10QSB

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

Form 10-QSB

(Mark One)
[X]	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended  June 30, 2003
[  ]	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from [ ] to [ ]
Commission file number    000-30193 Nation Energy, Inc. (Exact name of small business issuer as specified in its charter) Wyoming (State or other jurisdiction of incorporation or organization) 59-2887569 (IRS Employer Identification No.) Suite 1100 - 609 West Hastings Street Vancouver, BC, Canada V6B 4W4 (Address of principal executive offices) (800) 400-3969 (Issuer's telephone number) not applicable (Former name, former address and former fiscal year, if changed since last report)

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes [ ] No [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:

16,020,000 common shares outstanding as of August 1, 2003

Transitional Small Business Disclosure Format (Check one):  Yes [ ] No [X]

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Part I - FINANCIAL INFORMATION

Item 1. Financial Statements.

Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

DISCLOSURE

To: The Shareholders of Nation Energy, Inc.

It is the opinion of management that the interim financial statements for the quarter ended June 30, 2003 include all adjustments necessary in order to ensure that the financial statements are not misleading.

Vancouver, British Columbia
Date:  August 19, 2003

"John R. Hislop"
__________________________________
John R Hislop, Director of Nation Energy, Inc.

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Nation Energy, Inc.
Balance Sheet
June 30, 2003
(Unaudited)
ASSETS
Current assets:
Cash	$       18,472
Prepaid expenses	5,142
Total current assets	23,614
Unproved oil and gas properties - full cost method	634,581
	$      658,195
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$       15,234
Accounts payable - related party	27,195
Total current liabilities	42,429
Stockholders' equity:
Preferred stock, $.001 par value; 5,000,000
shares authorized; none outstanding	-
Common stock, $.001 par value; 50,000,000
shares authorized; 16,020,000 shares issued
and outstanding	16,020
Additional paid-in capital	6,868,380
Accumulated (deficit)	(6,268,634)
	615,766
	$      658,195

The accompanying notes are an integral part of these financial statements.

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Nation Energy, Inc.
Statements of Operations
(Unaudited)
	For the Three	For the Three
	Months Ended	Months Ended
	June 30, 2003	June 30, 2002
Revenue:	$                   -	$                -
Costs and expenses:
General, selling and administrative	21,468	26,990
Total costs and expenses	21,468	26,990
Other income (expense):
Interest income	667	929
Net (loss)	$           (20,801)	$         (26,061)
Per share information:
Weighted average number of common
shares outstanding - basic and diluted	16,020,000	16,020,000
Net (loss) per common share - basic and diluted	$              (0.00)	$            (0.00)

The accompanying notes are an integral part of these financial statements.

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Nation Energy, Inc.
Statements of Cash Flows
(Unaudited)
	For the Three	For the Three
	Months Ended	Months Ended
	June 30, 2003	June 30, 2002
Cash flows from operating activities:
Net cash (used in) operating activities	$        (293,163)	$            (3,214)
Cash flows from investing activities:
Purchase of unproved oil and gas properties	(134,581)	(562,933)
Net cash (used in) investing activities	(134,581)	(562,933)
Cash flows from financing activities:
Net cash provided by financing activities	-	-
Net (decrease) in cash	(427,744)	(566,147)
Beginning cash	446,216	1,385,254
Ending cash	$           18,472	$         819,107

The accompanying notes are an integral part of these financial statements.

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Nation Energy, Inc.

Notes to Financial Statements

June 30, 2003

(Unaudited)

Note 1. Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. They do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation, have been included in the accompanying unaudited financial statements. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the full year. For further information, refer to the financial statements and notes thereto, included in the Company’s Form 10-KSB as of and for the two years ended March 31, 2003.

Note 2. Going Concern

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates continuation of the Company as a going concern. The Company has incurred losses since inception of $6,268,634 and is reliant on raising capital to initiate its business plan.

The Company’s ability to continue as a going concern is contingent upon being able to secure financing and attain profitable operations. The Company is pursuing financing for its operations and is in the process of determining whether the Bolton Prospect has sufficient reserves to justify additional drilling.

The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

Note 3: Earnings Per Share

The Company calculates net income (loss) per share as required by Statement of Financial Accounting Standards (SFAS) 128, "Earnings per Share." Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares and dilutive common stock equivalents outstanding. During the periods presented, common stock equivalents were not considered, as their effect would be anti-dilutive.

Note 4. Unproved Oil and Gas Properties

During the three months ended June 30, 2003 the Company invested $134,581 in unproved oil and gas properties.

Periodically, but at least annually, the Company will evaluate the economic recoverability of their unproved oil and gas properties. As of June 30, 2003, management has determined that there was no impairment of their unproved oil and gas properties.

Note 5. Subsequent Event

During July 2003 the Company received advances from a related party aggregating $229,934 to fund exploration expenses on the their unproved properties. As of the date of this filing the terms of the loan have not been determined.

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Item 2. Management's Discussion and Analysis or Plan of Operation.

FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995.  These statements relate to future events or our future financial performance.  In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology.  These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors", that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.  Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.  Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

As used in this quarterly report, the terms "we", "us", "our", and "Nation Energy" mean Nation Energy, Inc., unless otherwise indicated.

All dollar amounts refer to US dollars unless otherwise indicated.

The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly 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 quarterly report, particularly in the section entitled "Risk Factors".

Business of Nation Energy, Inc.

We are an oil and gas exploration stage company with interests in properties located in Alberta, Canada.  Nation Energy is a Wyoming corporation with its business offices located at Suite 1100, 609 West Hastings Street, Vancouver, British Columbia.  Our telephone number is (800) 400-3969.

Corporate History

We were formed under the laws of the state of Florida on April 19, 1988 under the name Excalibur Contracting, Inc. and from that date until September 1998, we conducted no business and existed as a shell corporation.  Since the restatement of our Articles of Incorporation on September 16, 1998, our main focus has been the procurement of mineral leasehold interests, primarily for oil and gas exploitation rights.  We reincorporated as a Delaware corporation on February 2, 2000 and changed our name to Nation Energy, Inc. on February 15, 2000.   Following the change in our focus, we commenced corporate strategic development and have explored potential oil and gas projects.  Though we reviewed potential participation in several oil and gas projects in the Rocky Mountain region, we have entered into only one agreement as of this date for the exploration of oil and gas properties in that region.  This agreement was the Joint Operating Agreement with Saurus Resourc es, Inc., dated December 1, 1999, which was attached as an exhibit to our Form 10-SB filed with the Securities and Exchange Commission on March 31, 2000 and was described in detail in that filing. On June 13, 2003 we merged from the State of Delaware with Nation Energy Inc., a corporation organized and existing under the laws of the State of Wyoming.

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We held interests in 28 oil and gas leases located in the Great Trona Area prospect, located in and around Sweetwater County, Wyoming.  These leases cover approximately 22,000 acres.  Under the Joint Operating Agreement, Saurus Resources was the operator of oil and gas exploration on the property covered by these leases and has certain rights and duties as the operator.  Our only material activities until recently had been related to our participation in exploration conducted under the Joint Operating Agreement with Saurus Resources.  To date, 24 test wells have been drilled and completed under the Joint Operating Agreement.  We advanced a total of approximately $2,167,000 under our agreement with Saurus Resources.  Operational difficulties in developing the test wells are largely responsible for greater than anticipated operating costs.  These difficulties include mineral precipitation in the well bore, which inhibits production.  The wells drilled to date have been perforated and hydraulically fractured; these geophysical traits make extraction of gas much more complicated and expensive than anticipated. 

