EXHIBIT 10.3


                                STOCK OPTION PLAN













                                      FOR:




                                 PETROGEN CORP.











                                 PETROGEN CORP.
                       3200 Southwest Freeway, Suite 3300
                          Houston, Texas, U.S.A., 77027
                                   __________


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                                 PETROGEN CORP.



                                STOCK OPTION PLAN



This stock  option  plan (the  "PLAN") is adopted in  consideration  of services
rendered and to be rendered by key personnel to Petrogen Corp., its subsidiaries
and affiliates.


1.                DEFINITIONS.


he terms used in this Plan shall,  unless otherwise indicated or required by the
particular context, have the following meanings:


         BOARD:                     The Board of Directors of Petrogen Corp.


         COMMON STOCK:              The U.S. $0.001 par value common stock of
                                    Petrogen Corp.


         COMPANY:                   Petrogen  Corp., a  corporation incorporated
                                    under  the  laws  of the  State  of  Nevada,
                                    U.S.A.,  and any  successors  in interest by
                                    merger,  operation  of  law,  assignment  or
                                    purchase of all or substantially  all of the
                                    property, assets or business of the Company.


         DATE OF GRANT:             The date on which an Option (see herein-
                                    below) is granted under the Plan.


         FAIR MARKET VALUE:         The Fair Market  Value of the Option Shares.
                                    Such Fair Market  Value as of any date shall
                                    be  reasonably   determined  by  the  Board;
                                    provided, however, that if there is a public
                                    market for the Common Stock, the Fair Market
                                    Value of the  Option  Shares  as of any date
                                    shall not be less than the closing price for
                                    the  Common  Stock on the last  trading  day
                                    preceding  the  date  of  grant;   provided,
                                    further,  that if the  Company's  shares are
                                    not listed on any  exchange  the Fair Market
                                    Value of such shares  shall not be less than
                                    the average of the means between the bid and
                                    asked prices quoted on each such date by any
                                    two independent persons or entities making a
                                    market for the Common Stock, such persons or
                                    entities to be  selected by the Board.  Fair
                                    Market  Value  shall be  determined  without
                                    regard  to  any  restriction  other  than  a
                                    restriction  which, by its terms, will never
                                    lapse.


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                                      -2-


         INCENTIVE STOCK
         OPTION:                    An Option as  described in Section 9 herein-
                                    below  intended to qualify under section 422
                                    of the United States  INTERNAL  REVENUE CODE
                                    OF 1986, as amended.


         KEY PERSON:                A person  designated by the Board upon whose
                                    judgment, initiative and efforts the Company
                                    or a Related  Company  may  rely,  who shall
                                    include any Director,  Officer,  employee or
                                    consultant of the Company.  A Key Person may
                                    include a corporation  that is  wholly-owned
                                    and  controlled  by  a  Key  Person  who  is
                                    eligible  for  an  Option  grant,  but in no
                                    other case may the  Company  grant an option
                                    to a legal entity other than an individual.


         OPTION:                    The  rights  granted  to  a  Key  Person  to
                                    purchase  Common Stock pursuant to the terms
                                    and  conditions of an Option  Agreement (see
                                    hereinbelow).


         OPTION                     Agreement:  The written  agreement  (and any
                                    amendment or supplement thereto) between the
                                    Company  and a Key  Person  designating  the
                                    terms and conditions of an Option.


         OPTION SHARES:             The shares of Common Stock underlying an
                                    Option granted to a Key Person.


         OPTIONEE:                  A Key Person who has been granted an Option.


         RELATED COMPANY:           Any subsidiary or affiliate of the Company
                                    or of any  subsidiary  of the  Company.  The
                                    determination  of whether a corporation is a
                                    Related Company shall be made without regard
                                    to whether  the  entity or the  relationship
                                    between  the  entity  and  the  Company  now
                                    exists or comes into existence hereafter.


2.                PURPOSE AND SCOPE.


         (a)      The  purpose of the Plan is to advance  the  interests  of the
                  Company and its  stockholders  by affording Key Persons,  upon
                  whose  judgment,  initiative  and efforts the Company may rely
                  for the successful  conduct of their businesses an opportunity
                  for  investment  in the Company and the  incentive  advantages
                  inherent in stock ownership in the Company.


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                                      -3-


         (b)      This Plan  authorizes  the Board to grant  Options to purchase
                  shares of Common  Stock to Key  Persons  selected by the Board
                  while  considering  criteria  such as  employment  position or
                  other    relationship    with   the   Company,    duties   and
                  responsibilities,  ability, productivity, length of service or
                  association,  morale, interest in the Company, recommendations
                  by supervisors and other matters.

