COLORADO WYOMING RESERVE COMPANY
                                                         1801 BROADWAY STE. #600
                                                              DENVER, CO  80202
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PHONE 303-296-1908
FAX 303-296-0329


                                OPTION AGREEMENT

May 8, 2000

ST OIL COMPANY
1801 Broadway Ste. #600
Denver, CO  80202
Attn.: Mr. J. Samuel Butler, President & CEO

EDWARDS ENERGY CORPORATION
1401 17th Street Ste. 1400
Denver, CO  80202
Attn.: Mr. J. Keith Edwards, President

Re:   Lightning Draw/Paradox Basin Option Agreement
San Juan CO, UT

Gentlemen:

This Option Agreement (Agreement) when executed by the parties hereto, shall
represent the right for ST OIL COMPANY and EDWARDS ENERGY CORPORATION
(ST/Edwards) to purchase from COLORADO WYOMING RESERVE COMPANY (CWYR) certain
rights and interests in THE LIGHTNING DRAW/PARADOX BASIN EXPLORATION PROJECT
(The Project) located in an area (the Lands) described on Exhibit "A" attached
hereto and made a part hereof, which shall be subject to the following terms and
conditions:

                                  GENERAL TERMS

1.)  The effective date of this Agreement shall be April 30, 2000.

2.)  Consideration for this Agreement shall be $24,000.00 in cash, payable to
CWYR and due upon execution of this Agreement.

3.)  CWYR shall not be obligated to purchase any additional Leases or Seismic
Options in the Project area, but CWYR shall be obligated to maintain all leases
and options currently in effect, which include all delay rentals and Seismic
Option renewals during the full term of this Agreement. 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


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                                      -2-


or Seismic Options be unintentionally or intentionally lost, CWYR shall have the
opportunity to reinstate any lost acreage therein. The maximum monetary
liability to CWYR shall be $24,000.00.

4.)  ST/Edwards are currently engaged in combining their entities via merger and
to also obtain secondary financing concurrent with this business combination
(the Transaction). The purpose of this Agreement is to allow adequate time for
ST/Edwards to complete the Transaction. Therefore, the term of this Agreement
shall be one hundred twenty (120) days from the effective date hereof. However,
it is understood that rights to this Agreement as set out below, shall be
exercised at the time the merger is legally consummated and a minimum
subscription amount of $12,000,000 is reached under the ST/Edwards Private
Placement of Capital under the Transaction.

                        RIGHTS EARNED UNDER THE AGREEMENT

1.)  In accordance with the provisions set forth above, ST /Edwards shall, A) In
the event the business combination as set forth in Paragraph 4 is unsuccessful,
ST/Edwards may decline to exercise any rights under this Agreement forfeiting
all Option consideration hereof, but incurring no further obligation thereto, B)
Exercise the Agreement which shall include the following:

     a) Upon exercising the Agreement, ST/Edwards will have the obligation to
tender forty percent (40.0%) of the funds to permit, acquire, process and
interpret a 26 to 38 square mile Three Dimensional Seismic Survey (the Survey)
on a previously established 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 is budgeted for this survey, but a tolerance of ten percent (10%)
will be allowed in the event the actual cost of the Survey is more. In the event
the survey can be acquired for less than this amount, ST/Edwards will only be
obligated for their proportionate share of the actual cost of the survey, b)
Upon tendering 100% of ST's and Edward's proportionate share of the cost of the
Survey, ST/Edwards will earn an assignment of a twenty percent (20.0%) Member
Interest pursuant to and under the terms of the Special Purpose Entity discussed
in Paragraph # 1 Formal Agreements, in and to all the subject Lands and Project
area. CWYR will assign these rights with a proportionate eighty percent (80%)
Net Revenue Interest except on the lease known as the Tiger/Legacy lease located
in T.31S.-R.23E. which CWYR will deliver a proportionate 79% Net Revenue
Interest. In the event that CWYR owns less that the entire undivided interest in
any lease, ST/Edwards's interest will be proportionately reduced.

                                FORMAL AGREEMENTS

1.)  During the Option period, the parties hereto will create a tax favorable,
special purpose entity to prosecute and manage the Project. Said entity will be
assigned a 100% Working Interest of which ST/Edwards will be assigned their
proportionate share of the Membership interest as set out in Paragraph 1b above.
Upon closing of the Transaction, funds will be forwarded to and managed by this
entity. Said funds will be forwarded to the special purpose entity upon written
demand by the manager on a on going, as needed basis necessary to prosecute the
Survey.


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That certain Memorandum dated April 30, 2000 attached hereto and incorporated
herein, shall be the directive as to how ST/Edwards and CWYR 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. We are looking forward to your involvement in taking this project
to a successful conclusion.

Sincerely,
COLORADO WYOMING RESERVE COMPANY

   /s/  KIM M. FUERST
Kim M. Fuerst, President

Agreed to an Accepted this day, May 10, 2000;

ST OIL COMPANY

   /s/  J. SAMUEL BUTLER
J. Samuel Butler, President and Chief Executive Officer


EDWARDS ENERGY CORPORATION

   /s/  J. KEITH EDWARDS
J. Keith Edwards, President

KMF/frt


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                                   EXHIBIT "A"

Attached to that certain OPTION AGREEMENT dated May 8, 2000 by and between, ST
OIL COMPANY, EDWARDS ENERGY CORPORATION and COLORADO WYOMING RESERVE COMPANY:

                  LIGHTNING DRAW/PARADOX BASIN LAND DESCRIPTION

                         LEASEHOLD AND OPTIONS OWNED IN:


*T.30S.-R.23E. Sections 19-36; T.30S.-R.24E., Sections 19-36; T.31 S.-R.22E.
Sections 35, 36; T.31S.-R.23, 24 E. ALL; T.32S.-R.23,24E. All;
T.33S.-R.23,24E. All; T.34S.-R.24,25,26E. All; T.35S.-R25,26E. All*

San Juan County, Utah


WHERE PTS 1-28