Form 10-QSB for the quarterly period ended December 31, 2006

10QSB 1 n10qsb.htm FORM 10-QSB FOR THE PERIOD ENDING DECEMBER 31, 2006 Form 10-QSB for the quarterly period ended December 31, 2006

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 December 31, 2006
[ ]	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 September 29, 2008

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [ ] No [ X ]

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Part I – FINANCIAL INFORMATION

Item 1. Financial Statements

Our unaudited interim consolidated financial statements for the nine month period ended December 31, 2006 form part of this quarterly report. They are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

It is the opinion of management that the interim financial statements for the quarter ended December 31, 2006 include all adjustments necessary in order to ensure that the interim financial statements are not misleading.

Nation Energy, Inc.
Balance Sheet
December 31, 2006
(Unaudited)

ASSETS

Current assets:
Cash		$ 191,056
Accounts receivable		75,591
Prepaid expenses		5,000
Total current assets		271,647

Oil and gas properties, net - full cost method		778,922

		$ 1,050,569


LIABILITIES AND STOCKHOLDERS' (DEFICIT)

Current liabilities:
Accounts payable		$ 352,322
Accounts payable and accrued expenses-related party		41,727
Loans payable - shareholder		773,110
Total current liabilities		1,167,159

Asset retirement obligation		3,675

Stockholders' (deficit):
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)		(6,945,849)
Accumulated comprehensive loss:
Foreign currency translation		(58,816)
		(120,265)

		$ 1,050,569

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Nation Energy, Inc.
Statements of Operations
(Unaudited)

	For the Three Month Period Ended		For the Nine Month Period Ended
	For the Three Month Period Ended		For the Nine Month Period Ended
	December 31, 2006	December 31, 2005	December 31, 2006	December 31, 2005

Revenues:	$ 116,192	$ 131,670	$ 187,405	$ 333,454

Direct Expenses:
Depletion and accretion	(26,216)	-	(78,660)	-
Royalties	(16,861)	(27,707)	(11,576)	20,101
Operating expenses	(7,434)	(26,679)	(35,026)	(33,085)
	(50,511)	(54,386)	(125,262)	(12,984)

	65,681	77,284	62,143	320,470

Costs and expenses:
General, selling and administrative	26,148	25,273	93,872	85,315

Operating income (loss)	39,533	52,011	(31,729)	235,155

Other income (expense):
Interest expense	(30,127)	(25,159)	(79,298)	(74,434)
Interest income	801	287	1,625	614
	(29,326)	(24,872)	(77,673)	(73,820)

Net income (loss)	10,207	27,139	(109,402)	161,335

Foreign currency translation adjustments	29,272	62,710	4,106	30,012

Comprehensive income (loss)	$ 39,479	$ 89,849	$ (105,296)	$ 191,347

Per share information:

Weighted average number of common
shares outstanding - basic and diluted	16,020,000	16,020,000	16,020,000	16,020,000

Net income (loss) per common share -
basic and diluted	$ 0.00	$ 0.01	$ (0.01)	$ 0.01

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Nation Energy, Inc.
Statements of Cash Flows
(Unaudited)


	For the Nine Month Period Ended
	For the Nine Month Period Ended
	December 31, 2006	December 31, 2005

Cash flows from operating activities:
Net cash provided by (used in) operating activities	$ 188,913	$ 81,153

Cash flows from investing activities:
Purchase of unproven oil and gas properties	(15,080)	(28,014)
Net cash provided by (used in) investing activities	(15,080)	(28,014)

Cash flows from financing activities:
Proceeds from loan payable - shareholder	-	203,932
Payments on loan payable - shareholder	(41,432)	(128,581)
Net cash provided by (used in) financing activities	(41,432)	75,351


Net increase (decrease) in cash	132,401	128,490

Beginning cash	58,655	47,676

Ending cash	$ 191,056	$ 176,166

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Nation Energy, Inc.
Notes to Financial Statements
December 31, 2006
(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, 2006.

Certain prior year amounts have been reclassified for comparative purposes.

