PARTICIPATION AGREEMENT

                         Terry Field Extension Prospect





         THIS AGREEMENT, made and entered into this 5th day of September, 2000,

by and between Oceanic Exploration Company, whose address is 7800 East Dorado

Place, Suite 250, Englewood, Colorado 80111 (hereinafter referred to as

"Oceanic"), and Mariah Energy, L.L.C., whose address is 1776 Lincoln Street,

Suite 1314, Denver, Colorado 80203 (hereinafter referred to as "Mariah"), and

Daniel R. Sommer, whose address is 1776 Lincoln Street, Suite 1314, Denver, CO

80203 (hereinafter referred to as "Sommer"). Oceanic, Mariah and Sommer may

sometimes be collectively referred to as the "Parties".



         WITNESSETH:



         WHEREAS, Mariah and Sommer represent that they have entered into a

certain Farmout Contract dated March 14, 2000, as amended, with Presco Western,

L.L.C. (hereinafter referred to as "Presco") covering Presco's rights in the

following lands in Finney County, Kansas (hereinafter the "Farmout Contract"):



{Table}

{Caption}

                  Township 23 South, Range 34 West

                  --------------------------------

{S}                            {C}

                  Section 3:   S/2

                  Section 4:   Lots 1, 2, 3, 4, S/2N/2, S/2 (All)

                  Section 10:  N/2

{/Table}



A copy of the Farmout Contract and all amendments thereto is attached hereto and

made a part hereof as Exhibit "A"; and



         WHEREAS, Oceanic desires to acquire an interest in the Farmout

Contract, and the lands covered thereby, and participate in the drilling of an

exploration test well; and Mariah desires to sell Oceanic an interest in the

Farmout Contract, and allow Oceanic to participate in the drilling of the

exploration test well, all subject to the terms of this agreement.



         NOW, THEREFORE, for and in consideration of the mutual covenants and

conditions hereinafter set forth and other good and valuable consideration, the

Parties agree as follows:



1        Oceanic agrees to purchase a 75% interest in the Farmout Contract for a

         consideration payable to Mariah Energy, L.L.C. in the amount of $35.00

         per net acre covered by the Farmout Contract, or an amount of

         $33,600.00 (1,280.00 net acres X $35.00 per acre X 75%). The above

         consideration shall be paid to Mariah within five days after execution

         of this agreement.



2        Obligation Test Well.



         a)       As a further consideration of this Participation Agreement,

                  Oceanic hereby agrees to participate in the drilling and

                  testing of an exploration test well to be drilled at a legal

                  location in the SE/4SE/4 Section 4, Township 23 South, Range

                  34 West, Finney County, Kansas (hereinafter the "Obligation

                  Test Well") to the full extent of Oceanic's working interest

                  in the Farmout Contract. Such Obligation Test Well shall be

                  commenced on or before December 15, 2000, and thereafter

                  drilled to a depth of 4,900 feet, or to a depth sufficient to

                  adequately test (in Presco's opinion), the St. Louis

                  formation, whichever is the lesser depth (hereinafter

                  "Contract Depth"). Oceanic agrees and covenants to pay and

                  discharge 75% share of the costs incurred in the Obligation

                  Test Well. The Parties hereby agree that all operations

                  conducted in the drilling of the Obligation Test Well, will be

                  conducted pursuant to the terms of the Operating Agreement

                  attached as Exhibit "D" to the Farmout Contract, including

                  each Parties right to make a casing point election.



         b)       In the event the Operator is unable to drill the Obligation

                  Test Well to the Contract Depth, due to mechanical or other

                  difficulties beyond the reasonable control of Operator, then

                  Operator shall plug and abandon such well in accordance with

                  all applicable State regulations and shall, within fifteen

                  (15) days thereafter commence a substitute test well within

                  the same governmental quarter-quarter section or at such other

                  location mutually acceptable to all Parties (hereinafter

                  "Substitute Test Well") and thereafter drill such Substitute

                  Test Well to the Contract Depth pursuant to the Farmout

                  Contract such that the Substitute Test Well is deemed to be

                  the Obligation Test Well.



3        Optional Test Wells.



         a)       Following the drilling of the Obligation Test Well, any Party

                  hereto may propose the drilling of an additional test well or

                  wells on the lands covered by the Farmout Contract

                  (hereinafter an "Optional Test Well"). Any Party proposing to

                  drill an Optional Test Well shall (i) make such proposal

                  subject to the terms of the Farmout Contract, and (ii) shall

                  submit a written proposal to the all other Parties, specifying

                  the work to be performed, the location of the proposed well,

                  the proposed depth, objective zone, and the





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                  estimated cost of the operation. A proposal to drill an

                  Optional Test Well shall be made, and elections by the Parties

                  governed, pursuant to Article VI of the applicable Operating

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