10-K/A

United States

Securities and Exchange Commission

Washington, D.C. 20549

Form 10-K/A

(Amendment No. 2)

Annual Report pursuant to Section 13 or 15(D) of the Securities Exchange Act of 1934

For the year ended December 31, 2005

Commission file number : 000-32669

Heartland Oil and Gas Corp.

Incorporated in Nevada IRS ID No. 91-1918326

1625 Broadway, Suite 1480

Denver, Colorado 80202

(Address of principal executive offices)

Telephone: (303) 405-8450

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.001

Heartland is not a well-known seasoned filer. Heartland is required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Heartland (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months, and (2) has been subject to such filing requirements for the past 90 days.

Disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, but disclosure will be contained, to the best of Heartland’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

Heartland is a non-accelerated filer. Heartland is not a shell company.

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold as of June 30, 2005, the last business day of Heartland’s most recently completed second fiscal quarter, was $18,280,805.

As of March 13, 2006, the number of shares of common stock, $0.001 par value, outstanding was 46,737,013, and the number of shares of Series B preferred stock, $0.001 par value, outstanding was 3,529,412.

Documents Incorporated By Reference

Part III is incorporated by reference from the registrant’s definitive Proxy Statement for its Annual Meeting of Shareholders to be filed, pursuant to Regulation 14A, no later than 120 days after the close of the registrant’s fiscal year.

Explanatory Note

Heartland Oil and Gas Corp. has determined that, in certain cases, it did not comply with accounting principles generally accepted in the United States in the preparation of its financial statements for the years ended December 31, 2004, and 2005, and for the period from inception (August 11, 2000) through December 31, 2005. Accordingly, we have restated the annual financial statements in this Annual Report on Form 10-K/A (Amendment No. 2).

As discussed more fully in Note 15, “Restatement of Financial Statements”, to the financial statements in Item 8 of this Form 10-K/A (Amendment No. 2), the financial statements have been restated to reflect our Series B Convertible Redeemable Preferred Stock as a separate line item outside of permanent equity. The restatements are consistent with guidance in Emerging Issues Task Force (“EITF”) No. D-98, Classification and Measurement of Redeemable Securities.

The financial statements have also been restated to reflect the beneficial conversion feature as of the date of issuance of our Series A and Series B Convertible Redeemable Preferred Stock, and the allocation of value to warrants that were attached to the Series A Convertible Redeemable Preferred Stock. The restatements are consistent with guidance in EITF No. 98-5, Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios, EITF 00-27, Application of Issue No. 98-5 to Certain Convertible Instruments, and EITF 00-19, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock.

The financial statements have also been restated to reflect the discount, resulting from the allocation of proceeds to the beneficial conversion feature as a return to the preferred shareholders at the date of issuance (the date that the preferred shareholders could convert their shares of preferred stock into shares of common stock on a one-for-one basis). This discount is analogous to a dividend and as such affects net loss attributable to common shareholders, and net loss per share attributable to common shareholders. The restatements are consistent with guidance in EITF 98-5, Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios, and Financial Accounting Standards Board Statement of Standards No. 128, Earnings Per Share.

None of these items affect revenue or cash expenses.

We are filing, commensurate herewith, a restated Quarterly Report on Form 10-Q/A (Amendment No. 1) to reflect the effect of certain matters discussed above.

In our 2005 Form 10-K as originally filed we reported the Standardized Measure of our discounted future net cash flow of proved gas reserves as $1,316,103. We also reported that at December 31, 2005, we had approximately $14,550,000 in US federal and state net operating loss tax carryforwards, expiring through 2025. In calculating our Standardized Measure as originally reported we believed that we did not need to include income tax expense as a reduction of future cash flow from the proved reserves because our tax NOL carryforwards sharply exceeded our proved reserves. We have now concluded that GAAP requires that we include income tax expense in the calculation of the Standardized Measure, in spite of the large amount of our NOL carryforwards. Accordingly, we have restated the Standardized Measure in this Form 10-K/A (Amendment No. 2).

The results of the external audit of the Standardized Measure of our discounted future net cash flow of proved gas reserves, net of future income tax expense, as of December 31, 2005, are below.

	Proved Developed Producing		Proved Undeveloped		Total Proved
Net remaining reserves
Gas (mcf)		284,701		762,177		1,046,878
Income
Future net cash flow	$	649,025	$	838,142	$	1,487,167
Future net cash flow discounted at 10 percent	$	551,531	$	312,896	$	864,427

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Item 3. Legal Proceedings

Effective September 27, 2004, we entered into subscription agreements with 48 investors, whereby we issued a total of 23,260,909 shares of our common stock at a purchase price of $1.50 per share for total aggregate proceeds of $34,891,363. However, one subscriber, Concret GMBH, for 3,333,334 common shares, for proceeds of $5,000,000, failed to complete their purchase and provide the purchase price. In 2005, the 3,333,334 common shares were returned to treasury. In 2004 we filed a lawsuit against Concret to recover committed funds. Concret has not replied to our filing. The matter is still pending. However, we believe that Concret may no longer be in business. Accordingly we may not be able to recover such funds.

One or our wholly-owned subsidiaries entered into a joint venture agreement with the Far East International Petroleum Company (“FEIPCO”) on April 20, 2005, to establish a joint venture to drill, case and complete oil wells in the area known to the parties as West Qurnah and North Rumailia fields, Republic of Iraq. As part of the joint venture agreement, we provided approximately $4.1 million to FEIPCO and our then current Chief Executive Officer provided approximately $585,000 of his own money to the joint venture for initial construction cost. In September 2005 we received a notice from FEIPCO terminating the JV agreement and claiming that $1,600,000 is owed as part of the joint venture. We have conducted a due diligence investigation of FEIPCO and the merits of these claims. We sent correspondence denying any liability to FEIPCO with respect to the claims asserted and will vigorously defend any arbitration or other legal action based upon such claims. To our knowledge, FEIPCO has not commenced a legal action; accordingly, we have concluded that the likelihood of a further loss on this matter is remote. For additional information regarding FEIPCO see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” below.

We are not involved as a plaintiff in any other material proceedings or pending litigation. We know of no material, active or pending legal proceedings against us. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

Item 6. Selected Financial Data (As Restated, See Financial Statement Note 15)

	2005			2004			2003
Revenue	$	—		$	—		$	—
Net loss	$	(41,575,015	)	$	(1,683,413	)		(1,219,393	)
Series A Convertible Redeemable Preferred stock dividend		—			(1,487,850	)		—
Series B Convertible Redeemable Preferred stock dividend		—			(4,447,059	)		—
Net loss attributable to common shareholders	$	(41,575,015	)	$	(7,618,322	)	$	(1,219,393	)
Net loss per common share	$	(.89	)	$	(.25	)	$	(.06	)
Total assets		7,861,039			49,202,007			12,589,731
Total long-term obligations		671,140			562,619			—
Series B Convertible Redeemable Preferred stock		5,599,958			5,599,958			—
Total shareholders’ equity	$	1,307,644		$	42,264,120		$	12,089,368

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read with our financial statements and the related notes that appear elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to; those discussed below and elsewhere in this annual report, particularly in the section entitled “Item 1A. Risks Related To Our Business.”

Overview and Outlook

Heartland Oil and Gas Corporation is engaged in the exploration, development, production and sales of coalbed methane from its nearly 1 million acre eastern Kansas leasehold position. The acreage is located in two areas in northeast Kansas, primarily in Linn and Miami Counties: the Bourbon Arch, located on the northern edge of the Cherokee basin, and the Forest City Basin.

Corporate Strategy

Our objective. is to increase shareholder value by increasing the net asset value and maximizing the cash flow and earnings of our assets. We plan to achieve these goals by:

• Growing reserves and production from existing Bourbon Arch assets,

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• Building economies of scale to reducing unit costs and enhance economics,

• Increasing operational flexibility and controlling pace of development,

• Increasing balance sheet strength and flexibility,

• Building a portfolio of complementary oil and gas assets on the west coast, rocky mountains, mid-continent, and Appalachian regions,

• Investing capital in an efficient, disciplined way to increase reserves and production

Notable Items in 2005:

• Drilled and completed 10 wells on the Bourbon Arch with a 100% average production increase and 50% average reduction in drilling and completion costs,

• Completed construction of a 5.5 mile gas transportation line from Lancaster to Enbridge tap,

• Completed construction of Paola gas processing plant, including dehydration, carbon dioxide extraction,

• Drilled a water disposal well and associated disposal facilities at Beagle,

• Opened Corporate office in Denver, Colorado and relocated field office from Ottawa, Kansas, to Paola, Kansas,

• Evaluated Forest City Basin acreage with geology, engineering, and production testing.

Capital Expenditures

We plan to spend approximately $15 million in 2006. These expenditures will be directed toward developing existing proved and probable reserves on the Bourbon Arch, constructing additional pipelines, and evaluating new project areas. For 2006, we plan to invest approximately $15 million, or 100% of the budget, in our Bourbon Arch assets. Approximately 90% of the capital budget is focused on attempting to convert probable and possible reserves into proved reserves.

We project 2006 capital program will allow us to create value by drilling 100 net wells and installing 14.5 miles of transportation lines and associated facilities necessary to support the drilling program and to hook up currently stranded gas, compared to the 2005 program in which we drilled 11 wells and installed 5.5 miles of pipeline and associated gas processing facilities. If successful, we believe we can achieve a 2006 exit rate of 3 to 4 gross MMcfgpd per day from the Bourbon Arch project. We have currently secured the necessary pipeline right of ways to achieve the 2006 program. We expect production to be 100% natural gas and anticipate funding our capital program from outside financing sources and internally generated cash flow. Successes may also encourage the initiation of additional discretionary projects.

We are trying to obtain adequate financing so we can develop our Bourbon Arch project into a nucleus for future growth. We cannot assure that we will be able to obtain such financing. Without it, we will have to significantly reduce the scope of our operations or cease operations.

Appraisal, Evaluation and Exploitation Activity

Since 2003, we have been active in assembling significant acreage positions which we believe are prospective for finding and developing commercial quantities of hydrocarbons.

Development Activity

Bourbon Arch

Lancaster battery: The Lancaster battery includes 16 producing wells, one disposal well, and associated production and water disposal facilities. The wells are drilled on 40 and 80 acre spacing. With the completion of the 5.5 mile gas gathering and processing plant in late 2005, we established production, proved reserves, and cash flow from our Lancaster battery. Lancaster is currently producing 350 thousand cubic feet of gas per day (“Mcfgpd”). We expect sales to exceed 260 Mcfgpd net of fuel gas, shrinkage, and carbon dioxide extraction.

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The table below summarizes the well history at Lancaster:

	Operator		Total
Lancaster Activity	Heartland	Evergreen Resources
Drilled	7	9	16
Completed	10	6	16
Recompleted	6	3	9

Beagle, Jake and Osawatomie batteries: We are currently venting approximately 240 gross Mcfgpd from three other multi-well production batteries on the Bourbon Arch. Including Lancaster, each battery is separated by approximately three miles, and thus defines a potential project covering at least 12 miles along the Bourbon Arch. In August 2005 we drilled and completed two wells at Beagle and one well at Jake. We have monitored production rates of vented gas, and have accumulated continuous daily production data for over eight months. Initial rates of these wells ranged from 40 to 80 Mcfgpd, and are now venting gas at rates ranging from 35 to 70 Mcfgpd. We intend to put these three wells, along with five wells originally drilled and completed by Evergreen Resources (one at Beagle and four at Osawatomie) into production if we are able to access financing necessary to do so.

