PURCHASE AND SALE AGREEMENT

Exhibit 99.2 - Purchase and Sale Agreement

PURCHASE AND SALE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT dated as of September 25, 2007 and

effective as of September 1, 2007, is made by and between DIVERSITY PETROLEUM,

LP, a Texas limited partnership, LEWIS M. LINSON, an individual resident of San

Diego County, California, HILL & HILL PETROLEUM, LLC, a Georgia limited

liability company, ALVERA INVESTMENTS, LLC, a Texas limited liability company,

COETAS RESOURCE DEV., L.P., a Texas limited partnership, RICHARD S. CONEN, an

individual resident of Cook County, Illinois, BGK INVESTMENTS, L.P., a Texas

limited partnership, RAMON U. SUAREZ, an individual resident of Dallas County,

Texas, RAMON L. SUAREZ, an individual resident of Collier County, Florida,

RANDAL SADLER, an individual resident of Rockwall County, Texas, JANET SADLER,

an individual resident of Rockwall County, Texas, JAMES H. THOMAS REVOCABLE

TRUST, a revocable trust organized under the laws of Oklahoma, EDWARD N.

STRADER, an individual resident of Laramie County, Wyoming and CAROL ANN

STRADER, an individual resident of Laramie County, Wyoming (each a "Seller,"

and collectively, "Sellers") and STO PROPERTIES LLC, a Texas limited liability

company ("Buyer").

WITNESETH:

WHEREAS, Sellers desire to sell, assign and convey to Buyer, and Buyer

desires to purchase and accept, certain oil and gas properties and related

assets located in the State of Texas;

WHEREAS, Sellers and Buyer deem it in their mutual best interests to

execute and deliver this Agreement; and

WHEREAS, Diversity is acting as Agent and Attorney-in-Fact for all other

Sellers.

NOW, THEREFORE, in consideration of the foregoing Recitals and the mutual

covenants and agreements contained herein, Sellers and Buyer do hereby agree as

follows:

ARTICLE I

DEFINITIONS AND REFERENCES

1.1 Certain Defined Terms. When used in this Agreement, the following

terms shall have the respective meanings assigned to them in this Section 1.1

or in the section, subsections or other subdivisions referred to below:

"Agreement" shall mean this Agreement, as hereafter changed, amended

or modified in accordance with the terms hereof.

"Claim Notice" shall have the meaning assigned to such term in

Section 8.2.

"Closing" and "Closing Date" shall have the meanings assigned to

such terms in Section 6.1.

"Code" shall mean the Internal Revenue Code, of 1986, as amended

from time to time, and any successor statute thereto.

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"Common Stock" shall mean the membership interest of the Buyer.

"Controlling Party" shall have the meaning assigned to such term in Section

8.3(c).

"Conveyance" shall have the meaning assigned to such term in Section

6.2(a).

"Diversity" shall mean Diversity Petroleum, LP, a Texas limited

partnership, whether acting for its own account and/or as the Agent and

Attorney-in-Fact for all other Sellers herein.

"Effective Date" shall have the meaning assigned to such term in Section

6.2(a).

"Exchange Act" shall mean the Securities Exchange Act of 1934, as

amended, and all rules and regulations under such act.

"Indemnification Period" shall have the meaning assigned to such term in

Section

11.1.

"Indemnified Party" shall have the meaning assigned to such term in Section

8.2.

"Indemnifying Party" shall have the meaning assigned to such term in Section

8.2.

"Initial Cash Purchase Price" shall have the meaning assigned to such

term in Article III.

"Laws" shall mean any and all applicable laws, statutes, codes,

ordinances, rules, regulations, decrees, orders, judgments, permits, licenses,

or other authority issued or enacted by any governmental entity or authority

with jurisdiction over the Properties and the Parties.

"Noncontrolling Party" shall have the meaning assigned to such term in Section

8.3(c).

"Oil and Gas Properties" shall have the meaning assigned to such term in

Article II.

"Parent" shall mean South Texas Oil Company, a Nevada corporation.

