U.S. SECURITIES AND EXCHANGE COMMISSION

























WASHINGTON, D.C. 20549



















































FORM 10-KSB/A2







































(Mark one)











































/ X /   Annual report under section 13 or 15(d) of the Securities Exchange Act of 1934























For the Year Ended April 30, 2003























or











































/   /   Transition report under section 13 or 15(d) of the Securities Exchange  Act of 1934















































SONORANENERGY, INC.



























(Name of Small Business Issuer in its Charter)















































WASHINGTON                                                                                                                                                  
13-4093341



























(State of incorporation)                                                                                                           (IRS Employer Identification No.)

















































11300 W. Olympic Boulevard, Ste. 800, Los Angeles, CA, 90064





















(Address of Principal Executive Offices)         (Zip Code)















































866-599-7676



























(Issuer's Telephone Number)

















































Securities registered under Section 12(g) of the Act:























COMMON STOCK, NO PAR VALUE PER SHARE

























(Title of Class)





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Check whether issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange during the past 12
months (or for such shorter period that the registrant was required to file such reports), and (2)has been subject to such
filing requirements for the past 90 days.         Yes /X/   No / /











































State issuer's revenues for its most recent fiscal year:
$80,507.











































The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference
to the price at which the common equity was sold, or the average bid and ask price of such common equity, as of June 30,
2003 was $2,740,333.











































APPLICABLE ONLY TO CORPORATE REGISTRANTS











































The number of shares outstanding of the issuer's Common Stock, no par value, as of June 30, 2003, was 9,134,444.











































Transitional Small Business Disclosure Format (check one):





















YES / /   NO /X/



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SONORAN ENERGY, INC.





















































2003 FORM 10-KSB ANNUAL REPORT



















































Table of Contents













































































PART I

















































Item 1. Description of Business











































Item 2. Description of Property











































Item 3. Legal Proceedings











































Item 4. Submission of Matters to a Vote of
Security Holders













































PART II

















































Item 5. Market for Common Equity and
Related Stockholder Matters











































Item 6. Management's Discussion and
Analysis of Financial Condition and Results of Operations











































Item 7. Financial Statements











































Item 8. Changes In and Disagreements with
Accountants on Accounting and Financial Disclosure













































PART III

















































Item  9.    Directors, Executive Officers, Promoters and Control Persons; Compliance With Section





















16(a) of the Exchange Act











































Item 10. Executive Compensation











































Item 11. Security Ownership of Certain
Beneficial Owners and Management











































Item 12.    Certain Relationships and Related Transactions













































PART IV

















































Item 13. Exhibits and Reports on Form 8-K











































Item 14. Controls and Procedures



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Cautionary Statement



Sonoran Energy, Inc is
including the following discussion to inform existing and potential security
holders generally of some of the risks and uncertainties that can affect the
Company. Statements made in this Annual Report on Form 10-KSB may be
forward-looking statements.  In addition, from time to time, the Company may
otherwise make forward-looking statements to inform existing and potential
security holders about the Company.  These statements may include projections
and estimates concerning the timing and success of specific projects and the
Company's future (1) income, (2) oil and gas production, (3) oil and gas
reserves and reserve replacement and (4) capital spending.  Forward-looking
statements are generally accompanied by words such as "estimate," "project,"
"predict," "believe," "expect," "anticipate," "plan," "goal" or other words that
convey the uncertainty of future events or outcomes.  In addition, except for
the historical information contained in this report, the matters discussed in
this report are forward-looking statements.  These statements by their nature
are subject to certain risks, uncertainties and assumptions and will be
influenced by various factors.  Should any of the assumptions underlying a
forward- looking statement prove incorrect, actual results could vary
materially.























































PART I

























































ITEM 1 - DESCRIPTION OF BUSINESS



















































GENERAL BUSINESS DESCRIPTION

































Overview



















































Sonoran Energy, Inc. (the "Company", "Sonoran" and sometimes "we," "us," "our" and derivatives of such
words), formerly named Showstar Online.com Inc., was incorporated on July 14, 1995 in the State of Colorado
as Cerotex Holdings, Inc.  The stockholders of the Company approved a change in corporate domicile to
Washington State, which became effective on September 15, 2000. Prior to June 2002 the company had
developed software and an art site on the Internet. The project had to be discontinued due to lack of funding. On
June 3, 2002 the Company changed its name to Sonoran Energy, Inc. and began the full transition to becoming
a junior oil and gas producer.



































General























During the period from May 2001 to April
2002, Sonoran Energy, Inc. had been searching for a merger
partner, buyer or a combination thereof to ensure the Company's continued operations. In April 2002,
management was presented with an opportunity to acquire a minority working interest in two California oil and
gas properties. Further reviews and meetings resulted in the Company management deciding to enter the oil and
gas industry and in May 2002 closed on one of the properties.

















Following the corporate name change and repositioning, Sonoran Energy began an aggressive program to build
itself into a promising junior oil and gas producer, purchasing additional oil and gas properties in July and
December 2002 and then again in April 2003.





















The Company, through its association with knowledgeable industry consultants,
Longbow, LLC and Archer Explorations, Inc., is positioned to be able to
identify, acquire and develop working interest percentages in smaller, underdeveloped oil and gas projects that
do not meet the requirements of the larger California producers and developers. 
Longbow LLC was formed in November of 2001 by John Howe, Brad Califf, James
Gable, and Gary Ross specifically to apply management, operational and technical
expertise to acquisition, exploration and exploitation opportunities in the
Western United States.  The principals of Longbow collectively have over
eighty-five years of diversified oil and gas experience with both major and
independent companies in the largest oil and gas producing basins in North
America.



Archer Explorations, Inc. was incorporated
in 1992 in the state of Nevada as an oil and gas operating company.  Archer
has an extensive history of contract operations and the farm-out of exploratory
services.  In 1998, Archer participated in eight exploratory wells, of
which seven were successful discoveries of new gas production. 
Additionally, Archer purchased working interest in production over three fields
in the Sacramento Basin.  In 2000, Archer participated in 16
outside-operated exploratory wells.  Thirteen of these have been completed
as gas wells.  By year-end of 2000, Archer's net production had doubled
over its 1999 production.



Longbow LLC is the operator of the
properties jointly owned by Sonoran and Longbow.



Archer Explorations provides the Company
with first right to participate in projects that they find which meet our
criteria for investment and provide due diligence and research on properties
identified by Sonoran.

























Sonoran acquires interests in land and producing properties through acquisition and lease on which it drills
and/or operates oil or gas wells in efforts to discover and/or to produce oil and gas.  Crude oil and natural gas
produced from these properties are sold to various refineries and pipeline companies.  The majority of all oil
and gas properties that Sonoran owns and operates are in joint ventures with others in the industry.  Sonoran's
interests in these properties will vary depending on the availability of said interests and their locations.  All of
the Company's current operations and major revenue producing properties are in California.



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DESCRIPTION OF BUSINESS - OIL AND GAS OPERATIONS

















































EXPLORATION AND DEVELOPMENT











































Sonoran operates in a highly competitive
industry wherein many companies, from large multinational companies to small
independent producers, are competing for a finite amount of oil and gas
resources. The Company seeks out properties to explore for oil and gas by
drilling and also seeks out producing oil and gas properties that can be
purchased and operated. Management will continue to review its existing
properties for possible additional reserves, new well possibilities and upgrades
to production facilities.











































OIL AND GAS PRODUCTION OPERATIONS











































Sonoran has a working interest in 6 oil and gas leases (properties) located within various counties in the State of
California.  All of these properties are capable of producing oil or natural gas, although not all of these
properties are considered profitable under certain economic conditions. During fiscal 2003, the Company
owned working interests, in 6 leases within California, with total gross oil production of approximately 2,800
barrels of oil and 1,567 Mcf of gas for the short time that the company owned the properties.  Production
operations, conducted by third party operators, consist of the daily pumping of oil from a well(s) into tanks,
maintaining the production facilities both at the well and tank settings, preparing and shipping the crude oil to
buyers.  Daily operations differ from one property to another, depending on the number of wells, the depth of
the wells, the gravity of the oil produced and the location of the property.  All of Sonoran's oil production is
classified as primary recovery production at this time; although certain properties may be conducive to
secondary recovery operations in the future, depending on the prevailing price of oil.  Gas production and sales
are similarly done through third parties.











































Primary recovery of oil and gas is by means of natural flow(s) or artificial lift of oil and gas from a single well
bore.  Natural gas and petroleum fluids enter the well bore by means of reservoir pressure or gravity; fluids and
gases are moved to the surface by natural pressure or by means of artificial lift.











































The Company contracts, through Joint Operating Agreements, for field level personnel (i.e., pumpers, rig
crews, roustabouts and equipment operators) that perform basic daily activities associated with producing oil
and gas. Daily operations include inspections of surface facilities and equipment, gauging, reporting and
shipping oil, and routine maintenance and repair activities on wells, production facilities and equipment.











































The Company participates in new wells or redrills existing wells on properties owned by the Company in an
attempt to increase oil and gas production.  The Company utilizes the services of outside drilling contractors for
drilling new wells and redrilling existing wells.  Maintenance and repairs of existing wells to maintain or
increase oil and gas production are also carried out by contractors.  Economic factors associated with the price
of oil and gas and the productive output of wells determine the number of active wells the Company
participates in.











































MARKETING OF CRUDE OIL AND NATURAL GAS











































The Company sold all its crude oil,
through its operating partner, Longbow LLC, to Pacific Marketing and Transportation LLC in 2003.
The Company has an industry standard Joint Operating Agreement with Longbow LLC
on all of its oil properties.  Longbow, as the operator, has a Crude Oil
Purchase Contract that provides for the pick-up of oil and the sale of that oil
at the current average monthly price less $1.00.  Sonoran is not a
signatory to the agreement with Pacific Marketing and Transportation LLC.  While revenue from
this customer is significant it is management's opinion that the oil and gas it produces could be sold to other
crude oil purchasers, refineries or pipeline companies. Natural gas is sold to companies in the area of
operations.  The Company sells of its oil pursuant to short-term contracts at market prices.  Accordingly, the
amount of oil the Company sells is dependent upon market demand.  Market demand for Sonoran's production
is subject to various influences and can never be assured, especially in an era of changing prices.  The base
values for crude oil the Company sells is set by major oil companies in response to area and market strengths
and international influences.  Types and qualities of crude oil vary substantially in base values posted by crude
oil buyers in various areas of the country. Sonoran's crude oil sales are not seasonal, but uniform throughout the
year.  Gas sales are also done through short term month to month contracts with various buyers at market
prices.











































RISKS, COMPETITION AND INDUSTRY CONDITIONS











































The profitability of the Company's operations depends primarily on the production of oil and gas in
commercially profitable quantities.  Oil and gas properties often fail to provide a return sufficient to repay the
substantial sums of money required for their acquisition, exploration and development. The acquisition,
exploration and development of oil and gas properties is a highly competitive business.  Many entities with
which the Company competes have significantly greater financial and staff resources.  Such competitive
disadvantages could materially and adversely affect the Company's ability to acquire new properties or develop
existing properties.











































The oil and gas industry, in general, has been adversely affected by several factors beyond the Company's
control, including unstable oil and gas prices, uncertainty regarding the effect of pricing agreements and
production quotas and allocations established by the Organization of Petroleum Exporting Countries, political
instability in the Middle East and the status of ever-changing federal and state legislation and regulation. Given
the uncertainty of international and domestic political actions and their impact on the energy markets, it is
difficult, if not impossible, to predict the price or market situation for any oil or gas which is currently owned or
which could be developed by the Company.  Depressed oil and gas prices or significant curtailment in the
Company's oil and gas production from its better properties would have a material adverse effect on the
Company's operations.































































REGULATIONS



















In
the United States, legislation affecting the oil and gas industry has been
pervasive and is under constant review for amendment or expansion. Pursuant to
such legislation, numerous federal, state and local departments and agencies
have issued extensive rules and regulations binding on the oil and gas industry
and its individual members, some of which carry substantial penalties for
failure to comply. These laws and regulations have a significant impact on oil
and gas drilling, gas processing plants and production activities, increase the
cost of doing business and, consequently, affect profitability. Inasmuch as new
legislation affecting the oil and gas industry is commonplace and existing laws
and regulations are frequently amended or reinterpreted, Sonoran is unable to
predict the future cost or impact of complying with these laws and regulations.
Sonoran considers the cost of environmental protection a necessary and
manageable part of its business. Sonoran has been able to plan for and comply
with new environmental initiatives without materially altering its operating
strategies.





Exploration and Production. Sonoran's operations are subject to
various types of regulation at the federal, state and local levels. These
regulations include requiring permits for the drilling wells; maintaining
prevention plans; submitting notification and receiving permits relation to the
presence, sue and release of certain materials incidental to oil and gas
operations; and regulating the location of wells, the method of drilling and
casing wells, the use, transportation, storage and disposal of fluids and
materials used in connection with drilling and production activities, surface
plugging and abandoning of wells and the transporting of production. Sonoran's
operations are also subject to various conservation matters, including the
number of wells which may be drilled in a unit, and the unitization or pooling
of oil and gas properties. In this regard, some states allow the forced pooling
or integration of tracts to facilitate exploration while other states rely on
voluntary pooling of lands and leases, which may make it more difficult to
develop oil and gas properties. In addition state conservation laws establish
maximum rates of production oil and gas wells, generally limit the venting or
flaring of gas, and impose certain requirements regarding the ratable purchase
of production. The effect of these regulations is to limit the amounts of oil
and gas Sonoran can produce from its wells and to limit the number of wells or
the locations at which Sonoran can drill.





Environmental and Occupational Regulations. Various federal, state and
local laws and regulations concerning the discharge of incidental materials into
the environment, the generation, storage, transportation and disposal of
contaminants or otherwise relating to the protection of public health, natural
resources, wildlife and the environment, affect Sonoran's exploration,
development, processing, and production operations and the costs attendant
thereto. These laws and regulations increase Sonoran's overall operating
expenses. Sonoran, through its operating partner, Longbow, maintains levels of
insurance customary in the industry to limit its financial exposure in the event
of a substantial environment claim resulting from sudden, unanticipated and
accidental discharges of oil, salt water or other substances. However, 100%
coverage is not maintained concerning any environmental claim, and no coverage
is maintained with respect to any penalty or fine required to be paid by Sonoran
because of its violation of any federal, state or local law. Sonoran is
committed to meeting its responsibilities to protect the environment wherever it
operates and anticipates making increased expenditures of both a capital and
expense nature as a result of the increasingly stringent laws relating to the
protection of the environment. Sonoran's expenditures in the last fiscal year
concerning these matters were immaterial, but Sonoran cannot predict with any
reasonable degree of certainty its future exposure concerning such matters.





Occupational Health and Safety. Sonoran is also subject to laws and
regulations concerning occupational safety and health. Due to the continued
changes in these laws and regulations, and the judicial construction of many of
them, Sonoran is unable to predict with any reasonable degree of certainty its
future costs of complying with these laws and regulations. Sonoran considers the
cost of safety and health compliance a necessary and manageable part of its
business. Sonoran has been able to plan for and comply with new initiatives
without materially altering its operating strategies.





Sonoran is subject to certain laws and regulations relating to environmental
remediation activities associated with past operations, such as the
Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA")
and similar state statutes. In response to liabilities associated with these
activities, accruals have been established when reasonable estimates are
possible. Such accruals primarily include estimated costs associated with
remediation. Sonoran has to used discounting in determining its accrued
liabilities for environmental remediation, and no material claims for possible
recovery from third party insurers or other parties related to environmental
costs have been recognized in Sonoran's financial statements. Sonoran adjusts
the accruals when new remediation responsibilities are discovered and probable
costs become estimable, or when current remediation estimates must be adjusted
to reflect new information.



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TAXATION











































The operations of the Company, as is the case in the petroleum industry generally, are significantly affected by
federal tax laws. Federal, as well as state, tax laws have many provisions applicable to corporations which
could affect the future tax liability of the Company.































































ENVIRONMENTAL











































The Company's activities are subject to existing federal and state laws and regulations governing environmental
quality and pollution control.  These laws may require the acquisition of permits relating to certain ongoing
operations, for drilling, emissions, waste water disposal and other air and water quality controls.  In view of the
uncertainty and unpredictability of environmental statutes and regulations, the Company cannot ensure that
such laws and regulations will not materially and adversely affect the business of the Company.  The Company
does not anticipate any material effect on its capital expenditures or earnings as the result of governmental
regulations, enacted or proposed, concerning environmental protection or the discharge of material into the
environment.  The Company is actively pursuing an ongoing policy of upgrading and restoring older properties
to comply with current and proposed environmental regulations.











































COMMITMENTS AND CONTINGENCIES











































The Company is liable for future
dismantlement and abandonment costs associated with its oil and gas properties.
These costs include future site restoration, post closure and other
environmental exit costs. The costs of future dismantlement and abandonment have
not been determinedin detail.  Based on discussions with our operating partner and their experience
with other operations, Management believes that these costs will not have a
material adverse effect upon its financial position or results of operations.































































OTHER











































The Company employed 2 contract people as of April 30, 2003, who were office and administrative personnel.
The Company has Joint Operating Agreements with third parties covering the production crews on all
properties. The Company contracts for additional labor services when needed.  The Company is not a party to
any union or labor contracts.











































All of the Company's revenues during 2003 were derived from domestic sources.











































The Company does not have any patents or trademarks, and it does not believe that its business or operations
are dependent upon owning any patents or trademarks.



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ITEM 2 - DESCRIPTION OF PROPERTY

















































(a)  DESCRIPTION OF PROPERTY











































The principal assets of the Company consist of proven and unproven oil and gas properties along with oil and
gas production related equipment acquired as part of the leases.  The Company's oil and gas properties currently
are located exclusively in the state of California in the following locations:











































SAN ANTONIO PROJECT, acquired in May 2002, located in the Salinas Basin, Monterrey California. A
3.375 % working interest in future wells of this project.









FRANKLIN PROJECT, acquired in July 2002, located in the Sacramento Valley, California. Sonoran
acquired a 2% working interest in this gas well.   Sonoran secured any and all
rights held by previous owner to participate in future wells drilled on the Franklin Prospect Contract Area.









KEYSTONE OIL COMPANY'S DEER CREEK PROPERTY, acquired in December 2002, is a
lease consisting of approximately 93 acres at Deer Creek Field, Tulare County, California. Sonoran has a 60% working interest in the property but will receive 80% of the net revenue until it has
recouped 150% of its acquisition costs of $335,000. This project with 12 producing wells and two water injection wells, is a
straight production acquisition for approximately 35 barrels oil per day.













EMJAYCO'S GLIDE #33 PROPERTY,acquired in December 2002, is a lease consisting of 160 acres in Mt.
Poso Field, Kern County, California. Sonoran has a 60% working interest in the property but will receive 80%
of the net revenue until it has recouped 150% of its acquisition costs of
$113,875. The project, which has twelve wells and
one water injector well, is producing an average of 30 barrels per day.







DEER CREEK OIL FIELD - MERZONIAN LEASE
acquired in April 2003, is a lease consisting of
approximately 20 acres, 6 producing wells and one injection well in Tulare County adjacent to the Keystone
leases. Sonoran has a 50% working interest with the other 50% belonging to our operating partner. The wells
are producing an average of 25 barrels per day.







SACREMENTO BASIN GAS PROPERTIES acquired in April 2003, consists of four operations which
Sonoran has acquired a working interest in each lease:



-    Deverton Creek Gas Field located in Solano County, consisting of seven producing wells operated by
Aspen Exploration Corp. and producing 1000 Mcf /day as of January 1, 2003.  Sonoran acquired a 1.125%
Working Interest in the producing wells along with working interests varying from 0.019% to 0.056 % in
wells that have proven undeveloped reserves.











-    Malton-Black Butte Gas Field located in Tehama County, consisting of six producing wells, a water
injection well operated by Aspen Exploration Corp. with one shut-in well and producing 1000 Mcf /day as
of January 1, 2003.  Sonoran acquired a 10% Working Interest in the producing wells along with working
interests varying from 2.65% to 5.0 % in wells that have proved undeveloped reserves.











-    Maine Prairie Gas Field located in Solano County, consisting of four producing wells operated by Castle
Minerals Ltd. and producing 1914 MMBTU /day as of January 1, 2003. Sonoran acquired a 1.41%
Working Interest in three of the wells and a 0.705% working interest in the fourth well.











-    Lambie Ranch located in Salano County, consisting of one well that is presently being reworked and
operated by Gotland Oil Co. Sonoran has acquired a 1.0% Working Interest in this well.



Sonoran receives revenue from the properties as soon as they are
in production.  As an incentive to have Sonoran fully fund the purchases of
Keystone and Glide, the party holding the other 40% working interest in the
leases (Sonoran holds 60%) granted the Company an 80% interest in the net
revenue from the oil wells until such time as Sonoran has received an amount
equal to 150% of the initial acquisition costs.  At that point, Sonoran
will begin to receive only its original 60% working interest.



The Company has given a
blanket lien to Ironwood LLC on these properties as security for the notes payable as discussed
in note 7 to the financial statements as well as in  Item 6 (Managements
Discussion and Analysis) included in this 10KSB. We incorporate by
reference an 8K issued on 12/23/02 plus the two 8Ks included in this filing.



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(b)  OIL AND GAS PROPERTIES



The Company began acquiring these
properties in May of 2002, the first month of the current fiscal year. 
Prior to May 2002, Sonoran Energy, Inc. was not involved in the Oil and Gas
Industry, therefore, all prior years numbers are shown as zero.











































The Company's estimated future net recoverable oil and gas reserves  were
assembled from reports prepared by independent petroleum engineers using general accepted industry standards and are as follows:























|                            | Crude Oil (BBLS) | Natural Gas (MCF)
|--------------------------- | ---------------- | -----------------
|Proved Undeveloped Reserves | 444,082          | 126,632          
|Proved Developed Reserves   | 220,592          | 70,279           
|Total Proved Reserves       | 664,674          | 196,911          
|                            |                  |                  



















































The Company's estimated future net recoverable oil and gas reserves, noted above, have not been filed with any
other Federal authority or agency.























Using year-end oil prices and estimated lease operating expenses,
the estimated value of future net revenues, before income tax, to be derived
from proved oil and gas reserves, discounted at 10%, was $4,919,388 at April 30, 2003. The details of this
calculation can be found in Note 9 of the Notes to the Consolidated Financial
Statements included with this 10-KSB.























Sonoran's net share of oil and gas
production after royalty and other working interests for the past five years
ending April 30, were as follows:























|                  | 2003  | 2002
|----------------- | ----- | ----
|                  |       |     
|Crude oil (Bbls)  | 2,797 | 0   
|                  |       |     
|Natural gas (MCF) | 1,567 | 0   



























Sonoran's net share
of oil and gas wells and acreage after royalty and other working interests for
the past five years ending April 30, were as follows:



|                 | 2003  |  | 2002
|---------------- | ----- |  | ----
|                 | Gross |  | Net 
|Productive Wells |       |  |     
|Oil              | 23    |  | 11  
|Gas              | 27    |  | 4   
|                 |       |  |     
|Acreage          |       |  |     
|Oil - Developed  | 162   |  | 83  
|- Undeveloped    | 111   |  | 58  
|                 | 273   |  | 141 
|                 |       |  |     
|Gas - Developed  | 2,186 |  | 169 
|- Undeveloped    | 1,433 |  | 131 
|                 | 3,619 |  | 300 
|                 |       |  |     



Sonoran did not participate in the drilling of any new wells on
any property that they has a working interest in during this fiscal year.



Sonoran's average sales prices per barrel or per MCF of crude oil and natural gas, respectively, and production
costs per equivalent barrel (gas production is converted to equivalent barrels at the rate of 6 MCF per barrel,
representing the estimated relative energy content of gas to oil) for the past five years ending April 30, were as
follows:

























|                 | 2003     |  | 2002 
|---------------- | -------- |  | -----
|Sales price:     |          |  |      
|Crude oil        | $ 24.87  |  | $ n/a
|                 |          |  |      
|Natural gas      | $   4.99 |  | $ n/a
|                 |          |  |      
|Production costs | $   9.74 |  | $ n/a
|                 |          |  |      













































The average selling price of Sonoran's crude oil at April 30, 2003, was approximately $21.33 per barrel and the
average selling price of Sonoran's gas at April 30, 2003, was approximately $4.99 per MCF.



Page 8

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ITEM 3 - LEGAL PROCEEDINGS



















































The Company has been named as a defendant in a lawsuit filed against Savingsplus Internet Inc. by a director
of Savingsplus for failure to repay a $35,000 loan to the director's company (Korker
Diversified Holdings). The Company had contemplated an investment in Savingsplus
Internet, Inc. that was never consummated.  The Savingsplus Director who
filed suit was owed money by Savingsplus and, Management believes, may have felt
that Sonoran's possible investment would have been the basis for his repayment. The original claim was filed in the British Columbia
Supreme Court as Registry No. S004571 on August 23, 2000. Sonoran has retained counsel and
filed a reply to the suit as of April 30, 2001. There was no contact with the other party until April 2002 when
the Company was informed the other party wished to proceed and in July 2002 told that they had increased their
claim by about $190,000. Subsequent submissions by Korker have reduced the claim and Sonoran has held an
examination for discovery of Korker's officers. In April/May 2003 Korker attempted to schedule a Summary
Trial of the matter but adjourned after receipt of Sonoran's affidavits.  Counsel for Korker has made numerous
requests for information which should be apparent from the materials already prepared. Sonoran has invited
Korker's counsel to conduct an examination for discovery but to this date this
has not occurred. No new date has been set for the Summary Trial although all
necessary materials have been prepared.



































































ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

















































No matters were submitted to a vote of security holders during the fourth quarter of 2003.



Page 9

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PART II





















































ITEM 5 - MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

















































(a)  PRICE RANGE OF COMMON SHARES











































The common stock of Sonoran is traded on the OTC Bulletin Board under the symbol "SNRN".  The following
are high and low sales prices for each quarter of 2003 and 2002, and reflect inter-dealer prices without retail
markup, markdown or commission.























|QUARTER ENDING    | HIGH BID | LOW BID
|----------------- | -------- | -------
|July 31, 2001     | $0.02    | $0.01  
|October 31, 2001  | $0.01    | $0.01  
|January 31, 2002  | $0.01    | $0.01  
|April 30, 2002    | $0.01    | $0.01  
|July 31, 2002 (1) | $0.15    | $0.10  
|October 31, 2002  | $0.24    | $0.10  
|January 31, 2003  | $0.18    | $0.10  
|April 20, 2003    | $0.34    | $0.11  
|July 31,  2003    | $0.44    | $0.25  























(1)    The Company completed a 25 old for 1 new restructure of equity on June 3, 2002.













































At April 30, 2003, the Company had 219 shareholders of record, and an unknown number of additional holders
whose stock is held in "street name".











































The Company has paid no dividends on its common shares for the past five years.  In July 2003, the Company
announced an 8% Unit dividend and warrant (one warrant for every 10 shares held) payable August 22, 2003 to
shareholders of record on July 25, 2003.











































Future dividends on the common shares, if any, will be dependent upon the Company's earnings, financial
conditions and other relevant factors as determined by the Board of Directors.







































































ITEM 6 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL RESULTS OF
OPERATIONS

























GENERAL











The past 12 months have been one of dramatic change for Sonoran Energy, Inc. as it made the transition to a
junior oil and gas producer.  In April 2002, the Company began exploring opportunities within the oil and gas
industry, and made the decision to shift its business focus to the energy sector in May 2002, and acquired a
small working interest in an oil property lease in the Salinas Basin near Monterrey, California.  The Company
then completed the transition in June 2002 when it changed its name and began operating as Sonoran Energy,
Inc.











Sonoran Energy's initial acquisition introduced the Company to its operating partner Longbow LLC, who
together with Archer Exploration, began providing the Company with industry expertise and introductions to
new oil and gas opportunities.  That strategic alliance was solidified in the following months and led to the
Company formulating an ambitious property acquisition program.  As a result, the Company acquired a major
working interest in two significant oil and gas properties in the Bakersfield, California area in December 2002.
One of these oil-producing properties started generating revenues for the Company in December 2002.  The
second property required some reactivation work and has since been returned to production, and commenced
generating revenues in May 2003. In April 2003, the Company acquired two additional working interests
consisting of an oil lease adjacent to an existing lease and four natural gas leases both generating revenue upon
closure.  The acquisitions were accomplished through share issues as shown in note 4 and
through debt arranged with unrelated third parties as outlined in note 7 of the
audited financial statements. We incorporate by reference an 8K issued on
12/23/02 plus the two 8Ks included in this filing.











In May 2003, a third party geologic review identified an additional 250,000 barrels of proved undeveloped
(PUD) reserves on the Company's combined 113-acre leasehold in the Deer Creek Oil Field.  In June 2003, a
third party geologic review identified an additional 640,000 barrels of proved undeveloped (PUD) reserves on
Sonoran's Emjayco Glide #33 Property holdings













Management intends to continue with its acquisition program and plans to develop into a significant junior oil
and gas producer.