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 $6,945,849 and has working capital and stockholder deficits of $895,512 and $120,265 at December 31, 2006, 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 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 are calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share are 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. Oil and Gas Properties

Periodically, but at least annually, the Company will evaluate the economic recoverability of their proved oil and gas properties. For the year ended March 31, 2006, the Company recorded a ceiling test write-down of $555,085. As of December 31, 2006, management determined that there was no further impairment of their proved oil and gas properties.

Note 5. Related Party Transactions

During March 2002 the Company entered into a verbal agreement with a related party in which the related party will provide management services on a month-to-month basis. Total expenses recognized under this agreement for the nine months ended December 31, 2006 and 2005 were $38,280 for each of the periods.

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Note 6. Subsequent Events

On September 22, 2008, the Company announced that, jointly with Netco Energy Inc., it had entered into a Sales and Purchase agreement dated September 18, 2008 to sell their assets in the Smoky Area of Alberta for total net proceeds of Cdn $1,600,000. The agreement is effective June 1, 2008 and at the closing the Company will receive net Cdn $1,095,000 and Netco will receive net Cdn $505,000 for their interests.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

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”, “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”, “Nation” and “Nation Energy” mean Nation Energy, Inc. and our subsidiary 963639 Alberta Ltd., unless otherwise indicated.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars. All references to “CDN$” refer to Canadian dollars and all references to “common shares” refer to the common shares in our capital stock.

Our unaudited consolidated financial statements are stated in US dollars (“US$”) and are prepared in accordance with United States Generally Accepted Accounting Principles (“GAAP”). 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” of this quarterly report.

Overview

We are an oil and gas exploration company with interests in properties located in Alberta, Canada. We commenced limited production of natural gas from our properties in fiscal 2005. Nation Energy is a Wyoming corporation with its business offices located at Suite 1100, 609 West Hastings Street, Vancouver, British Columbia, Canada, V6B 4W4. 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. 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, which we incorporated for the purposes of the merger, pursuant to which we have changed our domicile to the State of Wyoming.

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

Boltan Prospect, Smoky Area, Alberta

Our business involves the development and exploration of our oil and gas properties located in the Smoky area near Grande Prairie, Alberta, Canada. Since 2002, we have actively participated in drilling and testing programs in well bores 09-09-59-02-W6M and 08-09-50-02-W6M. The 08-09-50-02-W6M well was tested as uneconomic in August 2003 and the 09-09-59-02-W6M well was turned to sales in June 2004.

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On January 10, 2005, we entered into a farm-in agreement with Netco Energy Inc. as to certain interests in two sections at Boltan. Under the terms of the agreement, Netco Energy Inc. earned 60% of our 15% working interest by paying for 100% of costs related to our interests in the drilling and development of exploratory well 14-10-59-2W6, a location offsetting the 09-09-59-02-W6M well bore. At the time of the January 10, 2005 farm-in agreement with Netco Energy Inc., Accrete Energy was the operator. Our remaining interests in the two sections of land and 14-10-59-2W6 well bore after payout will be 6%.

The 14-10-59-2W6 well was successfully drilled and completed in March 2005 and began producing to sales in June 2005 and was renamed and designated the 13-10-59-2W6 well to correctly reflect the wells surveyed bottom hole location. Compression facilities were installed November 2005 to enable the 13-10-59-2W6 and the 09-09-59-02-W6M well bores to flow on an unrestricted and uninterrupted basis into regional sales pipelines.

Effective January 1, 2006 Churchill Energy Inc. (“Churchill Energy”) assumed Accrete Energy’s interests and became operator of the Boltan property.

In November 2006 Churchill Energy issued an operations notice to recomplete and commingle an undeveloped zone within the 13-10-59-2W6 well bore and in November 2006 the well was shut-in, recompleted and subsequently placed back on production in March 2007.

