Document:

Bayshore Exploration L.L.C.                         20501 Kay Freeway, Suite 216
                                                              Katy, Texas  77450
                                                            Phone (281) 646-1919
                                                              Fax (281) 647-9448

April 20, 2005

Paxton Energy, Inc.
1940 Zinfandel Drive, Suite C
Rancho Cordova, California 95670

RE:      Leases & Options
         Cooke Ranch Deep Prospect
         La Salle County, Texas

Dear Sirs:

As of this date, Bayshore Exploration L.L.C. has 8,884.42 acres, more or less,
in oil and gas leases and 15,400 acres, more or less, in seismic and lease
option agreements which will be included in the AMI, Cooke Ranch Deep Prospect
in La Salle County, Texas.

Railroad Commission of Texas pro-ration units assigned to gas production below
10,600 feet shall contain 320 acres. Therefore, we will have room for at least
15 development wells.

Thank you for your consideration and please call if you have any questions.

Sincerely,

/s/ Jamin Swantner
Jamin Swantner
President

JJS:jrsBayshore Exploration L.L.C.                         20501 Kay Freeway, Suite 216
                                                              Katy, Texas  77450
                                                            Phone (281) 646-1919
                                                              Fax (281) 647-9448

                             PARTICIPATION AGREEMENT

Paxton Energy, Inc.
1940 Zinfandel Drive, Suite C
Rancho Cordova, California  95670

RE:      Cooke No. 3 Well
         Cooke Ranch Deep Prospect
         La Salle County, Texas

Gentlemen:

         Paxton Energy, Inc. ("PXTN") desires to apply for the purchase of a
working interest in the Cooke Ranch Deep Prospect in La Salle County, Texas.
PXTN ("Participant") hereby acknowledge that Bayshore Exploration L.L.C.
("Bayshore") will drill and put into production, if warranted, one test well
known as the Cooke No. 3 in the Cooke Ranch Field Are for Edwards, Glenrose,
Sligo, Hosston, Cotton Valley and/or Smackover oil/gas production.

         Participant hereby applies for the purchase of three & one quarter
(3.25) percentage points at $117,000.00 per each percentage point (1.00% working
interest) payable upon application, and tender herewith a share exchange
agreement with a par value in the amount of $380,250.00.

         Participant hereby makes the following representations, warranties and
commitments.

Initial only what is applicable:

a. By executing this Participation Agreement, Participant has, subject to
exchange of 507,000 Paxton Energy (PXTE) common shares; committed itself to
become a (3.25%) working interest owner in this prospect. KJM initials

b. The undersigned has such knowledge and experience in financial and business
matters that the undersigned is capable of evaluating the merits and risks of an
investment in this oil and gas prospect and of making an informed investment
decision. KJM initials

DRILLING OPERATIONS: Upon acceptance of the above recited consideration, on or
before July 31, 2005, Bayshore, with Bruington Engineering L.P. as operator,
agrees to drill and test, and if warranted, complete and equip one oil and/or
gas well at a location of Bayshore's choice on the subject leases described on
Exhibit "A" attached hereto, with the following terms and conditions:

<PAGE>

Page 2                                                              June 3, 2005

1. Bayshore shall permit said test well with the Railroad Commission of Texas,
survey and stake the drilling location, build a necessary lease road, prepare
the location, cure title to the drillsite, contract with third party contractors
and drill with due diligence on test well to a total depth of 21,000 feet, or a
depth sufficient to test the Smackover formation, log and test said well for the
purpose of establishing commercial oil/gas production or plugging and abandoning
same. Bayshore shall have the right to cease drilling operations if an
impenetrable substance or formation is encountered during the drilling of said
well at any depth below 10,000 feet. Bayshore shall deliver a 75% net revenue
interest in Participant in the Cooke No. 3 Well. Bayshore agrees that there
shall be no back-in or carried working interest attributable to Participant's
working interest in said test well.

2. Bayshore agrees that, during drilling and completion operations, Participant
shall receive the following:

         a. Daily drilling and completion reports on the subject well.
         b. Copies of all logs, tests and samples gained from the drilling and
            completion of the subject well.
         c. Copies of all Railroad Commission of Texas filings on the subject
            well.

3. In the event that an oil and/or gas well completion is attempted on the
subject test well, Participant agrees to pay its proportionate share of the
completion costs for the well per the Authority for Expenditure (AFE) attached
hereto as Exhibit "B" which equals $19,820.00 per each percentage point upon
written and/or verbal notification from Bayshore.

4. Attached hereto as Exhibit "C" is a Joint Operating Agreement Model Form
610-1989. Said Operating Agreement is incorporated herein and shall govern all
operations, including the Cooke No. 3 Well, on the Cooke Ranch Deep Prospect.
Subsequent operations and subsequent wells drilled and completed on the prospect
acreage shall be governed by the Joint Operating Agreement.

         Participant recognizes that an investment in oil and gas exploration
involves a high degree of risk of loss of its entire investment. Participant has
been advised to consult with its own financial advisors regarding this
investment. Its commitments to all investments bear a reasonable relationship to
its net worth and Participant is able to bear the risk of loss of its entire
investment in this prospect.

