Filed by Automated Filing Services Inc. (604) 609-0244 - Sun Cal Energy, Inc. - Exhibit 10.7






PURCHASE AND SALE AGREEMENT 


  
    
      
        THIS AGREEMENT dated as of the 25th day
          of July, 2007. 

      

    

  



BETWEEN: 


  
    
      
        DESERT MINING, INC., a Nevada corporation, with
          offices in the City of Longmont, in the State of Colorado (hereinafter
          called "Vendor") 

      

    

  



– and – 


  
    
      
        SUN CAL ENERGY, INC., with offices in Calgary,
          in the Province of Alberta Canada (hereinafter called "Purchaser")
        

      

    

  



            
WHEREAS, Vendor has agreed to sell to Purchaser and Purchaser has agreed to
purchase from Vendor the Assets on and subject to the terms and conditions of
this Agreement. 

      
       NOW THEREFORE THIS AGREEMENT WITNESSES THAT
in consideration of the mutual covenants and agreements set out, the Parties
covenant and agree as follows: 

1.          
DEFINITIONS 

1.1      
   Definitions: In this Agreement, the following terms have the
following respective meanings, unless the context otherwise requires: 

	 	(a) 	
      "Agreement" means this document together with the
      recitals and schedule attached hereto;

	 	 	 
	 	(b) 	
      "Assets" means the Petroleum and Natural Gas Rights and
      the Miscellaneous Interests;

	 	 	 
	 	(c) 	
      "Business Day" means a day other than a Saturday, Sunday
      or any day on which the principal banks located in the State of Colorado
      are not open for business during normal banking hours;

	 	 	 
	 	(d) 	
      "Closing" shall be August 31, 2007 or such other date as
      the parties may agree;

	 	 	 
	 	(e) 	
      "Conveyance Documents" means such assignments, novations,
      transfers, trust agreements and other documents that are reasonably
      required by either Party to complete the transfer and assignment of the
      Assets;

	 	 	 
	 	(f) 	
      "Documents of Title" means collectively any and all
      certificates of title, leases, reservations, permits, licenses,
      assignments, trust declarations, royalty agreements, operating agreements
      or procedures, participation agreements, farmin and farmout agreements,
      sale and purchase agreements, pooling agreements and any other agreements
      reserving or otherwise conferring rights to (i) explore for, drill for,
      produce, take, use or market Petroleum Substances,
(ii)







- 2 - 

	 		
      share in the production of Petroleum Substances, (iii)
      share in the proceeds from, or measured or calculated by reference to the
      value or quantity of, Petroleum Substances which are produced and (iv)
      rights to acquire any of the rights described in items (i) to (iii) of
      this definition; but only if the foregoing pertain in whole or in part to
      Petroleum Substances within, upon or under the Lands, including to those
      which are described in Schedule "A";

	 	 	 	 	 
	 	(g) 	
      "Dollars" or "$" means dollars in the lawful currency of
      the United States of America;

	 	 	 	 	 
	 	(h) 	
      "Lands" means the lands set forth and described in
      Schedule "A";

	 	 	 	 	 
	 	(i) 	
      "Losses" means losses, costs, claims, damages, expenses,
      liabilities, fines and penalties, including legal costs on a solicitor
      client basis;

	 	 	 	 	 
	 	(j) 	
      "Leased Substances" means all Petroleum Substances,
      rights to or in respect of which are granted, reserved or otherwise
      conferred by or under the Documents of Title (but only to the extent that
      the Documents of Title pertain to the Lands);

	 	 	 	 	 
	 	(k) 	
      "Miscellaneous Interests" means the entire right, title,
      estate and interest of Vendor in and to all property, assets and rights,
      to the extent pertaining to Petroleum and Natural Gas Rights (excluding
      therefrom materials and supplies used in connection with operations where
      the costs have not been charged to the joint account of Persons having an
      interest therein and also excluding Petroleum and Natural Gas Rights), but
      including:

	 	 	 	 	 
	 		(i) 	
      all contracts and other agreements to the extent relating
      to Petroleum and Natural Gas Rights or any rights in relation thereto,
      including operating agreements and agreements for the construction,
      ownership and operation of facilities;

	 	 	 	 	 
	 		(ii) 	
      all records, books, documents, licences, reports and
      data, including seismic records, reports and data, and all
      non-interpretive production and engineering information which is not of a
      proprietary nature and which relate directly to the Petroleum and Natural
      Gas Rights, that Vendor either has in its custody or to which Vendor has
      access, but excluding:

