Exhibit 10.3

                            Agreement with Canyon Oil



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                             JOINT VENTURE AGREEMENT
                             DATED DECEMBER 1, 1999

BETWEEN:

           SAN JOAQUIN OIL & GAS LTD., a corporation incorporated under the laws
           of the State of Nevada and  having an office in the City of  Calgary,
           in the Province of Alberta ("San Joaquin")

                                     - and -

           CANYON OIL & GAS , a Limited Liability Company incorporated under the
           laws of the State of  California  and having an office in the City of
           Sacramento, in the State of California ("Canyon")

WHEREAS:

A.       San Joaquin is engaged in the  exploration  and  development of oil and
         gas prospects in the San Joaquin and Sacramento basin of California;

B.       Canyon has agreed to provide San Joaquin with technical information for
         oil and gas  Prospects  that may be  acquired by San Joaquin in the San
         Joaquin and Sacramento basin of California;

C.       San Joaquin has agreed to pay certain overhead costs incurred by Canyon
         in exchange for provision of such technical information; and

D.       The Parties  have  further  agreed that San Joaquin will grant Canyon a
         Carried  Interest on all Acquired  Prospects,  which  Carried  Interest
         shall be a 14%  working  interest  in the  Acquired  Prospects,  all in
         accordance with the terms of this Agreement.

THE PARTIES AGREE AS FOLLOWS:

                           ARTICLE 1 - INTERPRETATION

1.1      DEFINITIONS
In this Agreement,  unless the context otherwise  requires,  the following terms
shall have the following meanings:

         "ACCOUNTING  PROCEDURE"  means the  COPAS - 1984 -  Onshore  Accounting
         Procedure attached as Exhibit C to Schedule "A" hereto;

         "ACQUIRED  PROSPECTS"  means Prospects in which an interest is acquired
         by San Joaquin pursuant to this Agreement;

         "BROCHURE" means written material describing a Prospect, containing the
         information set forth in Section 2.2;

         "CARRIED INTEREST" means the right to acquire a working (participating)
         interest without incurring any of the costs specified in Section 4.2;

         "CONFIDENTIAL  INFORMATION"  means all technical  information and data,
         evaluations,   reports,   proprietary  information  and  trade  secrets
         contained in a Brochure or otherwise provided by Canyon with respect to
         a Prospect;

         "EFFECTIVE DATE" means December 1, 1999;

         "EXCLUSION  AREA" means all lands  included in a Prospect  presented to
         San Joaquin by Canyon pursuant to Section 2.3;

         "FARMOUT AND JOINT OPERATING  AGREEMENT" means an agreement in the form
         attached  hereto as  Schedule  "A",  including  the  Exhibits  attached
         thereto;

         "INITIAL  PERIOD" means the period from the Effective  Date until March
         31, 2000, inclusive;

         "NON-ACQUIRED  PROSPECTS"  means  all  Prospects  other  than  Acquired
         Prospects;

         "NOTICES" is defined in Section 7.1;

         "OPERATING  PROCEDURE"  means the  A.A.P.L.  Form 610 - 1989 Model Form
         Operating Agreement attached as Exhibit 2 to Schedule "A" hereto ;

         "PARTICIPANTS"  means Persons who may  participate  with San Joaquin in
         acquiring and developing a Prospect;

         "PARTIES"  means San Joaquin and Canyon,  and "PARTY"  means  either of
         them;

         "PERIOD" means the Initial Period or one of the Renewal Periods;

         "PERSON"  includes a  corporation  or  limited  liability  company,  an
         individual, a partnership, a firm, an association and a syndicate;

         "PROSPECTS"  means all prospects  relating to interests in lands or the
         hydrocarbon   rights  thereto  acquired  or  generated  by  Canyon  and
         presented to San Joaquin  pursuant to the terms of this Agreement,  and
         "PROSPECT" means one of such Prospects;

         "RENEWAL PERIODS" is defined in Section 5.1;

         "REPRESENTATIVES"  means  employees,   consultants,  agents,  officers,
         directors, subsidiaries or affiliates of a Party;

         "STUDY  AREAS"  means lands and  geological  formations  within the San
         Joaquin and Sacramento Basin area of California;

         "TERM" means the period  commencing on the Effective Date and ending on
         the Termination Date;

         "TERMINATION DATE" is defined in Section 5.1.

