EXHIBIT 10.1


Translated into English from the executed Spanish document and filed pursuant to
Rule 306 of Regulation S-T.


                                LETTER OF INTENT


Between the undersigned,  ALEXANDER ARELLANO SUAREZ, identified as his signature
appears  below,  doing  business as MAXIM WELL SERVICES  LTDA, a legally  formed
partnership,  principally  domiciled  in the city of  Bogota,  as  stated in the
annexed original  certificate of existence and legal  representation,  issued by
the Bogota  Chamber of Commerce,  dated one month prior to the  execution of the
present agreement,  hereinafter the OPERATOR, on the one part, and, on the other
part,  RADIAL  ENERGY  INC,  incorporated  in  Nevada,  in  the  United  States,
represented  by GREGORY LEIGH LYONS and OMAR HAYES,  of legal age and identified
as  their  respective   signatures   appear  below,   domiciled  in  Bellingham,
Washington,  United States, duly empowered to enter into and execute the present
instrument,  all of which is accredited  by way of the annexed  legal  document,
properly  added and made an integral part of the present  document,  hereinafter
the  INVESTORS,   having  completed  favorable   negotiations  to  solidify  the
participation  of the INVESTORS in the development of the E&P Bloque Bosques No.
014  contract  dated  April 21,  2006,  its  additions,  clarifications,  and/or
modifications, hereinafter, and indistinctly, the CONTRACT or the PROJECT, which
text is an integral part of the present  document,  which the INVESTORS  declare
they understand and/or accept, awarded to the OPERATOR by the NATIONAL AGENCY OF
HYDROCARBONS of Colombia (ANH),  hereinafter the AGENCY,  to which the INVESTORS
shall have access to participate in, through the ECONOMIC INVESTMENT  stipulated
below,  having arrived at an  understanding  of the essential  conditions of the
business,  to endorse the intention to formalize it through the JOINT  OPERATING
AGREEMENT,  hereinafter  the JOA,  in the measure in which the terms are carried
out and conditions  formed in the present  agreement,  hereinafter the LETTER or
the LETTER OF INTENT, which are stated in the following clauses.

FIRST  CLAUSE:  OJBECTIVE:  The  objective  of  the  business  consists  in  the
subscription  of a JOA between the OPERATOR and the INVESTORS,  that will permit
the parties the joint  execution of the CONTRACT  awarded to the OPERATOR by the
AGENCY, in exchange for that which the INVESTORS shall provide to the PROJECT in
the total  disbursement  of TWO MILLION TWO HUNDRED  THOUSAND  AMERICAN  DOLLARS
(USD$2,200,000),  which  shall be applied  in the form and under the  conditions
specified in the subsequent clauses.

PARAGRAPH:  The Terms in which the CONTACT  was  accepted  by the  OPERATOR,  no
discussion  of which is admitted  for dealing  with an awarded  contract,  which
pursuant to the Colombian legislation, is Law for the parties. In this way it is
clear  that,  the  object of the JOA that is  subscribed  to by the  intervening
parties  as well as the  investment  here  agreed to by the  investors,  relates
directly  with the goal  established  in the CONTRACT,  according to which,  the
Colombian State granted to the OPERATOR the right to explore the area contracted
and to exploit the  Hydrocarbons of the property of the Colombian State that can
be discovered in said area, and equally establishing that the OPERATOR will have


                                       1


<PAGE>


right to the  Hydrocarbons  produced from the area which  corresponds  to it, of
which the INVESTORS  shall have the percent  participation  that is  established
below.

SECOND  CLAUSE:  VALUE  OF THE  INVESTMENT  AND  FORM OF  PAYMENT.  The sum that
INVESTORS  shall  invest in the  OPERATOR'S  PROJECT is TWO  MILLION TWO HUNDRED
THOUSAND AMERICAN  DOLLARS,  which shall be paid in the following manner: 1) ONE
MILLION FIVE HUNDRED THOUSAND AMERICAN  DOLLARS,  which shall be invested by the
OPERATOR  in the  development  of the  PROJECT  and  shall be  disbursed  in its
totality  by the  INVESTORS  through  the "cash  call"  system,  in favor of the
OPERATOR  within  fifteen (15) calendar  days  following the written "cash call"
request, in the amounts determine therein, in the place and time that each "cash
call" establishes,  without prejudice to that which is particularly  established
by the JOA. It is clear that the  present  LETTER and each "cash call" or in its
place the JOA, or both if necessary,  constitute  executive  title to effectuate
the performance of the obligations  emanating from the present LETTER OF INTENT.
2) The  value  remaining,  that  is to say  the sum of  Seven  Hundred  Thousand
American Dollars (USD $700,000) shall be applied to past costs of the PROJECT as
capital recoupment,  compensation and remuneration of the OPERATOR. The OPERATOR
shall dispose of this payment without need for any other authorization and shall
be paid by the INVESTORS in the follow manner:  a) Fifty percent (50%),  that is
to say THREE HUNDRED FIFTY THOUSAND  AMERICAN DOLLARS (USD $350,000) on the same
date as the execution of the JOA, and b) the remaining fifty percent (50%), that
is THREE HUNDRED FIFTY THOUSAND  AMERICAN  DOLLARS (USD  $350,000)  within sixty
(60) days of the execution of the JOA.

