True North Energy CORP (Form: 10KSB, Received: 07/30/2008 06:02:51)

Positions Held

Date of Election

or Appointment

as Director

John I. Folnovic

Chief Executive Officer, President and Director

June 1, 2006

Massimiliano Pozzoni

Secretary, Treasurer, Chief Financial and Accounting Officer and Director

January 27, 2006

U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-KSB

(Mark One)

x	ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For Fiscal Year Ended: April 30, 2008

o	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________

Commission file number: 000-51519

True North Energy Corporation
(Exact name of small business issuer as specified in its charter)

Nevada	98-0434820
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

2 Allen Center, 1200 Smith Street, 16 ^th Floor, Houston, TX		77002
(Address of principal executive offices)		(Postal Code)

Issuer's telephone number: (713) 353-3948

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

Securities registered under Section 12(g) of the Act: Common Stock, par value $0.0001 per share

Check whether the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. o

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of issuer's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. o

Indicate by check mark whether the issuer is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

State issuer's revenues for its most recent fiscal year: $1,225,735

As of July 23, 2008, there were 71,016,758 shares of the issuer's common stock, par value $0.0001, issued and outstanding. Of these, 36,266,758 shares are held by non-affiliates of the issuer. The market value of securities held by non-affiliates is approximately $6,165,349 based on the closing price of $0.17 for the issuer's common stock on July 23, 2008.

Transitional Small Business Disclosure Format (check one): Yes o No x

DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference, briefly describe them and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) any annual report to security holders; (2) any proxy or information statement; and (3) any prospectus filed pursuant to Rule 424(b) or (c) of the Securities Act of 1933, as amended (“Securities Act”).

Not Applicable.

TABLE OF CONTENTS

Item Number and Caption		Page

Forward-Looking Statements		2

PART I		3

1.	Description Of Business	3

2.	Description Of Property	8

3.	Legal Proceedings	30

4.	Submission Of Matters To A Vote Of Security Holders	30

PART II		31

5.	Market For Common Equity, Related Stockholder Matters And Small Business Issuer Purchases Of Equity Securities	31

6.	Plan Of Operation	36

7.	Financial Statements	41

8.	Changes In And Disagreements With Accountants On Accounting, And Financial Disclosure	41

8A.	Controls And Procedures	43

8B.	Other Information	44

PART III		44

9.	Directors, Executive Officers, Promoters And Control Persons and Corporate Governance; Compliance With Section 16(a) Of The Exchange Act	44

10.	Executive Compensation	48

11.	Security Ownership Of Certain Beneficial Owners And Management And Related Stockholder Matters	50

12.	Certain Relationships And Related Transactions and Director Independence	51

13.	Exhibits	52

14.	Principal Accountant Fees And Services	60

FORWARD-LOOKING STATEMENTS

Except for historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve risks and uncertainties, including, among other things, statements regarding our business strategy, future revenues and anticipated costs and expenses. Such forward-looking statements include, among others, those statements including the words “expects,” “anticipates,” “intends,” “believes” and similar language. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in the sections “Description of Business – Risk Factors” and “Plan of Operation.” You should carefully review the risks described in this Annual Report and in other documents we file from time to time with the Securities and Exchange Commission. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.

Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. These factors include among others:

The risks associated with oil and gas exploration;

Our ability to raise capital to fund capital expenditures;

Our ability to find, acquire, market, develop and produce new properties;

Oil and gas price volatility;

Uncertainties in the estimation of proved reserves and in the projection of future rates of production and timing of development expenditures;

Operating hazards attendant to the natural gas and oil business;

Downhole drilling and completion risks that are generally not recoverable from third parties or insurance;

Availability and cost of material and equipment;

Delays in anticipated start-up dates;

Actions or inactions of third-party operators of our properties;

Our ability to find and retain skilled personnel;

Regulatory developments;

Environmental risks; and

General economic conditions.

All references in this Form 10-KSB to the “Company,” “True North,” “we,” “us” or “our” are to True North Energy Corporation. All references to share amounts in this Form 10-KSB give retroactive effect to a 5:1 forward stock split that was effected by the Company on April 18, 2006.

PART I

ITEM 1.

DESCRIPTION OF BUSINESS

Company Overview

We are engaged in the acquisition, exploration, development and production of oil and gas properties in Alaska, Texas and Colorado. During the year ended April 30, 2007 we also participated in oil and gas exploration activities in Louisiana. We first became an oil and gas exploration and development company in February 2006, but until the September 19, 2007 closing of a Purchase and Sale Agreement with Prime Natural Resources, Inc. had no developed reserves or production, and had not realized any revenues from our operations. We were incorporated in Nevada in April 2004 under the name Ameriprint International Ltd. to engage in the business of providing printing and packaging solutions to entities of all sizes and to specialize in providing templated, low cost, quality printing of high volume, high turnover print materials. We conducted minimal operations in this area and discontinued these operations in January 2006.

Alaska Properties

Our principal Alaska assets consist of oil and gas leases covering approximately 35,000 acres in the Cook Inlet (25,000 acres) and Beaufort Sea (“North Slope”) (10,000 acres) areas of Alaska, the rights to which we acquired during January and May 2006. All of the North Slope and Cook Inlet leases have been registered in our name.

Presently, we hold a 100% working interest in our Alaska leases but may elect to sell a portion of our interests at some point in the future. The Cook Inlet leases provide for a net revenue interest of 87.5% prior to an overriding 5% royalty. The North Slope leases provide for a net revenue interest of approximately 83.3% prior to an overriding 5% royalty. We pay annual rental fees of approximately $48,000 on the Cook Inlet leases and approximately $16,000 on the North Slope leases.

In connection with our acquisition of the Cook Inlet leases we are obligated to drill or cause to be drilled, at our expense, on or before November 27, 2010, a test well to completion or abandonment, on at least one of three designated Cook Inlet leases, to a bottomhole depth and location at lease sufficient to test both the West Foreland and the Hemlock formations. Failure to drill the test well during that time period, to completion or abandonment, will result in our forfeiture of the three designated leases. These designated leases cover approximately 17,150 acres. In connection with our acquisition of the North Slope leases we are obligated to drill or cause to be drilled, at our expense, on or before March 1, 2012, to completion or abandonment, a test well on each of the four leases comprising our North Slope leases, to a bottom hole depth and location of at least 4,000 feet. Our failure to do so with respect to any such leases during this time period will result in our forfeiture of the North Slope lease or leases to which such failure relates.

On November 6, 2007 we entered into a pooling agreement (the “Pooling Agreement”) with Savant Alaska, LLC (“Savant“), which was given effect as of July 1, 2007. Savant holds leases for the exploration and production of oil and natural gas in an area of Alaska that is contiguous to certain of our North Slope Alaskan interests. Under the Pooling Agreement, we and Savant agreed that we would pool certain leasehold interests, on a net acreage basis, and further agreed to jointly drill a test well within the Savant Kupcake Prospect. The test well was planned to be drilled to a depth of 11,000 feet in order to test the Kemik formation. We were unable to raise our share of the test well drilling costs in time, which would have resulted in our earning a working interest within the pooled area of approximately 8.5%, and in January 2008 the Pooling Agreement was terminated by mutual agreement. Effective January 23, 2008 however, we entered into an Acreage Contribution Contract (the “Contract”) with Savant, pursuant to which we agreed to conditionally assign to Savant the part of our leasehold interest that was to be the subject of the Pooling Agreement (the “Lease Acreage”) in exchange for Savant’s drilling a test well within the Kupcake Prospect and allowing us to potentially earn a working interest of up to 2% in the future production unit if the test well was successful. Savant and its partners commenced drilling the test well in March 2008 and completed drilling in April 2008 upon reaching a depth of 10,686 feet. At such time, Savant decided to plug and abandon the test well as it did not result in a commercial discovery of crude oil or natural gas reserves. The entire cost, expense, risk of drilling, production testing, plugging and abandoning of the test well was borne by Savant and its drilling partners. Savant has met all of the requirements under the Contract. Accordingly, we are in the process of assigning part of one of our North Slope leases (approximately 90 acres) as contribution acreage to Savant. We anticipate that the assignment will be completed by the end of 2008. We continue to hold a 100% working interest in the remaining acreage (approximately 9,910 acres).

