EXHIBIT 10.2


                                    Exhibit E

                            Empire Energy Corporation
                       7500 College Boulevard, Suite 1215
                           Overland Park, Kansas 66210
                     Phone: 913.469.5615 o Fax: 913,469.1544



January 10, 2003


Norman L. Peterson



Re:  Letter Agreement Regarding the Acquisition of Subsidiaries and Assets

Dear Mr. Peterson:

     This letter, upon your acceptance, will represent a definitive agreement
("Agreement") providing for the acquisition of all of the outstanding capital
stock of Blue Mountain Resources, Inc. ("BMR") and Commonwealth Energy (USA)
Inc. ("CWE"), wholly owned subsidiaries of Empire Energy Corporation, to be
re-domiciled in Nevada as Empire Energy Corporation International (collectively
"EMPIRE"), and certain other assets of EMPIRE as listed herein ("Assets"), by
Norman L. Peterson ("NLP")

     The form of the transaction contemplated herein is an acquisition of all of
the capital stock of BMR and CWE and the Assets by NLP from EMPIRE (the
"Acquisition")

     1. Certain Terms of Reorganization Agreement. The terms and conditions of
the Agreement are as follows:

        1.1 The Acquisition shall be consummated on or about February 20, 2003,
the date approval from the shareholders is anticipated (the "Closing") . At the
Closing, all of the issued and outstanding BMR and OWE capital stock and the
Assets shall be acquired by NLP from EMPIRE.

        1.2 At the Closing, NLP shall assume all of the ongoing operations,
assets, liabilities, and continent liabilities of BMR and OWE, and the Assets
(collectively the "Business") . The "Assets" shall include the rights,
interests, ownership, and any associated obligations and liabilities of EMPIRE's
Tennessee operations and its interest in Bedsole Lease in Texas. EMPIRE shall
provide NLP with indemnity for and against all liabilities up to a total of
$250,000 related to the Business. At such time as EMPIRE shall have paid
liabilities or incurred costs associated with the liabilities of the Business
totaling $250,000, EMPIRE shall be relieved of any further obligations to NLP
associated with the Business; thereafter, NLP shall be the sole party
responsible for any liabilities and associated costs of the Business.

        1.3 In conjunction with the Acquisition, EMPIRE shall issue a warrant to
NLP to purchase 500,000 shares of EMPIRE's common stock following the closing of
a contemplated share exchange transaction between EMPIRE and GSLM. The warrant
shall be exercisable at $10.00 per share for a period of two years from the
closing of the EMPIRE/GSLM share exchange agreement.

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        1.4 Until the Closing, EMPIRE shall continue to operate BMR, OWE, and
the Assets in the ordinary course and shall not, without the prior written
consent of NLP, do any of the following:

            (i)      Incur any material obligations or commitments other than
                     in the ordinary course of business;

            (ii)     Grant any salary increases (other than as required by
                     existing contracts or consistent with current practices)
                     , unscheduled promotions or enter into any new
                     employment or benefit contracts;

            (iii)    Solicit, induce, or otherwise engage in discussions or
                     negotiations relating to or proposed to lead to the
                     Acquisition of the Business by or with any party other
                     than NLP;

            (iv)     Sell or dispose of any material Business assets or
                     properties, except in the ordinary course of business or
                     with the prior consent of the other party hereto; or,

            (v)      Sell any additional shares of BMR or CWE's capital stock
                     or grant any additional rights or options to acquire its
                     capital stock.

        1.5 As a condition to the consummation of the Acquisition, there shall
have been no material adverse change in the assets, Business, or prospects of
BMR, OWE, or the Assets except as contemplated by the Agreement, and EMPIRE
shall agree to assist NLP in discharging the Business obligations and disposing
of the assumed liabilities and current litigation.

        1.6 As a condition to the consummation of the Acquisition, NLP and its
counsel and EMPIRE and its counsel must be satisfied as to the validity and
legality of all aspects of the Acquisition, including all activities undertaken
in relation to this Agreement. Each of the parties to the Acquisition will pay
their own expenses incurred in connection with this Agreement end all other
events required for the Closing.

        1.7 Any claims or disputes arising hereunder or as a result of the
transactions contemplated hereby which cannot be resolved by the parties will be
referred to alternative dispute resolution by binding arbitration in the State
of Kansas.

        1.8 As an express condition to the Closing of the Acquisition, the
Agreement shall have been approved by a majority of the Stockholders as required
pursuant to the Company's Bylaws. The Company reserves the right to cancel the
Acquisition in the event the requisite Stockholder approval is not attained.

     2. Due Diligence. As of the date of this Agreement, the parties have
completed all due diligence they deem necessary end advisable regarding the
Acquisition.

     3. Confidentiality. In connection with the foregoing matters, each party
hereto has or will be furnishing to the other from time to time with oral and
written information which the parties consider to be proprietary and
confidential information (herein called the "Confidential Information"). Each
party acknowledges that "Confidential Information," as used herein, does not
include any information which (i) was or becomes generally available to the

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public other than as a result of an improper disclosure by the other party
hereto, or (ii) was or becomes information available to the other party on a
non-confidential basis from a third party source that is not bound by a
confidentiality obligation to either of the parties hereto.

     If the Closing thereunder shall fail to occur for any reason, each party
shall promptly deliver and return all copies of Confidential Information to the
party which owns the same, and without retaining any copy, notes, or extracts
thereof.

     4. Press Release. Upon acceptance and approval hereof, EMPIRE is authorized
by NLP to issue a press release for the purpose of publicly announcing the
transactions hereunder. EMPIRE and NLP each agree to consult with the other as
to the form and substance of any press release or other public disclosure of the
matters covered in this Agreement, provided that this shall not be deemed to
prohibit EMPIRE and CWE from making any disclosure which its respective counsel
deems necessary to comply with applicable law.

     5. Survival of Certain Provisions. The provision of Sections 3, 4, and 5 of
this Agreement are for the benefit of the respective parties hereto, shall
survive any termination of this Agreement, and shall be governed by and
construed in accordance with the laws of the State of Kansas.

     6. Binding Agreement. This letter Agreement constitutes a binding legal
obligation for the transactions described herein. The parties acknowledge that
they currently share common directors and common outside counsel for purposes of
the Acquisition who will have an inherent and unavoidable conflict of interest
as to the Acquisition. Each of the parties agrees to engage the services of
their own independent counsel if so desired for purposes of advising them in
connection with this Agreement, the Closing, and other matters relevant to the
Acquisition.

Very truly yours,

EMPIRE ENERGY CORPORATION



By:
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Its:
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Accepted and Agreed on this 10th day of January, 2003:



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     Norman L. Peterson