	 	 	 	 	 
	 			(A) 	
      tax, legal and financial records;

	 	 	 	 	 
	 			(B) 	
      economic evaluations; and,

	 	 	 	 	 
	 			(C) 	
      engineering, geophysical and geological information, to
      the extent Vendor is contractually prohibited from selling or disclosing
      to other Persons; and

	 	 	 	 	 
	 		(iii) 	
      all subsisting rights to enter upon, use and occupy the
      surface of any lands which are or may be used to gain access to or
      otherwise use the Petroleum and Natural Gas Rights;

	 	 	 	 	 
	 	(l) 	
      "Parties" means all parties to this Agreement, and
      "Party" means any of them;







- 3 - 

	 	(m) 	
      "Permitted Encumbrances" means:

	 	 	 	 
	 		(i) 	
      easements, rights of way, servitudes or other similar
      rights in lands which do not either alone or in the aggregate, materially
      detract from the value of the Assets or materially impair their
  use;

	 	 	 	 
	 		(ii) 	
      the right reserved to or vested in any government or
      other public authority by the terms of any statutory provision, to
      terminate any Documents of Title or to require annual or other periodic
      payments as a condition of the continuance thereof;

	 	 	 	 
	 		(iii) 	
      the right reserved to any governmental authority to levy
      taxes on Leased Substances or the income or revenue therefrom and
      governmental requirements as to production rates on the operations of any
      property;

	 	 	 	 
	 		(iv) 	
      rights reserved to or vested in any municipality or
      governmental, statutory or public authority to control or regulate any of
      the Assets in any manner, and all applicable laws, rules and orders of any
      governmental authority;

	 	 	 	 
	 		(v) 	
      undetermined or inchoate liens created as security in
      favour of the person conducting the operation of any of the Assets for
      Vendor's proportion of the costs and expenses of such
operations;

	 	 	 	 
	 		(vi) 	
      liens for taxes, assessments or governmental charges,
      which are not due or which are not delinquent or the validity of which are
      being contested by Vendor, in good faith;

	 	 	 	 
	 		(vii) 	
      mechanics', builders' or materialmen's liens in respect
      of services rendered or goods supplied for which payment is not at the
      time due;

	 	 	 	 
	 		(viii) 	
      the reservations, limitations, provisos and conditions in
      any original grants from the State of any of the Lands or interests
      therein and statutory exceptions to title;

	 	 	 	 
	 		(ix) 	
      the terms and conditions of the Documents of Title set
      forth in Schedule "A"; and

	 	 	 	 
	 		(x) 	
      such royalty burdens, penalties and other encumbrances as
      are set forth in Schedule "A";

	 	 	 	 
	 	(n) 	
      "Person" means any individual or entity other than Vendor
      or Purchaser including any natural person, firm, corporation, partnership,
      trustee, trust, unincorporated association, union, government or
      government department or government agency and any heir executor,
      administrator or other legal representative of an individual; and pronouns
      used in connection therewith have a similar extended meaning;

	 	 	 	 
	 	(o) 	
      "Petroleum and Natural Gas Rights" means the entire
      right, title and interest of Vendor in and to the Documents of Title and
      the Leased Substances including the interests as set forth in Schedule "A"
      hereto;







- 4 - 

	 	(p) 	
      "Petroleum Substances" means any of crude oil, crude
      bitumen and products derived therefrom, synthetic crude oil, petroleum,
      natural gas (including coalbed methane) natural gas liquids and any and
      all other substances, related to any of the foregoing whether liquid,
      solid or gaseous and whether hydrocarbons or not, including sulphur;
      and

	 	 	 
	 	(q) 	
      "Purchase Price" means the amount set forth in Clause
      3.1.



2.           
INTERPRETATION 

2.1          Derivatives:
When a capitalized derivative of a term defined herein is used, it shall have
the corresponding meaning of the defined term, unless the context otherwise
requires. 

2.2          Knowledge:
The knowledge or awareness of a Party on a matter shall consist of actual
knowledge or awareness of its current officers and its employees who are
primarily responsible for the matter in question in the course of their normal
duties (other than those employees in the field who do not have management
responsibilities), after reasonable inquiry of such Party's applicable files and
records. 

2.3         
Inclusive Language: Where used in this Agreement, "including" and derivative
words and phrases mean "including, without limitation". 

