EXHIBIT 10-5


                                                c/o Sterling Energy Company
                                                1200 17th Street, Suite 1000
                                                Denver, CO  80202
                                                Phone: (720)946-6105
                                                Fax: (702) 946-6104


SIEIRA GAS CORPORATION



May 8, 2003


Mr. Sacha H. Spindler
Petrogen International LTD

Re: Gas Purchase Proposal, Enos Creek Field - Hot Springs County, Wyoming


Dear Sacha:

Sierra  Gas  Corporation  ("Sierra")  is pleased to  present  this  proposal  to
purchase natural gas from Petrogen  Corporation's  ("Petrogen")  Enos Creek area
operations.

Sierra  registered to do business in the state of Wyoming in 1999 and since then
we have developed multiple gas markets on the Williston Basin Interstate ("WGl")
Pipeline System in conjunction  with our Big Horn Gas Plan  operations.  We also
have a  long-standing  relationship  with WBI and would  maintain an Operational
Balancing  Agreement on WBI for your Enos Creek Production.  We are confident we
can provide you a  consistent  market for all your  natural gas  production  and
creditworthy  customers  who  will  pay  you in  full  within  30  days  of each
production month end.

We propose to  purchase  all of  Petrogen's  Enos Creek area  production  on the
following terms:

1.   PURCHASE PRICE: 90% of Colorado Interstate Gas ("CIG") Rocky Mountain First
     of Month {"FOM") Index Price. Alternatively, if CIG FOM Index market is not
     available  for  all  of the  gas in a  particular  month,  then  90% of the
     Weighted Average Sale Price ("WASP") received by Sierra at the WBI delivery
     point,

2.   GAS SALES VOLUME;  The gas volumes  available for sale under this agreement
     shall  be  reduced  by any  fuel,  lost  and  unaccounted  for gas  volumes
     attributable  to the Wyoming  Gas System and the WS!  System as part of the
     payment calculation,

3.   DELIVERY POINT: Custody of the gas shall pass to Sierra at Petrogen's check
     meter into WGS,  provided  that the volume of gas  available for sale under
     this  Agreement  shall be reduced by any losses on the WGS as determined by
     the WBI Monthly Allocation Statement.

4.   QUALITY;  Petrogen shall deliver gas under this  Agreement  which meets the
     Gas  Quality  Specifications  established  by WGS and WBI for gas on  their
     systems.

5.   QUANTITY;  Petrogen  shall  provide its  projected  gas flow for the coming
     month not later  than 10 days  prior to the Y'1 of the month and shall take
     all  reasonable  steps to produce  its gas on a steady  basis  through  the
     month, subject to FORCE MAJEURE events.

6.   PAYMENTS;  All proceeds  payable  under this  Agreement  shall be paid on a
     gross  basis to Petrogen  on or before the end of the month  following  the
     month of  production.  Petrogen  shall be  responsible  for at!  royalties,
     severance taxes and production payments. All transportation and compression
     fees, measurement and other costs and all fuel lost and unaccounted for



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May 8, 2003
Page 2


     gas  volumes  imposed  by WGS shall be  deducted  prior to  payment  of the
     production proceeds to Petrogcn.

7.   TERM:  The term of this  agreement  shall be for one year  from  first  gas
     deliveries hereunder Thereafter, the term will continue year to year unless
     terminated on written notice from either party  delivered not less than 90
     days prior to the end of the renewal term.

Please  feel to to contact me directly  if you have any  questions  or wish to
discuss these terms further. If the terms above are generally acceptable, please
sign below and we will prepare a formal Gas Purchase  Agreement  for your review
and execution.

Sincerely,

/s/ WILLIAM H. PENNEY


WILLIAM H. PENNEY, PRESIDENT
SfERRA GAS CORPORATION

AGREED AND ACCEPTED BY PETROGEN

BY:  /s/ SACHA SPINDLER
---------------------------------------
TITLE:  PRESIDENT, CEO

DATE:  05/09/03




ESTIMATED INITIAL GAS FLOW:

Date:   TBA     Volume:  500 mefqd



cc: Robert B. Sanders