We plan to invest approximately $15 million on the Bourbon Arch. Of the $15 million, we expect $13 million will be directed toward a 100 well, 160 acre development drilling program targeting shallow (600 to 800 foot drill depth) Pennsylvanian reservoirs of the Cherokee and Marmaton Groups and $2 million will be invested in pipelines and infrastructure necessary to support development drilling and to hook up stranded gas from Jake, Beagle, and Osawatomie batteries.

See Item 1 Business for more information on Development Activity.

Results of Operations

The following overview provides a summary of key information concerning our financial results for 2005, 2004 and 2003.

	2005			2004			2003
Revenue	$	—		$	—		$	—
Expense
Impairment of oil and gas property		34,893,028			—			—
Impairment of equity investment in Arabian Heartland International Corp.		4,105,500			—			—
General and administrative:
Other		736,123			518,504			483,767
Salary and consulting fees		904,763			201,756			101,509
Legal and accounting fees		295,598			222,117			203,423
Stock-based compensation		618,539			766,069			455,375
Depreciation and accretion		141,754			67,235			3,221
Total general and administrative		2,696,777			1,775,681,			1,247,295
Operating Loss		(41,695,305	)		(1,775,681	)		(1,247,295	)
Interest Income		120,290			92,268			27,902
Net (Loss)	$	(41,575,015	)	$	(1,683,413	)	$	(1,219,393	)

Comparison of 2005, 2004 and 2003

Impairment of oil and gas property

In 2005, we recorded impairment to our oil and gas property of $34,893,028. This impairment was the result of the following items. In 2005 we recorded the expiration of certain leases for $73,917, and an impairment of $14,412,743 arising from the oil and gas leases we abandoned in the Forest City Basin in northeast Kansas. In 2005 we also recorded an impairment of $17,112,416 on exploration pilots in the northern part of our acreage, and two coalbed methane exploration pilots in the southern part of our acreage, all in northeast Kansas. We include the impairment losses in exploration expense.

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We apply a ceiling test to the capitalized cost in the full cost pool. The ceiling test limits such cost to the estimated present value, using a 10% discount rate, of the future net revenue from proved reserves, based on current economic and operating conditions. With the ceiling test at December 31, 2005, we computed a charge against our oil and gas property of $3,293,952.

Impairment of equity investment in Arabian Heartland International Corp

In April 2005, we and Far East International Petroleum Corp. (FEIPCO), entered into a joint venture agreement (“JV”). Under the JV, the parties were to pursue contracts in Southern Iraq relating to drilling, production, and marketing of hydrocarbons, as well as procurement of oilfield services. The parties were to form an operating company called Arabian Heartland International Corp., through which joint venture opportunities were to be pursued.

We held a 35% interest in the venture. FEIPCO held 60% and Richard Coglon, our former CEO, held 5% through an entity he controlled. Our board of directors approved each interest. In April 2005, we advanced $4,105,500 to FEIPCO, representing our 35% share of $10,730,000 camp construction and equipping cost, and $1,000,000 bid bond.

In September 2005 we received a notice from FEIPCO terminating the JV agreement and claiming that $1,600,000 is owed as part of the joint venture. We have conducted a due diligence investigation of FEIPCO and the merits of these claims. We sent correspondence denying any liability to FEIPCO with respect to the claims asserted and will vigorously defend any arbitration or other legal action based upon such claims. To our knowledge, FEIPCO has not commenced a legal action; accordingly, we have concluded that the likelihood of a further loss on this matter is remote.

General and administrative expense

Other general and administrative expense for 2005 and 2004 was $736,123 and $518,504, respectively, an increase of $217,619 for the year ended December 31, 2005. This increase was caused by to a full year of office expense for the Denver office and the Kansas field office, whereas in 2004 there were only partial year costs. General and administrative expense increased $34,736 for 2004 compared to 2003. This increase was caused by increased office rent from the opening of the Denver office and the acquisition of the Kansas field office lease from Evergreen Resources in the fourth 2004 quarter.

Salary and consulting fees were $904,763 and $201,756 for 2005 and 2004, respectively. The increase of $703,007 was a result of four full-time staff hired in the Denver office and land, engineering and geological services provided to evaluate and develop our oil and gas assets. In addition we accrued a $100,000 severance payment to our former president. Salary and management fees increased from $101,509 for 2003 to $201,756 for 2003 as a result of the inclusion of management fees to an officer for 2004. Management fees paid to two directors also increased 2004.

Legal and accounting fees were $295,598 and $222,117 for 2005 and 2004, respectively. The increase of $73,481 was primarily attributed to legal cost incurred for our joint venture with Far East International Petroleum Corp.

Stock based compensation was $618,539 and $766,069 for 2005 and 2004, respectively. The decrease of $147,530 occurred because we issued fewer shares to non-employees during 2005. Stock-based compensation was $455,375 for 2003. In 2004 we granted options for 1,880,000 shares compared to options for 100,000 shares in 2003.

Depreciation for 2005 and 2004 was $98,992 and $56,986, respectively, an increase of $42,006. This increase was due to additional furniture and equipment required for the Denver office and a full year of depreciation of the Kansas assets, compared to three months depreciation in 2004. Depreciation for 2003 was $3,221 The increase of $53,765 resulted from the acquisition of the Evergreen assets, including field trucks, office furniture and fixtures and salt water disposal facilities.

Accretion expense was $42,762 for 2005 compared to $10,249 for 2004. The increase of $32,513 was caused by the increased time factor of a full year’s accretion compared to three months accretion for 2004.

We have experienced recurring losses from operations. Our continuation is dependent upon a successful program of acquisition and exploration, and achieving a profitable level of operations. It is likely we will need additional financing for ongoing operations. We have raised additional capital through the equity offerings noted above. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining loans, assuming those loans would be available, would increase our liabilities and future cash commitments. We cannot assure that we will be able to obtain further funds we desire for our continuing operations or, if available, that funds can be obtained on commercially reasonable terms. If we are not able to obtain additional financing on a timely basis, we may be unable to conduct our operations as planned. In such event, we would have to scale down or perhaps even cease our operations.

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Operation plan

For the next 12 months, we plan to sell gas from Lancaster, and seek financing necessary to initiate drilling operations and hook up currently venting wells at Jake, Beagle, and Osawatomie. Based on geological mapping, pipelines, and leasehold position, we have defined a 100 well drilling program on our acreage and have obtained substantially all of the pipeline right of ways required to build the gathering system to tie in both the 100 well program and the currently venting gas to existing sales lines and processing facilities.

We have no drilling obligations or commitments, and, except for regulatory requirements, all activity is discretionary. In addition, we are evaluating alternatives for resolving our dispute with Far East International Oil Company.

Liquidity and Capital Resources

The information contained in the Liquidity and Capital Resources section is as of March 31, 2006. Please see our Quarterly Report for the quarter ended June 30, 2006 for more current information.

We require additional funds to implement our growth strategy in our gas exploration operations. These funds may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares. We may not be able to obtain such funds. If we are not able to do so we will have to significantly reduce the scope of our operations or cease operations entirely. This would result in substantial losses for our investors.

On January 13, 2004 we closed a private placement for the issuance and sale of 995,305 units at a purchase price of $3.20 per unit for total aggregate proceeds of $3,184,979. Each unit included one share of Series A Preferred Convertible Stock. The preferred shares have been converted into common shares.

As of December 31, 2005, we had working capital of $1,993,000. Over the next twelve months we intend to use all available funds to produce our Lancaster Prospect as shown below:

Estimated Expenditures During the Next Twelve Months

General and Administrative	$	1,350,000
Oil and Gas
Plugging and reclamation of northern wells		400,000
New leases		50,000
New drilling		13,000,000
Gathering and Pipelines		2,000,000
Lease Operating Expense		1,350,000
Total	$	18,150,000

The activities described above require additional capital. We may not be able to raise adequate capital. Should we not be able to do so, we will reduce the scope of our activities.

During the year ended December 31, 2005 we spent $3,686,232 on exploration and acquisition of our oil and gas property. $160,482 was acquisition cost and $3,525,750 was exploration cost. We also spent $1,106,703 on pipeline and processing facilities.

Our total liabilities at December 31, 2005 were $953,000, compared to $1,338,000 at December 31, 2004. The decreases occurred because we paid down our accounts payable from $765,000 as at December 31, 2004 to 282,000 at December 31, 2005.

We have no significant off-balance sheet arrangements.

Contractual Obligations

	Total		One Year		Three Years
Operating Lease Obligations	$	326,138	$	62,683	$	263,455

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We entered into management consulting agreements dated October 1, 2004, as amended, with a director for the payment of management fees of CN$ 7,500 per month for a term of two years and with Mr. Coglon, President for payment of $16,666 per month for a term of one year. Mr. Coglon’s agreement was terminated by his severance agreement dated December 31, 2005.

Critical Accounting Policies and Estimates

We are engaged in the exploration, development, acquisition and production of oil and gas. Our discussion of financial condition and results of operation is based upon the information reported in our financial statements. The preparation of these financial statements requires us to make assumptions and estimates that affect the reported amounts of assets, liabilities, revenue and expense at the date of our financial statements. We base our decisions affecting the estimates we use on historical experience and various other sources that we believe are reasonable under the circumstances. Actual results may differ from the estimates we calculate due to changing business conditions or unexpected circumstances. Policies we believe are critical to understanding our business operations and results of operations are detailed below. Through December 31, 2005 we were a development stage company as defined by Statement 7, Accounting and Reporting by Development Stage Enterprises. For additional information on our significant accounting policies you should see Note 2 of our financial statements in Item 8 of this report.

Proved oil and gas reserves. Proved oil and gas reserves are the most important estimates for an exploration and production company because they affect the perceived value of our company, are used in comparative financial analysis ratios, and are used as the basis for the most significant accounting estimates in our financial statements which include the periodic calculations of depletion, depreciation and impairment for our proved oil and gas property. Proved reserves are the estimated quantities of crude oil, natural gas and natural gas liquids which geological and engineering data demonstrate with reasonable certainty to be recoverable in future periods from known reservoirs under existing economic and operating conditions. We determine future cash inflow and future production and development cost by applying benchmark prices and costs, including transportation, quality and basis differentials, in effect at the end of each period to the estimated quantities of oil and gas remaining to be produced as of the end of that period. We reduce expected cash flow to present value using a discount rate that depends upon the purpose for which the reserve estimates will be used. For example, the standardized measure calculation required by Statement 69, Disclosures about Oil and Gas Producing Activity, requires a ten percent discount rate to be applied. Although reserve estimates are inherently imprecise, and estimates of new discoveries and undeveloped locations are more imprecise than those of established proved producing oil and gas property, we make considerable effort to estimate our reserves, including the use of independent reserve engineering consultants. We expect that periodic reserve estimates will change in the future as additional information becomes available or as oil and gas prices and operating and capital costs change. We evaluate and estimate our oil and gas reserves at December 31 each year. We record changes in depletion, depreciation or impairment calculations caused by changes in reserves in the period that the reserve estimates change.

Full cost method of accounting. Generally accepted accounting principles provide for two alternative methods for the oil and gas industry to use in accounting for oil and gas producing activity. These two methods are generally known in our industry as the full cost method and the successful efforts method. Both methods are widely used. The methods are different enough that in many circumstances the same set of facts will provide materially different financial statement results within a given year. We have chosen the full cost method of accounting for our oil and gas producing activity, and a detailed description is included in Note 2 of our financial statements in this report.

