WHEN RECORDED, RETURN TO:

Dan W. Egan
Ballard Spahr Andrews & Ingersoll, LLP
201 South Main Street, Suite 600
Salt Lake City, Utah 84111-2221



                      DEED OF TRUST AND SECURITY AGREEMENT
                                  (Oil and Gas)


         THIS DEED OF TRUST AND  SECURITY  AGREEMENT  (this  "Deed of Trust") is
made as of this 15th day of October,  2003, by PANNONIAN ENERGY INC., a Delaware
corporation  whose  address is 14 Inverness  Drive East,  Building H, Suite 236,
Englewood,  Colorado 80112 ("Trustor"); in favor of DAN W. EGAN, a member of the
Utah State Bar,  whose address is Ballard  Spahr  Andrews & Ingersoll,  LLP, 201
South Main Street,  Suite 600, Salt Lake City, Utah 84111-2221,  and also to any
substitute  or  successor   Trustee  as   hereinafter   provided  (all  of  whom
collectively  are included within the term "Trustee" as used  hereinafter);  and
BFSUS SPECIAL  OPPORTUNITIES  TRUST PLC, a public limited company  registered in
England and Wales,  RENAISSANCE  CAPITAL GROWTH & INCOME FUND III, INC., a Texas
corporation,  and  RENAISSANCE  US GROWTH & INCOME  TRUST PLC, a public  limited
company  registered in England and Wales, the address of all three of which, for
purposes  of this  Deed  of  Trust,  is 8080  North  Central  Expressway,  Suite
210-LB59, Dallas, Texas 75206 (collectively, the "Beneficiary").

                                   WITNESSETH:

     Gasco  Energy,  Inc.  ("Gasco"),  a  Nevada  corporation  that is the  sole
shareholder  of Trustor,  has delivered to Trustee a Convertible  Loan Agreement
dated as of October 15, 2003 (the "Loan Agreement");

         Trustor has delivered to Renaissance Capital Group, Inc., acting in its
capacity as agent for the Beneficiary,  a Subsidiary Guaranty Agreement dated as
of October 15, 2003 (as amended,  restated,  or replaced from time to time,  the
"Subsidiary Guaranty"),  and terms which are defined in that Subsidiary Guaranty
shall have the same  meanings in this Deed of Trust,  unless  otherwise  defined
herein or unless the context otherwise requires; and

         Pursuant to the Subsidiary Guaranty, Trustor has guaranteed the payment
and performance of the Liabilities and, in order to collateralize the Subsidiary
Guaranty,  has agreed to grant to Trustee for the benefit of Beneficiary a first
priority  security  interest in and to certain  interests  in real and  personal
property owned and hereafter to be acquired by Trustor in the State of Utah.

         NOW,  THEREFORE,  in consideration of the premises and the indebtedness
and trusts  hereinafter  set forth and of the sum of Ten  Dollars,  cash in hand
paid, the receipt and sufficiency of which are hereby acknowledged, Trustor does
grant and convey unto Trustee,  in trust,  with power of sale,  all of Trustor's
interest  in the real  property  described  below,  as well as all of  Trustor's
interest in the property relating thereto and all appurtenances  belonging or in
anywise appertaining  thereto,  whether owned or hereafter acquired,  and all of
Trustor's rights,  titles and interests in and to and relating to such property,
and does assign and pledge to Beneficiary  and its  successors and assigns,  and


                                       1


does grant to Beneficiary  and its  successors  and assigns a security  interest
under the Uniform  Commercial  Code of Utah (the  "Code"),  in all of  Trustor's
personal  property  (including  fixtures and  improvements)  described below and
owned by Trustor,  as well as all of Trustor's property relating thereto and all
appurtenances  belonging or in anywise  appertaining  thereto,  whether owned or
hereafter acquired,  and all of Trustor's rights, titles and interests in and to
and relating to such  property,  and all products  thereof and proceeds  derived
therefrom,  including  proceeds of  insurance,  with all such real and  personal
property subject to this Deed of Trust sometimes  collectively called the "Trust
Estate," including, but not limited to, the following:

     (a)  all  oil and gas  wells  specifically  identified  in  Exhibit  1 (the
          "Wells"),  together with the oil, gas,  casinghead gas, drip gasoline,
          natural  gasoline  and  all  other  liquid  and  gaseous  hydrocarbons
          (collectively,  "oil and gas")  produced  through the wellbores of the
          Wells; and