Colorado Properties

In June 2007 we acquired certain oil and gas interests and properties in northwest Colorado in an area covering more than 17,000 acres. At the time of acquisition and presently, these oil and gas interests had no production. We hold a 100% working interest in the leases comprising part of the acquired assets. The acquired leases expire in 2016. We continue to refine our development plans for the area. The purchase price for the interests and properties was approximately $1.4 million, together with an overriding royalty of one to three percent based on the applicable net revenue interest remaining after the landowner’s royalty and existing burdens have been deducted. The purchase price was paid $345,477 in cash and $1,064,000 in shares of our restricted common stock. Pursuant thereto, on July 6, 2007 we issued 1,832,769 shares of common stock to the seller. In January 2007 we had loaned $180,000 to the seller. Interest, at an annual rate of 5%, was due on the loan until paid. The loan, together with all interest due thereon, was collected in full at the closing of the acquisition.

Texas Properties

On August 31, 2007 our wholly owned subsidiary, ICF Energy Corporation (“ICF“), entered into a Purchase and Sale Agreement (the “Agreement”) with Prime Natural Resources, Inc., a Texas corporation (“Prime”) pursuant to which, on September 19, 2007, ICF acquired certain oil and gas properties and related assets (the property and assets are hereinafter collectively referred to as the “Prime Assets”) located in Brazoria County, Texas from Prime for approximately $3.7 million, including closing and other transaction-related costs. The purchase price was paid with a combination of cash ($2.4 million), 1,928,375 shares of our restricted common stock valued at approximately $926,000, and the assumption of certain liabilities totaling approximately $343,000. The Prime Assets included the Devon Fee Unit and the O’Leary Unit No. 1 and covered an aggregate of approximately 1,150 acres. The Prime Assets included two producing wells with an estimated 701,772 Mcfe of proved reserves to the Company as well as three additional exploration prospects in the Old Ocean Unit in Brazoria County, Texas. Daily production currently approximates 500,000 standard cubic feet per day of gas and six barrels of oil per day, net to the Company. As discussed in greater detail below under “Valens Securities Purchase Agreement,” we financed the purchase of the Prime Assets through the issuance of an aggregate of $3,750,000 in secured promissory notes.

Drilling and Exploration Activities

We participated in the drilling of five exploratory oil and gas wells in Louisiana and Texas during the year ended April 30, 2007. None of these exploratory wells resulted in a commercial discovery. We expended approximately $6.3 million in connection with our participation in such drilling activities. Our working interests in these wells ranged from 8.75% to 25.0% and our share of the related capital expenditures varied from 11.7% to 33.3%. The five exploratory wells consisted of the Frost National Bank Deep Prospect (“McLean #1 Well”) in Live Oak County Texas, the Zodiac II prospect in Jefferson Davis and Calcasieu Parishes in Louisiana (the “Walker LA Properties Findley #19-1 Well”), the Deweyville Prospect (“Hankamer #1 Well”) located in Newton County Texas and Calcasieu Parish in Louisiana, and two wells in Pointe Coupee Parish, Louisiana that were drilled pursuant to our October 1, 2006 and January 1, 2007 Development Agreements with BP America Production Company (the “O. Jarreau Heirs No. 1 Well” and “A. Major Heirs No. 1 Well”). Other than our participation in the Savant well as previously described, we did not participate in exploration or drilling activities during the year ended April 30, 2008.

Advisory Board

On October 5, 2006 we created an advisory board and appointed five persons to serve thereon. Each advisory board member (an “Advisor”) is independent and has an extensive background in oil and gas and/or financial matters including but not limited to corporate governance, compliance, deal flow, and technical matters such as geosciences, drilling, engineering and risk management. The Advisors provide us with advice and assistance with strategic business and financial matters. Each Advisor devotes a minimum of 30 days annually to the provision of the advisory services. We have entered into engagement letters with each of the Advisors. Thereunder, the term of engagement of each Advisor is one year. Each Advisor and we have the right to terminate the engagement upon 30 days prior written notice. The engagement will be automatically extended for additional one year periods, if not terminated by us or the Advisor at least 30 days prior to the applicable anniversary date. Pursuant to the extension provision, the engagement of each of our Advisors was extended for an additional one year period as of October 5, 2007. In consideration of the services being provided, each Advisor is entitled to receive the following:

50,000 shares of our restricted common stock payable at the end of each year of service;

A quarterly fee consisting of 5,000 shares of our restricted common stock payable within ten days of the end of each fiscal quarter; and

Reimbursement of all reasonable and customary out of pocket business expenses incurred in the performance of his duties under the letter agreement. Expenses in excess of $5,000 require prior approval by us.

The advisory board consists of James Gouveia, George Lindahl III, J. Lanier Yeates, Jeffrey B. Ahbe, and Neville W. Patterson. The background of each Advisor is provided below.

James (Jim) Gouveia, P. Eng.

Mr. Gouveia is a Partner in Rose & Associates LLP., a Houston, Texas based firm that provides consultancy and training services to exploration and production companies in designing, implementing and sustaining risk analysis systems. He is a lead partner for S.E. Asia and the Russian Federation. Mr. Gouveia is a recognized expert in portfolio and project risk management and has 27 years of experience as a practicing reservoir engineer, commercial analyst, evaluations engineer, and multi-disciplinary sub-surface manager. He has provided expert guidance to major oil and gas industry clients on the characterization and economic analysis of tight gas, heavy oil, international, offshore development and coal bed methane unconventional resource. Mr. Gouveia has provided independent reserve and chance assessments for exploration prospects in major oil and gas basins all over the world. He is an active member of the petroleum industry in the major oil and gas centers in North America - Calgary, Denver, Houston and New Orleans. Mr. Gouveia is a past Director of Risk Management for Amoco Energy North America and holds a Bachelor of Applied Science degree in Chemical Engineering from the University of Toronto.

George Lindahl III

Mr. Lindahl was a Managing Partner in Sandefer Capital Partners located in Houston, Texas from 2002 to 2007. Mr. Lindahl is a past Vice Chairman of Anadarko Petroleum and past Chairman and CEO of Union Pacific Resources. He served as an Executive Vice President of Walker Energy and has over 30 years of oil and gas industry experience within both technical arenas as a geologist and a geophysicist and in executive and managerial roles. Mr. Lindahl currently serves as a Board Member of the Houston Museum of Natural Science, the Goodwill of Houston, the Foundation Board of US Oncology and the Cynthia Woods Mitchell Pavilion. He is currently a Director of EVEP, a public Exploration and Production Master Limited Partnership. Mr. Lindahl graduated from the University of Alabama with a Bachelor of Science in Geology. He has completed Graduate Studies at Tulane University and is a graduate of the Advanced Management Program at the Harvard Business School.

J. Lanier Yeates

Mr. Yeates is a partner of the Gordon Arata McCollam & Eagan Law Firm resident in the Houston office of the firm. He is licensed to practice law in Texas and Louisiana. His practice is focused on the energy industry. Mr. Yeates has taught Louisiana Oil and Gas Law as a member of the Adjunct Faculty of the University of Houston Law Center and has served as both a member of the Advisory Council of the Louisiana Mineral Law Institute and its Chairman for multiple terms. Mr. Yeates served as Vice-Chairman of the American Bar Association Energy Policy Committee and the Oil & Natural Gas Exploration and Production Committee. He has served on the Technical Subcommittee of the AAPL-OCS Committee’s Deepwater Offshore Operating Agreement Model Form Subcommittee, which developed a deepwater offshore operating agreement that was adopted in 2000 by the AAPL as a model form. Mr. Yeates was appointed for two terms by Governor George W. Bush and served as Vice Chairman of the Spindletop Centennial Celebration Commission and planned the 100th anniversary celebration of the discovery of the Lucas Gusher in the Spindletop Field.

Mr. Yeates currently serves as Chairman of the Board of Directors of the LSU Foundation and Chairman of Campanile Charities, Inc. He is a past President of the LSU Law Alumni Association. His memberships include the United States Supreme Court Bar Association, the State Bar of Texas, and the College of the State Bar of Texas, the Pro-Bono College of the State Bar of Texas, the Louisiana State Bar Association, the American Bar Association, the Houston Bar Association, and the American Law Institute. Mr. Yeates is a graduate of the Louisiana State University Law School where he served as Associate Editor of the Louisiana Law Review and was graduated Order of the Coif. Mr. Yeates has published numerous articles and other publications and has been a frequent speaker on subjects of importance to the energy industry. In 2004, he published his first novel, Bay of One Hundred Fires.

