Rolling Thunder Exploration Inc.

1211-5th St. NW

Calgary, Alberta

T2M 3B6

Tel. Cell 403-540-1332



April 7th, 2005



San Telmo Energy Inc.

1120, 144-4thth Avenue S.W.

Calgary, AB. T2P 3N4



Attention: Mr. Brian Bass

Dear Sir:



Re: Seismic Purchase Option Proposal

Morinville, Alberta



As per our recent conversations, Rolling Thunder Exploration Ltd submits the following proposal to San Telmo Energy Inc:



1.

Parties



Optionor: San Telmo Energy Inc.



Optionee: Rolling Thunder Exploration Inc.



2.

Option Lands





Morinville

Twp. 56 Rge 25 W4M, sec. 11, expires Feb 7th, 2007

3.

Title

It is our understanding that the Option Lands are in good standing and that they are unencumbered except for the applicable Crown Royalty.

4.

Seismic Purchase

a)

On or before September 15, 2005, Optionee shall purchase a minimum of 2 miles of seismic on or within one mile of the Option Lands above. Optionee, at its own expense shall have the Data interpreted and if necessary reprocessed.

b)

On or before November 15, 2005, Optionee shall elect in writing to either:

a)



i)

drill a Test Well at a location of its choice on a Prospect of its choice on the Option Lands.



ii)

surrender its right to earn an interest in the Option Lands.





5.

Test Well



Within sixty (60) days of electing to drill a Test Well, Optionee shall commence drilling such Test Well at a location of its choice on the Option Lands, subject to surface access, rig availability and regulatory approval.



a)

The Test Well shall be drilled to contract depth and either completed, capped or abandoned. Contract depth for the Test Well shall be determined by the Optionee during the review of the seismic and Optionor will be notified of the contract depth specific to the Test well 15 days prior to spud.



b)

If in drilling the Test Well, mechanical difficulties or practically impenetrable geological formations are encountered, Optionee may abandon the Test Well. Within thirty (30) days of such abandonment, Optionee shall, access permitting, commence and thereafter continuously carry on the drilling of a substitute well at a location of its choice on the Option Lands. All the provisions of this Agreement shall apply to the substitute well with the same force and effect of the abandoned well.





6.

Earning



Upon Optionee drilling, at its sole cost, risk and expense, the Test Well to Contract Depth and thereafter either casing, capping or abandoning same, Optionee shall earn, to the base of the deepest formation penetrated, the following interest in the option lands:





i)

In the Test Well spacing unit (one section for Gas, 1/4section for oil): one hundred percent (100%) of Optionor's working interest reserving unto Optionor a gross overriding royalty of 1/150 (5%-15%) on oil; and 15% on gas convertible at payout to 60% of Optionor's pre-farmout interest; and



ii)

60% of Optionor's interest in the balance of the Earning Block

7.

Assignment



Optionee shall have the right to assign any part of its interest or rights hereunder during the period Optionee has a right to earn an interest under this Agreement. Optionor, shall look only to the Optionee for performance of it's obligations hereunder.

8.

Area of Mutual Interest



An area of mutual interest shall be established encompassing the lands within one mile of the option lands as per attachment a. The area of mutual interest will be as to the post farmout earned working interests and will be in force for a period of 2 years from the date of this agreement.

9.

Rentals



Optionee shall reimburse Optionor for One Hundred Percent (100%) of Optionor's share of the lease rentals attributed to the Option Lands on a per diam basis, effective from the date this Agreement is accepted to the date Optionee has performed all of its obligations to earn its entire interest in the Option Lands hereunder or until the date on which such

right to earn expires or is surrendered, whichever first occurs. Thereafter, all rentals attributed to the Option Lands shall be shared by the parties in accordance with their respective working interests.

The foregoing outlines the basic conditions under which Rolling Thunder Exploration Ltd. is prepared to farmin on the subject lands. Should these terms be acceptable to your company, please sign where provided for below and return one (1) copy of this Proposal Letter to the undersigned prior to April 15th, 2005. Upon receipt of same, a more comprehensive agreement will be prepared.

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