1.2      INTERPRETATION
a)       The  headings  of the  articles  and  sections  of this  Agreement  are
         inserted for  convenience  of  reference  only and shall not be used in
         construing or interpreting any provisions hereof.
b)       Whenever the singular or masculine or neuter is used in this Agreement,
         the same shall be  construed  as meaning the plural or feminine or body
         politic or corporate  and vice versa as the context or reference to the
         Parties may require.

1.3      SCHEDULES
All Schedules  attached hereto are incorporated  herein by reference as fully as
though contained in the body hereof.  The Schedules are as follows:

         a)       Schedule "A" which is the form of Farmout and Joint  Operating
                  Agreement   to  be  entered  into  with  respect  to  Acquired
                  Prospects,   including   Exhibit  2  which  is  the  Operating
                  Procedure and other Exhibits attached thereto; and

         b)       Schedule "B" which lists for the Initial Period,  the Acquired
                  Prospects,  along with the  interests  to be  acquired  by San
                  Joaquin  therein.  Should  there  be a  conflict  between  the
                  provisions  of the  body of this  Agreement  and an  agreement
                  entered  into in the form of Schedule  "A",  the latter  shall
                  prevail.


                              ARTICLE 2 - PROSPECTS

2.1      EXCLUSIVE RIGHTS OF SAN JOAQUIN
San Joaquin shall have  exclusive  access to all Prospects  located in the Study
Areas.  San Joaquin  acknowledges,  however,  that the  following  prospects and
activities are specifically excluded from this Agreement:
         Conaway Ranch Gas Field
         Conaway Ranch Extension
         Crossroads Gas Field
         Crossroads Extension
         North San Joaquin Project (Harwood Capital)
         Raisin City Oil Field
         Vemalis Gas Field

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         Vemonia Gas Field (Oregon)
         Winters Gas Field
         Equinax/E&B Natural Resources Acquisition Broker
         Personal Working Interest Investments with Capitol Oil Corporation and
         others
         Prospect Review for several investors/oil companies


2.2      PRESENTATION OF PROSPECT BROCHURES
The  Parties  acknowledge  that a Brochure  has been  provided  with  respect to
Prospects for the Initial  Period,  as outlined in Schedule "B" hereto.  Six (6)
weeks prior to the commencement of each Renewal Period, Canyon shall provide San
Joaquin  with a Brochure  for all  Prospects  to be  initiated  during each such
Renewal Period. Each Brochure shall contain the following information:
         a)       a map outlining the area covered by each Prospect;
         b)       description  of and vintage of seismic data  available for the
                  Prospect;
         c)       proposed  budget  for the  Prospect  including  details of the
                  following costs:
                  (i)      lease acquisition costs;
                  (ii)     seismic data costs;
                  (iii)    geological data costs; and
                  (iv)     well costs; and
         d)       terms of the  Canyon  Carried  Interest  where  the  number of
                  Carried Interest wells in a Prospect is to be greater than one
                  (1).

2.3      PRESENTATION OF PROSPECTS

a)       Within one week of receiving a Brochure,  San Joaquin  shall elect,  by
         written notice to Canyon, to receive additional information with regard
         to any or all of the Prospects contained within the Brochure.  Should a
         Prospect included in a Brochure conflict with or cover the same area as
         prior activities of San Joaquin, San Joaquin shall elect not to acquire
         any additional  information  with respect to such Prospect from Canyon.
         Any  Prospects  for  which  San  Joaquin  does  not  elect  to  receive
         additional  information  shall  not be  subject  to the  provisions  of
         Article 6.
b)       One week after San Joaquin  receives a Brochure  for a Prospect,  or on
         such date as mutually  agreed by the Parties,  Canyon shall provide San
         Joaquin with additional information,  including geological, geophysical
         and engineering description, and ownership of petroleum and natural gas
         leases with respect to all  Prospects for which San Joaquin has elected
         to  receive  such  information.  The  additional  information  shall be
         provided in Sacramento,  California by way of a presentation,  commonly
         called a "show and tell", regarding each such Prospect.
c)       Canyon  shall  provide  San  Joaquin  with  access  to all  geological,
         geophysical, engineering and land data provided in the presentations so
         as to enable San Joaquin to provide all such data to its  Participants.
         In any cases where Canyon is not permitted under its arrangements  with
         other  Persons to allow  such data to be  provided  for review  outside
         Canyon's offices,  Canyon shall provide the Participants with access to
         such data at Canyon's offices.