     (b)  all oil and gas leases described in Exhibit 1 hereto attached and made
          a part hereof,  insofar and only insofar as the leases cover the lands
          described  in Exhibit 1 and then only to the extent  that such  leases
          are  necessary  to produce and operate  the Wells  (collectively,  the
          "Leases"), as executed in favor of, or as assigned, sublet, farmed-out
          or otherwise  transferred  to Trustor,  together  with all  easements,
          privileges,  surface  rights,  production and drilling  rights and all
          other rights, privileges,  titles and interests appurtenant thereto or
          relating  thereto,  but only to the extent  necessary  to produce  and
          operate the Wells; and

     (c)  all  currently  existing  unitization,   communitization  and  pooling
          agreements and the units created thereby (including without limitation
          all units formed under orders,  regulations,  rules or other  official
          acts of any federal, state or other governmental body or agency having
          jurisdiction)  relating  to the  Wells,  in each case  subject  to all
          segregation  agreements  which may now or hereafter be recorded in the
          applicable real property records,  provided,  however,  that the Trust
          Estate  shall not  include  any  interest  whatsoever,  even under the
          Leases, in new  communitization or pooling agreements which may now or
          hereafter  be  recorded  relating  to oil and gas wells other than the
          Wells; and

     (d)  all intangible  personal  property,  now owned or hereafter  acquired,
          such as chattel paper,  instruments,  documents,  general intangibles,
          accounts, accounts receivable, contract rights and other rights to the
          payment of moneys in  connection  with,  or relating to, the Wells and
          the production and  transportation of oil and gas therefrom,  together
          with all  operating  agreements,  drilling  agreements,  gas  purchase
          contracts,  oil purchase contracts,  standing purchase orders for oil,
          and other  agreements  relating  to the Wells and the  production  and
          transportation of oil and gas therefrom; and

     (e)  all  tangible  personal  property,  now owned or  hereafter  acquired,
          including without limitation inventory,  materials,  supplies,  tanks,
          boilers,  compressors,  tubing, casing, rods, line pipe,  connections,
          pumping  outfits,   derricks,  houses,  jacks,  tubing,  cable  lines,
          materials,  machinery,  equipment,  and  any and  all  other  property
          (including  fixtures and improvements) and appurtenances,  but only to
          the extent used in connection  with the Wells and the  production  and
          transportation  of  oil  and  gas  therefrom,  and  any  replacements,
          attachments  or  accessories  now  or  hereafter  attached,  added  or
          affixed; and

         Trustor  hereby  expressly  confirms  its  intention  to include in the
foregoing  definition of Trust Estate all of the real and personal  property now
owned by it which is required  to produce and operate its  interest in the Wells
and to receive its share of production and  production  proceeds from the Wells,
while  Beneficiary   confirms  its  intention  to  exclude  from  the  foregoing
definition of Trust Estate all of Trustor's real and personal  property required
to produce and operate Trustor's interest in all oil and gas wells, now existing


                                       2


or hereafter  drilled,  other than the Wells and to exclude  Trustor's  share of
production  and  production  proceeds from such other wells,  even if such other
wells are located on lands described in Exhibit 1.

         Without  in any  manner  limiting  the  generality  of any of the other
provisions hereof,  this instrument is a deed of trust of both real and personal
property,  a security agreement,  a financing  statement and an assignment,  and
also covers  proceeds and  fixtures.  This Deed of Trust shall be effective as a
financing  statement  filed as covering  minerals or the like (including oil and
gas) and accounts  subject to Subsection  (4) of ss.  9a-301 of the Code,  which
minerals or the like (including oil and gas) or accounts will be financed at the
wellhead located on the Trust Estate.

         TO HAVE AND TO HOLD the Trust Estate unto Trustee and its successors in
the trust forever.

         IN TRUST  NEVERTHELESS to secure  Trustor's  payment and performance of
the Guarantee Obligations,  including, without limitation, Trustor's guaranty of
the full  payment  by Gasco  of  Gasco's  aggregate  principal  indebtedness  of
$2,500,000 under three Debentures, each of which matures on October 15, 2008.