Because of the poor operating results under the Joint Operating Agreement, we began to explore other alternatives to this arrangement.  On February 28, 2001 we entered into a Purchase and Sale Agreement with VRD, Inc., an affiliate of Saurus Resources, under which we agreed to sell to VRD, Inc. all of our interest in our oil and gas leases in the Greater Trona Area, all right, title and interest in and to all of the personal property, fixtures and improvements appurtenant to the such leases, and all of our rights under the Joint Operating Agreement with Saurus Resources.  The rights that were to be sold included the right to participate in the drilling, completion, tie-in and production of wells within the contract area.  In consideration for the sale, we were to receive from VRD, Inc. $2,165,780 in cash from VRD, Inc. and we were to retain certain royalty interests.

We attempted to obtain the approval of our shareholders of the transactions contemplated in the Purchase and Sale Agreement with VRD, Inc.  The details of this transaction and the reasons for the sale were described in detail in our Consent Solicitation Statement on Schedule 14A, which was filed on April 26, 2001 and subsequently amended by a filing made June 28, 2001.  We obtained clearance from the SEC to distribute the Schedule 14A to our shareholders on September 26, 2001.  However, by the time of the SEC clearance, the Purchase and Sale Agreement had expired in accordance with its terms and VRD, Inc. was unwilling to proceed with the transaction.

We entered into a Quitclaim, Release and Assumption Agreement, dated December 6, 2001, with VRD, Inc. and Saurus Resources, pursuant to which we disposed of any and all interests that we held in the oil and gas leases located in the Greater Trona Area of Sweetwater County, Wyoming.  We felt that it was in the best interests of our company given our potential liability under the oil and gas leases and the fact that it was unlikely that the properties in question had any realizable value.  We wrote off the remaining value of the properties.

Due to our current operations and their location in Alberta, Canada, we registered as an extra-provincial company in the province of Alberta on June 3, 2003.

Our Current Business

On November 21, 2001 we entered into a farm-in agreement with Olympia Energy Inc. (the "Farm-in Agreement") under which we agreed to share the development costs and revenues for a natural gas project in the Smoky area near Grande Prairie, Alberta, Canada (the "Bolton Prospect").  Under the terms of the Farm-in Agreement, we will fund 25% of the cost to drill and complete a 4,800 meter well in the Bolton Prospect and will earn a 15% interest after payout in the Bolton Prospect.  Drilling costs for the Bolton Prospect are estimated to be CDN$11,000,000.  An initial well at 09-09-59-02-W6M was drilled to a total depth of 4830 meters in March of 2002 and has been logged.   A completion program was attempted on the well, and the well flowed small amounts of gas and large amounts of salt water.  Various attempts to shut off the salt water have been unsuccessful to date.  Total costs incurred by Nation for the Bolton Prospect to date are $3,005 ,483.

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Olympia Energy, the operator of the well has presented the partners, including Nation Energy, with a proposed program including further logging of the Leduc formation in the well and, if warranted, further production testing.  The estimated cost of the logging program was $133,580 and the estimated cost of the production testing was $454,840.  Nation Energy participated in the program.  The logging and testing program began in February 2003.  Testing has shown the Leduc formation to be non-productive, and the zone has been plugged and abandoned.  In March 2003 Nation participated in a testing program on the shallower Gething formation and at March 31, 2003, the Gething was producing gas on test.  The Operator has shut-in the well for Spring break-up and intends to resume testing the Gething and other potentially productive zones by August 2003.  Additional costs to test these zones are estimated to be $400,000.

Our primary objective over the 12 months ending June 30, 2004, will be to continue to participate in the Farm-in Agreement with Olympia Energy Inc. We intend to participate in and develop further wells on the Bolton Prospect if warranted, based upon the results that we receive from the initial well.

In July 2003, we participated in a program to test the Dunvegan formation, which, if successful, could be flowed along with gas from the Gething formation.  At August 19, 2003 the testing program was still underway and no results were yet available.

In April 2003, we participated, as to its 15% interest, in the purchase of additional lands in the Bolton area.  During the first quarter 2004, Nation and its partners commenced a re-entry and completion of a shallow formation that is thought to be productive in these lands.  As of August 19, 2003 the shallow formation was still being tested and no results were yet available.  

We have not had any operating revenues from the date of our formation in April 18, 1988 to the present.  We anticipate that we will not have enough cash to meet our expenses and capital commitments during the next twelve months, as described under Liquidity and Capital Resources below.

Results of Operations

Quarter Ended June 30, 2003 Compared to Quarter Ended June 30, 2002

We incurred a net operating loss of $(20,801) for the three months ended June 30, 2003, compared to a net loss of $(26,061) for the three months ended June 30, 2002.  The net loss per common share for the three months ended June 30, 2003 was $0.00, compared to a net loss per common share for the three months ended June 30, 2002 of $0.00.  

Discussion and analysis related to significant operating activities undertaken during the three months ended June 30, 2003 is set out below.

Lack of Revenues

We have not generated any material revenues to date from operations.  At this time, our ability to generate any revenues continues to be uncertain.  We generated $667 in income from interest during the three month period ended June 30, 2003, compared to $929 in interest income during the three month period ended June 30, 2002.

Investment

As at June 30, 2003, we have invested a total of $3,005,483 under the Farm-in Agreement with Olympia Energy Inc. towards the drilling and development costs of the initial well at the Bolton Prospect.  Of this investment, $134,581 was invested during the three month period ended June 30, 2003.  However, given the results that we have received on the Bolton Prospect to date, we have recorded a $2,370,902 impairment on the Bolton Prospect to date.  

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Liquidity and Capital Resources

We currently rely on our existing cash reserves to fund our continuing operating expenses and to fund the identification and evaluation of a suitable business opportunity or business combination.  As of June 30, 2003 and June 30, 2002, our cash and cash equivalent balances were $18,472 and $819,107, respectively.  Subsequent to the period ended June 30, 2003 we received a bridge loan in the amount of $229,934 from a related party to fund further exploration.  The terms of the loan have not been determined and formal documentation has not yet been entered into.   We anticipate that we will require additional financing in order to fund our obligations under the Farm-in Agreement.  Should we require additional financing, we would likely seek to secure same through a private placement of our shares of common stock.  

Our material commitments for capital expenditures are limited to the Farm-in Agreement with Olympia Energy for the development of the Bolton Prospect.

We can only estimate the future needs for capital based on the current status of our operations, our current plans and current economic condition.  Due to the uncertainties regarding our future activities, we are unable to predict precisely what amount will be used for any particular purpose, other than the funds which we will be required to expend under the Farm-in Agreement.

Plan of Operation

Our primary objective over the twelve months ending June 30, 2004, will be to continue to participate in the Farm-in Agreement with Olympia Energy Inc. with respect to the development of the Bolton Prospect.

Cash Requirements

Subsequent to the period ended June 30, 2003 we received a bridge loan in the amount of $229,934 from a related party to fund further exploration.  The terms of the loan have not been determined and formal documentation has not yet been entered into.  We anticipate that we may require further financing from third parties in order to continue our operations and fund our capital commitments under the Farm-in Agreement.  At this time, we anticipate that we will require additional capital to fund our ongoing operations and capital expenditure commitments to June 30, 2004.  However, we may be required to raise additional financing for a particular business opportunity.  We would likely seek to secure any additional financing necessary through a private placement of our common stock.

We have suffered recurring losses from operations.  The continuation of our company as a going concern is dependent upon our company attaining and maintaining profitable operations and raising additional capital.  The financial statements do not include any adjustment relating to the recovery and classification of recorded asset amounts or the amount and classification of liabilities that might be necessary should our company discontinue operations.