"Parent Common Stock" shall mean shares of common stock, par value $.001

per share, of Parent.

"Promissory Note" shall have the meaning assigned to such term in

Article III. "Properties" shall have the meaning assigned to such term

in Article II.

"Property Obligations" shall have the meaning assigned to such term in Section

7.1.

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"Purchase Price" shall have the meaning assigned to such term in

Article III. "Restricted Stock" shall have the meaning assigned to

such term in Article III. "SEC" shall mean the United States

Securities and Exchange Commission.

"Securities Act" shall mean the Securities Act of 1933, as amended, and

all rules and regulations under such act.

1.2References, Titles and Construction.

(a) All references in this Agreement to articles, sections,

subsections and other subdivisions refer to corresponding articles, sections,

subsections and other subdivisions of this Agreement unless expressly provided

otherwise;

(b) Titles appearing at the beginning of any of such subdivisions are

for convenience only and shall not constitute part of such subdivisions and

shall be disregarded in construing the language contained in such subdivisions;

(c) The words "this Agreement," "this instrument," "herein," "hereof,"

"hereby," "hereunder" and words of similar import refer to this Agreement as a

whole and not to any particular subdivision unless expressly so limited;

(d) Words in the singular form shall be construed to include the

plural and vice versa, unless the context otherwise requires. Pronouns in

masculine, feminine and neuter genders shall be construed to include any other

gender;

(e) Unless the context otherwise requires or unless otherwise provided

herein, the terms defined in this Agreement which refer to a particular

agreement, instrument or document also refer to and include all renewals,

extensions, modifications, amendments or restatements of such agreement,

instrument or document, provided that nothing contained in this subsection

shall be construed to authorize such renewal, extension, modification,

amendment or restatement;

(f) Examples shall not be construed to limit, expressly or by

implication, the matter they illustrate;

(g) The word "or" is not intended to be exclusive and the word

"includes" and its derivatives means "includes, but is not limited to" and

corresponding derivative expressions;

(h) No consideration shall be given to the fact or presumption that

one party had a greater or lesser hand in drafting this Agreement;

(i)All references herein to "$" or "dollars" shall refer to U.S. Dollars;

and

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(j) The Exhibits listed on page (iii) are attached hereto. Each

such Exhibit is incorporated herein by reference for all purposes and

references to this Agreement shall also include such Exhibit unless the

context in which used shall otherwise require.

ARTICLE II

PROPERTY TO BE SOLD AND PURCHASED

Sellers agree to sell and Buyer agrees to purchase, for the consideration

hereinafter set forth, and subject to the terms and provisions herein

contained, the following described properties, rights and interests:

(a) The properties described in Exhibit I attached hereto and

made a part hereof for all purposes;

(b) Without limitation of the foregoing, all other right, title

and interest (of whatever kind or character, whether legal or equitable,

and whether vested or contingent) of each Seller in and to the oil, gas

and other minerals in and under or that may be produced from the lands

and wells described in Exhibit I hereto (including interests in oil, gas

and/or mineral leases covering such lands and wells, overriding

royalties, production payments and net profits interests in such lands,

such leases and wells, and fee mineral interests, fee royalty interests

and other interests in such oil, gas and other minerals), whether such

lands be described in a description set forth in such Exhibit I or be

described in such Exhibit I by reference to another instrument (and

without limitation by any depth limitations that may be set forth in such

Exhibit I or in any such instrument so referred to for description), even

though such Seller's interest in such oil, gas and other minerals may be

incorrectly described in, or omitted from, such Exhibit I;

(c) All rights, titles and interests of each Seller in and to, or

otherwise derived from, all presently existing and valid oil, gas and/or

mineral unitization, pooling, and/or communitization agreements,

declarations and/or orders which are set forth on Exhibit I and in and

to the properties covered and the units created thereby (including all

units formed under orders, rules, regulations, or other official acts of

any federal, state, or other authority having jurisdiction, voluntary

unitization agreements, designations and/or declarations) relating to the

properties described in paragraphs (a) and (b) above;

