herein shall be subject to
        the following conditions:


         


        
        A.     The representations and warranties of Purchaser herein
        shall be true and accurate as of and on the Closing Date, with the same effect as though
        made at such time; and


         


        
        B.     Purchaser shall have performed all obligations and complied
        with all covenants required by this Agreement to be performed or complied with prior to the
        Closing Date.


        


        
                         
        4.02     Conditions Precedent to Obligations of Purchaser.
        The obligations of Purchaser to effect the transactions contemplated herein shall be
        subject to the following conditions:


        
         


        
                          A.     The
        representations and warranties herein made by Seller shall be true and accurate as of and
        on the Closing Date, with the same effect as though made at such time; Seller shall have
        performed all obligations and complied with all covenants required by this Agreement to be
        performed or complied with prior to or on Closing Date;


        
         


        
                          B.     No
        material change in the operation of the Assets shall have occurred since the effective date
        of this Agreement, other than changes in the ordinary course of business.


        
         

        
        

        

        
         


        


        ARTICLE
        V


        
        Environmental


        


        
        5.01     Environmental Conditions. The assets have been
        utilized by Seller for the purpose of exploration, development, processing, temporary
        storage, and transportation of oil, gas and/or condensate. To the best of Seller’s
        knowledge, there has not been any substantial quantity of crude oil and produced water
        spilled or disposed of on-site and the locations thereof including pit closures, burial,
        land farming, land spreading, and/or underground injection. In addition, to the best of
        Sellers knowledge, there is no known asbestos or naturally occurring radioactive material
        commonly known as “NORM”, present in any of the gas field production equipment
        or flow lines.


        


        ARTICLE
        VI


        
        Closing


        


        
        6.01     Closing Date. The closing of the transactions
        contemplated in this Agreement shall be held on September 21, 2006, 11:00 AM. (the
        “Closing” or “Closing Date”) at 5525 Erindale Drive, Suite 201,
        Colorado Springs, CO 80918, or at another date and location as mutually agreed by the
        parties in writing.


        


        
        6.02     Delivery of Documents. On the Closing Date, Seller
        shall deliver an executed Bill of Sale and/or assignments and other documents as may be
        necessary to transfer the Assets to Purchaser.


        


        ARTICLE
        VII


        
        Miscellaneous


        


        
                         
        7.01     Amendment. This Agreement contains the entire
        agreement between parties concerning the subject matter herein. This Agreement may not be
        altered or amended, nor any rights or conditions hereunder waived, except by mutual
        agreement of the parties in writing.


        


        
                          7.02     
        Further Assurances. The parties to this Agreement shall execute, acknowledge and
        deliver, or cause to be executed, acknowledged and delivered such documents and instruments
        and shall take other action as may be necessary or advisable to carry out their respective
        obligations under this Agreement.


        


        
        7.03     Assignment. No party may assign its rights or
        delegate its duties or obligations under this Agreement without prior written consent of
        the other party.


        


        
                          7.04     
        Headings. The headings of the articles and sections of the Agreement are for
        convenience of reference only and shall not limit, or otherwise affect any of the terms or
        provisions of this Agreement.


        


        
                         
        7.05     Governing Law. This Agreement shall be construed
        in accordance with, and governed by, the laws of the state of Colorado.


        


        
                          7.06     
        Survival. All of the covenants, agreements, representations and warranties set forth
        in this Agreement shall survive the Closing


        


        
                         
        7.07     Counterparts. This Agreement may be executed by
        the parties in counterparts, each of which shall be deemed an original instrument, all of
        which together shall constitute one and the same Agreement.


        


        
             

        
        


        

        

        
        7.08     Parties in Interest. This Agreement shall be
        binding upon, and shall inure to the benefit of, the parties hereto and their respective
        successors and permitted assigns. Nothing contained in this Agreement, express or implied,
        is intended to confer upon any other person or entity any benefits, rights or remedies
        whatsoever.


        


        
                         
        7.09     Waiver and Severability. No waiver by either party
        of any breach or default hereof by the other shall be deemed to be a waiver of any
        preceding or succeeding breach or default hereof, and no waiver shall be operative unless
        the same shall be in writing. Should any provision of this Agreement be declared invalid by
        a court of competent jurisdiction, the remaining provisions hereof shall remain in full
        force and effect regardless of such declaration.