2.4      ACCEPTANCE OF PROSPECTS
Within  twenty-five  (25) days of  receiving a  presentation  with  respect to a
Prospect,  San  Joaquin  shall  indicate  in  writing  if it intends to accept a
Prospect,  and the interest  that it shall  acquire  therein,  in which case the
Parties shall forthwith  enter into a Farmout and Joint  Operating  Agreement in
the form attached  hereto as Schedule "A" with respect to the lands  included in
such Acquired Prospect.

2.5      PARTICIPATION LEVEL
San  Joaquin  may elect to acquire an interest in a Prospect in any amount up to
100% of the interest in such  Prospect.  The  participation  level may vary from
Prospect to  Prospect.  If San Joaquin  elects to acquire  less than 100% of the
interest in a Prospect,  San Joaquin may attempt to locate other Participants to
acquire the remaining  interest,  which  Participants  would enter into the same
Farmout and Joint Operating Agreement to be entered into by the Parties for that
Prospect and be subject to the same terms and conditions.

2.6      OPERATORSHIP OF PROSPECTS
a)       San Joaquin shall be operator of all Acquired Prospects for purposes of
         drilling, and thereafter operating, each well.
b)       Canyon shall be operator for acquisition of all seismic data.

2.7      REJECTION OF PROSPECTS BY SAN JOAQUIN
Subject  to  Article  6, San  Joaquin  may  reject  any or all  Prospects  after
receiving  a  presentation  with  respect  thereto.  If San  Joaquin  rejects  a
Prospect, Canyon may find another Person or Persons to acquire such Non-Acquired
Prospect without any further obligation to San Joaquin.


                            ARTICLE 3 - COMPENSATION

3.1      OVERHEAD COSTS
In  consideration  for the provision by Canyon of the Prospects  hereunder,  San
Joaquin shall pay for Canyon's  overhead  costs in the amount of $70,000.00  for
the  Initial  Period  and for each  Renewal  Period,  payable  in advance at the
beginning of the Initial Period and of each Renewal Period.  It is intended that
such payments will cover costs for salaries of Canyon's Representatives,  office
costs,  and geological and  geophysical  data in Canyon's  possession,  provided
however that all ownership  rights to such geological and geophysical data shall
remain with Canyon. It is understood and agreed that:

a)       Canyon  shall be solely  responsible  for any  additional  salaries and
         wages, cost of holidays,  vacation,  sickness and disability  benefits,
         insurance coverage and other customary  allowances which may be payable
         to any of Canyon's Representatives; and that
b)       the  above-referenced  fees cover all office overhead costs and include
         all  engineering,  geological  and  geophysical  data  relating  to the
         Prospects currently in the possession of Canyon.

3.2      NO OTHER INTEREST
Except as provided in Section 3.1 and Article 4, Canyon shall not be entitled to
any other fees nor any share of the  interest  of San  Joaquin  in any  Acquired
Prospect  and that San  Joaquin  shall be  solely  entitled  to the  rights  and
benefits in respect to the Acquired  Prospects.  Without limiting the generality
of the foregoing, Canyon shall not be entitled to an overriding royalty interest
on any Acquired  Prospect and any costs passed on from Canyon to San Joaquin and
any of San Joaquin's Participants shall be at Canyon's cost without any markup.


               ARTICLE 4 - CANYON INTERESTS IN ACQUIRED PROSPECTS

4.1      STANDARD TERMS AND CONDITIONS
The provisions of this Article 4 contain the standard terms and conditions  that
shall be included in the Farmout  and Joint  Operating  Agreement  to be entered
into by the Parties for each Acquired Prospect.

4.2      CANYON CARRIED INTEREST
San Joaquin and any  Participants in an Acquired  Prospect shall pay 100% of the
following  costs:  a) costs of acquiring  seismic data to evaluate such Acquired
Prospect for purposes of drilling a test well
                  thereon;
b)       lease acquisition costs for such Acquired Prospect;
c) first year  rental  and bonus  costs for leases  acquired  for such  Acquired
Prospect;  d) acquisition of geological data for the Acquired  Prospect;  e) all
costs  associated  with the test well,  including  drilling to  contract  depth,
testing, logging and
                  abandoning,  or, if San Joaquin and its Participants  elect to
                  complete and equip the test well,  costs to complete and equip
                  the test well; and
f)                in those  exceptional cases where the Parties have agreed that
                  the Carried Interest shall apply to more than the initial well
                  on a Prospect, costs for a second well, only if negotiated and
                  agreed by the  Parties in writing at the time that San Joaquin
                  agrees to acquire an interest in such Acquired Prospect.