Using the full cost method, we capitalize to the full cost pool all cost incurred with acquisition, exploration and development of oil and gas reserves, including cost such as leasehold acquisition cost, geological expenditures, tangible and intangible development cost including direct internal cost. Beginning at December 31, 2005, we have property with proven reserves. Beginning in 2006, as we earn revenue, capitalized cost, including estimated future cost to develop the reserves and estimated abandonment cost, net of salvage, will be depleted on the units-of-production method using estimates of proved reserves. Investments in unproved properties and major development projects are not amortized until proved reserves associated with the projects can be determined. If the future development of unproved properties is determined uneconomical the amount of such property is added to the capitalized cost to be amortized. The capitalized cost included in the full cost pool is subject to a “ceiling test”, which limits such cost to the estimated present value, using a ten percent discount rate, of the future net revenue from proved reserves, based on current economic and operating conditions. The ceiling test calculation is dependent on the estimates used in the calculation of our proved reserves. As of December 31, 2005, a portion of our oil and gas property was unproved and was excluded from amortization.

Sales of proved and unproved property are accounted for as adjustments of capitalized cost with no gain or loss recognized, unless such adjustments would significantly alter the relationship between capitalized cost and proved reserves of oil and gas, in which case the gain or loss is recorded in the operations statement.

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In periods prior to establishing proved reserves at December 31, 2005, we recorded an impairment charge on unproved property when we determined that the property would not be developed or the carrying value would not be realized. In the quarter ended September 30, 2005, we recorded a year-to-date impairment loss of $31,600,000 arising from the uneconomic CBM exploration pilots in the Forest City Basin acreage. At December 31, 2004, we concluded that none of our unproved oil and gas properties were impaired.

We account for sales of proved and unproved property as adjustments of capitalized cost with no gain or loss recognized, unless such adjustments would significantly alter the relationship between capitalized cost and proved reserves of oil and gas, in which case the gain or loss is recorded in the operations statement.

Asset retirement obligations. We record an estimated liability for future cost associated with plugging and reclaiming of our oil and gas properties at the end of the commercial life of each property. We base our estimate of the liability on our historical experience in plugging and reclaiming oil and gas property projected into the future based on our current understanding of federal and state regulatory requirements. Our present value calculations require us to estimate the economic lives of our properties, assume what future inflation rates apply to external estimates as well as determine what credit adjusted risk-free rate to use. The impact of these estimates on our operations statement appears in our depreciation, depletion and amortization calculations and occurs over the remaining life of our oil and gas property.

Stock-based compensation. We have historically accounted for stock-based compensation using the intrinsic value recognition and measurement principles detailed in Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees. No stock-based employee compensation expense relating to stock options has been reflected in our expense as all options granted under our plans had an exercise price equal to the market value of the underlying common stock on the date of grant. We currently use the Black-Scholes option valuation model to calculate required disclosures under SFAS No. 123, Accounting for Stock Based Compensation. We account for stock-based compensation issued to non-employees and consultants in accordance with the provisions of Statement 123 and the Emerging Issues Task Force consensus in Issue No. 96-18 (“EITF 96-18”), Accounting for Equity Instruments that are issued to Other Than Employees for Acquiring or in Conjunction with Selling Goods or Services. As of January 1, 2006, we have adopted the provisions of Statement 123(R), Share-Based Payment. This statement requires us to record expense associated with the fair value of stock-based compensation. As a result of adoption of this statement, we expect to record compensation expense associated with unvested stock options totalling $354,955 recorded in future periods under the modified-prospective adoption method.

Item 8. Financial Statements and Supplementary Data.

The information required by this item begins at Page F-1.

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Part IV

Item 15. Exhibits and Financial Statement Schedules.

We file the following Exhibits with this Annual Report:

Exhibit Number	Description
3.1	Articles of Incorporation (1)
3.2	Bylaws of Adriatic Holdings Ltd. (1)
3.3	Certificate of Amendment to Articles of Incorporation effective November 4, 2002 (2)
3.4	Certificate of Amendment to Articles of Incorporation effective December 10, 2003 (12)
3.5	Certificate of Designation for shares of Series A Convertible Preferred Stock, effective December 18, 2003 (9)
3.6	Certificate of Designation for shares of Series B Convertible Preferred Stock, effective October 1, 2004 (12)
4.1	2005 Stock Option Plan (13)
10.1	Form of Oil and Gas Lease (4)
10.2	Managing Dealers Agreement, dated June 19, 2003, between Heartland Oil and Gas Corp. and C.K. Cooper and Company, Inc. (5)
10.3	Managing Dealers Agreement, dated July 29, 2003 between Heartland Oil and Gas Corp. and C.K. Cooper and Company, Inc. (8)
10.4	Form of Subscription Agreement in connection with private placements on June 24 and June 30, 2003 (5)
10.5	Form of Subscription Agreement in connection with private placement on August 19, 2003 (6)
10.6	Consulting Agreement dated July 1, 2003, between Heartland Oil and Gas Corp. and Donald Sharpe (8)
10.7	Consulting Agreement dated July 1, 2003, between Heartland Oil and Gas Corp. and Richard Coglon (8)
10.8	Letter Agreement between Topeka-Atchison Gas & Illuminating LLC with Heartland Oil and Gas Inc., dated August 25, 2000 (8)
10.9	Form of Oil and Gas Lease with Option (7)
10.10	Form of Subscription Agreement in connection with private placement of Series A Preferred shares, dated September 24, 2003 (10)
10.11	Purchase and Sale Agreement between Heartland Oil and Gas Corp. and Evergreen Resources, Inc, dated effective September 27, 2004 (12)
10.12	Form of Securities Purchase Agreement in connection with private placement of Series B Preferred shares, dated October 1, 2004 (11)
10.13	Form of Subscription Agreement in connection with the private placement on September 27, 2004 (12)
10.14	Amended Consulting Agreement dated November 1, 2004 with Richard Coglon (13)
10.15	Amended Consulting Agreement dated November 1, 2004 with Donald Sharpe (13)
10.16	Joint Venture Agreement dated April 20, 2005 between Far East International Petroleum Company (14)
10.17	Agreement for Services dated July 19, 2005 with Robert Poley (15)
14.1	Code of Business Conduct and Ethics (10)
21.1	Heartland Oil and Gas Inc., a company incorporated pursuant to the laws of the State of Nevada
23.1	Consent of Staley, Okada & Partners, Independent Auditors *
23.2	Consent of MHA Petroleum Consultants *
31.1	Certification of Chief Executive Officer (pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934, as amended) *
31.2	Certification of Chief Financial Officer (pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934, as amended) *
32.1#	Certification of Chief Executive Officer (pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. Section 1350)) *
32.2#	Certification of Chief Financial Officer (pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. Section 1350)) *

 * Filed herewith

# This certification “accompanies” this Annual Report, is not deemed filed with the SEC and is not to be incorporated by reference into any of our filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing.

10

(1) Incorporated by reference to our Form SB-2 Registration Statement filed with the Securities and Exchange Commission on October 23, 2001.

(2) Incorporated by reference to our Form 10-QSB filed with the Securities and Exchange Commission on November 14, 2002.

(3) Incorporated by reference to our Form 8-K filed with the Securities and Exchange Commission on October 2, 2002.

(4) Incorporated by reference to our Form 10-KSB filed with the Securities and Exchange Commission on April 1, 2003.

(5) Incorporated by reference to our Form 10-QSB filed with the Securities and Exchange Commission on July 28, 2003.

(6) Incorporated by reference to our Form 8-K filed with the Securities and Exchange Commission on August 21, 2003.

(7) Incorporated by reference to our Form 10-KSB/A filed with the Securities and Exchange Commission on October 22, 2003.

(8) Incorporated by reference to our Form SB-2 Registration Statement filed with the Securities and Exchange Commission on August 29, 2003, as amended.

(9) Incorporated by reference to our Form SB-2 Registration Statement filed with the Securities and Exchange Commission on February 17, 2004.

(10) Incorporated by reference to our Form 10-KSB filed with the Securities and Exchange Commission on March 29, 2004, as amended on May 27, 2004.

(11) Incorporated by reference to our Form 8-K filed with the Securities and Exchange Commission on October 6, 2004.

(12) Incorporated by reference to our Form SB-2 Registration Statement filed with the Securities and Exchange Commission on November 15, 2004.

(13) Incorporated by reference to our Form 10-KSB filed with the Securities and Exchange Commission on April 15, 2005.

(14) Incorporated by reference to our current report on Form 8-K filed with the Securities and Exchange Commission on May 13, 2005.

(15) Incorporated by reference to our current report on Form 8-K filed with the Securities and Exchange Commission on July 21, 2005.

11

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, Heartland has duly caused this report to be signed on its behalf by the undersigned authorized officer.

HEARTLAND OIL AND GAS CORP.

/s/ Philip S. Winner

Phillip S. Winner

President, Chief Executive Officer and Director

August 16, 2006

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of Heartland and in the capacities and on the dates indicated.

/s/ Philip S. Winner

Philip S. Winner, Chief Executive Officer and Director

(Principal Executive Officer)

August 16, 2006

/s/ Robert L. Poley

Robert L. Poley, Chief Financial Officer and Director

(Principal Financial Officer and Principal Accounting Officer)

August 16, 2006

/s/ Donald Sharpe by Philip S. Winner, Attorney-in-fact

Donald Sharpe, Director

August 16, 2006

/s/ John Martin by Philip S. Winner, Attorney-in-fact

John Martin, Director

August 16, 2006

/s/ Todd Mackintosh by Philip S. Winner, Attorney-in-fact

Todd Mackintosh, Director

August 16, 2006

12

Item 8. —Financial Statements and Supplementary Data.

Heartland Oil & Gas Corp. (An Exploration Stage Company)
Report of Independent Registered Public Accounting Firm	F-2
Balance Sheet as of December 31, 2005 and 2004	F-3
Operations Statement for the years ended December 31, 2005, 2004 and 2003, and for the period from inception (August 11, 2000) through December 31, 2005	F-4
Stockholders’ Equity Statement for the years ended December 31, 2005, 2004 and 2003, and for the period from inception (August 11, 2000) through December 31, 2005	F-5
Cash Flow Statement for the years ended December 31, 2005, 2004 and 2003, and for the period from inception (August 11, 2000) through December 31, 2005	F-7
Financial Statement Notes	F-8

F-1

Report of Independent Registered Public Accounting Firm

To the Stockholders of Heartland Oil and Gas Corp.:

We have audited the accompanying balance sheet of Heartland Oil and Gas Corp. (An Exploration Stage Company) (the “Company”) as at December 31, 2005 and 2004 and the related operations statement, stockholders’ equity statement and cash flow statement for each of the years ended December 31, 2005, 2004 and 2003. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as at December 31, 2005 and 2004, and the results of its operations and its cash flow for each of the years ended December 31, 2005, 2004 and 2003, in conformity with United States generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company is dependent upon financing to continue operations and has suffered recurring losses from operations. These matters raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regards to these matters are discussed in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

As described in Note 15 to the financial statements, the Company has restated its financial statements as of December 31, 2005 and 2004 and for the period from inception (August 11, 2000) through December 31, 2005.

“Staley, Okada & Partners”

Vancouver, B.C.	STALEY, OKADA & PARTNERS
24 March 2006, except for notes 7 and 15, as to which the date is July 31, 2006	CHARTERED ACCOUNTANTS

F-2

Heartland Oil & Gas Corp.