         (c)      Incentive  benefits granted  hereunder may be either Incentive
                  Stock  Options,  Non-qualified  Stock  Options,  stock awards,
                  Restricted  Shares or cash  awards.  The types of  options  or
                  other  incentives  granted shall be determined by the Board or
                  the  Compensation  Committee  and  reflected  in the  terms of
                  written agreements.


3.                ADMINISTRATION OF THE PLAN.


The Plan shall be administered by the Board.  The Board shall have the authority
granted to it under this section and under each other section of the Plan.


In  accordance  with and  subject to the  provisions  of the Plan,  the Board is
hereby authorized to provide for the granting,  vesting,  exercise and method of
exercise of any Options all on such terms  (which may vary  between  Options and
Optionees granted from time to time) as the Board shall determine.  In addition,
and without limiting the generality of the foregoing, the Board shall select the
Optionees  and shall  determine:  (i) the number of shares of Common Stock to be
subject to each Option,  however,  in no event may the maximum  number of shares
reserved for any one individual  exceed 20% of the issued and outstanding  share
capital of the  Company;  (ii) the time at which each  Option is to be  granted;
(iii) the purchase price for the Option Shares;  (iv) the Option period; and (v)
the manner in which the Option becomes  exercisable or terminated.  In addition,
the Board shall fix such other terms of each Option as it may deem  necessary or
desirable. The Board may determine the form of Option Agreement to evidence each
Option.


The Board from time to time may adopt such rules and  regulations  for  carrying
out the purposes of the Plan as it may deem proper and in the best  interests of
the   Company   subject  to  the  rules  and   policies   of  any   exchange  or
over-the-counter market which is applicable to the Company.


The Board may from time to time make such  changes in and  additions to the Plan
as it may  deem  proper,  subject  to the  prior  approval  of any  exchange  or
over-the-counter  market which is  applicable  to the  Company,  and in the best
interests of the  Company;  provided,  however,  that no such change or addition
shall impair any Option previously granted under the Plan. If the shares are not
listed on any exchange, then such approval is not necessary.


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                                      -4-


Each  determination,  interpretation  or other action made or taken by the Board
shall be  final,  conclusive  and  binding  on all  persons,  including  without
limitation, the Company, the stockholders,  directors, officers and employees of
the Company and the Related  Companies,  and the Optionees and their  respective
successors in interest.


4.                THE COMMON STOCK.


Save and except as may be determined by the Board at a duly constituted  meeting
of the Board as set forth  hereinbelow,  the Board is  presently  authorized  to
appropriate, grant Options, issue and sell for the purposes of the Plan, a total
number of shares of the Company's Common Stock not to exceed 15,000,000,  or the
number  and  kind of  shares  of  Common  Stock  or  other  securities  which in
accordance  with  Section 10 shall be  substituted  for the shares or into which
such shares shall be adjusted. Save and except as may otherwise be determined by
the disinterested approval of the shareholders of the Company at any duly called
meeting  of the  shareholders  of the  Company,  at any duly  constituted  Board
meeting the Board may determine that the total number of shares of the Company's
Common Stock which may be reserved  for  issuance for Options  granted and to be
granted under this Plan,  from time to time,  may be to the maximum extent of up
to 100% of the Company's  issued and outstanding  Common Stock as at the date of
any such  meeting  of the  Board.  In this  regard,  and  subject  to the  prior
disinterested  approval  of the  shareholders  of the Company at any duly called
meeting of the  shareholders  of the Company,  the total number of shares of the
Company's  Common Stock which may be reserved  for issuance for Options  granted
and to be granted  under  this  Plan,  from time to time,  may be  increased  to
greater than 100% of the Company's issued and outstanding Common Stock as at the
date of notice of any such meeting of the  shareholders  of the Company  whereat
such disinterested shareholders' approval is sought and obtained by the Company.
All or any unissued  shares  subject to an Option that for any reason expires or
otherwise terminates may again be made subject to Options under the Plan.


5.                ELIGIBILITY.


Options will be granted only to Key Persons.  Key Persons may hold more than one
Option  under the Plan and may hold Options  under the Plan and options  granted
pursuant to other plans or otherwise.


6.                OPTION PRICE AND NUMBER OF OPTION SHARES.


The Board  shall,  at the time an Option is granted  under  this  Plan,  fix and
determine  the exercise  price at which Option  Shares may be acquired  upon the
exercise of such Option;  provided,  however, that any such exercise price shall
not be less than that, from time to time, permitted under the rules and policies
of any exchange or over-the-counter market which is applicable to the Company.