PARAGRAPH: THE JOA THAT FORMALIZES THE PRESENT NEGOTIATION SHOULD, AT A MINIMUM,
INCLUDE THE CONDITIONS ESTABLISHED IN THIS LETTER OF INTENT.

CLAUSE THIRD:  INVESTORS' PERCENT  PARTICIPATION.  The disbursements made by the
INVESTORS in favor of the OPERATOR  under the terms  established in the previous
clause and in the JOA,  shall give the INVESTORS the right to participate in the
development  of the PROJECT  that is provided by the  CONTRACT,  its  additions,
clarifications and/or  modifications,  in the proportion of twenty percent (20%)
of all its effects and  requirements,  rights and  obligations,  under the terms
established  in the JOA,  including the risk factor and in the same  proportion,
the possibility of gain and/or loss.

PARAGRAPH:  Until the  INVESTORS  recoup  the sum of ONE  MILLION  FIVE  HUNDRED
THOUSAND  AMERICAN DOLLARS (USD $1,500,000) that corresponds to that part of the
investment that the OPERATOR has earmarked for the development of the PROJECT as
was  agreed in number 1) of the Second  Clause of this  LETTER,  the  INVESTORS'
percent participation shall be Thirty-three point Thirty-three percent (33.33%).
It is  understood  that the  percentage  that is  established  here is  strictly
provisional  and only until the  established  condition is met.  Once the stated
amount is recouped by the INVESTOR,  his percent  participation  shall be Twenty
percent (20%) as agreed.


                                       2


<PAGE>


PARAGRAPH TWO: The previous investment or about TWO MILLION TWO HUNDRED THOUSAND
AMERICAN  DOLLARS (USD  $2,200,000)  will be realized in accord with the Percent
Participation  as much from the OPERATOR as the  INVESTORS.  Also,  the gains or
benefits generated by the PROJECT shall be distributed in the same proportion in
accord with the Percent Participation.

CLAUSE FOURTH:  EXCLUSIVITY:  The OPERATOR  grants to the INVESTORS a Sixty (60)
calendar day term following the execution of this LETTER OF INTENT to proceed to
execute the JOA,  extendable  an additional  thirty (30) days,  according to the
decision of the OPERATOR,  pursuant to INVESTORS' previous written request, five
(5) calendar days prior to the  expiration of the initial term, or, in the event
of a proved fortuitous case or force majuer.  Upon the expiration of the initial
term or the  extended  term,  in which  they were to  appear,  having  failed to
execute  the JOA due to fault  attributable  to the  INVESTORS,  which  shall be
presumed by the simple  passage of time, the OPERATOR  understands  that the JOA
was not  possible,  in which case he himself  shall be released from agreeing to
contracts  with other  sources of funds.  The OPERATOR  expects to impart in the
present  negotiation  all the seriousness  and  transparency  necessary to reach
closing of the operation.

CLAUSE FIFTH:  DATE AND TIME TO EXECUTE THE JOA. The JOA by which performance of
the present  LETTER OF INTENT is completed,  shall be executed by the PARTIES in
the city of Bogota,  prior to October 31, 2006, on Street 93B #12-30 office 203,
the  OPERATOR's  offices,  at 11 a.m.  which  signatures  shall be submitted for
authentication to a Notary.

CLAUSE  SIXTH:  CONFIDENTIALITY.  For the  development  of the  objective of the
present contract, independently of that which the parties particularly determine
in  the  JOA,  the  INVESTORS  obligate   themselves  to  maintain  and  provide
confidentiality,  oral as well as written,  to all information,  relating to the
PROJECT,  received from the OPERATOR. In performance of the above, the INVESTORS
obligate  themselves  with regard to access  previously  permitted to any of its
employees  or  associates  to the  PROJECT  material,  that  these same shall be
informed of the terms of confidentiality  contained in this LETTER, and shall be
subject  to it in its  entirety,  in such  case  the  INVESTORS  maintain  their
obligations  of   confidentiality.   The  PROJECT   material  will  include  any
information,  oral  or  written,  supplied  to the  INVESTORS  by the  OPERATOR.
Whatever report or information  that is produced by the INVESTORS,  based on the
PROJECT  material,  or that is reflected or contained therein is also subject to
the reserve of confidentiality. The INVESTORS shall be released from maintaining
the reserve of  confidentiality  of the  PROJECT  material  under the  following
cases:  (I) when it is or becomes  available  to third  parties  or the  general
public,  as a  consequence  distinct  from the violation by the INVESTORS of the
reserve of  confidentiality  contained  in the present  document,  (II) when the
information  has  been  obtained  by the  INVESTORS  without  being  subject  to
confidentiality,  previous to its  delivery by the  OPERATOR,  and (III) when it
becomes  available  for  INVESTORS in such a manner which it could not or should
not be understand to be under the reserve of confidentiality with respect to the