Page 10

---





























LIQUIDITY AND CAPITAL RESOURCES





















































The Company had cash and cash equivalents of $32,719 at April 30, 2003 for an increase of $25,009 when
compared to April 30, 2002.  Net capital spending of $987,420 used cash in 2003.  This was offset by proceeds
from the issuance of notes payable of $1,075,000 and private placements of $142,487.  The components of the
changes in cash for 2003 are more fully described in the Statements of Cash Flows included in Item 7 of this
Form 10-KSB.  Adequate funds were available to carry out all cash calls the Company chose to participate in.



















































The Company believes that its existing current assets and the amount of cash it anticipates it will generate from
current operations will be sufficient to fund the anticipated liquidity and capital resource needs of the Company
for the fiscal year ended April 30, 2004.  The Company expects to increase its capital expenditures during the
current fiscal year to enhance or increase its current oil and gas production capacities and does not anticipate
having any trouble in securing sufficient funds to complete projects.



At the present time, Management feels that
there are opportunities to enhance existing wells and discussions have been held
regarding efforts to tap into newly found reserves on the oil properties,
however, there are no definitive plans at this time for any capital
expenditures.





















































The Company is not a party to off-balance sheet arrangements and does not engage in trading activities
involving non-exchange traded contracts.  In addition, the Company has no financial guarantees, debt or lease
agreements or other arrangements that could trigger a requirement for an early payment or that could change the
value of the Company's assets.  Management continues to examine various alternatives for increasing capital
resources including, among other things, participation with industry and/or private partners and specific rework
of existing properties to enhance production and expansion of its sales of crude oil and natural gas in California.















































































ANALYSIS OF SIGNIFICANT CHANGES IN RESULTS OF OPERATIONS























































































Results of Operations for the Fiscal Year Ended April 30, 2003 compared to the Fiscal Year Ended April 30,
2002:



















































REVENUES



















































Revenue was $80,507 in April 30, 2003 and $122,134 in April 30, 2002. As the Company changed its business
plan early in fiscal 2003 to enter the oil and gas industry a explanation of the change in revenue would be
meaningless.  The revenue for April 30, 2003 is not indicative of the anticipated revenue for 2004 due to the
limited time the Company received revenue from it's properties - i.e., Gas properties acquired in April 2003 and
one of the oil properties began operation in May 2003.

















































OPERATING EXPENSES



















































Operating expense was $48,759 in April 30,
2003 and $0 in April 30, 2002. As the Company changed its business plan early in
fiscal 2003 to enter the oil and gas industry, an explanation of the change in
operating expenses
would be meaningless.











































































GENERAL AND ADMINISTRATIVE EXPENSES



















































General and administrative expenses decreased by approximately 46% for the year ended April 30, 2003, when
compared with the same period for 2002.  Stock based compensation increased during 2003 as the Company
was able to pay for the listed services with stock rather than cash.
The Company incurred
increased legal expense as a result of the work needed on the acquisitions and
corporate matters such as the name change and share restructuring.  G & A
expense includes the costs for Management services, Investor Relations, Audit,
travel and office expenses.  Consultants were hired to assist the Company
in searching for and getting introductions to potential acquisition projects as
well as due diligence and geological reviews.











































































PROVISION FOR DEPLETION, DEPRECIATION AND AMORTIZATION



















































The provision for depletion, depreciation and amortization was $4,228 for the year ended April 30, 2003
reflecting the cost associated with the first years operation from the oil and gas leases which were not part of
the Company in 2002.



CORPORATE INDEBTEDNESS



Following is a schedule of the Company's notes payable as of April 30, 2003:







|Note payable dated
    October 28, 2002, interest rate at 18 percent, maturity date of October 24,
    2004                                                                                                                              |                   
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------
|secured by first
    mortgage on oil and gas properties, convertible (1) to the Company's common                                                                                                                                         |                   
|stock at the option of
    the holder                                                                                                                                                                                                    | $     
    600,000
|                                                                                                                                                                                                                                         |                   
|Note payable dated
    April 1, 2003, interest rate at 15 percent, maturity date of March 31, 2005                                                                                                                                       |                   
|secured by first
    mortgage on oil and gas properties, convertible (1) to the Company's common                                                                                                                                         |                   
|stock at the option of
    the holder                                                                                                                                                                                                    | 375,000           
|                                                                                                                                                                                                                                         |                   
|Note payable dated
    April 30, 2003, interest rate at 15 percent, maturity date of March 31, 2005                                                                                                                                      |                   
|secured by first
    mortgage on oil and gas properties, convertible (1) to the Company's common                                                                                                                                         |                   
|stock at the option of
    the holder                                                                                                                                                                                                    | 25,000            
|Total notes payable,
    long-term                                                                                                                                                                                                       | $  1,000,000      
|                                                                                                                                                                                                                                         |                   
|Note payable dated May
    23, 2002, interest rate at 8 percent, default interest rate of 16 percent,
    maturity date of September 30, 2002, unsecured, convertible (2) to the
    Company's common stock at the option of the holder  | $       25,000    
|                                                                                                                                                                                                                                         |                   
|Note payable dated July
    13, 2002, interest rate at 8 percent, default interest rate of 16 percent,
    maturity date of September 30, 2002, unsecured, convertible (2) to the
    Company's common stock at the option of the holder | 50,000            
|Total notes payable,
    short-term                                                                                                                                                                                                      | $       75,000    
|                                                                                                                                                                                                                                         |                   































(1)    Note holder is entitled, at its option, to convert any or all of the principal amounts of the note
into shares of the Company's common stock at the greater of a price equal to 80 percent of
the average daily trading prices over the thirty days immediately preceding the date of
conversion, or $.50 per share.













(2)    Note holder is entitled, at its option, to convert any or all of the indebtedness related to the
note into shares of the Company's common stock at the greater of a price equal to 80 percent
of the average daily trading prices over the five days immediately preceding the date of
conversion, or $.25 per share.













Accrued interest payable and interest expense on the promissory notes totaled $10,290 and $58,179,
respectively, as of and for the year ended April 30, 2003.



Page 11

---





















































OTHER INCOME (EXPENSE)



















































The liability settlement gains arise from the Company being able to settle longer term debt from expense
incurred prior to its entry into the oil and gas industry.



















































RECENT ACCOUNTING DEVELOPMENTS













































In December 2002, the Financial Accounting Standards Board issued SFAS No. 148,
"Accounting for Stock-Based Compensation-Transition and Disclosure", which amended SFAS No. 123 to provide alternative
methods of transition for a voluntary change to the fair value based method of accounting for stock-based
employee compensation. It also amends the disclosure provisions of SFAS No. 123 to require prominent
disclosure in both annual and interim financial statements about the method of accounting for stock-based
employee compensation and the effect of the method used on reported results. For the Company, the provisions
of SFAS No. 148 were in effect for its year ended April 30, 2003. The Company will continue to use APB No.
25 to account for stock based compensation, while providing the disclosures required by SFAS No. 123 as
amended by SFAS No. 148.



Page 12







---











































ITEM 7- FINANCIAL STATEMENTS



SONORAN ENERGY, INC.

Index to Consolidated Financial Statements



|                                                                                                       | Page
|------------------------------------------------------------------------------------------------------ | ----
|Independent Auditors' Report                                                                           | F-2 
|                                                                                                       |     
|Consolidated Balance Sheet at April 30, 2003                                                           | F-3 
|                                                                                                       |     
|Consolidated Statements of Operations for the
    years ended April 30, 2003 and 2002                  | F-4 
|                                                                                                       |     
|Consolidated Statement of Changes in
    Shareholders' Deficit from May 1, 2001 through April 30, 2003 | F-5 
|                                                                                                       |     
|Consolidated Statements of Cash Flows for the
    years ended April 30, 2003 and 2002                  | F-7 
|                                                                                                       |     
|Notes to Consolidated Financial Statements                                                             | F-9 
|                                                                                                       |     

F-1

---



To the Board of Directors and Shareholders





Sonoran Energy, Inc.









INDEPENDENT AUDITORS' REPORT









We have audited the accompanying consolidated balance sheet of Sonoran Energy, Inc. and its
subsidiaries as of April 30, 2003 and the related consolidated statements of operations, changes in
shareholders' deficit, and cash flows for the years ended April 30, 2003 and 2002.  These consolidated
financial statements are the responsibility of the Company's management.  Our responsibility is to
express an opinion on these consolidated financial statements based on our audits.







We conducted our audits in accordance with auditing standards generally accepted in the United States
of America.  Those standards require that we plan and perform the audits to obtain reasonable assurance
about whether the financial statements are free of material misstatements.  An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit
also includes assessing the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation.  We believe that our audits provide a
reasonable basis for our opinion.







In our opinion, the consolidated financial statements referred to above present fairly, in all material
respects, the financial position of Sonoran Energy, Inc. and its subsidiaries as of April 30, 2003 and the
results of their operations and their cash flows for the years ended April 30, 2003 and 2002 in
conformity with accounting principles generally accepted in the United States of America.







The accompanying financial statements have been prepared assuming that the Company will continue as
a going concern.  As discussed in Note 1 to the financial statements, the Company has a working capital
deficit at April 30, 2003 and has incurred significant losses since inception, which raise substantial
doubt about its ability to continue as a going concern.  Management's plans in regard to these matters
are also described in Note 1.  The financial statements do not include any adjustments that might result
from the outcome of these uncertainties.







Cordovano and Harvey, P.C.





Denver, Colorado





July 31, 2003



F-2

---

SONORAN ENERGY, INC.

Consolidated Balance Sheet

April 30, 2003



|Assets                                                         |                  
|-------------------------------------------------------------- | -----------------
|Current assets:                                                |                  
|Cash                                                           | $     
    32,719
|Accounts receivable                                            | 14,592           
|Loan receivable (Note 3)                                       | 2,525            
|Accrued interest receivable (Note 3)                           | 327              
|Prepaid expenses                                               | 82,500           
|Total current assets                                           | 132,663          
|                                                               |                  
|Restricted cash - Idle
    well bond (Note 1)                  | 75,303           
|Oil and gas properties
    - full cost method (Notes 1 and 8): |                  
|Proved                                                         | 747,209          
|Unproved                                                       | 514,908          
|Total oil and gas properties                                   | 1,262,117        
|Accumulated depletion                                          | (4,228)          
|Net oil and gas properties                                     | 1,257,889        
|                                                               |                  
|Assets available for
    sale (Note 6)                         | 309,743          
|                                                               | $  1,775,598     
|                                                               |                  
|Liabilities and Shareholders' Deficit                          |                  
|Current liabilities:                                           |                  
|Accounts payable                                               | $   
    562,964 
|Accrued expenses                                               | 241,337          
|Loans payable (Note 6)                                         | 845,000          
|Notes payable (Note 7)                                         | 75,000           
|Accrued interest payable (Notes 6 and 7)                       | 231,790          
|Indebtedness to related parties (Note 2)                       | 15,042           
|Total current liabilities                                      | 1,971,133        
|                                                               |                  
|Long-term debt (Note
    7):                                   |                  
|Notes payable                                                  | 1,000,000        
|Total liabilities                                              | 2,971,133        
|                                                               |                  
|Contingencies (Note 8)                                         | -                
|                                                               |                  
|Shareholders' deficit
    (Note 4):                            |                  
|Preferred stock, no par value; 25,000,000 shares authorized,   |                  
|no shares issued and outstanding                               | -                
|Common stock, no par value; 75,000,000 shares authorized,      |                  
|8,854,444 shares issued and outstanding                        | 14,589,663       
|Additional paid-in capital                                     | 380,000          
|Outstanding common stock warrants - 150,000                    | 7,200            
|Cumulative translation adjustments                             | 22,687           
|Accumulated deficit                                            | (16,195,085)     
|                                                               | (1,195,535)      
|                                                               |                  
|Total shareholders' deficit                                    | $    1,775,598   
|                                                               |                  

See accompanying notes to consolidated financial statements.



F-3

---

SONORAN ENERGY, INC.

Consolidated Statements of Operations



|                                                    | For the Years Ended April 30,
|--------------------------------------------------- | -----------------------------
|                                                    | 2003                         
|Revenue                                             |                              
|Oil and gas sales                                   | $     
    78,007            
|Other                                               | 2,500                        
|Total revenue                                       | 80,507                       
|                                                    |                              
|Operating expenses:                                 |                              
|Oil and gas production costs                        | 48,759                       
|Depletion                                           | 4,228                        
|Depreciation and amortization                       | -                            
|Stock-based compensation (Note 3):                  |                              
|Officer compensation                                | 30,000                       
|Legal                                               | 106,000                      
|Debt issue costs                                    | 85,000                       
|Stock warrants                                      | 7,200                        
|Consulting                                          | 111,025                      
|General and administrative                          | 235,945                      
|Impairment of web site and domain name (Note 1)     | -                            
|Liability settlement gains                          | (231,390)                    
|Total costs and expenses                            | (396,767)                    
|                                                    |                              
|Interest income                                     | 630                          
|Interest expense                                    | (145,376)                    
|                                                    |                              
|Loss from continuing operations before income taxes | (461,006)                    
|                                                    |                              
|Income tax provision
    (Note 5)                   | -                            
|                                                    |                              
|Net loss                                            | $    (461,006)               
|                                                    |                              
|Net loss per common
    share:                      |                              
|Basic and diluted                                   | $         
    (0.08)        
|Weighted average common
    shares outstanding:     |                              
|Basic and diluted                                   | 5,524,542                    
|                                                    |                              



*
Restated for 1:25 reverse common stock split (see Note 4)



See accompanying notes to consolidated
financial statements.



F-4

---

SONORAN ENERGY, INC.

Consolidated Statement of Changes in Shareholders' Deficit



|                                                                                  | Common Stock | Additional Paid-In Capital | Outstanding Common Stock Options/Warrants | Deferred Stock Compensation | Deficit Accumulated During Development Stage | Cumulative Trasnlation Adjustment | Total        
|--------------------------------------------------------------------------------- | ------------ | -------------------------- | ----------------------------------------- | --------------------------- | -------------------------------------------- | --------------------------------- | -------------
|                                                                                  | Shares       | Amount                     | Other Comprehensive Income (Loss)        
|                                                                                  |              |                            |                                           |                             |                                              |                                   |              
|Balance at
    April 30, 2001                                                     | 50,847,030   | $  13,356,971              | $    74,000                               | $  191,000                  | $  (81,663)                                  | $ (14,264,246)                    | $    (42,280)
|                                                                                  |              |                            |                                           |                             |                                              |                                   |              
|Common
    stock cancelled                                                        | (575,000)    | (115,000)                  | 115,000                                   | -                           | -                                            | -                                 | -            
|                                                                                  |              |                            |                                           |                             |                                              |                                   |              
|Common
    Stock issued to an officer under terms of employment contract (Note 2) | 400,000      | 4,000                      | -                                         | -                           | -                                            | -                                 | -            
|                                                                                  |              |                            |                                           |                             |                                              |                                   |              
|Common
    stock issued to officers as payment for liabilities (Note 2)           | 4,645,800    | 46,458                     | -                                         | -                           | -                                            | -                                 | -            
|                                                                                  |              |                            |                                           |                             |                                              |                                   |              
|Deferred
    stock compensation                                                   | -            | -                          | -                                         | -                           | 81,663                                       | -                                 | -            
|                                                                                  |              |                            |                                           |                             |                                              |                                   |              
|Expired
    warrants and options                                                  | -            | -                          | 191,000                                   | (191,000)                   | -                                            | -                                 | -            
|                                                                                  |              |                            |                                           |                             |                                              |                                   |              
|Comprehensive loss:                                                               |              |                            |                                           |                             |                                              |                                   |              
|Net loss, year ended                                                              |              |                            |                                           |                             |                                              |                                   |              
|April 30, 2002                                                                    | -            | -                          | -                                         | -                           | -                                            | (1,469,833)                       | -            
|Cumulative Translation                                                            |              |                            |                                           |                             |                                              |                                   |              
|Adjustment                                                                        | -            | -                          | -                                         | -                           | -                                            | -                                 | 94,086       
|                                                                                  |              |                            |                                           |                             |                                              |                                   |              
|Comprehensive loss                                                                | -            | -                          | -                                         | -                           | -                                            | -                                 | -            
|                                                                                  |              |                            |                                           |                             |                                              |                                   |              
|Balance at
    April 30, 2002                                                     | 55,317,830   | 13,292,429                 | 380,000                                   | -                           | -                                            | (15,734,079)                      | 51,806       
|                                                                                  |              |                            |                                           |                             |                                              |                                   |              
|1 for 25
    reverse common stock split                                           | (53,105,074) | -                          | -                                         | -                           | -                                            | -                                 | -            
|                                                                                  |              |                            |                                           |                             |                                              |                                   |              
|Common
    stock sales (Note 4)                                                   | 569,950      | 142,487                    | -                                         | -                           | -                                            | -                                 | -            
|                                                                                  |              |                            |                                           |                             |                                              |                                   |              
|Common
    stock issued to an officer as payment for salaries (Note 2)            | 200,000      | 30,000                     | -                                         | -                           | -                                            | -                                 | -            
|                                                                                  |              |                            |                                           |                             |                                              |                                   |              
|Common
    stock issued in exchange for consulting services (Note 4)              | 2,038,500    | 299,525                    | -                                         | -                           | -                                            | -                                 | -            
|                                                                                  |              |                            |                                           |                             |                                              |                                   |              
|Common
    stock issued in exchange for debt issue costs (Note 4)                 | 500,000      | 85,000                     | -                                         | -                           | -                                            | -                                 | -            
|                                                                                  |              |                            |                                           |                             |                                              |                                   |              
|Common
    stock issued to officers as payment for liabilities (Note 2)           | 1,184,200    | 296,055                    | -                                         | -                           | -                                            | -                                 | -            
|                                                                                  |              |                            |                                           |                             |                                              |                                   |              
|Common
    stock issued in exchange for debt payments (Note 4)                    | 399,038      | 94,167                     | -                                         | -                           | -                                            | -                                 | -            
|                                                                                  |              |                            |                                           |                             |                                              |                                   |              
|Common
    stock issued in exchange for oil and gas properties (Note 4)           | 1,750,000    | 350,000                    | -                                         | -                           | -                                            | -                                 | -            
|                                                                                  |              |                            |                                           |                             |                                              |                                   |              
|Common
    stock warrants issued to non-employees (Note 4)                        | -            | -                          | -                                         | 7,200                       | -                                            | -                                 | -            
|                                                                                  |              |                            |                                           |                             |                                              |                                   |              
|Comprehensive loss:                                                               |              |                            |                                           |                             |                                              |                                   |              
|Net loss, year ended                                                              |              |                            |                                           |                             |                                              |                                   |              
|April 30, 2003                                                                    | -            | -                          | -                                         | -                           | -                                            | (461,006)                         | -            
|Cumulative translation                                                            |              |                            |                                           |                             |                                              |                                   |              
|adjustment                                                                        | -            | -                          | -                                         | -                           | -                                            | -                                 | (29,119)     
|Comprehensive loss                                                                | -            | -                          | -                                         | -                           | -                                            | -                                 | -            
|                                                                                  |              |                            |                                           |                             |                                              |                                   |              
|Balance at
    April 30, 2003                                                     | 8,854,444    | $  14,589,663              | $  380,000                                | $    7,200                  | $              
    -                        | $ (16,195,085)                    | $      22,687
|                                                                                  |              |                            |                                           |                             |                                              |                                   |              

See accompanying notes to consolidated financial statements.



F-6

---

SONORAN ENERGY, INC.

Consolidated Statements of Cash Flows



|                                                                            | For the Years Ended April 30,
|--------------------------------------------------------------------------- | -----------------------------
|                                                                            | 2003                         
|Cash flows from
    operating activities:                                   |                              
|Net loss                                                                    | $   
    (461,006)           
|Adjustments to reconcile net loss to net cash used in operating activities: |                              
|Depletion, depreciation and amortization                                    | 4,228                        
|Liability settlement gains                                                  | (231,390)                    
|Impairment of web site and domain name                                      | -                            
|Stock compensation expense                                                  | 329,525                      
|Stock issued for debt issue costs                                           | 85,000                       
|Common stock warrants granted                                               | 7,200                        
|Changes in operating assets and liabilities:                                |                              
|Receivables and prepaid expenses                                            | (97,419)                     
|Accounts payable and accrued expenses                                       | 190,448                      
|                                                                            |                              
|Net cash used in operating activities                                       | (173,414)                    
|                                                                            |                              
|Cash flows from
    investing activities:                                   |                              
|Issuance of note receivable                                                 | (2,525)                      
|Payment of Idle well bond                                                   | (75,000)                     
|Purchases of oil and gas properties                                         | (912,420)                    
|                                                                            |                              
|Net cash used in investing activities                                       | (989,945)                    
|                                                                            |                              
|Cash flows from
    financing activities:                                   |                              
|Proceeds from advances                                                      | -                            
|Proceeds from notes payable                                                 | 1,075,000                    
|Proceeds from the sale of common stock                                      | 142,487                      
|                                                                            |                              
|Net cash provided by financing activities                                   | 1,217,487                    
|                                                                            |                              
|Cumulative translation
    adjustment                                       | (29,119)                     
|                                                                            |                              
|Net change in cash                                                          | 25,009                       
|                                                                            |                              
|Cash, beginning of year                                                     | 7,710                        
|                                                                            |                              
|Cash, end of year                                                           | $      32,719                
|                                                                            |                              
|Supplemental disclosure
    of cash flow information:                       |                              
|Cash paid for income taxes                                                  | $              
    -        
|Cash paid for interest                                                      | $     47,889                 
|                                                                            |                              
|Non-cash investing and
    financing activities:                            |                              
|Common stock issued for payment of debt, advances, and other liabilities    | $   390,222                  
|Common stock issued for acquisition of oil and gas properties               | $   350,000                  
|                                                                            |                              

See accompanying notes to consolidated financial statements.

F-8

---

SONORAN ENERGY, INC.

Notes to Consolidated Financial
Statements









Note 1:    Nature of Organization and Summary of Significant Accounting Policies









Nature of Organization

















Sonoran Energy, Inc. (the "Company") was incorporated under the laws of Colorado as Cerotex
Holdings, Inc. on July 14, 1995.  The Company's shareholders approved a change of corporate domicile
to Washington State, which became effective on September 15, 2000.  Prior to June 2002, the Company
developed software and an art site on the Internet.  The Internet project was terminated in April 2002,
due to lack of funding, after generating approximately $1.8 million in liabilities that were unpaid as of
June 30, 2003.  On June 3, 2002, the Company changed its name to Sonoran Energy, Inc. and entered
the oil and gas industry.  The Company's primary objective is to identify, acquire and develop oil and
gas projects located in California.























The Company acquires interests in producing properties through leases on which it drills and/or operates
oil or gas wells in efforts to discover and/or to produce oil and gas.  The majority of all oil and gas
properties that the Company owns and operates are in joint venture with others in the industry.  The
Company's interests in the properties vary depending on the availability of the interests and their
locations.























The Company has a working interest in six oil and gas properties located within the State of California.





Basis of Presentation









The accompanying consolidated financial statements have been prepared on a going concern basis,
which contemplates the realization of assets and liabilities in the normal course of business.  As shown
in the accompanying consolidated financial statements, the Company has incurred significant losses
since inception.  The Company lacks liquidity and has a working capital deficit at April 30, 2003.  These
factors, among others, indicate that the Company may be unable to continue as a going concern.





The consolidated financial statements do not include any adjustments relating to the recoverability and
classification of liabilities that might be necessary should the Company be unable to continue as a going
concern.  The Company's continuation as a going concern is dependent upon its ability to secure
profitable interests in oil and gas projects.  Further, the Company is dependent upon management's
ability to produce sufficient cash flow that is required to meet obligations as they come due.  Lastly, the
Company is dependent upon successful completion of additional financing and, ultimately, to attain
profitability.  Historically, the Company has been successful in meeting ongoing cash requirements
sufficient to remain in operations; however there can be no assurances that the Company will continue
to be successful in obtaining the funds necessary to meet the anticipated cash requirements.  The
Company plans to continue to finance its operations and satisfy cash requirements with a combination of
debt financing, stock sales and in the longer term, revenues from operations.





Basis of Consolidation









The consolidated financial statements include the accounts of Sonoran Energy, Inc. and its wholly
owned subsidiaries Showstar Entertainment Corporation, a Nevada company that has done business as
Showstar Productions, Inc.; Showstar Online Canada, Inc., a Canadian registered company; and ALS
Sportswear.  All significant intercompany balances and transactions have been eliminated in
consolidation.  The Company's subsidiaries have been dormant since the Company entered the oil and
gas industry.



F-9

---













SONORAN ENERGY, INC.

Notes to Consolidated Financial
Statements













Use of Estimates









The preparation of financial statements in accordance with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date of financial statements and the
reported amounts of revenues and expenses during the reporting period.  Actual results could differ from
those estimates.

























Cash Equivalents













For the purposes of the statement of cash flows, the Company considers all highly liquid debt
instruments purchased with an original maturity of three months or less to be cash equivalents.  The
Company had no cash equivalents at April 30, 2003.















Restricted Cash







The Company was required to post a $75,000 Idle Well Bond with the government prior to beginning
operations on the oil well leases.  The funds are held by a financial institution in an investment
certificate, which bears interest at a variable rate.





Oil and Gas Producing Activity







The Company follows the full cost method of accounting for its oil and gas activity. Accordingly, all
costs associated with the acquisition, exploration and development of oil and gas properties are
capitalized within the appropriate cost center.  Any internal costs that are capitalized are limited to those
costs that can be directly identified with acquisition, exploration, and development activities undertaken
by the Company for its own account, and do not include any costs related to production, general
corporate overhead, or similar activities.







All capitalized costs within a cost center are depleted on the units-of-production method based on
estimated proved reserves attributable to the oil and gas properties owned by the Company.





For each cost center, capitalized costs less accumulated depletion and related deferred income taxes,
may not exceed the cost center ceiling.  Any excess is charged to expense during the period in which the
excess occurs.  The cost center ceiling is equal to the sum of:





(a) The present value of estimated future net revenues from proved oil and gas reserves, less
estimated future expenditures to be incurred in developing the proved reserves computed
using a 10 percent discount factor; (b) the cost of properties not being amortized; (c) the
lower of cost or fair market value of unproven properties included in the costs being
amortized; and (d) income tax effects related to the differences between the book and tax
basis of the properties.













If a significant portion of the Company's oil and gas interests are sold, a gain or loss would be
recognized; otherwise, proceeds from sales are applied as a reduction of oil and gas properties. The
Company did not sell any of its oil and gas properties during the year ended April 30, 2003.



F-10

---





SONORAN ENERGY, INC.

Notes to Consolidated Financial
Statements









Assets Available For Sale







Assets available for sale are stated at cost less accumulated depreciation.  Propriety of the assets is
subject to certain negotiations discussed in Note 6.





Web Site and Software























The Company recognizes web site development costs in accordance with Statement of Position ("SOP")
98-1.  As such, the Company expenses all costs incurred that relate to the planning and post
implementation phases of development.  Costs incurred during the development phase are capitalized
and recognized over the product's estimated useful life if the product is expected to have a useful life
beyond one year.  The cost of developing the Company's Internet portal (web site) was expensed until
the Company determined that the portal would result in future economic benefit and management was
committed to funding the project.  Thereafter, all direct external implementation and development costs
were capitalized and amortized using the straight-line method over the remaining estimated useful lives,
not exceeding three years.  Costs associated with repair or maintenance of the existing site or the
development of web site content are expensed when incurred in the accompanying consolidated
statements of operations.





The Company recorded depreciation expense of $-0- and $183,547 related to the capitalized Internet
portal and webmail costs during the years ended April 30, 2003 and 2002, respectively.







In addition, the Company has adopted
Emerging Issues Task Force Issue No. 00-2 ("EITF 00-2"). EITF
00-2 requires the implementation of SOP 98-1 when software is used by a vendor in providing a service
to a customer but the customer does not acquire the software or the right to use it.





Impairment - Web site and domain name











In the fourth quarter of the year ended April 30, 2002, the Company completed a balance sheet review
that identified assets whose carrying amounts were not recoverable.  As a result of this review, the
Company recorded an asset impairment charge of $782,955 for the write-off of unamortized web site
software costs and the domain name.













Impairments on Long-Lived Assets















The Company evaluates the carrying value
of its long-lived assets under the provisions of Statement of Financial
Accounting Standards ("SFAS") No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets". SFAS No. 144 requires impairment losses to be recorded on long-lived assets used
in operations when indicators of impairment are present and the undiscounted future cash flows
estimated to be generated by those assets are less than the assets' carrying amount.   If such assets are
impaired, the impairment to be recognized is measured by the amount by which the carrying amount of
the assets exceeds the fair value of the assets.  Assets to be disposed of are reported at the lower of the
carrying value or fair value, less costs to sell.



F-11

---





SONORAN ENERGY, INC.

Notes to Consolidated Financial
Statements

Net loss per share







The Company accounts for loss per share in accordance with SFAS No. 128. Under SFAS
No. 128, net loss per basic share excludes dilution and is determined by
dividing loss available to common shareholders by the weighted average number of
common shares outstanding during the period. Net loss per diluted share reflects
the potential dilution that could occur if securities and other contracts to
issue common stock were exercised or converted into common stock. Due to the
Company's losses, any inclusion of other securities to issue common stock would
have an anti-dilutive effect on loss per diluted
share.  Therefore, basic and diluted loss per share amounts are equal.





Income Taxes











Income taxes are provided for the tax effects of transactions reported in the financial statements and
consist of taxes currently due plus deferred taxes related primarily to differences between the recorded
book basis and tax basis of assets and liabilities for financial and income tax reporting.  The deferred tax
assets and liabilities represent the future tax return consequences of those differences, which will either
be taxable or deductible when the assets and liabilities are recovered or settled.  Deferred taxes are also
recognized for operating losses that are available to offset future taxable income and tax credits that are
available to offset future income taxes.



