         As further  security  for  Trustor's  payment  and  performance  of the
Guarantee Obligations, and for the same consideration hereinabove set forth, and
cumulative  of any and all other rights and remedies  herein  provided,  Trustor
warrants,  grants, bargains,  conveys, sells, transfers and assigns unto Trustee
for the benefit of the  Beneficiary  all of  Trustor's  interest in the proceeds
(less severance,  production,  ad valorem and windfall profits taxes) of oil and
gas and other minerals  produced  through the wellbores of the Wells,  including
without limitation all right, title and interest of Trustor in, to and under any
contracts for the sale of minerals  produced  from and after the effective  date
hereof at 7:00 a.m.  local time from the Trust  Estate.  Upon actual  receipt of
written notice of the occurrence of an Event of Default, as that term is defined
in Section 5 of the Subsidiary Guaranty, purchasers of oil and gas produced from
the Wells are irrevocably authorized and directed to pay directly to Trustee for
the account of  Beneficiary  the interest of Trustor in the proceeds of the sale
of the oil and gas produced from the Wells,  and to continue such payments until
they have been furnished with release hereof, executed by Trustee in writing. No
production  purchaser  shall be  required  to see to the proper  application  by
Beneficiary  of such proceeds so paid to it, and Trustor  covenants (i) to cause
all production  purchasers to pay promptly to Trustee the interest of Trustor in
the proceeds of the sale  thereof and (ii) to execute and deliver such  transfer
orders or other documents as may be necessary or proper to effect such payments.
All proceeds of oil and gas production from the Wells shall, however, be paid by
each production  purchaser directly to Trustor until such time as the production
purchaser  has  actually  received  written  notice  from  the  Trustee  of  the
occurrence of an Event of Default.

         Beneficiary  and Trustee shall never be under any obligation to enforce
the collection of such proceeds so assigned hereunder,  nor shall either of them
ever be liable for failure to exercise diligence in the collection thereof,  but
they shall only be accountable for such sums as they shall actually receive.

     1.  Representations And Warranties.  Trustor hereby confirms and makes anew
to Beneficiary all of the  representations  and warranties that are set forth in
Section 11 of the Subsidiary  Guaranty,  intending that this confirmation  shall
have the same force and effect as if each of the  representations and warranties
contained  in Section 11 of the  Subsidiary  Guaranty  were set forth in full in
this Deed of Trust.

     2. Covenants.  Trustor hereby confirms and makes anew to Beneficiary all of
the  covenants  that  are set  forth  in  Sections  12 and 13 of the  Subsidiary
Guaranty,  intending that this confirmation shall have the same force and effect
as if each of the  covenants  contained in Sections 12 and 13 of the  Subsidiary
Guaranty were set forth in full in this Deed of Trust, and, in addition,  agrees
that:

                                       3


          (a)  Trustor  will  promptly  pay or cause  to be paid all  royalties,
     rentals,  and other obligations  accruing under, and perform or cause to be
     performed  every act or thing required by the Leases;  will keep the Leases
     in full force and effect; will not amend or modify, or permit the amendment
     or modification  of, the Leases,  if such amendment or  modification  would
     reduce any amounts payable to, or otherwise materially adversely affect any
     benefit  accruing to, or other  interest  of,  Trustor;  and will  promptly
     notify  Beneficiary  of any event,  occurrence or  transaction  which would
     result in the termination of any Lease.

          (b) Trustor will pay or cause to be paid when due all taxes,  charges,
     claims  and  assessments  which may be  assessed  or  levied by any  public
     authority  against or upon the Trust Estate,  and also any taxes,  charges,
     claims  (including  claims of mechanics and materialmen) or assessments for
     which  Trustor  may become  liable or which may by law become a lien on the
     Trust Estate  either  having  priority over the lien of this Deed of Trust;
     provided,  however,  that  Trustor  need  not pay any tax,  charge,  claim,
     assessment  or  liability  so long  as its  validity  or  amount  shall  be
     contested in good faith by appropriate proceedings duly prosecuted.

          (c) Except with the specific  written consent of Beneficiary,  Trustor
     will not sell, lease, transfer, mortgage, pledge, charge, grant a lien upon
     or security interest in, or otherwise dispose of or encumber, or permit any
     encumbrance to attach to, the Trust Estate or any part thereof,  other than
     Permitted Liens (as such term is defined in the Loan Agreement).