2.4          Schedule(s):
The following Schedule(s) are attached to and made a part of this Agreement:


               
Schedule "A" Documents of Title, Petroleum and Natural Gas Rights, Lands, and
Encumbrances 

2.5         
Conflicts: In the event of any conflicts between the provisions of the body of
this Agreement and the Schedule, the provisions of the body of this Agreement
prevail. In the event of any conflicts between the provisions of this Agreement
and the Documents of Title, the provisions of the Document of Title prevail.


2.6         
Headings and Descriptions: The headings of all Articles, Clauses and Subclauses
are inserted for convenience of reference only and shall not affect the
construction or interpretation of this Agreement, or any provision thereof. Use
of words "Article", "Clause" or "Subclause" in this Agreement refers to an
Article, Clause or Subclause of this Agreement unless a contrary intention is
specifically stated. 

2.7         
Singular/Plural: Whenever the singular or masculine or neuter is used in this
Agreement or in the Schedule, it shall be interpreted as meaning the plural or
feminine or body politic or corporate or vice versa, as the context requires.


3.           
PURCHASE AND SALE 

3.1         
Deposit: At Signing, the Purchaser shall pay to the Vendor the amount of Two
Hundred Fifty Thousand Dollars ($250,000.00), and the Vendor shall immediately
refrain from offering the properties to other possible purchasers. Purchaser
shall have until Closing Date to complete their Due Diligence work. If Purchaser
is unwilling or unable to complete the transaction as herein outlined by the
Closing Date, the Deposit will be forfeited. 




- 5 - 

3.2          Conveyance:
At Closing, the Purchaser shall pay to the Vendor the amount of Five Hundred
Seventy One Thousand Seven Hundred Ninety-Eight Dollars and Forty Five Cents
($571,798.45), and the Vendor shall sell, assign, transfer, convey and set over
to Purchaser, and Purchaser shall purchase from Vendor, all of the right, title,
estate and interest of Vendor (whether absolute or contingent, legal or
beneficial) in and to the Assets, TO HAVE AND TO HOLD the same, together with
all benefit and advantage to be derived therefrom, absolutely, subject to the
terms of this Agreement. 

4.           
CONVEYANCE DOCUMENTS 

4.1          Cost
of Registration: Purchaser shall bear all costs incurred in registering all
Conveyance Documents relating to the Assets and all costs of registering any
further Conveyance Documents Purchaser may reasonably require. Vendor shall bear
all costs of preparing and registering discharges of any and all security
interests registered against Vendor's interest in the Assets. 

4.2          Subordination
of Ancillary Documents: All documents executed by the Parties and delivered
pursuant to the provisions of this Article 4, or otherwise pursuant to this
Agreement, are subordinate to the provisions hereof and the provisions hereof
shall govern and prevail in the event of conflict. 

5.           
REPRESENTATIONS AND WARRANTIES OF VENDOR 

5.1          Representations
and Warranties of Vendor: Vendor hereby represents and warrants to Purchaser,
both as at the date hereof and at Closing, that: 

	 	(a) 	
      Standing: It is a corporation duly organized and validly
      existing under the laws of its jurisdiction of incorporation and in good
      standing under the laws of the jurisdiction in which it is required to be
      registered in order to hold the Assets;

	 	 	 
	 	(b) 	
      Requisite Authority: It has all necessary corporate
      power, authority and capacity to enter into and execute this Agreement, to
      sell the Assets and to perform its other obligations under this
      Agreement;

	 	 	 
	 	(c) 	
      No Conflicts: The execution and delivery of this
      Agreement and the consummation of the transactions contemplated by this
      Agreement will not violate, nor be in conflict with, its charter, bylaws
      or similar constating documents of Vendor, or any provision of any
      agreement or instrument of a material nature to which it is a party or is
      bound, or any decree, order, statute, rule or regulations applicable to
      it;

	 	 	 
	 	(d) 	
      No Prior Approval: No authorization or approval or other
      action by, and no notice to or filing with, any governmental authority or
      regulatory body exercising jurisdiction over the Assets is required for
      the due execution, delivery and performance by Vendor of this Agreement,
      other than authorizations, approvals or exemptions from requirement
      therefor, previously obtained and currently in force;

	 	 	 
	 	(e) 	
      Execution and Enforceability of Documents: It has duly
      executed and delivered this Agreement and all other documents required
      hereunder and this Agreement and such documents constitute legal, valid
      and binding obligations of it