There is substantial doubt about our ability to continue as a going concern as the continuation of our business is dependent upon obtaining further financing, a successful program of acquisition and exploration, and, finally, achieving a profitable level of operations.  The issuance of additional equity securities by us could result in a 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.

There are no assurances that we will be able to obtain further funds required for our continued operations.  There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms.  If we are not able to obtain the additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our other obligations as they become due.  In such event, we will be forced to scale down or perhaps even cease our operations.

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Product Research and Development

We do not anticipate that we will expend any significant monies on research and development over the twelve months ending June 30, 2004.

Purchase of Significant Equipment

We do not intend to purchase any significant equipment over the twelve months ending June 30, 2004.

Employees

Over the twelve months ending June 30, 2004, we do not anticipate an increase in the number of employees that we may retain.  We currently have no employees other than our directors and officers.

RISK FACTORS

Much of the information included in this registration statement includes or is based upon estimates, projections or other "forward looking statements".  Such forward looking statements include any projections or estimates made by us and our management in connection with our business operations.  While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgement regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein.

Such estimates, projections or other "forward looking statements" involve various risks and uncertainties as outlined below.  We caution the reader that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other "forward looking statements".

Our shares of common stock are considered speculative while we proceed with our commitments in connection with the Smoky project or while we continue our search for a new business opportunity.  Prospective investors should consider carefully the risk factors set out below.

Because of the early stage of development and the nature of our business, our securities are considered highly speculative.

Our securities must be considered highly speculative, generally because of the nature of our business and the early stage of its development. We are engaged in the business of exploring and, if warranted, developing commercial reserves of oil and gas. Our properties are in the exploration stage only and are without known reserves of oil and gas.   Accordingly, we have not realized a profit from our operations to date and there is little likelihood that we will realize any profits in the short term.  Any profitability in the future from our business will be dependent upon locating and developing economic reserves of oil and gas, which itself is subject to numerous risk factors as set forth herein.

A portion of our interest in our properties may be lost if we are unable to obtain significant additional financing.

Our ability to continue exploration and, if warranted, development of our properties will be dependent upon our ability to raise significant additional financing. If we are unable to obtain such financing, a portion of our interest in our properties may be lost to exploration partners or our properties may be lost entirely.  We have limited financial resources and limited cash flow from operations and we are dependent for funds on our ability to sell our common shares, primarily on a private placement basis.  There can be no assurance that we will be able to obtain financing on that basis in light of factors such as the market demand for our securities, the state of financial markets generally and other relevant factors.  The method of financing employed by us to date results in increased dilution to the existing shareholders each time a private placement is conducted.

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There can be no assurance that additional funding will be available to us for exploration and development of our projects or to fulfil our obligations under any applicable agreements.  Although historically we have announced additional financings to proceed with the development of some of our previous properties, there can be no assurance that we will be able to obtain adequate financing in the future or that the terms of such financing will be favourable.  Failure to obtain such additional financing could result in delay or indefinite postponement of further exploration and development of our projects with the possible loss of such properties.

We will require substantial funds to enable us to decide whether our properties contain commercial oil and gas deposits and whether they should be brought into production, and if we cannot raise the necessary funds we may never be able to realize the potential of our properties.

Our decision as to whether our properties contain commercial oil and gas deposits and should be brought into production will require substantial funds and depend upon the results of exploration programs and feasibility studies and the recommendations of duly qualified engineers, geologists, or both.  This decision will involve consideration and evaluation of several significant factors including but not limited to: (1) costs of bringing a property into production, including exploration and development work, preparation of production feasibility studies, and construction of production facilities; (2) availability and costs of financing; (3) ongoing costs of production; (4) market prices for the oil and gas to be produced; (5) environmental compliance regulations and restraints; and (6) political climate, governmental regulation and control.

We have obtained title reports, but these reports do not guarantee title against all possible claims.  Our properties may be subject to prior unregistered agreements, native land claims or transfers which have not been recorded or detected, resulting in a possible claim against any future revenues generated by such properties.

We have obtained title reports with respect to our oil and gas properties and believe our interests are valid and enforceable; however, these reports do not guarantee title against all possible claims.  The properties may be subject to prior unregistered agreements, native land claims or transfers which have not been recorded or detected through title research.  Additionally, the land upon which we hold oil and gas leases may not have been surveyed; therefore, the precise area and location of such interests may be subject to challenge.

Our accounts are subject to currency fluctuations which may materially affect our financial position and results.

We maintain our accounts in US and Canadian currencies and are therefore subject to currency fluctuations and such fluctuations may materially affect our financial position and results. We do not engage in currency hedging activities.

We may not be able to manage the significant strains that future growth may place on our administration infrastructure, systems and controls.

In the event our properties commence production, we could experience rapid growth in revenues, personnel, complexity of administration and in other areas.  There can be no assurance that we will be able to manage the significant strains that future growth may place on our administrative infrastructure, systems, and controls.  If we are unable to manage future growth effectively, our business, operating results and financial condition may be materially adversely affected.

The loss of Donald Sharpe would have an adverse impact on future development and could impair our ability to succeed.

We are dependent on our ability to hire and retain highly skilled and qualified personnel. We face competition for qualified personnel from numerous industry sources, and there can be no assurance that we will be able to attract and retain qualified personnel on acceptable terms. We do not have key man insurance on any of our employees. The loss of service of any of our key personnel could have a material adverse effect on our operations or financial condition.

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We are dependent upon Olympia Energy Inc.’s expertise in the area of oil and gas exploration.

Under the Farm-in Agreement, Olympia Energy Inc. will act as operator for the purposes of carrying out the work necessary to obtain our right to earn an interest under the Farm-in Agreement and we are therefore dependent upon Olympia Energy Inc. expertise in the area of oil and gas exploration.

Our management currently engages in other oil and gas businesses and, as a result, conflicts could arise.

In addition to their interest in our company, our management currently engages, and intends to engage in the future, in the oil and gas business independently of our company. As a result, conflicts of interest between us and management of our company might arise.

Trading of our stock may be restricted by the SEC’s penny stock regulations which may limit a stockholder’s ability to buy and sell our stock.

Our shares of common stock are subject to rules promulgated by the Securities and Exchange Commission relating to "penny stocks," which apply to companies whose shares are not traded on a national stock exchange or on the NASDAQ system, trade at less than $5.00 per share, or who do not meet certain other financial requirements specified by the Securities and Exchange Commission.  These rules require brokers who sell "penny stocks" to persons other than established customers and "accredited investors" to complete certain documentation, make suitability inquiries of investors, and provide investors with certain information concerning the risks of trading in the such penny stocks.  These rules may discourage or restrict the ability of brokers to sell our shares of common stock and may affect the secondary market for our shares of common stock.  These rules could also hamper our ability to raise funds in the primary market for our shares of common sto ck.

Since our shares are thinly traded, and trading on the OTC Bulletin Board may be sporadic because it is not an exchange, stockholders may have difficulty reselling their shares.

Our shares of common stock are currently publicly traded on the OTC Bulletin Board service of the National Association of Securities Dealers, Inc.  The trading price of our shares of common stock has been subject to wide fluctuations.  Trading prices of our shares of common stock may fluctuate in response to a number of factors, many of which will be beyond our control.  The stock market has generally experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies with no current business operation.  There can be no assurance that trading prices and price earnings ratios previously experienced by our shares of common stock will be matched or maintained.  These broad market and industry factors may adversely affect the market price of our shares of common stock, regardless of our operating performance.