(d) All rights, titles and interests of Sellers in and to all

presently existing and valid production sales (and sales related)

contracts, operating agreements, and other agreements and contracts which

are set forth on Exhibit I and which relate to any of the properties

described in paragraphs (a), (b) and (c) above, or which relate to the

exploration, development, operation, or maintenance thereof or the

treatment, storage, transportation or marketing of production therefrom

(or allocated thereto);

(e) All rights, titles and interests of each Seller in and to all

materials, supplies, machinery, equipment, improvements and other real,

personal, or mixed property and fixtures (including but not by way of

limitation, all wells, wellhead equipment, pumping units, pipe, tubing,

flow lines, tanks, buildings, injection wells and related facilities,

saltwater wells and related disposal facilities, compression facilities,

separation, heating, treating and dehydration facilities, gathering

systems, and other equipment), and all easements, rights of way, surface

leases and other surface rights, all permits and licenses, and all other

appurtenances being used or held for use in connection with, or otherwise

related to, the exploration, development, operation or maintenance of any

of the properties described in paragraphs (a), (b) and (c) above, or the

gathering, treatment, storage, transportation or marketing of production

therefrom (or allocated thereto); and

(f) All of Sellers' lease files, abstracts and title opinions,

production records, well files, accounting records (but not including

general financial accounting records), seismic records and surveys,

gravity and other maps, electric and other logs, technical, geological or

geophysical data and records, federal, state and local governmental

filings with any governmental authority and other files, documents and

records of every kind and description which relate to the properties

described above.

The properties and interests specified in the foregoing paragraphs (a), (b) and

(c) are herein sometimes collectively called the "Oil and Gas Properties," and

the properties and interests specified in the foregoing paragraphs (a), (b),

(c), (d), (e) and (f) are herein sometimes collectively called the

"Properties."

ARTICLE III

PURCHASE PRICE

In consideration of the sale of the Properties by Sellers to Buyer, Buyer

shall pay to Sellers the following: (a) cash in the amount of $7,500,000 (the

"Initial Cash Purchase Price") to be paid by wire transfer on the Closing Date

pursuant to the wiring instructions set forth on Exhibit III, (b)cash in the

total amount of $1,500,000 to be paid in immediately available funds in twenty-

four monthly installments in the amount of $62,500 each beginning thirty days

after the Closing Date, the obligations of which are captured in a promissory

note, the form of which is attached hereto as Exhibit VI (the "Promissory

Note"), and (c) 105,820 shares of Parent Common Stock as of the Effective Date

representing an aggregate value of $1,000,000 (the "Restricted Stock") which

shares shall be subject to a restriction on sale or transfer (collectively, the

"Purchase Price").

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF SELLERS

Each Seller jointly represents and warrants to Buyer that, as of the date

of this Agreement, the statements set forth in this Article IV are true and

correct in all material respects, except to the extent any representation and

warranty speaks as of any other specific date, in which case such

representation and warranty will have been true and correct in all material

respects as of such date; provided, however, each Seller shall only be liable

for such representations and warranties to the extent of such Seller's

ownership interest in such Properties. Each of the entities comprising any

Seller shall not be deemed to make, and shall not have any liability or

obligations hereunder with respect to, any agreement, indemnity, representation

or warranty made by any Seller that does not relate to such entity or to any of

the Properties in which such entity owns an interest. The Sellers further

acknowledge that the Buyer

has entered into this Agreement upon the basis of and in reliance upon the

statements in this Agreement, in particular this Article IV:

4.1 Organization and Good Standing. As applicable, each Seller is duly

organized, validly existing and in good standing under the Laws of the

jurisdiction of its formation and has all requisite power and authority to own,

lease and operate its properties and assets and to conduct its business as

presently conducted and as planned to be conducted by such Seller. As

applicable, each Seller is duly qualified or licensed to do business and, where

applicable as a legal concept, is in good standing as a foreign entity in each

jurisdiction in which the character of the properties it owns, operates or

leases or the nature of its activities makes such qualification or licensure

necessary.