(An Exploration Stage Company)

Balance Sheet

(As Restated. See Note 15)

	December 31,
	2005 (Audited)			2004 (Audited)
Assets
Current assets:
Cash and cash equivalents	$	2,126,156		$	13,081,221
Prepaid expense		145,658			332,021
Other current assets		3,849			762
Total current assets		2,275,663			13,414,004
Oil and gas property and equipment, full cost method (Note 3):
Oil and gas property, unproved (Note 3)		1,776,322			34,299,134
Oil and gas property, subject to depletion, proved		1,316,102			—
Pipeline and facilities (Note 3)		2,332,155			1,260,279
Equity investment in Arabian Heartland International Corp. (Note 4 )		4,105,500			—
Impairment of equity investment in Arabian Heartland International Corp.		(4,105,500	)		—
Other property and equipment, net of accumulated depreciation of $85,984 and $24,727, respectively		160,797			228,590
Total assets	$	7,861,039		$	49,202,007
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable and accrued liabilities	$	282,297		$	764,790
Due to related parties (Note 5)		—			10,520
Total current liabilities		282,297			775,310
Long-term debt
Asset retirement obligations (Note 6)		671,140			562,619
Series B Convertible Redeemable Preferred stock - $0.001 par value, 5,000,000 shares authorized, 3,529,412 shares issued and outstanding (liquidation preference: $6,000,000- See Note 7)		5,599,958			5,599,958
Stockholders’ equity
Common stock - $0.001 par value, 100,000,000 shares authorized, 46,737,013 shares issued and outstanding at December 31, 2005, and 50,070,347 shares issued and 46,737,013 shares outstanding at December 31, 2004		46,737			46,737
Additional paid-in capital		46,220,873			45,602,334
Deficit accumulated during the exploration stage		(44,959,966	)		(3,384,951	)
		1,307,644			42,264,120
Total liabilities and stockholders’ equity	$	7,861,039		$	49,202,007

See accompanying notes.

F-3

Heartland Oil & Gas Corp.

(An Exploration Stage Company)

Operations Statement

	Year Ended December 31, 2005			Year Ended December 31, 2004			Year Ended December 31, 2003			Period from Inception (August 11, 2000) Through December 31, 2005
				(As Restated. See Note 15)						(As Restated. See Note 15)
Revenue	$	—		$	—		$	—		$	—
Expense:
Impairment of oil and gas property		34,893,028									34,893,028
Impairment of equity investment in Arabian Heartland International Corp.		4,105,500									4,105,500
General and administrative		2,696,777			1,775,681			1,247,295			6,203,253
Total operating expense		41,695,305			1,775,681			1,247,295			45,201,781
Loss from operations		(41,695,305	)		(1,775,681	)		(1,247,295	)		(45,201,781	)
Interest income		120,290			92,268			27,902			241,815
Net loss		(41,575,015	)		(1,683,413	)		(1,219,393	)		(44,959,966	)
Series A Convertible Redeemable Preferred Stock dividend (Note 7)		—			(1,487,850	)		—			(1,487,850	)
Series B Convertible Redeemable Preferred Stock dividend (Note 7)		—			(4,447,059	)		—			(4,447,059	)
Net loss attributable to common shareholders	$	(41,575,015	)	$	(7,618,322	)	$	(1,219,393	)	$	(50,894,875
Basic And Diluted Net Loss Per Common Share	$	(0.89	)	$	(.25	)	$	(.06	)
Basic And Diluted Weighted Average Number of Common Shares Outstanding		46,737,013			30,168,000			21,752,000

See accompanying notes.

F-4

Heartland Oil & Gas Corp.

(An Exploration Stage Company)

Stockholders’ Equity Statement From Inception (August 11, 2000) To December 31, 2005

(As Restated. See Note 15)

	Common Shares	Common Stock		Additional Paid-In Capital		Stock Subscription Receivable		Deficit Accumulated During the Exploration Stage
Inception, August 11, 2000	—	$	—	$	—	$	—	$	—
Common stock issued at $0.005 per share	10,000,000		10,000		40,000		—		—
Common stock issued at $0.35 per share	1,332,429		1,332		465,018		—		—
Net loss	—		—		—		—		(10,004	)
Balance, December 31, 2000	11,332,429		11,332		505,018		—		(10,004	)
Net loss	—		—		—		—		(43,587	)
Balance, December 31, 2001	11,332,429		11,332		505,018		—		(53,591	)
Common stock issued at $0.50 per share	880,000		880		439,120		—		—
Recapitalization	7,090,000		7,090		402,313		—		—
Common stock issued at $1.40 per share	280,000		280		391,720		—		—
Issuance of stock warrants as compensation	—		—		219,600		—		—
Net loss	—		—		—		—		(428,554	)
Balance, December 31, 2002	19,582,429		19,582		1,957,771		—		(482,145	)

Continued

F-5

Heartland Oil & Gas Corp.

(An Exploration Stage Company)

Stockholders’ Equity Statement (Continued)

(As Restated. See Note 15)

	Common Shares		Common Stock			Additional Paid-in Capital			Stock Subscription Receivable			Deficit Accumulated During the Exploration Stage
Common stock issued at $1.40 per share	720,000			720			1,007,280			—			—
Exercise of options at $0.50 per share	70,000			70			34,930			—			—
Conversion of debentures at $2.00	121,345			121			242,569			—			—
Conversion of debentures at $1.00	450,016			450			449,566			—			—
Common stock issued at $2.82 per share	602,835			603			1,699,395			—			—
Common stock issued at $3.20 per share	2,754,695			2,755			8,812,268			—			—
Issuance of stock options as compensation	—			—			455,375			—			—
Less: share issue costs	—			—			(892,549	)		—			—
Net loss	—			—			—			—			(1,219,393	)
Balance, December 31, 2003	24,301,320			24,301			13,766,605			—			(1,701,538	)
Common stock issued at $0.35 per share	30,000			30			10,470			—			—
Common stock issued at $0.50 per share	100,000			100			49,900			—			—
Common stock issued at $1.50 per share	23,260,909			23,261			34,868,104			(5,000,000	)		—
Cancellation of stock subscription (Note 7)	(3,333,334	)		(3,333	)		(4,996,667	)		5,000,000			—
Issuance of stock options as compensation	—			—			766,069			—			—
Common stock warrants issued with Series A Convertible Redeemable Preferred Stock	—			—			741,371			—			—
Series A Convertible Redeemable Preferred Stock beneficial conversion	—			—			—			—			—
Series A Convertible Redeemable Preferred Stock beneficial conversion	—			—			—			—			—
Preferred stock converted to common stock	2,378,118			2,378			2,441,227			—			—
Less: share issue cost	—			—			(2,044,745	)		—			—
Net loss	—			—			—			—			(1,683,413	)
Balance, December 31, 2004	46,737,013			46,737			45,602,334			—			(3,384,951	)
Issuance of stock options as compensation	—			—			618,539			—			—
Net loss	—			—			—			—			(41,575,015	)
Balance, December 31, 2005	46,737,013		$	46,737		$	46,220,873		$	—		$	(44,959,966	)

See accompanying notes.

F-6

Heartland Oil & Gas Corp.

(An Exploration Stage Company)

Cash Flow Statement

	Year Ended December 31, 2005			Year Ended December 31, 2004			Year Ended December 31, 2003			Period from Inception (August 11, 2000) Through December 31, 2005
Cash Flow From Operating Activity
Net loss	$	(41,575,015	)	$	(1,683,413	)	$	(1,219,393	)	$	(44,959,966	)
Adjustments to reconcile net loss to net cash used in operating activity:
Accretion expense		42,762			10,249			0			53,011
Accrued interest on convertible debentures		—			—			22,308			49,061
Stock - based compensation		618,539			766,069			455,375			2,059,583
Depreciation and amortization		98,992			56,986			3,571			159,608
Impairment of oil and gas property		34,893,028			—			—			34,893,028
Impairment of equity investment in Arabian Heartland International Corp.		4,105,500									4,105,500
Decrease (increase) in other assets		(3,087	)		(762	)		—			(3,849	)
Decrease (increase) in prepaid expense		186,364			(305,010	)		(22,670	)		(145,632	)
(Decrease) increase in accounts payable and accrued liabilities		(482,493	)		271,454			429,080			511,743
Net cash used in operating activity		(2,115,410	)		(884,427	)		(331,729	)		(3,277,913	)
Cash Flow From Investing Activity
Purchase of property and equipment		(19,285	)		(230,711	)		(16,605	)		(269,701	)
Acquisition and exploration of oil and gas properties		(4,704,350	)		(30,778,662	)		(2,117,087	)		(39,750,183	)
Equity investment in Arabian Heartland International Corp.		(4,105,500	)		—			—			(4,105,500	)
Net cash used in investing activity		(8,829,135	)		(31,009,373	)		(2,133,692	)		(44,125,384	)
Cash Flows From Financing Activity
Increase (decrease) in due to related parties		(10,520	)		3,463			(7,051	)		221,480
Cash received on recapitalization		—			—			—			15,896
Proceeds from issuance of common stock, net of offering costs		—			27,764,186			10,665,471			39,778,007
Proceeds from issuance of Series A and B Convertible Redeemable Preferred Stock, net of offering cost		—			8,927,898						8,927,868
Proceeds from long-term debt		—			—			—			586,202
Net cash (used in) provided by financing activity		(10,520	)		36,695,547			10,658,420			49,529,453
Net (Decrease) Increase in Cash		(10,955,065	)		4,801,747			8,192,999			2,126,156
Cash, beginning of period		13,081,221			8,279,474			86,475			—
Cash, end of period	$	2,126,156		$	13,081,221		$	8,279,474		$	2,126,156

See accompanying notes

F-7

Heartland Oil and Gas Corp.

Financial Statement Notes

Note 1 - Organization, Operations and Significant Accounting Policies

Organization

Heartland Oil and Gas Corp. was incorporated in the State of Nevada on August 11, 2000. Our principal business is exploration and development of oil and gas property in the United States to determine whether they contain economically recoverable resources. Through December 31, 2005, we were in the exploration stage and had not generated significant revenue from our operations.

The accompanying consolidated financial statements include the accounts of Heartland Oil and Gas Corp. and its wholly-owned entities. We have eliminated all significant intercompany balances and transactions in consolidation.

We have incurred recurring losses from operations and have accumulated a deficit of $44,959,966 since inception. At December 31, 2005 we have working capital of $1,993,300. Since inception, we have funded operations through the issuance of capital stock and debt. We plan to continue raising additional funds through future equity or debt financing until we achieve profitable operations.

Cash and Cash Equivalents

We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Foreign Currency Translation

Our functional currency is the U.S. dollar. We translate the financial statements to U.S. dollars in accordance with Statement 52 of the Financial Accounting Standards Board (FASB), Foreign Currency Translation. We translate monetary assets and liabilities denominated in foreign currencies using the exchange rate prevailing at the balance sheet date. We include gains and losses arising on translation or settlement of foreign-currency-denominated transactions or balances in the determination of income. Our primary foreign currency transactions are in Canadian dollars. We have not entered into derivative instruments to offset the impact of foreign currency fluctuations.

Basic and Diluted Net Income (Loss) Per Share

We compute net income (loss) per share in accordance with FASB Statement 128, Earnings per Share. Statement 128 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. We compute basic EPS by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, we use the average stock price for the period in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is antidilutive.

Oil and Gas Property

We utilize the full cost method to account for our oil and gas property. Accordingly, we capitalize all cost associated with acquisition, exploration and development of oil and gas reserves, including such cost as leasehold acquisition cost, capitalized interest cost relating to unproved property, geological expenditures, tangible and intangible exploration and development cost including direct internal cost, to the full cost pool. When our oil and gas property commences production, we will deplete the capitalized cost, including estimated future cost to develop the reserves and estimated abandonment cost, net of salvage, on the units-of-production method, when a unit is produced, using estimates of proved reserves. We do not amortize cost of unproved property and major development projects, including capitalized interest, if any, until the property commences production. If we determine the future exploration of unproved properties to be uneconomical, we add the cost of such property to the capitalized cost to be amortized.