- 6 - 

	 		
      enforceable in accordance with their respective terms,
      subject to the qualification that their enforceability may be limited by
      rules of equity and by insolvency, bankruptcy and other laws of general
      application affecting the enforcement of creditor's rights;

	 	 	 
	 	(f) 	
      Finder's Fees: It has not incurred any obligation or
      liability, contingent or otherwise, for brokers' or finders' fees in
      respect of the Assets for which Purchaser shall have any obligation or
      liability;

	 	 	 
	 	(g) 	
      Lawsuits and Claims: No lawsuits, actions or other
      proceedings before any court, governmental agency or arbitral body has
      been commenced against Vendor or, to the knowledge, information and belief
      of Vendor, has been threatened against Vendor or any other Person, which
      might result in impairment or loss of the interest of Vendor in and to the
      Assets or which might otherwise adversely affect the Assets, and Vendor
      has not received notice from any Person claiming an interest in and to the
      Assets adverse to the interest of Vendor and Vendor has no reason to
      believe that any such claim may be made;

	 	 	 
	 	(h) 	
      Default: It has not received notice of any default under
      any order, writ, injunction or decree of any court or of any commission or
      administrative agency or any of the Documents of Title and is not aware of
      any default that might materially adversely impact upon the value of the
      Assets or subject the Documents of Title to cancellation or
      termination;

	 	 	 
	 	(i) 	
      Encumbrances: Other than permitted Encumbrances, (i)
      Vendor has not alienated or encumbered the Assets or any part or portion
      thereof, (ii) Vendor has not committed and is not aware of there having
      been committed any act or omission whereby the interest of Vendor in and
      to the Assets or any part or portion thereof may be cancelled or
      determined, and (iii) the Assets are now free and clear of all royalty
      burdens, liens, penalties, conversion rights and other claims of Third
      Parties, created by, through or under Vendor or of which Vendor has
      knowledge;

	 	 	 
	 	(j) 	
      Production Contracts: Vendor is not a party to and
      Vendor's interest in and to the Assets is not otherwise bound or affected
      by any (i) production sales contracts pertaining to Leased Substances,
      (ii) gas balancing or similar agreements pertaining to Leased Substances,
      (iii) agreements for the transportation, processing or disposal of Leased
      Substances, (iv) agreements for the contract operation of the Assets or
      any of them, or (v) agreements to provide transportation, processing or
      disposal capacity or service to any Person;

	 	 	 
	 	(k) 	
      Reduction of Interest: The Petroleum and Natural Gas
      Rights are not subject to reduction by virtue of the conversion or other
      alteration of the interest of any Person under existing agreements created
      by, through or under Vendor;

	 	 	 
	 	(l) 	
      Production Penalty: The Assets are not subject to a
      production penalty whereby the production proceeds allocable to Vendor's
      interest are payable to a Person until an amount calculated in respect of
      certain costs and expenses paid by such Person are recovered by such
      Person;







- 7 - 

	 	(m) 	
      Quiet Enjoyment: Subject to the rents, covenants,
      conditions and stipulations in the Documents of Title reserved and
      contained on the lessee's or holder's part thereunder to be paid,
      performed and observed, Purchaser may enter into and upon and hold and
      enjoy the Assets for the residue of their respective term thereof for its
      own use and benefit without any lawful interruption of or by Vendor or any
      other Person claiming by, through or under Vendor except pursuant to or in
      respect of Permitted Encumbrances;

	 	 	 	 
	 	(n) 	
      Payment of Taxes and Royalties: All ad valorem, property,
      royalties, production, severance and similar taxes and assessments based
      on or measured by the ownership of the Assets or the production of Leased
      Substances or the receipt of proceeds therefrom payable by it to the date
      hereof have been properly paid and discharged;

	 	 	 	 
	 	(o) 	
      Environmental Claims: Vendor is not aware of and has not
      received:

	 	 	 	 
	 		(i) 	
      any orders or directives which relate to environmental
      matters and which require any work, repairs, construction or capital
      expenditures with respect to the Assets; or

	 	 	 	 
	 		(ii) 	
      any demand or notice issued with respect to the breach of
      any environmental, health or safety law applicable to the Assets,
      including respecting the use, storage, treatment, transportation or
      disposition of environmental contaminants;

	 	 	 	 
	 		
      nor is Vendor aware of any event or circumstance that
      might give rise to any such order, directive, demand or notice;