          (d) Trustor  represents and warrants that it has obtained,  and agrees
     that it will  obtain,  or shall  cause  to be  obtained,  all  permissions,
     licenses,  easements,  rights of way,  and all  local,  state  and  federal
     governmental  approvals,  authorizations,  consents and permits, as well as
     all  permissions  necessary to the ownership,  development and operation of
     the Trust  Estate,  all of which are,  and shall be kept in, full force and
     effect,  consistent  with the Drilling  Program (as such term is defined in
     the Loan Agreement).

          (e) Trustor will continuously  operate,  or cause to be operated,  the
     Trust Estate in good and  workmanlike  manner and in accordance  with sound
     and  approved  practices,   consistent  with  the  Drilling  Program;  will
     maintain,  or cause to be  maintained,  the Trust  Estate  in good  repair,
     working  order  and  condition;  will not  commit  or  permit  any waste or
     impairment of the Trust Estate; will not permit the Trust Estate to be used
     in  violation  of any statute or  regulation;  will  otherwise  protect and
     preserve,  or cause to be protected and  preserved,  the Trust Estate;  and
     will permit Beneficiary and its  representatives  and agents, or cause them
     to be permitted,  to inspect the Trust Estate during normal business hours.
     If and  when  any of the  Wells  ceases  producing  oil and  gas in  paying
     quantities  or is of no  further  use,  or  Trustor  or any  other  person,
     corporation  or other  entity is required to do so under any  agreement  or
     law,  Trustor  will plug and abandon or cause to be plugged and  abandoned,
     such  Well in  accordance  with  the  local,  state  and  federal  laws and
     regulations then in force.

          (f) Trustor shall,  whenever and so often as requested by Beneficiary,
     promptly execute and deliver or cause to be executed and delivered all such
     other and further instruments,  documents or assurances (including all such
     as may  from  time to time be  required  by  pipeline  companies  or  other
     purchasing  parties)  and  shall  promptly  do or cause to be done all such
     other and  further  things,  as may by  Beneficiary  be  deemed  necessary,
     expedient or  advisable in order to better and more fully  preserve or vest
     in it all rights,  interest,  powers,  benefits,  privileges and advantages
     conferred or intended to be conferred by this Deed of Trust or by any other
     instrument delivered simultaneously herewith or pursuant hereto.

                                       4


     3. Rights And Remedies  Upon  Default.  Upon the  occurrence of an Event of
Default,  as that  term is  defined  in  Section 5 of the  Subsidiary  Guaranty,
Trustee  may  by  written  notice  to  Trustor  declare  all  of  the  Guarantee
Obligations  immediately  due,  whereupon all such Guarantee  Obligations  shall
become immediately due. In addition, Beneficiary may exercise any one or more of
the following remedies:

          (a)  Without  notice  to or  demand on  Trustor  or any other  person,
     Beneficiary  may (i) forthwith  enter into and upon any or all of the Trust
     Estate,  either in person or by agent, and take possession of any or all of
     the Trust Estate without  process of law,  without  liability to Trustor or
     other owner or owners of the Trust Estate;  manage the Trust Estate, or any
     part thereof; collect and receive the rents, issues and profits thereof and
     apply the same to the  Guarantee  Obligations,  after first  deducting  the
     costs and expenses  incurred in managing the Trust  Estate;  or (ii) have a
     receiver  appointed  by any court  having  jurisdiction  to take charge and
     manage the Trust Estate.  Nothing herein  contained shall be construed as a
     substitute  for, or in derogation  of, the right to foreclose  this Deed of
     Trust or as imposing any duty or obligation upon Beneficiary to take charge
     of the Trust Estate, or to collect said rents,  issues or profit or to have
     a receiver appointed for such purposes.