We apply a ceiling test to the capitalized cost in the full cost pool, in accordance with the provisions of SEC Regulation S-X, Rule 4-10 (c) (4), Limitation on capitalized costs. The ceiling test limits such cost to the estimated present value, using a ten percent discount rate, of the future net revenue from proved reserves, based on current economic and operating conditions. Specifically, we compute the ceiling test so that capitalized cost, less accumulated depletion and related deferred income tax, do not exceed an amount (the ceiling) equal to the sum of: (A) The present value of estimated future net revenue computed by applying current prices of oil and gas reserves (with consideration of price changes only to the extent provided by contractual arrangements) to estimated future production of proved oil and gas reserves as of the date of the latest balance sheet presented, less estimated future expenditures (based on current cost) to be incurred in developing and producing the proved reserves computed using a discount factor of ten percent and assuming continuation of existing economic conditions; plus (B) the cost of property not being amortized; plus (C) the lower of cost or estimated fair value of unproved properties included in the costs being amortized; less (D) income tax effects related to differences between the book and tax basis of the property.

F-8

Heartland Oil and Gas Corp.

Financial Statement Notes

For unproved property, we exclude from capitalized cost subject to depletion all cost directly associated with the acquisition and evaluation of unproved property until we determine whether or not proved reserves can be assigned to the property. Until we make such a determination, we assess the property at least annually to ascertain whether impairment has occurred, in accordance with FASB Statement 144, Accounting for Impairment of Long-Lived Assets. In assessing impairment we consider factors such as historical experience and other data such as primary lease terms of the property, average holding periods of unproved property, geographic and geologic data, and market values of comparable unproved property being bought and sold by other parties. We recognize an impairment loss only if the carrying amount of an unproved property is not recoverable from its undiscounted cash flow. We measure an impairment loss as the difference between the carrying amount and the fair value of the asset. We add the amount of impairment assessed to the cost to be amortized subject to the ceiling test.

We account for sales of proved and unproved property as adjustments of capitalized cost with no gain or loss recognized, unless such adjustments would significantly alter the relationship between capitalized cost and proved reserves of oil and gas, in which case we record the gain or loss in the operations statement.

Property and Equipment

Property and equipment includes office furniture & equipment and gathering and surface facilities. We record property and equipment at cost. We provide depreciation for office furniture & equipment on a straight line basis at annual rates ranging from 20 percent to 50 percent per annum, and for gathering and surface facilities on a straight-line basis over 20 years.

Long-Lived Assets

For other than oil and gas properties, and in accordance with FASB Statement 144, Accounting for the Impairment or Disposal of Long-Lived Assets, we review the carrying value of intangible assets and other long-lived assets on a regular basis for the existence of facts or circumstances that may suggest impairment. We recognize impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. We measure impairment losses, if any, as the excess of the carrying amount of the asset over its estimated fair value.

Income Tax

We account for income tax in accordance with FASB Statement 109, Accounting for Income Taxes. Under the asset and liability method of Statement 109, we record deferred tax assets and liabilities for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. We measure Deferred tax assets and liabilities using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. we believe that the estimates we utilize in preparing the financial statements are prudent and reasonable. Actual results may differ from these estimates.

Financial Instruments and Concentration of Credit Risk

We carry substantially all of our assets and liabilities at fair value or contracted amounts that approximate fair value. We make estimates of fair value at a specific point in time, based on relative market information and information about the financial instrument, specifically, the value of the underlying financial instrument. Assets that we record at fair value are primarily cash and other assets, which we carry at contracted amounts that approximate fair value. Our liabilities consist of

Short-term liabilities are recorded at contracted amounts that approximate fair value. Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash in excess of the federally insured amount of $100,000. To date, we have not incurred a loss relating to this concentration of credit risk.

Stock-Based Compensation

We account for stock-based compensation to employees and directors using Accounting Principles Board (APB) Opinion 25, Accounting for Stock Issued to Employees. We have adopted the disclosure-only provisions of FASB Statement 123, Accounting for Stock-Based Compensation. Accordingly, we measure compensation cost for stock options at intrinsic value, which is the excess, if any, of the quoted market price of our common stock at the date of the grant over the amount an employee is required to pay for the stock.

F-9

Heartland Oil and Gas Corp.

Financial Statement Notes

We account for stock-based compensation issued to non-employees and consultants in accordance with the provisions of Statement 123 and the consensus of the Emerging Issues Task Force (EITF) of the FASB in Issue No. 96-18, Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring or in Conjunction with Selling, Goods or Services. Under our Amended 2005 Stock Option Plan, we may grant up to a maximum of 4,000,000 shares of common stock to key employees and consultants. The options granted under the plan vest over four years except as stated otherwise in the individual grants, and are for a term not exceeding 10 years. In addition, under our 2004 Stock Option Plan, up to a maximum of 2,000,000 shares of common stock were available for grant.

We expense the fair value of options granted to non-employees and disclose the proforma fair value of options granted to employees, officers and directors.

Had we measured compensation cost based on the fair value of the options at the grant date for the years ended December 31, 2005, 2004 and 2003 consistent with the method prescribed by Statement 123, we would have increased our net loss and loss per common share to the pro forma amounts indicated below:

	Year Ended December 31, 2005			Year Ended December 31, 2004			Year Ended December 31, 2003
Net loss, as reported	$	(41,575,015	)	$	(1,683,413	)	$	(1,219,393	)
Add: Stock-based employee compensation expense included in reported net loss, net of related tax effects of $0, $0 and $0, respectively		618,539			766,069			455,375
Deduct: Total stock-based employee compensation expense determined under fair-value-based method for all awards, net of related tax effects of $0, $0 and $0 respectively		(1,402,458	)		(1,753,970	)		(550,456	)
Pro forma net loss	$	(42,358,934	)	$	(2,671,314	)	$	(1,314,474	)
Basic and diluted loss per share:
As reported	$	(0.89	)	$	(0.06	)	$	(0.06	)
Pro forma	$	(0.91	)	$	(0.09	)	$	(0.06	)

The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options that have no vesting restrictions, are fully transferable, and are not subject to trading restrictions or blackout periods. In addition, option valuation models require the input of highly subjective assumptions, including the expected stock price volatility. Because our employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, it is our opinion that the existing models do not necessarily provide a reliable single measure of the fair value of our employee stock options.

Asset Retirement Obligations

We account for asset retirement obligations in accordance with the provisions of Statement 143 “Accounting for Asset Retirement Obligations”. Statement 143 requires us to record the fair value of an asset retirement obligation as a liability in the period in which it incurs a legal obligation associated with the retirement of tangible long-lived assets that result from the acquisition, construction, development and/or normal use of the assets. We recognize asset retirement obligations related to our oil and gas property.

Recent Accounting Pronouncements

In December 2004, the FASB issued Statement No. 123 (Revised 2004), Share-Based Payment, which requires the compensation cost related to share-based payments, such as stock options and employee stock purchase plans, be recognized in the financial statements based on the grant-date fair value of the award. Statement 123(R) is effective for all interim periods beginning after December 15, 2005. The discussion above in the “Stock-based Compensation” section of this note shows the approximate impact of this standard on our financial condition and results of operations.

In December 2004, the FASB issued Statement 153, Exchanges of Non-monetary Assets, an amendment of APB Opinion No. 29, Accounting for Non-monetary Transactions. Statement 153 requires that exchanges of non-monetary assets be measured based on fair value and eliminates the exception for exchanges of non-monetary, similar productive assets, and adds an exemption for non-monetary exchanges that do not have commercial substance. Statement 153 will be effective for fiscal periods beginning after June 15, 2005. We believe that the adoption of this standard will have no material impact on our financial condition or results of operations.

F-10

Heartland Oil and Gas Corp.

Financial Statement Notes

Reclassifications

We have reclassified certain data in the financial statements of the prior periods to conform to the current period presentation.

Note 2 - Going Concern

We have incurred significant losses since inception and have had no revenue from inception to December 31, 2005. Until 2006 we have not sold any hydrocarbons. As of December 31, 2005, we have limited financial resources. Our continuation is dependent upon our ability to raise additional capital, to exploit our mineral holdings, and to generate sufficient revenue from our planned operations to enable us to attain and maintain profitable operations. We received revenue for the first time in 2006.

The issuance of additional equity securities by us could result in significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

We cannot assure that we will be able to obtain further funds required for our continued operations, that additional financing will be available to us when needed or, if available, that we can obtain it on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we may be unable to conduct our operations as planned, and we may not be able to meet our other obligations as they become due. In such event, we would be forced to scale down or perhaps even cease our operations.

Note 3 - Gas Property

Capitalized Cost Relating to Gas Producing Activity

	December 31,
	2005			2004
Unproved gas property	$	36,669,350		$	34,299,134
Proved gas property		1,316,102			—
		37,985,452			34,299,134
Accumulated impairment		(34,893,028	)		—
Net capitalized cost	$	3,092,424		$	34,299,134

Cost Incurred in Gas Property Acquisition, Exploration and Development Activity

	Year Ended December 31,						Inception To December 31, 2005
	2005		2004		2003
Acquisition of unproved property	$	160,482	$	21,927,100	$	839,081	$	24,459,919
Exploration cost		2,209,734		8,104,863		1,278,006		12,209,731
Cost of development of gas gathering facilities		1,106,703		—		—		1,106,703
Total	$	3,476,919	$	30,031,963	$	2,117,087	$	37,776,353

Results of Operations for Producing Activity

	Year Ended December 31,					Inception To December 31, 2005
	2005			2004	2003
Valuation provisions	$	(34,893,028	)	—	—	$	(34,893,028	)
Results of operations from producing activity (excluding corporate overhead)	$	(34,893,028	)	—	—	$	(34,893,028	)

F-11

Heartland Oil and Gas Corp.

Financial Statement Notes

Property Purchase from Evergreen Resources

In October 2004 we acquired 766,000 acres of prospective coalbed methane property in the Forest City Basin in Northeastern Kansas from Evergreen Resources, Inc. for $22,588,297. Below is the asset allocation we made on this purchase.

Cost of Acquisition:
Cash payments	$	22,437,541
Legal fees		120,502
Lease brokerage fees		19,237
Accounting fees		10,720
Other		297
Total cost of acquisition	$	22,588,297
Allocation:
Coalbed methane mineral leases	$	19,921,397
Tangible support equipment		1,467,313
Gathering pipeline pipe		854,391
Inventory-well site equipment		391,573
Two water trucks		204,618
Asset retirement obligation		(276,953	)
Other equipment		25,958
	$	22,588,297

Gas Property, Unproved

The total cost incurred and excluded from depletion is summarized as:

	Acquisition Cost		Exploration Cost		Impairment			Total
Cost incurred during periods ended:
December 31, 2005	$	160,482	$	2,209,734	$	(34,893,028	)	$	(32,522,812	)
December 31, 2004		21,927,100		8,104,863		—			30,031,963
December 31, 2003		839,081		1,278,006		—			2,117,087
December 31, 2002		917,003		—		—			917,003
December 31, 2001		506,253		591,875		—			1,098,128
December 31, 2000		110,000		24,953		—			134,953
Totals	$	24,459,919	$	12,209,431	$	(34,893,028	)	$	1,776,322

Undeveloped property, Bourbon Arch, Northeast Kansas

The current status of our significant property excluded from depletion is below. If we are able to raise sufficient funding, we anticipate a development program in 2006 of as much as $15 million to develop the property.

Jake battery: Jake is a one well battery. It is located three miles east of Lancaster and is the easternmost battery in the project area. It has been venting gas at the rate of approximately 40 Mcfgpd since August 2005. It currently shows evidence of only slight decline.

Osawatomie battery: Osawatomie is a four well battery drilled on 80 acre spacing by Evergreen approximately five miles southwest of Lancaster. It has been venting gas at the rate of approximately 50 Mcfgpd and continues to show increases in production.

Beagle battery: Beagle is a three well battery approximately four miles southwest of Osawatomie battery. Two of the three wells were drilled by Heartland as 80 acre offsets to the original Evergreen well. In aggregate, Beagle is producing gas at rates of approximately 120 Mcfgpd.

F-12

Heartland Oil and Gas Corp.