Jeffrey B. Ahbe

Mr. Ahbe is the President of Ahbe Capital Investment Group Inc., located in Denver, Colorado and is a co-founder of PMT Energy LLC. Mr. Ahbe’s oil and gas career spans over 23 years. He has served as an Executive Vice President of Union Pacific Resources Canada and held numerous executive positions with that company including General Manager of North America operating divisions. While at Union Pacific, Mr. Ahbe was a key member of the team that completed the acquisition of Norcen Canada and the merger between Union Pacific Resources and Anadarko Petroleum. Mr. Ahbe has worked extensively over the years with the financial and investment banking communities and has worked with corporate and regulatory leaders in the United States, Canada and overseas. Mr. Ahbe is currently a member of the board of Eastern Platinum Limited (trading on Toronto and London exchanges), Barplats Investments Limited (trading on the Johannesburg Stock Exchange), and is a director and principal of several privately held companies, including First Platinum Inc. Pty. (S.A.), SRH LLC, Montana Eagle LLC, and Hat Tricks Inc. Mr. Ahbe has served as a past director of the Colorado Oil and Gas Association. He received both his Bachelors and Masters of Sciences Degrees from Purdue University and has completed the Executive Program in Business at Northwestern University’s Kellogg Business School.

Neville W. Patterson

Mr. Patterson is the President and Founder of W. A. Fritze (North America) Inc., a privately held international bulk wine and spirits-alcohol trading company. The company’s business activities and focus is the procurement, sale and ocean shipment of bulk alcohol products between suppliers and purchasers located in North America, Europe, South Africa and South America.

Mr. Patterson graduated as an accountant in Cape Town, South Africa and possesses 30 plus years of international corporate and entrepreneurial experience spanning four continents. Previously he served in various senior corporate finance and treasury positions while in the employ of Mobil Oil, Turbo Resources, Unilever and Wiggins Teape (formerly a subsidiary of British America Tobacco). During his career he has developed an extensive specialized knowledge of certain offshore financial and commodity markets and has been involved in advising and facilitating business strategies and in the development of new markets for those companies wishing to expand into markets where he is already established.

Note Financing

Effective March 30, 2007 we issued and sold a $500,000 Convertible Promissory Note (the “Note”) to a single investor (the “Noteholder”) respecting a loan of which we received $250,000 during April 2007 and the remaining $250,000 during May 2007. The Note bore interest at the rate of 8% per annum. Subject to prior conversion or acceleration, the principal balance of the Note was due in a single payment on March 30, 2010. Interest was payable semi-annually with the first such interest payment due on October 1, 2007. In the event we completed an offering (the “Offering”) of $10 million or more of equity or debt securities within 90 days of the date of the Note (the “Offering Completion Date”), the Note, including any accrued and unpaid interest, was to be automatically converted into like shares or securities issued by us in the Offering on the same terms that such like shares or securities were purchased by subscribers in the Offering. The amount of like shares or securities so issued was to be based on the amount of principal and interest converted.

In the event an Offering was not completed by the Offering Completion Date, which was the case, we became obligated to issue common stock purchase warrants (the “Warrants”) to the Noteholder. The Warrants were to be exercisable for a period of three years commencing on the date of issuance of the Warrants. The number of shares of our common stock issuable upon exercise of the Warrants and the exercise price was to be calculated based upon the average closing price of our common stock for the 20 business days preceding the date of the Note (the “Average Price”). The number of shares that the Noteholder was to be entitled to purchase upon exercise of the Warrants was to be calculated by dividing the principal amount of the Note by the Average Price. Fractional shares resulting from the calculation were to be rounded up to the next whole share. The exercise price of the Warrants was to be equal to 140% of the Average Price.

In August 2007 we cancelled our $500,000 convertible promissory note dated March 30, 2007 (the “Cancelled Note”) and replaced it with two $250,000 convertible promissory notes, dated April 10, 2007 and May 15, 2007, respectively (the “Replacement Notes”). The holder of the Cancelled Note agreed to the cancellation and replacement as the date of the new notes reflected the actual dates on which funds were received by us from the holder. Except for timeline changes owing to the dates of the Replacement Notes, the Replacement Notes contain the same material terms as the Cancelled Note. They bear interest at the rate of 8% per annum and subject to prior conversion or acceleration, note principal is due in a single payment on the third anniversary of the date of the note. Interest on the Replacement Notes is payable semi-annually with the first of such interest payments due the first day of the first month following 180 days from the respective dates of the Replacement Notes.

Pursuant to the terms of the April 10, 2007 Replacement Note, on August 30, 2007 we issued 182,249 common stock purchase warrants to the holder, each exercisable for the purchase of one share of our common stock for a period of 3 years from issuance at a price of $1.92 per share. Pursuant to the terms of the May 10, 2007 Replacement Note, on August 30, 2007 we issued 298,330 common stock purchase warrants to the holder, each exercisable for the purchase of one share of our common stock for a period of 3 years from issuance at a price of $1.17 per share. In connection with the Valens financing discussed below, the holder of the Replacement Notes entered into a subordination agreement in which it agreed to take a junior position to that of the Valens entities.

August 2007 Bridge Financing

On August 23, 2007 we received an aggregate of $250,000 in loan proceeds from two persons (the “Lenders”) and issued to each of the Lenders a secured promissory note in the principal amount of $125,000 (each a “Note” and collectively the “Notes”). Each Note bore interest at the rate of 12% per annum. Subject to earlier payment, at our option, interest on the unpaid principal amount of each Note was payable in monthly installments commencing September 1, 2007 and principal was due and payable on the earlier of November 19, 2007 or 15 days following the closing of the asset acquisition we had entered into with Prime. If all interest and principal due on the Note was not paid on or before November 19, 2007 the interest rate was to be increased to 24% per annum from November 19, 2007 until the Note was repaid in full.

Until paid in full, each Note was secured by 1,250,000 shares of our restricted common stock (the “Stock”) standing in the name of Massimiliano Pozzoni or John Folnovic. In connection therewith, we made, executed, acknowledged, delivered and filed such documents and instruments, including without limitation a financing statement on Form UCC-1, as was reasonably necessary, to effect complete, or perfect the security interest of the Lenders in the Stock. Pursuant to the Notes we issued 50,000 shares (the “Shares”) of our restricted common stock to and in the name of each Lender. At the loan closings, we paid each Lender a cash fee of $3,750 to reimburse them for the costs and expenses incurred by them in connection with the loan transaction. We further agreed to pay the reasonable fees and disbursements of their respective legal counsels in connection with the enforcement of their rights under the Notes. On September 19, 2007 the Notes were repaid in full from proceeds received pursuant to the Valens Securities Purchase Agreement discussed below.

Valens Securities Purchase Agreement

On September 18, 2007 we and our wholly-owned subsidiary ICF entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with Valens U.S. SPV I, LLC (“Valens US”), a Delaware limited liability company in its capacity as Agent and with Valens US and Valens Offshore SPV II, Corp. in their capacities as purchasers (the “Purchasers”). Pursuant to the Securities Purchase Agreement, we and ICF sold secured term notes (the “Secured Notes”) to the Purchasers in the aggregate principal amount of $3,750,000, following which the Purchasers became our and ICF's senior secured lenders. At closing, on September 19, 2007, we utilized approximately $2,260,000 of the Secured Notes proceeds to pay Prime the balance of the cash component of the purchase price due to Prime under the Prime Purchase Agreement entered into on August 31, 2007. On September 19, 2007, we also issued 1,928,375 shares of our common stock to Prime representing payment of the stock component of the purchase due to Prime under the Prime Purchase Agreement.

The cash and stock payments allowed us to complete ICF’s acquisition of certain oil and gas assets of Prime including two producing wells with an estimated 701,772 Mcfe of proved reserves, net to the Company. All revenues from these producing assets and all other assets owned by ICF are required to flow through a controlled lockbox account to insure that part of such revenues will be used to repay the obligations under the Secured Notes. In the event of a default by us or ICF under the Securities Purchase Agreement, the Secured Notes or any related agreements, the Purchasers will have the right to block the account until the default is remedied. Repayment of the Secured Notes and satisfaction of our and ICF’s other obligations under the Securities Purchase Agreement and related agreements has been secured by the grant of liens and other security interests on all of our and ICF’s principal assets. To further secure the debt, we have pledged our ICF shares to the Purchasers.