On November 29, 2006 we entered into a letter of intent with Netco Energy Inc. to earn 60% of our interest in a new exploratory well proposed at Boltan, well bore 1-16-59-2W6 (the “Test Well”) and the land, Section 16, Twp 59, Rge 2 W6M, on which the well is located and a farm-in agreement was established effective January 1, 2007 (the “1-16 Farm-in Agreement)

The 1-16 Farm-in Agreement provided that Netco Energy Inc. would acquire 60% of Nation’s 15% interest in the Test Well and the section of land where the Test Well is located by funding Nation’s share of related drilling and development costs. Netco Energy Inc. would earn a 15% before payout (and 9% after payout) interest in the Test Well. In addition, we agreed to dedicate 100% of our net production revenues from our interests at the Boltan property to Netco Energy Inc. until such time that Netco Energy Inc. recoups 100% of its capital expenses associated with the Test Well. The 1-16-59-2W6M well reached a total depth of 3,585 meters in January 2007 and was cased as a potential gas well. Completion operations commenced in early February 2007 and were suspended later that month due to early spring break up and road access bans. Operations to finish well completions and tie-in the Test Well resumed in July 2007 and the Test well was placed on production to sales in November 2007.

Effective May 1, 2008 EnCana Oil and Gas Partnership. (“EnCana”) assumed Churchill Energy’s interests and became operator of the Boltan property.

On September 22, 2008, we announced that, together with Netco Energy Inc. (“Netco”), we jointly entered into a Sales and Purchase agreement with EnCana Oil and Gas (“EnCana”) dated September 18, 2008. The agreement contemplates the sale of all of our assets in the Smoky Area of Alberta for a total net price of Cdn $1,600,000. The terms of the agreement state that EnCana is to purchase all of our interests in the Bolton assets described above, as well as all of Netco’s interests outlined in the Farm-in agreements and that the purchase price be split as to Cdn $1,095,000 to Nation and Cdn $505,000 to Netco. The agreement, when closed, is to have an effective date of June 1, 2008.

Plan of Operations and Cash Requirements

Cash Requirements

We intend to use the proceeds of the sale, described above, to fund future oi land gas exploration programs and for general working capital.

Going Concern

We have suffered recurring losses from operations prior to fiscal 2005. The continuation of our company as a going concern is dependent upon our company attaining and maintaining profitable operations and raising additional capital. Management's plan in this regard is to raise additional capital through a debt or an equity offering. 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.

Due to the uncertainty of our ability to meet our current operating expenses and the capital expenses noted above, in their report on the annual financial statements for the year ended March 31, 2006, our independent auditors included an explanatory paragraph regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.

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.

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There are no assurances that we will be able to obtain further funds required for our continued operations. We are pursuing various financing alternatives to meet our immediate and long-term financial requirements. 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.

Plan of Operation

Currently our primary objective is to review and if warranted proceed with future oil and gas exploration and development programs.

Results of Operations

Three Months Ended December 31, 2006 Compared to Three Months Ended December 31, 2005

Our accumulated losses increased to $6,945,849 as of December 31, 2006. Our financial statements report net income of $39,479 for the three months ended December 31, 2006 compared to net income of $89,849 for the three months ended December 31, 2005. Our earnings have decreased primarily as a result of decreased revenues and increased depletion expenses. The net earnings per common share for the three months ended December 31, 2006 was $nil, compared to net earnings per common share of $0.01 for the three months ended December 31, 2005. We also recognized depletion of its capitalized oil and gas expenditures of $26,216 during the three months ended December 31, 2006, compared to $nil for the three months ended December 31, 2005. Discussion and analysis related to significant operating activities undertaken during the years is set out below.

The following summary of our results of operations should be read in conjunction with our financial statements for the quarter ended December 31, 2006 which are included herein.

Our operating results for the three months ended December 31, 2006, for the three months ended December 31, 2005 and the changes between those periods for the respective items are summarized as follows:

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		Three Months Ended December 31, 2006		Three Months Ended December 31, 2005		Changes between Three Month Period Ended December 31, 2006 and December 31, 2005
Revenue	$	116,192	$	131,670	$	(15,478)
General & Administrative		26,148		25,273		875
Interest expense		30,127		25,159		4,968
Oil and gas operating expenses		50,511		54,386		(3,875)
Foreign currency translation adjustments		29,272		62,710		(33,438)
Net income (loss)		39,479		89,849		(50,370)

Revenues decreased during the three months ended December 31, 2006 to $116,192 from $131,670 for the three months ended December 31, 2005. The decrease in revenues is primarily due to a decrease in both volumes and lower natural gas prices. General and administrative expenses remained materially the same with expenses totaling $26,148 compared to $25,273 in prior period. Interest expenses rose to $30,127 for the three month period ended December 31, 2006 from $25,159 recorded for the three months ended December 31, 2005. Oil and gas direct operating expenses remained steady at $50,511 for the three months ended December 31, 2006 compared to slightly higher operating costs of $54,386 for the prior period. The decrease in operating expenses is in relation to a decrease in revenues. Foreign currency adjustments resulted in losses of $29,272 for the current period compared to higher losses for the prior period of $62,710. The strengthening Canadian dollar is responsible for the reduced losses on translation.