         In the event that a dispute arises between Participant and Bayshore or
its affiliates, or any of their respective successors, representatives, agents,
officers or employees, in connection with this offering, the offer and sale of
working interest, or this Participant Agreement, the parties hereto hereby
expressly agree that any such dispute shall be resolved through Arbitration
rather than litigation, and to submit the dispute to the American Arbitration
Association within 15 days after receiving a written request to do so. If any
party hereto fails to submit the dispute to Arbitration within the specified
time above, the requesting party may then file any papers necessary to commence
arbitration. The parties hereto agree that any hearing scheduled after an
Arbitration proceeding is initiated, by either party, shall take place in
Houston, Harris County, Texas.

         This Participation Agreement, and all of its terms and conditions,
represent the entire agreement between Participant and Bayshore pertaining to
the Cooke Ranch Deep Prospect, and supersedes any and all prior agreements,
written or oral. Any changes to this agreement must be agreed to in writing by
both parties hereto.

<PAGE>

Page 3                                                              June 3, 2005

         This Participation Agreement, and all of its terms and conditions,
shall be binding upon the parties hereto and shall extend to and be binding upon
their respective heirs, successors and assigns. Participant shall provide
Bayshore with written notice prior to assigning any or all of Participant's
working interest herein to at third party.

         Amount of Working Interest: Participant represents that it is
delivering herewith a share exchange agreement with a par value in the amount of
$117,000.00 per each percentage point. The total point(s) for which Participant
is offering to purchase and the total amount of the aforementioned share
exchange are as follows:

                  Total Point(s) Desired:         Three & one quarter (3.25%)

                  Amount of Subscription:         $380,250.00

**Make check payable to Bayshore Exploration L.L.C.

IN WITNESS WHEREOF, the undersigned has executed this Agreement on the date set
forth below:

__________________________                    /s/ Keith J. McKenzie
S.S. No./Federal I.D. No.                     Participant's Signature

__________________________                    Paxton Energy, Inc. June 6, 2005
Business Address-Street                       Participant's Name & Date

__________________________                    2041 East 5th Avenue
City, State & Zip                             Home Address

__________________________                    Vancouver, B.C. V5N 1M3
Business Telephone                            City, State & Zip

__________________________                    604 215 3832
Fax Number                                    Home Telephone

__________________________
E-Mail Address

**Please note where and how you would like to receive your reports.

                                   ACCEPTANCE

         Bayshore Exploration L.L.C. hereby accepts the offer represented by the
foregoing Participation Agreement, subject to the terms and conditions thereof.

         AGREED AND ACCEPTED ON THIS 6TH DAY OF JUNE, 2005.

         By: /s/ Jamin Swantner
            Jamin Swantner, President
JJS:jr
Exhibit "A", "B" & "C"PAXTON ENERGY, INC.

                         FARM-IN PARTICIPATION AGREEMENT

Maxim Resources, Inc.
888-888 Dunsmuir St.
Vancouver, B.C.
V6C 3K4

RE:      Cooke No. 3 Well
         Cooke Ranch Deep Prospect
         La Salle County, Texas

Gentlemen:

         Maxim Resources, Inc. ("Maxim") desires to apply for the purchase of a
farm-in working interest in the Cooke Ranch No. 3 Well in La Salle County,
Texas. Maxim ("Participant") hereby acknowledges that Paxton Energy, Inc.
("Paxton") has a participation agreement dated June 3, 2005 for 3.25% WI in the
Cooke No. 3 Well in the Cooke Ranch Field Area for Edwards, Glenrose, Sligo,
Hosston, Cotton Valley and/or Smackover oil/gas production.

         Participant hereby applies for the farm-in purchase in the Cooke Ranch
No. 3 Well of three and one quarter (3.25) percentage points at $117,000.00 per
each percentage point (1.00% farm-in interest) subject to a one half percent
(0.5) percentage carried WI interest to Paxton and is payable upon this
application, and tenders herewith a copy of the wire instructions payable to
Bayshore in the amount of $380,250.00.

         Participant hereby makes the following representations, warranties and
commitments:

Initial only what is applicable:

a. By executing this Participation Agreement, Participant has committed itself
to become a (3.25%) farm-in working interest owner in the Cooke No. 3 Well only.
[AB and RB initials]

b. The undersigned has such knowledge and experience in financial and business
matters that the undersigned is capable of evaluating the merits and risks of an
investment in this oil and gas prospect and of making an informed investment
decision. [AB and RB initials]

DRILLING OPERATIONS: Upon acceptance of the above recited consideration, on June
12, 2005, Bayshore, with Bruington Engineering L.P. as operator, commenced the
drilling of the Cooke Ranch #3 well, and if warranted, will complete and equip
one oil and/or gas well at the location of on the subject leases described on
Exhibit "A" attached hereto, with the following terms and conditions:

<PAGE>

Page 2                                                             July 25, 2005

1. Bayshore has permitted said test well with the Railroad Commission of Texas,
survey and staked the drilling location, built a necessary lease road, prepared
the location, cured title to the drillsite contracted with third party
contractors and began drilling with due diligence one test well to a total depth
of 21,000 feet, or a depth sufficient to test the Smackover formation, log and
test said well for the purpose of establishing commercial oil/gas production or
plugging and abandoning same. Bayshore shall have the right to cease drilling
operations if an impenetrable substance or formation is encountered during the
drilling of said well at any depth below 10,000 feet. Paxton shall deliver a 70%
net revenue interest to Participant in the Cooke No. 3 Well. Paxton and Maxim
agree that there shall be a one half (0.5%) carried WI interest attributable to
Participant's working interest in favor of Paxton in said test well.