In the past, following periods of volatility in the market price of a company's securities, securities class-action litigation has often been instituted.  Such litigation, if instituted, could result in substantial costs for us and a diversion of management's attention and resources.

Our By-laws contain provisions indemnifying our officers and directors against all costs, charges and expenses incurred by them.

Our by-laws contain provisions with respect to the indemnification of our officers and directors against all expenses (including, without limitation, attorneys' fees, judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with any proceeding arising by reason of the fact that the person is one of our officers or directors) incurred by an officer or director in defending any such proceeding to the maximum extent permitted by Delaware law.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of our company under Delaware law or otherwise, we have been advised the opinion of the Securities and Exchange Commission is that such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable.

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Investors’ interests in our company will be diluted and investors may suffer dilution in their net book value per share if we issue additional shares or raise funds through the sale of equity securities.

Our constating documents authorize the issuance of 50,000,000 shares of common stock, each with a par value of $0.001.  In the event that we are required to issue any additional shares or enter into private placements to raise financing through the sale of equity securities, investors' interests in our company will be diluted and investors may suffer dilution in their net book value per share depending on the price at which such securities are sold.  If we issue any such additional shares, such issuances also will cause a reduction in the proportionate ownership and voting power of all other shareholders.  Further, any such issuance may result in a change in our control.

Our by-laws do not contain anti-takeover provisions which could result in a change of our management and directors if there is a take-over of our company.

We do not currently have a shareholder rights plan or any anti-takeover provisions in our By-laws.  Without any anti-takeover provisions, there is no deterrent for a take-over of our company, which may result in a change in our management and directors.

Risks Relating to the Industry

As our properties are in the exploration and development stage there can be no assurance that we will establish commercial discoveries on our properties.

Exploration for economic reserves of oil and gas is subject to a number of risk factors.  While the rewards to an investor can be substantial if an economically viable discovery is made, few of the properties that are explored are ultimately developed into producing oil and/or gas wells. Our properties are in the exploration and development stage only and are without proven reserves of oil and gas.  There can be no assurance that we will establish commercial discoveries on any of our properties.

The potential profitability of oil and gas ventures depends upon factors beyond the control of our company

The potential profitability of oil and gas properties is dependent upon many factors beyond our control.  For instance, world prices and markets for oil and gas are unpredictable, highly volatile, potentially subject to governmental fixing, pegging, controls, or any combination of these and other factors, and respond to changes in domestic, international, political, social, and economic environments.  Additionally, due to worldwide economic uncertainty, the availability and cost of funds for production and other expenses have become increasingly difficult, if not impossible, to project.  These changes and events may materially affect our financial performance.

Adverse weather conditions can also hinder drilling operations.  A productive well may become uneconomic in the event water or other deleterious substances are encountered which impair or prevent the production of oil and/or gas from the well.  In addition, production from any well may be unmarketable if it is impregnated with water or other deleterious substances.  The marketability of oil and gas which may be acquired or discovered will be affected by numerous factors beyond our control.  These factors include the proximity and capacity of oil and gas pipelines and processing equipment, market fluctuations of prices, taxes, royalties, land tenure, allowable production and environmental protection. The extent of these factors cannot be accurately predicted but the combination of these factors may result in our company not receiving an adequate return on invested capital.

Competition in the oil and gas industry is highly competitive and there is no assurance that we will be successful in acquiring desirable oil and gas leases.

The oil and gas industry is intensely competitive. We compete with numerous individuals and companies, including many major oil and gas companies, which have substantially greater technical, financial and operational resources and staffs.  Accordingly, there is a high degree of competition for desirable oil and gas leases, suitable properties for drilling operations and necessary drilling equipment, as well as for access to funds.  There can be no assurance that the necessary funds can be raised or that any projected work will be completed.

- 14 -

The marketability of natural resources will be affected by numerous factors beyond our control which may result in us not receiving an adequate return on invested capital to be profitable or viable.

The marketability of natural resources which may be acquired or discovered by us will be affected by numerous factors beyond our control. 

These factors include market fluctuations in oil and gas pricing and demand, the proximity and capacity of natural resource markets and processing equipment, governmental regulations, land tenure, land use, regulation concerning the importing and exporting of oil and gas and environmental protection regulations.  The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in us not receiving an adequate return on invested capital to be profitable or viable.

Oil and gas operations are subject to comprehensive regulation which may cause substantial delays or require capital outlays in excess of those anticipated causing an adverse effect on our company.

Oil and gas operations are subject to federal, provincial, and local laws relating to the protection of the environment, including laws regulating removal of natural resources from the ground and the discharge of materials into the environment.  Oil and gas operations are also subject to federal, state, and local laws and regulations which seek to maintain health and safety standards by regulating the design and use of drilling methods and equipment.  Various permits from government bodies are required for drilling operations to be conducted; no assurance can be given that such permits will be received.  No assurance can be given that environmental standards imposed by federal, provincial, or local authorities will not be changed or that any such changes would not have material adverse effects on our activities.  Moreover, compliance with such laws may cause substantial delays or require capital outlays in excess of those anticipated, thus causing an adverse effect on us.   Additionally, we may be subject to liability for pollution or other environmental damages which it may elect not to insure against due to prohibitive premium costs and other reasons.

Exploration and production activities are subject to certain environmental regulations which may prevent or delay the commencement or continuance of our operations.

In general, our exploration and production activities are subject to certain federal, provincial and local laws and regulations relating to environmental quality and pollution control.  Such laws and regulations increase the costs of these activities and may prevent or delay the commencement or continuance of a given operation.  Compliance with these laws and regulations has not had a material effect on our operations or financial condition to date.  Specifically, we are subject to legislation regarding emissions into the environment, water discharges and storage and disposition of hazardous wastes.  In addition, legislation has been enacted which requires well and facility sites to be abandoned and reclaimed to the satisfaction of state authorities.  However, such laws and regulations are frequently changed and we are unable to predict the ultimate cost of compliance.  Generally, environmental requirements do not appear to affect us any differently or to any gr eater or lesser extent than other companies in the industry.

We believe that our operations comply, in all material respects, with all applicable environmental regulations.

Our operating partners maintain insurance coverage customary to the industry; however, it is not fully insured against all environmental risks.

Exploratory drilling involves many risks and we may become liable for pollution or other liabilities which may have an adverse effect on our financial position.

Drilling operations generally involve a high degree of risk.  Hazards such as unusual or unexpected geological formations, power outages, labor disruptions, blow-outs, sour gas leakage, fire, inability to obtain suitable or adequate machinery, equipment or labour, and other risks are involved. We may become subject to liability for pollution or hazards against which it cannot adequately insure or which it may elect not to insure.  Incurring any such liability may have a material adverse effect on our financial position and operations.

- 15 -

Any change to government regulation/administrative practices may have a negative impact on our ability to operate and our profitability.

There is no assurance that the laws, regulations, policies or current administrative practices of any government body, organization or regulatory agency will not be changed, applied or interpreted in a manner which will fundamentally alter the ability of our company to carry on our business.

The actions, policies or regulations, or changes thereto, of any government body or regulatory agency, or other special interest groups, may have a detrimental effect on our Company.  Any or all of these situations may have a negative impact on our ability to operate and/or become profitable.

