Additionally assets covered under the agreement include a 27.4km long 8 million cubic feet per day capacity pipeline.

Sun and Victoria will earn up to a collective 90% interest in the leases and other assets from Kestrel Energy Inc by funding US$3 million of expenditure in three equal tranches of US$1 million.

The main thrust of Sun and Victoria is exploration and development of indicated, large in-place Coal Bed Methane (CBM) resources from CBM potential studies of the Upper Cretaceous and Early Tertiary age multi seam coals on the present leases.

Recent preliminary CBM potential resource studies of the greater basin coals have indicated a 314 trillion cubic feet in place CBM resource awaiting exploration and future development.

The associated pipeline has compression and links into a local market, but more particularly an interstate pipeline terminal near Rock Springs, through which 1.1 trillion cubic feet of gas per annum passes to western states customers and 0.7 trillion cubic feet of gas per annum passes to eastern states customers.

Sun as operator for the Joint Venture plans to drill the first well in the Greens Canyon area lease before April 2004. This area currently has deep conventional gas production and three permitted drill locations with access roads in place near the pipeline.