Nine Months Ended December 31, 2006 Compared to Nine Months Ended December31, 2005

Our financial statements report a net loss of $105,296 for the nine months ended December 31, 2006 compared to net income of $191,347 for the nine months ended December 31, 2005. Our earnings have decreased primarily as a result of decreased revenues and increased depletion expenses. The net loss per common share for the nine months ended December 31, 2006 was $0.01, compared to net earnings per common share of $0.01 for the nine months ended December 31, 2005. We also recognized depletion of its capitalized oil and gas expenditures of $78,660 during the nine months ended December 31, 2006, compared to $nil for the nine months ended December 31, 2005. Discussion and analysis related to significant operating activities undertaken during the years is set out below.

The following summary of our results of operations should be read in conjunction with our financial statements for the quarter ended December 31, 2006 which are included herein.

Our operating results for the nine months ended December 31, 2006, for the nine months ended December 31, 2005 and the changes between those periods for the respective items are summarized as follows:

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		Nine Months Ended December 31, 2006		Nine Months Ended December 31, 2005		Changes between Nine Month Period Ended December 31, 2006 and December 31, 2005
Revenue	$	187,405	$	333,454	$	(146,049)
General & Administrative		93,872		85,315		8,557
Interest expense		79,298		74,434		4,864
Oil and gas operating expenses		125,262		12,984		112,278
Foreign currency translation adjustments		4,105		30,012		(25,907)
Net income (loss)		(105,296)		191,347		(296,643)

Revenues decreased during the nine months ended December 31, 2006 to $187,405 from $333,454 for the nine months ended December 31, 2005. The decrease in revenues is primarily due to a decrease in both volumes and lower natural gas prices. General and administrative expenses remained materially the same with expenses totaling $93,872 compared to $85,315 in prior period. Interest expenses rose slightly to $79,298 for the nine month period ended December 31, 2006 from $74,434 recorded for the nine months ended December 31, 2005. Oil and gas direct operating expenses totaled $125,262 for nine months ended December 31, 2006 compared to lower net operating costs of $12,984 for the prior period. The decrease in operating expenses is in relation to a decrease in revenues in addition to a one-time correction to royalty expenses for 2005. Depletion expense was booked, in relation to production, during the period ended December 31, 2006. Foreign currency adjustments resulted in losses of $4,105 for the current period compared to higher losses for the prior period of $30,012. The strengthening Canadian dollar is responsible for the reduced losses on translation.

Investment

As at December 31, 2006, we have invested a total of $3,878,624 under the farm-in agreement with Churchill Energy towards the drilling and development costs of the initial well at the Boltan prospect, with initial focus targeting deep rock formations underlying the oil and gas leases. However, given the results that we had received on the Boltan prospect to date testing the deep formations, we recorded a $2,370,902 impairment on the Boltan prospect during the fiscal year ended March 31, 2003 and an additional $555,085 during the fiscal year ended March 31, 2006. Production on the property has been achieved from shallower rock formations.

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Liquidity and Capital Resources

These financial statements have been prepared on the basis of a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Our company has incurred losses since inception in excess of $6 million and has only generated modest profitable operations when we commenced gas production in fiscal 2006.

Working Capital

		At December 31, 2006		At March 31, 2006
Current Assets	$	271,647	$	137,297
Current liabilities		1,167,159		991,093
Working Capital	$	(895,512)	$	(853,796)

Cash Flows

		Nine months ended December 31, 2006		Nine months ended December 31, 2005
Cash flows provided by operating activities	$	188,913	$	81,153
Cash flows used in investing activities		(15,080)		(28,014)
Cash flows provided by (used in) financing activities		(41,432)		75,351
Net increase in cash during the period	$	132,401	$	128,490

Cash flows provided by operating activities increased to $188,913 for the nine months ended December 31, 2006 compared to $81,153 for the same period in 2005. The increase is primarily due to an increase in unpaid account payable. A decrease in accounts receivable at the period end also increased cash from operations. We used $15,080 in property expenses for the nine months ended December 31, 2006 compared to $28,014 during the same period in 2005. We increased our loan during the nine months ended December 31, 2005 compared to using $41,432 in payments on the loan during the current period.

