FINANCING AGREEMENT

THIS AGREEMENT dated for reference January 12, 2001, is among Wet Coast
Management Corp., a British Columbia company ("Wet Coast"), of 1100 Melville
Street, Suite 600, Vancouver, British Columbia, V6E 4A6, and fax (604) 682-6509;
and San Joaquin Resources Inc., a Nevada company ("San Joaquin"), of 1305 - 1090
West Georgia Street, Vancouver, British Columbia, V6E 3V7, and fax (604)
683-1585. WHEREAS Wet Coast has agreed to finance San Joaquin for the
development of its business, FOR VALUABLE CONSIDERATION, the receipt and
sufficiency of which are acknowledged, and the following mutual promises, the
parties agree that:

                                 INTERPRETATION

1.       The definitions in the recitals are part of this agreement.

2.       In this agreement:

         a.       "Closing" means 5:00 pm Vancouver time on February 12, 2001.

         b.       "Consulting Agreement" means the consulting agreement attached
                  as exhibit A.

         c.       "Financing" means $7.2 million to be raised through the
                  assistance of Wet Coast by the issuance of new shares of the
                  common stock of San Joaquin at $3.00 per share under available
                  registration exemptions.

         d.       "Merger Agreement" means the merger agreement among San
                  Joaquin, Pannonian Energy Inc. and a wholly owned subsidiary
                  of San Joaquin attached as exhibit B.

         e.       "Riverbend Project" means the project of the same name
                  consisting of leased acreage in the Uintah Basin area of Utah
                  and owned by Pannonian Energy, Inc., including but not limited
                  to that acreage described in the acquisition agreement dated
                  December 18, 2001 between Pannonian Energy Inc. and Phillips
                  Petroleum Company.

         f.       "Term" means the twelve months following the Closing.

         g.       "$" means United States dollars unless otherwise indicated.

                                THE TRANSACTION

The Financing

3.       Wet Coast will arrange the Financing by delivering to San Joaquin
         subscriptions for the appropriate number of shares of San Joaquin's
         common stock from non-US or accredited US investors together with the
         cash proceeds in good same-day funds as set out in Table 1.

<PAGE>

                              Table 1
                              Financing Schedule
                              --------------------------------------
                                                     Subscription
                              Date                   amount
                              --------------------------------------
                              On closing             $1,200,000
                              1 May 2001              1,500,000
                              1 August 2001           4,500,000
                                                     ----------
                                                     $7,200,000
                              --------------------------------------

4.       San Joaquin, as soon as practical after it receives the subscriptions
         and cash proceeds, will issue to the subscribers through its transfer
         agent the number of shares of its common stock as set out in Table 2
         under available registration exemptions as provided by the United
         States securities law. Wet Coast will provide all information to San
         Joaquin, including tax identification number, if applicable, ownership
         registration, and address information to enable the issuance of these
         shares.

                              Table 2
                              Subscription Shares
                              --------------------------------------
                              Subscription        Number of shares @
                              amount              $3 per share
                              --------------------------------------
                              $1,200,000              400,000
                               1,500,000              500,000
                               4,500,000            1,500,000
                              --------------------------------------
                              $7,500,000            2,400,000
                              --------------------------------------
Additional Financing

5.       Wet Coast will introduce San Joaquin to institutional investors,
         investment bankers, lending institutions and high net worth individual
         investors and will assist in negotiating the terms of debt, equity or
         other additional financing required by San Joaquin.

6.       San Joaquin will give Wet Coast the right of first refusal during the
         Term to find any additional financing needed by San Joaquin by giving
         Wet Coast a written notice of the terms and conditions of its
         requirements and its proposed use of proceeds at least two months
         before it requires the financing. Wet Coast must notify San Joaquin in
         writing within one month of its receipt of San Joaquin's notice whether
         it intends to exercise its right to arrange the financing. This right
         of first refusal ends if Wet Coast refuses to arrange a specific
         financing.

7.       San Joaquin will pay Wet Coast a finder's fee equal to 2% of the gross
         proceeds of any additional financing found by Wet Coast and will
         reimburse Wet Coast for its expenses incurred in finding the additional
         financing. In this regard, Wet Coast represents that it has a legal
         status under United States securities laws that will enable it to be
         paid this finder's fee.

