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                                  Exhibit 10.3


                              MANAGEMENT AGREEMENT


         THIS AGREEMENT, made as of the first day of January, 2000, between
Oceanic Exploration Company, a corporation with offices at 5000 South Quebec
Street, Suite 450, Denver, Colorado 80237 ("Oceanic"), and San Miguel Valley
Corporation, a corporation with offices at 5000 South Quebec Street, Suite 450,
Denver, Colorado 80237 ("San Miguel"),

                                   WITNESSETH:

         WHEREAS, Oceanic and San Miguel each require support services; and

         WHEREAS, Oceanic has sufficient personnel to provide support services
to both Oceanic and San Miguel; and

         WHEREAS, duplication of functions and costs can be avoided, for the
economic benefit of both companies if Oceanic provides personnel to perform
support services for San Miguel; and

         WHEREAS, Oceanic is willing to provide personnel to perform such
services under the terms of this Agreement;

         NOW, THEREFORE, in consideration of their respective covenants, the
parties agree as follows:

I.       Services to be Performed.

         Subject to the provisions of this Agreement, Oceanic shall provide the
personnel to perform the following services for the account of San Miguel:


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                  a. Management and supervisory services, including local
                  management personnel, necessary to operate San Miguel as a
                  continuing and active real estate investment company.

                  b. Complete accounting services necessary to maintain complete
                  and accurate records on behalf of San Miguel.

                  c. Administrative services as necessary to facilitate the
                  orderly performance of the general office.

                  d. Performance of such other services, at the option of
                  Oceanic, as may be requested from time to time by San Miguel.

II.      Compensation and Reimbursement.

         For the performance of services described in Article I, San Miguel
shall compensate and reimburse Oceanic as follows:

                  a. On January 1, 2000, a monthly management fee shall be
                  calculated based upon experience during the previous
                  nine-month period. The fee will be based on actual time spent
                  on San Miguel activities using current pay rates and benefit
                  schedules plus an additional fee of 5% of the total amount. On
                  January 1 of every year thereafter, this fee will be subject
                  to recalculation based upon experience during the previous
                  twelve-month period. This payment will be due and payable on
                  the last day of each month. If payment is not made by the
                  fifteenth day of the following month, the unpaid balance shall
                  bear interest monthly at the rate of 10% per annum.


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                  b. Reimbursement of any direct charges incurred by Oceanic for
                  the account of San Miguel, exclusive of personnel costs
                  included in Item a. These reimbursements will be due and
                  payable upon receipt of invoice from Oceanic to San Miguel.

III.     Covenants of Each Participating Company.

         In consideration for Oceanic's agreement to perform the services
described in Article I, as an accommodation to San Miguel, San Miguel covenants
and agrees to indemnify and hold Oceanic harmless from any loss or liability
resulting from the performance of services contracted by this Agreement
excepting only losses or liabilities resulting from Oceanic's gross negligence
or wanton misconduct.

         In consideration for San Miguel's payment of the monthly management
fee, Oceanic covenants and agrees to provide their employees with adequate
salary and benefits to ensure the retention of personnel capable of performing
the services specified in Article I. Benefits are to include:

                  a. Health, life and disability insurance.

                  b. Employer taxes including social security, unemployment, and
                  other taxes.

                  c. Pension and other retirement plans as employee eligibility
                  requires.

                  d. Any other benefits Oceanic sees as necessary and
                  appropriate.

IV.      Term.

         This Agreement shall continue from year to year until the same is
terminated by not less than 60 days written notice from either party. On
termination, each party shall be released from all obligations accruing under
the Agreement from and after the termination date but San Miguel shall remain
obligated for all direct charges incurred by Oceanic prior to said date, whether
or not known, asserted or invoiced prior to said date.


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V.       Status of Employer.

         It is understood and agreed that Oceanic is acting as an independent
contractor and not as an employee or agent of any party. All personnel provided
by Oceanic for performance of its duties under this Agreement shall be and
remain the employees of Oceanic, and the selection of such employees, their
hours of labor, and the compensation to be paid to them shall be determined by
Oceanic except as required under Article III.

VI.      Notices.

         All notices required or permitted by this Agreement shall be in writing
and shall be deemed to have been delivered to the other party when delivered in
person or transmitted by mail, postage and charges prepaid, addressed to Oceanic
at the address set out above, or by facsimile.

VII.     General.

         a. This Agreement shall be governed by the laws of the State of
         Colorado, United States of America.

         b. The provisions hereof inure to the benefit of and are binding upon
         the successors in interest of each party.



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         IN WITNESS WHEREOF, the parties have executed this Agreement on the
date and year first above written.

                                         OCEANIC EXPLORATION COMPANY



                                          /s/ Janet A. Holle
                                         --------------------------------------
                                         Janet A. Holle
                                         Vice President


                                         SAN MIGUEL VALLEY CORPORATION



                                          /s/ Charles N. Haas
                                         --------------------------------------
                                         Charles N. Haas
                                         President