                                       3


<PAGE>


information  supplied.  The INVESTORS obligate themselves to utilize the PROJECT
material  exclusively  as support for the  analysis  and  support  for  decision
making,  especially with respect to the present LETTER OF INTENT and only permit
the access to such  information  to its  employees  and/or third  parties,  when
strictly necessary. If the INVESTORS or one of their employees or associates are
required to reveal the PROJECT  material or any other  related  information,  in
relation to any legal proceeding or administrative investigation,  the INVESTORS
shall be released from complying with the reserve of  confidentiality  contained
in the present document. To that effect, the INVESTORS shall notify the OPERATOR
in writing of the judicial or  administrative  requirement  no later than within
five (5) days following its occurrence.  As well as the  obligations  previously
stated the INVESTORS pledge to carry out the present  CONFIDENTIALITY  CLAUSE in
the  determined  cases,  for a term of four (4) years  from the  signing of this
LETTER.

CLAUSE SEVENTH:  RESPONSIBILITY FOR BREACH. The INVESTORS assume  responsibility
for the  obligations  contracted  for as  effected by the signing of the present
LETTER  OF  INTENT,  especially:  A) The  obligation  to sign the JOA and B) the
INVESTORS shall also respond for the losses and for any harm or damage which the
OPERATOR may suffer as a consequence for the DISCLOSURE OF INFORMATION regarding
any aspect of the PROJECT,  which will cause the  presumption of, besides fraud,
violation of the  confidentiality  clause agreed to in the present LETTER.  They
shall be exempt from responsibility for judicial and administrative requests.

PARAGRAPH:  The  breach of the LETTER in those  areas  detailed  in the  present
clause,  shall bring as a consequence to the INVESTORS,  an economic sanction if
the JOA is not signed and/or a violation of the  obligations of  confidentiality
is presented, of: A) FIFTY THOUSAND AMERICAN DOLLARS (USD $50,000) from the date
of the signing of the present LETTER until the  presentation of the Act or other
document  on the  part  of the  AGENCY  that  permits  the  commencement  of the
operations in the Campo  Sogamoso,  hereinafter  the ACT. From the moment of the
presentation of the Act the economic sanction, if the JOA is not signed and/or a
violation of their obligations of confidentiality is presented, shall be: B) ONE
HUNDRED THOUSAND AMERICAN DOLLARS (USD $100,000), up to the thirtieth (30th) day
counted from the  presentation of the ACT and C) TWO HUNDRED  THOUSAND  AMERICAN
DOLLARS  (USD  $200,000),  from the  thirty-first  (31st) day  counted  from the
presentation of the ACT. The sums above shall be charged to the INVESTORS by way
of penalty for their  breach,  without  prejudice of any other  available  legal
actions,  for the payment of  additional  damages,  without  need for private or
judicial requests,  nor establishment of default, of which the PARTIES expressly
renounce. To guaranty the performance of the present clause, the INVESTORS shall
establish  a POLICY OF  PERFORMANCE  with an  insurance  company  recognized  in
Colombia,  for the value that  corresponds to one hundred  percent (100%) of the
value of the penalty herein  established,  for the term of one hundred days, and
shall  be  established  no  later  than  ten  (10)  days  after  the date of the
presentation  of the  ACT and  delivered  to the  OPERATOR  in its  office.  The
OPERATOR is  responsible to send the INVESTORS a copy of the ACT the same day of
its receipt by way of electronic means and certified mail.


                                       4


<PAGE>


CLAUSE  EIGHTH:  DUE  DILIGENCE.  After the first  business  day  following  the
execution of the present  LETTER OF INTENT and until the signing of the JOA, the
PARTIES  here  intervening  shall  complete  a process  of "DUE  DILIGENCE",  to
determine  the legal  situation,  commercial,  financial  and  accounting of the
OPERATOR  and the  PROJECT as well as the  INVESTORS,  so that the  parties  may
determine  the number and the  specialty  of the natural and legal  persons that
will  participate  in the process.  The parties'  representatives  should submit
themselves  to the  previous  acceptance  of the other  party and should  obtain
authorization for each of them, prior to the realization of this work.