Stock-Based Compensation









The Company accounts for stock-based employee compensation arrangements in accordance with
Accounting Principles Board ("APB") Opinion 25 and complies with the disclosure provisions of SFAS
No. 123.  Under APB No. 25, compensation expense is based on the difference, if any, on the date of
grant, between the fair value of the Company's stock and the exercise price.  The Company accounts for
stock issued to non-employees in accordance with the provisions of SFAS No. 123.  SFAS 123 requires
the fair value based method of accounting for stock issued to non-employees in exchange for services.





Companies that elect to use the method provided in APB 25 are required to disclose pro forma net
income and pro forma earnings per share information that would have resulted from the use of the fair
value based method.  The Company has elected to continue to determine the value of stock-based
compensation arrangements under the provisions of APB 25.





Fair Value of Financial Instruments









The Company's financial instruments, including cash, receivables, current liabilities, and short-term
debt, are carried at cost, which approximates their fair value because of the short-term maturity of these
instruments.



F-12

---





SONORAN ENERGY, INC.

Notes to Consolidated Financial
Statements









Foreign Currency Translation







Assets and liabilities of non-U.S. subsidiaries are translated to U.S. dollars at end-of-period
exchange rates. The effects of this translation for non-U.S. subsidiaries are reported in other comprehensive
income (loss).  Remeasurement of assets and liabilities of non-U.S. subsidiaries
that use a currency other than the U.S. dollar as their functional currency are
included in income as transaction gains and losses. Income statement elements of
all non-U.S. subsidiaries are translated to U.S. dollars at average-period exchange rates and are recognized as part of revenues, costs and expenses.  The functional
currency of the Company's foreign subsidiary is the local currency, the Canadian dollar.















Recent Accounting Pronouncement







In December 2002, the Financial Accounting Standards Board issued SFAS No. 148,
"Accounting for
Stock-Based Compensation-Transition and Disclosure", which amended SFAS No. 123 to provide
alternative methods of transition for a voluntary change to the fair value based method of accounting for
stock-based employee compensation. It also amends the disclosure provisions of SFAS No. 123 to
require prominent disclosure in both annual and interim financial statements about the method of
accounting for stock-based employee compensation and the effect of the method used on reported
results. For the Company, the provisions of SFAS No. 148 were in effect for its year ended April 30,
2003. The Company will continue to use APB No. 25 to account for stock based compensation, while
providing the disclosures required by SFAS No. 123 as amended by SFAS No. 148.















Reclassifications







Certain prior year amounts may have been reclassified to conform to the current year presentation. Such
reclassifications had no effect on the prior year net income.















Note 2:    Related Party Transactions









During the year ended April 30, 2003, the Company issued 426,200 shares of its common stock to an
officer as payment for $106,550 of accrued compensation.  The market price of the common stock was
$.25 on the date of issuance.





During the year ended April 30, 2003, the Company issued 200,000 shares of its common stock to an
officer as payment for $30,000 of salaries.  The market price of the common stock was $.15 on the date
of issuance.







As of April 30, 2001, the Company owed an officer $189,640 for loans, accrued interest and advances
made to the Company in prior years.  During the year ended April 30, 2002, the Company repaid $8,360
of principal and $9,098 of accrued interest with the issuance of 1,745,800 shares of the Company's
common stock.  The market price of the stock was $.01 per share on the date of the issuance.  Interest
expense on the loans and advances totaled $39,592 for the year ended April 30, 2002, which increased
the balance owed the officer to $211,774 as of April 30, 2002.  During the year ended April 30, 2003,
the Company issued the officer 758,000 shares of its common stock to pay off all of the officer's loans
and accrued interest valued at $189,504.  The number of shares issued was based on the market price of
the stock on the date of issuance, $.25.  The Company also repaid the officer 47,228 against the officer's
advances.  Following the stock issuance and payments, the Company owes the officer for $15,042 in
non-interest bearing advances as of April 30, 2003.  The $15,042 is included in the accompanying
consolidated financial statements as "indebtedness to related parties".



F-13

---





SONORAN ENERGY, INC.

Notes to Consolidated Financial
Statements

During the year ended April 30, 2002, the Company issued 400,000 shares of its common stock to an
officer under the terms of an employment agreement.  The market price of the stock was $.01 per share
on the date of the issuance.  As a result, the Company recognized a stock-based compensation expense
for the market value of the stock, $4,000.





During the year ended April 30, 2002, the Company issued a total of 2,900,000 shares of its common
stock to one officer as payment for $29,000 of accrued wages.  The market price of the stock was $.01
per share on the date of the issuance.













Note 3:    Loan Receivable









During the year ended April 30, 2003, the Company advanced an unrelated third party $2,525 as part of
a loan agreement.  The loan carries a 15 percent interest rate and matured on July 1, 2002.  The loan was
unpaid as of April 30, 2003.  Accrued interest on the loan totaled $327 at April 30, 2003.















Note 4:    Shareholders' Deficit































Preferred Stock













The Company is authorized to issue 25 million shares of no par value preferred stock, which may be
issued in series with such designations, preferences, stated values, rights, qualifications or limitations as
determined by the Board of Directors.

























Common Stock















On May 29, 2002, the Company's Board of Directors approved a 1 for 25 reverse stock split.  Following
the reverse stock split the Company had 2,212,756 common shares issued and outstanding.













During the year ended April 30, 2003, the Company sold, through its officers and directors, 569,950
shares of its common stock for $142,487.















During the year ended April 30, 2003, the Company issued 1,750,000 shares of its common stock in
exchange for working interests in oil and gas properties valued at $350,000.  The value of the stock
issued was recorded at the quoted market price on the date of issuance.  The working interests were
acquired in the developments known as the Franklin Prospect ($225,000) and the San Antonio Anvil Bar
($125,000).















During the year ended April 30, 2003, the Company issued 399,038 shares of its common stock as
payment for liabilities valued at $94,167.  The value of the stock issued was recorded at the quoted
market price on the date of issuance.



F-14

---





SONORAN ENERGY, INC.

Notes to Consolidated Financial
Statements













Stock-Based Compensation



















During the year ended April 30, 2003, the Company issued 2,038,500 shares of its common stock to
outside service providers, in exchange for legal, financial consulting, investor relations and other
consulting services. The value of the stock issued was recorded at the quoted market price on the date of
issuance and totaled $299,525.  The services are included in the accompanying financial statements as
"stock-based compensation", net of $82,500 prepaid for the fiscal year ended April 30, 2004.





During the year ended April 30, 2003, the Company issued 500,000 shares of its common stock as
payment for debt issue costs. The value of the stock issued was recorded at the quoted market price on
the date of issuance and totaled $85,000.  The costs are included in the accompanying financial
statements under "stock-based compensation".















Common Stock Options and Warrants







A summary of the status of the Company's stock option and stock warrant awards as of April 30, 2002,
and the changes during the period from May 1, 2000 through April 30, 2002 are presented below:



|                                   | Incentive Stock Option Plan | Options and Warrants Issued to Non-Employees | Weighted Average Exercise Price | Weighted Average Fair Value | Exercisable   | Weighted Average Exercise Price - Exercisable
|---------------------------------- | --------------------------- | -------------------------------------------- | ------------------------------- | --------------------------- | ------------- | ---------------------------------------------
|                                   | Incentive Stock Options     | Executive Employment Options                
|Outstanding, April 30,
    2001    | -                           | 400,000                                      | 700,000                         | $   
    1.29               | $   
    0.57 | 700,000                                      
|                                   |                             |                                              |                                 |                             |               |                                              
|Options and warrants
    issued    | -                           | -                                            | -                               | -                           | -             | -                                            
|Options and warrants
    exercised | -                           | (200,000)                                    | -                               | 0.02                        | -             | -                                            
|Options and warrants
    cancelled | -                           | (200,000)                                    | (700,000)                       | -                           | -             | (700,000)                                    
|Outstanding, April 30,
    2002    | -                           | -                                            | -                               | -                           | -             | -                                            
|                                   |                             |                                              |                                 |                             |               |                                              
|Options and warrants
    issued    | -                           | -                                            | 150,000                         | 0.25                        | 0.05          | 150,000                                      
|Options and warrants
    exercised | -                           | -                                            | -                               | -                           | -             | -                                            
|Options and warrants
    cancelled | -                           | -                                            | -                               | -                           | -             | -                                            
|Outstanding, April 30,
    2003    | -                           | -                                            | 150,000                         | $         -                 | $          -  | 150,000                                      
|                                   |                             |                                              |                                 |                             |               |                                              







During October 2002, the Company granted an unrelated third party warrants to purchase 150,000
shares of the Company's common stock.  The warrants carry an exercise price of $.25 per share and
expire two years from the grant date.  The Company determined the fair value of the warrants at $.05
per share in accordance with SFAS 123.  The transaction was valued at $7,200 and is included in the
accompanying consolidated financial statements as "stock-based
compensation". The fair value for these warrants was estimated at the date of
grant using the Black-Scholes option-pricing model with the
following assumptions:



F-15

---





SONORAN ENERGY, INC.

Notes to Consolidated Financial
Statements



Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.. . . . . . . . . . . . . . . . .     2.00%









Dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.. . . . . . . . . . . . . . . . . .     0.00%

Volatility factor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.. . . . . . . . . . . . . . . . . . .  100.00%

Weighted average expected life . . . . . . . . . . . . . . . . . . . . . . . . .
.. . . . . . . . . . .   2 years















The Black-Scholes options valuation model was developed for use in estimating the fair value of traded
options, which have no vesting restrictions and are fully transferable.  In addition, option valuation
models require the input of highly subjective assumptions including the expected stock price volatility.
Because the Company's stock options have characteristics significantly different from those of traded
options, and because changes in the subjective input assumptions can materially affect the fair value
estimate, in management's opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its stock options.







During 1999, the Company granted an officer options to purchase 1,000,000 shares of the Company's
common stock exercisable at $.50 per share.  In January 2001, the board of directors voted to amend the
exercise price from $.50 to $.02 per share.  The options vested evenly through November 2001.  In
accordance with the re-valuing of the options, the Company recorded compensation expense at the time
the options were exercised.  All options were exercised or cancelled as of April 30, 2002.











Note 5:    Income Taxes









A reconciliation of the U.S. statutory federal income tax rate to the effective tax rate is as follows:









































|                                                   | Years Ended
    April 30,
|-------------------------------------------------- | -------------------------
|                                                   | 2003                     
|U.S.
    Federal statutory graduated rate          | 34.00%                   
|State
    income tax rate, net of federal benefit  | 5.83%                    
|Net
    operating loss for which no tax benefit is |                          
|currently available                                | -39.83%                  
|                                                   | 0.00%                    
|                                                   |                          















The valuation allowance offsets the net deferred tax asset for which there is no assurance of recovery.
The change in the valuation allowance for the years ended April 30, 2003 and 2002 totaled $180,982
and $554,925, respectively.  The current tax benefit also changed by $180,982 and $554,925 for the
years ended April 30, 2003 and 2002, respectively.  The net operating loss carryforward expires through
the year 2023.







The valuation allowance will be evaluated at the end of each year, considering positive and negative
evidence about whether the deferred tax asset will be realized.  At that time, the allowance will either be
increased or reduced; reduction could result in the complete elimination of the allowance if positive
evidence indicates that the value of the deferred tax assets is no longer impaired and the allowance is no
longer required.





Should the Company undergo an ownership change as defined in Section 382 of the Internal Revenue
Code, the Company's tax net operating loss carryforwards generated prior to the ownership change will
be subject to an annual limitation, which could reduce or defer the utilization of these losses.



F-16

---





SONORAN ENERGY, INC.

Notes to Consolidated Financial
Statements

















Note 6:    Advances and Loans Payable





























Loans from Merger Candidate













The Company received loans from First Nevisian ("FN"), the parent of a potential merger candidate,
totaling $25,000 and $818,000 during the years ended April 30, 2002 and 2001, respectively.  The
Company also moved its operations into the FN offices during the year ended April 30, 2001.  The loans
were due on demand in the event that the proposed merger was not consummated.











Effective July 31, 2001, the proposed merger agreement was terminated.  Following the termination, the
Company moved its operations from the FN offices, but left all of its property and equipment.  As of
April 30, 2003, the Company owed FN the $843,000 in loans and $212,394 in related accrued interest.
In addition, FN held property and equipment owned by the Company with a book value of
approximately $309,743.  The two parties are negotiating a settlement agreement whereby FN would
reduce the balance of principal and interest owed on the loans in exchange for the Company's property
and equipment held by FN.  The net realizable value of the property and equipment held by FN is
included in the accompanying consolidated financial statements as "assets available for sale".













Other Loans













During the year ended April 30, 2003, the Company received $2,000 from an unrelated third party for
working capital.  The loan carries a 16 percent interest rate and is payable on demand.  As of April 30,
2003, the loan had not been repaid and the Company accrued $53 in related accrued interest payable.











During the years ended April 30, 2003 and 2002, the Company received $11,700 and $29,300,
respectively, from unrelated third parties for working capital.  During the year ended April 30, 2003, the
Company issued 150,438 shares of its common stock as payment for the loans and $1,758 of accrued
interest.





During the year ended April 30, 2001, the Company received $50,000 from an unrelated third party for
working capital.  During the year ended April 30, 2003, the Company issued 248,600 shares of its
common stock as payment for the loans and $12,149 of accrued interest.



F-17

---





SONORAN ENERGY, INC.

Notes to Consolidated Financial
Statements











Note 7:    Notes Payable



























Following is a schedule of the Company's notes payable as of April 30, 2003:







|Note payable dated
    October 28, 2002, interest rate at 18 percent, maturity date of October 24,
    2004                                                                                                                              |                   
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------
|secured by first
    mortgage on oil and gas properties, convertible (1) to the Company's common                                                                                                                                         |                   
|stock at the option of
    the holder                                                                                                                                                                                                    | $     
    600,000
|                                                                                                                                                                                                                                         |                   
|Note payable dated
    April 1, 2003, interest rate at 15 percent, maturity date of March 31, 2005                                                                                                                                       |                   
|secured by first
    mortgage on oil and gas properties, convertible (1) to the Company's common                                                                                                                                         |                   
|stock at the option of
    the holder                                                                                                                                                                                                    | 375,000           
|                                                                                                                                                                                                                                         |                   
|Note payable dated
    April 30, 2003, interest rate at 15 percent, maturity date of March 31, 2005                                                                                                                                      |                   
|secured by first
    mortgage on oil and gas properties, convertible (1) to the Company's common                                                                                                                                         |                   
|stock at the option of
    the holder                                                                                                                                                                                                    | 25,000            
|Total notes payable,
    long-term                                                                                                                                                                                                       | $  1,000,000      
|                                                                                                                                                                                                                                         |                   
|Note payable dated May
    23, 2002, interest rate at 8 percent, default interest rate of 16 percent,
    maturity date of September 30, 2002, unsecured, convertible (2) to the
    Company's common stock at the option of the holder  | $       25,000    
|                                                                                                                                                                                                                                         |                   
|Note payable dated July
    13, 2002, interest rate at 8 percent, default interest rate of 16 percent,
    maturity date of September 30, 2002, unsecured, convertible (2) to the
    Company's common stock at the option of the holder | 50,000            
|Total notes payable,
    short-term                                                                                                                                                                                                      | $       75,000    
|                                                                                                                                                                                                                                         |                   































(1)    Note holder is entitled, at its option, to convert any or all of the principal amounts of the note
into shares of the Company's common stock at the greater of a price equal to 80 percent of
the average daily trading prices over the thirty days immediately preceding the date of
conversion, or $.50 per share.













(2)    Note holder is entitled, at its option, to convert any or all of the indebtedness related to the
note into shares of the Company's common stock at the greater of a price equal to 80 percent
of the average daily trading prices over the five days immediately preceding the date of
conversion, or $.25 per share.













Accrued interest payable and interest expense on the promissory notes totaled $10,290 and $58,179,
respectively, as of and for the year ended April 30, 2003.



F-18

---





SONORAN ENERGY, INC.

Notes to Consolidated Financial
Statements







Maturities on the Company's notes payable are as follows:



|April 30, |                   
|--------- | ------------------
|2004      | $      
    75,000
|2005      | 1,000,000         
|          | $  1,075,000      
|          |                   













Note 8:    Concentrations and Contingencies

























Concentrations

















During the year ended April 30, 2003, the Company sold all of its crude oil to Pacific Marketing and
Transportation LLC.  While revenue from this customer is significant, it is management's belief that the
oil and gas the Company produces could be sold to other crude oil purchasers, refineries or pipeline
companies.  The Company sells its oil pursuant to short-term contracts at market prices.  Market
demand for the Company's production is subject to various influences that can never be assured.  The
base values for the Company's crude oil sales is set by major oil companies in response to area and
market strengths and international influences.























Contingencies



















The Company has been named as a defendant in a lawsuit filed by a director of Savingsplus
Internet, Inc. for failure to repay a $35,000 loan to the director's company ("Korker"). Sonoran has retained
counsel and filed a reply to the suit as of April 30, 2001. In July 2002, the Company was informed that
Korker had increased their claim by approximately $190,000. Subsequent submissions by Korker have
reduced the claim and Sonoran has held an examination for discovery of Korker's officers. In April and
May 2003 Korker attempted to schedule a Summary Trial of the matter but adjourned after receipt of
Sonoran's affidavits.  The Company is optimistic that the lawsuit will be successfully defended and is
considering a countersuit.























Note 9:    Unaudited Oil and Gas Reserve Information









At April 30, 2003 (the Company had no reserves at April 30, 2002), the estimated oil and gas reserves
presented herein were derived from reports prepared by independent engineering firms.  The Company
cautions that there are many inherent uncertainties in estimating proved reserve quantities and in
projecting future production rates and the timing of development expenditures. Accordingly, these
estimates are likely to change as future information becomes available, and these changes could be
material.





The properties included in the oil and gas reserve estimates presented below contributed all of the
Company's oil and gas production during the year ended April 30, 2003.





Proved oil and gas reserves are the estimated quantities of crude oil and natural gas, which geological
and engineering data demonstrate with reasonable certainty to be recoverable in future years from
known reservoirs under existing economic and operating conditions.





Proved developed reserves are reserves expected to be recovered through existing wells with existing
equipment and operating methods.



F-19

---





SONORAN ENERGY, INC.

Notes to Consolidated Financial
Statements









Analysis of Changes in Proved Reserves







Estimated quantities of proved reserves (all of which are located within the United States), as well as the
changes in proved reserves during the year ended April 30, 2003, are presented in the following tables
(there was no oil and gas activity during the year ended April 30, 2002):











|                                            | Crude Oil (Bls) |  | Natural Gas (Mcf)
|------------------------------------------- | --------------- |  | -----------------
|Proved reserves at April 30, 2002           | -               |  | -                
|Purchase of reserves                        | 667,471         |  | 198,478          
|Production                                  | (2,797)         |  | (1,567)          
|                                            | 664,674         |  | 196,911          
|Proved reserves at April 30, 2003           |                 |  |                  
|                                            |                 |  |                  
|                                            | Crude Oil (Bls) |  | Nautral Gas (Mcf)
|                                            |                 |  |                  
|Proved developed reserves at April 30, 2003 | 220,592         |  | 70,279           
|                                            |                 |  |                  





















Costs incurred in oil and gas property acquisition, exploration and development activities are
summarized as follows:



























|                  | Year Ended
    April 30, 2003
|----------------- | -----------------------------
|                  |                              
|Acquisitions:     |                              
|Proved            | $     
    747,209           
|Unproved          | 446,787                      
|Development costs | 68,121                       
|Exploration costs | -                            
|                  |                              
|Total             | $  1,262,117                 
|                  |                              





















F-20

---

SONORAN ENERGY, INC.

Notes to Consolidated Financial
Statements



The table below sets forth a standardized measure of the estimated discounted future net cash flows
attributable to the Company's proved oil and gas reserves. Estimated future cash inflows were computed
by applying year-end prices of oil and gas (with consideration of price changes only to the extent
provided by contractual arrangements) to the estimated future production of proved oil and gas reserves
at April 31, 2003 discounted at 10 percent. The future production and development costs represent the
estimated future expenditures to be incurred in developing and producing the proved reserves, assuming
continuation of existing economic conditions.













|                                                                      | Year Ended
    April 30, 2003
|--------------------------------------------------------------------- | -----------------------------
|                                                                      |                              
|Future cash inflows                                                   | $  15,160,030                
|Future cash outflows:                                                 |                              
|Production costs                                                      | (3,524,264)                  
|Development costs                                                     | (1,359,559)                  
|Future net cash flows before income taxes                             | 10,276,207                   
|                                                                      |                              
|Future income taxes                                                   | (2,569,052)                  
|Future net cash flows                                                 | 7,707,155                    
|Adjustment to discount future annual net cash
    flows at 10 percent | (2,787,767)                  
|                                                                      |                              
|Standardized measure of discounted future net
    cash flows          | $    4,919,388               
|                                                                      |                              

The following table summarizes the principal factors comprising the changes in the standardized
measure of estimated discounted net cash flows for the year ended April 30, 2003.

















|                                              | Year Ended
    April 30, 2003
|--------------------------------------------- | -----------------------------
|                                              |                              
|Standardized measure, beginning of period     | $                     
    - 
|Sales of oil and gas, net of production costs | (29,248)                     
|Purchase of reserves                          | 4,948,363                    
|                                              |                              
|Standardized measure, end of period           | $       4,919,388            
|                                              |                              

F-21

---



























































ITEM 8 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS  ON ACCOUNTING AND
FINANCIAL DISCLOSURE

























































None

---















































































PART III

























































































ITEM 9 - DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT































Section 16(a) of the Exchange Act
("Section 16(a)") requires the Company's Officers and Directors, and persons who
own more than ten percent of a registered class of the Company's equity
securities, to file reports of ownership on Form 3 and changes in ownership on
Form 4 or Form 5 with the Securities and Exchange Commission (the "SEC"). Such
Officers, Directors and ten percent shareholders are also required by SEC rules
to furnish the Company with copies of all such forms that they file. The
Company's initial registration statement on Form 10-SB became effective on or
about April 5, 2000.  Management is confident that all filings required are
current as of the proxy date.







|Name                                 | Age | Current Position/Office | Position Held Since
|------------------------------------ | --- | ----------------------- | -------------------
|                                     |     |                         |                    
|Flavio Bidese                        | 38  | Director                | 2000               
|Class II (Term Expires in
    2005)  |     |                         |                    
|                                     |     |                         |                    
|John Punzo                           | 48  | Director                | 1999               
|Class III (term expires
    in 2006) |     |                         |                    
|                                     |     |                         |                    
|Russ Costin                          | 59  | Director                | 2000               
|Class III (term expires
    in 2006) |     |                         |                    







































































































FLAVIO BIDESE, DIRECTOR







Mr. Bidese has worked in the film industry for 17 years with Rainmaker Digital
Pictures. He graduated with honors from BCIT in the Broadcast Communications
program. His experience as an online editor has him working with High Definition
Television technology in the telecommunication industry. His skills and
knowledge combine both the creativity of a graphic artist and the
troubleshooting ability of a computer technician.  He has applied his
knowledge in skills in these fields for his restaurant and catering business to
develop a comprehensive online ordering system to maximize the efficiency of
processing by eliminating redundancy with automation but maintaining the much
needed human service interaction required for this business.  During the past five years, Mr.
Bidese has been continuously employed by Rainmaker Digital Pictures as a Senior
Online Editor.  In this position, Mr. Bidese is responsible for the final
version of TV shows, feature films and videos that are viewed by the public.
Other than the previous year with Sonoran, Mr. Bidese has had no prior
experience in the petroleum industry.





``

JOHN PUNZO, DIRECTOR (CHAIRMAN), PRESIDENT & CHIEF EXECUTIVE OFFICER

``

``

Mr. Punzo has been Sonoran's President and Chief Executive Officer since January 7, 1999.
Since 1981, he has been a self employed businessman and entrepreneur, launching and operating several businesses,
including a successful restaurant operation in Vancouver, Canada. Mr. Punzo also has played a key role in obtaining
funding for a number of public and private companies. In late 1998, John began working with the existing Management
of Showstar Entertainment assisting them in the re-structuring  of the company. After the company went public,
it became apparent to the Board of Directors that a strategic shift would be necessary and they felt that Mr. Punzo
would be a required element in changing the company's direction. John accepted the position of President and CEO of
Showstar in January 1999. In the year that followed, John directed the Company into the Internet industry. Although
many 'dotcom' companies have collapsed during the past years, he was able to keep Showstar afloat and is now directing
the Company in getting itself established in the oil and gas industry. Other
than the previous year with Sonoran, Mr. Punzo has had no prior experience in
the petroleum industry.

``

``

``

``

RUSS COSTIN, DIRECTOR, CONTROLLER

``

``



``

``

Russ is a Certified General Accountant in the Province of British Columbia and has served in a variety of accounting and management positions in the forest industry. In mid 1989, he chose to join a Tax Preparation firm to further his knowledge of business and personal taxes as well as working with start-up businesses. 
In June 1994, Mr. Costin started up his own public practice to provide tax,
accounting and consulting services to businesses and private citizens.  On
June 1, 1999, he joined Showstar as Controller and provided a variety of
administrative functions such as CFO and Corporate Secretary and now continues
to provide the same support to the CEO through the transition into the oil and
gas sector. Other than the previous year with Sonoran, Mr. Costin has had no prior
experience in the petroleum industry.









The Directors
acknowledge that there is a lack of Oil and Gas Industry experience on the
Board.  Until such time as we are able to attract knowledgeable board members we
will continue to work with Longbow, LLC ( who are discussed in the General
remarks in the MD&A).



Page 13

---









ITEM 10 - EXECUTIVE COMPENSATION

























































SUMMARY COMPENSATION TABLE











The following table sets forth the aggregate annual remuneration of Sonoran's Chief Executive
Officer and the other executive officers whose annual salary and bonus exceeded $100,000 in the
fiscal year ended April 30, 2003 (collectively, the "named executive officers"), and for the fiscal
years ended April 30, 2002 and April 30, 2003, the Company's most recent and only meaningful
fiscal years. All amounts are in U.S. dollars unless otherwise noted.







|                            |      | Annual Compensation | Long Term Compensation
|--------------------------- | ---- | ------------------- | ----------------------
|Name and Principal Position | Year | Salary              | Bonus                 
|John Punzo                  | 2001 | $ 150,000(1)        | 0                     
|Chief Executive Officer     | 2002 | $ 82,488(1)         | 0                     
|                            | 2003 | $120,000(1)         | 0                     





(1) Payment was made in Cash and debt



Mr. Punzo, under contract
since 1999 (see Exhibit filed with Form 10SB which went effective April 5,
2000), modified the terms of the original agreement, effective June 1, 2002,
such that his monthly salary (paid to and through his consulting firm, Paradigm
Process, Ltd.) has been lowered to $10,000 per month, through December 31, 2005. 
However, his option grants were increased to 750,000 during the first year (with
a strike price of $0.20) and
an additional 750,000 during his second full term of service (with a strike
price of $0.25).  These
options are described in the tables set forth above.  If Paradigm (Punzo)
has its contract cancelled during 2004 because of a takeover, Paradigm will be
entitled to three (3) times its normal annual fee.  (Please see
Exhibit 10.9, filed with the 10KSB/A2.)















































































ITEM 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

























































BENEFICIAL SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL
OWNERS











The following table sets forth the beneficial ownership of Common Stock of the Company as of
the Record Date for the following: (i) each person or entity who is known to the Company to
beneficially own more than 5% of the outstanding shares of the Company's Common Stock; (ii)
each of the Company's Directors (and nominees for election as Directors); (iii) the Company's
Chief Executive Officer and each of the officers ("Named Officers") named in the Summary
Compensation Table herein; and (iv) all Directors and executive officers of the Company as a
group.





The number and percentage of shares beneficially owned is determined under rules of the
Securities and Exchange Commission ("SEC"), and the information is not necessarily indicative
of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes
any shares as to which the individual has sole or shared voting power or dispositive power and
also any shares that the individual has the right to acquire within sixty days of the Record Date
through the exercise of any stock option or other right. Unless otherwise indicated in the
footnotes, each person has sole voting and dispositive power (or shares such power) with respect
to the shares shown as beneficially owned.







|TITLE OF CLASS | NAME AND ADDRESS OF BENEFICIAL OWNER         | AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP | PERCENT OF CLASS
|-------------- | -------------------------------------------- | ----------------------------------------- | ----------------
|Common Stock   | John Punzo, Surrey, B.C.                     | 1,105,534                                 | 12.09           
|Common Stock   | Monahan & Biagi, Seattle,
    Washington (3) | 500,000                                   | 5.47            
|Common Stock   | Directors and Officers  as a
    Group       | 1,146,598                                 | 12.54           



Note 1 - Effective
June 1, 2003, the directors can exercise their options of 150,000 shares each,
granted June 2002 at a strike price of $.20 per share



Note 2 - John Punzo
can exercise options for 750,000 shares granted June 2002 at a strike price of
$.20 per share.



Note 3 - The holder is
a law firm of which either partner may make a decision, however, Jay Biagi normally contacts the Company with questions and
has voted their position in the past.





















































ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS



















































On July 3, 2002, the Company issued 426,200 shares of its common
stock to a company controlled by John Punzo as payment for $106,550 of accrued
compensation.