In addition to the foregoing, pursuant to the Securities Purchase Agreement and related agreements:

we issued common stock purchase warrants to the Purchasers to purchase up to an aggregate of 1,953,126 shares of our common stock (the “Company Warrants”);

ICF issued common stock purchase warrants to the Purchasers to purchase up to an aggregate of 1,000 shares of common stock of ICF (the “ICF Warrants”);

ICF issued to the Purchasers an aggregate 5% overriding royalty interest in the oil and gas properties of ICF which reduces to an aggregate 3% overriding royalty interest upon the payment in full of the Secured Notes;

we and ICF paid to the Purchasers and/or Valens Capital Management, LLC, the investment manager for the Purchasers an aggregate of approximately $336,000 consisting of transaction fees, advance prepayment discount deposits, due diligence fees and the reimbursement of expenses (including legal fees and expenses) incurred by the Purchasers in connection with the entering into of the Securities Purchase Agreement and related agreements;

we and ICF agreed to negative covenants customary for transactions of this type;

we and ICF granted registration rights to the Purchasers with respect to the shares underlying the Company and ICF warrants;

we and ICF granted the Purchasers a right of first refusal to provide additional financing sought by us, ICF, or our respective subsidiaries, if any, until such time as all obligations of ours and ICF to the Purchasers have been paid in full excluding financing for the proposed Powder River Transaction, as hereinafter defined;

we and ICF entered into an agreement with the Purchasers to negotiate the terms of a shareholders’ agreement between the Purchasers and the then shareholders of ICF at such time, if ever, that the Purchasers exercise the ICF warrants, such shareholders agreement to require ICF to seek the written approval of the Purchasers before taking certain actions;

EH&P Investments AG (“EH&P”), the holder of an aggregate of $500,000 of our promissory notes entered into a subordination agreement with Valens US, in its capacity as agent for the Purchasers in which EH&P agreed to take a junior position to that of the Purchasers;

we utilized approximately $252,384 of the net proceeds from the Secured Notes to pay off our August 23, 2007 secured promissory notes in the aggregate principal amount $250,000;

we and ICF entered into a Collateral Assignment with Valens US, in its capacity as agent for the Purchasers, whereby we and ICF assigned to Valens US for the ratable benefit of Valens US and the Purchasers all of our rights, but not the obligations, under the Prime Purchase Agreement and related agreements;

we and ICF entered into a Master Security Agreement, dated September 18, 2007 whereby we assigned and granted to Valens US, as Agent, for the ratable benefit of the Purchasers, a security interest in certain property now owned or at any time thereafter acquired by us or ICF, or in which we or ICF have or at any time in the future may acquire any right, title, or interest;

we paid $192,000, agreed to issue 300,000 common stock purchase warrants with an exercise price of $0.48 per share and granted piggyback registration rights with respect to the shares underlying the warrants to a financial advisor as a finder’s fee; and

we and ICF executed a post closing letter dated as of September 18, 2007 with Valens US, in its capacity as Agent for the Purchasers, in which Valens US agreed to allow us to satisfy certain requirements under the Securities Purchase Agreement on a post closing basis, the failure of which to achieve within the applicable time limits contained therein constitutes an event of default under the Securities Purchase Agreement and related agreements.

The Secured Notes, which mature on September 18, 2010 (the “Maturity Date”), provide for interest payments on the outstanding principal amount at the rate of 13% per annum payable monthly in arrears. Amortizing payments of principal are also due monthly. Commencing October 1, 2007 and on the first business day of such succeeding month thereafter through and including the Maturity Date (each an “Amortization Date”) we and ICF are required, jointly and severally, to make monthly payments to the Purchasers in an amount equal to the monthly Amortization Amount (which includes any accrued and unpaid interest on such portion of the principal amount) plus any and all other unpaid amount which are then owing under the Notes, the Purchase Agreement and/or any related agreements. For each Amortization Date during the period ending on September 18, 2008, Amortization Amount means an amount equal to the greater of (i) $100,000 and (ii) sixty percent (60%) of the net revenue (the “Net Revenue Amount”) relating to all oil and gas properties of ICF (collectively, the Oil and Gas Properties”) for the calendar month immediately preceding the applicable Amortization Date and (b) for each Amortization Date thereafter, an amount equal to the greater of (i) $100,000 and (ii) eighty percent (80%) of the Net Revenue Amount relating to the Oil and Gas Properties for the calendar month immediately preceding the applicable Amortization Date, provided, however, such percentage will increase to one hundred percent (100%) upon the occurrence and during the continuance of an event of default.

The Company Warrants are exercisable at any time during the five year period ending September 18, 2012 at an exercise price equal to the lesser of (i) $0.48 per share or, (ii) if the transactions contemplated by a purchase and sale agreement involving oil and gas assets and properties in Wyoming’s Powder River Basin (the “Powder River Transaction”) being negotiated between us and Angel LLC, CN Energy LLC, Swanson Energy Company, LLC, Fuel Exploration, LLC, MHBR Energy LLC, and Rocky Mountain Rig LLC (collectively the “Sellers”) had been consummated, a price equal to the then fully diluted price per share of the Company common stock issued by us to the Sellers in connection with such purchase and sale agreement. The Company Warrants contain customary adjustment provisions for events affecting the Company and its common stock. The Powder River Transaction was not consummated because we were unable to raise the funds necessary to consummate that acquisition.

The ICF Warrants were only exercisable in the event the Powder River Transaction was not consummated on or before January 18, 2008. As that did not happen, the ICF Warrants are presently exercisable. The exercise price of the ICF Warrants is $0.01 per share. The ICF Warrants contain a cashless exercise provision and customary adjustment provisions for events affecting ICF and its common stock. The Purchasers have been granted registration rights with respect to the ICF Warrants.

On March 31, 2008 the Purchasers made an additional advance to us in the aggregate amount of $425,000. The September 18, 2007 and March 31, 2008 advances are now evidenced by March 31, 2008 Amended and Restated Notes in the aggregate principal amount of $3,931,883. In consideration of the March 31, 2008 advance we paid certain fees and expenses aggregating to approximately $34,370 to the Purchasers and affiliated parties and issued an aggregate of 1,739,130 shares of our restricted common stock (the “Shares”) to the Purchasers. In connection therewith, we entered into a March 31, 2008 Registration Rights Agreement with the Purchasers pursuant to which we granted the Purchasers demand registration rights with respect to the Shares.

The demand registration rights are exercisable in the event the Purchasers determine that they are unable to sell all of the Shares pursuant to Rule 144 under the Securities Act of 1933, as amended. Upon receipt of a demand notice from the Purchasers, we are required to file a registration statement covering the resale of the Shares no more than 30 days thereafter and to have the registration statement declared effective no later than 30 days following the filing date in the event the SEC determines not to review the registration statement or 90 days following the filing date if the SEC determines to review the registration statement. Notwithstanding the foregoing, we shall have 120 days following the filing date to have the registration statement declared effective if the SEC issues more than two comment letters on the registration statement. Our failure to file the registration statement on time, have it declared effective on time, or maintain its effectiveness, will result in our having to pay liquidated damages to the Purchasers in an amount equal to $4,250 for each 30 days period (prorated for partial periods) that we are in default subject to a maximum cap of $42,500. We are not obligated to effect more than two demand registrations under the Registration Rights Agreement.

Prime Consulting Agreements

On December 21, 2007 we entered into a nine-month consulting agreement (the ‘Consulting Agreement”) with Prime pursuant to which Prime provides us with bookkeeping, accounting, financial reporting and related services. The Consulting Agreement was given retroactive effect to October 1, 2007, the date on which Prime began rendering such services. As compensation for the services rendered to us by Prime under the Consulting Agreement we paid Prime a monthly cash fee of $5,000 and also paid Prime a quarterly fee in the form of shares of our common stock valued at $45,000 payable at the end of each of the quarters ended December 31, 2007, March 31, 2008 and June 30, 2008. The number of shares issuable to Prime for each quarterly period is determined by taking the average closing price of our common stock during the last five business days of each month during the quarter and apportioning such number of shares equal to the amount of $15,000 for each of the three months comprising the quarter. We have granted Prime piggyback registration rights with respect to these share payments. The Consulting Agreement also provides for the payment of expense reimbursement to Prime. On January 30, 2008 we issued 167,101 shares to Prime constituting payment of the stock fee due to Prime under the Consulting Agreement for the three months ended December 31, 2007. On June 19, 2008 we issued 176,179 shares to Prime constituting payment of the stock fee due to Prime under the Consulting Agreement for the three months ended March 31, 2008. A total of 182,193 shares are payable to Prime, but have not yet been issued, relative to payment of the stock fee due Prime under the Consulting Agreement for the three months ended June 30, 2008.

On June 30, 2008 we entered into a twelve month consulting agreement with Prime which is identical, in all material respects, to the December 21, 2007 Consulting Agreement, except that it has a twelve-month term and provides for a quarterly stock fee valued at $60,000.

Charter Amendment to Increase Authorized Capital

By written consents dated May 4, 2007 our board of directors and our stockholders holding 34,750,000 (approximately 53.7%) of our outstanding common shares on May 4, 2007 authorized us to amend our Articles of Incorporation to increase our authorized capital stock from 120 million shares consisting of 100 million shares of common stock, $0.0001 par value and 20 million shares of preferred stock, $0.0001 par value to 270 million shares, consisting of 250 million shares of common stock, $0.0001 par value and 20 million shares of preferred stock, $0.0001 par value. The amendment required the affirmative vote of a majority of the outstanding shares of common stock entitled to vote thereon. There were no dissenters’ rights applicable to the amendment. Our stockholders were provided with notice of the proposed amendment. We filed the Certificate of Amendment to our Articles of Incorporation on October 9, 2007.