4.3      CANYON WORKING INTEREST
Canyon  shall be entitled to a 14% working  interest in the leases and test well
in all Acquired  Prospects and shall  thereupon be  responsible  for its working
interest share of all future costs incurred on the Acquired Prospect,  including
any future well costs relating to the test well.


4.3      PARTICIPANTS WITH SAN JOAQUIN
It is  acknowledged  that San  Joaquin may have  Participants  acting with it in
acquiring an interest in any  Prospect.  The  Participants  will pay 100% of the
costs  listed in Section  4.2 to earn a 75%  working  (participating)  interest.
However, Canyon need only deal with San Joaquin for purposes of this Agreement.


                          ARTICLE 5 - TERM OF AGREEMENT

5.1      RENEWAL PERIODS
This Agreement may be continued  beyond the Initial Period by written  agreement
of the Parties.  If so continued beyond the Initial Period, this Agreement shall
continue in effect for  successive  four month periods (the  "Renewal  Periods")
until  terminated  by  either  Party by  written  notice  given at least two (2)
calendar  months prior to the end of any Period.  The Agreement  shall thereupon
terminate on the last day of the Period in which such notice has been given (the
"Termination Date").

5.2      TERM
The  Term of  this  Agreement  shall  be  from  the  Effective  Date  until  the
Termination Date.


                    ARTICLE 6 - CONFIDENTIALITY AND EXCLUSION

6.1      CONFIDENTIALITY
In consideration of the disclosure of Confidential  Information by Canyon to San
Joaquin,  San Joaquin hereby  agrees,  for a period of one year from the date it
receives  a  Brochure  for a Prospect  to keep  confidential  any and all of the
Confidential Information relating to such Prospect and that it shall only use or
permit the use of the Confidential Information for the purpose of evaluating and
acquiring the Prospects in accordance with this Agreement. San Joaquin shall not
under any circumstances disclose the Confidential  Information,  either directly
or  indirectly,  to any third party or parties or to any of its  Representatives
not  having a need to know for the  purpose of  appraising  the  Prospects.  The
Confidential  Information shall only be disclosed to San Joaquin's  Participants
and Representatives on a "need to know" basis. San Joaquin shall ensure that all
such  Persons  having  access to the  Confidential  Information  comply with the
provisions of this Agreement.

6.2      EXCEPTIONS
San Joaquin's  confidentiality  obligations  hereunder shall not apply to any of
the Confidential  Information that San Joaquin can demonstrate:
         a)       to have been known to San Joaquin  prior to the  disclosure to
                  San Joaquin by Canyon;
         b)       to be in the public domain  through no fault of San Joaquin or
                  any of its Representatives; or
         c)       to have been lawfully  obtained from a source  independent  of
                  Canyon where San Joaquin has made reasonable efforts to ensure
                  that  such   source  is  not  a  party  to  or  bound  by  any
                  confidentiality agreement with Canyon.
         d)       is  required  to  be   disclosed   to  a  court  of  competent
                  jurisdiction  or to any regulatory  body having  jurisdiction,
                  provided that:
                  (i)      San Joaquin shall take  reasonable  steps to maintain
                           the  confidentiality of the Confidential  Information
                           by the court or regulatory body; and
                  (ii)     San  Joaquin  shall  provide  Canyon  with  immediate
                           written notice of any request for disclosure.

6.3      EXCLUSION AREA
a)       San Joaquin  shall not obtain any interest in petroleum and natural gas
         rights  within  the  Exclusion  Area for a period of one year after the
         date that it receives the Brochure  applicable to such Exclusion  Area.
         San Joaquin agrees that if it acquires any right or interest within the
         Exclusion  Area  within  one year after the date that it  receives  the
         Brochure  applicable  to such  Exclusion  Area,  100% of such  right or
         interest  shall  immediately  be offered to Canyon for a like amount of
         the  consideration  expended  by San  Joaquin  for the  said  right  or
         interest, whether such consideration be monetary, incurred obligations,
         or otherwise.  The foregoing provisions shall not apply to any interest
         acquired by San Joaquin from Canyon in accordance  with the  provisions
         of this Agreement.
b)       The Parties  acknowledge  and agree that San Joaquin shall be permitted
         to acquire  prospects and resulting  leases in prospects  outside areas
         covered by the  Prospects  and that San  Joaquin has no  obligation  to
         offer Canyon the right to participate in any such other prospects.