On October 29, 2002, the Company issued 200,000 shares of its
common stock to John Punzo as payment for $30,000 of salaries.  The market
price of the common stock was $0.15 on the date of issuance.



















On July 3, 2002, the Company issued John
Punzo 758,000 shares of its common stock to pay off all of the officer's loans
and accrued interest valued at $189,504. The number of shares issued was based
on the market price of the stock on the date of issuance, $.25. The Company also
repaid Mr. Punzo
$47,228 against the officer's advances.  Following the stock issuance and payments, the Company owes the
officer for $15,042 in non-interest bearing advances as of April 30, 2003.  The $15,042 is included in the
accompanying consolidated financial statements as "indebtedness to related parties".



Page 14

---



















































PART IV



























































ITEM 13 - EXHIBITS AND REPORTS ON FORM 8-K

























































































(a)  1.  FINANCIAL STATEMENTS



























































These documents are listed and included in Part II, Item 7 of this

























report:



















































Report of Independent Public Accountants

























Balance Sheets at April 30, 2003

























Statements of Operations for the periods ended April 30, 2003 and 2002.

























Statements of Shareholders' Equity for the periods ended April 30, 2003 and 2002.

























Statements of Cash Flows for the periods ended April 30, 2003 and 2002.

























Notes to Financial Statements.















































































(a)  3.  EXHIBITS



3.1 - Articles of Incorporation - Cerotex Holdings, Inc.*

3.2 - Articles of Incorporation - Name change from Cerotex Holding, Inc. to
Showstar Entertainment Corporation*

3.3 - Amendment to the Articles of Incorporation - Name change from Showstar
Entertainment Corporation to Showstar Online.com, Inc.*

3.4 - Bylaws of Showstar - Name change from Certoex Holdings, Inc. to Showstar
Entertainment Corporation to Showstar Online.com, Inc.*

3.5 - Amended Articles of Incorporation (filed with Definitive Proxy Statement
on August 17, 2000)

3.6 - Amended Bylaws (filed with the Definitive Proxy Statement on August 17,
2000)

4.1 - Convertible Note

4.2 - Convertible Note

10.1 - Content Licensing Agreement with National Register Publishing, a division
of Reed Elsevier, Inc.*

10.2 - Supplier Agreement - Leiberman's Gallery, LLP*

10.3 - Agreement dated October 29, 2000 regarding Proposed China Joint Venture*

10.4 - John Punzo Employment Contract dated May 27, 1999*

10.5 - Oil and Gas Purchase Agreement between Sonoran Energy, Inc. and Longbow,
LLC for Emjayco Glide #33 Lease (dated October 5, 2002)

10.6 - Oil and Gas Purchase Agreement between Sonoran Energy, Inc. and Longbow,
LLC for Keystone/Deer Creek Property (dated October 5, 2002)

10.7 - Deer Creek Property Purchase Agreement (dated February 7, 2003)

10.8 - Denverton Creek/Malton Black Butte/Maine Prairie/Lambie Ranch Field
Property Purchase Agreement (dated March 1, 2003)

10.9 - Services Agreement between Sonoran and Paradigm (Punzo)































> 99.1
> - Certifications by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Sections 906
> and 302 of the Sarbanes-Oxley Act of 2002











































> 99.2
> - Certifications by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906and
> 302 of the Sarbanes-Oxley Act of 2002



























* Incorporated by reference (filed with Company's Form 10-SB on
January 14, 2000).





















































(b) REPORTS ON FORM 8-K

























































The Company filed the following two Form 8-K during the 4th quarter:

























April 3rd, 2003
- Item 2.   Acquisition or Disposition of Assets.











































On April 1, 2003, Sonoran Energy, Inc. (the "Company") acquired a working interest in three natural
gas producing properties in California's Sacramento Basin from Archer Exploration, Inc. The Company
has acquired varying percentages in the three properties that are producing 3,700 Mcf per day.

























The first property is located in the Malton-Black Butte Gas Field, Tehama County and the Company's
interest consists of a 10% working interest in six wells and a water injection well producing a combines
1,000 Mcf per day.  The estimated economic life of production of this field is 20 years from the present.

























The second property, located in the Denverton Creek Gas Field, Solano County, consists of a 1.25%
working interest in seven wells operated by Aspen Exploration. As of January 1, 2003, the wells were
producing 1,000 Mcf per day.

























The third property, located in the Maine Prairie Gas Field, Solano County, consists of a 1.41% working
interest in four wells producing 1,700 Mcf per day as of January 1, 2003.

























To finance the purchase, the Company secured a $150,000 loan from Ironwood LLC covering all of the
costs of acquisition. The loan is for a two-year term and gives the lender the right to convert any
outstanding balance after two-years into common stock of the Company at a floor price of 50 cents per
share. The $150,000 loan is secured by a deed of trust on the Properties.





















































April 22nd, 2003
- Item 2.   Acquisition or Disposition of Assets.











































On April 16, 2003, Sonoran Energy, Inc.
(the "Company") completed its 50% acquisition of the National Development
Company - Merzonian Lease with operating partner, Longbow, LLC, acquiring
the remaining 50% interest. The acquisition of the lease (Section 22, T22S R27E MDB&M), located in
the Deer Creek Oil Field, 42 miles north of Bakersfield, California, is a straight production
acquisition. The lease consists of six producing wells and one injection well producing approximately
25 barrels of oil per day.  The new lease is an offset property to the 93-acre Deer Creek Field Keystone
leases acquired by the Company in December of 2002.

























The Deer Creek Field is located in an area predominately explored and operated by small independent
oil and gas companies, and lies in the western dipping homocline along the western flank of the Sierra
Nevada.  Production on the Merzonian Lease is long lived and on a relatively flat line curve.

























Crude oil sales from the Merzonian Lease over the past six months have averaged 763 barrels of oil per
month, for a daily average of 25.2 barrels of oil per day. Based on a price of $20 per barrel, the
undiscounted Net Present Value of the property is estimated at $613,000. Payout for the acquisition is
approximately three years.

























To finance the purchase, the Company secured a $148,334 loan from Ironwood LLC covering all of the
costs of acquisition. The loan is for a two-year term and gives the lender the right to convert any
outstanding balance after two-years into common stock of the Company at a floor price of 50 cents per
share. The $148,334 loan is secured by a deed of trust on the Properties.



























































ITEM 14.  CONTROLS AND PROCEDURES

























































We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in
our filings under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commission's rules and forms. Our chief executive
officer and chief financial officer have evaluated our disclosure controls and procedures within 90 days prior to
the filing of this annual report of Form 10-KSB and have determined that such disclosure controls and
procedures are effective.



















































There have been no significant changes in our internal controls or in other factors that could significantly affect
internal controls subsequent to the date of their evaluation including any corrective actions with regard to
significant deficiencies and material weaknesses.



















































SIGNATURES



















































Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.





















































SONORAN ENERGY, INC











































































November 4, 2003



By:    John Punzo































John Punzo























Director/President/CEO



By: Russ Costin

Russ Costin

Chief Financial Officer



Page 15

---



























Exhibit 99.1



CERTIFICATION PURSUANT TO 18 U.S.C. Section 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of
Sonoran Energy, Inc.
on Form 10-KSB/Z for the year ending April 30, 2003, as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I,
John Punzo, Chief Executive Officer, President and Director of the Company, certify, pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief: (1)
the Report fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and (2) the information contained in the Report
fairly presents, in all material respects, the financial condition and result of
operations of the Company.

/s/ John Punzo

John Punzo

Chief Executive
Officer/President/Director

November 4, 2003





CERTIFICATION PURSUANT TO 18 U.S.C.
SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 CERTIFICATIONS



I, John Punzo, certify that:



1.    I have reviewed this
annual report on Form 10-KSB/A of Sonoran Energy, Inc.;

2.    Based on my knowledge, this
annual report does not contain any untrue statement of material fact or omit to state a material face necessary to make the statement made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
annual report;



3.    Based on my knowledge, the financial statements, and other financial information included in this
annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this
annual report;



4.    The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:



a.    designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this
annual report is being prepared;



b.    evaluated the effectiveness of the registrant's disclosure controls and procedures as of a
date within 90 days prior to the filing date of this annual report (the
"Evaluation Date"); and



c.    presented in this
annual our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;



5.    The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):



a.    all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and



b.    any fraud, whether or not material, that involves management or other employees who

have a significant role in the registrant's internal controls; and



6.    The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent, evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.



Date:     
November 4, 2003



/s/ John Punzo

John Punzo

Chief Executive
Officer/President/Director































---

Exhibit 99.2

CERTIFICATION PURSUANT TO 18 U.S.C. Section 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of
Sonoran Energy, Inc.
on Form 10-KSB/A for the year ending April 30, 2003, as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I,
Russ Costin, Chief Financial Officer of the Company, certify, pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief: (1)
the Report fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and (2) the information contained in the Report
fairly presents, in all material respects, the financial condition and result of
operations of the Company.

/s/ Russ Costin

Russ Costin

Chief Financial
Officer

November 4, 2003



CERTIFICATION PURSUANT TO 18 U.S.C.
SECTION 1350, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 CERTIFICATIONS



I, Russ Costin, certify that:



1.    I have reviewed this
annual report on Form 10-KSB/A of Sonoran Energy, Inc.;



2.    Based on my knowledge, this
annual report does not contain any untrue statement of material fact or omit to state a material face necessary to make the statement made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
annual report;



3.    Based on my knowledge, the financial statements, and other financial information included in this
annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this
annual report;



4.    The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:



a.    designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this
annual report is being prepared;



b.    evaluated the effectiveness of the registrant's disclosure controls and procedures as of a
date within 90 days prior to the filing date of this annual report (the
"Evaluation Date"); and



c.    presented in this
annual our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;



5.    The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):



a.    all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and



b.    any fraud, whether or not material, that involves management or other employees who

have a significant role in the registrant's internal controls; and



6.    The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent, evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.



Date:     
November 4, 2003



/s/ Russ Costin

Russ Costin,

Chief Financial
Officer

---

Exhibit 4.1





THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT
BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED ABSENT
AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT, OR UNLESS THE
COMPANY HAS RECEIVED AN OPINION OF COUNSEL, SATISFACTORY TO THE
COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.







18% CONVERTIBLE NOTE DUE OCTOBER _____, 2004









THIS NOTE is one of a duly authorized issue of Notes of Sonoran Energy, Inc., (a Washington
corporation and the "Company" in this document) designated as its 18% Convertible Note Due
October ___, 2004, in an aggregate principal amount not exceeding $550,000.













FOR VALUE RECEIVED, the Company promises to pay to purchaser or the registered holder
hereof (the "Holder"), the principal sum of (up to) Five Hundred Fifty Thousand Dollars ($550,000),
on October ___, 2004 (the "Maturity Date"), and to pay interest on the principal sum outstanding
from time to time in arrears on the Maturity Date, at the rate of 18% per annum and payable
quarterly accruing from the date of initial issuance.  Accrual of interest shall commence on the first
business day to occur after the date hereof until payment in full of the principal sum has been made
or duly provided for.  All accrued and unpaid interest shall bear interest at the same rate as the
principal and be due on the date for the principal.  Interest may be paid in the form of Common
Stock, issued at the conversion rates described below in the amounts necessary to satisfy the
outstanding interest amounts then due.  The interest so payable will be paid on the Maturity Date to
the person in whose name this Note (or one or more predecessor Notes) is registered on the records
of the Company regarding registration and transfers of the Notes (the "Note Register") on the tenth
day prior to the Maturity Date; provided, however, that the Company's obligation to a transferee of
this Note arises only if such transfer, sale or other disposition is made in accordance with the terms
and conditions of the Regulation 506 Securities Subscription Agreement executed by the original
Holder.  The principal of, and interest on, this Note are payable in such coin or currency of the
United States of America as at the time of payment is legal tender for payment of public and private
debts, at the address last appearing on the Note Register of the Company as designated in writing by
the Holder from time to time.  The Company will pay the principal of and interest upon this Note on
the Maturity Date, less any amounts required by law to be deducted, to the registered Holder of this
Note as of the tenth day prior to the Maturity Date and addressed to such Holder as the last address
appearing on the Note Register.  The forwarding of such check shall constitute a payment of
principal and interest hereunder and shall satisfy and discharge the liability for principal and interest
on this Note to the extent of the sum represented by such check less any amounts so deducted.











This Note is subject to the following additional provisions:







1.Proceeds from this Note are to be used for the acquisition of (1) Emjayco
"Glide 33" Lease
in Mt. Poso Field, Kern County, California ("Glide Lease"), and (2) the Keystone Oil
Company "Community" Lease in Deer Creek Field, Tulare County, California ("Deer
Creek") (collectively the "Properties"). Additionally, proceeds of the Note will also be used
to return the wells on those properties to properties to profitability with any remaining
amounts to be used as working capital. This Note will be secured by first mortgage charges
on the Properties and such security interest shall be noted on the title to both Properties.









2.The funds due to the Company under this note shall be deposited by the Holder into an
escrow account with __________ and shall be released to the Company upon closing of
escrow for the Properties.









3.Advances are subject to receipt of satisfactory legal opinions on the Properties and the
Security.  All legal fees and disbursements in connection with this note and acquisition of the
Properties and any other costs incurred by the Holder in processing this loan shall be borne
by the Company.









4.The Company may repay the loan in full at any time, provided the Holder has received a
minimum of $50,000 in interest payments and thirty (30) days notice of repayment.  Holder
may elect to exercise the Conversion for thirty days following such notice of repayment.









5.The Company shall pay a finder's fee to _____ in the amount of $__,000 payable in shares
of Common Stock of the Company.









6.This Note has been issued subject to investment representations of the original purchaser
hereof and may be transferred or exchanged only in compliance with the Securities Act of
1933, as amended (the "Act").  Prior to due presentment for or transfer of this Note, the
Company and any agent of the Company may treat the person in whose name this Note is
duly registered on the Company's Note Register as the owner hereof for the purpose of
receiving payment as herein provided and for all other purposes, whether or not this Note be
overdue, and neither the Company nor any such agent shall be affected by notice to the
contrary.









7.The Holder of this Note is entitled, at its option, at any time commencing after the Closing
Date until maturity hereof to convert any or all of the principal amounts of these Notes or any
portion of the principal amount (to include accrued interest) hereof into shares of Common
Stock of the Company ("Shares") at the greater of a price equal to eighty percent (80%) of
the average daily trading prices over the thirty (30) days immediately preceding the date of
conversion, or $0.50 per share, subject to adjustment in the event of any stock split, dividend,
combination or similar event).  Such conversion shall be effectuated by surrendering the
Notes to be converted to the Company, with the form of conversion notice attached to the
Note as Exhibit A, executed by the Holder of the Note evidencing such Holder's intention to
convert this Note, and accompanied, if required by the Company, by proper assignment
hereof in blank.  Accrued but unpaid interest shall be subject to conversion, at the Holder's
election.  No fraction of Shares or script representing fractions of Shares will be issued on
conversion, but the number of Shares issuable shall be rounded to the nearest whole Share.
The date on which notice of conversion is given shall be deemed to be the date on which the
Holder has delivered this Note, with the conversion notice duly executed, to the Company,
or if earlier, the date set forth in such notice of conversion if the Note is received by the
Company within five business days thereafter.









8.No provision of this Note shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of, and interest on, this Note at the time,
place, and rate, and in the coin or currency herein prescribed.  This Note and all other Notes
now or hereafter issued on similar terms are direct obligations of the Company.  This Note
ranks equally with all other Notes now or hereafter issued under the terms set forth herein
with respect to this Note offering of up to $550,000.









9.The Company hereby expressly waives demand and presentment for payment, notice of
nonpayment, protest, notice of protest, notice of dishonor, notice of acceleration or intent to
accelerate, bringing of suit and diligence in taking any action to collect amounts called for
hereunder and shall be directly and primarily liable for the payment of all sums owing and
to be owing hereon, regardless of and without any notice, diligence, act or omission as or
with respect to the collection of any amount called for hereunder.









10.The Company agrees to pay all costs and expenses, including reasonable attorneys' fees,
which may be incurred by Holder in collection any amount due under this Note.









11.If one or more of the following described "Events of Default" shall occur:













(a)    The Company shall default in the payment of principal or interest on this Note; or











(b)    Any of the representations or warranties made by the Company herein, in the
documents delivered to the Holder dated as of _____________, 2002 (the
"Subscription Agreement"), or in any certificate or financial or other statements
heretofore or hereafter furnished by or on behalf of the Company in connection with
the execution and delivery of this Note or the Subscription Agreement shall be false
or misleading in any material respect at the time made; or











(c)    The Company shall fail to perform or observe any other covenant, term, provision,
condition, agreement or obligation of the Company under this Note and such failure
shall continue uncured for a period of seven (7) days after notice from the Holder of
such failure; or











(d)    The Company shall (1) become insolvent; (2) admit in writing its inability to pay its
debts as they mature; (3) make an assignment for the benefit of creditors or
commence proceedings for its dissolution; or (4) apply for or consent to the
appointment of a trustee, liquidator or receiver for it or for a substantial part of its
property or business; or











(e)    A trustee, liquidator or receiver shall be appointed for the Company or for a
substantial part of its property or business without its consent and shall not be
discharged within thirty (30) days after such appointment; or











(f)    Any governmental agency or any court of competent jurisdiction at the instance of
any governmental agency shall assume custody or control of the whole or any
substantial portion of the properties or assets of the Company and shall not be
dismissed within thirty (30) days thereafter, or











(g)    Any money judgment, writ or warrant of attachment, or similar process in excess of
Two Hundred Thousand Dollars ($200,000) in aggregate shall be entered or filed
against the Company or any of its properties or other assets and shall remain
unvacated, unbonded or unstayed for a period of fifteen (15) days or in any event
later than five (5) days prior to the date of any proposed sale thereunder; or











(h)    Bankruptcy, reorganization, insolvency or liquidation proceedings or other
proceedings for relief under any bankruptcy law or any law for the relief of debtors
shall be instituted by or against the Company and, if instituted against the Company,
shall not be dismissed within thirty (30) days after such institution or the Company
shall by any action or answer approve of, consent, or acquiesce in any such
proceedings or admit the material allegations of, or default in answering a petition
filed in any such proceeding; or











(i)    The Company shall have its Common Stock delisted from an exchange or over-the-counter market, without being relisted on a public exchange shortly thereafter.









Then, or at any time thereafter, and in each and every such case, unless such Event of Default
shall have been waived in writing by the Holder (which waiver shall not be deemed to be a
waiver of any subsequent default) at the option of the Holder and in the Holder's sole
discretion, the Holder may consider this Note immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which are hereby expressly waived,
anything herein or in any note or other instruments contained to the contrary notwithstanding,
and the Holder may immediately and without expiration of any period of grace, enforce any
and all of the Holder's rights and remedies provided herein or any other rights or remedies
afforded by law.







12.The Company covenants and agrees that until all amounts due under this Note have been
paid in full, by conversion or otherwise, [and for so long as Holder holds shares of Common
Stock issued upon conversion of this Note] unless the Holder waives compliance in writing,
the Company shall:







(a)    Give prompt written notice to the Holder of any Event of Default as defined in this
Note or of any other matter which has resulted in, or could reasonably be expected
to result in, a materially adverse change in its financial condition or operations.











(b)    Give prompt notice to the Holder of any claim, action or proceeding which, in the
event of any unfavorable outcome, would or could reasonably be expected to have a
material adverse effect on the financial condition of the Company.











(c)    At all times reserve and keep available out of its authorized but unissued stock, for
the purpose of effecting the conversion of this Note such number of its duly
authorized shares of Common Stock as shall from time to time be sufficient to effect
the conversion of the outstanding principal balance of this Note into shares of
Common Stock.











(d)    Upon receipt by the Company of evidence reasonably satisfactory to it of the loss,
theft, destruction or mutilation of this Note and:











(i)    in the case of loss, theft or destruction, of indemnity reasonably satisfactory
to it, or











(ii)   
in the case of mutilation, upon surrender and cancellation of this note,the Company at its expense will execute and deliver a new Note, dated the date of the
lost, stolen, destroyed or mutilated Note.







13.The Holder of this Note, by acceptance hereof, agrees that this Note is being acquired for
investment and that such Holder will not offer, sell or otherwise dispose of this Note or the
Shares of Common Stock issuable upon exercise thereof except under circumstances which
will not result in a violation of the Act or any applicable state Blue Sky laws or similar laws
relating to the sale of securities.









14.In case any provision of this Note is held by a court of competent jurisdiction to be excessive
in scope or otherwise invalid or unenforceable, such provision shall be adjusted rather than
voided, if possible, so that it is enforceable to the maximum extent possible, and the validity
and enforceability of the remaining provisions of this Note will not in any way be affected
or impaired thereby.









15.This Note constitutes the full and entire understanding and agreement between the Company
and the Holder with respect to the subject hereof.  Neither this Note nor any term hereof may
be amended, waived, discharged or terminated other than by a written instrument signed by
the Company and the Holder.









16.This Note shall be governed by and construed in accordance with the laws of the State of
Washington.









IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed by
an officer thereunto duly authorized.







Dated: October ____, 2002











SONORAN ENERGY, INC.







By:_________________________________

















---

Exhibit 4.2











THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED ABSENT AN EFFECTIVE
REGISTRATION THEREOF UNDER SUCH ACT, OR UNLESS THE COMPANY HAS
RECEIVED AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND ITS
COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.











10% CONVERTIBLE NOTE DUE April 18, 2005













THIS NOTE is a duly authorized issuance of Sonoran Energy, Inc., (a Washington corporation and
the "Company" in this document) designated as its 10% Convertible Note Due April 18, 2005, in
an aggregate principal amount not exceeding $50,000.







FOR VALUE RECEIVED, the Company promises to pay to purchaser or the registered holder
hereof (the "Holder"), the principal sum of Fifty Thousand Dollars ($50,000), on April 18, 2005 (the
"Maturity Date"), and to pay interest on the principal sum outstanding from time to time in arrears
on the Maturity Date, at the rate of 10% per annum and accruing from the date of initial issuance,
with the first payment occurring on July 18, 2003, and then quarterly thereafter. Accrual of interest
shall commence on the first business day to occur after the date hereof until payment in full of the
principal sum has been made or duly provided for. All accrued and unpaid interest shall bear interest
at the same rate as the principal and be due on the date for the principal. Interest may be paid in the
form of Common Stock, issued at the conversion rates described below in the amounts necessary to
satisfy the outstanding interest amounts then due. The interest so payable will be paid on the Maturity
Date to the person in whose name this Note (or one or more predecessor Notes) is registered on the
records of the Company regarding registration and transfers of the Notes (the "Note Register") on
the tenth day prior to the Maturity Date; provided, however, that the Company's obligation to a
transferee of this Note arises only if such transfer, sale or other disposition is made in accordance
with the terms and conditions of the Regulation 506 Securities Subscription Agreement executed by
the original Holder. The principal of, and interest on, this Note are payable in such coin or currency
of the United States of America as at the time of payment is legal tender for payment of public and
private debts, at the address last appearing on the Note Register of the Company as designated in
writing by the Holder from time to time. The Company will pay the principal of and interest upon
this Note on the Maturity Date, less any amounts required by law to be deducted, to the registered
Holder of this Note as of the tenth day prior to the Maturity Date and addressed to such Holder as
the last address appearing on the Note Register. The forwarding of such check shall constitute a
payment of principal and interest hereunder and shall satisfy and discharge the liability for principal
and interest on this Note to the extent of the sum represented by such check less any amounts so
deducted.















This Note is subject to the following additional provisions:















1. Proceeds from this Note are to be used for operating capital.















2. The funds due to the Company under this note shall be deposited by the Holder into the
Company's treasurey upon receipt.















3. Acceptance of the advance is subject to receipt of satisfactory legal opinions on the issuance of
the security. All legal fees and disbursements in connection with this note shall be borne by the
Company.















4. The Company may repay the loan in full at any time, provided the Holder has received a minimum
of $50,000 in interest payments and thirty (30) days notice of repayment. Holder may elect to
exercise the Conversion for thirty days following such notice of repayment.















5. The Company shall not pay a finder's fee.















6. This Note has been issued subject to investment representations of the original purchaser hereof
and may be transferred or exchanged only in compliance with the Securities Act of 1933, as
amended (the "Act"). Prior to due presentment for or transfer of this Note, the Company and any
agent of the Company may treat the person in whose name this Note is duly registered on the
Company's Note Register as the owner hereof for the purpose of receiving payment as herein
provided and for all other purposes, whether or not this Note be overdue, and neither the Company
nor any such agent shall be affected by notice to the contrary.















7. The Holder of this Note is entitled, at its option, at any time commencing after the Closing Date
until maturity hereof to convert any or all of the principal amounts of these Notes or any portion of
the principal amount (to include accrued interest) hereof into shares of Common Stock of the
Company ("Shares") at the greater of a price equal to eighty percent (80%) of the average daily
trading prices over the thirty (30) days immediately preceding the date of conversion, but no less
than $0.25 per share, subject to adjustment in the event of any stock split, dividend, combination or
similar event. Such conversion shall be effectuated by surrendering the Note to be converted to the
Company, with the form of conversion notice attached to the Note as Exhibit A, executed by the
Holder of the Note evidencing such Holder's intention to convert this Note, and accompanied, if
required by the Company, by proper assignment hereof in blank. Accrued but unpaid interest shall
be subject to conversion, at the Holder's election. No fraction of Shares or script representing
fractions of Shares will be issued on conversion, but the number of Shares issuable shall be rounded
to the nearest whole Share. The date on which notice of conversion is given shall be deemed to be
the date on which the Holder has delivered this Note, with the conversion notice duly executed, to
the Company, or if earlier, the date set forth in such notice of conversion if the Note is received by
the Company within five business days thereafter.















8. No provision of this Note shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of, and interest on, this Note at the time, place, and rate, and
in the coin or currency herein prescribed. This Note and all other Notes now or hereafter issued on
similar terms are direct obligations of the Company. This Note ranks equally with all other Notes
now or hereafter issued under the terms set forth herein with respect to this Note offering of up to
$50,000.















9. The Company hereby expressly waives demand and presentment for payment, notice of
nonpayment, protest, notice of protest, notice of dishonor, notice of acceleration or intent to
accelerate, bringing of suit and diligence in taking any action to collect amounts called for hereunder
and shall be directly and primarily liable for the payment of all sums owing and to be owing hereon,
regardless of and without any notice, diligence, act or omission as or with respect to the collection
of any amount called for hereunder.















10. The Company agrees to pay all costs and expenses, including reasonable attorneys' fees, which
may be incurred by Holder in collection any amount due under this Note.















11. If one or more of the following described "Events of Default" shall occur:











(a)     The Company shall default in the payment of principal or interest on this Note; or















(b)     Any of the representations or warranties made by the Company herein, in the documents
delivered to the Holder dated as of March 1, 2003, or in any certificate or financial or other
statements heretofore or hereafter furnished by or on behalf of the Company in connection with the
execution and delivery of this Note or the Subscription Agreement shall be false or misleading in any
material respect at the time made; or















(c)     The Company shall fail to perform or observe any other covenant, term, provision, condition,
agreement or obligation of the Company under this Note and such failure shall continue uncured for
a period of seven (7) days after notice from the Holder of such failure; or















(d)     The Company shall (1) become insolvent; (2) admit in writing its inability to pay its debts as they
mature; (3) make an assignment for the benefit of creditors or commence proceedings for its
dissolution; or (4) apply for or consent to the appointment of a trustee, liquidator or receiver for it
or for a substantial part of its property or business; or















(e)     A trustee, liquidator or receiver shall be appointed for the Company or for a substantial part of
its property or business without its consent and shall not be discharged within thirty (30) days after
such appointment; or















(f)     Any governmental agency or any court of competent jurisdiction at the instance of any
governmental agency shall assume custody or control of the whole or any substantial portion of the
properties or assets of the Company and shall not be dismissed within thirty (30) days thereafter, or













(g)     Any money judgment, writ or warrant of attachment, or similar process in excess of Two
Hundred Thousand Dollars ($200,000) in aggregate shall be entered or filed against the Company
or any of its properties or other assets and shall remain unvacated, unbonded or unstayed for a period
of fifteen (15) days or in any event later than five (5) days prior to the date of any proposed sale
thereunder; or















(h)     Bankruptcy, reorganization, insolvency or liquidation proceedings or other proceedings for relief
under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the
Company and, if instituted against the Company, shall not be dismissed within thirty (30) days after
such institution or the Company shall by any action or answer approve of, consent, or acquiesce in
any such proceedings or admit the material allegations of, or default in answering a petition filed in
any such proceeding; or















(i)     The Company shall have its Common Stock delisted from an exchange or over-the-counter
market, without being relisted on a public exchange shortly thereafter.















Then, or at any time thereafter, and in each and every such case, unless such Event of Default shall
have been waived in writing by the Holder (which waiver shall not be deemed to be a waiver of any
subsequent default) at the option of the Holder and in the Holder's sole discretion, the Holder may
consider this Note immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which are hereby expressly waived, anything herein or in any note or other
instruments contained to the contrary notwithstanding, and the Holder may immediately and without
expiration of any period of grace, enforce any and all of the Holder's rights and remedies provided
herein or any other rights or remedies afforded by law.















12. The Company covenants and agrees that until all amounts due under this Note have been paid
in full, by conversion or otherwise, [and for so long as Holder holds shares of Common Stock issued
upon conversion of this Note] unless the Holder waives compliance in writing, the Company shall:















(a)     Give prompt written notice to the Holder of any Event of Default as defined in this Note or of any
other matter which has resulted in, or could reasonably be expected to result in, a materially adverse
change in its financial condition or operations.