Operating Activities

Net cash provided by operating activities was $188,913 in the nine months ended December 31, 2006 compared with net cash provided by operating activities of $81,153 in the same period in 2005.

Investing Activities

Net cash used in investing activities was $15,080 in the nine months ended December 31, 2006 compared to net cash used in investing activities of $28,014 in the same period in 2005. The slight decrease in use of cash of $12,934 in investing activities is mainly attributable to the completion of the test well, resulting in lower capital expenditures.

Financing Activities

Net cash used in financing activities was $41,432 in the nine months ended December 31, 2006 compared to net cash provided by financing activities of $75,351 in the same period in 2005. This is attributable to increases in net cash provided by operating activities.

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We are currently relying on revenues generated from production to fund our continuing operating expenses and to fund the identification and evaluation of further oil and gas properties. Cash balances were $191,056 and $176,166 as of December 31, 2006 and December 31, 2005, respectively.

We entered into bridge loan agreements with a related party, in 2003 and 2004 to fund operations. The terms of these bridge loan agreements provide that any principal amount outstanding is payable upon demand and bears interest at 15% per annum, payable quarterly. In fiscal 2006, we consolidated and restructured our loans with the related party. As part of the restructuring, we borrowed an additional CDN$250,000 (US$203,932). The new loan bears interest at 15% per annum and is payable quarterly. Any principal amount outstanding under the loan is payable upon demand. The loan is payable in Canadian dollars and is secured by a Promissory Note. During the quarter ended December 31, 2006, we paid down $41,432 and accordingly the balance at the quarter ended December 31, 2006 totaled $773,110.

Should we require additional financing beyond that provided from operating activities, we would likely seek to secure same through a private placement of common stock or debt securities. Our material commitments for capital expenditures are limited to the farm-in agreement with Churchill Energy for the development of the Boltan prospect.

We have limited operating history. 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.

Purchase of Significant Equipment

Currently we do not intend to purchase any significant equipment (excluding oil and gas activities).

Employees

Currently our only employee is our director and officer. We do and will continue to outsource contract employment as needed and do not currently anticipate an increase in the number of employees that we may retain.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

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 judgment 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, development and production stage and have proven reserves of oil and gas as at March 31, 2006. Accordingly, we have realized limited revenues and profit from our operations to date and there is little likelihood that we will realize material 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.

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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.

There can be no assurance that additional funding will be available to us for exploration and development of our projects or to fulfill 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 favorable. 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 experience any rapid expansion in production over current levels, 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 John Hislop 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.

We are dependent upon our operator’s expertise in the area of oil and gas exploration.

Under the farm-in agreement, EnCana, as successor to Churchill Energy, will act as operator for the purposes of carrying out the work necessary at Boltan and we are therefore dependent upon the operator’s expertise in the area of oil and gas exploration.

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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.

The U.S. Securities and Exchange Commission has adopted regulations which generally define “penny stock” to be any equity security that has a market price (as defined) of less than $5.00 per share or an exercise price of less that $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors.” The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC, which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. 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 stock.

The Financial Industry Regulatory Authority, or FINRA, has adopted sales practice requirements which may also limit a stockholder’s ability to buy and sell our stock.

In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-intuitional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.

Trading in our common shares on the OTC Bulletin Board is limited and sporadic making it difficult for our shareholders to sell their shares or liquidate their investments.

Our shares of common stock are currently listed for public trading on the OTC Bulletin Board. The trading price of our common shares has been subject to wide fluctuations. Trading prices of our common shares 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 operations. There can be no assurance that trading prices and price earnings ratios previously experience by our common shares will be matched or maintained. These broad market and industry factors may adversely affect the market price of our common shares, 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.

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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 Wyoming 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 Wyoming law or otherwise, we have been advised that 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.

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.