6.4      LIABILITY AND INDEMNITY
San Joaquin shall:
         a)       be liable to Canyon for all loss and damages  whatsoever which
                  Canyon may sustain or incur; and, in addition
         b)       indemnify and hold  harmless  Canyon from and against all loss
                  and  damages  whatsoever  which may be  suffered  by Canyon or
                  which it may  sustain or incur by reason of the failure of San
                  Joaquin or its  Representatives or Participants to comply with
                  the obligations contained in Sections 6.1, 6.2 and 6.3 of this
                  Agreement.


                     ARTICLE 7 - GENERAL CONTRACT PROVISIONS

7.1      NOTICES
All notices, requests, demands or other communications (collectively, "Notices")
by the terms hereof required or permitted to be given by one Party to the other,
or to any other  person,  shall be given in writing by  personal  delivery or by
facsimile transmission to such other Party at the following address:

         To San Joaquin at:                 53 STRATFORD PLACE S.W.
                                            CALGARY, ALBERTA T3H 1H7
                                            FAX: (403) 246-5056

         To Canyon at:                      SUITE 1, 2625 FAIR OAKS BOULEVARD
                                            SACRAMENTO, CA  95864
                                            FAX: (916) 486-9197
or such other  address as may be given by a Party to the other  Party  hereto in
writing from time to time.

All such  Notices  shall be deemed  to have  been  received  when  delivered  or
transmitted, provided that any Notice received after normal business hours or on
a holiday or weekend  shall be deemed to be  received  on the next day  business
day.


7.2      FURTHER ASSURANCES
The Parties shall sign such further and other documents,  cause such meetings to
be held,  resolutions  passed  and  by-laws  enacted,  exercise  their  vote and
influence,  do and perform and cause to be done and  performed  such further and
other acts and things as may be  necessary  or  desirable  in order to give full
effect to this Agreement and every part hereof.

7.3      COUNTERPARTS
This  Agreement  may be  executed  in  several  counterparts,  each of  which so
executed shall be deemed to be an original and such counterparts  together shall
be one and the same instrument.

7.4      TIME OF THE ESSENCE
Time shall be of the essence of this  Agreement  and of every part hereof and no
extension  or  variation  of this  Agreement  shall  operate as a waiver of this
provision.

7.5      ENTIRE AGREEMENT
This Agreement constitutes the entire Agreement between the Parties with respect
to all the  matters  herein and its  execution  has not been  induced by, nor do
either of the Parties rely upon or regard as material,  any  representations  or
writings whatever not incorporated herein and made a part hereof. This Agreement
may not be amended  or  modified  in any  respect  except by written  instrument
signed by the Parties.  Any schedules referred to herein are incorporated herein
by reference and form part of this Agreement.

7.6      ENUREMENT
This Agreement shall enure to the benefit of and be binding upon the Parties and
their   respective   legal   personal    representatives,    heirs,   executors,
administrators or successors.

7.7      ASSIGNMENT
Neither Party may assign its rights and obligations  under this  Agreement.  The
Parties  acknowledge  that San Joaquin may bring in Participants who will become
parties to Farmout and Joint  Operating  Agreements  entered into in the form of
Schedule "A".  Such  Participants  shall not,  however,  become  parties to this
Agreement.

7.8      CURRENCY
Unless  otherwise   specifically  provided  for  herein,  all  monetary  amounts
specified  herein  shall  refer to the  lawful  money of the  United  States  of
America.

7.9      GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the laws of
the State of California and each Party irrevocably  attorns to the non-exclusive
jurisdiction of the Courts of such State.

7.10     CALCULATION OF TIME
When  calculating a period of time within which or following which any act is to
be done  or step  taken  pursuant  to this  Agreement,  the  date  which  is the
reference date shall, unless otherwise  specifically  included,  be excluded. If
the last day of a period is not a business day, then the time period in question
shall end on the first business day following such non-business day.

7.11     SEVERABILITY
If any portion of this  Agreement is determined  to be invalid or  unenforceable
for any reason whatsoever,  that invalidity or unenforceablity  shall not affect
the validity or enforceability of remaining  portions of this Agreement and such
invalid or  unenforceable  portion  shall be severed from the  remainder of this
Agreement.


IN WITNESS  WHEREOF the Parties have executed  this  Agreement as of the day and
year first above written.

SAN JOAQUIN OIL & GAS LTD.                  CANYON OIL & GAS

PER: /s/ J. Timothy Bowes                   PER: /s/ Monty Doris
     ----------------------------                ---------------------------
J. TIMOTHY BOWES,
PRESIDENT
                                            PER:     ______________________

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