(b)     Give prompt notice to the Holder of any claim, action or proceeding which, in the event of any
unfavorable outcome, would or could reasonably be expected to have a material adverse effect on
the financial condition of the Company.















(c)     At all times reserve and keep available out of its authorized but unissued stock, for the purpose
of effecting the conversion of this Note such number of its duly authorized shares of Common Stock
as shall from time to time be sufficient to effect the conversion of the outstanding principal balance
of this Note into shares of Common Stock.















(d)     Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Note and:















(i)     in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it, or















(ii)     in the case of mutilation, upon surrender and cancellation of this Note, the Company at its expense will execute and deliver a new Note, dated the date of the lost, stolen,
destroyed or mutilated Note.















13. The Holder of this Note, by acceptance hereof, agrees that this Note is being acquired for
investment and that such Holder will not offer, sell or otherwise dispose of this Note or the Shares
of Common Stock issuable upon exercise thereof except under circumstances which will not result
in a violation of the Act or any applicable state Blue Sky laws or similar laws relating to the sale of
securities.















14. In case any provision of this Note is held by a court of competent jurisdiction to be excessive in
scope or otherwise invalid or unenforceable, such provision shall be adjusted rather than voided, if
possible, so that it is enforceable to the maximum extent possible, and the validity and enforceability
of the remaining provisions of this Note will not in any way be affected or impaired thereby.















15. This Note constitutes the full and entire understanding and agreement between the Company and
the Holder with respect to the subject hereof. Neither this Note nor any term hereof may be amended,
waived, discharged or terminated other than by a written instrument signed by the Company and the
Holder.















16. This Note shall be governed by and construed in accordance with the laws of the State of
Washington.





IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed by an
officer thereunto duly authorized.











Dated: April ___, 2003









SONORAN ENERGY, INC.

(Lender)













By:_____________________________        By:_______________________________









John Punzo, President







---



Exhibit 10.5

OIL AND GAS PURCHASE AGREEMENT



















EMJAYCO'S GLIDE #33 PROPERTY



























THIS AGREEMENT







("Agreement") is made and entered into this 5th day of October
2002, by and between:























LONGBOW, LLC,

a Nevada limited liability corporation ("LONGBOW"), and















SONORAN ENERGY,

a Washington corporation ("SONORAN"),













both are here and after referred to as the Parties ("Parties").















This Agreement when accepted and agreed to by SONORAN will constitute an
Agreement by and between SONORAN and LONGBOW, which provides for the
participation in and acquisition of a Working Interest by SONORAN in the Emjayco
Glide #33 Lease (the "Property"), lands in the NE/4, Section 33, T27S, R28E, M. D. B.
& M., Kern County, California (see "AMI", Area of Mutual Interest, attached as Exhibit
"A"), the Lease Schedule attached as Exhibit "B", the Well List attached as Exhibit
"C",
and Tangible Personal Property list attached as Exhibit "D". Interest conveyed by
LONGBOW to SONORAN by this agreement shall be subject to all the terms and
conditions of this Agreement.













LONGBOW is the owner of certain interests in oil and gas leases ("Leases") as more
fully described in Exhibit "B" attached hereto covering and embracing certain lands
within an area of mutual interest generally within the Mount Poso Oil Field ("Mount Poso AMI"), as shown on Exhibit
"A" attached hereto.















NOW THEREFORE, IN FURTHERANCE OF THE FOREGOING, and in
consideration of the mutual covenants, conditions, representations, warranties and
agreements contained herein, and for other good and valuable consideration, receipt of
which is hereby acknowledged, the parties hereto agree as follows:

















1)   Compensation.   As Compensation for its right, title and interest in the Property,
SONORAN shall pay to LONGBOW:















> (a)    Ten Dollars ($10.00 US), which shall be deposited into
> an account at Central California Escrow at Bakersfield, California, on or
> before Twelve noon, November 1, 2002 or no less than ten (10) business
> days prior to the close of the Property, whichever is sooner. In the event
> that closing is expected to take place on any date other than November 16,
> 2002, LONGBOW shall notify SONORAN no less than Fifteen (15)
> business days prior to that date.







> (b)    LONGBOW shall pay for of all costs associated with the escrow, e.g.,
> escrow fees, title searches, title reports, title insurance, environmental
> reviews, etc., including but not limited to LONGBOW's time and cost in
> finding and preparing the Property for presentation to SONORAN, said
> amount is not included in the amount set forth in 1(a) above, but shall be
> set forth in an invoice to SONORAN within Five (5) Business days of the
> closing of this sale. SONORAN shall pay the invoiced amount to
> LONGBOW no later than Five (5) Business days following receipt of the
> invoice.





> (c)    SONORAN shall pay, at signing, the amount of Twenty Thousand
> ($20,000.00) Dollars to LONGBOW, said amount to be credited toward
> the amount set forth in Section 1b above.













2)  Definitions.  For the purposes of this Agreement, the following definitions and/or
interpretations shall apply:









> (a)    "Title Information" shall be all information forms and reports related to title in
> connection with the leases and or property, as well as licenses and permits related to the
> Property.
>   
>   (b)    "Sellers and Buyers Information" shall include all names addresses, and
> identification necessary to complete the transaction.





> (c)    "Payout" shall mean an amount of SONORAN's total Net Revenue
> generated from the property that is equal to one hundred and fifty percent
> (150%) of the total amount of dollars attributed to SONORAN's Capital
>   Contribution Account as established by Operator to account for costs of
>   purchase and specified operations, as set forth in Section 5c of this
>   Agreement
>   
>   (d)    "Operator" shall be as defined in that certain A.A.P.L. Model Form
> Operating Agreement attached as Exhibit "E".







> (e)    "Effective Date" shall be October 5, 2002.
>   
>   (f)    "LONGBOW" shall mean LONGBOW, LLC, a Nevada limited liability
> corporation designated as Operator under a Joint Operating Agreement.
>   
>   (g)    "Dollars" shall mean United States Dollars.
>   
>   (h)    "Net Revenue" shall mean revenue received less the cost of operations,
> exclusive of Capital Costs, including but not limited to sources other than
> oil and gas sales from the Property, such as oil and gas sales from other
> properties, and operating fees from third party uses. At such time as
> LONGBOW releases the security used as the Idle Well Bond back to SONORAN, that amount shall be deemed as a Net Revenue Offset to the
> Capital Contribution Account.













3).  Assignment of Interest.











> (a)    Assignment of interest shall be made to SONORAN of the Working
> Interest in the described leases within the Property AMI equal to sixty
> percent of one hundred percent (60% of 100%) through this Agreement.
>   
>   (b)    Until such time as payout occurs, eighty percent of one hundred percent
> (80% of 100%) of the net revenue shall be credited to SONORAN's
> account under the provisions of the Joint Operating Agreement. It is
> understood that the tax consequences and benefits for the parties
> corresponds to their percentage of revenue during this period.
>   
>   (c)    After payout, as defined in 2c above, the allocation of revenue shall be
> proportional to the ownership interests of the Parties.
>   
>   (d)    Should it be necessary to trade equity for further financing of operations
> on the Property, the interests of the Parties shall be proportionally reduced
> to cover that cost.
>   
>   (e)    If, prior to payout, LONGBOW is removed as Operator for serious cause,
> i.e., fraud, embezzlement or breach of its fiduciary or operational
> obligations under the Joint Operating Agreement for the Property, then
> LONGBOW's interest in the Property, as defined in Section 3a above,
> shall immediately be reduced, in favor of SONORAN, to an amount equal
> to its net revenue share as set forth in Section 3b above.













4)   Use of Funds.    Upon deposit of funds into the account, LONGBOW, as Operator,
shall have total and non-conditional control of the funds to further the interests of the
Parties, as provided for under the provisions of this Agreement.













5)  Operations.

> (a)    LONGBOW shall act as Operator for the working interest owners. The
> Parties shall enter into a Joint Operating Agreement, with LONGBOW,
> defining the terms and conditions of the operations, said agreement is
> attached hereto as Exhibit "E".
>   
>   (b)    SONORAN shall pay, at closing, to LONGBOW the amount of Eighty
> Thousand Dollars ($80,000.00), said amount to be used as working capital
> for the Property. Use of working capital is set forth in the Operational Plan
> attached as Exhibit "F"







> (c)    SONORAN shall deliver to LONGBOW, at closing, a Certificate of
> Deposit, or some other acceptable form of security ("security") in the amount of
> One Hundred Thousand Dollars ($100,000.00). LONGBOW shall tender said security
> to the Division of Oil and Gas and Geothermal Resources of the State of
> California ("DOGGR") to serve as an "Idle Well
> Bond", as defined and used by the DOGGR. Said security shall remain the
> property of SONORAN. Longbow, as Operator of the Property, shall pay
> to SONORAN an amount equal to Eight Thousand Dollars ($8,000.00)
> per year, in equal monthly installments, for the Parties' use of the security.







> (d)    Any other costs notwithstanding, the total amount of the Capital
> Contribution Account per the terms of this Agreement is Two Hundred
> Thousand Dollars ($200,000.00), i.e., the cost of the purchase of the
> Property, Twenty Thousand Dollars ($20,000.00), plus the working capital
> amount of Eighty Thousand Dollars ($80,000.00), plus the One Hundred
> Thousand Dollars ($100,000.00) put up by SONORAN as security for the
> Idle Well Bond.











6)   Sale of Property.    In the event that SONORAN sells any or all of its interest in the
Property:







> (a)    LONGBOW shall be given first right of refusal to purchase the Property
> under the same terms and conditions as the purchaser.
>   
>   (b)    If, prior to payout as defined in Section 2c above, the Parties sell all of their
> interest in the Property, once an amount equal to one-hundred percent of one-hundred percent (100% of 100%) of the amount in the Capital Contribution
> Account plus one-hundred percent of one-hundred percent (100% of 100%) of
> the amount establish pursuant to Section 1b above, has been paid to Sonoran,
> whether through Net Revenue Offsets, proceeds from the sale or a
> combination thereof, the remainder of all funds shall be divided among the
> Parties as to their interest share as set forth in Section 3a above.
>   
>   (c)    If, prior to payout as defined in Section 2c above, the Parties sell all of their
> interest in the Property to a third party on a basis mutually agreeable to both
> Parties to this Agreement, then the proceeds of the sale shall be distributed in
> accordance with the provisions of Section 6b above, with the exception that
> the payout definition shall be as per said Section 2c above.
>   
>   (d)    Should SONORAN sell or deliver any or all of its interest to a third Party,
> payout will be re-defined to read as set forth in Section 6b above. In addition,
> Section 6a above would apply to any transfer.













7)  Use of Bond.   LONGBOW may make use of the Idle Well Bond on any other
Property that it operates by paying the appropriate pro rata share of the cost of the Idle
Well Bond, as defined in Section 5c. In the event that the number of idle wells controlled
by LONGBOW exceeds the amount covered by the Bond, wells in which SONORAN
owns an interest shall be covered to the exclusion of any others.













8)   Conflicts.    If at any time there exists a conflict between this Agreement and
attachments to this Agreement, the provisions, terms, and conditions of this Agreement
shall control to the extent of said conflict.













9)   Enforcement    If any provision, including paragraphs and excerpts of this Agreement,
or attachments to this Agreement, is declared to be void or unenforceable for any reason,
the remaining provisions shall nevertheless remain valid and enforceable and binding
upon the parties hereto.













10)   Survivorship.   This Agreement entered into by and between the parties shall be
binding on and inure to the benefit of the parties, their assigns, heirs and successors in
interest as to all rights and obligations herein.













11)   Amendments.    No amendment, change or modification of this Agreement shall be
effective unless in writing and signed by both parties hereto.













12)   Time is of the Essence.    Time is of the essence in the completion of this transaction.
The Parties understand and pledge to fulfill all obligations on or before the deadlines set
forth in the Agreement. All payments due under the terms of this Agreement must be
made in full, on time and without extension. Failure to perform in a timely manner shall
constitute a material breach of this Agreement and render all further obligations of
LONGBOW to SONORAN null and void. The Parties agree that the penalty for such
breach shall be forfeiture of all right title and interest in the Property to LONGBOW.













13)   Notice
- Payments.    Any notice, request for payment of funds for operations,
payment of funds for operations, instruction or other document deemed by any party to
be necessary or desirable to be given to another party shall be in writing and shall be
hand delivered by courier, mailed by registered mail or certified mail, return receipt
requested, postage prepaid, by prepaid deposit with an overnight express delivery service,
or faxed with hard copy delivered by mail, addressed as follows:















If to SONORAN:













SONORAN ENERGY









1100 Melville Street, Suite 302









Vancouver, BC  V6E 4A6









Attn: John Punzo









FAX:  (604) 599-1862













If to LONGBOW:













LONGBOW EXPLORATION, INC.









1701 Westwind Dr., Suite #101









Bakersfield, CA 93301









Attn:  John W. Howe









FAX:  (661) 631-1715











If mailed as aforesaid, notice shall be deemed given three days after deposit in the United
States Mail. Notice by overnight express delivery service shall be deemed effective on
the date received. Notice by personal or courier delivery shall be deemed effective at the
time of delivery. Notice also may be given by means of electronic facsimile transmission
("fax"); provided, however, that in order for a fax notice to be deemed effective on the
day received the fax must be received by 5:00 p.m. California time and the party giving
notice shall, concurrently with such facsimile notice, provide a copy of such notice to the
other party by the next business day, pursuant to one of the methods of "hard copy"
delivery specified above. The person and addresses to which mailings may be made may
be changed from time to time by a notice mailed as stated above.











14)  Indemnity.

> (a)    Each party hereto shall be liable and responsible for and shall
> indemnify and hold the other harmless (including costs and attorney's fees)
> from and against any claim or actions following injury to, illness or death of
> any person and any loss or damage to any property occurring in connection
> with the performance or non-performance of this agreement only to the extent
> of its own negligence and that of its agents, servants, employees and
> contractors.
>   
>   (b)    SONORAN shall be liable and responsible for and shall indemnify and
> hold LONGBOW harmless (including costs and attorney's fees) from and against
> any claim or actions against SONORAN's interest herein.











15)  Disclaimer. LONGBOW will diligently prepare and present the information
regarding the Property. LONGBOW does not warranty the information presented as to its
accuracy or completeness. SONORAN agrees to hold LONGBOW, its owners, partners,
affiliates, consultants or agents harmless from any liability for its efforts in connection
with this Property.













16)  Arbitration.   Any dispute, controversy or claim arising out of or relating to this
Agreement or the breach or validity thereof ("Dispute") shall be referred to and finally
settled by final and binding arbitration in Bakersfield, Kern County, California. The term
"Agreement" includes the contract itself and all exhibits and attachments. The parties
agree to apply California law, but ignore any conflicts of law that would refer to the law
of another jurisdiction. Upon request of any party, whether made before or after the
institution of any legal proceedings, any Dispute shall be resolved by binding arbitration
by three arbitrators. The parties agree to use the Commercial Arbitration Rules of the
Arbitration Association and, to the maximum extent possible, the Federal Arbitration Act
(Title 9 of the United States Code). If the Federal Arbitration Code does not apply, the
parties select the arbitration law of the state having the most significant contacts with the
Dispute as determined by the arbitrators. The transactions contemplated by this
Agreement are transactions involving or related to commerce. In any arbitration, each
party shall designate one arbitrator and those two arbitrators shall select a third, but, if
they cannot agree, the Administrator of the American Arbitration Association shall
appoint the third arbitrator. The arbitrators shall base their decision on the applicable law,
including any laws related to statutes of limitation. The arbitrators shall not have the
authority to award, and the tribunal shall not award, any damages or compensation for
loss of prospective profits or special, indirect or consequential damages, punitive
damages, or exemplary damages in connection with any Dispute. In any action under the
provisions of this Agreement, the Losing Party shall pay all costs of the arbitration
process, including any attorney's, expert witness, or other such fees or costs of the
Prevailing Party.













The terms and conditions herein are accepted and agreed to this ______day of October
2002.



LONGBOW, LLC                       
SONORAN ENERGY, INC.







___________________________ _____________________________









John W. Howe                                  John Punzo









CEO                                                 President





---











Exhibit "B"























OIL AND GAS LEASES SUBJECT TO THIS AGREEMENT











Lizzie H.
Glide         100% Interest       
160 Gross Acres        04/26/35 Lease Date       
Held by Production Term



---

EXHIBIT "C"



Wells, Working Interest, and Net Revenue Interests



|Well Name    | Working Interest (in percent) | Net Revenue Interest (in percent)
|------------ | ----------------------------- | ---------------------------------
|Glide #33-1  | 100                           | 87.5                             
|Glide #33-2  | 100                           | 87.5                             
|Glide #33-3  | 100                           | 87.5                             
|Glide #33-4  | 100                           | 87.5                             
|Glide #33-5  | 100                           | 87.5                             
|Glide #33-6  | 100                           | 87.5                             
|Glide #33-7  | 100                           | 87.5                             
|Glide #33-8  | 100                           | 87.5                             
|Glide #33-9  | 100                           | 87.5                             
|Glide #33-10 | 100                           | 87.5                             
|Glide #33-11 | 100                           | 87.5                             
|Glide #33-12 | 100                           | 87.5                             
|Glide #33-13 | 100                           | 87.5                             
|Glide #33-15 | 100                           | 87.5                             



























---



EXHIBIT "D"

























TANGIBLE PERSONAL PROPERTY













LOCATED ON TEXACO-CLANCY LEASE









Trailer House License #CA 1CR6109











Hot Oil Truck License #CA 2W56474









Misc                  3" pipe colored gray













Portable test trap #9870 marked TST #1











Misc                  Behind South side of small seatrain container on
East with step ladder and misc.









2" valves, and signs (valves moved inside seatrain container)













Contents of small Eastern seatrain container











Water tank approx 100-125 gal marked WT #1









West seatrain and contents









Misc                  Pipe and light pole close to well #42













Baker 500 bbl. Wheel mounted red frac. Tank marked TMT #1











Misc                  Pile of tubulars and tank stairway close to Clancy Lease flare













White 500 bbl. Skid mounted tank marked SMT #1 next to well #22 with 2",











1-1/4 tubing













Jts. Conductor pipe approx 41' long and misc. tubulars on ground next to











conductor pipe











LOCATED ON THE UNION BANK LEASE







2-7/8" buttress tubing on ground











Misc
Bundle of 3/4" and 7/8" sucker rods on ground









Misc                 7-5/8" Landing jts and flag jts













Jts 2-3/8" coated line pipe











1
 500 Bbl skid mounted water tank









---

Exhibit 10.6

OIL AND GAS PURCHASE AGREEMENT





















KEYSTONE OIL COMPANY'S DEER CREEK PROPERTY



























THIS AGREEMENT ("Agreement") is made and entered into this 5th day of
October 2002, by and between:















LONGBOW, LLC,
a Nevada limited liability corporation ("LONGBOW"), and













SONORAN ENERGY, INC.,

a Washington corporation













both are here and after referred to as the Parties ("Parties").















This Agreement when accepted and agreed to by SONORAN will constitute an
Agreement by and between SONORAN and LONGBOW, which provides for the
participation in and acquisition of a Working Interest by SONORAN in the Keystone Oil
Company's Deer Creek Property (the "Property"), as more fully described in the AMI
Map attached as Exhibit "A", the Lease Schedule attached as Exhibit "B", the Well List
attached as Exhibit "C", and Tangible Personal Property list attached as Exhibit
"D".
Interest conveyed by LONGBOW to SONORAN by this agreement shall be subject to all
the terms and conditions of this Agreement.













LONGBOW is the owner of certain interests in oil and gas leases ("Leases") as more
fully described in Exhibit "B" attached hereto covering and embracing certain lands
within an area of mutual interest generally within the Deer Creek Oil Field ("Deer Creek
AMI"), as shown on Exhibit "A" attached hereto.















NOW THEREFORE, IN FURTHERANCE OF THE FOREGOING, and in
consideration of the mutual covenants, conditions, representations, warranties and
agreements contained herein, and for other good and valuable consideration, receipt of
which is hereby acknowledged, the parties hereto agree as follows:













1   Compensation.   As Compensation for its right, title and interest in the Property,
SONORAN shall pay to LONGBOW:













> a.    Three Hundred Ten Thousand Dollars ($310,000.00 US), which amount
> shall be deposited into an escrow account at Central California Escrow at
> Bakersfield, California, on or before Twelve noon, November 1, 2002 or
> no less than ten (10) business days prior to the close of the Property,
> whichever is sooner. In the event that closing is expected to take place on
> any date other than November 16, 2002, LONGBOW shall notify
> SONORAN no less than Fifteen (15) business days prior to that date.











> b.    LONGBOW shall pay for of all costs associated with the due diligence,
> e.g., escrow fees, title searches, title reports, title insurance, environmental
> reviews, etc., including but not limited to LONGBOW's time and cost in
> finding and preparing the Property for presentation to SONORAN, said
> amount is not included in the amount set forth in 1(a) above, but shall be
> set forth in an invoice to SONORAN within Five (5) Business days of the
> closing of this sale. SONORAN shall pay the invoiced amount to
> LONGBOW no later than Five (5) Business days following receipt of the
> invoice.











> c.    SONORAN shall pay, at signing, the amount of Twenty Five Thousand
> ($25,000.00) Dollars to LONGBOW, said amount to be credited toward
> the amount set forth in Section 1b above.













2)  Definitions.   For the purposes of this Agreement, the following definitions and/or
interpretations shall apply:













> (a) "Title Information" shall be all information forms and reports related to
> title in connection with the leases and or property, as well as licenses and
> permits related to the Property.









> (b) "Sellers and Buyers Information" shall include all names addresses, and
> identification necessary to complete the transaction.









> (c) "Payout" shall mean an amount of SONORAN's total Net Revenue
> generated from the property that is equal to one hundred and fifty percent
> (150%) of the total amount of dollars attributed to SONORAN's Capital
> Contribution Account as established by Operator to account for costs of
> purchase and specified operations, as set forth in Section 5c of this
> Agreement, plus an amount of SONORAN's total Net Revenue generated
> from the property that is equal to one hundred percent (100%) of the total
> amount of dollars attributed to due diligence and related expenses as set
> forth in Section 1b of this Agreement,









> (d) "Operator" shall be as defined in that certain A.A.P.L. Model Form
> Operating Agreement attached as Exhibit "E".









> (e) "Effective Date" shall be November 1, 2002, or the date of closing.









> (f)"LONGBOW" shall mean LONGBOW, LLC, a Nevada limited liability
>   corporation designated as Operator under a Joint Operating Agreement.

















> (g) "Dollars" shall mean United States Dollars.









> (h) "Net Revenue" shall mean revenue received less the cost of operations,
> e.g., royalties, overhead and utilities, exclusive of Capital Costs, including
> but not limited to sources other than oil and gas sales from the Property,
> such as oil and gas sales from other properties, and operating fees from
> third party uses.











3).  Assignment of Interest.











> (a)    Assignment of interest shall be made to SONORAN of the Working
> Interest in the described leases within the Property AMI equal to sixty
> percent of one hundred percent (60% of 100%) through this Agreement.











> (b)    Until such time as payout occurs, eighty percent of one hundred percent
> (80% of 100%) of the net revenue shall be credited to SONORAN's
> account under the provisions of the Joint Operating Agreement. It is
> understood that the tax consequences and benefits for the parties
> corresponds to their percentage of revenue during this period.











> (c)    After payout, as defined in 2c above, the allocation of revenue shall be
> proportional to the ownership interests of the Parties.













> (d)Should it be necessary to trade equity for further financing of operations
> on the Property, the interests of the Parties shall be proportionally reduced
> to cover that cost. No financing secured by the Property will be put in
> place without the consent of both of the Parties.













> (e)    If, prior to payout, LONGBOW is removed as Operator for serious cause,
> i.e., fraud, embezzlement or breach of its fiduciary or operational
> obligations under the Joint Operating Agreement for the Property, then
> LONGBOW's interest in the Property, as defined in Section 3a above,
> shall immediately be reduced, in favor of SONORAN, to an amount equal
> to its net revenue share as set forth in Section 3b above.













4)   Use of Funds.    Upon deposit of funds into the account, LONGBOW, as Operator,
shall have total and non-conditional control of the funds to further the interests of the
Parties, as provided for under the provisions of this Agreement.













5)   Operations.













> (a)    LONGBOW shall act as Operator for the working interest owners. The
> Parties have entered into a Joint Operating Agreement, with LONGBOW,
> defining the terms and conditions of the operations, said agreement is
> attached hereto as Exhibit "E".
>   
>   (b)    SONORAN shall pay, at closing, to LONGBOW the amount of Twenty
> Five Thousand Dollars ($25,000.00), said amount to be used as working
> capital for the Property. Uses of working capital are set forth in Exhibit
>   "F".
>   
>   (c)    Any other costs notwithstanding, the total amount of the Capital
> Contribution Account per the terms of this Agreement is Three Hundred
> Thirty Five Thousand Dollars ($335,000.00), i.e., the cost of the purchase
> of the Property, Three Hundred Ten Thousand Dollars ($310,000.00), plus
> the working capital amount of Twenty Five Thousand Dollars
> ($25,000.00).





6)   Sale of Property.    In the event that SONORAN sells any or all of its interest in the
Property:



> (a)    The Parties shall be each given first right of refusal to purchase the Property
> under the same terms and conditions as the purchaser, in the event that the
> other Party attempts to sell any or all of its interest.
>   
>   (b)    If, prior to payout as defined in Section 2c above, the Parties sell all of their
> interest in the Property, once an amount equal to one-hundred percent of one-hundred percent (100% of 100%) of the amount in the Capital Contribution
> Account plus one-hundred percent of one-hundred percent (100% of 100%) of
> the amount establish pursuant to Section 1b above, has been paid to Sonoran,
> whether through Net Revenue Offsets, proceeds from the sale or a
> combination thereof, the remainder of all funds shall be divided among the
> Parties as to their interest share as set forth in Section 3a above.













> (c)    If, prior to payout as defined in Section 2c above, the Parties sell all of their
> interest in the Property to a third party on a basis mutually agreeable to both
> Parties to this Agreement, then the proceeds of the sale shall be distributed in
> accordance with the provisions of Section 6b above, with the exception that
> the payout definition shall be as per said Section 2c above.













> (d)    Should SONORAN sell or deliver any or all of its interest to a third Party,
> payout will be re-defined to read as set forth in Section 6b above. In addition,
> Section 6a above would apply to any transfer.













7)   Conflicts.   If at any time there exists a conflict between this Agreement and
attachments to this Agreement, the provisions, terms, and conditions of this Agreement
shall control to the extent of said conflict.













8)   Enforcement    If any provision, including paragraphs and excerpts of this Agreement,
or attachments to this Agreement, is declared to be void or unenforceable for any reason,
the remaining provisions shall nevertheless remain valid and enforceable and binding
upon the parties hereto.













9)   Survivorship.    This Agreement entered into by and between the parties shall be
binding on and inure to the benefit of the parties, their assigns, heirs and successors in
interest as to all rights and obligations herein.













10)  Amendments.   No amendment, change or modification of this Agreement shall be
effective unless in writing and signed by both parties hereto.













11)  Time is of the Essence.    Time is of the essence in the completion of this transaction.
The Parties understand and pledge to fulfill all obligations on or before the deadlines set
forth in the Agreement. All payments due under the terms of this Agreement must be
made in full, on time and without extension. Failure to perform in a timely manner shall
constitute a material breach of this Agreement and render all further obligations of
LONGBOW to SONORAN null and void. The Parties agree that the penalty for such
breach shall be forfeiture of all right title and interest in the Property to LONGBOW.













12)  Notice
- Payments.    Any notice, request for payment of funds for operations,
payment of funds for operations, instruction or other document deemed by any party to
be necessary or desirable to be given to another party shall be in writing and shall be
hand delivered by courier, mailed by registered mail or certified mail, return receipt
requested, postage prepaid, by prepaid deposit with an overnight express delivery service,
or faxed with hard copy delivered by mail, addressed as follows:















If to SONORAN:













SONORAN ENERGY, INC.









11300
West Olympic Boulevard, Suite 800









Los
Angeles, California 90064









Attn: John Punzo









FAX:  (604) 599-1862













If to LONGBOW:













LONGBOW EXPLORATION, INC.









1701 Westwind Dr., Suite #101









Bakersfield, CA 93301









Attn:  John W. Howe









FAX:  (661) 631-1715











If mailed as aforesaid, notice shall be deemed given three days after deposit in the United
States Mail. Notice by overnight express delivery service shall be deemed effective on
the date received. Notice by personal or courier delivery shall be deemed effective at the
time of delivery. Notice also may be given by means of electronic facsimile transmission
("fax"); provided, however, that in order for a fax notice to be deemed effective on the
day received the fax must be received by 5:00 p.m. California time and the party giving
notice shall, concurrently with such facsimile notice, provide a copy of such notice to the
other party by the next business day, pursuant to one of the methods of "hard copy"
delivery specified above. The person and addresses to which mailings may be made may
be changed from time to time by a notice mailed as stated above.











13)  Indemnity.





> (a)    Each party hereto shall be liable and responsible for and shall
> indemnify and hold the other harmless (including costs and attorney's
> fees) from and against any claim or actions following injury to, illness
> or death of any person and any loss or damage to any property
> occurring in connection with the performance or non-performance of
> this agreement only to the extent of its own negligence and that of its
> agents, servants, employees and contractors.