2. Bayshore agrees that, during drilling and completion operations, Participant
shall receive the following:

         a. Daily drilling and completion reports on the subject well.
         b. Copies of all logs, tests and samples gained from the drilling and
            completion of the subject well.
         c. Copies of all Railroad Commission of Texas filings on the subject
            well.

3. In the event that an oil and/or gas well completion is attempted on the
subject test well, Participant agrees to pay its proportionate share of the
completion costs for the well per the Authority for Expenditure (AFE) for the
Cooke No. 3 Well which equals $19,820.00 per each percentage point upon written
and/or verbal notification from Paxton.

4. In the event that commercial oil and/or gas production is established on the
subject lease with said test well, then both Bayshore and Paxton shall enter
into a mutually acceptable Joint Operating Agreement Model Form 610-1989 for the
operation of the subject well. Paxton shall then make the assignment of a two
and three quarter (2.75) percentage WI in the Cooke Ranch No. 3 Well and its
pro-ration unit acreage. All subsequent operations and subsequent wells drilled
and completed on the pro-rata acreage shall be governed by the Joint Operating
Agreement.

         Participant recognizes that an investment in oil and gas exploration
involves a high degree of risk of loss of its entire investment. Participant has
been advised to consult with its own financial advisors regarding this
investment. Its commitments to all investments bear a reasonable relationship to
its net worth and Participant is able to bear the risk of loss of its entire
investment in this prospect.

         In the event that a dispute arises between Participant and Paxton or
its affiliates, or any of their respective successors, representatives, agents,
officers or employees, in connection with this offering, the offer and farm-in
of working interest, or this farm-in Agreement, the parties hereto hereby
expressly agree that any such dispute shall be resolved through Arbitration
rather than litigation, and to submit the dispute to the American Arbitration
Association within 15 days after receiving a written request to do so. If any
party hereto fails to submit the dispute to Arbitration with in the specified
time above, the requesting party may then file any papers necessary to commence
arbitration. The parties hereto agree that any hearing scheduled after an
Arbitration proceeding is initiated, by either party, shall take place in Salt
Lake City, Utah.

         This Participation Agreement, and all of its terms and conditions,
represent the entire agreement between Participant and Paxton pertaining to the
Cooke Ranch No. 3 well, and supersedes any and all prior agreements, written or
oral. Any changes to this agreement must be agreed to in writing by both parties
hereto.

         This Participation Agreement, and all of its terms and conditions,
shall be binding upon the parties hereto and shall extend to and be binding upon
their respective heirs, successors and assigns. Participant shall provide Paxton
with written notice prior to assigning any or all of Participant's Farm-in
interest herein to a third party.

<PAGE>

Page 3                                                             July 25, 2005

         Amount of Working Interest: Participant represents that it is
delivering herewith wire instructions for funds on or before June 25, 2005 in
the amount of $117,000.00 per each percentage point. The total point(s) for
which Participant is offering to purchase and the total amount of the
aforementioned funds are as follows:

                  Total Point(s) Desired:           Three and One-Quarter (3.25)
                  Amount of Subscription:           $380,250.00

**Wire funds to Bayshore Exploration L.L.C.

IN WITNESS HEREOF, the undersigned has executed this Agreement on the date set
forth below:

                                                   /s/ Arthur Brown
---------------------------                        --------------------------
S.S. No/Federal I.D. No                            Participant's Signature

888-888 Dunsmuir St.                               Maxim Resources, Inc
---------------------------                        --------------------------
Business Address - Street                          Participant's Name

Vancouver, BC V6C 3K4                              888-888 Dunsmuir Street
---------------------------                        --------------------------
City, State & Zip                                  Home Address

604/630-0280                                       Vancouver, B.C. V6C 3K4
---------------------------                        --------------------------
Business Telephone                                 City, State & Zip

604/688-7846                                       604/630-0280
---------------------------                        --------------------------
Fax Number                                         Home Telephone

Art(C)MaximResources.com
E-Mail Address

**Please note where and how you would like to receive your reports.

                                   ACCEPTANCE

         Paxton Energy, Inc. hereby accepts the offer represented by the
foregoing Farm-in Agreement, subject to the terms and conditions thereof.

         AGREED AND ACCEPTED ON THIS 25 DAY OF JULY 2005.

By: /s/ Keith J. McKenzie
   Keith J. McKenzie, COO

KJM:kjm
Exhibits "A"

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