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                                      -5-


The number of Option Shares that may be acquired  under an Option  granted to an
Optionee  under  this Plan shall be  determined  by the Board as at the time the
Option is granted; provided, however, that the aggregate number of Option Shares
reserved for issuance to any one Optionee  under this Plan, or any other plan of
the Company,  shall not exceed 20% of the total number of issued and outstanding
Common Stock of the Company.


7. DURATION, VESTING AND EXERCISE OF OPTIONS.


         (a)      The  option  period  shall  commence  on the Date of Grant and
                  shall be up to 10 years in length  subject to the  limitations
                  in this Section 7 and the Option Agreement.


         (b)      During  the  lifetime  of the  Optionee  the  Option  shall be
                  exercisable  only by the Optionee.  Subject to the limitations
                  in paragraph (a)  hereinabove,  any Option held by an Optionee
                  at the time of his death may be exercised by his estate within
                  one year of his death or such  longer  period as the Board may
                  determine.


         (c)      The Board may determine whether an Option shall be exercisable
                  at any time during the option  period as provided in paragraph
                  (a)  of  this  Section  7  or  whether  the  Option  shall  be
                  exercisable in  installments  or by vesting only. If the Board
                  determines  the  latter  it  shall  determine  the  number  of
                  installments  or vesting  provisions and the percentage of the
                  Option  exercisable  at each  installment  or vesting date. In
                  addition,   all  such   installments   or  vesting   shall  be
                  cumulative. In this regard the Company will be subject, at all
                  times,   to  any  rules  and   policies  of  any  exchange  or
                  over-the-counter market which is applicable to the Company and
                  respecting any such required installment or vesting provisions
                  for certain or all Optionees.


         (d)      In the case of an  Optionee  who is a director  or officer of
                  the Company or a Related  Company,  if, for any reason  (other
                  than death or removal  by the  Company or a Related  Company),
                  the Optionee  ceases to serve in that  position for either the
                  Company or a Related Company,  any option held by the Optionee
                  at the time such  position  ceases or  terminates  may, at the
                  sole  discretion  of the Board,  be exercised  within up to 90
                  calendar  days  after the  effective  date  that his  position
                  ceases or terminates  (subject to the limitations at paragraph
                  (a)  hereinabove),  but only to the extent that the option was
                  exercisable  according to its terms on the date the Optionee's
                  position  ceased or  terminated.  After such 90-day period any
                  unexercised portion of an Option shall expire.


         (e)      In the case of an Optionee who is an  employee  or  consultant
                  of the Company or a Related Company, if, for any reason (other
                  than  death  or  termination  for  cause by the  Company  or a


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                                      -6-


                  Related Company), the Optionee ceases to be employed by either
                  the  Company  or a Related  Company,  any  option  held by the
                  Optionee at the time his employment  ceases or terminates may,
                  at the sole discretion of the Board, be exercised within up to
                  60 calendar days (or up to 30 calendar days where the Optionee
                  provided only investor  relations services to the Company or a
                  Related  Company) after the effective date that his employment
                  ceased or terminated (that being up to 60 calendar days (or up
                  to 30  calendar  days) from the date that,  having  previously
                  provided  to or  received  from the  Company  a notice of such
                  cessation or termination, as the case may be, the cessation or
                  termination becomes effective;  and subject to the limitations
                  at paragraph (a) hereinabove), but only to the extent that the
                  option was exercisable  according to its terms on the date the
                  Optionee's employment ceased or terminated.  After such 60-day
                  (or 30-day) period any unexercised  portion of an Option shall
                  expire.


         (f)      In the case of an Optionee who is an employee or consultant of
                  the Company or a Related Company, if the Optionee's employment
                  by  the  Company  or a  Related  Company  ceases  due  to  the
                  Company's termination of such Optionee's employment for cause,
                  any  unexercised  portion of any Option  held by the  Optionee
                  shall immediately  expire. For this purpose "cause" shall mean
                  conviction of a felony or continued failure,  after notice, by
                  the Optionee to perform fully and  adequately  the  Optionee's
                  duties.


         (g)      Neither the selection of any Key Person as an Optionee nor the
                  granting  of an Option to any  Optionee  under this Plan shall
                  confer upon the  Optionee any right to continue as a director,
                  officer,  employee or  consultant  of the Company or a Related
                  Company,  as the case may be, or be  construed  as a guarantee
                  that  the  Optionee  will  continue  as a  director,  officer,
                  employee or consultant of the Company or a Related Company, as
                  the case may be.