> (b)    SONORAN shall be liable and responsible for and shall indemnify and
> hold LONGBOW harmless (including costs and attorney's fees) from
> and against any claim or actions against SONORAN's interest herein.













14)  Disclaimer.    LONGBOW will diligently prepare and present the information
regarding the Property. LONGBOW does not warranty the information presented as to its
accuracy or completeness. SONORAN agrees to hold LONGBOW, its owners, partners,
affiliates, consultants or agents harmless from any liability for its efforts in connection
with this Property.













15)  Arbitration. Any dispute, controversy or claim arising out of or relating to this
Agreement or the breach or validity thereof ("Dispute") shall be referred to and finally
settled by final and binding arbitration in Bakersfield, Kern County, California. The term
"Agreement" includes the contract itself and all exhibits and attachments. The parties
agree to apply California law, but ignore any conflicts of law that would refer to the law
of another jurisdiction. Upon request of any party, whether made before or after the
institution of any legal proceedings, any Dispute shall be resolved by binding arbitration
by three arbitrators. The parties agree to use the Commercial Arbitration Rules of the
Arbitration Association and, to the maximum extent possible, the Federal Arbitration Act
(Title 9 of the United States Code). If the Federal Arbitration Code does not apply, the
parties select the arbitration law of the state having the most significant contacts with the
Dispute as determined by the arbitrators. The transactions contemplated by this
Agreement are transactions involving or related to commerce. In any arbitration, each
party shall designate one arbitrator and those two arbitrators shall select a third, but, if
they cannot agree, the Administrator of the American Arbitration Association shall
appoint the third arbitrator. The arbitrators shall base their decision on the applicable law,
including any laws related to statutes of limitation. The arbitrators shall not have the
authority to award, and the tribunal shall not award, any damages or compensation for
loss of prospective profits or special, indirect or consequential damages, punitive
damages, or exemplary damages in connection with any Dispute. In any action under the
provisions of this Agreement, the Losing Party shall pay all costs of the arbitration
process, including any attorney's, expert witness, or other such fees or costs of the
Prevailing Party.









The terms and conditions herein are accepted and agreed to this ______day of October
2002.











LONGBOW, LLC.                         SONORAN ENERGY, INC.











___________________________               _____________________________









John W. Howe                                 John Punzo









CEO                                                 President







---









Exhibit
"B"

















OIL AND GAS LEASES SUBJECT TO THIS AGREEMENT



















Parcel                                                                 Gross         Net











No___   Lessor Name__________ Interest___Acres__ _Acres__ _Lease Date_
Term







1        Harry Hallaian et al                         100%         40             40             11/02/53    HBP









2        National Development Co.             100%         40             40              06/03/53    HBP









3        Zola B. Moore                               100%         20             20              12/08/53    HBP





---

















EXHIBIT
"C"













Wells, Working Interest, and Net Revenue Interests









Well Name
Working Interest
Net Revenue InterestCommunity #1
100%
84.834%Community #2
100%
84.834%Community #3
100%
84.834%Community #4
100%
84.834%Community #5
100%
84.834%Community #6
100%
84.834%Community #9
100%
84.834%Community #10
100%
84.834%Community #11
100%
84.834%Community #12
100%
84.834%Community #14
100%
84.834%Hallain #2
100%




---







EXHIBIT "D"

























TANGIBLE PERSONAL PROPERTY













A.  Surface
Equipment





























1.  Well
Community #1











-Slab 3' x 12' with Sign, Trash Barrel











-Pumping Unit:









-Lufkin 40D, Belt Drive, Rod Fence











-Motor, 10hp, Enclo.











-Panel and Wiring











-Hangar and Polish Rod











-Test Barrel and Stand











-Casing Head and Piping













2.   Well Community #2













-Slab 3' x 12'
with Sign, Trash Barrel











-Pumping Unit:











-Cabot-16D, Belt Drive, Rod Fence











-Motor, 5hp, Enclo.











-Panel and Wiring











-Hangar and
Polish Rod











-Test Barrel and
Stand











-Casing Head and
Piping













3.   Well Community #3













-Slab 3' x 12'
with Sign, Trash Barrel











-Pumping Unit:











-Lufkin 16-D, Belt Drive, Rod Fence











-Motor, 3hp, Enclo.











-Panel and Wiring











-Hangar and
Polish Rod











-Test Barrel and
Stand











-Casing Head and
Piping



4.  Well
Community #4













-Slab 3' x 12'
with Sign, Trash Barrel, Pipe Fence











-Pumping
Unit:Parkersburg, Equiv. 57D, Belt Drive











-Motor, 5hp, Enclo.











-Panel and Wiring









-Hangar and
Polish Rod











-Test Barrel and
Stand











-Casing Head and
Piping













5.   Well Community #5













-Slab 3' x 12'
with Sign, Trash Barrel











-Pumping Unit:











-Cabot 16-D, Belt Drive, Rod Fence











-Motor, 5hp, Enclo.











-Panel, Wiring, and Timer











-Hangar and
Polish Rod











-Test Barrel and
Stand











-Casing Head and
Piping













6.  Well
Community #6













-Slab 3' x 12'
with Sign, Trash Barrel











-Pumping Unit:











-Lufkin 40D, Belt Drive, Rod Fence











-Motor, 7 1/2 hp, Enclo.











-Panel and Wiring











-Hangar and
Polish Rod











-Test Barrel and
Stand











-Casing Head and
Piping













7.   Well Community #9













-Slab with Sign











-Pumping Unit:











-Lufkin 114D, Extra Base, Belt Drive, Fence











-Motor, 30hp, EP











-Panel and Wiring











-Hangar and
Polish Rod











-Casing Head and
Piping













8.   Well Community #10













-Slab 3' x 12'
with Sign, Trash Barrel











-Pumping Unit:











-Lufkin 40D, #15 Gear Box Belt Drive, Fence











-Motor, 20hp, EP











-Panel and Wiring











-Hangar and
Polish Rod











-Test Barrel and
Stand











-Casing Head and
Piping













9.   Well Community #11













-Sign











-Casing Head and
Piping













10.  
Well Community #12













-Slab (4'-6') x
12' with Sign, Trash Barrel











-Pumping Unit:











-Lufkin 40D, Belt Drive, Rod Fence











-Motor, 15hp, EP











-Panel and Wiring











-Hangar and
Polish Rod











-Test Barrel and
Stand











-Casing Head and
Piping













11.  
Well Community #14













-Slab 44' x 10-6'
with Sign











-Pumping Unit:











-Cabot-D 1608 Gear Box, Belt Drive, No Guard











-Motor, 3hp, Enclo.











-Panel, Wiring, and Timer











-Hangar and
Polish Rod











-Test Barrel and
Stand











-Casing Head and
Piping













12. 
Miscellaneous Yard Equipment













-Electric Power
Line Distribution System with 27 Poles, 10 Guys, 3,500' 3 Wire and Main, 4
Drops, 3 Panels











-1 Tank - Fresh
Water on 4' x 6' 2P Tower 7'











-6 Racks - 6P 20'
x 4'











-1 Spare Pumping
Unit Cabot 16D











-Surplus
Equipment













13.  Tank
Battery with Stairs and Platform













-1 Stock Tank











-21' x 16' SB with Interior Hot Water Heater Plates, 6 Cut & Can and Fittings











-Gravel and Ring











-1 Wash Tank











-21' x 16' SB with 6 Cut & Can and Fittings











-Gravel and Ring











-Chemical Pump
and Chemical Storage Tanks for Pump













14.  Sumps













-6 - Various
Sizes with Fencing surrounding all sumps











-1 of above
approx. 80' x 80' with Top and fully enclosed











-1 of above
approx. 40' x 55' with Top and fully enclosed











-Skimming Pump
and Electric Motor











-Plastic Piping
for Skimming System













15.  Office
Building













-10' x 20' x 10'
on concrete blocks











-Galv, Sheeting,
and Wood framing











-Doors, Windows,
Partition, Ceiling











-Floor - Wood
with Asphalt Tile, Timber Base











-Wiring











-Windows











-Window AC - (Not
installed)











-Work Bench
attached to Wall













16.  Office
Building Contents













-1 Metal Desk, 3
Folding Chairs, 1 Electric Heater, 2 Electric Clocks, Desk Lamp, Card Table,
Tall Portable Shelves, Telephone, Desk Files, Office Supplies











-Centrifuge and
Equipment for determining Gravity and BS&W











-2 Spare Motors











-Small Electric
Refrigerator











-Misc. Tools and
Supplies













17.  
Heater House













-8' x 12' x 10'
Pipe Frame, Roof, and 1/2 Wall Galv.













18.  
Heater













-Ajax, WOFD-700,
with Ray Burner and Fittings













19.  Diesel
Tank (for Heater)













-10' D x 8" with
Fitting, 5P Skid, Timber Base











-Slab













20.  1 Tank
- Fresh Water (for Heater) with assoc. Piping













-4' x 6' on 2P











-Tower 7"













21.  
Yard













-1 Enclosed
Weatherproof Electrical Distribution Circuit Breaker Panel with 2 Transformers
and Wiring











-1 LPG Tank 20" x
80"











-Trash Barrels











-2 Barrel Cradles











-6 Pipe Racks -
6P











-20' x 4'











-1 Spare Cabot
16D Pumping Unit











-Surplus
Equipment













22.   1
Seatrain box, approx. 40' x 8' x 9'













B.  
Subsurface Equipment













Inventory of
Subsurface Equipment has been derived from Company Well Pulling Records, which
are taken as being correct and accurate.











1.   Well Community #1













-Sucker Rods, 18
x 30', Sub 3/4" x 6" + 6 7/8 Rods











-Tubing, 2 7/8"
OD, 8 jts 8 RD R-11, 4 jts 8 RD R-1, and 17 jts 10V R-I











-Pumping, 2 1/2"
x 2 1/4" x 48" x 7' x 9' x 11' THE













2.   Well Community #2













-Sucker Rods, 12
7/8 x 30', 8 3/4" x 30", Subs 1 2'











-Tubing, 2 7/8"
OD, 19 jts EUE R-11 and 3 jts EUE R-I











-Pumping, 2 1/2 x 2
1/4 x 7' x 9' x 11' Tubing Barrel













3.   Well Community #3













-Sucker Rods, 16
7/8 x 30" and 9 3/4" x 30'











-Tubing, 2 7/8"
OD, 19 jts R-I and 20 jts R-I











-Pumping, 2 1/2"
x 2 1/4" x 48" x 7' x 9' x 11' Tubing Barrel













4.   Well Community #4













-Sucker Rods, 21
3/4" x 30', Subs 1 2', 1 4', and 1 8'











-Tubing, 2 7/8"
OD, 21jts EUE











-Pumping, 3" x 2
3/4" x 7' x 9' x 11' Tubing Barrel













5.   Well Community #5













-Sucker Rods, 26
3/4" x 30", Subs 2 2' and 1 6'











-Tubing, 2 7/8"
OD, 27 jts EUE











-Pumping, 2 1/2"
x 2 1/4" x 7' x 9' x 11' Tubing Barrel













6.   Well Community #6













-Sucker Rods, 23
3/4" x 30', Subs 1 2", 1 4', and 1 6'











-Tubing, 2 7/8"
OD, 7 jts R-II EUE and 21 jts R-I EUE











-Pumping, 3" x 2
3/4" x 9' x 12' Tubing Barrel













7.   Well Community #9













-Sucker Rods, 22
7/8 x 30', Subs 2 2', 1 4', 2 6', and 1 10'











-Tubing, 2 7/8"
OD, 23 jts R-II EUE











-Pumping, 4" x 3
3/4" x 12' x 16' Tubing Barrel













8.   Well Community #10













-Sucker Rods, 28
7/8 x 30', Subs 1 2' on bottom: 1 2', 1 4', 1 2', 1 6', 1 10' on top











-Tubing, 3 1/2" OD,
29 jts EUE 8-R











-Pumping, 3" x 3
3/4" x 36" x 15' x 17" Tubing Barrel













9.   Well Community #12













-Sucker Rods, 24
1"











-Tubing, 3 1/2" OD,
29 jts EUE











-Pumping, 2 1/2"
x 2 1/4" x 7' x 11' Tubing Barrel THE













10.  
Well Community #14













-Sucker Rods, 24
1" with 1 1/8" x 11' Polish Rod











-Tubing, 3 1/2" OD
25 jts EUE











-Pumping, 3" x 2
3/4" x 9' x 11' Tubing Barrel (Plunger 2 3/4" x 36")















Inventory Community Lease











September 7, 2000













Bold denotes quantity





















Seatrain











1.  
Rod Boxes

25 1"

28 7/8"













2.  
Collars: Tubing

8   3"

3 
2 3/8"

















3.    1
Box Rod Guides 7/8 x 3 1/2















4.   
5 Circulating Pumps Complete













5.   
3 HP 870 RPM Electric Motor (no brand)















6.   
2  3 x 2 3/4 x 10 x 14















7.    1 3 1/2
Slim Hole Pump 18'















8.    1 30'
Chrome Polish Rod

9.   
2 11' Chrome Polish Roads















10.  5 Bridals

11.   
Various B & C Section Belts

12.   
2 Saddle Bearings for a Small Unit

13.   
2 Wrist Pins & 3 Crank Arms for Small Units

14.   
114 Saddle Bearings

15.   
Various Hubs and Shieves

16.   
1 15 HP 1175 RPM Electric Motor (Westinghouse)

17.   
2 Peige On and Off Tools

18.   
2 Red Tool Boxes of Electrical Fittings

19.   
4 7/8 x 2 Rod Subs

20.   
3  3/4 x 2 Rod Subs

21.   
1 1" x 2 Rod Subs

22.   
4  3/4 x 4 Rod Subs

23.   
4  7/8 x 4 Rod Subs

24.   
1 1" x 4 Rod Subs

25.   
3   7/8 x 6 Rod Subs

26.   
1  3/4 x 6 Rod Subs

27.   
6  Boxes of Various 1/2, 3/4 Pipe Fittings

28.   
2  Boxes of Various 1" Pipe Fittings

29.   
3  2" Ball Valves 400PSI

30.   
5  2" Check Valves

31.   
4  2" x 1" Nipples

32.   
5  2" x 10" Nipples

33.   
3  2" x 8" Nipples

34.   
5  2" x 6" Nipples

35.   
6  2" x 4" Nipples

36.   
21  2" x 2" Nipples

37.   
2   2" Closed Nipples

38.   
1  36" Rigid Pipe Wrench

39.   
7  2" Hammer Unions

40.   
9  2" Standard Unions

41.   
13  2" 90s

42.   
3  2" Street 90s

43.   
4  2" 45s

44.   
2  3 x 2 Swedges

45.   
4  3" Gate Valves

46.   
3  3" Check Valves

47.   
10  3" Unions

48.   
2  3" Hammer Unions

49.   
12  3" Collars

50.   
12  3" Tees

51.   
1  Rigid Pipe Cutter and Dyes:  1  1/2, 1 11/4, 1 11/2, 1 2"

52.   
1  Miller Thunderbolt 225 Arc Welder

53.   
Various Rods for Welder























Office Inventory

















54.   
1 Come Along

55.   
1 5HP 1200RPM (Westinghouse)

56.   
1 3HP 900 RPM (Fairbanks Morse)

57.   
1 Robinson Centrifuge

58.   
1 Set of Hydrometers

59.   
3 Thermometers

60.   
Miscellaneous Yard Tools

61.   
Desk, 2 Chairs

62.   
Refrigerator















Pipe Rack









63.   
20 1" Rods

64.   
7  jts 3" R2s

65.   
1  jts 3" R1

66.   
23  7/8 Rods

67.   
21  3/4 Rods

68.   
3  jts 2 7/8 R2 8 Round















Note   The
inventory dated September 26, 2000, was prepared by Company, and the inventory
dated September 7, 2000, was prepared by a previous buyer. There may be some
duplication. See, for example, item 16 (Office Building Contents) on the
September 26 inventory and the Office Inventory on September 7 inventory.









---

Exhibit 10.7





February 7, 2003







John Punzo





Sonoran Energy, Inc.





12484 63A Avenue





Surrey, BC V3X 2C7







RE: Property Acquisition Option Agreement





Deer Creek Oil Company, Deer Creek Oil Field Property





Lands in Tulare County, California







Dear John:







This letter, when signed by the parties, shall constitute an Agreement between
Longbow, LLC (Longbow) and Sonoran Energy, Inc. (Sonoran) under which Sonoran
shall have the sole and exclusive option to purchase a portion of the right,
title and interest in the Deer Creek Oil Company

"National
Development Company - Merzonian Lease, Deer Creek Oil Field", Section 22, T22S
R27E, MDB&M,

as described on Exhibit "A" attached
hereto, Tulare County, California (the "Property").









Said option shall be subject to the following terms and conditions:







1)  As consideration for this option, within five (5) business days of the
signing of this Agreement, Sonoran shall place a sum equal to Fifteen Thousand
dollars ($15,000.00) into Longbow's account at Bakersfield California. Said
amount to be used to pay due diligence and escrow costs for the transaction,
with any balance applied to the Working Capital contribution of Sonoran for use
on the Property.



Sonoran agrees to purchase the
"Property" under the terms and conditions of the Purchase Sale Agreement
(without Exhibits), attached as Exhibit "B". Sonoran understands that the
current owner, Deer Creek Oil Company ("Deer Creek"), has accepted an offer
letter from Longbow to sell the Property to Longbow and that the Deer Creek and
Longbow are now in the due diligence phase of that transaction. Further, sale of
any interest in the Property is contingent upon the closing of that transaction.



Sonoran understands that in the event
that the Deer Creek - Longbow transaction does not close, for any reason, within
the time limits set forth in the Longbow - Deer Creek Offer Letter, i.e., April
1, 2003, the basis of this Agreement is moot. Sonoran agrees that in that event,
both Parties to this Agreement shall consider it to be null and void and Longbow
shall pay the appropriate costs incurred from monies paid by Sonoran and return
the balance, if any. In the event this transaction fails as a result of this
Section, Sonoran shall have no claim to any right, title or interest in the
Property and no claim against Longbow.









4)    As consideration to Longbow for the option, Sonoran agrees
to pay for all costs related exclusively to Sonoran's acquisition, i.e.,
Document Preparation and Recording, Title Insurance and associated costs, as
well as Two Thirds of One Hundred Percent (2/3rds of 100%) of all costs in
connection with the acquisition of the Property.



> (a)    Costs shall include, but are not limited to studies of:



> i)     Title of Land and Mineral Rights
>     ii)     Environmental Conditions
>     iii)    Reserves and Geology
>     iv)    Operations Analysis
>     v)     Economic Evaluation
>     vi)    Escrow Costs



5)    Payable costs
shall include the costs of Longbow, LLC (Longbow) employees as well as third
party reports, materials and other expenses incurred in the completion of due
diligence and the escrow. Rates for time spent shall be at the following rates:









(a)    Land work at $50.00/hour







(b)    Technical work at $85.00/hour







(c)    Managerial work at $100.00/hour







(d)    Third Party Costs are as set forth in invoices









6)    In the event that Sonoran does not exercise its option or
fails to complete the purchase after signing this Option Agreement, any monies
paid to Longbow under this Option Agreement or the Purchase Sale Agreement shall
remain with Longbow. Further, Sonoran shall forfeit any right, title or interest
in the Property, or claim thereto, to Longbow with no cause for refund or
reimbursement of monies paid.









7)    Sonoran shall accept any and all conditions placed on the
purchase by the seller.



8)    Sonoran shall
enter into a mutually agreeable Joint Operating Agreement, naming Longbow as
Operator.









9)    Failure to place all funds required under this Agreement or
the Purchase Sale Agreement, into Longbow's account, in a timely manner, shall
cause Sonoran to lose all right and interest in and to the Property or
Properties, with no recourse to recover any funds paid.









10)    Longbow will use their best efforts in the preparation and
presentation of information regarding the Property. Longbow do not warranty the
information presented as to its accuracy or completeness. Sonoran agrees to hold
Longbow harmless from any liability for its efforts in connection with this
Agreement.









11)    Sonoran shall indemnify Longbow from any actions by
Sonoran, its agents, affiliates or representatives in connection with this
Agreement.









12)    If any provision, including paragraphs and excerpts of
this Agreement, or attachments to this Agreement, is found to be unenforceable
for any reason, the remaining provisions shall nevertheless remain valid and
enforceable on the parties hereto.









13)    If this Agreement should become null and void or end for
any reason, its demise shall have no affect on the Non-Circumvention and
Non-Disclosure Agreement between the Parties in regards to the Property.









14)    Time is of the essence in the performance of all aspects
of this Agreement.









15)    Any controversy or claim arising out of or relating to
this agreement, or breech thereof, and which is not settled between the
signatories themselves, shall be settled by binding arbitration under applicable
rules of the American Arbitration Association, with hearings to take place in
Bakersfield, California or other mutually agreed location. Judgment upon award
rendered at the arbitrator(s) may be entered in any court having jurisdiction
thereof, including the award to the aggrieved signatory or signatories, such
award being related to the total remuneration received as a result of business
conducted with the parties covered by this agreement, plus any and all court
costs, attorney fees and other costs for charges reasonably necessary to
adjudicate the controversy in addition to any and all damages deemed fair by the
arbitrator(s).









16)    Should either party bring an action, including
arbitration, against the other to enforce or interpret any term or condition of
this Agreement, the prevailing party in such action, including arbitration,
shall be entitled to recover an amount to be determined by the court (or
arbitration) and for reasonable attorney's fees, in addition to any costs
awarded by judgment. This Agreement shall be governed exclusively by and
construed according to the laws of the State of California. The parties agree
that Kern County shall be the venue in the event of any legal proceedings.









17)    This Agreement shall be binding on and inure to the
benefit of the heirs, successors and assigns of the parties hereto.









18)    No amendment, modification, termination or cancellation of
this Agreement shall be effective unless in writing and signed by all parties
hereto.











This offer expires at close of
business February 14, 2003. If a signed acceptance of this offer is not received
in the offices of Longbow, LLC by that time, this offer will be null and void.









The terms and conditions of this Agreement are accepted this ______ day of
February 2003.







LONGBOW, LLC





______________________________ February 10, 2003





By: John W. Howe, CEO









SONORAN ENERGY,
INC.









_____________________________ February 25, 2003





By: John Punzo, President





---

EXHIBIT "A"

(Map of the Field)

(Not Included in
this Filing)



---

EXHIBIT "B"

OIL AND GAS PURCHASE AGREEMENT





















DEER CREEK OIL COMPANY'S DEER CREEK PROPERTY

























THIS AGREEMENT ("Agreement") is made and entered into this 5th day of February
2003, by and between:















LONGBOW, LLC,

a Nevada limited liability corporation ("LONGBOW"), and















SONORAN ENERGY, INC.,

a Washington corporation ("SONORAN"),













both are here and after referred to as the Parties ("Parties").







This Agreement when accepted and agreed to by SONORAN will constitute an
Agreement by and between SONORAN and LONGBOW, which provides for the
participation in and acquisition of a Working Interest by SONORAN in the Deer Creek
Oil Company's Deer Creek Property (the "Property"), as more fully described in the AMI
Map attached as Exhibit "A", the Lease Schedule attached as Exhibit "B", the Well List
attached as Exhibit "C", and Tangible Personal Property list attached as Exhibit
"D".
Interest conveyed by LONGBOW to SONORAN by this agreement shall be subject to all
the terms and conditions of this Agreement.













LONGBOW is the owner of certain interests in oil and gas leases ("Leases") as more
fully described in Exhibit "B" attached hereto covering and embracing certain lands
within an area of mutual interest generally within the Deer Creek Oil Field ("Deer Creek
AMI"), as shown on Exhibit "A" attached hereto.















NOW THEREFORE, IN FURTHERANCE OF THE FOREGOING, and in
consideration of the mutual covenants, conditions, representations, warranties and
agreements contained herein, and for other good and valuable consideration, receipt of
which is hereby acknowledged, the parties hereto agree as follows:















1)  Consideration.As Consideration for a Fifty Percent (50%) Working Interest in the
Property, SONORAN shall pay to LONGBOW:







> (a)    One Hundred Thirty Three Thousand Three Hundred and Thirty Four
> Dollars ($133,334.00 US), of which One Hundred Thousand Dollars
> ($100,000.00US) shall be a proportional share of the purchase price and
> Thirty Three Thousand Three Hundred and Thirty Four Dollars
> ($33,334.00 US) shall be a proportional share of the cost to close the
> waste water disposal sumps. Said total amount shall be deposited into the
> account of Longbow, LLC at Bakersfield, California, on or before Twelve
> noon, March 15, 2003 or no less than ten (10) business days prior to the
> close of the Property, whichever is sooner. In the event that closing is
> expected to take place on any date other than April 1, 2003, LONGBOW
> shall notify SONORAN no less than Fifteen (15) business days prior to
> that date.











> (b)    SONORAN shall pay for Two Thirds of One Hundred Percent (2/3rds of
> 100%) of all costs associated with the due diligence, e.g., escrow fees, title
> searches, title reports, environmental reviews, economic analysis, etc.,
> including but not limited to LONGBOW's time and cost in finding and
> preparing the Property for presentation to SONORAN. Said amount is not
> included in the amount set forth in 1(a) above, but shall be set forth in an
> invoice to SONORAN within Five (5) Business days of the closing of this
> sale. SONORAN shall pay the invoiced amount to LONGBOW no later
> than Five (5) Business days following receipt of the invoice. Any costs
> associated directly to SONORAN'S acquisition, i.e., title insurance,
> document preparation, etc., shall be paid One Hundred Percent (100%) by
> SONORAN











2)   Definitions.  For the purposes of this Agreement, the following definitions and/or
interpretations shall apply:









> (a) "Title Information" shall be all information forms and reports related to
> title in connection with the leases and or property, as well as licenses and
> permits related to the Property.









> (b) "Sellers and Buyers Information" shall include all names addresses, and
> identification necessary to complete the transaction.









> (c) "Operator" shall be as defined in that certain A.A.P.L. Model Form
> Operating Agreement attached as Exhibit "E".









> (d) "Effective Date" shall be April 1, 2003, or the date of closing.









> (e)"LONGBOW" shall mean LONGBOW, LLC, a Nevada limited liability
>   company, designated as Operator under a Joint Operating Agreement.









> (f) "Dollars" shall mean United States Dollars.





3).  Assignment of Interest.







> (a)  Assignment of interest shall be made to SONORAN of the Working
> Interest in the described leases within the Property AMI equal to Fifty
> Percent of One Hundred Percent (50% of 100%) through this Agreement.











> (b)    Should it be necessary to trade equity for further financing of operations
> on the Property, the interests of the Parties shall be proportionally reduced
> to cover that cost. No financing secured by the Property will be put in
> place without the consent of both of the Parties.





4)   Use of Funds.    Upon deposit of funds into the account, LONGBOW, as Operator,
shall have total and non-conditional control of the funds to further the interests of the
Parties, as provided for under the provisions of this Agreement.













5)  Operations.    LONGBOW shall act as Operator for the working interest owners. The
Parties have entered into a Joint Operating Agreement, with LONGBOW, defining the
terms and conditions of the operations; said agreement is attached hereto as Exhibit
"E".













6)  Sale of Property.    Deer Creek Oil Company ("Deer Creek"), the current owner
of the Property, has accepted an offer letter from Longbow to sell the Property to
Longbow. Deer Creek and Longbow are now in the due diligence phase of that
transaction. The sale of any interest in the Property to Sonoran is contingent upon
the closing of that transaction.













If for any reason, the Deer Creek
- Longbow transaction does not close, within
the time limits set forth in the Longbow - Deer Creek Offer Letter, i.e., April 1,
2003, the basis of this Agreement is moot. In that event, both Parties to this
Agreement shall consider it to be null and void. Longbow shall pay the
appropriate costs incurred from monies paid by Sonoran and return the balance, if
any. In the event this transaction fails as a result of this Section, Sonoran shall
have no claim to any right, title or interest in the Property and no claim against
Longbow.











7)  Right of Refusal.    The Parties shall be each given first right of refusal to purchase the
Property under the same terms and conditions as the purchaser, in the event that the other
Party attempts to sell any or all of its interest.













8)  Conflicts.    If at any time there exists a conflict between this Agreement and
attachments to this Agreement, the provisions, terms, and conditions of this Agreement
shall control to the extent of said conflict.













9)  Enforcement     If any provision, including paragraphs and excerpts of this Agreement,
or attachments to this Agreement, is declared to be void or unenforceable for any reason,
the remaining provisions shall nevertheless remain valid and enforceable and binding
upon the parties hereto.













10)  Survivorship.   This Agreement entered into by and between the parties shall be
binding on and inure to the benefit of the parties, their assigns, heirs and successors in
interest as to all rights and obligations herein.













11)   Amendments.   No amendment, change or modification of this Agreement shall be
effective unless in writing and signed by both parties hereto.













12)   Time is of the Essence.   Time is of the essence in the completion of this transaction.
The Parties understand and pledge to fulfill all obligations on or before the deadlines set
forth in the Agreement. All payments due under the terms of this Agreement must be
made in full, on time and without extension. Failure to perform in a timely manner shall
constitute a material breach of this Agreement and render all further obligations of
LONGBOW to SONORAN null and void. The Parties agree that the penalty for such
breach shall be forfeiture of all right title and interest in the Property to LONGBOW with
no refund or return of any funds previously paid.