4.2 Power and Authority. Each Seller has the requisite power and

authority to execute, deliver, and perform this Agreement and each other

agreement, instrument, or document executed or to be executed by such Seller in

connection with the transactions contemplated hereby to which it is a party and

to consummate the transactions contemplated hereby and thereby. The execution,

delivery, and performance by Sellers of this Agreement and each other

agreement, instrument, or document executed or to be executed by Sellers in

connection with the transactions contemplated hereby to which they are a party,

and the consummation by them of the transactions contemplated hereby and

thereby, have been duly authorized by all necessary action of such Sellers.

4.3 Valid and Binding Agreement. This Agreement has been duly executed

and delivered by each Seller and constitutes, and each other agreement,

instrument, or document executed or to be executed by Sellers in connection

with the transactions contemplated hereby to which they are a party has been,

or when executed will be, duly executed and delivered by Sellers and

constitutes, or when executed and delivered will constitute, a valid and

legally binding obligation of Sellers, enforceable against them in accordance

with their respective terms, except that such enforceability may be limited by

(a) applicable bankruptcy, insolvency, reorganization, moratorium, and similar

Laws affecting creditors' rights generally and (b) equitable principles which

may limit the availability of certain equitable remedies (such as specific

performance) in certain instances.

4.4 Non-Contravention. Neither the execution, delivery, and performance

by Sellers of this Agreement and each other agreement, instrument, or document

executed or to be executed by Sellers in connection with the transactions

contemplated hereby to which they are a party nor the consummation by them of

the transactions contemplated hereby and thereby do and will (a) conflict with

or result in a violation of any provision of the charter, bylaws or other

governing instruments of any Seller, (b) conflict with or result in a violation

of any provision of, or constitute (with or without the giving of notice or the

passage of time or both) a default under, or give rise (with or without the

giving of notice or the passage of time or both) to any right of termination,

cancellation, or acceleration under, any bond, debenture, note, mortgage or

indenture, or any material lease, contract, agreement, or other instrument or

obligation to which any Seller is a party or by which any Seller or any of

their properties may be bound, (c) result in the creation or imposition of any

lien or other encumbrance upon the properties of any Seller, or (d) violate any

applicable Law, rule or regulation binding upon any Seller or the Properties.

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4.5 Approvals. No consent, approval, order, or authorization of, or

declaration, filing, or registration with, any court or governmental agency or

of any third party is required to be obtained or made by any Seller in

connection with the execution, delivery, or performance by Sellers of this

Agreement, each other agreement, instrument, or document executed or to be

executed by Sellers in connection with the transactions contemplated hereby to

which they are a party or the consummation by them of the transactions

contemplated hereby and thereby.

4.6 Pending Litigation. There are no pending suits, actions, or other

proceedings in which any Seller is a party that would prevent or otherwise

adversely affect the execution and delivery of this Agreement, the consummation

of the transactions contemplated hereby, or the performance of obligations

contemplated hereby.

4.7 Compliance with Laws, Judgments and Governmental Authorizations. As

it relates to the Properties, none of the Sellers have received at any time in

the last five years any written communication from any governmental authority

regarding any actual, alleged or potential violation of, or failure to comply

with, any Law, judgment or governmental authorization, or any actual, alleged

or potential obligation on the part of the Sellers to undertake, or to bear all

or any portion of the cost of, any remedial action of any nature.

4.8 Solvency. None of the Sellers are insolvent, and none will be

rendered insolvent by any of the transactions contemplated by this Agreement.

As used in this section, "insolvent" means that the sum of the debts and other

probable liabilities of any Seller exceeds the present fair saleable value of

such Seller's assets. The cash available to each Seller, after taking into

account all other anticipated uses of the cash, will be sufficient to pay all

its liabilities and judgments promptly in accordance with their terms.