          (b) If the power of sale is invoked, Trustee, upon the written request
     of  Beneficiary,  shall  execute a written  notice of the  occurrence of an
     Event of Default and of the  election to cause the Trust  Estate to be sold
     and shall  record such  notice in each county in which the Trust  Estate is
     located.  Beneficiary  or Trustee  shall mail  copies of such notice in the
     manner  prescribed  by  applicable  law to Trustor and to the other persons
     prescribed  by  applicable  law.  In the  event  Trustor  does not cure the
     default within the time  prescribed by applicable  law,  Trustee shall give
     public  notice of the sale to the persons and in the manner  prescribed  by
     applicable law. After the time required by applicable law, Trustee, without
     demand on  Trustor,  shall sell the Trust  Estate at public  auction to the
     highest bidder at the time and place and under the terms  designated in the
     notice  of  sale  in one or  more  parcels  and in the  order  the  Trustee
     determines,  but  subject to any  statutory  right the  Trustor may have to
     direct  the  order in which  the  Trust  Estate  is  sold.  Trustee  may in
     accordance  with  applicable law postpone sale of all or any portion of the
     Trust Estate by public announcement at the time and place of the previously
     scheduled  sale.  Beneficiary or its designee may purchase the Trust Estate
     at any such  sale.  Out of the  proceeds  of such sale  Trustee  shall pay,
     first,  the costs and expenses of executing  this trust,  including but not
     limited to reasonable Trustee's and attorneys' fees; second, to Beneficiary
     in the full amount  necessary to satisfy the  Guarantee  Obligations;  and,
     third, the balance, if any, to Trustor, its successors or assigns.

          (c) To the extent  that  Chapter 9a of the Code is  applicable  to the
     Trust  Estate,  Trustee  shall have the right to and may,  at the option of
     Beneficiary,  exercise  any or all of the rights and  remedies of a secured
     party  under the Code,  in  addition  to such  rights and  remedies  as are
     provided herein or in any of the Loan  Documents.  To assist Trustee in the
     exercise of such rights and remedies  Trustor shall,  at Trustee's  request
     and at Trustor's expense, assemble and prepare for removal at and to places
     to be  designated  by  Beneficiary  such  items of the Trust  Estate as are
     selected by Trustee.  Any requirement of law as to reasonable  notification
     of the time and place of any public  sale,  or of the time after  which any
     private  sale or other  intended  disposition  of the Trust Estate is to be
     made,  shall be met by giving  Trustor seven days' prior written  notice of
     the time and place of any such public sale or the time after which any such
     private sale or any other intended disposition is to be made.

          (d) The  provisions  hereof  with  respect to  foreclosure  under this
     instrument as a deed of trust are intended to comply with the provisions of
     the statutes of Utah relating to such  foreclosure,  as in force and effect
     on the  date  hereof,  and in the  event  the  statutory  requirements  for
     foreclosure  shall be modified by future  amendment,  the  requirements for
     foreclosure,  including  notice,  shall be  deemed to be  modified  in this
     instrument in conformity with such amendment.

                                       5


          (e) In the event of suit being brought to foreclose this Deed of Trust
     by reason of any default,  all costs of such suit  allowable by  applicable
     law shall be  included in any  judgment or decree as part of the  Guarantee
     Obligations  secured by this Deed of Trust,  and there  shall  likewise  be
     included in any such judgment or decree,  all sums paid out by  Beneficiary
     for stenographic fees and for outlays for documentary  evidence,  including
     cost of bringing  down to date all  abstracts of title or policies of title
     insurance  relating to the property covered hereby, and for the examination
     of and  rendering  of an  opinion  of  title  for the  purpose  of any such
     foreclosure.

          (f)  Beneficiary may have or take other security or guarantees for the
     Guarantee  Obligations  or for any part of the same,  although  neither the
     giving of this Deed of Trust nor the acceptance of any additional  security
     or guarantee shall operate to prevent or hinder  Beneficiary from resorting
     first to such other  security or first to the  security  herein  given,  or
     first from time to time to either or both; and Beneficiary may from time to
     time as it sees fit, in its sole 'and  uncontrolled  discretion,  resort to
     all or any part of the Trust Estate covered  hereby,  without  resorting to
     all or any other  security given to secure the Guarantee  Obligations;  and
     that such action on its part shall not in anywise be considered as a waiver
     of any of the benefits or rights conferred by the Deed of Trust.

          (g) The remedies  herein  provided are  cumulative  and that no remedy
     herein  conferred  is  intended  to be  exclusive  of any  other  remedy or
     remedies.  Beneficiary  may, in addition to the remedies  herein  provided,
     avail itself of such other remedy or remedies as may now or hereafter exist
     at law or in equity.  No delay or  omission  by Trustee or  Beneficiary  in
     exercising  or  enforcing  the  rights  and powers  herein  granted  and no
     exercise or enforcement  thereof shall be considered as a waiver thereof or
     be held to exhaust such rights and powers.