<PAGE>

                              CONDITIONS PRECEDENT

8.       The following conditions must be satisfied before any of the Financing
         is advanced as set out in Table 1:

         a.       The representations and warranties of San Joaquin in this
                  agreement must be true and correct in all material respects.

         b.       The Merger Agreement must be executed and delivered by all
                  necessary parties.

         c.       San Joaquin must have signed the Consulting Agreement and must
                  not be in default of any terms or conditions under the
                  Consulting Agreement.

                               POSITIVE COVENANTS

San Joaquin

9.       San Joaquin will immediately begin preparing the pro forma financial
         statements as of December 31, 2000 giving effect to the merger
         contemplated under the Merger Agreement.

10.      If it has not already done so, San Joaquin will take the steps that are
         necessary to

         a.       have its shares approved for quotation on a quotation medium
                  or listed for trading on a stock exchange, and

         b.       be listed in the Standard & Poor's Corporation Records with
                  super accelerated coverage.

11.      Wet Coast or an affiliate of Wet Coast will assist San Joaquin with the
         endeavors described in paragraph 10 and make available to San Joaquin
         the experience and contacts of Wet Coast to enable San Joaquin to
         complete these tasks. In this regard, San Joaquin authorizes Wet Coast
         or an affiliate to act as agent for San Joaquin in completing these
         endeavors. San Joaquin will bear all of the costs incurred by Wet Coast
         acting as agent under this paragraph.

12.      During the Term, San Joaquin, its subsidiaries, and its successors by
         merger or other corporate reorganization, will

         a.       maintain their corporate existence,

         b.       carry on their business in a proper and businesslike manner in
                  accordance with good business practices, prudently manage
                  their cash resources, and keep proper books of account in
                  accordance with generally accepted accounting principles,

         c.       at the end of each month, deliver to Wet Coast a written
                  report describing any exploration results or material
                  modifications on the Riverbend Project, provided that Wet
                  Coast is not entitled to nonpublic material information about
                  the operations at the Riverbend Project, and San Joaquin may
                  delay reporting to Wet Coast if necessary to allow for initial
                  press release or SEC filing preparation.,

<PAGE>

         d.       by the twentieth day of each month, deliver to Wet Coast their
                  unaudited consolidated financial statements for the preceding
                  month consisting of a balance sheet, statement of operations,
                  statement of changes in shareholders' equity, statement of
                  cash flow, and notes to the financial statements, all prepared
                  in accordance with accounting principals generally accepted
                  for public companies engaged in the natural gas business in
                  the United States,

         e.       deliver to Wet Coast any other information that Wet Coast
                  reasonably requests,

         f.       use, calculated pro rata against the total Financing,

                  i.       a minimum of $5 million of the Financing only to pay
                           any costs incurred in the development and exploration
                           of the Riverbend Project, or to acquire more land to
                           be included in the Riverbend Project, and

                  ii.      the remainder of the Financing for other corporate
                           purposes approved by San Joaquin's board of directors
                           in consultation with Wet Coast, it being understood
                           that substantially all of the Financing is intended
                           by both parties to advance the market value and
                           success of San Joaquin, and

         g.       file with the Securities & Exchange Commission any document
                  that is necessary to maintain its status as a reporting issuer
                  under United States securities laws.

13.      San Joaquin will file the disclosure documents with the Securities &
         Exchange Commission that are necessary to register certain shares as
         set out in Table 3 but will not permit any other restricted stock to be
         registered during the Term without the written consent of Wet Coast.

         Table 3
         Registration Filings
         -----------------------------------------------------------------------
         Shares to be registered             When registration documents to
                                             be filed
         -----------------------------------------------------------------------
         The restricted shares of San        As soon as possible after the
         Joaquin that are outstanding        Closing, recognizing that the
         on the Closing (approximately       Pannonian acquisition is a
         5 million shares)                   material and significant
                                             transaction for San Joaquin,
                                             and the Securities & Exchange
                                             Commission may require a delay
                                             in the effectiveness of any
                                             such registration statement
                                             pending the completion of the
                                             merger and the filing of pro
                                             forma financial information on
                                             Form 8-K.
         -----------------------------------------------------------------------
         The shares that are issued in       As soon as possible after the
         accordance with the schedule        shares are issued, recognizing
         set out in Table 2 (no more         the same caveat set forth
         than 2.4 million shares)            above.
         -----------------------------------------------------------------------
         The shares that are issued          At San Joaquin's discretion
         under the Merger Agreement to       but not before registration
         the shareholders of Pannonian       statements to register the
         Energy Inc. who paid $1.80 per      shares described above are
         share for 800,000 Pannonian         filed.
         shares (approximately 1.4
         million San Joaquin shares)
         -----------------------------------------------------------------------