Principal Products and Services

We have limited oil and gas producing properties. We need to raise a significant amount of capital to pay for our planned exploration and development activities. If we cannot raise the capital we require or find partners that can fund our required expenditures, we will not be able to drill and our business will fail. Even assuming that we obtain the financing we require, if we do not discover and produce additional commercial quantities of oil and natural gas, we will have minimal products or services to offer and our business could fail.

Competitive Business Conditions

The oil and natural gas industry is highly competitive. We compete with private and public companies in all facets of the oil and natural gas business. Numerous independent oil and gas companies, oil and gas syndicators, and major oil and gas companies actively seek out and bid for oil and gas prospects and properties as well as for the services of third-party providers, such as drilling companies, upon which we rely. Many of these companies not only explore for, produce and market oil and natural gas, but also carry out refining operations and market the resultant products worldwide. Most of our competitors have longer operating histories and substantially greater financial and other resources than we do.

Competitive conditions may be affected by various forms of energy legislation and/or regulation considered from time to time by the government of the United States and other countries, as well as factors that we cannot control, including international political conditions, overall levels of supply and demand for oil and gas, and the markets for synthetic fuels and alternative energy sources.

In an effort to achieve operating efficiency, we intend to rely on independent contractors to assist in conducting our operations including the provision of technical, geological, geophysical and financial reports on our leased properties. Because of current high-energy prices, lead times necessary to acquire drilling rigs or the services of independent contractors in the industry are high. As a result, we may not be able to compete successfully and competitive pressures may adversely affect our business, results of operations and financial condition.

Patents, Trademarks and Licenses

We do not own any patents, trademarks, copyrights or other forms of intellectual property.

Need for Governmental Approval and the Effects of Regulations

We presently are subject to various laws and regulations of the United States, as well as the states and municipalities in which we operate that govern the exploration, development and production of oil and natural gas. The Alaska Department of Natural Resources - Division of Oil and Gas and the Alaska Oil and Gas Conservation Commission determine most of the procedures and regulations that concern oil and gas exploration and production activities in Alaska. The Railroad Commission of Texas - Oil and Gas Division determines most of the procedures and regulations that concern oil and gas exploration and production activities in Texas. The Colorado Oil and Gas Conservation Commission determines most of the procedures and regulations that concern oil and gas exploration and production activities in Colorado. We also are subject to, or will be subject to, regulation by, among others, the Alaska Department of Commerce, Community and Economic Development; the Alaska Department of Fish and Game; the U.S. Environmental Protection Agency; the U.S. Fish and Wildlife Service; and the U.S. Department of the Interior Bureau of Land Management. We will have to abide by and follow the procedures established by the above agencies. These procedures are generally designed to prevent pollution, to provide funds or procedures for cleaning up air pollution that cannot be prevented, and generally to protect land, water, air, flora and fauna from unnecessary or undue damage or disturbance.

Research and Development

We have not performed any research and development since our inception.

Employees

John Folnovic serves as our President and Chief Executive Officer. Massimiliano Pozzoni, our largest shareholder, serves as our Secretary, Treasurer and Principal Financial Officer.

We have used a number of independent contractors on an as-needed basis to conduct our operating activities and expect to continue to do so. Our management team will select and hire these independent contractors and manage and evaluate their work performance. We intend to use various independent contractors to provide technical, geological, geophysical and financial reports on our properties.

We are not subject to any collective bargaining agreements. We believe that our relationships with our employee and independent contractors are satisfactory.

Our Business Strategy

For a description of our business strategy, see “Plan of Operation - Business Strategy. ”

Risk Factors

In addition to the other information set forth elsewhere in this Form 10-KSB, you should carefully consider the following risk factors when evaluating us. The trading price of our shares will be affected by the performance of our business relative to, among other things, competition, market conditions and general economic and industry conditions. The value of our shares may decrease, resulting in a loss. The risk factors listed below are not all inclusive.

RISKS RELATED TO OUR COMPANY

We have a history of operating losses which may continue.

We have a history of losses and may continue to incur operating and net losses for the foreseeable future. We incurred net losses of $11,783,731 and $9,069,110 during the years ended April 30, 2008 and 2007, respectively. As of April 30, 2008, our accumulated deficit was $21,005,787. We have not achieved profitability on a quarterly or on an annual basis. We may not be able to reach a level of revenue to achieve profitability. Our gross revenues for the years ended April 30, 2008 and 2007 were $1,225,735 and $0, respectively. If our revenues grow more slowly than anticipated or if our operating expenses exceed expectations, then we may not be able to achieve profitability in the near future or at all, which may depress the price for our common stock.

Our auditors have indicated that our inability to generate sufficient revenue raises substantial doubt as to our ability to continue as a going concern.

Our audited financial statements for the year ended April 30, 2008 were prepared on a going concern basis in accordance with United States generally accounting principles. The going concern basis of presentation assumes that we will continue in operation for the foreseeable future and will be able to realize our assets and discharge our liabilities and commitments in the normal course of business. However, our auditors have indicated that our minimal revenues and significant accumulated losses since February 1, 2006 (inception of exploration stage) raise substantial doubt as to our ability to continue as a going concern. In the absence of additional financing or significant revenues and profits, we may have to curtail or cease operations. However, we cannot guarantee that will be able to obtain sufficient additional funds when needed, or that such funds, if available, will be obtainable on terms satisfactory to us. In the event that these plans cannot be effectively realized, there can be no assurance that we will be able to continue as a going concern.

Negative covenants in the Securities Purchase Agreement governing our September 2007 secured term notes limit, among other things, our ability to incur debt, pay dividends, raise additional capital, create liens on our properties and issue equity securities with registration rights, which may impair our ability to pursue our objectives.

The September 18, 2007 Securities Purchase Agreement governing our September 18, 2007 secured term notes contains various negative covenants that limit, among other things, our ability to incur debt, pay dividends, raise additional capital, create liens on our properties and issue equity securities with registration rights without the prior consent of the agent for our September 18, 2007 note holders. These negative covenants may impair our ability to pursue our business objectives. Any failure to comply with these covenants may constitute a breach under the September 18, 2007 Securities Purchase Agreement governing our September 18, 2007 notes that provides the holders of the September 18, 2007 notes with the right to require us to purchase all or any part of the then outstanding principal amount of the September 2007 notes. We may not have sufficient funds to purchase the September 18, 2007 notes upon such a breach.

Rules issued under the Sarbanes-Oxley Act of 2002 may make it difficult for us to retain or attract qualified officers and directors, which could adversely affect the management of our business and our ability to obtain or retain listing of our common stock.

We may be unable to attract and retain those qualified officers, directors and members of board committees required to provide for our effective management because of rules and regulations that govern publicly held companies, including, but not limited to, certifications by principal executive officers. The enactment of the Sarbanes-Oxley Act has resulted in the issuance of rules and regulations and the strengthening of existing rules and regulations by the SEC, as well as the adoption of new and more stringent rules by the stock exchanges and NASDAQ. The perceived increased personal risk associated with these recent changes may deter qualified individuals from accepting roles as directors and executive officers.

Further, some of these recent changes heighten the requirements for board or committee membership, particularly with respect to an individual’s independence from the corporation and level of experience in finance and accounting matters. We may have difficulty attracting and retaining directors with the requisite qualifications. If we are unable to attract and retain qualified officers and directors, the management of our business and our ability to obtain or retain listing of our shares of common stock on any stock exchange or NASDAQ (assuming we elect to seek and are successful in obtaining such listing) could be adversely affected.

If we fail to maintain an effective system of disclosure and internal controls, we may not be able to accurately report our financial results or detect fraud. Consequently, investors could lose confidence in our financial reporting and this may decrease the trading price of our stock.

We must maintain effective disclosure and internal controls to provide reliable financial reports and detect fraud. Based on our evaluation as of April 30, 2008, we concluded that we do maintain effective disclosure controls and procedures. Failure to implement changes to our controls that we may identify in the future as necessary to maintain an effective system of such controls could harm our operating results and cause investors to lose confidence in our reported financial information. Any such loss of confidence would have a negative effect on the trading price of our stock.

We have a limited operating history in the oil and gas business. Accordingly, you will have little basis upon which to evaluate our ability to achieve our business objectives.