Financial Statement Notes

Undeveloped property, Forest City Basin, Northeast Kansas

Northern acreage: As of December 31, 2005, we had a total of 856,000 acres of undeveloped land under lease in eastern Kansas. Based on evaluation work done during 2005, CBM production from the Forest City basin acreage has been deemed uneconomic, although we retain valid leases on a substantial acreage position which expire between 2006 and 2012. We have identified areas for prospective, longer-term conventional oil and gas exploration and development.

Development of unproved property

As of March 1, 2006, we held 969,557 acres. As of December 31, 2005, we had established proved reserves on 1,920 acres. We are currently seeking additional capital to fund a 100-well drilling program which we will commence shortly after raising the funds, although we cannot assure that we will be successful in raising the funds. Should we obtain the capital we project that we will drill the 100 wells at the rate of 14 wells per month. If the drilling is successful it will establish proved reserves to be added to our amortization computation at the rate of 2,240 acres per month. If the 100 well program is fully successful it will add 16,000 acres to our amortization computation. Upon completion of the 100-well drilling program we will evaluate the results as a basis for seeking capital for development of our remaining acreage. Because of the uncertainty described above we cannot currently anticipate the timing of development beyond the 100 well program.

Oil and Gas Property, Proved

In 2005 we entered into sales agreements and committed funds necessary to establish sales from the 16 Lancaster wells. Our proved oil and gas property will be subject to depletion once our sales commence in 2006. We initiated continuous gas sales on February 21, 2006. We retained MHA Petroleum Consultants to perform an external audit of our Lancaster project. There is further discussion on the reserves in Note 14.

Pipeline and Marketing

In July 2005 we signed contracts to initiate gas sales from our Lancaster coalbed methane battery located near Paola, Kansas. The agreement is with a subsidiary of Enbridge Energy Partners, L.P. to provide for construction of a pipeline tap into a gas transportation line and for gas marketing services. While the gas price is variable, we expect to realize a wellhead price approximating 75 percent of NYMEX price or mid-continent gas posting. We have competed construction of the pipeline. We began selling methane from our Lancaster battery in February, 2006.

Cost associated with our pipeline and facilities includes:

	Cost		Accumulated Amortization		December 31, 2005 Net Carrying Value		December 31, 2004 Net Carrying Value
Pipeline and Processing Facilities (1)	$	1,106,703	$	—	$	1,106,703	$	—
Salt Water Disposal Systems		1,299,069		73,617		1,225,452		1,260,279
	$	2,405,772	$	73,617	$	2,332,155	$	1,260,279

(1) The pipeline and processing facilities were not completed and functional as of December 31, 2005; consequently no depreciation was taken. They will be depreciated beginning in 2006.

Impairment

In 2005 we recorded an impairment arising from the expiration of certain leases of $73,917, and an impairment of $14,412,743 arising from the oil and gas leases we abandoned in the Forest City Basin in northeast Kansas. In 2005 we also recorded an impairment of $17,112,416 on exploration pilots in the northern part of our acreage, and two coalbed methane exploration pilots in the southern part of our acreage, all in northeast Kansas. We include the impairment losses in exploration expense. We recorded the impairments as of September 30, 2005. The fair value of our impaired unproved property at September 30, 2005, was zero.

F-13

Heartland Oil and Gas Corp.

Financial Statement Notes

In October 2004 we closed the purchase of the unproved gas property from Evergreen Resources. With the acquisition, we concluded we needed an operations office to manage our property in the region of the property, which we opened on November 1, 2004, in Denver. From November 2004 into June 2005 we engaged into our Denver office our chief operating officer, our vice president of operations, our controller and our chief financial officer to manage our oil and gas operations. The responsibilities of this team included the development and evaluation of our U.S. gas property and other responsibilities.

From inception to the present all of our U.S. gas property is located in northeastern Kansas. Operationally we have viewed that property in two geographic areas, the northern area and the southern area. Prior to the Evergreen purchase, Evergreen had drilled several gas wells in the northern area. Those wells vented methane as well as impurities including nitrogen. Evergreen had injected nitrogen to fracture the mineral formations from which the gas was produced, a procedure commonly used for increasing gas production. At the time of the purchase we anticipated that the nitrogen production would decrease as the nitrogen introduced in the fracturing was produced. We monitored the impurity production from October 1, 2004, forward.

The nitrogen production caused the wells to be uneconomical. By June 2005 the nitrogen production had not yet declined to economic levels. Accordingly, we concluded that we would not as a company incur more exploration cost on the northern property. However, we believed that, given the steady increase in the price of natural gas, other companies with more capital would be interested in purchasing the northern property, likely for an amount equal to or greater than our book value. Accordingly, on July 5, 2005, we engaged a lease broker to find buyers for the leases we had decided not to retain.

The broker conducted a marketing campaign in an effort to find buyers for the leases. The broker established October 31, 2005, as the closing date for prospective buyers to make offers on the property. On October 31, 2005, the broker advised us that, although there were interested parties, it had yet received any offers for any of the leases. Because we had not yet finalized the accounting for the quarter ended September 2005, we fully impaired those leases as of September 30, 2005.

As of December 31, 2004, we had concluded that no impairment related to the above property was necessary because we had just acquired most of the property three months earlier and had just begun our evaluation of the property.

At December 31, 2005, we owned unproved property in northeast Kansas with a cost of $1,776,322 which we did not impair because the fair value of the property exceeded the cost.

During the fourth quarter of 2005, we computed a ceiling test limitation that was charged against our oil and gas property of $3,293,952 that is reflected as impairment of oil and gas property in the operations statement.

To summarize our impairment assessment process during 2005, we can group all of our gas property into three groups:

1. Our Bourbon Arch property which was under development in 2005 (or immediately adjacent to property under development) and on which we established proved reserves as of December 31, 2005. We evaluated this property for impairment at December 31, 2005, by use of the ceiling test, as described above.

2. Our Forest City property which we decided to offer for sale in 2005. We fully impaired this property at September 30, 2005, as described above.

3. Our unproved Bourbon Arch property which we concluded we would not offer for sale in 2005. We assessed this property for impairment at December 31, 2005, and determined that it was not impaired because the fair value of the property exceeded the cost.

Note 4. Equity investment in Arabian Heartland International Corp.

In April 2005, we and Far East International Petroleum Corp. (FEIPCO), entered into a joint venture agreement (“JV”). Under the JV, the parties were to pursue contracts in Southern Iraq relating to drilling, production, and marketing of hydrocarbons, as well as procurement of oilfield services. The parties were to form an operating company called Arabian Heartland International Corp, through which joint venture opportunities were to be pursued.

We held a 35% interest in the venture. FEIPCO held 60% and Richard Coglon, our former CEO, held 5% (through an entity he controlled). Our board of directors approved each interest. In April 2005 we advanced $4,105,500 to FEIPCO, representing our 35 percent share of $10,730,000 camp construction and equipping cost, and $1,000,000 bid bond.

In September 2005 we received a notice from FEIPCO terminating the JV agreement and claiming that $1,600,000 is owed as part of the joint venture. We are currently conducting a due diligence investigation of FEIPCO and the merits of these claims. We sent correspondence denying any liability to FEIPCO with respect to the claims asserted and will vigorously defend any arbitration or other legal action based upon such claims. To our knowledge, FEIPCO has not commenced a legal action; accordingly, we have concluded that the likelihood of a further loss on this matter is remote.

F-14

Heartland Oil and Gas Corp.

Financial Statement Notes

Note 5 - Related Party Transactions

The amount due to related parties represented non-interest bearing expense reimbursements to directors and officers, which were subsequently paid.

We entered into management consulting agreements dated October 1, 2004, as amended, with a director for the payment of management fees of $7,500 per month, for a term of two years, and with our former Chief Executive Officer for the payment of $16,666 per month, for a term of one year.

During the year ended December 31, 2005, we incurred $391,203 (2004—$187,731) in management and consulting fees to our directors and officers. The $391,203 includes $100,000 incurred to our CEO as part of a termination package.

Note 6 - Asset Retirement Obligations

	Year Ended December 31, 2005		Year Ended December 31, 2004
Beginning asset retirement obligations	$	562,619	$	—
Additions related to new property		—		276,953
Liabilities incurred		65,758		275,417
Accretion		42,763		10,249
Total asset retirement obligations	$	671,140	$	562,619

Note 7 - Preferred Stock

In 2005 we had no preferred stock transactions.

During 2004 the following transactions occurred:

Series A Convertible Redeemable Preferred Stock

• In January 2004, we completed the sale of 995,305 units at $3.20 per unit for proceeds of $3,184,976, before issue cost. Each unit consisted of one share of Series A Convertible Redeemable Preferred Stock and one half of a common stock purchase warrant exercisable at $3.84 per whole warrant until January 13, 2007. The preferred shares have certain liquidation preferences and participation rights in future equity financings.

• The holder of a preferred share can redeem the preferred shares under certain circumstances.

• We can redeem the preferred shares up to 12 months, 24 months and thereafter for 112%, 124% and 136%, respectively, of the conversion price of $3.20.

• The holders of the preferred shares can immediately convert their preferred shares into common shares at any time on a one-for-one basis.

• The holders of the preferred shares could participate in any subsequent equity financing, and use either cash or their preferred shares as currency based on a price of $3.584, equal to 112% of the $3.20 per unit.

• We may require the holder of a Series A Convertible Redeemable Preferred Stock to convert their preferred shares into common shares at any time following

• at least 18 months from the issuance date and

• at any time that our shares have traded at or above 200% of the conversion price of $3.20 for 10 consecutive days.

The proceeds from the offering were allocated $2,443,605 to the Series A Convertible Redeemable Preferred Stock and $741,371 to the common stock warrants based on their relative fair values at the date of issuance. Because, at the date of issuance, the value of the common stock of $3.95 per share exceeded the allocated price of $3.20 per share by $0.75 per share, the Company reflected a dividend from the beneficial conversion of $1,487,850, equal to the product of the 995,305 shares and the $0.75 per share plus the value ascribed to the warrants.

F-15

Heartland Oil and Gas Corp.

Financial Statement Notes

The beneficial conversion at issuance of $0.75 associated with converting preferred shares into common shares exceeded the beneficial conversion of $0.384 associated with participating in any subsequent equity financing and, consequently, there was no event reflected in the financial statements subsequent to the issuance date. In addition, the equity participation conversion option continuously reset as the underlying stock price increased or decreased so as to provide a fixed value of common stock to the holder at any conversion date and, consequently, the Series A Convertible Redeemable Preferred Stock was considered stock-settled and the contingent beneficial conversion option provisions of Emerging Issues Task Force Issue 98-5 did not apply when the reset subsequently occurred.

There was no resulting impact to our balance sheet and shareholders’ equity statement. The dividend of $1,487,850 was reflected on our operations statement to derive net loss attributable to common shareholders and net loss per common share attributable to common shareholders.

On October 1, 2004, the holders of 995,305 Series A Convertible Redeemable Preferred Stock converted their shares into 2,378,118 shares of common stock for no additional consideration to us. At December 31, 2004, there is no Series A Convertible Redeemable Preferred Stock outstanding.

Series B Convertible Redeemable Preferred Stock

• In September 2004, we completed the sale of 3,529,412 shares of Series B Convertible Redeemable Preferred Stock at $1.70 per share for proceeds of $6,000,000, before issue cost. The preferred shares have certain liquidation preferences and participation rights in future equity financings.

• The holder of a preferred share can redeem the preferred shares under the circumstances described below.

• We can redeem the preferred shares up to 12 months, 24 months and thereafter for 112%, 124% and 136%, respectively, of the conversion price of $1.70.

• The holders of the preferred shares can convert their preferred shares into common shares at any time on a one-for-one basis.