	 	 	 	 
	 	(p) 	
      No Operations: There have been no operations by Vendor or
      any other Person on or related to the Assets;

	 	 	 	 
	 	(q) 	
      Outstanding AFEs: There are no authorities for
      expenditure, operations notices or amounts budgeted pursuant to Title
      Documents with respect to the Assets;

	 	 	 	 
	 	(r) 	
      No Tangibles: There are no facilities or other tangible
      depreciable property that are used, or intended for use, in connection
      with production, processing, gathering, storage, treatment, injection or
      other operations respecting the Petroleum and Natural Gas Rights included
      in the Assets;

	 	 	 	 
	 	(s) 	
      No Wells: There are no producing wells located on the
      surface of the Lands which may be used in connection with the Petroleum
      and Natural Gas Rights;

	 	 	 	 
	 	(t) 	
      Areas of Mutual Interest or Exclusion: None of the
      Documents of Title include an area of mutual interest, area of exclusion
      or similar provision that remains in effect;

	 	 	 	 
	 	(u) 	
      Offset Wells: No obligations have accrued pursuant to the
      Documents of Title that may be satisfied by the drilling of a well, the
      payment of compensatory royalty or the surrender of some or all of the
      interests granted, reserved or otherwise conferred pursuant to the
      Documents of Title, other than obligations that have been satisfied (by
      means other than by the payment of compensatory royalties) or have been
      permanently waived; and







- 8 - 

	 	(v) 	
      Preferential Rights: None of the interest of Vendor in
      and to the Assets is subject to any rights of first refusal, preemptive
      right of purchase or similar right whereby any Person, other than Vendor,
      would have the right to acquire or purchase all or a portion of the Assets
      that become operative by virtue of this Agreement or the transaction to be
      effected by it.



5.2          No
Other Vendor Representations or Warranties: Vendor makes no warranty whatsoever
except as and to the extent set forth in Clause 5.1. Without limiting the
generality of the foregoing, Vendor does not make any representation or warranty
with respect to: 

	 	(a) 	
      the quality, quantity or recoverability of the Petroleum
      Substances within or under the Lands or any lands pooled or unitized
      therewith;

	 	 	 
	 	(b) 	
      the value of the Assets or the future revenues applicable
      thereto; or

	 	 	 
	 	(c) 	
      any economic evaluations respecting the
  Assets.



6.           
REPRESENTATIONS AND WARRANTIES OF PURCHASER 

6.1         
Representations and Warranties of Purchaser: Purchaser hereby represents and
warrants to Vendor, both as at the date hereof and at Closing, that: 

	 	(a) 	
      Standing: It is a corporation duly organized and validly
      existing under the laws of its jurisdiction of incorporation and in good
      standing under the laws of the jurisdiction in which it is required to be
      registered in order to hold the Assets;

	 	 	 
	 	(b) 	
      Requisite Authority: It has all necessary authority and
      capacity to enter into and execute this Agreement, to buy the Assets and
      to perform its other obligations under this Agreement;

	 	 	 
	 	(c) 	
      No Conflicts: The execution and delivery of this
      Agreement and the consummation of the transactions contemplated by this
      Agreement will not violate, nor be in conflict with, its charter, bylaws
      or similar constating documents of it, or any provision of any agreement
      or instrument to which it is a party or is bound, or any judgment, decree,
      order, statute, rule or regulation applicable to Purchaser;

	 	 	 
	 	(d) 	
      Execution and Enforceability of Documents: It has duly
      executed and delivered this Agreement and all other documents required
      hereunder. This Agreement does, and such documents will, constitute legal,
      valid and binding obligations of it enforceable in accordance with their
      respective terms, subject to the qualification that their enforceability
      may be limited by rules of equity and by insolvency, bankruptcy and other
      laws of general application affecting the enforcement of creditors'
      rights; and

	 	 	 
	 	(e) 	
      Finder's Fees: It has not incurred any obligation or
      liability, contingent or otherwise, for brokers' or finders' fees in
      respect of this transaction for which Vendor shall have any obligation or
      liability.



6.2          Survival
of Representations and Warranties: The representations and warranties contained
herein shall survive the closing of the transactions contemplated hereby, and
shall 




- 9 - 

remain in full force and effect for the benefit of Purchaser
with respect to Clause 5.1 and for the benefit of Vendor with respect to Clause
6.1, but no claim or action in respect of any breach of such representation or
warranty shall be made unless the Party making such claim or bringing such
action has given notice of such claim (including reasonable particulars of the
misrepresentations or breach) to the other within twelve (12) months following
the date of this Agreement. 