We have been an oil and gas company since February 1, 2006 and have minimal oil and gas operations and revenues. As an oil and gas exploration and development company with a limited operating history, properties and related assets, it is difficult for potential investors to evaluate our business. Our operations are therefore subject to all of the risks inherent in the establishment of a new business enterprise and must be considered in light of the expenses, difficulties, complications and delays frequently encountered in connection with the formation of any new business, as well as those risks that are specific to the oil and gas industry. Investors should evaluate us in light of the delays, expenses, problems and uncertainties frequently encountered by companies developing markets for new products, services and technologies. We may never overcome these obstacles.

Strategic relationships upon which we may rely are subject to change, which may diminish our ability to conduct our operations.

Our ability to successfully acquire oil and gas businesses and properties, to discover reserves, to participate in extraction opportunities, and to identify and enter into commercial arrangements with customers will depend on our developing and maintaining close working relationships with industry participants and on our ability to select and evaluate suitable businesses and properties and consummate transactions in a highly competitive environment. These realities are subject to change and may impair our ability to grow.

To develop our business, we will endeavor to use the business relationships of our management to enter into strategic relationships, which may take the form of joint ventures with private parties and contractual arrangements with other oil and gas companies, including those that supply equipment and other resources that we expect to use in our business. We may not be able to establish these strategic relationships, or if established, we may not be able to maintain them. In addition, the dynamics of our relationships with strategic partners may require us to incur expenses or undertake activities we would not otherwise be inclined to in order to fulfill our obligations to these partners or maintain our relationships. If our strategic relationships are not established or maintained, our business prospects may be limited, which could diminish our ability to conduct our operations.

Competition in obtaining rights to acquire and develop oil and gas reserves and to market our production may impair our business.

The oil and gas industry is highly competitive. Other oil and gas companies may seek to acquire property leases and other properties and services that we also seek to acquire. This competition has become increasingly intense as the price of oil and gas on the commodities markets has risen in recent years. Additionally, other companies engaged in our line of business may compete with us from time to time in obtaining capital from investors. Competitors include larger companies, which, in particular, may have access to greater resources, may be more successful in the recruitment and retention of qualified employees, and may conduct their own refining and petroleum marketing operations. The breadth and scope of these companies may provide them with a competitive advantage over us. In addition, actual or potential competitors may be strengthened through the acquisition of additional assets and interests. If we are unable to compete effectively or adequately respond to competitive pressures, this inability may materially adversely affect our results of operation and financial condition.

The natural resource industry is highly competitive in all aspects, including the distribution and marketing of petroleum products. The oil and gas industry competes with other industries in the supply of energy, fuel, and related products to consumers. Development of new projects or expansion of existing operations could materially increase the supply of oil and gas in the marketplace. Depending upon the levels of future demand, increased supplies could negatively impact the prices obtained for oil and gas.

We may be unable to obtain additional capital that we will require to implement our business plan, which would restrict our ability to grow.

We have a limited amount of working capital that will not be sufficient to fully fund our planned operations including participation in an increasing number of development and exploration projects. We will require additional capital to continue to operate our business beyond the initial phase and to expand our operations. We may be unable to obtain the additional capital required.

Future acquisitions, development, production and marketing activities, as well as our administrative requirements (such as salaries, insurance expenses and general overhead expenses, as well as legal compliance and accounting expenses) will require a substantial amount of additional capital and cash flow. We may not be successful in locating suitable financing transactions in the time period required or at all, and we may not be able to obtain the capital we require by other means. If we do not succeed in raising additional capital, we may be unable to fund our operations going forward.

Our ability to obtain needed financing may be impaired by such factors as the capital markets (both generally and in the oil and gas industry in particular), our status as a relatively new enterprise without a demonstrated operating history, the location of our oil and gas properties, the price of oil and gas on the commodities markets (which will impact the amount of asset-based financing available to us), or the retention or loss of key management. Further, if oil and gas prices on the commodities markets decrease, then our revenues will likely decrease, and such decreased revenues may increase our requirements for capital. If the amount of capital we are able to raise from financing activities is not sufficient to satisfy our capital needs, we may be required to curtail or cease our operations. Further, we may be forced to sell certain of our assets in an untimely fashion or on less than favorable terms.

We may incur substantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees, printing and distribution expenses and other costs. We also may be required to recognize non-cash expenses in connection with certain securities we may issue, such as convertible notes and warrants, which may adversely impact our financial condition.

We may not be able to effectively expand operations or manage our growth, which may harm our profitability.

Our strategy envisions expanding our business. If we fail to effectively manage our growth, our financial results could be adversely affected. Growth may place a strain on our management systems and resources. We must continue to refine and expand our business development capabilities, our systems and processes, and our access to financing sources. As we grow, we must continue to hire, train, supervise and manage new employees. We cannot assure you that we will be able to:

meet our capital needs;

expand our systems effectively or efficiently or in a timely manner;

allocate our human resources optimally;

identify and hire qualified employees or retain valued employees; or

incorporate effectively the components of any business that we may acquire in our effort to achieve growth.

If we are unable to manage our growth, our operations and our financial results could be adversely affected by inefficiency, which could diminish our profitability.

Our business may suffer if we do not attract and retain talented personnel.

Our success will depend in large measure on the abilities, expertise, judgment, discretion, integrity and good faith of our management and other personnel in conducting our intended business. We presently have a small management team that we intend to expand in conjunction with our planned operations and growth. The loss of a key individual or our inability to attract suitably qualified staff could materially adversely impact our business. We presently do not maintain “key man” life insurance on any member of our management team.

Our success depends on the ability of our management and employees to interpret market and geological data correctly and to interpret and respond to economic, market and other conditions in order to locate and adopt appropriate investment opportunities, monitor such investments, and ultimately, if required, to successfully divest such investments. Further, no assurance can be given that our key personnel will continue their association or employment with us or that replacement personnel with comparable skills can be found. We have sought to and will continue to ensure that management and any key employees are appropriately compensated; however, their services cannot be guaranteed. If we are unable to attract and retain key personnel, our business may be adversely affected.

RISKS RELATED TO OUR INDUSTRY

Losses and liabilities arising from uninsured or under-insured hazards could have a material adverse effect on our business.

Our operations are subject to the customary hazards of recovering, transporting and processing hydrocarbons such as fires, explosions and gaseous leaks, and migration of harmful substances, blowouts and oil spills. A casualty occurrence might result in the loss of equipment or life, as well as injury, property damage or other liability. It cannot be assured that our insurance will be sufficient to cover any such casualty occurrences or disruptions. Our operations could be interrupted by natural disasters or other events beyond our control. Losses and liabilities arising from uninsured or under-insured events could have a material adverse effect on our business, financial condition and results of operations.

Amendments to current laws and regulations governing our operations could have a material adverse impact on our business.

Our business is subject to substantial regulation under local and federal laws relating to the exploration for, and the development, upgrading, marketing, pricing, taxation and transportation of oil, gas and related products and other matters. Amendments to current laws and regulations governing operations and activities of oil and gas operations could have a material adverse impact on our proposed business. In addition, there can be no assurance that income tax laws, royalty regulations and government incentive programs related to the oil and gas industry generally, will not be changed in a manner which may adversely affect us and cause delays, inability to complete, or abandonment of properties.

Permits, leases, licenses and approvals are required from a variety of regulatory authorities at various stages of exploration and extraction. There can be no assurance that the various government permits, leases, licenses and approvals sought will be granted to us or, if granted, will not be cancelled or will be renewed upon expiration.

Estimates of oil and gas reserves that we make may be inaccurate. The 3D seismic data and other advanced technologies we use cannot eliminate exploration risk. These factors could impair our ability to generate revenues from operations.

There are numerous uncertainties inherent in estimating quantities of oil and gas resources, including many factors beyond our control, and no assurance can be given that expected levels of resources or recovery of oil and gas will be realized. In general, estimates of recoverable oil and gas resources are based upon a number of factors and assumptions made as of the date on which resource estimates are determined, such as geological and engineering estimates that have inherent uncertainties and the assumed effects of regulation by governmental agencies and estimates of future commodity prices and operating costs, all of which may vary considerably from actual results. All such estimates are, to some degree, uncertain and classifications of resources are only attempts to define the degree of uncertainty involved. For these reasons, estimates of the recoverable quantities of oil and gas, the classification of such resources based on risk of recovery, prepared by different engineers or by the same engineers at different times, may vary substantially.

Our expenditures on exploration may not result in new discoveries of oil or natural gas in commercially viable quantities. It is difficult to project the costs of implementing an exploratory drilling program due to the inherent uncertainties of drilling in unknown formations, the costs associated with encountering various drilling conditions, such as over-pressured zones and tools lost in the hole, and changes in drilling plans and locations as a result of prior exploratory wells or additional seismic data and interpretations thereof.