• We may require the holder of a Series B Convertible Preferred Stock to convert their preferred shares into common shares at any time following

• At least 18 months from the issuance date; and

• At any time that our shares have traded at or above 200% of the conversion price of $1.70 for 10 consecutive days.

Series B Redemption Rights:

The Series B, Convertible Preferred Stock which we issued has certain provisions allowing redemption by the holder. Upon the occurrence of a redemption event the holders of the Series B preferred shares will have the right to require us to purchase their shares for cash for an amount equal to a redemption amount specified by the Preferred Share Certificate of Designation of Preferences and Rights. The redemption amount is $6,720,000 as long as the market price of our common stock is below $1.90.

The triggering events for redemption by the holder are:

(i) Our common stock is suspended from trading for an aggregate of ten or mores days in any twelve month period.

(ii) The registration statement associated with Series B preferred shares is not declared effective by the 120^th day after the issuance date or after the registration statement has been declared effective cannot be utilized by the holders for an aggregate of more than 20 days.

(iii) We fail to remove any restrictive legend on any certificate of any common stock issued to the holders of Series B preferred stock issued upon conversion of the Series B preferred stock as required by the certificate of designation and the failure to remove the restrictive legend remains uncured for five business days after we have been notified.

(iv) We provide notice to any Series B preferred stock holder of our intention to not issue common stock to any Series B preferred stock holder upon conversion in accordance with the Certificate of Designation.

(v) We make an assignment for the benefit of creditors or apply for the appointment of a receiver or trustee for a substantial part of our property or assets.

(vi) Bankruptcy, insolvency, reorganization or liquidation or other proceedings for the relief of debtors is instituted by or against us that is not dismissed within 60 days of the initiation.

(vii) We,

a) sell, convey or dispose of substantially all of our assets;

F-16

Heartland Oil and Gas Corp.

Financial Statement Notes

b) merge, consolidate or engage in a business combination that results in

i. our common shareholders immediately prior to the transaction having the right to vote 50% or less of the total outstanding voting stock of the surviving entity or,

ii. our board of directors immediately prior to the transaction comprise 50% or less of the board of directors of the surviving entity;

c) either

i. fail to pay, when due, any third party indebtedness in excess of $250,000 other than payments we contested in good faith;

ii. default on any agreement where the default would or is likely to have a material adverse effect on us;

d) have 35% of our voting stock owned beneficially by a single person or group;

(viii) We breach any material term in either the Series B Share Purchase Agreement or Registration of Rights Agreement.

Series B Beneficial Conversion

Because, at the date of issuance, the value of the common stock of $2.96 exceeded the conversion price of $1.70 by $1.26, we reflected a dividend from the beneficial conversion of $4,447,059, equal to the product of the 3,529,412 shares and the $1.26. There was no resulting impact to our balance sheet and shareholders’ equity statement. The dividend of $4,447,059 was reflected on our operations statement to derive net loss attributable to common shareholders and net loss per common share.

Series B Liquidation Preference

The Series B preferred stock has a liquidation preference of $1.70 per share, which is $6,000,000 on the 3,529,412 Series B shares outstanding, except that if the market price of the common stock immediately prior to a Liquidation Event is greater than $1.70 per share, then the liquidation preference of the Series B will be the market price of the common stock.

Note 9 - Common Stock

During 2005 we had no common stock transactions.

During 2004 the following transactions occurred:

• On September 30, 2004, we completed the sale of 23,260,909 shares of common stock at $1.50 per share for proceeds of $34,891,365, before issue cost. However, one subscriber for 3,333,334 common shares for proceeds of $5,000,000 failed to complete their purchase and did not remit the purchase price. In 2005 we cancelled these unpaid shares. Accordingly, the previous $5,000,000 stock subscription has been reversed as at December 31, 2004, and the 3,333,334 shares of common stock have been excluded from total common shares outstanding. In 2004 we filed a lawsuit against the subscriber to recover committed funds. However, we believe that the subscriber is no longer in business, it is unlikely we will recover the funds.

• During 2004 we issued 100,000 shares of common stock at $0.50 per share for proceeds of $50,000 and 30,000 shares of common stock at $0.35 per share for proceeds of $10,500 from the exercise of stock options.

During 2003, the following transactions occurred:

• In March 2003, we sold 690,000 units at $1.40 for proceeds of $966,000. Each unit consisted of one share of common stock and one common stock purchase warrant, exercisable at a price of $1.75 per share until August 31, 2004. We relied on the provisions of Regulation S promulgated under the Securities Act of 1933, for the issuance of the shares.

• In May 2003, we sold 30,000 units at $1.40 for proceeds of $42,000. This sale included the “Regulation S” private placement of 1,000,000 units at $1.40 per unit.

• We issued 121,345 units at a price of $2.00 for the conversion of $242,690 (including interest of $20,242) outstanding on a convertible debenture. Each unit consisted of one share of common stock and one common stock purchase warrant, exercisable at $2.00 per share expiring on December 31, 2004.

• We issued 602,836 units at $2.82 per unit for proceeds of approximately $1,700,000 from a private placement. Each unit consisted of one share of common stock and one-half share purchase warrant exercisable at $3.38 per warrant expiring on June 24, 2006.

F-17

Heartland Oil and Gas Corp.

Financial Statement Notes

• The holder of a convertible debenture for $450,016 (including interest of $15,016) converted the debenture into 450,016 units at a price of $1.00 per unit on June 30, 2003. Each unit consisted of one share of common stock and one common stock purchase warrant, exercisable at $1.00 per share expiring on December 31, 2004.

• In August 2003, we issued 2,754,695 units at $3.20 per unit for proceeds of $8,815,024 pursuant to a private placement. Each unit consisted of one share of common stock and one-half share purchase warrant exercisable at $3.84 per warrant expiring on August 19, 2006.

• During the year ended December 31, 2003 we issued 70,000 shares at $0.50 per share for proceeds of $35,000 from the exercise of stock options.

Note 10 - Stock Options and Warrants

Options

A summary of the changes in our common share purchase options is below:

	December 31, 2005					December 31, 2004
	Number		Weighted Average Exercise Price			Number		Weighted Average Exercise Price
Balance, beginning of year	2,950,000		$	1.25		1,200,000		$	0.50
Granted	3,025,000		$	.40		1,880,000		$	1.67
Exercised						(130,000	)	$	(0.47	)
Forfeited / Expired	(1,170,000	)	$	(.63	)	—			—
Balance, end of year	4,805,000		$	.87		2,950,000		$	$1.25

Additional information regarding options outstanding at December 31, 2005 is:

	Outstanding				Exercisable
	Number of shares	Weighted average remaining contractual life (years)	Weighted average exercise price		Vested Number of shares	Exercise prices
$ 0.00 - $ 1.00	3,075,000	8.03	$	0.40	2,020,000	$	0.40
$ 1.01 - $ 2.00	1,730,000	3.95	$	1.69	1,130,000	$	1.68
	4,805,000	6.56	$	0.87	3,150,000	$	0.86

Warrants

Below is a summary of our warrant activity:

	Warrants	Exercise Price	Expiration Dates
Outstanding at December 31, 2004	2,339,377	$3.38- $3.84	2006-2007
Outstanding at December 31, 2005	2,339,377	$3.38- $3.84	2006-2007
Outstanding at March 31, 2006	2,339,377	$3.38- $3.84	2006-2007

In June 2003 we sold 602,836 units at $2.82 per unit for total proceeds of $1,699,998. Each unit consisted of one common share and one half of a common stock purchase warrant exercisable at $3.38 per whole warrant until June 24, 2006. We issued 25,223 commission warrants (whole warrants) exercisable at $3.38 per warrant until June 24, 2006, in relation to this offering.

F-18

Heartland Oil and Gas Corp.

Financial Statement Notes

In August 2003 we sold 2,754,695 units at $3.20 per unit for total proceeds of $8,815,023. Each unit consisted of one common share and one half of a common stock purchase warrant exercisable at $3.84 per whole warrant until August 26, 2006. We issued 137,735 commission warrants (whole warrants) exercisable at $3.84 per warrant until August 26, 2006 in relation to this offering.

In January 2004 we sold 995,305 units at $3.20 per unit for total proceeds of $3,184,976. Each unit consisted of one Series “A” preferred share and one half of a common stock purchase warrant exercisable at $3.84 per whole warrant until January 13, 2007.

Note 11 – Supplemental Disclosure for Non-cash Investing and Financing Activity

	Year Ended December 31, 2005		Year Ended December 31, 2004		Period from Inception (Aug. 11, 2000) Through December 31, 2005
Supplemental Disclosure of Non-Cash Investing and Financing Activities
Note payable converted to convertible debenture	$	—	$	—	$	201,510
Advances received on long-term debt relieved upon reverse acquisition	$	—	$	—	$	586,202
Conversion of convertible debentures including interest to common stock	$	—	$	—	$	692,706

a) In a prior year we acquired 72% of the capital stock of Adriatic Holdings Limited for 100% of the capital of Heartland Oil & Gas, Inc. in a reverse acquisition. In connection with the reverse acquisition, we assumed the following liabilities:

Fair Value	$	454,401
Cash acquired		(15,896	)
Liabilities assumed	$	438,505

b) On October 1, 2004, we issued 2,378,118 shares of common stock for the conversion of 995,305 shares of Series A Convertible Preferred Stock.

Note 12- Commitments

We lease facilities in Paola, Kansas; Denver, Colorado; and Vancouver, British Columbia, Canada. The leases expire in October 2005, October 2007 and February 2008, respectively. Future minimum lease payments are:

2006		176,706
2007		120,719
2008		19,183
	$	316,608

We entered into management consulting agreements dated October 1, 2004, as amended, with a director for the payment of management fees of $7,500 CN per month for a term of two years and with Mr. Coglon, President for payment of $16,666 per month for a term of one year. Mr. Coglon’s agreement was terminated by his severance agreement dated December 31, 2005.

Note 13 - Income Tax

At December 31, 2005, we had approximately $14,550,000 in US federal and state net operating loss carryforwards, expiring through 2025. We incurred portions of such net operating loss carryforwards prior to September 17, 2002, our reverse acquisition date. As such, we anticipate limitations to the use of these carryforwards under Internal Revenue Code Section 382. We provide for deferred taxes arising from temporary differences in the book and tax carrying amounts of assets and liabilities. Temporary differences arise primarily from differences in reporting stock-based compensation and intangible drilling and completion cost. We have fully reserved the deferred tax assets that arise from such operating loss carryforwards and temporary differences of approximately $6,160,000 and $3,510,000 at December 31, 2005 and 2004, respectively, in the accompanying financial statements as follows. For 2005 and 2004, the valuation allowance established against the deferred tax assets increased by $2,650,000 and $2,490,000, respectively.

F-19

Heartland Oil and Gas Corp.

Financial Statement Notes

	December 31, 2005			December 31, 2004
Net operating loss deduction	$	5,600,000		$	2,950,000
Stock-based compensation		560,000			560,000
Total Deferred Tax Asset		6,160,000			3,510,000
Valuation Allowance		(6,160,000	)		(3,510,000	)
Net Deferred Tax Asset	$	—		$	—

Reconciliation of the differences between the statutory tax rate and the effective tax rate is:

	For the years ended December 31,
	2005		2004
Federal statutory tax rate	34.0	%	34.0	%
State Tax Rate	4.5	%	4.5	%
Effective Tax Rate	38.5	%	38.5	%
Valuation Allowance	(38.5	)%	(38.5	)%
Net Effective Tax Rate	—		—

Note 14 - Disclosures About Gas Producing Activity (Unaudited)

Reserve Quantity Information

At December 31, 2005, the estimated gas reserves presented in this report were derived from reports prepared by MHA Petroleum Consultants, an independent petroleum engineering firm. We caution that there are many inherent uncertainties in estimating proved reserve quantities and in projecting future production rates and the timing of development expenditures. Accordingly, these estimates are likely to change as future information becomes available, and these changes could be material.