          (h) Any and all options or rights of election  herein provided for the
     benefit of Beneficiary shall be continuing;  and it is expressly understood
     and agreed that  failure to exercise  any of such options upon a particular
     default or breach or upon any  subsequent  default  or breach  shall not be
     construed  as waiving the right of such option or election  for any default
     or breach occurring thereafter.

     4.  Request for  Notices.  Trustor  requests  that copies of the notices of
default and sale be sent to the address specified for it in Section 9, below.

     5. Foreclosure  Commenced But Not Completed.  In the event that foreclosure
proceedings  are  instituted  hereunder  but are not  completed,  Trustor  shall
reimburse Trustee and Beneficiary for all costs and expenses incurred by them in
commencing such proceedings.

     6. Acts of Trustee.  Trustee may act in the  execution  of this trust,  and
Trustee is  authorized  to act by agent or  attorney  in the  execution  of this
trust.  It shall not be necessary for the Trustee to be present in person at any
foreclosure sale under this Deed of Trust.

     7.  Substitution Of Trustee.  Beneficiary may, at any time and from time to
time  hereafter,  without  notice,  appoint and  substitute  another  trustee or
trustees,  corporations  or  persons,  in place of the Trustee  herein  named to


                                       6


execute the trust herein created. Upon such appointment,  either with or without
a  conveyance  to said  substituted  trustee or trustees  by the Trustee  herein
named,  or by any  substituted  trustee in case the said right of appointment is
exercised  more than once, the new and  substituted  trustee or trustees in each
instance shall be vested with all the rights, titles, interests,  powers, duties
and trusts in the premises  which are vested in and  conferred  upon the Trustee
herein  named;  and  such  new and  substituted  trustee  or  trustees  shall be
considered  the  successors  and assigns of the Trustee who is named herein with
the meaning of this instrument, and substituted in his place and stead.

     8. Non-Waiver.  No failure of Beneficiary or Trustee to exercise any option
herein  contained  shall  constitute a waiver of any right or  privilege  herein
given or granted to  Beneficiary  or  Trustee,  and a waiver by  Beneficiary  or
Trustee of the right to  exercise  any option as to any breach or default  shall
not  constitute a waiver of the right to exercise the same option,  or any other
option herein contained, as to another or any continuing or subsequent breach of
default.

     9. Notices. Notices required by applicable law shall be given in accordance
with   applicable   law.  All  other  notices,   requests,   demands  and  other
communications  required or permitted to be given hereunder shall be deemed duly
given if in  writing  and  delivered  personally  or  mailed,  postage  prepaid,
registered or certified,  at the following addresses or at such other address as
a party may designate in the manner provided in this paragraph:

          If to Borrower:      Pannonian Energy Inc.
                               14 Inverness Drive East
                               Building H, Suite 236
                               Englewood, CO 80112
                               Attn:    Mark Erickson
                               Telephone:  (303) 483-0044
                               Telecopier:

          with a copy to:      Vinson & Elkins LLP
                               2300 First City Tower
                               1001 Fannin
                               Houston, TX 77002
                               Attn:    Michael P. Finch, Esq.
                               Telephone:  (713) 758-2128
                               Telecopier:  (713) 615-5282

          If to Beneficiary:   Renaissance Capital Growth & Income Fund III,Inc.
                               c/o Renaissance Capital Group, Inc.
                               8080 North Central Expressway, Suite 210-LB59
                               Dallas, TX 75206
                               Attn:    Russell Cleveland
                                        President and CEO
                               Telephone:  (214) 891-8294
                               Telecopier:  (214) 891-8291

                               Renaissance US Growth & Income Trust PLC
                               c/o Renaissance Capital Group, Inc.
                               8080 North Central Expressway, Suite 210-LB59
                               Dallas, TX 75206
                               Attn:    Russell Cleveland
                                        President and CEO
                               Telephone:  (214) 891-8294
                               Telecopier:  (214) 891-8291