7.          
 INDEMNITIES 

7.1         
Vendor's Indemnity for Breach of Representations and Warranties: Subject to
Clauses 6.2, Vendor shall indemnify Purchaser and its directors, officers,
employees and agents from and against all Losses which any of them may pay,
suffer, sustain or incur as a consequence of a breach of any representation or
warranty of Vendor contained in Clause 5.1, excepting any Losses, if and to the
extent caused by the gross negligence or willful misconduct of Purchaser, its
successors, agents or assigns. The indemnity granted by Vendor in this Clause
7.1 is not a title warranty and does not provide an extension of any
representation or warranty contained in Clause 5.1 or any additional remedy with
regard to Vendor's breach of any representation or warranty. Furthermore, the
indemnity of Vendor to Purchaser granted pursuant to this Clause 7.1 shall only
apply to claims of indemnity made by Purchaser to Vendor by giving written
notice to Vendor within twelve (12) months following the date of this Agreement
and, in no event shall the total of the liabilities and indemnities of Vendor
under this Agreement, including any claims relating to Article 5, in the
aggregate exceed the Purchase Price. 

7.2         
Purchaser's Indemnity for Breach of Representations and Warranties: Subject to
Clause 6.2, Purchaser shall indemnify Vendor and its directors, officers,
employees and agents from and against all Losses which any of them may pay,
suffer, sustain or incur as a consequence of a breach of any representation or
warranty of Purchaser contained in Clause 6.1 of this Agreement, excepting any
Losses, if and to the extent caused by the gross negligence or willful
misconduct of Vendor, its successors, agents or assigns. The indemnity granted
by Purchaser in this Clause 7.2 does not provide an extension of any
representation or warranty contained in Clause 6.1 of this Agreement or any
additional remedy with regard to Purchaser's breach of any representation or
warranty. Furthermore, the indemnity of Purchaser to Vendor granted pursuant to
this Clause 7.2 shall only apply to claims of indemnity made by Vendor to
Purchaser by giving written notice to Purchaser within twelve (12) months
following the date of this Agreement. 

7.3          Purchaser's
Liability and Indemnity to Vendor: Purchaser hereby agrees: 

	 	(a) 	
      to be liable to Vendor, its directors, officers, agents
      and employees, for all Losses which any of them may pay, suffer, sustain
      or incur and, in addition,

	 	 	 
	 	(b) 	
      to indemnify and save harmless Vendor, its directors,
      agents and employees from and against all Losses which may be brought
      against or suffered by any of them,



in relation to the Assets and arising out of or in connection
with operations which arise, on or subsequent to the date of this Agreement,
excepting any Losses if, and to the extent, caused by the gross negligence or
willful misconduct of Vendor or its agents and provided further that Purchaser
shall not be liable to, nor be required to, indemnify Vendor in respect of any
Losses in respect of which Vendor is liable to and has indemnified Purchaser
pursuant to Clause 7.1. 




- 10 - 

7.4          Vendor's
Liability and Indemnity to Purchaser: Vendor hereby agrees: 

	 	(a) 	
      to be liable to Purchaser, its directors, officers,
      agents and employees, for all Losses which any of them may pay, suffer,
      sustain or incur and, in addition,

	 	 	 
	 	(b) 	
      to indemnify and save harmless Purchaser, its directors,
      agents and employees from and against all Losses which may be brought
      against or suffered by any of them,



in relation to the Assets and arising out of or in connection
with operations which arose, prior to the date of this Agreement, excepting any
Losses if, and to the extent, caused by the gross negligence or willful
misconduct of Purchaser or its agents and provided further that Vendor shall not
be liable to, nor be required to, indemnify Purchaser in respect of any Losses
in respect of which Purchaser is liable to and has indemnified Vendor pursuant
to Clause 7.2. 