The property included in the gas reserve estimates presented below were connected to Heartland Gas Gathering in February, 2006. There were no sales in the year ended December 31, 2005.

Proved gas reserves are the estimated quantities of natural gas which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. Proved developed reserves are reserves expected to be recovered through existing wells with existing equipment and operating methods.

Proved undeveloped reserves are reserves that are expected to be recovered from new wells on undrilled acreage. Reserves on undrilled acreage shall be limited to those drilling units offsetting productive units that are reasonably certain of production when drilled.

Estimated Reserve Quantities

Estimated quantities of proved and proved developed reserves (all of which are located within the United States), as well as the changes in proved reserves, are presented in the following table:

Reserve Quantity Information

	Natural Gas (mcf)
Proved reserves at December 31, 2004	—
Extensions and discoveries	1,046,900
Proved reserves at December 31, 2005	1,046,900
Proved developed reserves at December 31, 2005	284,781

F-20

Heartland Oil and Gas Corp.

Financial Statement Notes

Standardized Measure of Discounted Future Net Cash Flow

The table below presents a standardized measure of the estimated discounted future net cash flow attributable to our proved gas reserves. Estimated future cash inflow was computed by applying a year-end price of $7.77 per thousand cubic feet (Mcf) of natural gas to the estimated future production of proved gas reserves at December 31, 2005. We had no proved reserves at December 31, 2004, 2003 and 2002. We compute the future production and development cost by estimating the expenditures to be incurred in developing and producing the proved gas reserves at the end of the year, based on end-of-year prices, assuming continuation of existing economic conditions. We calculated future income tax expense using year-end statutory tax rates. Discounting the annual net cash flow at 10% shows the impact of timing on the future cash flow.

Standardized Measure of Estimated Discounted Future Net Cash Flow

	December 31, 2005
Future cash inflow	$	8,136,000
Future production cost		(3,762,717	)
Future development cost		(2,120,000	)
Future income tax expense		(766,116	)
Future net cash flow		1,487,167
10% annual discount for estimated timing of cash flow		(622,740	)
Standardized measure of discounted future net cash flow	$	864,427

The following table summarizes the principal factors comprising the changes in the standardized measure of estimated discounted net cash flow for the year ended December 31, 2005.

Changes in Standardized Measure of Estimated Discounted Net Cash Flow

	Year Ended December 31, 2005
Standardized measure, beginning of year	$	—
Extensions and discoveries		864,427
Standardized measure, end of year	$	864,427

The December 31, 2005, independent evaluation of our proved reserves was the first evaluation of proved reserves we have had prepared. The entire amount of our proved reserves at December 31, 2005, came from discoveries in 2005.

Note 15 – Restatement of Financial Statements

We have determined that, in certain cases, we did not comply with accounting principles generally accepted in the United States in the preparation of our financial statements for the years ended December 31, 2005, and 2004, and for the period from inception (August 11, 2000) through December 31, 2005, and accordingly, we have restated the annual financial statements in this Annual Report on Form 10-K/A (Amendment No. 2).

The financial statements have been restated to reflect our Series B Convertible Redeemable Preferred Stock as a separate line item outside of permanent equity. The restatements are consistent with guidance in Emerging Issues Task Force (“EITF”) No. D-98, Classification and Measurement of Redeemable Securities.

The financial statements have also been restated to reflect the beneficial conversion feature as of the date of issuance of its Series A and Series B Convertible Redeemable Preferred Stock, and the allocation of value to warrants that were attached to the Series A Convertible Redeemable Preferred Stock. The restatements are consistent with guidance in EITF No. 98-5, Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios, EITF 00-27, Application of Issue No. 98-5 to Certain Convertible Instruments, and EITF 00-19, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock.

The financial statements have also been restated to reflect the discount, resulting from the allocation of proceeds to the beneficial conversion feature, as a return to the preferred shareholders at the date of issuance (the date that the preferred shareholders could

F-21

Heartland Oil and Gas Corp.

Financial Statement Notes

convert their shares of preferred stock into shares of common stock on a one-for-one basis) The dividend is analogous to a dividend and as such affects net loss attributable to common shareholders, and net loss per share attributable to common shareholders. The restatements are consistent with guidance in EITF 98-5, Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios, and Financial Accounting Standards Board Statement of Standards No. 128, Earnings Per Share.

None of these items affect revenue or cash expenses.

We are filing, commensurate herewith, a restated March 31, 2006, Quarterly Report on Form 10-Q/A (Amendment No. 1) to show the effect of certain matters discussed above.

Balance Sheet Amounts

	December 31, 2005, and 2004
	As Previously Reported			Adjustment			As Restated
Series B Convertible Redeemable Preferred stock - $0.001 par value, 5,000,000 shares authorized, 3,529,412 shares issued and outstanding (liquidation preference: $6,000,000)		—		$	5,599,958		$	5,599,958
	December 31, 2005
	As Previously Reported			Adjustment			As Restated
Stockholders’ Equity:
Preferred stock	$	3,529		$	(3,529	)	$	—
Common stock		46,737			—			46,737
Additional paid in capital		51,817,302			(5,596,429	)		46,220,873
Deficit accumulated during the exploration stage		(44,959,966	)		—			(44,959,966	)
Total shareholders’ equity	$	6,907,602		$	(5,599,958	)	$	1,307,644
	December 31, 2004
	As Previously Reported			Adjustment			As Restated
Stockholders’ Equity:
Preferred stock	$	3,529		$	(3,529	)	$	—
Common stock		46,737			—			46,737
Additional paid in capital		51,198,763			(5,596,429	)		45,602,334
Deficit accumulated during the exploration stage		(3,384,951	)		—			(3,384,951	)
Total shareholders’ equity	$	47,864,078		$	(5,599,958	)	$	42,264,120

F-22

Heartland Oil and Gas Corp.

Financial Statement Notes

Operations Statement Amounts

	For the year ended December 31, 2004
	As Previously Reported			Adjustment			As Restated
Net loss	$	(1,683,413	)		—		$	(1,683,413	)
Series A Convertible Redeemable Preferred stock dividend		—			(1,487,850	)		(1,487,850	)
Series B Convertible Redeemable Preferred stock dividend		—			(4,447,059	)		(4,447,059	)
Net loss attributable to common shareholders	$	(1,683,413	)	$	(5,934,909	)	$	(7,618,322	)
Net loss per share attributable to common shareholders	$	(0.06	)	$	(0.19	)	$	(0.25	)
	For the period from inception (August 11, 2000) through December 31, 2005
	As Previously Reported			Adjustment			As Restated
Net loss	$	(44,959,966	)		—		$	(44,959,966	)
Series A Convertible Redeemable Preferred stock dividend		—			(1,487,850	)		(1,487,850	)
Series B Convertible Redeemable Preferred stock dividend		—			(4,447,059	)		(4,447,059	)
Net loss attributable to common shareholders	$	(44,959,966	)	$	(5,934,909	)	$	(50,894,875	)

Shareholders’ Equity Statement Amounts

	Preferred Shares		Preferred Stock			Common Shares	Common Stock		Additional Paid-in Capital
Balance, December 31, 2004, As Reported	3,529,412		$	3,529		46,737,013	$	46,737	$	51,198,763
Adjustments:
Series A Convertible Redeemable Preferred stock reflected outside permanent capital	—			—		—		—		(3,182,598	)
Proceeds from Series A Convertible Redeemable Preferred Stock allocated to warrants	—			—		—		—		741,371
Series A Convertible Redeemable Preferred Stock converted to Common Stock	—			—		—		—		2,441,227
Series B Convertible Redeemable Preferred stock reflected outside permanent capital	(3,529,412	)		(3,529	)	—		—		(5,596,429	)
Balance, December 31, 2004, As Restated	—			—		46,737,013	$	46,737	$	45,602,334

F-23

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT AUDITORS

To the Board of Directors

Heartland Oil and Gas Corp.

We hereby consent to the use of our audit report dated 24 March 2006, except for notes 7 and 15, as to which the date is July 31, 2006, on the balance sheet of Heartland Oil and Gas Corp. as at December 31, 2005 and 2004 and the related operations statement, stockholders’ equity statement and cash flow statement for the three years ended December 31, 2005, 2004 and 2003 in the annual report on Form 10-K/A (Amendment No. 2) for Heartland Oil and Gas Corp.

“Staley, Okada & Partners”

Vancouver, B.C., Canada	STALEY, OKADA & PARTNERS
August 16, 2006	CHARTERED ACCOUNTANTS

EX-23.2

Exhibit 23.2

MHA Petroleum Consultants, Inc.

14142 Denver West Parkway, Suite 190

Lakewood, CO 80401

August 16, 2006

Heartland Oil and Gas Corp.

1625 Broadway

Denver, Colorado 80202

Gentlemen:

In connection with the Annual Report on Form 10-K for the year ended December 31, 2005, (the Annual Report) of Heartland Oil and Gas Corp. (the Company), we hereby consent to (i) the reference to our “Evaluation of the Oil and Gas Reserves of Heartland Oil and Gas Corporation Lancaster Project Constant Prices and Costs as of January 1, 2006, (the Evaluation) in the Annual Report; and (ii) the use of and reference to the name MHA Petroleum Consultants as the independent petroleum engineering firm that prepared the Evaluation.

Sincerely,

/s/ MHA Petroleum Consultants, Inc.

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

Pursuant to Section 302 of Sarbanes Oxley Act of 2002

I, Philip S. Winner, President, Chief Executive Officer, and Director certify that:

1. I have reviewed this second amendment report on Form 10-K/A of Heartland Oil and Gas Corp. (the Company);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flow of the Company as of, and for, the periods presented in this annual report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

b) evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

c) disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter that has materially affected or is reasonably likely to materially affect the Company’s internal control over financial reporting;

d) disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter that has materially affected or is reasonably likely to materially affect the Company’s internal control over financial reporting.

5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors:

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting.

	/s/ Philip S. Winner
August 16, 2006	Philip S. Winner
	President, Chief Executive Officer, and Director

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer

Pursuant to Section 302 of Sarbanes Oxley Act of 2002

I, Robert L. Poley, Chief Financial Officer and Director, certify that:

1. I have reviewed this second amendment report on Form 10-K/A of Heartland Oil and Gas Corp. (the Company);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this annual report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

b) evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

c) disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter that has materially affected or is reasonably likely to materially affect the Company’s internal control over financial reporting;

5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting to the Company’s auditors and the audit committee of the Company’s board of directors:

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting.

	/s/ Robert L. Poley
August 16, 2006	Robert L. Poley
	Chief Financial Officer and Director

EX-32.1

Exhibit 32.1

Certification of Chief Executive Officer

Pursuant to Section 906 of Sarbanes Oxley Act of 2002

In Connection with the amended Annual Report of Heartland Oil and Gas Corp. (the “Company”) on Form 10-K/A for the period ending December 31, 2005, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Philip S. Winner, President, Chief Executive Officer and Director of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002, that:

1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ Philip S. Winner
August 16, 2006	Philip S. Winner
	President, Chief Executive Officer and Director

EX-32.2

Exhibit 32.2

Certification of Chief Financial Officer

Pursuant to Section 906 of Sarbanes Oxley Act of 2002

In Connection with the amended Annual Report of Heartland Oil and Gas Corp. (the “Company”) on Form 10-K/A for the period ending December 31, 2005, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert L. Poley, Chief Financial Officer and Director of the Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002, that:

1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ Robert L. Poley
August 16, 2006	Robert L. Poley
	Chief Financial Officer and Director