Even when used and properly interpreted, 3D seismic data and visualization techniques only assist geoscientists in identifying subsurface structures and hydrocarbon indicators. They do not allow the interpreter to know conclusively if hydrocarbons are present or economically producible. In addition, the use of 3D seismic data becomes less reliable when used at increasing depths. We could incur losses as a result of expenditures on unsuccessful wells. If exploration costs exceed our estimates, or if our exploration efforts do not produce results which meet our expectations, our exploration efforts may not be commercially successful, which could adversely impact our ability to generate revenues from our operations.

We may not be able to develop oil and gas reserves on an economically viable basis and our reserves and production may decline as a result.

If we succeed in acquiring or discovering oil or natural gas reserves, we cannot assure that these reserves will be capable of production levels we project or in sufficient quantities to be commercially viable. On a long-term basis, our viability depends on our ability to find or acquire, develop and commercially produce additional oil and natural gas reserves. Without the addition of reserves through acquisition, exploration or development activities, our reserves and production will decline over time as reserves are produced. Our future reserves will depend not only on our ability to develop then-existing properties, but also on our ability to identify and acquire additional suitable producing properties or prospects, to find markets for the oil and natural gas we develop and to effectively distribute our production into our markets.

Future oil and gas exploration may involve unprofitable efforts, not only from dry wells, but from wells that are productive but do not produce sufficient net revenues to return a profit after drilling, operating and other costs. Completion of a well does not assure a profit on the investment or recovery of drilling, completion and operating costs. In addition, drilling hazards or environmental damage could greatly increase the cost of operations, and various field operating conditions may adversely affect the production from successful wells. These conditions include delays in obtaining governmental approvals or consents, shut-downs of connected wells resulting from extreme weather conditions, problems in storage and distribution and adverse geological and mechanical conditions. While we will endeavor to effectively manage these conditions, we cannot be assured of doing so optimally, and we will not be able to eliminate them completely in any case. Therefore, these conditions could diminish our revenue and cash flow levels and result in the impairment of our oil and natural gas interests.

Abandonment and reclamation costs are unknown and may be substantial.

We will be responsible for compliance with terms and conditions of environmental and regulatory approvals and all laws and regulations regarding the abandonment of our properties and reclamation of lands at the end of their economic life, which abandonment and reclamation costs may be substantial. A breach of such legislation and/or regulations may result in the issuance of remedial orders, the suspension of approvals, or the imposition of fines and penalties, including an order for cessation of operations at the site until satisfactory remedies are made. It is not possible to estimate with certainty the abandonment and reclamation costs since they will be a function of regulatory requirements at the time.

Our inability to obtain necessary facilities could hamper our operations.

Oil and gas extraction and development activities are dependent on the availability of equipment, transportation, power and technical support in the particular areas where these activities will be conducted, and our access to these facilities may be limited. To the extent that we conduct our activities in remote areas, needed facilities may not be proximate to our operations, which will increase our cost of doing business. Demand for such limited equipment and other facilities or access restrictions may affect the availability of such equipment to us and may delay exploration and development activities. The quality and reliability of necessary facilities may also be unpredictable and we may be required to make efforts to standardize our facilities, which may entail unanticipated costs and delays. Shortages and/or the unavailability of necessary equipment or other facilities will impair our activities, either by delaying our activities, increasing our costs or otherwise.

We may have difficulty distributing our production, which could harm our financial condition.

In order to sell the oil and gas that we are able to produce, we will have to make arrangements for storage and distribution to the market. We will rely on local infrastructure and the availability of transportation for storage and shipment of our products, but infrastructure development and storage and transportation facilities may be insufficient for our needs at commercially acceptable terms in the localities in which we operate. This could be particularly problematic to the extent that our operations are conducted in remote areas that are difficult to access, such as areas that are distant from shipping and/or pipeline facilities. These factors may affect our ability to explore and develop properties and to store and transport our oil and gas production and may increase our expenses.

Furthermore, weather conditions or natural disasters, actions by companies doing business in one or more of the areas in which we will operate, or labor disputes may impair the distribution of oil and gas and in turn diminish our financial condition or ability to maintain our operations.

Prices and markets for oil and gas are unpredictable and tend to fluctuate significantly, which could reduce profitability, growth and the value of our business.

Our revenues and earnings, if any, will be highly sensitive to the price of oil and gas. Prices for oil and gas are subject to large fluctuations in response to relatively minor changes in the supply of and demand for oil and gas, market uncertainty, and a variety of additional factors beyond our control. These factors include, without limitation, weather conditions, the condition of the U.S. and global economies, the actions of the Organization of Petroleum Exporting Countries, governmental regulations, political stability in the Middle East and elsewhere, war or the threat of war in oil and gas producing regions, the foreign supply of oil and gas, the price of foreign imports and the availability of alternate fuel sources. Significant changes in long-term price outlooks for oil and gas could have a material adverse effect on us.

Increases in our operating expenses will impact our operating results and financial condition.

Extraction, development, production, marketing (including distribution costs) and regulatory compliance costs (including taxes) will substantially impact the net revenues we derive from the oil and gas that we produce. These costs are subject to fluctuations and variation in different locales in which we will operate, and we may not be able to predict or control these costs. If these costs exceed our expectations, our results of operations may be adversely affected. In addition, we may not be able to earn net revenue at our predicted levels, which may impact our ability to satisfy our obligations.

Penalties we may incur could impair our business.

Failure to comply with government regulations could subject us to civil and criminal penalties, could require us to forfeit property rights, and may affect the value of our assets. We also may be required to take corrective actions, such as installing additional equipment or taking other actions, each of which could require us to make substantial capital expenditures. We also could be required to indemnify our employees in connection with any expenses or liabilities that they may incur individually in connection with regulatory action against them. As a result, our future business prospects could deteriorate due to regulatory constraints, and our profitability could be impaired by our obligation to provide such indemnification to our employees.

Environmental risks may adversely affect our business.

Oil and gas extraction operations present environmental risks and hazards and are subject to environmental regulation pursuant to a variety of federal, state, provincial and municipal laws and regulations. Environmental legislation provides for, among other things, restrictions and prohibitions on spills, releases or emissions of various substances produced in association with oil and gas operations. The legislation also requires that facility sites be operated, maintained, abandoned and reclaimed to the satisfaction of applicable regulatory authorities. Compliance with such legislation can require significant expenditures and a breach may result in the imposition of fines and penalties, some of which may be material. Environmental legislation is evolving in a manner we expect may result in stricter standards and enforcement, larger fines and liability, and potentially increased capital expenditures and operating costs. The discharge of oil, gas or other pollutants into the air, soil or water may give rise to liabilities to governments and third parties and may require us to incur costs to remedy such discharges. The application of environmental laws to our business may cause us to curtail our production or increase the costs of our production, development or exploration activities.

Challenges to title to our properties may impact our financial condition.

Title to oil and gas interests is often not capable of conclusive determination without incurring substantial expense. While we intend to make appropriate inquiries into the title of properties and other development rights we acquire, title defects may exist. In addition, we may be unable to obtain adequate insurance for title defects, on a commercially reasonable basis or at all. If title defects do exist, it is possible that we may lose all or a portion of our right, title and interests in and to the properties to which the title defects relate. If our property rights are reduced, our ability to conduct our exploration, development and production activities may be impaired.

RISKS RELATED TO OUR COMMON STOCK

There has been a limited trading market for our common stock that may impair your ability to sell your shares.

There has been a limited trading market for our common stock since our inception. The lack of an active market may impair your ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable. The lack of an active market may also reduce the fair market value of your shares. An inactive market may also impair our ability to raise capital by selling shares of capital stock and may impair our ability to acquire other assets or companies by using common stock as consideration.

Our common stock is currently quoted on the NASD’s Over-the-Counter Bulletin Board under the symbol “TNEN.OB.” As indicated above, our common stock is not actively traded. As a result, investors may find it difficult to obtain accurate quotations of the price of our common stock. This situation severely limits the liquidity of our common stock, and would likely reduce the market price of our common stock and hamper our ability to raise additional capital.

The market price of our common stock is likely to be highly volatile and subject to wide fluctuations.