                                       7


                               BFSUS Special Opportunities Trust PLC
                               c/o Renaissance Capital Group, Inc.
                               8080 North Central Expressway, Suite 210-LB59
                               Dallas, TX 75206
                               Attn:    Russell Cleveland
                                        President and CEO
                               Telephone:  (214) 891-8294
                               Telecopier:  (214) 891-8291

          with a copy to:      Jackson Walker L.L.P.
                               901 Main Street, Suite 6000
                               Dallas, Texas 75202
                               Attn:    Jeffrey M. Sone
                               Telephone:  (214) 953-6107
                               Telecopier:  (214) 953-5822

          If to Trustee:       Dan W. Egan
                               Ballard Spahr Andrews & Ingersoll, LLP
                               201 South Main Street, Suite 600
                               Salt Lake City, Utah 84111-2221
                               Telephone:  (801) 531-3000
                               Telecopier:  (801) 531-3001

     10. Governing Law. This Deed of Trust shall be governed by Utah law.

     11. Successors and Assigns. All covenants, agreements,  representations and
warranties  contained  herein shall bind, and the benefits and advantages  shall
inure to, the respective successors and assigns of the parties hereto.

         IN WITNESS  WHEREOF,  Trustor  has caused this Deed of Trust to be duly
executed and delivered as of the date first above written.

                                   PANNONIAN ENERGY INC.


                                   By:
                                      -----------------------------
                                        Mark A. Erickson, President






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STATE OF COLORADO )
                                    ) ss.
COUNTY OF ARAPAHOE         )

     The  foregoing  instrument  was  acknowledged  before me this  _____ day of
October,  2003, by Mark A.  Erickson,  as President of Pannonian  Energy Inc., a
Delaware corporation.

         Witness my hand and official seal.

         My commission expires:




                                  Notary Public




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                                    Exhibit 1

               Deed of Trust and Security Agreement (Oil and Gas)



         The five following wells, together with the leases set forth below, but
only insofar as the leases cover the specific  quarter-quarter section described
below and only  insofar as they may be necessary to produce and operate the five
following wells, and not other wells:


         Well Name:                 Lytham Federal No. 22-22-9-19
         Lessor:                    United States of America
         Lessee:                    Pannonian Energy, Inc.
         Serial No.:                UTU - 78433
         Effective Date:            July 1, 1999
         Recorded:                  January 9, 2001, Book 748, page 495
         Description:               Township 9 South, Range 19 East
                                    -------------------------------
                                    Section 22:  SE/4 NW/4
                                    Uintah County, Utah

         Well Name:                 Federal No. 23-21-9-19
         Lessor:                    United States of America
         Lessee:                    Pannonian Energy, Inc.
         Serial No.:                UTU - 78433
         Effective Date:            July 1, 1999
         Recorded:                  January 9, 2001, Book 748, page 495
         Description:               Township 9 South, Range 19 East
                                    -------------------------------
                                    Section 21:  NE/4 SW/4
                                    Uintah County, Utah

         Well Name:                 Federal No. 32-31-9-19
         Lessor:                    United States of America
         Lessee:                    Retamco Operating, Inc.
         Serial No.:                UTU - 76489
         Effective Date:            July 1, 1997
         Recorded:                  January 9, 2001, Book 748, page 459
         Description:               Township 9 South, Range 19 East
                                    -------------------------------
                                    Section 31:  SW/4 NE/4
                                    Uintah County, Utah

                                       10


         Well Name:                 Federal No. 23-29-9-19
         Lessor:                    United States of America
         Lessee:                    Medallion Exploration
         Serial No.:                UTU - 76262
         Effective Date:            April 1, 1997
         Recorded:                  December 21, 2001, Book 747, page 245
         Description:               Township 9 South, Range 19 East
                                    -------------------------------
                                    Section 29:  NE/4 SW/4
                                    Uintah County, Utah

         Well Name:                 Federal No. 42-29-9-19
         Lessor:                    United States of America
         Lessee:                    Medallion Exploration
         Serial No.:                UTU - 76262
         Effective Date:            April 1, 1997
         Recorded:                  December 21, 2001, Book 747, page 245
         Description:               Township 9 South, Range 19 East
                                    -------------------------------
                                    Section 29:  SE/4 NE/4
                                    Uintah County, Utah



              This is intended to be a wellbore deed of trust only.



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