Item 3. Controls and Procedures

As required by Rule 13a-15 under the Exchange Act, within the 90 days prior to the filing date of this report, our Company carried out an evaluation of the effectiveness of the design and operation of our Company's disclosure controls and procedures. This evaluation was carried out under the supervision and with the participation of our Company's management, including our Company's President, Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our Company's President, Chief Executive Officer and Chief Financial Officer concluded that our Company's disclosure controls and procedures are effective. There have been no significant changes in our Company's internal controls or in other factors, which could significantly affect internal controls subsequent to the date our Company carried out its evaluation.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in Company reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in Company reports filed under the Exchange Act is accumulated and communicated to management, including the Company's Chief Executive Officer and Chief Financial Officer as appropriate, to allow timely decisions regarding required disclosure.

- 16 -

Part II - OTHER INFORMATION

Item 1. Legal Proceedings.

We know of no material, active or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation.  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 2. Changes in Securities.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

Item 5. Other Information.

None.

Item 6. Exhibits and Reports on Form 8-K.

Reports of Form 8-K

None.

Financial Statements Filed as a Part of the Quarterly Report

Our unaudited interim financial statements include:

Balance Sheets

Statements of Operations

Statements of Cash Flows

Notes to the Financial Statements

- 17 -

Exhibits Required by Item 601 of Regulation S-B

(2) Plan of Purchase, Sale, Reorganization, Arrangement, Liquidation or Succession

2.1 Purchase and Sale Agreement dated February 28, 2001 (incorporated by reference from our Consent Solicitation Statement on Schedule 14A, filed on April 26, 2001)

(3) Articles of Incorporation and By-laws

3.1 Certificate of Incorporation (incorporated by reference from our Registration Statement on Form 10-SB, filed on March 31, 2000)

3.2 Certificate of Amendment of Certificate of Incorporation (incorporated by reference from our Registration Statement on Form 10-SB, filed on March 31, 2000)

3.3 Bylaws (incorporated by reference from our Registration Statement on Form 10-SB, filed on March 31, 2000)

3.4** Certificate of Merger (Delaware) effective June 12, 2003

3.5** Certificate of Merger (Wyoming) effective June 13, 2003

(10) Material Contracts

10.1 1999 Stock Option Plan (incorporated by reference from our Registration Statement on Form 10-SB filed with the SEC on March 31, 2000)

10.2 Quitclaim Release and Assumption Agreement with Saurus Resources, Inc. and VRD, Inc., dated December 6, 2001 (incorporated by reference from our Quarterly Report on Form 10-QSB filed with the SEC on  February 14, 2002)

10.3 Farm-in Agreement with Olympia Energy Inc., dated November 21, 2001 (incorporated by reference from our Quarterly Report on Form 10-QSB filed with the SEC on February 14, 2002)

10.4 Management Services Agreement with D. Sharpe Management Inc., dated July 1, 2002 (incorporated by reference from our Quarterly Report on Form 10-QSB filed with the SEC on August 14, 2002)

(31) 306 Certifications

31.1** Section 302 Certification under Sarbanes-Oxley Act of 2002 of Donald Sharpe, dated August 19, 2003;

31.2** Section 302 Certification under Sarbanes-Oxley Act of 2002 of John Hislop, dated August 19, 2003;

(32) 906 Certifications

32.1** Section 906 Certification under Sarbanes-Oxley Act of 2002 of Donald Sharpe, dated August 19, 2003

32.2** Section 906 Certification under Sarbanes-Oxley Act of 2002 of John Hislop, dated August 19, 2003

**Filed herewith

- 18 -

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

NATION ENERGY, INC.

By: "Donald A. Sharpe"
Donald Sharpe, President and Chief Executive Officer /Director
(Principal Chief Executive Officer)
Date: August 19, 2003

By: "John R. Hislop"
John Hislop, Chairman of the Board and Chief Financial Officer/Director
(Principal Chief Financial and Accounting Officer)
Date:  August 19, 2003

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO
18 U.S.C. ss.1350, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Donald Sharpe, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of Nation Energy, Inc.;

2. Based on my knowledge, this quarterly 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 quarterly report;

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

4. The small business issuer'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) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15-15(f)) for the small business issuer 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 small business issuer, including its consolidated subsidiaries, is made know to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the small business issuer'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

d) disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financing reporting.

5. The small business issuer's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions):

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 small business issuer'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 small business issuer's internal control over financial reporting.

Date: August 19, 2003
"Donald Sharpe"
Donald Sharpe
President, Chief Executive Officer and Director
(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO
18 U.S.C. ss.1350, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John Hislop, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of Nation Energy, Inc.;

2. Based on my knowledge, this quarterly 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 quarterly report;

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

4. The small business issuer'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) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15-15(f)) for the small business issuer 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 small business issuer, including its consolidated subsidiaries, is made know to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the small business issuer'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

d) disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financing reporting.

5. The small business issuer's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions):

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 small business issuer'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 small business issuer's internal control over financial reporting.

Date: August 19, 2003
"John Hislop"
John Hislop
Chairman of the Board, Chief Financial Officer and Director
(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Nation Energy, Inc. (the "Company") on Form 10-QSB for the period ended June 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Donald Sharpe, President, Chief Executive Officer and Director of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:

(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 result of operations of the Company.

Dated: August 19, 2003

"Donald Sharpe"
_________________________________________________

Donald Sharpe, President, Chief Executive Officer and Director
(Principal Executive Officer)

EX-32.2 6 cert906-jrh.htm SECTION 906 CERTIFICATION OF JOHN HISLOP

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Nation Energy, Inc. (the "Company") on Form 10-QSB for the period ended June 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, John Hislop, Chairman of the Board, Chief Financial Officer and Director of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:

(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 result of operations of the Company.

Dated: August 19, 2003

"John Hislop"
_______________________________________________________

John Hislop, Chairman of the Board, Chief Financial Officer and Director
(Principal Financial and Accounting Officer)

EX-3.4 7 merger-de.htm CERTIFICATE OF MERGER (DELAWARE)

Exhibit 3.4

Delaware

The First State

I, HARRIET SMITH WINDSOR, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF MERGER, WHICH MERGES:

"NATION ENERGY, INC.", A DELAWARE CORPORATION, WITH AND INTO "NATION ENERGY INC." UNDER THE NAME OF "NATION ENERGY INC.", A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF WYOMING, AS RECEIVED AND FILED IN THIS OFFICE THE TWELFTH DAY OF JUNE, A.D. 2003, AT 4:10 O'CLOCK P.M.

A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE COUNTY RECORDER OF DEEDS.

/s/ Harriet Smith Windsor
Harriet Smith Windsor, Secretary of State

3669377 8100M

030389566

AUTHENTICATION:  2480056

DATED:  06-18-03

State of Delaware
Secretary of State
Division of Corporations
Delivered 04:15 PM 06/12/2003
FILED 04:10 PM 06/12/2003
SRV 030389566 – 3128617 FILE

CERTIFICATE OF MERGER (DELAWARE)

OF

NATION ENERGY INC.

(a Delaware Corporation)

AND

NATION ENERGY INC.

(a Wyoming Corporation)

In accordance with Section 252 of the Delaware General Corporation Law, and the Wyoming Business Corporation Act, the undersigned, Donald A. Sharpe, being the President and Chief Executive Officer of Nation Energy Inc., a Delaware corporation, DOES HEREBY CERTIFY as follows:

1. The name and state of incorporation of each of the constituent corporations are Nation Energy Inc., a Delaware corporation (the "Disappearing Corporation"), and Nation Energy Inc., a Wyoming corporation (the "Surviving Corporation").

2. The Agreement and Plan of Merger attached hereto as Exhibit "A", have been approved, adopted, certified, executed and acknowledged by each of the constituent corporations in accordance with Section 252 of the Delaware General Corporation Law.