Since our director and officer is not a resident of the United States, investors may find it difficult to enforce, within the United States, any judgments obtained against our company or our director and officer.

We do not currently maintain a permanent place of business within the United States. In addition, our director and officer is not a resident of the United States. As a result, it may be difficult for investors to enforce within the United States any judgments obtained against our company or our officers or directors, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof.

Risks Relating to the Industry

As our properties are primarily in the exploration and, development stage there can be no assurance that we will establish further 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, development and production stage. We only established proven reserves of oil and gas in fiscal 2006. There can be no assurance that we will establish further commercial discoveries on any of our properties.

A decline in oil and natural gas prices will have an adverse impact on our operations.

Our revenues, cash flows and profitability are substantially dependent upon prevailing prices for oil and natural gas. In recent years, oil and natural gas prices and, therefore, the level of drilling, exploration, development and production, have been extremely volatile. Any significant or extended decline in oil or natural gas prices will have a material adverse effect on our business, financial condition and results of operations and could impair access to future sources of capital. Volatility in the oil and natural gas industry results from numerous factors over which we have no control, including but not limited to, the level of oil and natural gas prices, expectations about future oil and natural gas prices and the ability of international cartels to set and maintain production levels and prices; the cost of exploring for, producing and transporting oil and natural gas; the domestic and foreign supply of oil and natural gas; domestic and foreign governmental regulation; the level and price of foreign oil and natural gas transportation; available pipeline and other oil and natural gas transportation capacity; weather conditions; international political, military, regulatory and economic conditions; the level of consumer demand; the price and the availability of alternative fuels; the effect of worldwide energy conservation measures; and the ability of oil and natural gas companies to raise capital.

Significant declines in oil and natural gas prices for an extended period may impair our financial condition, liquidity, ability to finance planned capital expenditures and results of operations, reduce the amount of oil and natural gas that we can produce economically, cause us to delay or postpone some of our capital projects, reduce our revenues, operating income and cash flow and reduce the carrying value of oil and natural gas properties.

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No assurance can be given that current levels of oil and natural gas prices will continue. We expect oil and natural gas prices, as well as the oil and natural gas industry generally, to continue to be volatile.

Continued financial success depends on our ability to replace our reserves in the future.

Our future success as an oil and natural gas producer depends upon our ability to find, develop and acquire additional oil and natural gas reserves that are profitable. Oil and natural gas are depleting assets, and production from oil and natural gas from properties declines as reserves are depleted with the rate of decline depending on reservoir characteristics. If we are unable to conduct successful exploration or development activities or acquire properties containing proved reserves, our proved reserves generally will declines as the reserves are produced, and our level of production and cash flows will be adversely affected. Replacing our reserves through exploration or development activities or acquisitions will require significant capital which may not be available to us.

Reserve estimates depend on many assumptions that may turn out to be inaccurate.

Any material inaccuracies in these reserve estimates or underlying assumptions could materially affect the quantities and present values of our reserves. The process of estimating natural gas and oil reserves is complex. It requires interpretations of available technical data and various assumptions, including assumptions relating to economic factors. Any significant inaccuracies in these interpretations or assumptions could materially affect the estimated quantities and present value of reserves shown in this quarterly report. In order to prepare these estimates, we must project production rates and timing of development expenditures. We must also analyze available geological, geophysical, production and engineering data, and the extent, quality and reliability of this data can vary. The process also requires economic assumptions relating to matters such as oil and natural gas prices, drilling and operating expenses, capital expenditures, taxes and availability of funds.

Actual future production, oil and natural gas prices, revenues, taxes, development expenditures, operating expenses and quantities of recoverable oil and natural gas reserves most likely will vary from our estimates. Any significant variance could materially affect the estimated quantities and pre-tax net present value of reserves shown in this quarterly report. In addition, we may adjust estimates of proved reserves to reflect production history, results of exploration and development, prevailing oil and natural gas prices and other factors, many of which are beyond our control.

Investors should not assume that the pre-tax net present value of our proved reserves referred to in this quarterly report is the current market value of our estimated oil and natural gas reserves. We base the pre-tax net present value of future net cash flows from our proved reserves on prices and costs on the date of the estimate. Actual future prices, costs, and the volume of produced reserves may differ materially from those used in the pre-tax net present value estimate.