13)  Notice
- Payments.    Any notice, request for payment of funds for operations,
payment of funds for operations, instruction or other document deemed by any party to
be necessary or desirable to be given to another party shall be in writing and shall be
hand delivered by courier, mailed by registered mail or certified mail, return receipt
requested, postage prepaid, by prepaid deposit with an overnight express delivery service,
or faxed with hard copy delivered by mail, addressed as follows:















If to SONORAN:













SONORAN ENERGY, INC.









11300
West Olympic Boulevard, Suite 800









Los
Angeles, California 90064









Attn: John Punzo









FAX:  (604) 599-1862













If to LONGBOW:













LONGBOW EXPLORATION, INC.









1701 Westwind Dr., Suite #101









Bakersfield, CA 93301









Attn:  John W. Howe









FAX:  (661) 631-1715











If mailed as aforesaid, notice shall be deemed given three days after deposit in the United
States Mail. Notice by overnight express delivery service shall be deemed effective on
the date received. Notice by personal or courier delivery shall be deemed effective at the
time of delivery. Notice also may be given by means of electronic facsimile transmission
("fax"); provided, however, that in order for a fax notice to be deemed effective on the
day received the fax must be received by 5:00 p.m. California time and the party giving
notice shall, concurrently with such facsimile notice, provide a copy of such notice to the
other party by the next business day, pursuant to one of the methods of "hard copy"
delivery specified above. The person and addresses to which mailings may be made may
be changed from time to time by a notice mailed as stated above.





14)  Indemnity.







> (a)    Each party hereto shall be liable and responsible for and shall
> indemnify and hold the other harmless (including costs and attorney's
> fees) from and against any claim or actions following injury to, illness
> or death of any person and any loss or damage to any property
> occurring in connection with the performance or non-performance of
> this agreement only to the extent of its own negligence and that of its
> agents, servants, employees and contractors.











> (b)    SONORAN shall be liable and responsible for and shall indemnify and
> hold LONGBOW harmless (including costs and attorney's fees) from
> and against any claim or actions against SONORAN's interest herein.





15)  Disclaimer.    LONGBOW will diligently prepare and present the information
regarding the Property. LONGBOW does not warranty the information presented as to its
accuracy or completeness. SONORAN agrees to hold LONGBOW, its owners, partners,
affiliates, consultants or agents harmless from any liability for its efforts in connection
with this Property.













16)  Arbitration.    Any dispute, controversy or claim arising out of or relating to this
Agreement or the breach or validity thereof ("Dispute") shall be referred to and finally
settled by final and binding arbitration in Bakersfield, Kern County, California. The term
"Agreement" includes the contract itself and all exhibits and attachments. The parties
agree to apply California law, but ignore any conflicts of law that would refer to the law
of another jurisdiction. Upon request of any party, whether made before or after the
institution of any legal proceedings, any Dispute shall be resolved by binding arbitration
by three arbitrators. The parties agree to use the Commercial Arbitration Rules of the
Arbitration Association and, to the maximum extent possible, the Federal Arbitration Act
(Title 9 of the United States Code). If the Federal Arbitration Code does not apply, the
parties select the arbitration law of the state having the most significant contacts with the
Dispute as determined by the arbitrators. The transactions contemplated by this
Agreement are transactions involving or related to commerce. In any arbitration, each
party shall designate one arbitrator and those two arbitrators shall select a third, but, if
they cannot agree, the Administrator of the American Arbitration Association shall
appoint the third arbitrator. The arbitrators shall base their decision on the applicable law,
including any laws related to statutes of limitation. The arbitrators shall not have the
authority to award, and the tribunal shall not award, any damages or compensation for
loss of prospective profits or special, indirect or consequential damages, punitive
damages, or exemplary damages in connection with any Dispute. In any action under the
provisions of this Agreement, the Losing Party shall pay all costs of the arbitration
process, including any attorney's, expert witness, or other such fees or costs of the
Prevailing Party.













The terms and conditions herein are accepted and agreed to this ______day of February
2003.











LONGBOW, LLC.                                 SONORAN ENERGY, INC.





















___________________________         _____________________________









John W. Howe                                         John Punzo









CEO                                                         President





---











Exhibit
"B"



















OIL AND GAS LEASES SUBJECT TO THIS AGREEMENT





















Parcel                                                             Gross         Net

















No___   Lessor Name__________ Interest___Acres__ _Acres__ _Lease Date_
Term













1         Merzonian et al                      50%         12             6             11/02/53     HBP









2         National Development Co.     50%         12             6             06/03/53     HBP















---

















EXHIBIT
"C"















Wells, Working Interest, and Net Revenue Interests









Well Name
Working Interest
Net Revenue InterestNational Development - Merzonian #1
100%
84.834%National
Development - Merzonian #2
100%
84.834%National
Development - Merzonian #3
100%
84.834%National
Development - Merzonian #4
100%
84.834%National
Development - Merzonian #5
100%
84.834%National
Development - Merzonian #6
100%
84.834%National
Development - Merzonian #7*
100%
84.834%National
Development - Merzonian #1A
100%
84.834%National
Development - Merzonian #2A
100%
84.834%




---





















EXHIBIT "D"























TANGIBLE PERSONAL PROPERTY













A.   Surface Equipment













1. Well
National Development - Merzonian #1













Slab 3' x 12' with Sign, Trash Barrel



Pumping Unit:



Lufkin 40D, Belt Drive, Rod Fence

Motor, 10hp, Enclo.

Panel and Wiring

Hangar and Polish Rod

Test Barrel and Stand

Casing Head and Piping













2.   
Well National Development - Merzonian #2



Slab 3' x 12' with Sign, Trash Barrel

Pumping Unit:

Cabot-16D, Belt Drive, Rod Fence

Motor, 5hp, Enclo.

Panel and Wiring

Hangar and Polish Rod

Test Barrel and Stand

Casing Head and Piping













3.   Well National Development - Merzonian #3













Slab 3' x 12' with Sign, Trash Barrel

Pumping Unit:

Lufkin 16-D, Belt Drive, Rod Fence

Motor, 3hp, Enclo.

Panel and Wiring

Hangar and Polish Rod

Test Barrel and Stand

Casing Head and Piping













4.  Well
National Development - Merzonian #4













Slab 3' x 12' with Sign, Trash Barrel, Pipe Fence

Pumping Unit:Parkersburg, Equiv. 57D, Belt Drive

Motor, 5hp, Enclo.

Panel and Wiring

Hangar and Polish Rod

Test Barrel and Stand

Casing Head and Piping













5.   Well National Development - Merzonian #5













Slab 3' x 12' with Sign, Trash Barrel

Pumping Unit:

Cabot 16-D, Belt Drive, Rod Fence

Motor, 5hp, Enclo.

Panel, Wiring, and Timer

Hangar and Polish Rod

Test Barrel and Stand

Casing Head and Piping













6.   Well National Development - Merzonian #6













Slab 3' x 12' with Sign, Trash Barrel

Pumping Unit:

Lufkin 40D, Belt Drive, Rod Fence

Motor, 7 1/2 hp, Enclo.

Panel and Wiring

Hangar and Polish Rod

Test Barrel and Stand

Casing Head and Piping













7.   Well National Development - Merzonian #7













Slab with Sign

Pumping Unit:

Lufkin 114D, Extra Base, Belt Drive, Fence

Motor, 30hp, EP

Panel and Wiring

Hangar and Polish Rod

Casing Head and Piping













8.   Well National Development - Merzonian #1A













Slab 3' x 12' with Sign, Trash Barrel

Pumping Unit:

Lufkin 40D, #15 Gear Box Belt Drive, Fence

Motor, 20hp, EP

Panel and Wiring

Hangar and Polish Rod

Test Barrel and Stand

Casing Head and Piping













9.  Well
National Development - Merzonian #2A













Slab (4'-6') x 12' with Sign, Trash Barrel

Pumping Unit:

Lufkin 40D, Belt Drive, Rod Fence

Motor, 15hp, EP

Panel and Wiring

Hangar and Polish Rod

Test Barrel and Stand

Casing Head and Piping













10.  
Miscellaneous Yard Equipment













Electric Power Line Distribution System with 27 Poles, 10 Guys, 3,500' 3 Wire and Main, 4
Drops, 3 Panels

1 Tank - Fresh Water on 4' x 6' 2P
Tower 7'

6 Racks - 6P 20' x 4'

1 Spare Pumping Unit Cabot 16D

Surplus Equipment













11.   Tank Battery with Stairs and Platform













1 Stock Tank

21' x 16' SB with Interior Hot Water Heater Plates, 6 Cut & Can and Fittings

Gravel and Ring

1 Wash Tank

21' x 16' SB with 6 Cut & Can and Fittings

Gravel and Ring

Chemical Pump and Chemical Storage Tanks for Pump













12.  Sumps













6 - Various Sizes with Fencing surrounding all sumps

1 of above approx. 80' x 80' with Top and fully enclosed

1 of above approx. 40' x 55' with Top and fully enclosed

Skimming Pump and Electric Motor

Plastic Piping for Skimming System













13.  Office Building













10' x 20' x 10' on concrete blocks

Galv, Sheeting, and Wood framing

Doors, Windows, Partition, Ceiling

Floor - Wood with Asphalt Tile, Timber Base

Wiring

Windows

Window AC - (Not installed)

Work Bench attached to Wall













14.  Office Building Contents













1 Metal Desk, 3 Folding Chairs, 1 Electric Heater, 2 Electric Clocks, Desk Lamp, Card Table,
Tall Portable Shelves, Telephone, Desk Files, Office Supplies

Centrifuge and Equipment for determining Gravity and BS&W

2 Spare Motors

Small Electric Refrigerator











Misc. Tools and Supplies













15.  Heater House













8' x 12' x 10' Pipe Frame, Roof, and
1/2 Wall Galv.













16.  Heater













Ajax, WOFD-700, with Ray Burner and Fittings













17.  Diesel Tank (for Heater)



10' D x 8" with Fitting, 5P Skid, Timber Base











Slab













18.  1 Tank
- Fresh Water (for Heater) with assoc. Piping













4' x 6' on 2P













Tower 7"













19.  Yard













1 Enclosed Weatherproof Electrical Distribution Circuit Breaker Panel with 2 Transformers
and Wiring

1 LPG Tank 20" x 80"

Trash Barrels

2 Barrel Cradles

6 Pipe Racks - 6P

20' x 4'

1 Spare Cabot 16D Pumping Unit

Surplus Equipment













20.  1 Seatrain box, approx. 40' x 8'
x 9'













B.   Subsurface Equipment    Inventory of Subsurface Equipment has been derived from Company Well Pulling Records, which are
taken as being correct and accurate.

















1.  
Well National Development - Merzonian #1



Sucker Rods, 18 x 30',
Sub 3/4" x 6" + 6 7/8 Rods

Tubing, 2 7/8" OD, 8 jts 8 RD R-11, 4 jts 8 RD R-1, and 17 jts 10V R-I

Pumping, 2 1/2" x 2 1/4" x 48" x 7' x 9' x 11' THE













2.   Well National Development - Merzonian #2













Sucker Rods, 12 7/8 x 30', 8 3/4" x 30",
Subs 1 2'

Tubing, 2 7/8" OD, 19 jts EUE R-11 and 3 jts EUE R-I

Pumping, 2 1/2 x 2 1/4 x 7' x 9' x 11' Tubing Barrel













3.   Well National Development - Merzonian #3













Sucker Rods, 16 7/8 x 30" and 9 3/4"
x 30'

Tubing, 2 7/8" OD, 19 jts R-I and 20 jts R-I

Pumping, 2 1/2" x 2 1/4" x 48" x 7' x 9' x 11' Tubing Barrel













4.   Well National Development - Merzonian #4













Sucker Rods, 21 3/4" x 30', Subs 1 2', 1 4',
and 1 8'

Tubing, 2 7/8" OD, 21jts EUE

Pumping, 3" x 2 3/4" x 7' x 9' x 11' Tubing Barrel













5.   Well National Development - Merzonian #5













Sucker Rods, 26 3/4" x 30", Subs 2 2'
and 1 6'

Tubing, 2 7/8" OD, 27 jts EUE

Pumping, 2 1/2" x 2 1/4" x 7' x 9' x 11' Tubing Barrel













6.   Well National Development - Merzonian #6













Sucker Rods, 23 3/4" x 30', Subs 1 2", 1 4',
and 1 6'

Tubing, 2 7/8" OD, 7 jts R-II EUE and 21 jts R-I EUE

Pumping, 3" x 2 3/4" x 9' x 12' Tubing Barrel













7.  Well
National Development - Merzonian #7













Sucker Rods, 22 7/8 x 30', Subs 2 2', 1 4', 2 6',
and 1 10'

Tubing, 2 7/8" OD, 23 jts R-II EUE

Pumping, 4" x 3 3/4" x 12' x 16' Tubing Barrel













8.  Well
National Development - Merzonian #1A













Sucker Rods, 28 7/8 x 30', Subs 1 2' on bottom:  1 2', 1 4', 1 2', 1 6', 1 10' on top

Tubing, 3 1/2" OD, 29 jts EUE 8-R

Pumping, 3" x 3 3/4" x 36" x 15' x 17" Tubing Barrel













9.  Well
National Development - Merzonian #2A













Sucker Rods, 24 1"

Tubing, 3 1/2" OD, 29 jts EUE

Pumping, 2 1/2" x 2 1/4" x 7' x 11' Tubing Barrel THE

















Inventory
National Development - Merzonian Lease











September 7, 2000













Bold denotes quantity

























Seatrain











1.  Rod Boxes



25  1"

28 7/8"













2.  Collars:  Tubing



8  3"

32 3/8"

















1 Box Rod Guides 7/8 x 3 1/2

5 Circulating Pumps Complete

3 HP 870 RPM Electric Motor (no brand)

2 3 x 2 3/4 x 10 x 14

1 3 1/2 Slim Hole Pump 18'

1 30' Chrome Polish Rod

2 11' Chrome Polish Roads

5 Bridals

Various B & C Section Belts

2 Saddle Bearings for a Small Unit

2 Wrist Pins & 3 Crank Arms for Small Units

114 Saddle Bearings

Various Hubs and Shieves

1 15 HP 1175 RPM Electric Motor (Westinghouse)

2 Peige On and Off Tools

2 Red Tool Boxes of Electrical Fittings

4 7/8 x 2 Rod Subs

3 3/4 x 2 Rod Subs

1 1" x 2 Rod Subs

4 3/4 x 4 Rod Subs

4 7/8 x 4 Rod Subs

1 1" x 4 Rod Subs

3 7/8 x 6 Rod Subs

1 3/4 x 6 Rod Subs

6 Boxes of Various 1/2, 3/4 Pipe Fittings

2 Boxes of Various 1" Pipe Fittings

3 2" Ball Valves 400PSI

5 2" Check Valves

4 2" x 1" Nipples

5 2" x 10" Nipples

3 2" x 8" Nipples

5 2" x 6" Nipples

6 2" x 4" Nipples

21 2" x 2" Nipples

2 2" Closed Nipples

1 36" Rigid Pipe Wrench

7 2" Hammer Unions

9 2" Standard Unions

13 2" 90s

3 2" Street 90s

4 2" 45s

2 3 x 2 Swedges

4 3" Gate Valves

3 3" Check Valves

10 3" Unions

2 3" Hammer Unions

12 3" Collars

12 3" Tees

1 Rigid Pipe Cutter and Dyes:

1 1/2,

1 1 1/4,

1 1 1/2,

1 2"

1 Miller Thunderbolt 225 Arc Welder

Various Rods for Welder

























Office Inventory







1 Come Along

1 5HP 1200RPM (Westinghouse)

1 3HP 900 RPM (Fairbanks Morse)

1 Robinson Centrifuge

1 Set of Hydrometers

3 Thermometers

Miscellaneous Yard Tools

Desk,

2 Chairs

Refrigerator

























Pipe Rack







20 1" Rods

7 jts 3" R2s

1 jts 3" R1

23 7/8 Rods

21 3/4 Rods

3 jts 2 7/8 R2 8 Round















> Note:The inventory dated September 26, 2000, was prepared by Company, and the inventory dated
> September 7, 2000, was prepared by a previous buyer.  There may be some duplication.  See, for example,
> item 16 (Office Building Contents) on the September 26 inventory and the Office Inventory on September 7
> inventory.





---

Exhibit 10.9

PROPERTY PURCHASE AGREEMENT













THIS PROPERTY PURCHASE AGREEMENT (the "Agreement") is made
and entered into as of March 1, 2003, by and between SONORAN ENERGY,
INC. ("Buyer"), with offices at 12484 63a Ave., Surrey, British Columbia, Canada,
V3X2C7, and ARCHER EXPLORATION, INC. ("Seller"), with offices at 1701 Westwind Drive, Suite 103, Bakersfield, California, 93301.









Recitals











A.    Seller owns a Non-Operating Working Interest in certain oil and gas leases
located within the Malton Black Butte Field located in Tehama and Glenn
Counties, California, and described as: Section 36, T23N; R4W, Section 31,
T23N, R3W; Sections 12, 13 & 24, T22N, R4W. M.D.B.&M; the Denverton Creek
Field located in Solano County, California, and described as: Section 2 &3, T4N;
R1E, Section 34 &35, T5N; R1E, M.D.B.&M; the Maine Prairie Field located in
Solano County, California, and described as: Section 3 & 4, T5N; R2E,
M.D.B.&M; the Lambie Ranch Field located in Solano County, California, and
described as: Section 4, T4N; R1E, M.D.B.&M; (hereafter collectively referred to
as "the Properties"), as more fully described on the Exhibit "A" attached hereto.





B.   
Buyer is a Washington corporation and has limited experience in non - operated
interests of producing oil and gas leases in California.





C.    Seller desires to sell to Buyer and Buyer desires to purchase and assume:
liabilities from Seller, on the terms and conditions set forth in this Property
Purchase Agreement ("Agreement"), certain interests in the Properties, leases, contract(s), easements, rights-of-way, Farm-ins, drilling rights, licenses, on the
real property subject to the Leases and Agreements of the individual Properties,
all of which is hereinafter referred to as the "Assets."



NOW, THEREFORE, for good and valuable consideration and for the mutual
covenants herein contained, Seller and Buyer agree as follows:









1.       Sale of Assets and Assumption of Liabilities   Seller will sell, assign,
transfer, and convey to Buyer at "Closing" (as defined below), and Buyer will
purchase and receive all of Seller's right, title, and interest in and to the Assets
as described in the following Exhibits, attached hereto and made a part hereof,
subject to the terms and conditions set forth in this Agreement and said Exhibits.
The Exhibits are:







> Exhibit "A"      Description of Leases along with Plats of the Areas
> of Mutual Interest.
>   Exhibit
>   "B"A listing of:  Wells Active, Idle, Plugged and
> Abandoned with the Working Interest and Net
> Revenue Interest thereof all of which are being
> acquired by Buyer.Exhibit "C"       
>   Assignment of Interest in Oil and Gas Leases:  The Assignment of Seller's
>   interest in the leases and the lands described therein.









2.    Closing     Closing shall mean the date on which Buyer will pay to Seller a
one-time consideration in the amount of One Hundred
Fifty Thousand Dollars ($150,000.00) for Seller's
right, title and interest in the Properties. and the conveyancing instruments referred to in Paragraph 12
are delivered to Buyer.  Unless Buyer elects not to
close this sale pursuant to the terms of Paragraphs 15
or 19 hereof, Closing shall occur at the offices of
Seller, in Bakersfield, California, at 10:30 A.M., on or
before March 3, 2003, or at such other time and place
as is agreeable to Seller and Buyer.  In the event
Closing has not occurred for any reason by March 4,
2003, then this Agreement shall expire, lapse, and
terminate and be of no further force or effect.







3.    Effective Date        The Effective Date of this sale shall
be March 1, 2003, and all revenues and expenses
related to the Assets, shall be prorated as of that date.





4.   Transfer Date        The Transfer Date shall be at 12:01
A.M. on March 1, 2003.



















5.   Consideration       At Closing, Buyer will assume, at its
sole cost and expense, the liability for its
proportionate share of the operation or the plugging
and abandonment of all wells on the Properties









a.   At Closing, Buyer shall pay to Seller the Purchase Price, plus
or minus any amount known due from Buyer to Seller or from Seller
to Buyer for prorations as provided in Paragraphs 7 and 8.







b.  All amounts to be paid hereunder shall be paid by cashier's check
or wire transfer of immediately available funds.  If such amounts are
to be paid by wire transfer, payment is to be directed to Buyer's
bank account number 09061 06714, at Bank of America,
Bakersfield, California, ABA No. 121000358 in the amount of One
Hundred Fifty Thousand Dollars ($150,000).







c.  Seller shall request no later than three (3) days prior to Closing that
Buyer bring additional funds to Closing for the costs for filing fees,
recording fees, transfer taxes, including sales taxes on the tangible
personal property, and such other charges necessary to transfer
the Assets.









6.    Disposition of Accounts Receivable and Other Revenue    Accounts
receivable or other revenue associated with the Assets, to the extent that such
accounts receivable or revenue are attributable to times prior to the Effective
Date, and oil in Tanks above the pipeline connections and gas produced prior to
such date shall not be a part of the sale, but shall remain the property of Seller.
Seller and Buyer shall execute such additional documents as may be necessary
to properly evidence the transfer of the interests herein sold and purchased,
including any Consent to Transfer, if necessary.











7.    Prorations of Credits and Payments Obligations









a   All credits and payment obligations associated with the
Assets, including, but not limited to, royalties, lease rentals (except
for any state leases paid in arrears, which shall be the sole burden
of Buyer). Seller shall be responsible for all such items due prior to
the Effective Date and Buyer shall be responsible for, and shall pay
for, all such items due after such date.  Buyer shall pay all sales,
transfer, documentary transfer, and use taxes, if any, plus any
penalty or interest thereon, applicable to the sale of the Assets.









b.  Seller shall retain all rights and obligations existing as of the
Effective Date regarding outstanding receivables pertaining to the
Assets.  In the event Seller is unsuccessful in collecting all or any
portion of said receivables, Seller shall so advise Buyer and Buyer
shall cooperate with Seller in attempting to collect the receivables
to whatever extent is reasonably legally possible at no cost to
Buyer, but Buyer shall not be obligated to institute litigation or
otherwise incur extraordinary costs and expenses.











8.    Real Estate and Other Taxes   All real estate, occupation, ad valorem,
personal property, and severance taxes and charges on any of the Assets shall
be the responsibility of the Buyer after the Effective Date.  Seller shall pay all
such items for all periods prior to such date and shall be entitled to all refunds
and rebates with regard to such periods.











9.    Sales Tax and Recording Fees    Buyer shall be responsible for the
determination and payment of:  (i) any sales tax due on the sale and purchase of
the Assets, and (ii) all recording and transfer fees.











10.    Documentation of Sale and Transfer of Ownership

Except as
otherwise provided herein, the Assets to be conveyed by Seller to Buyer shall be
conveyed "AS IS, WHERE IS" pursuant to the instruments substantially in the
form of the Exhibits attached hereto and such other form or forms customary and
necessary to properly transfer the Assets according to the requirements by any
applicable federal, state, or local agency.  Except as provided for in this
Agreement, Buyer assumes the risk of description, title, and condition of the
Assets and shall satisfy itself with respect thereto.









> a.    Seller shall deliver the Asset to Buyer at the Closing subject
> to the reservations, limitations, conditions, and restrictions
> contained in this Agreement and the instruments of conveyance
> attached hereto.



> b.    The title to the Assets shall be subject to all matters appearing of
> record or that can be ascertained by an inspection thereof and shall
> be conveyed to Buyer without any warranty of title, express or
> implied, except that Seller has not heretofore disposed of any
> interest herein offered for sale.  Seller does represent that all of the
> Assets hereby conveyed are free and clear of all liens, charges,
> and encumbrances created by and through Seller.  The cost of title
> insurance, if any, shall be paid for by the party requesting same.







> c.  Seller shall make available at Seller's office at 1701 Westwind
> Drive, Suite 103, Bakersfield, California, or such other place as
> deemed appropriate by Seller, during normal business hours, for
> examination by Buyer, such title information and abstracts as may
> then be available in Seller's files.  Seller shall not perform any
> additional title work, and any existing abstracts and title opinions
> will not be made current by Seller.  NO WARRANTY OF ANY KIND
> IS MADE BY SELLER AS TO THE INFORMATION SO SUPPLIED,
> and Buyer agrees that any conclusions drawn therefrom shall be
> the result of its own independent review and judgment.



11.    Deliveries at ClosingBuyer shall deliver to Seller at or before Closing the
following: A Quitclaim Deed of the Seller's interest in the Properties
in the form of Exhibit "B," in favor of Buyer quitclaiming the
leasehold interest, duly executed and acknowledged by Seller (the
original will be recorded by Buyer at Buyer's expense);









12.    Buyer's Acceptance of the Assets



> a.    Buyer assumes the risk of condition of the Assets, including,
> but not limited to, compliance with all laws, rules, orders, and
> regulations affecting the environment, whether existing before or
> after Closing, subject to Paragraphs 15 and 18, and Buyer shall
> satisfy itself with respect thereto.



> b.    SUBJECT TO PARAGRAPHS 14, 15, AND 18, THE ASSETS ARE
> SOLD "AS IS, WHERE IS" AND SELLER MAKES NO
> WARRANTY, WHETHER EXPRESS OR IMPLIED, IN FACT OR IN
> LAW, OF MERCHANTABILITY, FITNESS FOR ANY PURPOSE,
> STATE OF REPAIR, CONDITION OR SAFETY OF THE REAL OR
> PERSONAL PROPERTY, NOR OF COMPLIANCE WITH
> APPLICABLE LAW, RULE, ORDER, OR REGULATION,
> CONCERNING THE ASSETS.





13.    Physical Condition of the Assets





> a.    The Assets have been used for oil and gas drilling and
> producing operations, related oil field operations, and possibly for
> the storage and disposal of waste materials or hazardous
> substances.  Physical changes in the land may have occurred as a
> result of such uses.  The Assets also contain buried pipelines and
> other equipment, whether or not of a similar nature, the locations of
> which may not now be known by Seller or be readily apparent by a
> physical inspection of the property.  Buyer understands that Seller
> may not have the requisite information with which to determine the
> exact nature or condition of the Assets nor effect any such use has
> had on the physical condition of the Assets.
>   b.    Except as otherwise provided herein, Buyer acknowledges that:



> i.    It has entered into this Agreement on the basis of its
> own investigation of the physical condition of the Assets,
> including subsurface condition, subject to Paragraph 15.
>     ii.    The Assets have been used in the manner and for the
> purposes set forth above and that physical changes to the
> Assets may have occurred as a result of such use.
>     iii.    Subject to the terms and conditions of Paragraphs 14,
> 15, and 18 on Closing, Buyer shall assume the risk that the
> Assets may contain wastes or contaminants and that
> adverse physical conditions, including the presence of
> wastes or contaminants may not have been revealed by
> Buyer's or Seller's investigation.  Subject to the terms and
> conditions of Paragraphs 14, 15, and 18 on Closing, all
> responsibility and liability related to disposal, spills, waste, or
> contamination on and below the Assets whether occurring
> before or after the Effective Date shall be transferred from
> Seller to Buyer.











14.    Seller's Representations and WarrantiesSeller makes the following
representations and warranties to Buyer with regard to the sale of the Assets:

a.    The defined term "Assets" represents all of Seller's right,
title, and interest in the real property, contracts, the Properties'
Leases, easements, rights-of-way, drilling and operating permits,
licenses, personal property, fixtures, and improvements, located on
the real property and leased premises.





If, after Closing, it is discovered that Seller owns an interest in the
Properties' Leases consisting of contracts, easements, rights-of-way, drilling and operating permits, licenses, personal property,
fixtures, improvements, etc., located on the real property and the
leased premises, then Seller shall transfer, in writing, said interest
to Buyer at no additional cost.



b.    Seller has no knowledge of any claim, lawsuit, environmental
matter, or notice of noncompliance from any governmental agency
or lessor or farmee, violation of Environmental Laws (as defined in
Paragraph 17) or delinquent payment obligation which would affect
the Assets, nor does Seller have any current, actual knowledge of
any circumstances, events, or conditions which would give rise to
any asserted claims, lawsuit, title defect, violation of Environmental
Laws (as defined in Paragraph 17), hazardous waste, notice of
noncompliance or payment obligations.









15.  Buyer's Investigation

> a.    Buyer shall have the right to make an environmental
> assessment of the Assets until March 2, 2003.  Buyer and its
> agents shall have the right to do the following (and Seller agrees to
> cooperate reasonably with Buyer in this regard):  to enter upon and
> within the Assets and all buildings and improvements thereon,
> inspect same, and generally conduct such tests, examinations,
> investigation, and studies as may be necessary or appropriate in
> Buyer's reasonable judgment for the preparation of appropriate
> engineering and other reports and judgments relating to the
> condition of the Assets; provided, however, that no such test,
> investigation, examination, or study shall be conducted without
> Seller's prior written approval of Buyer's plan for such, which shall
> have been submitted to Seller before commencement of any such
> test, investigation, examination, or study.  If, on or before the end of
> such examination period, Buyer, in its sole discretion, determines
> that the condition of the property to be conveyed may create
> substantial problems for Buyer or users of the Assets, then, by so
> notifying Seller within such period, Buyer may terminate this
> Agreement, upon which termination this Agreement shall be null
> and void, and Buyer shall have no further obligation or liability of
> any kind hereunder.