4.9 Special Limited Warranty of Title. Each Seller does hereby bind

itself, and its successors and assigns, to warrant and forever defend title to

the Properties unto Buyer, and its successors and assigns, against every claim

to, and every person claiming an interest in, the Oil and Gas Properties and to

any other Properties or any part thereof by, through and under such Seller, but

not otherwise. Pursuant to this special limited warranty of title, each Seller

represents that the working interest and net revenue interest for each of the

Oil and Gas Properties conveyed hereunder shall be the same as the working

interest and net revenue interest attributable to such Seller as set forth in

Exhibit I hereto.

4.10 Shares Restricted. Each Seller understands, acknowledges and agrees

that that the shares of Parent Common Stock delivered by Parent pursuant to

Article III are "restricted securities" under applicable federal securities

laws and that the Securities Act and the rules of the SEC provide in substance

that Sellers may dispose of the Restricted Stock only pursuant to an effective

registration statement under the Securities Act or an exemption therefrom. Each

Seller acknowledges that Parent does not intend to file a registration

statement with the SEC. The certificates evidencing the Restricted Stock will

bear a legend which clearly sets forth this restriction. Each Seller

understands that it may not at any time demand the purchase by Parent of any of

such Seller's shares of Restricted Stock. The Restricted Stock shall bear the

following or similar legend:

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"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN

REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THESE SHARES MAY

NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF

AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT OR ANY

APPLICABLE STATE SECURITIES LAW OR AN OPINION OF COUNSEL REASONABLY

SATISFACTORY TO SOUTH TEXAS OIL COMPANY THAT SUCH REGISTRATION IS NOT

REQUIRED."

The foregoing legend will also be placed on any certificate representing

securities issued subsequent to the original issuance of the Restricted Stock

as a result of any transfer of such shares or any stock dividend, stock split,

or other recapitalization as long as the Restricted Stock have not been

transferred in such manner to justify the removal of the legend therefrom:

"THE HOLDER OF THIS SHARE ACKNOWLEDGES AND AGREES THAT PART OF THE

CONSIDERATION PAID TO SUCH HOLDER AS PART OF THE PURCHASE PRICE PAID PURSUANT

TO THE TERMS OF THAT CERTAIN PURCHASE AND SALE AGREEMENT DATED AS OF SEPTEMBER

25, 2007 (THE "PURCHASE AGREEMENT") SHALL CONSIST OF RESTRICTED STOCK AND,

ACCORDINGLY: (1) THAT SELLER WILL NOT SELL, ASSIGN, PLEDGE, GIVE, TRANSFER OR

OTHERWISE DISPOSE OF THE SHARES OR ANY INTEREST THEREIN, OR MAKE ANY OFFER OR

ATTEMPT TO DO ANY OF THE FOREGOING, EXCEPT PURSUANT TO A REGISTRATION OF THE

SHARES UNDER THE ACT AND ALL APPLICABLE SECURITIES LAWS OR IN A TRANSACTION

WHICH IS EXEMPT FROM THE REGISTRATION PROVISIONS OF THE ACT AND ALL APPLICABLE

SECURITIES LAWS; AND (2) THAT SOUTH TEXAS OIL COMPANY AND ANY TRANSFER AGENT

FOR THE SHARES SHALL NOT BE REQUIRED TO GIVE EFFECT TO ANY PURPORTED TRANSFER

OF ANY OF THE SHARES EXCEPT UPON COMPLIANCE WITH THE FOREGOING RESTRICTIONS AND

NOT BEFORE A PERIOD OF EIGHTEEN (18) MONTHS FROM THE CLOSING DATE (AS DEFINED

IN THE PURCHASE AGREEMENT)."

4.11 Bastrop II Leases. Each Seller hereby declares that it has no right,

title or interest in or to the oil and gas leasehold interests and other oil

and gas interests of any kind, whether legal, contractual, or equitable, actual

or contingent, in and to the Properties listed on Exhibit IV attached hereto

or made a part hereof. In the event it is established that any Seller currently

has or pre