3. The name of the Surviving Corporation is Nation Energy Inc.

4. The Merger shall become effective on June 12, 2003 (the "Effective Date") after satisfaction of the requirements of the applicable laws of such States prerequisite to the filing of a Certificate of Merger with the Secretary of State of the State of Delaware and a Certificate of Merger with the Secretary of State of the State of Wyoming, including without limitation the approval of the shareholders of the Disappearing Corporation.

5. The Surviving Corporation, Nation Energy Inc., will be a Wyoming corporation and its Certificate of Incorporation as currently filed with the Secretary of State of the State of Wyoming shall be the Certificate of Incorporation of the Surviving Corporation.

6. For the Surviving Corporation, the Agreement and Plan of Merger was duly authorized by all action required under the Wyoming Business Corporation Act and by its constituent documents.

7. The executed agreement of merger is on file at the principal place of business of the Surviving Corporation, Suite 1100 – 609 West Hastings Street, Vancouver, British Columbia V6B 4W4.

8. A copy of the Agreement and Plan of Merger will be furnished by the Surviving Corporation, on request and without cost, to any shareholder of either constituent corporation.

9. The Surviving Corporation will be responsible for all franchise tax liabilities of the Disappearing Corporation.

10. The Surviving Corporation hereby agrees that it may be served with process in the State of Delaware and hereby irrevocably appoints the Secretary of State of the State of Delaware as its agent to accept service of process and hereby directs that a copy of such process be mailed by the Secretary of State to the Surviving Corporation at Suite 1100 – 609 West Hastings Street, Vancouver, British Columbia V6B 4W4.

11. As to the Disappearing Corporation, the designation, number of outstanding shares, number of votes entitled to be cast by each voting group entitled to vote, total number of shares voted for and against the agreement of merger are as follows:

Designation	No. Of Shares Outstanding	No. Of Votes Entitled To Be Cast	No. Shares Voted For	No. Of Shares Voted Against
Common	11,020,000	11,020,000	6,532,000	Nil

Dated March 26, 2003

NATION ENERGY INC.

Per:  /s/ Donald A. Sharpe
Name:  Donald A. Sharpe
Title:  President, CEO and Director

Exhibit "A"

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER DATED AS OF JANUARY 29, 2002

BETWEEN:

NATION ENERGY INC., (a Delaware Corporation) having a place of business at Suite 1100 - 609 West Hastings Street, Vancouver, British Columbia, V6B 4W4

("DelawareCo")

AND:

NATION ENERGY INC., (a Wyoming Corporation) c/o CT Corporation System, 1720 Carey Avenue, Cheyenne, Wyoming  82001

("WyomingCo")

WHEREAS:

This Agreement and Plan of Merger (this "Agreement") is made and entered into as of January 29, 2002 between DelawareCo and WyomingCo.  DelawareCo and WyomingCo are from time to time herein referred to as the "Constituent Corporations".

A. DelawareCo is a corporation duly organized and existing under the laws of the State of Delaware and, on the date hereof, has authorized capital consisting of 50,000,000 shares of common stock, with a par value of $0.001 per share (the "DelawareCo Common Stock"), of which 11,020,000 shares are issued and outstanding as of November 30, 2001 and 5,000,000 shares of preferred stock, with a par value of $0.001, of which no shares are issued and outstanding.

B. WyomingCo is a corporation duly organized and existing under the laws of the State of Wyoming and, on the date hereof, has authorized capital consisting of 100,000,000 shares of common stock, with no par value (the "WyomingCo Common Stock"), of which no shares are issued and outstanding.

C. Each of the Boards of Directors of the Constituent Corporations deem it advisable and in the best interests of Constituent Corporations and their respective shareholders that DelawareCo be merged with and into WyomingCo for the purpose of changing the jurisdiction of incorporation of DelawareCo from the State of Delaware to the State of Wyoming.

D. By directors' resolution dated January 29, 2002, the Board of Directors of WyomingCo has approved the Plan of Merger embodied in this Agreement.

E. By directors' resolution dated January 29, 2002, the Board of Directors of DelawareCo has approved the Plan of Merger embodied in this Agreement.

F. By shareholders' consent resolution dated January 29, 2002, the majority of the shareholders of DelawareCo have approved the Plan of Merger embodied in this Agreement.

NOW THEREFORE, in consideration of the mutual agreements and covenants set forth herein, the Constituent Corporations do hereby agree to merge on the terms and conditions herein provided, as follows:

1. THE MERGER

1.1 The Merger

Upon the terms and subject to the conditions hereof, on the Effective Date (as hereinafter defined), DelawareCo shall be merged with and into WyomingCo in accordance with the applicable laws of the States of Delaware and Wyoming (the "Merger").  The separate existence of DelawareCo shall cease, and WyomingCo shall be the surviving corporation (the "Surviving Corporation") and shall be governed by the laws of the State of Wyoming.

1.2 Effective Date

The Merger shall become effective on June 12, 2003 (the "Effective Date") after satisfaction of the requirements of the applicable laws of such States prerequisite to the filing of a Certificate of Merger with the Secretary of State of the State of Delaware and a Certificate of Merger with the Secretary of State of the State of Wyoming, including without limitation the approval of the shareholders of DelawareCo.

1.3 Certificate of Incorporation

On the Effective Date, the Certificate of Incorporation of WyomingCo, as in effect immediately prior to the Effective Date, shall continue in full force and effect as the Certificate of Incorporation of the Surviving Corporation.

1.4 Bylaws

On the Effective Date, the Bylaws of WyomingCo, as in effect immediately prior to the Effective Date, shall continue in full force and effect as the bylaws of the Surviving Corporation.

1.5 Directors and Officers

The directors and officers of WyomingCo immediately prior to the Effective Date shall be the directors and officers of the Surviving Corporation, until their successors shall have been duly elected and qualified or until otherwise provided by law, the Certificate of Incorporation of the Surviving Corporation or the Bylaws of the Surviving Corporation.

2. CONVERSION OF SHARES

2.1 DelawareCo Common Stock

Upon the Effective Date, by virtue of the Merger and without any action on the part of any holder thereof, each share of DelawareCo Common Stock outstanding immediately prior thereto shall be changed and converted into one fully paid and non-assessable shares of the common stock of the Surviving Corporation, par value of $0.001 per share (the "Survivor Stock").

2.2 WyomingCo Common Stock

Upon the Effective Date, by virtue of the Merger and without any action on the part of the shareholder thereof, each share of WyomingCo Common Stock outstanding immediately prior thereto shall be cancelled and returned to the status of authorized but unissued shares.

2.3 Options

Upon the Effective Date, the Surviving Corporation shall assume and continue the rights and obligations of DelawareCo under each then outstanding option to purchase DelawareCo Common Stock, and the outstanding and unexercised portions of all options and rights to buy DelawareCo Common Stock shall become rights or options for the same number of shares of Survivor Stock with no other changes in the terms and conditions of such options or rights, including exercise prices, and upon the Effective Date, the Surviving Corporation hereby assumes the outstanding and unexercised portions of such options and rights and the obligations of DelawareCo with respect thereto.

2.4 Exchange of Certificates

Each person who becomes entitled to receive any Survivor Stock by virtue of the Merger shall be entitled to receive from the Surviving Corporation, as promptly as practicable after the Effective Date, a certificate or certificates representing the number of Survivor Stock to which such person is entitled as provided herein.

