Filed by Automated Filing Services Inc. (604) 609-0244 - Red Sky Resources Inc. - Exhibit 10.1





 EXHIBIT 10.1 

 BANKS VENTURES LTD. 

  SUITE 1320 – 925 WEST GEORGIA STREET 

  VANCOUVER BC CANADA V6C 3L2 


June 01, 2003 

 Pacific Petroleum Inc. 

  Suite 283 – 1755 Robson St. 

  Vancouver, BC V6G 3B7 


Attention: D. Barry Lee  

 Sir: 

Farmout Agreement Covering Prospects in the

  East Corning Project, Tehama County, California

                 Whereas,
  Lario Oil and Gas Company (“Lario”) owns PNG Leases at East Corning,
  Tehama County, California (as more fully described in Clause 3) and; 

                 Whereas,
  Lario entered into a Farmin Agreement dated September 15, 2000 between Lario
  and Olympic Resources (Arizona) Ltd. (“Olympic”) for certain earning
  rights on the PNG Leases and; 

                 Whereas,
  Olympic entered into a Farmout Agreement on April 15, 2002 and amended on August
  2, 2002 between Olympic and Banks Ventures Ltd. (Banks) for certain earning
  rights on the PNG Leases and; 

                 The
  following sets out the specific terms and provisions for this Farmout Agreement
  between Banks and Pacific Petroleum Inc. covering the prospect area, controlled
  by Lario, with earning terms and conditions for the area, and more specifically
  for each well. 

	 1.	 Farmee:  Pacific Petroleum Inc.  
	  	 
	 2.	 Farmor:  Banks Ventures Ltd.  
	  	 
	 3. 	 Farmout Lands:     
             The Farmout Lands shall comprise the following lands
        with the right to explore for, work, win and recover petroleum and natural
        gas in all P&NG rights which are granted by the PNG Leases as outlined
        below:





	 Farmout Lands  	 Farmor’s Available WI 
	  	 
	 Township 24 North, Range 2 West  	 12.75% 
	 Section 31: Lots 1 and 2 in Block 84  	 
	 Tehama County, CA  	 




	 	Farmor does not warrant title to the Farmout Lands.






 

	 4.	 Farmout Well: 
      

	  	 
	 	 Bell Bottom Blues #1-36 
      

	  	 
	 	 This earning well will be
        drilled in the second or third quarter of 2003 subject to surface access,
        rig availability and receipt of all necessary approvals. The Farmee agrees
        to pay 100% of Farmor’s 12.75% in drilling, completing, equipping
        and tie-in costs. The Farmee will have a 10.75% net revenue interest in
        the drilling spacing unit subject to overriding and landowner royalties.
        There is no payout in this well.  

	  	 
	 	        
                   Well Name:                    Bell
        Bottom Blues #1-36 

	 	        
                   Working Interest Assigned:                  
        12.75 %  

	 	        
                   Net Revenue Interest Assigned:           
        10.75 %  

	  	 
	 5.	 Insurance  

	  	 
	 	 Unless notified by Farmee,
        Farmee will be covered under Farmor’s Well Control and Blow-Out
        Insurance.  

	  	 
	 6.	 Appointment of Operator 
      

	  	 
	 	 Lario, or its assigns, is
        hereby appointed the initial Operator and agrees to act as Operator to
        conduct operations on the Farmout Lands for the Parties in accordance
        with their working interests. 

	  	 
	 7.	 Formal Agreement 
      

	  	 
	 	 This letter sets out the
        basic terms and conditions of our proposal. If you are in agreement with
        the foregoing, kindly indicate your acceptance by signing in the space
        provided below and return one copy of this letter to the attention of
        the undersigned. 






Sincerely, 


Banks Ventures Ltd. 

 /S/ Chris Cooper 

  Chris Cooper 

  Director 

 


ACCEPTED AND AGREED TO THIS 3RD DAY OF JUNE 2003. 


Pacific Petroleum Inc. 

 /S/ D. Barry Lee 

  D. Barry Lee 

  President 

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