<PAGE>

      NEGATIVE COVENANTS

14.      Until the earlier of the end of the Term, and the day on which San
         Joaquin completes another financing, if it completes one during the
         Term,, San Joaquin will not, without the written consent of Wet Coast,

         a.       issue or authorize the issuance of any of its shares or other
                  securities except those authorized by this agreement,

         b.       authorize any changes to its charter documents unless the
                  changes are required to implement this agreement,

         c.       cause any of its assets to be encumbered, sold or transferred,

         d.       grant stock options to its directors, officers and employees
                  that may be exercised during the Term, or

         e.       file a registration statement in respect of any shares except
                  those described in Table 3.

                         REPRESENTATIONS AND WARRANTIES

Wet Coast

15.      Wet Coast represents and warrants that it has the experience and
         expertise required to negotiate and finalize the Financing and to
         perform the Consulting Agreement and all of its undertakings as
         described in this Agreement and in the Consulting Agreement..

San Joaquin

16.      San Joaquin represents and warrants that:

         a.       San Joaquin is a company formed and in good standing under the
                  laws of Nevada.

         b.       San Joaquin has the legal capacity and authority to make and
                  perform this agreement.

         c.       San Joaquin will have a minimum of $300,000 in cash at
                  Closing.

         d.       No person has made a claim against San Joaquin before any
                  court or regulatory authority, no claims are pending or
                  threatened, and San Joaquin is not aware of any ground for any
                  claim that might succeed.

         e.       This Agreement has been reviewed and approved by the board of
                  directors of San Joaquin.

                                OTHER PROVISIONS

17.      San Joaquin will pay all reasonable legal and other costs in connection
         with the making and performing of this agreement, whether incurred by
         Wet Coast or Pannonian or San

<PAGE>

         Joaquin, out of the proceeds of the Financing, provided, however, that
         Wet Coast's costs in this regard may not exceed $30,000 without the
         advance and express written approval of San Joaquin.

18.      This is the entire agreement among the parties and replaces any earlier
         understandings and agreements regarding financing, whether written or
         oral.

19.      Time is of the essence of this agreement.

20.      This agreement is governed by the laws of British Columbia and must be
         litigated in the courts of British Columbia.

21.      Any notice that must be given or delivered under this agreement must be
         in writing and delivered by hand to the address or transmitted by fax
         to the fax number given for the party on page 1 and is deemed to have
         been received when it is delivered by hand or transmitted by fax unless
         the delivery or transmission is made after 4:00 p.m. or on a
         non-business day where it is received, in which case it is deemed to
         have been delivered or transmitted on the next business day. Any
         payments of money must be delivered by hand or wired as instructed in
         writing by the receiving party. Any delivery other than a written
         notice or money must be made by hand at the receiving party's address.
         Any notice sent to San Joaquin must also be sent by fax to Robert
         Thorup for Pannonian Energy, Inc., fax (801-532-7543.

22.      San Joaquin may not assign this agreement or any part of it to another
         party.

23.      Any amendment of this agreement must be in writing and signed by the
         parties.

24.      This agreement enures to the benefit of and binds the parties and their
         respective successors, heirs and permitted assignees.

25.      No failure or delay of Wet Coast in exercising any right under this
         agreement operates as a waiver of the right. Wet Coast's rights under
         this agreement are cumulative and do not preclude Wet Coast from
         relying on or enforcing any legal or equitable right or remedy.

26.      If any provision of this agreement is, illegal or unenforceable under
         any law, the remaining provisions remain legal and enforceable.

This agreement may be signed in counterparts and delivered to the parties by
fax, and the counterparts together are deemed to be one original document.

THE PARTIES' signatures below are evidence of their agreement.

Wet Coast Management Corp.                San Joaquin Resources Inc.


_____________________________             _______________________________
Authorized signatory                      Authorized signatory

<PAGE>

Financing Agreement                                                          7/7

This agreement has been reviewed and
approved by Pannonian Energy, Inc.



____________________________________
Authorized signatory