To effect the above, the PARTIES promise among each other, to be at the disposal
of each other, the designated and accepted  persons,  and conducive  elements to
that end. As well,  to  designate a  representative  to attend to the  personnel
requirements of the DUE DILIGENCE for each one of the PARTIES.

During the time it takes to conduct the DUE  DILIGENCE,  each one of the PARTIES
promises to submit to each other, the technical information, operational, legal,
commercial,  financial and accounting which are required. The diligence referred
to in  this  clause  grants  liberty  to  the  parties  to  have  access  to the
information  that it believes  pertinent but is prohibited  from making magnetic
reproductions,  imprints or any other kind of reproduction of the information to
which it has access.

CLAUSE  NINTH:  CONTRACTUAL  DOMICILE.  For the  effects  related to the present
contract, the city of Bogota shall be the city of contractual domicile.

CLAUSE TENTH: APPLICABLE LAW AND LANGUAGE. This LETTER OF INTENT is governed and
interpreted  in  accordance  with  the laws of the  Republic  of  Colombia.  The
official language in which the JOA shall be made and in which all communications
relative to the same  during its  validity  and for all  effect,  is the Spanish
language but there will be an English translation.

CLAUSE  ELEVENTH:  DIRECT  ARRANGEMENT  AND  ABRITRATION.  The Parties  agree to
resolve their  differences  through  conciliation  in the Chamber of Commerce of
Bogota.  To that  effect,  they will be provided a term of thirty (30)  calendar
days  from the date in which any one of them  requests  this in  writing  of the
other  party.  The  communications  may be sent by mail,  fax or telegram at the
address  provided  in this  instrument.  Once the time period has lapsed for the
direct  arrangement,  the PARTIES shall submit any  differences or disputes that
may arise in relation to this contract, exclusively to a Tribunal of Arbitration
organized in  conformity  with the rules of the Center for Merchant  Arbitration
and  Conciliation  of the  Chamber  of  Commerce  of  Bogota.  The  tribunal  of
arbitration  shall be comprised of an  arbitrator,  who is  designated by mutual
agreement of the PARTIES, who shall have a term of thirty (30) calendar days for
this.  Once the above has expired  without an agreement for an  arbitrator,  one
shall be designated  by the Chamber of Commerce of Bogota,  and whose acts shall


                                       5


<PAGE>


be governed by the rules of the Center and as provided  in  Columbian  law.  The
corresponding decision should be stated in law.

PARAGRAPH:   Each  one  of  the  parties   obligates  itself  to  designate  its
corresponding  arbitrator,  within fifteen (15) business days following the date
in which the Chamber of Commerce  designates the arbitrator  that it is required
to name within the term of this  clause.  In the event either one of the parties
does not designate the corresponding  arbitrator within the term indicated,  the
breaching party shall expressly authorize that its designation be effectuated by
the Center of Merchant  Arbitration and  Conciliation of the Chamber of Commerce
of Bogota.

CLAUSE TWELFTH: ASSIGNMENT.  Neither party may assign, transfer, substitute, nor
subrogate its rights and obligations incurred by virtue of this contract without
prior written consent of the other party.  Whatever  attempt in doing so without
written consent of the other party will be considered without effect.

CLAUSE THIRTEENTH.  COPIES. This contract is signed in two copies, each of which
constitutes one original,  with  authentication of signatures by each party that
signs.

ADDRESSES:   Each  party's  address,   to  which  all  necessary   requests  and
correspondence  for the  fulfillment  of this  contract  shall  be  sent,  is as
follows:

         FOR THE OPERATOR:
         MAXIM WELL SERVICES LTDA
         Attn:  ALEXANDER ARELLANO SUAREZ
         Address: Street 93 B #12-30 Office 203
                  Bogota D.C., Colombia
         Telephone:  +57-1-6218158
         E-mail:  MAXIMWELL@ETB.NET.CO

         FOR THE INVESTORS:
         RADIAL ENERGY INC.
         Attn: GREGORY LEIGH LYONS
         Address: 1313 East Maple St, Suite 223
                  Bellingham, Washington 98225
                  USA
         Telephone:  +1-360-685-4200
         E-mail:  LYONS@RADIALENERGYINC.COM

The above stated has been agreed to and is signed in the city of Bogota,  on the
twenty-third (23) day of the month of August, 2006.

THE OPERATOR                                         THE INVESTORS
MAXIM WELL SERVICES LTDA                             RADIAL ENERGY INC



/s/ ALEXANDER ARELLANO SUAREZ                        /s/ GREGORY LEIGH LYONS
_____________________________                        _______________________
    Alexander Arellano Suarez                            Gregory Leigh Lyons





                                       6