         (h)      Each  Option  shall  be  exercised  in  whole  or in  part  by
                  delivering  to the  office  of the  Treasurer  of the  Company
                  written  notice of the number of shares with  respect to which
                  the  Option  is to be  exercised  and by  paying  in full  the
                  purchase price for the Option Shares purchased as set forth in
                  Section 8.


8.                PAYMENT FOR OPTION SHARES.


Unless restricted by the Option  agreement,  the exercise price shall be paid by
any of the following methods or any combination of the following methods:

         (i) in cash;


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                                      -7-


         (ii) by cashier's check, certified cheque, or other acceptable banker's
         note payable to the order of the Company;

         (iii) by net exercise  notice  whereby the Option Holder will authorize
         the return to the Plan pool,  and  deduction  from the Option  Holder's
         Stock Option,  of sufficient  Option Shares whose net value (Fair Value
         less Option  exercise  price) is  sufficient to pay the Option Price of
         the Shares exercised.  The Fair Value of the Shares of the Option to be
         returned to the Plan pool as payment will be  determined by the closing
         price of the Company's Shares on the date notice is delivered;

         (iv) by  delivery  to the  Company  of a  properly  executed  notice of
         exercise  together with  irrevocable  instructions  (referred to in the
         industry as `delivery  against  payment') to a broker to deliver to the
         Company  promptly  the amount of the  proceeds  of the sale of all or a
         portion of the Stock or of a loan from the broker to the Option  Holder
         necessary to pay the exercise price; or

         (v) such other method as the Option  Holder and the Board may determine
         as adequate  including  delivery of  acceptable  securities  (including
         securities  of  the  Company),  set-off  for  wages  or  invoices  due,
         property, or other adequate value.

In the  discretion  of the Board,  the Company  may grant a loan or  guarantee a
third-party  loan  obtained by an Option Holder to pay part or all of the Option
Price of the Shares provided that such loan or the Company's guaranty is secured
by the Shares.


<PAGE>


                                      -8-


9.                INCENTIVE STOCK OPTIONS.


         (a)      The  Board  may,  from  time  to  time,  and  subject  to  the
                  provisions of this Plan and such other terms and conditions as
                  the Board may  prescribe,  grant to any Key  Person  who is an
                  employee  eligible to receive  Options  one or more  Incentive
                  Stock Options to purchase the number of shares of Common Stock
                  allotted by the Board.


         (b)      The Option  price per share of Common Stock  deliverable  upon
                  the  exercise of an  Incentive  Stock  Option shall be no less
                  than the Fair Market  Value of a share of Common  Stock on the
                  Date of Grant of the Incentive Stock Option.


         (c)      The  Option  term of each  Incentive  Stock  Option  shall  be
                  determined  by the Board and shall be set forth in the  Option
                  Agreement,  provided  that the Option  term shall  commence no
                  sooner  than  from the Date of Grant and  shall  terminate  no
                  later  than 10  years  from the  Date of  Grant  and  shall be
                  subject to possible early  termination as set forth in Section
                  7 hereinabove.


10.               CHANGES IN COMMON STOCK, ADJUSTMENTS, ETC.


In the event that each of the  outstanding  shares of Common  Stock  (other than
shares  held by  dissenting  stockholders  which are not  changed or  exchanged)
should be changed into, or exchanged  for, a different  number or kind of shares
of stock or other securities of the Company, or, if further changes or exchanges
of any stock or other  securities  into which the Common  Stock  shall have been
changed,  or for which it shall have been  exchanged,  shall be made (whether by
reason  of  merger,  consolidation,   reorganization,   recapitalization,  stock
dividends, reclassification, split-up, combination of shares or otherwise), then
there shall be substituted for each share of Common Stock that is subject to the
Plan, the number and kind of shares of stock or other securities into which each
outstanding  share  of  Common  Stock  (other  than  shares  held by  dissenting
stockholders  which are not  changed  or  exchanged)  shall be so changed or for
which  each  outstanding  share of  Common  Stock  (other  than  shares  held by
dissenting  stockholders) shall be so changed or for which each such share shall
be  exchanged.  Any  securities  so  substituted  shall be  subject  to  similar
successive adjustments.


In the  event of any such  changes  or  exchanges,  the  Board  shall  determine
whether,  in order to prevent  dilution or enlargement of rights,  an adjustment
should  be made in the  number,  kind,  or option  price of the  shares or other
securities then subject to an Option or Options granted pursuant to the Plan and
the Board shall make any such adjustment, and such adjustments shall be made and
shall be effective and binding for all purposes of the Plan.


<PAGE>


                                      -9-


11.               RELATIONSHIP OF EMPLOYMENT.


Nothing  contained in the Plan, or in any Option  granted  pursuant to the Plan,
shall  confer upon any  Optionee  any right with  respect to  employment  by the
Company,  or interfere in any way with the right of the Company to terminate the
Optionee's employment or services at any time.