3. EFFECT OF THE MERGER

3.1 Rights, Privileges, etc.

On the Effective Date of the Merger, the Surviving Corporation, without further act, deed or other transfer, shall retain or succeed to, as the case may be, and possess and be vested with all the rights, privileges, immunities, powers, franchises and authority, of a public as well as of a private nature, of DelawareCo and WyomingCo; all property of every description and every interest therein, and all debts and other obligations of or belonging to or due to each of DelawareCo and WyomingCo on whatever account shall thereafter be taken and deemed to be held by or transferred to, as the case may be, or invested in the Surviving Corporation without further act or deed, title to any real estate, or any interest therein vested in DelawareCo or WyomingCo, shall not revert or in any way be impaired by reason of this merger; and all of the rights of creditors of DelawareCo and WyomingCo shall be preserved unimpaired, and all liens upon the property of DelawareCo or WyomingCo shall be preserved unimpaired, and all debts, liabilities, obligations and duties of the respective corporations shall thenceforth remain with or be attached to, as the case may be, the Surviving Corporation and may be enforced against it to the same extent as if all of said debts, liabilities, obligations and duties had been incurred or contracted by it.

3.2 Further Assurances

From time to time, as and when required by the Surviving Corporation or by its successors and assigns, there shall be executed and delivered on behalf of DelawareCo such deeds and other instruments, and there shall be taken or caused to be taken by it such further other action, as shall be appropriate or necessary in order to vest or perfect in or to confirm of record or otherwise in the Surviving Corporation the title to and possession of all the property, interest, assets, rights, privileges, immunities, powers, franchises and authority of DelawareCo and otherwise to carry out the purposes of this Agreement, and the officers and directors of the Surviving Corporation are fully authorized in the name and on behalf of DelawareCo or otherwise to take any and all such action and to execute and deliver any and all such deeds and other instruments.

4. GENERAL

4.1 Abandonment

At any time before the Effective Date, this Agreement may be terminated and the Merger may be abandoned for any reason whatsoever by the Board of Directors of either DelawareCo or WyomingCo or both, notwithstanding the approval of this Agreement by the shareholders of DelawareCo.

4.2 Amendment

At any time prior to the Effective Date, this Agreement may be amended or modified in writing by the Board of Directors of either DelawareCo or WyomingCo or both; provided, however, that an amendment made subsequent to the adoption of this Agreement by the shareholders of DelawareCo shall not alter or change any of the terms and conditions of this Agreement is such alteration or change would adversely affect the rights of the shareholders of DelawareCo.

4.3 Service of Process

The WyomingCo hereby agrees that it may be served with process in the State of Delaware and hereby irrevocably appoints the Secretary of State of the State of Delaware as its agent to accept service of process and hereby directs that a copy of such process be mailed by the Secretary of State to the WyomingCo at Suite 1100 – 609 West Hastings Street, Vancouver, British Columbia  V6B 4W4.

4.4 Governing Law

This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Wyoming and, so far as applicable, the merger provisions of the Delaware General Corporation Law.

4.5 Counterparts

In order to facilitate the filing and recording of this Agreement, the same may be executed in any number of counterparts, each of which shall be deemed to be an original.

4.6 Electronic Means

Delivery of an executed copy of this Agreement by electronic facsimile transmission or other means of electronic communication capable of producing a printed copy will be deemed to be execution and delivery of this Agreement as of the date hereof.

IN WITNESS WHEREOF, the parties hereto have entered into and signed this Agreement as of the date and year first written.

NATION ENERGY INC.

Per:  /s/ Donald A. Sharpe
Name:  Donald A. Sharpe
Title:   President, CEO and Director

NATION ENERGY INC.

Per: /s/ Donald A. Sharpe
Name:  Donald A. Sharpe
Title: President, CEO and Director

EX-32.2

906 Certification

EX-3.4

Certificate of Merger - Delaware

EX-3.5

Exhibit 3.5

State of Wyoming

Office of the
Secretary of State

United States of America,
State of Wyoming	ss.

I, JOSEPH B. MEYER, Secretary of State of the State of Wyoming, do hereby certify that the filing requirements for the issuances of this certificate have been fulfilled.

CERTIFICATE OF MERGER

OF

NATION INC. (UNQUALIFIED) (DE)
merged into:  NATION ENERGY INC. (WY) (SURVIVOR)

Accordingly, the undersigned, by virtue of the authority vested in me by law, hereby issues this Certificate.

GREAT SEAL OF THE STATE OF WYOMING	IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed the Great Seal of the State of Wyoming.  Done at Cheyenne, the Capital, this 13th day of June A.D., 2003.
	/s/ Joseph B. Meyer
	Secretary of State
	By:  /s/ signed

FILED:  06/13/2003
CID: 2002-00430642
WY Secretary of State

Doc. ID: 2003-00450950

ARTICLES OF MERGER (WYOMING)

OF

NATION ENERGY INC.

(a Wyoming Corporation)

AND

NATION ENERGY INC.

(a Delaware Corporation)

In accordance with Article 11 of the Wyoming Business Corporation Act, the undersigned, Donald A. Sharpe, being the Chief Executive Officer of Nation Energy Inc., a Wyoming corporation, DOES HEREBY CERTIFY as follows:

(1) The name and state of incorporation of each of the constituent corporations are Nation Energy Inc., a Wyoming corporation, and Nation Energy Inc., a Delaware corporation;

(2) An agreement of merger, attached hereto as Exhibit “A”, has been approved, adopted, certified, executed and acknowledged by each of the constituent corporations in accordance with Article 11 of the Wyoming Business Corporation Act pursuant to which shareholder approval was not required;

(3) The name of the surviving corporation is Nation Energy Inc.;

(4) The surviving corporation, Nation Energy Inc., will be a Wyoming corporation and its Articles of Incorporation as currently filed with the Secretary of State of the State of Wyoming shall be the Articles of Incorporation of the surviving corporation;

(5) The executed agreement of merger is on file at the principal place of business of the surviving corporation, Suite 1100 – 609 West Hastings Street, Vancouver, British Columbia V6B 4W4;

(6) A copy of the agreement of merger will be furnished by the surviving corporation, on request and without cost, to any  stockholder of either constituent corporation;

(7) The authorized capital stock of Nation Energy Inc., a Delaware corporation, consists of 50,000,000 shares of common stock, with a par value of $0.001 per share pursuant to which shareholder approval was required; and

(8) This certificate shall become effective at 5:00 p.m. PST on the date it is filed.

IN WITNESS WHEREOF, the undersigned has signed his name and affirmed that this instrument is in the act and deed of the corporation and that the statements herein are true, under penalties of perjury, this January 29, 2002.

NATION ENERGY INC.

Per: /s/ Donald A. Sharpe
Donald A. Sharpe,
President, CEO and Director

Exhibit "A"

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER DATED AS OF JANUARY 29, 2002

BETWEEN:

NATION ENERGY INC., (a Delaware Corporation) having a place of business at Suite 1100 - 609 West Hastings Street, Vancouver, British Columbia, V6B 4W4

("DelawareCo")

AND:

NATION ENERGY INC., (a Wyoming Corporation) c/o CT Corporation System, 1720 Carey Avenue, Cheyenne, Wyoming  82001

("WyomingCo")

WHEREAS:

This Agreement and Plan of Merger (this "Agreement") is made and entered into as of January 29, 2002 between DelawareCo and WyomingCo.  DelawareCo and WyomingCo are from time to time herein referred to as the "Constituent Corporations".

A. DelawareCo is a corporation duly organized and existing under the laws of the State of Delaware and, on the date hereof, has authorized capital consisting of 50,000,000 shares of common stock, with a par value of $0.001 per share (the "DelawareCo Common Stock"), of which 11,020,000 shares are issued and outstanding as of November 30, 2001.

