SHORCO

                                            THE SHORELINE COMPANIES, INC.
                                            =============================
                                            8360 East Hinsdale Avenue
                                            Englewood, CO  80112
                                            303-779-3661  Fax: 978-428-0529
                                            E-Mail: _____________




COLORADO WYOMING RESERVE COMPANY
1801 Broadway Ste. #600
Denver, CO  80202

Attn: Mr. Kim Fuerst, President

Re: Lightning Draw/Paradox Basin Exploration Project
San Juan County, Utah

Gentlemen:

This Letter of Intent (LOI) when executed by the parties hereto shall serve as
an intent by The Shoreline Companies, Inc. (Shorco) to participate for up to a
Ten Percent (10%) working interest in the captioned exploration project. The
area and lands are described on Exhibit "A" attached hereto and made a part
hereof, with participation subject to the following terms and conditions:

                                  GENERAL TERMS

    I.     Colorado Wyoming Reserve Company (CWYR) shall contribute its entire
           leasehold and seismic option ownership in the Exhibit "A" lands (The
           Lands). These Lands among others, shall also establish an Area of
           Mutual Interest (AMI) between Shorco and CWYR and the term shall run
           ten (10) years.

    II.    The term of this LOI shall be for 120 days from April 30, 2000.


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o PAGE 2                                                            May 10, 2000


    III.   CWYR shall not be obligated to purchase any additional leases or
           seismic options in the Lands, but CWYR shall be obligated to
           maintain all leases and seismic options currently in effect,
           which shall include delay rentals and seismic option renewals
           during the full term of this LOI. Should the parties hereto
           jointly determine not to pay certain rentals or renew certain
           seismic options, CWYR will not have defaulted under this
           provision. Should any leases or seismic options be
           unintentionally or intentionally lost, CWYR shall have the
           opportunity to reinstate any lost acreage therein. If CWYR is in
           default of this provision, this LOI may be void able at the sole
           discretion of Shorco.

    IV.    ST Oil Company and Edwards Energy Corporation (ST) have entered in to
           An Option Agreement with CWYR to purchase up to a 20% working
           interest in the project area. This agreement is conditioned upon
           a proposed business combination and financing arrangement. The
           Option agreement runs concurrent with this LOI. If ST is
           unsuccessful with this effort as set out in the Option Agreement,
           it is unlikely that they will exercise this option. If ST does
           not exercise this option, Shorco reserves the right herein to
           decline any participation under this LOI.

           OBLIGATIONS AND RIGHTS EARNED UNDER THE LOI

    I.     In the event ST exercises it' rights as described in Paragraph IV
           above, Shorco shall commit to tender twenty percent (20%) of the
           funds subject to paragraph to permit, acquire, process and
           interpret a 26 to 38 square mile three dimensional (3-D) seismic
           survey (The Survey) on a previously designated program on the
           subject Lands. Estimated cost to acquire 100% of said survey is
           $1,000,000. It is agreed that a maximum of $1,000,000 will be
           budgeted for this survey, but a tolerance of ten percent (10%)
           will allowed if the actual Survey is more. In the event the
           survey can be acquired for less than this amount, Shorco will
           only be obligated for their proportionate share of the actual
           survey.

    II.    Upon the conditions set forth above, Shorco will earn an assignment
           of ten percent (10%) Member Interest in the entire subject Lands
           and project area. CWYR will assign these rights with an eighty
           percent (80%) net revenue interest, except on the lease known as
           the Tiger/Legacy lease located in T.31S.-R.23E. wherein CWYR will
           assign a seventy nine percent (79%) net revenue interest. In the
           event that CWYR owns less than an entire undivided interest in
           any lease, Shorco's interest will be proportionately reduced.

    III.   Shorco shall have the right to form any legal entity subsidiary,
           partnership,


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o PAGE 3                                                            May 10, 2000


           LLC, etc. to effect this transaction. Said Entity shall be acceptable
           to and not impede any of the advantages created by the formation of
           the Special Purpose Entity as set out below in Paragraph I, Formal
           Agreement.

    IV.    Shorco shall have the right to employ at their expense, independent
           Consultants to review all data and information, and shall have
           reasonable access to all files relative to the Paradox Basin and Area
           of Mutual Interest therein, which is in the possession of CWYR.


    V.     Shorco shall have the right to void this LOI without penalty, at any
           time, prior to ST exercising its Option as set out herein.

                                FORMAL AGREEMENT

I.         During the LOI period, the parties hereto agree to create a tax
           favorable, Special Purpose Entity to prosecute and manage the
           Project. Said entity will be assigned a 100% working interest of
           which Shorco will be assigned their proportionate share of the
           Membership Interest as set out in Paragraph II, Obligations
           above. Upon demand by the Special Purpose Entity, all funds will
           be forwarded to, and managed by this entity on an on going and as
           needed basis. Non-payment under any call, shall result in the
           forfeiture of any interest not paid for under said call resulting
           a proportionate reduction of Shorco's interest. The procedure for
           handling call demands, shall be set out in detail in the Special
           Purpose Entity Agreement. A manager of this entity will be named
           at this time.

II.        This Agreement shall also be subject to that certain Memorandum dated
           April 30, 2000, which is attached as Exhibit "B" to the ST Option
           Agreement, and shall set out the directive on how CWYR and Shorco
           will proceed with the Special Purpose Entity and prosecute the
           Survey.

    If the foregoing terms and conditions are acceptable, please sign in the
    space provided below, forwarding the enclosed extra copy to our offices
    within five (5) Days hereof.

    Sincerely,

       /s/ F. ROBERT TIDDENS
    F. Robert Tiddens, President

    Agreed to and accepted this day, May 10, 2000,
       /s/ KIM M. FUERST
    ----------------------------
    Kim M. Fuerst, President


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