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.

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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. Environmental standards imposed by federal, provincial, or local authorities may be changed and any such changes may 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. To date we have not been required to spend any material amount on compliance with environmental regulations. However, we may be required to do so in the future and this may affect our ability to expand or maintain our operations.

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 greater 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 labor, 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.

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.

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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

Management’s report on disclosure controls and procedures

As required by Rule 13a-15 under the Securities Exchange Act of 1934, as of the end of the period covered by the quarterly report, being December 31, 2006, we have 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 and chief financial officer. Based upon that evaluation, our company's president and chief financial officer concluded that our company's disclosure controls and procedures are effective as at the end of the period covered by this report. There have been no changes in our internal controls over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect our internal controls over financial reporting.

Disclosure controls and procedures and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time period 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 our reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to management including our president and secretary as appropriate, to allow timely decisions regarding required disclosure.

Inherent limitations on effectiveness of controls

Internal control over financial reporting has inherent limitations which include but is not limited to the use of independent professionals for advice and guidance, interpretation of existing and/or changing rules and principles, segregation of management duties, scale of organization, and personnel factors. Internal control over financial reporting is a process which involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human errors. Internal control over financial reporting can be circumvented by collusion or improper management override. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis, however these inherent limitations are known features of the financial reporting process and it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures deteriorate.

Changes in internal control over financial reporting

There have been no significant changes in our internal controls over financial reporting that occurred during the quarter ended December 31, 2006 that have materially or are reasonable likely to materially affect, our internal controls over financial reporting.

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. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

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

None.

Item 5. Other Information.

Committees of the Board

We do not have a standing audit, nominating or compensation committee at the present time. Our company did not hold any formal board meetings during the quarter ended December 31, 2006. All the proceedings of the board were conducted by resolutions consented to in writing by all of our directors and filed with the minutes of the proceedings of the directors. Such resolutions consented to in writing by the directors entitled to vote on that resolution are, according to the Wyoming General Corporate Law and our by-laws, as valid and effective as if they had been at a meeting of the directors duly called and held.

Item 6. Exhibits.

Exhibits Required by Item 601 of Regulation S-B

(3)

Articles of Incorporation/Bylaws

3.1

Certificate of Incorporation (incorporated by reference from our Registration Statement on Form 10-SB filed with the Securities and Exchange Commission 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 with the Securities and Exchange Commission on March 31, 2000)

3.3

Bylaws (incorporated by reference from our Registration Statement on Form 10-SB filed with the Securities and Exchange Commission on March 31, 2000)

3.4

Certificate of Merger (Delaware) effective June 12, 2003 (incorporated by reference from our Annual Report on Form 10-KSB filed with the Securities and Exchange Commission on June 30, 2003)

3.5

Certificate of Merger (Wyoming) effective June 13, 2003 (incorporated by reference from our Annual Report on Form 10-KSB filed with the Securities and Exchange Commission on June 30, 2003)

3.6*

Certificate of Reinstatement

(10)

Material Contracts

10.1

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

10.2

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 Securities and Exchange Commission on February 14, 2002)

10.3

Management Agreement with D. Sharpe Management Ltd., July 1, 2002 (incorporated by reference from our Quarterly Report on Form 10-QSB filed with the Securities and Exchange Commission on August 14, 2002)

10.4

Agreement with Netco Energy Inc. dated January 10, 2005 (incorporated by reference from our Current Report on Form 8-K filed with the Securities and Exchange Commission on January 28, 2005)

(14)

Code of Ethics

14.1

Code of Business Conduct and Ethics (incorporated by reference from our Annual Report on Form 10-KSB filed with the Securities and Exchange Commission on July 15, 2004)

(31)

Section 302 Certifications

31.1*

Section 302 Certification under Sarbanes-Oxley Act of 2002

(32)

Section 906 Certifications

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32.1*

Section 906 Certification under Sarbanes-Oxley Act of 2002

*Filed herewith

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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: “John R Hislop”
John Hislop, President, Chief Executive Officer, Chairman of the Board,
Chief Financial/Director
(Principal Executive Officer and Principal Financial and Accounting Officer)
Date: September 29, 2008