        


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


        


        	
                	
                
	
                	SELLER:

                

                PROSPECTOR CAPITAL, INC.

                

                

                BY:  /s/ John R. Overturf, Jr.

                

                TITLE:  President

                

                

                PURCHASER:

                

                BLUE STAR ENERGY, INC.

                

                

                BY: /s/ Rayond E. McElhaney

                

                TITLE:  President 


        


        
         

        
        


        

        

        
        Exhibit “A”

        Asset Description of Wells


        


        
             Whereas SELLER is owner of an eleven and seven-eighths
        percent (11.875%) Working Interest of certain oil and gas leases wells and equipment
        described as follows, (which shall be referred to hereinafter as the “Oil and Gas
        Leases”):

         


        


        	
                	
                
	Well
                Name

                1) Lutin #1

                                


                                 


                                 


                                 


                

                 2) Marostica #1

                                


                                 


                                 


                                 


                

                 3) Stroh #1

                                


                                 


                                 
                	
                         
                Lands covered

                         T9N,R51W,6th P.M.

                         Sec. 9: NW1/4

                         Sec. 8: SE1/4

                         Logan County, Colorado

                Containing 320 acres, more or less

                

                         T10N,R51W,6th P.M.

                         Sec. 15: W1/2SE1/4,

                         E1/2SW1/4, NW1/4SW1/4

                         Logan County, Colorado

                Containing 200 acres, more or less

                

                         T3N,R57W,6th P.M.

                         Sec. 35: SW1/4

                         Morgan County, Colorado

                Containing 160 acres, more or less 



        
        Equipment

        


        
         


        
        Marostica #1 and Gathering Station

         


        
               (1)     Natural Gas
        Compressor - Electric

               (1)     Natural Gas Stripping
        Plant

               (1)     New PCS Controller
        System

               1,300 feet of 2 inch Gathering System

               (1)     Meter Run

               (2)     210 Barrel Production
        and Water Tanks

               (1)     3 Phase 1,000#
        Separator

                5 1⁄4 Miles of 3 inch SDR-7 Poly Pipe

                2 1/8 Miles of 2 1⁄2 inch 0.1888 Wall
        Coated Steel Pipe

               (1)     18,000 Gallon High
        Pressure Tank


        


        
        Lutin #1

        


        
              (1) New PCS Controller System250 PSI High Pressure
        Separator

               2 inch Meter Run to Stripping Plant

              (1) 250 PSI High Pressure Separator

              (2) 300 Barrel Production Water Tanks

              (1) 3 Phase 250# Separator

              (3) Electronic Flow Meters


        


        
        Gas Contract – Kinder Morgan/Seminole Energy, Oil Sales to Suncor Energy, Liquids
        Sales to Donvan Resources.


        


        
        Committed Leasehold Interests:


        


        
        Each oil and gas lease owned, at the time of this agreement, by either party hereto
        covering lands within the above Contract Areas is committed insofar, and only insofar, as
        it covers lands within the applicable Contract Area. Should any lease be obtained by any
        party hereto after the date of this Agreement which covers any portion of the Contract
        Area, such lease shall be deemed to have been committed insofar as such lease covers lands
        within the Contract Area. Should any lease owned by either party hereto cover lands in
        addition to those set forth above, such additional lands are specifically excluded here
        from.


        
         


        
         

        
        

        

        
         


        
        Exhibit “B”

        Description of “Area of Mutual Interest”

         


        
        The “Area of Mutual Interest (“AMI”) is an area 3 miles in radius
        surrounding the wells and mineral leases described in Exhibit “A”. That shall
        constitute the parties area of mutual interest (“AMI”) within, which all
        operations shall be conducted for the benefit of the parties hereto. This area is shown on
        maps to be included under exhibit “C”.

         


        
         


        
         


        

        
        


        

        

        
        Exhibit “C”


        
        Maps


         


         


        
        

        

        
        


        

        

        
        Exhibit “D”

        Convertible Promissory Note