8.          
 NOTICE 

8.1         
Method of Notice: Any notice, communication or other document (hereinafter
called "notice") required or permitted to be given under this Agreement by one
Party to the other shall be in writing and shall be sufficiently given and
received if: 

	 	(a) 	
      personally served on the Party to whose attention the
      notice is to be addressed pursuant to Clause 8.2, at the time of actual
      delivery or, if delivered by hand to a responsible Person at the address
      of the Party to which such notice is directed, two hours following
      delivery to such Party; provided that if such time of deemed receipt is
      not within the normal business hours of the recipient Party, then such
      notice shall be deemed received at the next commencement of business on a
      day that business is normally conducted by the recipient Party;

	 	 	 
	 	(b) 	
      sent by facsimile transmission and directed to the Party
      to whose attention the notice is to be addressed pursuant to Clause 8.2 at
      that Party's fax number set forth below, and such notice so given shall be
      deemed to have been received by the recipient, if the time of transmission
      is stated, two hours following the time so stated; provided that if such
      time of deemed receipt is not within the normal business hours of the
      recipient Party, then such notice shall be deemed received at the next
      commencement of business on a day that business is normally conducted by
      the recipient Party; or

	 	 	 
	 	(c) 	
      mailed by first class registered post, postage prepaid,
      to the other Party (such notice so served shall be deemed to have been
      received by the recipient Party on the fourth (4th) Business Day following
      the date of mailing thereof); provided that in the event of an actual or
      threatened postal strike or other labor disruption that may affect mail
      service, notices shall not be mailed.




		
      For greater certainty, electronic transmission or email
      shall not be an acceptable method of notice.

	 	 
	8.2 	
      Address for Notice: The address for notice for each of
      the Parties shall be as follows:







- 11 - 

	Vendor: 	Purchaser: 
	  	  
	Desert Mining, Inc. 	Sun Cal Energy, Inc. 
	4328 Highway 66 	Bow Valley Square II 
	Longmont, CO 80504 	700, 205 – 5th Ave SW 
	U.S.A. 	Calgary, AB T2P 2V7 
	  	Canada 
	Fax: (970) 535-6220 	  
	  	Fax: 
	Attention: Randy Anderson 	  
	  	Attention: 


8.3         
Changes of Address for Notice: Any Party may, from time to time, change its
address for notice by giving written notice to the other. 

9.          
 MISCELLANEOUS PROVISIONS 

9.1          Non-merger:
The representations and warranties set forth in Clauses 5.1 and 6.1 and the
indemnities and covenants set forth in Article 7 shall be deemed to apply to all
Conveyance Documents and there shall not be any merger of any representation,
warranty, indemnity or covenant in any Conveyance Documents, notwithstanding any
rule or law, equity or statute to the contrary and all such rules are hereby
waived. 

9.2          Public
Announcements: No Party shall release any information concerning this Agreement
and the transaction herein provided for without the prior written consent of the
other Party, which will not be withheld unreasonably. Nothing contained herein
shall prevent any Party at any time from furnishing information to any
governmental agency or regulatory authority, or to the public if required by
applicable law or securities rules or regulations, or if such Party considers it
to be advisable in the circumstances, provided that the Parties shall advise
each other in advance of any public statement which they propose to make
regarding the said transaction. Nothing herein contained shall prevent Vendor
from furnishing information relating to the said transaction or the identity of
Purchaser in connection with the procurement of the consent of other Persons
where required pursuant to any Documents of Title. 

9.3          Signs
and Notifications: Vendor may remove any signs which indicate Vendor's ownership
or operation of the Assets. It shall be the responsibility of Purchaser, where
necessary, to erect or install any signs that may be required by governmental
agencies indicating Purchaser to be the owner of the Assets and to notify
contractors, governmental agencies and any other Person of Purchaser's interest
in the Assets. 

9.4          Conflicts
and Entire Agreement: The provisions contained in all documents and agreements
collateral hereto shall at all times be read subject to the provisions of this
Agreement and, in the event of conflict between the provisions contained in any
documents or agreements collateral hereto and the provisions of this Agreement,
the provisions of this Agreement shall prevail unless otherwise expressly
provided herein. 

9.5          Waiver:
Any waiver of any term or condition of this Agreement or consent to any
departure from this Agreement by one Party to the other shall be effective only
if in writing and only in the specific instance and for the specific purpose for
which it is given. 




- 12 - 

9.6         
Applicable Law: This Agreement shall be construed and enforced in accordance
with the laws in effect in the State of Wyoming. 

9.7          Entire
Agreement: This Agreement constitutes the entire agreement between the Parties
with respect to the transactions contemplated herein, contains all of the
representations and warranties of the respective Parties and supersedes all
prior agreements, documents, writing and verbal understandings between the
Parties with respect to the sale of the Assets. 

9.8          Amendments:
This Agreement may not be amended or modified in any respect, except by written
instrument executed by the Parties. 