12.               NON-TRANSFERABILITY OF OPTION.


No Option granted under the Plan shall be transferable  by the Optionee,  either
voluntarily  or  involuntarily,  except  by will  or the  laws  of  descent  and
distribution, and any attempt to do so shall be null and void.


13.               RIGHTS AS A STOCKHOLDER.


No person  shall  have any  rights as a  stockholder  with  respect to any share
covered by an Option until that person shall become the holder of record of such
share and,  except as provided in Section 10, no  adjustments  shall be made for
dividends or other distributions or other rights as to which there is an earlier
record date.


14.               SECURITIES LAWS REQUIREMENTS.


No Option  Shares  shall be issued  unless  and  until,  in the  opinion  of the
Company,  any  applicable   registration   requirements  of  the  United  States
SECURITIES  ACT OF 1933, as amended (the "U.S.  ACT"),  any  applicable  listing
requirements of any securities exchange on which stock of the same class is then
listed,  and any other  requirements  of law or of any regulatory  bodies having
jurisdiction  over such issuance and delivery,  have been fully  complied  with.
Each Option and each Option  Share  certificate  may be  imprinted  with legends
reflecting  federal and state securities laws  restrictions and conditions,  and
the Company may comply  therewith and issue "stop transfer"  instructions to its
transfer agent and registrar in good faith without liability.


In addition, the Company may not, except as otherwise directed by counsel to the
Company,  register any Option  Shares for resale under the U.S. Act or under any
other applicable securities legislation when the registration of any such Option
Shares may be contrary or inconsistent with the intent of any provisions,  rules
or policies  promulgated under the U.S. Act or any other securities  legislation
applicable to any such Option Shares.


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                                      -10-


15.               DISPOSITION OF OPTION SHARES.


Each Optionee, as a condition of exercise,  shall represent,  warrant and agree,
in a form of written certificate  approved by the Company, as follows:  (i) that
all Option  Shares are being  acquired  solely  for his own  account  and not on
behalf of any other person or entity; (ii) that no Option Shares will be sold or
otherwise  distributed  in  violation  of the U.S.  Act or any other  applicable
federal or state  securities  laws;  (iii)  that if he is  subject to  reporting
requirements under Section 16(a) of the United States SECURITIES EXCHANGE ACT OF
1934,  as amended,  he will (a)  furnish the Company  with a copy of each Form 4
filed  by him and (b)  timely  file  all  reports  required  under  the  federal
securities  laws; and (iv) that he will report all sales of Option Shares to the
Company in writing on a form prescribed by the Company.


16.               EFFECTIVE DATE OF PLAN; TERMINATION DATE OF PLAN.


The Plan  shall be  deemed  effective  as of March  5th,  2004.  The Plan  shall
terminate at midnight on March 5th, 2024 except as to Options previously granted
and  outstanding  under the Plan at the time.  No Options shall be granted after
the date on which the Plan  terminates.  The Plan may be abandoned or terminated
at any  earlier  time by the Board,  except  with  respect to any  Options  then
outstanding under the Plan.


17.               OTHER PROVISIONS.


                  The following provisions are also in effect under the Plan:


         (a)      the use of a masculine  gender in the Plan shall also  include
                  within its meaning the feminine,  and the singular may include
                  the plural,  and the plural may include the  singular,  unless
                  the context clearly indicates to the contrary;


         (b)      any expenses of  administering  the Plan shall be borne by the
                  Company;


         (c)      this Plan shall be  construed to be in addition to any and all
                  other compensation plans or programs. The adoption of the Plan
                  by  the  Board  shall  not  be   construed   as  creating  any
                  limitations  on the power or  authority  of the Board to adopt
                  such  other   additional   incentive  or  other   compensation
                  arrangements as the Board may deem necessary or desirable; and


         (d)      the validity, construction, interpretation, administration and
                  effect of the Plan and of its rules and  regulations,  and the
                  rights of any and all personnel  having or claiming to have an
                  interest  therein  or  thereunder  shall  be  governed  by and


<PAGE>


                                      -11-

                  determined  exclusively and solely in accordance with the laws
                  of the State of Nevada, U.S.A.


                  This Plan is dated and made effective on this 5th day of March
                  2004.


                      BY ORDER OF THE BOARD OF DIRECTORS OF
                                 PETROGEN CORP.
                                      Per:

                               "SACHA H. SPINDLER"

                                SACHA H. SPINDLER
                          Chairman, CEO and a Director
                                   __________