> b.    Buyer is hereby granted access to the Assets prior to Closing to
> conduct its assessment upon the following conditions:



> i.    Buyer waives and releases all claims against Seller,
> its employees, attorneys, representatives, and agents for
> injury to or death of persons or damage to property arising in
> any way from the exercise of rights granted to Buyer hereby
> or the activities (except where any such injury or damage is
> caused solely by the active gross negligence or willful
> misconduct of any of said Indemnitees) of Buyer or its
> employees or agents on the Assets.  Buyer shall indemnify
> and defend Seller, its employees, attorneys, representatives,
> and agents against and hold each and all of its Indemnitees
> harmless from any and all loss, cost, damage, expense, or
> liability, including attorneys' fees, whatsoever arising out of
> (a) any and all statutory or common law liens or other
> encumbrances for labor or materials furnished in connection
> with such tests, samplings, studies, or surveys as Buyer may
> conduct with respect to the Assets, and (b) any injury to or
> death of persons or damage to property occurring in, on, or
> about the Assets as a result of such exercise or activities
> (except where any such injury or damage is caused solely by
> the active gross negligence or willful misconduct of any of
> said Indemnitees).  The foregoing obligation of indemnity
> shall survive Closing or termination of this Agreement
> without Closing.







> ii.    Buyer shall obtain and maintain comprehensive public
> liability and property damage insurance at no less than $1
> million dollars coverage with respect to the exercise by
> Buyer and its agents of the rights granted hereby.  Prior to
> any exercise of the rights granted hereby, Buyer shall furnish
> to Seller a certificate evidencing the existence of the
> insurance required hereunder.





> iii.    Buyer shall obtain the permission of the Operator of
> the Properties prior to entry.



16.    ComplianceBuyer shall comply with all covenants in the instruments in
the chain of title to the Assets and with all terms and provisions, expressed or
implied, in the agreements, permits, and leases to which the Assets are subject.











17.    Indemnification and Assumption of ObligationsExcept as otherwise
provided in this Agreement, Buyer shall assume and be fully responsible for his
proportional share of the Assets as of Closing, including all operations,
responsibilities, obligations and their costs, and shall indemnify, hold harmless,
and defend Seller and its employees, attorneys, agents, and representatives
from and against all loss, liability, claims, fines, and expenses, costs (including,
without limitation, attorneys' fees and expenses, court costs, and expert fees and
expenses) and causes of action whenever arising with respect thereto, including,
but not limited to, plugging and abandonment of existing wells or reabandonment
of any wells, the restoration of the surface of the land as may be required under
the applicable leases or as may be required by any federal, state, or local agency
having jurisdiction over well abandonments, facilities abandonment, and
environmental clean-up, damages to property, injury to, or death of persons or
other living things, natural resource damages, CERCLA response costs,
environmental remediation and restoration costs, or fines or penalties arising
under environmental laws, and the removal of or failure to remove any sumps,
foundation, structures, or equipment therefrom, whether or not such matters are
attributable to the condition or operation of the Assets before, at, or after the
Effective Date.







As used herein, the term
"Environmental Laws" shall mean any and all laws, statutes, regulations, rules,
orders, ordinances, permits, or determinations of any governmental authority
pertaining to health or the environment in effect in any and all jurisdictions
in which the Assets are located, including, without limitation, the Clean Air
Act, as amended, the Federal Water Pollution Control Act, as amended, the Rivers
and Harbors Act of 1899, as amended, the Safe Drinking Water Act, as amended,
the Comprehensive Environmental Response, Compensation of Liability Act ("CERCLA"), as amended, the Superfund Amendments and
Reauthorization Act of 1986 ("SARA"), as amended, the Hazardous and Solid Waste
Amendments Act of 1984, as amended, the Toxic Substances Control Act, as
amended, the Occupational Safety and Health Act ("OSHA"), as amended, the Hazardous Materials Transportation Act,
as amended, and other federal, state, and local laws whose purpose is to
conserve or protect health, the environment, wildlife, or natural resources.
The terms "hazardous substance," "release," and "threatened release"
shall have the meanings specified in CERCLA, and the terms "solid waste," "hazardous waste," and
"disposal" (or "disposed") shall have the
meanings specified in RCRA; provided, however, that (a) to the extent the
laws of the state in which the Assets are located are applicable and have
established a meaning of "hazardous substance," "release," "threatened release,"
"solid waste," "hazardous waste," or "disposal" that is broader
than the specified CERCLA or RCRA, such broader meaning shall apply
with respect to the matters covered by such laws and (b) the term "solid
waste" shall include all oil and gas exploration, development, and
production wastes, even if such wastes are specifically exempt from
classification as hazardous substances or hazardous wastes pursuant to CERCLA or RCRA, or the California analogues to those statutes.







18.Indemnification and Assumption of Environmental Risks

> a.    Buyer shall forever indemnify and hold Seller harmless from
> all liability, damages, claims, costs, legal fees, and causes of action
> caused by, relating to, or arising out of any lawsuit, regulatory, or
> administrative action whose basis is the violation of any
> governmental law or regulation applicable to hazardous waste
> which was removed from the Assets and deposited elsewhere prior
> to the Closing.



> b.    Without in any manner limiting the indemnification contained in
> Paragraph 19, and in addition to such indemnity, Buyer assumes
> full responsibility from the date of closing to indemnify, defend, and
> hold harmless Seller from all liability, loss, claims, expenses, costs,
> and causes of action caused by or arising out of the violation of any
> governmental law or regulation applicable to waste material or
> hazardous waste attributable to activities on the Properties before
> or after the Effective Date.



> c.    Seller shall have the right at all times to collaborate fully with Buyer
> in the conduct of any hearing or trail as well as the right to appear
> on its own behalf, at its own expense, at any hearing or trial.
> Seller's right to participate in or appear in its own defense shall not
> diminish Buyer's ability or obligation under Paragraph 17 or this
> Paragraph 18.



19.    Consents to Assignments







> a.    Seller will use reasonable efforts to obtain any necessary
> consents and approvals prior to Closing.



> b.    If Buyer elects to proceed with Closing in the absence of any
> necessary consents, then Seller shall continue to use Seller's
> reasonable efforts for a period of three (3) months after Closing to
> obtain any outstanding necessary consents, but before or after
> Closing Seller shall not be liable for failure to obtain any such
> consent.  Seller shall have no liability with regard to any failure to
> obtain any required consent and Seller shall have no responsibility
> to expend any funds or agree to any conditions that it deems
> unacceptable in its sole and absolute discretion in order to obtain
> any such consent.



20.    Broker's or Finder's FeesSeller and Buyer warrant that neither has
incurred any liability, contingent or otherwise, for brokers' or finder's fees or
commissions relating to this Agreement for which the other shall have
responsibility.  Except as otherwise provided herein, all fees, costs, and
expenses incurred by Seller or Buyer relating to this Agreement shall be paid by
the party incurring the same.  All recording and transfer fees shall be paid by the
Buyer.



21.    NoticesAll notices and consents to be given hereunder shall be in
writing and shall be deemed to have been duly given if delivered personally,
telexed with receipt acknowledged, mailed by registered mail, postage prepaid,
or delivered by a recognized commercial courier to the party as follows, or such
other address as any party shall have designated for itself by ten (10) days' prior
notice to the other party:



> TO BUYER:
>   SONORAN ENERGY, INC
> Attention:  Mr. John Punzo
> 11300 West Olympic Boulevard, Suite 800
>     Los Angeles, California 90064



> TO SELLER:
>   ARCHER EXPLORATION, INC.
>     Attention:  John W. Howe
> 1701 Westwind Drive, Suite 103
> Bakersfield, CA  93301
> Fax:  1-(661)-631-1715









22.    SeverabilityIn the event any covenant, condition, or provision contained
herein is held to be invalid by a court of competent jurisdiction, the invalidity of
any such covenant, condition, or provision contained herein shall not affect the
remainder of this Agreement; provided, however, that any such invalidity does
not materially prejudice either Buyer or Seller in its respective rights and
obligations contained in the valid covenants, conditions, and provisions of this
Agreement.



23.    Construction of AmbiguityIn the event of any ambiguity in any of the
terms or conditions of this Agreement, including any exhibits whether or not
placed of record, such ambiguity shall not be construed for or against any party
hereto on the basis that such party did or did not author the same.



24.    Authority to ExecuteIf either Buyer or Seller is a corporation, each
individual executing this Agreement on behalf of said corporation represents that
they are duly authorized to execute and deliver this Agreement on behalf of said
corporation, in accordance with the duly adopted resolution of the board of
directors of said corporation or in accordance with the bylaws of said corporation,
and that this Agreement is binding upon said corporation in accordance with its
terms.

25.    ConfidentialityBuyer agrees that all information received by Buyer from
Seller or that Buyer obtains in its due diligence review of Seller's records will be
treated confidentiality by Buyer and that Buyer will take appropriate steps to
ensure that its agents, representatives, directors, partners, and employees
maintain such confidentiality.  Buyer's obligations with regard to maintenance of
confidentiality shall continue until this Agreement is terminated or expires, in
which case all such confidential information shall be returned to Seller, or until
the Closing.

26.    PublicitySeller and Buyer shall jointly plan and coordinate all notices to
third parties and all other publicity concerning the transactions contemplated by
this Agreement.

27.    Time of PerformanceTime is of the essence of this Agreement and
each and every provision hereof in which time of performance is a factor.



28.    Entire AgreementThis Agreement constitutes the entire agreement
between Seller and Buyer with respect to the subject matter hereof, superseding
all prior statements, representations, discussions, agreements, and
understandings relating to such subject matter.











29.    AssignmentBuyer shall not assign, mortgage, pledge, or hypothecate
its rights or obligations under this Agreement without the prior written consent of
Seller, which consent may be withheld in Seller's sole and absolute discretion.



30.    Governing LawThis Agreement shall be governed by the law of the
State of California, without regard to rules concerning conflicts of law, and venue
shall be in Kern County, California.











31.    Attorneys' FeesIn the event of any claim, dispute, or controversy
arising out of or relating to this Agreement, including an action for declaratory
relief, the prevailing party in such action or proceeding shall be entitled to recover
its court costs and reasonable out-of-pocket expenses not limited to taxable
costs, including, but not limited to, phone calls, photocopies, expert witness,
travel, etc., and reasonable attorneys' fees to be fixed by the court.  Such
recovery shall include court costs, out-of-pocket expenses and attorneys' fees on
appeal, if any.  The court shall determine who is the "prevailing party," whether or
not the dispute or controversy proceeds to final judgment.  If either party is
reasonably required to incur such out-of-pocket expenses and attorneys' fees as
a result of any claim arising out of or concerning this Agreement or any right or
obligation derived hereunder, then the prevailing party shall be entitled to recover
such reasonable out-of-pocket expenses and attorneys' fees whether or not an
action is filed.



32.    No Third Party BeneficiaryThis Agreement shall not be interpreted to
nor shall it create any third party beneficiary contract rights.

33.    WaiverThe waiver or failure of either party to enforce any provision of
this Agreement shall not be construed or operate as a waiver of any further
breach of such provision or of any other provision of this Agreement.

34.    Survival of AgreementsExcept as otherwise specifically provided in
this Agreement, all covenants, agreements, representations, guarantees,
indemnities, and warranties shall survive the execution of this Agreement,
Closing, and the delivery and recordation of any deeds, assignments, or bills of
sale which convey the Assets from Seller to Buyer.

35.    Successors and AssignsThis Agreement and the provisions herein,
which shall survive Closing, shall bind and insure to the benefit and burden of the
heirs, successors, and assigns of the parties hereto.







IN WITNESS WHEREOF, the undersigned parties to this Agreement have
executed it as of the day and year first above written.

SELLER

ARCHER EXPLORATION, INC.



By:_________________________

John W. Howe, President



BUYER:

SONORAN ENERGY, INC.



By:_________________________

John Punzo, President

---

EXHIBIT "A"

(Maps)(Not included)

---



EXHIBIT "B"









ARCHER EXPLORATION, INC.

















PRODUCING PROPERTIES, CALIFORNIA











|                               | Working Interest Percentage | Net Revenue Interest (Percent)
|------------------------------ | --------------------------- | ------------------------------
|Denverton Creek                |                             |                               
|Emigh 34-1                     | 1.125                       | .008213                       
|Emigh 34-2                     | 1.125                       | .008213                       
|Emigh 34-3                     | 0.05625                     | .00433125                     
|Emigh 35-1                     | 1.125                       | .0082125                      
|Emigh 35-2                     | 1.125                       | .0082125                      
|Emigh 35-3                     | 0.05625                     | .00433125                     
|Emigh 35-4                     | 0.01875                     | .00144375                     
|Emigh 35-5                     | 1.125                       | .0082125                      
|Emigh 2-1                      | 1.125                       | .0082125                      
|Emigh 3-1                      | 1.125                       | .0082125                      
|Cygnus 1                       | 0.05625                     | .00410625                     
|Cygnus 2                       | 0.01875                     | .00136875                     
|                               |                             |                               
|Lambie Ranch                   |                             |                               
|Lambie 3-4                     | 1.0                         | .0065                         
|                               |                             |                               
|Maine Prairie                  |                             |                               
|Miller #1                      | 1.41                        | .011333                       
|Miller #3                      | 1.41                        | .011333                       
|Miller #4                      | 1.41                        | .011333                       
|Peters #5                      | 0.705                       | .0056665                      
|                               |                             |                               
|Malton Black Butte             |                             |                               
|Johnson Unit (3 wells in unit) | 10.0                        | .077                          
|Gay Unit (2 wells in unit)     | 10.0                        | .077                          
|Electra #1                     | 3.60                        | .02675462                     
|Houghton 25-1                  | 3.70                        | .02849                        
|Eastby 36-2                    | 3.70                        | .02849                        
|Daughters of Dragon #1         | 2.65                        | .01969437                     
|Gay 12-1                       | 5.0                         | .0385                         

























---













Exhibit "C"











Attached to and
made a part of that certain Asset Sale Agreement by and between Archer
Exploration, Inc. and Sonoran Energy, Inc., dated March 1, 2003











ASSIGNMENT OF
WORKING INTEREST









KNOWN ALL MEN BY THESE PRESENTS: That
Archer Exploration, Inc., hereinafter, referred to as ASSIGNOR, for good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, does hereby grant, transfer, assign and convey on a pro-rata basis
unto Sonoran Energy, Inc., hereinafter referred to as ASSIGNEE, its successors
and assigns, subject to the conditions stated below, an undivided working
interest, as set forth in Exhibit "A" hereto, being all of ASSIGNOR'S undivided
working interest in those certain oil and gas leases, hereinafter called "Said
Properties", which working interest covers the described lands as set forth in
Exhibit "B: attached hereto.









Assignor represents and warrants that title to said property as described herein
is conveyed free and clear of all liens, claims, clouds or encumbrances caused
or created by, through or under Assignor. Assignor further represents and
warrants that no assignment, transfer, conveyance, encumbrance, or other
hypothecation affecting the interest as described herein exists.







This effective date of this assignment is March 1, 2003.







TO
HAVE AND TO HOLD the same unto Assignee, Assignee's successors and assigns
forever, subject to the terms and provisions contained herein.









IN WITNESS WHEREOF, this assignment
is executed this ___________ day of March 2003.











ASSIGNOR:
ASSIGNEE:









ARCHER EXPLORATION, INC. SONORAN ENERGY, INC.





_______________________







John W. Howe, President John Punzo, President





---











[Exhibit "A" to the ASSIGNMENT OF
WORKING INTEREST (Exhibit "C" above)]

















Attached to and a made a part of that certain Assignment of Interest dated March
1, 2003.

















ARCHER EXPLORATION, INC.

















PRODUCING PROPERTIES, CALIFORNIA











|                               | Working Interest Percentage | Net Revenue Interest (Percent)
|------------------------------ | --------------------------- | ------------------------------
|Denverton Creek                |                             |                               
|Emigh 34-1                     | 1.125                       | .008213                       
|Emigh 34-2                     | 1.125                       | .008213                       
|Emigh 34-3                     | 0.05625                     | .00433125                     
|Emigh 35-1                     | 1.125                       | .0082125                      
|Emigh 35-2                     | 1.125                       | .0082125                      
|Emigh 35-3                     | 0.05625                     | .00433125                     
|Emigh 35-4                     | 0.01875                     | .00144375                     
|Emigh 35-5                     | 1.125                       | .0082125                      
|Emigh 2-1                      | 1.125                       | .0082125                      
|Emigh 3-1                      | 1.125                       | .0082125                      
|Cygnus 1                       | 0.05625                     | .00410625                     
|Cygnus 2                       | 0.01875                     | .00136875                     
|                               |                             |                               
|Lambie Ranch                   |                             |                               
|Lambie 3-4                     | 1.0                         | .0065                         
|                               |                             |                               
|Maine Prairie                  |                             |                               
|Miller #1                      | 1.41                        | .011333                       
|Miller #3                      | 1.41                        | .011333                       
|Miller #4                      | 1.41                        | .011333                       
|Peters #5                      | 0.705                       | .0056665                      
|                               |                             |                               
|Malton Black Butte             |                             |                               
|Johnson Unit (3 wells in unit) | 10.0                        | .077                          
|Gay Unit (2 wells in unit)     | 10.0                        | .077                          
|Electra #1                     | 3.60                        | .02675462                     
|Houghton 25-1                  | 3.70                        | .02849                        
|Eastby 36-2                    | 3.70                        | .02849                        
|Daughters of Dragon #1         | 2.65                        | .01969437                     
|Gay 12-1                       | 5.0                         | .0385                         











---



---



















Exhibit "B"









[to the Assignment
of Working Interest (Exhibit C to main agreement)]







Attached to and a
made a part of that certain Assignment of Interest dated March 1, 2003.













Parcel 1: Aspen
Exploration, Inc. - Malton Black Butte Property











660 acres, that
being portions of Section 36, Township 23 North, Range 4 West, Mount Diablo Base
and Meridian; Section 31, Township 23 North, Range 3 West, Mount Diablo Base and
Meridian Tehama County, California, and











615.18 acres,
that being portions of Sections 12, 13 & 14, Township 22 North, Range 4 West,
Mount Diablo Base and Meridian; Glenn County, California











Parcel 2: Aspen
Exploration, Inc. - Denverton Creek Property











The South
one-half of Section 34 and the Southwest one-quarter of Section 35, Township 5
North Range One East, Mount Diablo Base and Meridian Solano County, California,
and











The North
one-half of Section 2 and the North one-half of Section 3 and the Northwest
one-quarter of Section 4, Township 4 North Range 1 East, Mount Diablo Base and
Meridian Solano County, California.











Parcel 3:
Castle Minerals Inc. - Main Prairie Property











The Northwest
one-quarter of the Southwest one-quarter and the West one-half of the Northeast
one-quarter of the Southwest one-quarter and a portion of the South one-half of
the Northwest one-quarter Section 3, Township 5 North Range 2 East, Mount Diablo
Base and Meridian Solano County, California, and











A portion of
the South one-half of the Northeast one-quarter, Section 4, Township 5 North
Range 2 East, Mount Diablo Base and Meridian Solano County, California.











Parcel 4:
Gotland Oil Company - Lambie Ranch Property











A portion of
the Southeast one-quarter, Section 4 Township 5 North Range 1 East, Mount Diablo
Base and Meridian Solano County, California.

---





Exhibit 10.8







CONTRACT FOR SERVICES







This AGREEMENT made as of the 1st day of June, 2002, by and between
SONORAN ENERGY, INC., a Washington corporation (the "Company"), and Paradigm
Process, Ltd, a British Columbia corporation, which has the ability to provide the
services of John Punzo ("Contractor").







WHEREAS, Contractor heretofore has been providing the services of John Punzo to the
Company and the Company seeks to ensure continued service from the Contractor's
personnel by entering into this Agreement with Contractor;







WHEREAS, the Company and Contractor mutually desire that Contractor continue to
provide Punzo's services to the Company and that Contractor devote reasonable efforts
and attention to the operation of the Company; and







WHEREAS, the Company and Contractor mutually desire to set forth the terms of their
intended employment relationship;







NOW THEREFORE, in consideration of the premises and the terms hereinafter set forth,
the parties, intending to be legally bound, agree as follows:







1.  Employment of Contractor. Beginning on the Effective Date (hereinafter defined), the
Company shall employ Paradigm and Paradigm will provide the services of John Punzo
as Contractor and Contractor shall accept employment by the Company, as its Chairman
of the Board of Directors, President and Chief Executive Officer pursuant to the terms of
this Agreement. Contractor currently is a member of the Company's Board of Directors;
the Company shall use it best efforts to cause Contractor to be reelected to the Board of
Directors  while Contractor is employed by the Company.







2.  Contractor's Duties. Contractor's primary duties will consist of those as may be
reasonably determined by the Board of Directors and as are generally consistent with the
duties of a Chief Executive Officer of the Company. The Board of Directors will assist
and work with the Contractor in the performance of his duties.







3.  Time Obligations; Other Employment. Contractor shall be a full-time Contractor of
the Company and shall devote reasonable efforts to the Company's business and
purposes. Contractor shall not engage in any activities in conflict with the purposes and
businesses of the Company as from time to time conducted.



4.  Compensation. For all services rendered by Contractor to the Company under this
Agreement or otherwise, the Company shall compensate Contractor as follows
commencing on the Effective Date:







4.1.  Base Salary. Base fee at the rate of $10,000 per month, subject, however, to
any increase(s) as determined by the Company. Base fee shall be payable no less often
than twice each month, on the fifteenth and on the last day of each month, in conformity
with the usual payment practices of the Company.



4.2.  Stock Options. In addition to the base fee, the Company shall grant to
Contractor, upon the Effective Date, options to purchase One Million Five Hundred
Thousand (1,500,000) shares of the common stock of the Company, exercisable at $0.20
per share on the first 750,000 shares and $0.25 per share on the second 750,000 shares.
Such options shall vest in and become exercisable by Contractor at the rate of 185,000
shares at the end of each successive three (3) month period commencing on the
Effective Date.  The foregoing notwithstanding, Contractor's right to all of the said
options shall vest and all of the said options shall become immediately exercisable,
twenty (20) days before a Change in Control Event, as defined below.  All of such
options, to the extent not exercised, shall expire ten (10) years after the Effective Date.
In addition to the foregoing, Contractor shall be included in the group of senior
executives considered for future grants of stock options under stock option plans, if any,
in effect for the Company from time to time.  In addition, the Company will review
performance and will negotiate for further options to be granted in subsequent years of
the agreement.  The Company will file a registration statement to cover the shares
covered by this agreement.







4.3.  Benefits. Contractor's personnel shall be entitled to all fringe benefits offered
generally to the Company's senior officers and any other benefit plan established by the
Company, subject to the rules and regulations in effect regarding participation in such
plans.







4.4.  Severance Payment. If a Change in Control Event should occur and
Contractor's employment by the Company hereunder be terminated for any reason
(voluntarily or involuntarily) within two (2) years hereafter, Contractor shall be paid a
lump sum payment equal to three (3) times the then-annual fee simultaneously with such
termination.







5.  Confidentiality; Change in Control Event



5.1.  Contractor agrees not to, except to the Company, its subsidiaries and
affiliates, communicate or divulge to any person, firm or corporation, directly or
indirectly, any confidential or proprietary information relating to the business, customers
and suppliers or other affairs of the Company, its parents, subsidiaries and their affiliates.



5.2.  For purposes of this Agreement, a "Change in Control Event" shall mean (i) a
sale or other change in control of all or a substantial portion of all of the Company's
assets or (ii) any transaction or series of related transactions (including without limitation
any reorganization, merger or consolidation) which results to the shareholders of the
Company immediately prior to such transaction holding, following such transaction, less
than fifty percent (50%) of the voting power of the surviving or continuing entity or (iii)
a change of the voting group that in fact controls the Company on the Effective Date or
(iv) a change in persons who constitute a majority of the Board of Directors of the
Company on the Effective Date.







6.  Term and Termination.



6.1.  This Agreement shall become effective on June 1, 2002 (the "Effective
Date"). Unless otherwise terminated as provided in this section 10, the term of
Contractor's employment shall expire on May 31, 2005, provided, however, that the term
of this Agreement shall thereafter automatically renew for successive one-year periods
unless either party gives notice to the other party of non-renewal no later that February
28th in any calendar year of this Agreement after 2005. Any such notice of non-renewal
shall be deemed a termination without cause for purposes hereof.







6.2.  The provisions of paragraph 6.1 notwithstanding, this Agreement shall
terminate upon the occurrence of any one or more of the following:







a.  Death of Contractor; or







b.  Inability of Contractor to perform his duties for a period of one hundred
eighty (180) consecutive days due to sickness, disability or any other cause, unless
Contractor is granted a leave of absence by the Company.







7.  Notice and Opportunity to Cure. Whenever a breach of this Agreement by either party
is relied upon as a justification for any action taken by the other party, before such action
is taken, the party asserting the breach shall give the other party written notice of the
existence and nature of the breach and such other party shall have the opportunity to
correct such breach during the sixty-day period following such notice. If such cure is
effected, then any such breach shall not be a basis for the party intending to rely thereon.







8.  Notices. All notices and other communications in connection with this Agreement
shall be in writing and shall be given by personal delivery or by registered or certified
mail, return receipt requested, addressed as follows:







If to Contractor:         Paradigm Process, Ltd.





12484 - 63A Avenue





Surrey, British Columbia





Canada  V3X 2C7







If to the Company:     Sonoran Energy, Inc.





11300 W. Olympic Boulevard, Suite 800





Los Angeles, California 90064











With a copy to:         Christopher H. Dieterich





Dieterich & Associates





11300 West Olympic Boulevard, Suite 800





Los Angeles, California 90064







or to such other address as the party to receive the notice or other communication shall
have designated by notice to the other hereunder. The date any such notice or other
communication shall be deemed hereunder to have been given shall be seven (7) days
after the date that it is deposited in the mails, with proper postage prepaid, or when
delivered personally by hand, courier or otherwise.







9.  Assignment. The rights of either party shall not be assigned or transferred, whether
voluntarily or by operation of law or otherwise, without the other party's prior written
consent, nor shall the duties of either party be delegated in whole or in part, whether
voluntarily or by operation of law or otherwise, without the other party's prior written
consent. Any attempted assignment, transfer or delegation shall be of no force or effect
unless so consented to in writing.







10.  Preparation of Agreement. Contractor acknowledges that this Agreement was
prepared by attorneys representing the Company. This Agreement will have tax and other
consequences to Contractor. Contractor acknowledges that he has been advised by the
Company to consult with an attorney, tax advisor and other Contractors of his choice
before entering into this Agreement and he has done so. Contractor further acknowledges
that he has not relied upon any legal or tax advice of the Company or the Company's
attorney in connection with this Agreement.







11.  Miscellaneous.







11.1.  Waiver. No delay or failure by a party to exercise any right under this
Agreement, and no partial or single exercise of that right, shall constitute a waiver of that
or any other right, unless otherwise expressly set forth in a writing signed by such party.
No consent or waiver, express or implied, by either party to any breach or default by the
other party in the performance by the other of its or his obligations hereunder shall be
effective unless made in a writing duly executed by the party giving or making such
consent or waiver. No such consent or waiver shall be deemed or construed to be consent
or waiver to or of any other breach or default in the performance by such other party of
the same or any other obligation of such party.







11.2.  Amendments. To be effective, all changes, additions and other amendments
to this Agreement must be set forth in a writing signed by the party to be charged, and no
oral changes, additions or other amendments hereto shall be binding upon either party.







11.3.  Integration. This Agreement constitutes the entire agreement between the
parties relating to the subject matter hereof and supersedes and cancels all other prior
agreements, understandings, representations, warranties, inducements or other matters in
connection with such subject matter.







11.4.  Severability; Blue Pencil. The unenforceability or invalidity of any provision
of this Agreement in a particular case shall not render unenforceable or invalid in such
case any other provision hereof or such provision in any other case. If any one or more of
the provisions of this Agreement shall for any reason be deemed excessive as to duration,
scope, activity or subject or shall be otherwise unenforceable, such provision(s) shall be
construed or recast so as to enforce the intent of the parties as herein set forth to the
greatest extent permitted by applicable law.







11.5.  Headings. The headings and titles in this Agreement are for purposes of
convenience of reference only and shall not in any way affect the meaning, interpretation
or enforcement of this Agreement.



11.6.  Governing Law. This Agreement shall be governed by the laws of the State
of Washington as in effect for contracts made and to be performed in the State of
Washington. The parties hereby submit to the jurisdiction of the courts of, and the federal
courts located in, the State of Washington for all purposes related to this Agreement and
the relationship between the parties, and such courts shall have exclusive jurisdiction of
the subject matter hereof and thereof.







11.7.  Nature of Relationship. The relationship of the parties shall be only that of
employer and Contractor. The parties do not intend to be partners and neither party shall
hold itself out as being a partner of, or having a similar relationship with, the other party.







11.8.  Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original and all of which shall constitute one and the
same agreement.









11.9 Previous Agreements.  This agreement replaces the employment agreements
between Showstar Entertainment Corp. dated May 29, 1999 and John Punzo and
Paradigm Process, Ltd.









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







COMPANY:                                                                Contractor:

SONORAN ENERGY, INC.







/s/_John Punzo_____                                                 By: /s/_John Punzo_______________





John  Punzo, IndividuallyJohn Punzo, President













By: /s/ Russ Costin







PARADIGM PROCESS, LTD.                                           R.H. Costin, Secretary/Treasurer







By: /s/ John Punzo





John Punzo, President