B. WyomingCo is a corporation duly organized and existing under the laws of the State of Wyoming and, on the date hereof, has authorized capital consisting of 100,000,000 shares of common stock, with no par value (the "WyomingCo Common Stock"), of which no shares are issued and outstanding.

C. Each of the Boards of Directors of the Constituent Corporations deem it advisable and in the best interests of Constituent Corporations and their respective shareholders that DelawareCo be merged with and into WyomingCo for the purpose of changing the jurisdiction of incorporation of DelawareCo from the State of Delaware to the State of Wyoming.

D. By directors' resolution dated January 29, 2002, the Board of Directors of WyomingCo has approved the Plan of Merger embodied in this Agreement.

E. By directors' resolution dated January 29, 2002, the Board of Directors of DelawareCo has approved the Plan of Merger embodied in this Agreement.

F. By shareholders' consent resolution dated January 29, 2002, the majority of the shareholders of DelawareCo have approved the Plan of Merger embodied in this Agreement.

NOW THEREFORE, in consideration of the mutual agreements and covenants set forth herein, the Constituent Corporations do hereby agree to merge on the terms and conditions herein provided, as follows:

1. THE MERGER

1.1 The Merger

Upon the terms and subject to the conditions hereof, on the Effective Date (as hereinafter defined), DelawareCo shall be merged with and into WyomingCo in accordance with the applicable laws of the States of Delaware and Wyoming (the "Merger").  The separate existence of DelawareCo shall cease, and WyomingCo shall be the surviving corporation (the "Surviving Corporation") and shall be governed by the laws of the State of Wyoming.

1.2 Effective Date

The merger shall become effective on the date and at the time of filing of this Agreement and Plan of Merger, or Certificate of Merger, in substantially the form annexed hereto as Appendix A-1, with the Secretary of State of the State of Delaware, and a Certificate of Merger in substantially the same form with the Secretary of State of the State of Wyoming, whichever occurs later (the "Effective Date"), all after satisfaction of the requirements of the applicable laws of such States prerequisite to such filings, including without limitation the approval of the shareholders of DelawareCo.

1.3 Certificate of Incorporation

On the Effective Date, the Certificate of Incorporation of WyomingCo, as in effect immediately prior to the Effective Date, shall continue in full force and effect as the Certificate of Incorporation of the Surviving Corporation.

1.4 Bylaws

On the Effective Date, the Bylaws of WyomingCo, as in effect immediately prior to the Effective Date, shall continue in full force and effect as the bylaws of the Surviving Corporation.

1.5 Directors and Officers

The directors and officers of WyomingCo immediately prior to the Effective Date shall be the directors and officers of the Surviving Corporation, until their successors shall have been duly elected and qualified or until otherwise provided by law, the Certificate of Incorporation of the Surviving Corporation or the Bylaws of the Surviving Corporation.

2. CONVERSION OF SHARES

2.1 DelawareCo Common Stock

Upon the Effective Date, by virtue of the Merger and without any action on the part of any holder thereof, each share of DelawareCo Common Stock outstanding immediately prior thereto shall be changed and converted into one fully paid and non-assessable shares of the common stock of the Surviving Corporation, par value of $0.001 per share (the "Survivor Stock").

2.2 WyomingCo Common Stock

Upon the Effective Date, by virtue of the Merger and without any action on the part of the shareholder thereof, each share of WyomingCo Common Stock outstanding immediately prior thereto shall be cancelled and returned to the status of authorized but unissued shares.

2.3 Options

Upon the Effective Date, the Surviving Corporation shall assume and continue the rights and obligations of DelawareCo under each then outstanding option to purchase DelawareCo Common Stock, and the outstanding and unexercised portions of all options and rights to buy DelawareCo Common Stock shall become rights or options for the same number of shares of Survivor Stock with no other changes in the terms and conditions of such options or rights, including exercise prices, and upon the Effective Date, the Surviving Corporation hereby assumes the outstanding and unexercised portions of such options and rights and the obligations of DelawareCo with respect thereto.

2.4 Exchange of Certificates

Each person who becomes entitled to receive any Survivor Stock by virtue of the Merger shall be entitled to receive from the Surviving Corporation, as promptly as practicable after the Effective Date, a certificate or certificates representing the number of Survivor Stock to which such person is entitled as provided herein.

3. EFFECT OF THE MERGER

3.1 Rights, Privileges, etc.

On the Effective Date of the Merger, the Surviving Corporation, without further act, deed or other transfer, shall retain or succeed to, as the case may be, and possess and be vested with all the rights, privileges, immunities, powers, franchises and authority, of a public as well as of a private nature, of DelawareCo and WyomingCo; all property of every description and every interest therein, and all debts and other obligations of or belonging to or due to each of DelawareCo and WyomingCo on whatever account shall thereafter be taken and deemed to be held by or transferred to, as the case may be, or invested in the Surviving Corporation without further act or deed, title to any real estate, or any interest therein vested in DelawareCo or WyomingCo, shall not revert or in any way be impaired by reason of this merger; and all of the rights of creditors of DelawareCo and WyomingCo shall be preserved unimpaired, and all liens upon the property of DelawareCo or WyomingCo shall be preserved unimpaired, and all debts, liabilities, obligations and duties of the respective corporations shall thenceforth remain with or be attached to, as the case may be, the Surviving Corporation and may be enforced against it to the same extent as if all of said debts, liabilities, obligations and duties had been incurred or contracted by it.

3.2 Further Assurances

From time to time, as and when required by the Surviving Corporation or by its successors and assigns, there shall be executed and delivered on behalf of DelawareCo such deeds and other instruments, and there shall be taken or caused to be taken by it such further other action, as shall be appropriate or necessary in order to vest or perfect in or to confirm of record or otherwise in the Surviving Corporation the title to and possession of all the property, interest, assets, rights, privileges, immunities, powers, franchises and authority of DelawareCo and otherwise to carry out the purposes of this Agreement, and the officers and directors of the Surviving Corporation are fully authorized in the name and on behalf of DelawareCo or otherwise to take any and all such action and to execute and deliver any and all such deeds and other instruments.

4. GENERAL

4.1 Abandonment

At any time before the Effective Date, this Agreement may be terminated and the Merger may be abandoned for any reason whatsoever by the Board of Directors of either DelawareCo or WyomingCo or both, notwithstanding the approval of this Agreement by the shareholders of DelawareCo.

4.2 Amendment

At any time prior to the Effective Date, this Agreement may be amended or modified in writing by the Board of Directors of either DelawareCo or WyomingCo or both; provided, however, that an amendment made subsequent to the adoption of this Agreement by the shareholders of DelawareCo shall not alter or change any of the terms and conditions of this Agreement is such alteration or change would adversely affect the rights of the shareholders of DelawareCo.

4.3 Governing Law

This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Wyoming and, so far as applicable, the merger provisions of the Delaware General Corporation Law.

4.4 Counterparts

In order to facilitate the filing and recording of this Agreement, the same may be executed in any number of counterparts, each of which shall be deemed to be an original.

4.5 Electronic Means

Delivery of an executed copy of this Agreement by electronic facsimile transmission or other means of electronic communication capable of producing a printed copy will be deemed to be execution and delivery of this Agreement as of the date hereof.

IN WITNESS WHEREOF, the parties hereto have entered into and signed this Agreement as of the date and year first written.

NATION ENERGY INC.

Per:  /s/ Donald A. Sharpe
Name:  Donald A. Sharpe
Title:   President, CEO and Director

NATION ENERGY INC.

Per: /s/ Donald A. Sharpe
Name:  Donald A. Sharpe
Title: President, CEO and Director