9.9          Time
of the Essence: Time shall be of the essence of this Agreement and of every part
thereof. 

9.10          Further
Assurances: The Parties shall do all things and provide all assurances, as may
be reasonably required to consummate the transactions contemplated by this
Agreement, and each Party shall provide those further documents or instruments
as may be reasonably required by the other Parties to give effect to this
Agreement and to carry out its provisions. 

9.11         
Enurement: This Agreement shall enure to the benefit of and be binding upon the
Parties, and their respective successors and assigns. 

9.12          Counterpart:
This Agreement may be executed in counterpart and when each party has executed a
counterpart, all counterparts taken together shall constitute an entire
Agreement. 

                  IN
WITNESS WHEREOF the parties have duly executed this Agreement as of the
date and year first above written. 

	DESERT MINING, INC. 	SUN CAL ENERGY, INC. 
	 	 
	 	 
	 	 
	 	 
	Per:           
      /s/
      Signed                                                                  
    	Per:             
       G.
      Drazenovic                                                
    
	Name: Randall B. Anderson 	Name: George Drazenovic 
	Title: CEO 	Title: CFO/Director 






SCHEDULE "A" 

This comprises Schedule "A" attached to and forming part of
that certain Purchase and Sale Agreement dated as of the 25th day of
July, 2007 and made between Desert Mining, Inc. as Vendor, and Sun Cal Energy,
Inc., as Purchaser. 

LANDS


	
Title Document 	
Lands 	
Encumbrances 	Vendor's 
Interest
      
	
United States Department 
of the Interior Bureau of 
Land
      Management Oil and 

Gas Lease #WYW159753 
dated August 1, 2004
      and 
issued to Desert Mining, 
Inc. 




United
      States Department 
of the Interior Bureau of 
Land Management Oil
      and 
Gas Lease #WYW158664 
dated August 1, 2004 and 
issued to
      Desert Mining, 
Inc. 









United
      States Department 
of the Interior Bureau of 
Land Management Oil
      and 
Gas Lease #WYW158665 
dated August 1, 2004 and 
issued to
      Desert Mining, 
Inc. 


	
All Township 27N Range 
110 West 

Section 1
      – Lots 1-4; 

S2N2, NESE 
Section 12 W2NE, NW, 
N2S2, SESW,
      S2SE 


All Township 28N Range 

110 West 
Section 6 –
      Lots 1-7; 
S2NE; SENW; E2SW; 
N2SE 
Section 7 Lots 1 – 4;
      
E2W2 

Section 17 N2 
Section 19 Lots 3 & 4; 
E2SW
      
Section 30 Lots 1 – 4; 
E2W2; SE 


All Township 28N Range
      
110 West 

Section 28 SW 
Section 29 S2 

Section 31
      Lots 1 - 4; 
S2NE; E2W2; SE 



All Township 27N Range 	
Lessor Royalty 

Overriding royalty
      

retained by Vendor 







Lessor Royalty
      
Overriding royalty 

retained by Vendor
      












Lessor Royalty
      

Overriding royalty 
retained by Vendor
    





	
12.5% 



5.0%
      







12.5% 


5.0%
      











12.5% 


5.0%
      
















	
United States Department 

of the Interior Bureau
      of 
Land Management Oil and 
Gas Lease #WYW159733 
dated February
      1, 2004 
and issued to Desert 
Mining, Inc.
      




United States Department 
of the Interior Bureau of
      
Land Management Oil and 
Gas Lease #WYW159734 
dated February 1,
      2004 
and issued to Desert 
Mining, Inc. 



United
      States Department 

of the Interior Bureau of 
Land Management
      Oil and 
Gas Lease #WYW159737 
dated February 1, 2004 
and issued
      to Desert 
Mining, Inc. 	107 West 
Section 4 Lots 1 – 4;
      

S2N2; S2 
Section 7 E2 

Section 17 SWNE; W2; 
N2SE
      


All Township 27N Range 

107 West 
Section 5 Lots 1 –
      4; 
S2N2; S2 






All Township 27N Range 
107
      West 

Section 8 N2; N2SE; 
SESE 




	
Lessor Royalty 

Overriding royalty
      
retained by Vendor 







Lessor Royalty
      

Overriding royalty 
retained by Vendor
      







Lessor Royalty 

Overriding royalty
      

retained by Vendor 


	12.5% 


5.0%
      








12.5% 


5.0%
      







12.5% 



5.0%