Assuming we are able to establish an active trading market for our common stock, the market price of our common stock is likely to be highly volatile and could be subject to wide fluctuations in response to a number of factors that are beyond our control, including:

Dilution caused by our issuance of additional shares of common stock and other forms of equity securities, which we expect to make in connection with future capital financings to fund our operations and growth, to attract and retain valuable personnel, and in connection with future strategic partnerships with other companies;

Announcements of acquisitions, reserve discoveries or other business initiatives by our competitors;

Fluctuations in revenue from our oil and gas business as new reserves come to market;

Changes in the market for oil and gas commodities and/or in the capital markets generally;

Changes in the demand for oil and gas, including changes resulting from the introduction or expansion of alternative fuels;

Quarterly variations in our revenues and operating expenses;

Changes in the valuation of similarly situated companies, both in our industry and in other industries;

Changes in analysts’ estimates affecting us, our competitors and/or our industry;

Changes in the accounting methods used in or otherwise affecting our industry;

Additions and departures of key personnel;

Announcements of technological innovations or new products available to the oil and gas industry;

Announcements by relevant governments pertaining to incentives for alternative energy development programs; and

Fluctuations in interest rates and the availability of capital in the capital markets.

These and other factors are largely beyond our control, and the impact of these risks, individually or in the aggregate, may result in material adverse changes to the market price of our common stock and/or our results of operations and financial condition.

Our operating results may fluctuate significantly, and these fluctuations may cause our stock price to decline.

Our operating results will likely vary in the future primarily as the result of fluctuations in our revenues and operating expenses, including the coming to market of oil and gas reserves that we are able to develop, expenses that we incur, the price of oil and gas in the commodities markets, and other factors. If our results of operations do not meet the expectations of current or potential investors, the price of our common stock may decline.

We do not expect to pay dividends in the foreseeable future.

We do not intend to declare dividends for the foreseeable future, as we anticipate that we will reinvest any future earnings in the development and growth of our business. Therefore, investors will not receive any funds unless they sell their common stock, and stockholders may be unable to sell their shares on favorable terms or at all. Investors cannot be assured of a positive return on investment or that they will not lose the entire amount of their investment in our common stock.

Applicable SEC rules governing the trading of “penny stocks” will limit the trading and liquidity of our common stock, which may affect the trading price of our common stock.

Our common stock is considered to be a “penny stock” and is therefore subject to SEC rules and regulations that (i) impose limitations upon the manner in which our shares may be publicly traded and (ii) regulate broker-dealer practices in connection with transactions in “penny stocks.” Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). 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 that provides information about penny stocks and the risks in the penny stock market. The broker-dealer must also 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. In addition, the penny stock rules generally require that prior to a transaction in a penny stock, the broker-dealer 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 a stock that becomes subject to the penny stock rules and may increase the difficulty investors might experience in attempting to liquidate such securities.

You may experience dilution of your ownership interests because of the future issuance of additional shares of our common stock and our preferred stock.

In the future, we may issue our authorized but previously unissued equity securities, resulting in the dilution of the ownership interests of our present stockholders. We are currently authorized to issue an aggregate of 270,000,000 shares of capital stock consisting of 250,000,000 shares of common stock and 20,000,000 shares of preferred stock with preferences and rights to be determined by our board of directors. As of July 25, 2008, there were 71,016,758 shares of common stock outstanding, 182,193 shares issuable to Prime pursuant to the Consulting Agreement, and 7,139,260 shares reserved for issuance upon the exercise of outstanding warrants.

ITEM 2.

DESCRIPTION OF PROPERTY

Properties

Our principal executive office is located at 1200 Smith Street, 16th Floor, Houston, Texas 77002. We pay a monthly rental of $300 per month for this virtual office lease, which we utilize for certain of our administrative needs. At that location, we have access to conference and meeting room facilities on an as needed basis. We also sublease approximately 175 square feet of office space at 1400 Woodloch Forest Drive, Suite 530, The Woodlands, Texas 77380 at a monthly cost of $850. We utilize this space for administrative needs as well including, but not limited to, our banking, oil and gas operations, and public company filing requirements. This sublease has a present term of six-months that expires on July 31, 2008 and is renewable thereafter for additional six-month terms. We also lease approximately 1,470 feet of office space in Golden, Colorado at the rate of $2,500 per month. The lease commenced on September 1, 2007 and runs through December 31, 2008. We believe that our property leases are suitable for our current and projected needs.

Acreage

The following table sets forth certain information regarding our developed and undeveloped lease acreage as of April 30, 2008. “Developed Acreage” refers to acreage on which wells have been drilled or completed to a point that would permit production of oil and natural gas in commercial quantities. “Undeveloped Acreage” refers to acreage on which wells have not been drilled or completed to a point that would permit production of oil and natural gas in commercial quantities whether or not the acreage contains proved reserves.

	2007-08		4/30/2008 Proved		Average
	Production		Reserves-		Working			Developed Acreage				Undeveloped Acreage				Total Acreage
	Mcfe		Mcfe		Interest			Gross		Net		Gross		Net		Gross		Net
Alaska		-		-		100.00	%		-		-		35,000		35,000		35,000		35,000
Colorado		-		-		100.00	%		-		-		17,000		17,000		17,000		17,000
Texas		143,041		551,441		30.14	%		1,150		430		2,400		640		3,550		1,070

Total		143,041		551,441					1,150		430		54,640		52,640		55,550		53,070

An element of an oil or natural gas lease is the obligation to drill upon the fields that are acquired. If the Company is not successful in securing additional capital some of these leases might be lost.

Volumes, Prices and Oil & Natural Gas Operating Expense

The following table sets forth certain information regarding the production volumes of, average sales prices received for and average production costs associated with our sales of oil and natural gas for the periods indicated.

	Year Ended April 30,
	2008		2007
Production volumes:
Oil (Bbls)		1,649		-
Natural gas (Mcf)		133,147		-
Standard cubic feet of gas equivalent (Mcfe)		143,041		-

Average sales prices:
Oil (per Bbl)	$	91.52	$	-
Natural gas (per Mcf)	$	8.07	$	-
Standard cubic feet of gas equivalent (per Mcfe)	$	8.57	$	-

Average costs (per Mcfe) (1)	$	3.18	$	-

(1)

Includes direct lifting costs (labor, repairs and maintenance, materials and supplies), workover costs and the administrative costs of production offices, insurance and property and severance taxes.

Oil and Natural Gas Reserves

The reserves as of April 30, 2008 were derived from reserve estimates prepared by the independent reserve engineers Netherland, Sewell & Associates, Inc. for the Old Ocean Field. No reserve reports were provided to any government agency. The PV-10 value was derived using constant prices as of the calculation date, discounted at 10% per annum on a pretax basis, and is not intended to represent the current market value of the estimated oil and natural gas reserves owned by the Company. For further information concerning the present value of future net revenues from these proved reserves, see Note 11 of Notes to Consolidated Financial Statements.

The following table sets forth our estimated net proved oil and natural gas reserves and the PV-10 value of such reserves as of April 30, 2008.

	Proved Reserves
	Developed		Undeveloped		Total
Oil and condensate (Bbls)		8,407		-		8,407
Natural gas (Mcf)		500,999		-		500,999
Total proved reserves (Mcfe)		551,441		-		551,441
PV-10 Value (1)(2)	$	4,073,978	$	-	$	4,073,978

(1)	The PV-10 value as of April 30, 2008 is pre-tax and was determined by using the April 30, 2008 sales prices, which averaged $113.14 per Bbl of oil and $11.51 per Mcf of natural gas. Management believes that the presentation of PV-10 value may be considered a non-GAAP financial measure. Therefore we have included a reconciliation of the measure to the most directly comparable GAAP financial measure (standardized measure of discounted future net cash flows in footnote (2) below). Management believes that the presentation of PV-10 value provides useful information to investors because it is widely used by professional analysts and sophisticated investors in evaluating oil and natural gas companies. Because many factors that are unique to each individual Company may impact the amount of future income taxes to be paid, the use of the pre-tax measure provides greater comparability when evaluating companies. It is relevant and useful to investors for evaluating the relative monetary significance of our oil and natural gas properties. Further, investors may utilize the measure as a basis for comparison of the relative size and value of our reserves to other companies.

	Management also uses this pre-tax measure when assessing the potential return on investment related to its oil and natural gas properties and in evaluating acquisition candidates. The PV-10 value is not a measure of financial or operating performance under GAAP, nor is it intended to represent the current market value of the estimated oil and natural gas reserves owned by us. The PV-10 value should not be considered in isolation or as a substitute for the standardized measure of discounted future net cash flows as defined under GAAP.

(2)	Future income taxes and present value discounted (10%) future income taxes were $nil and $nil, respectively, due to the Company having sufficient NOL carryforwards. Accordingly, the after-tax PV-10 value of Total Proved Reserves (or “Standardized Measure of Discounted Future Net Cash Flows”) is $4,073,978.

Development, Exploration and Acquisition Capital Expenditures

The following table sets forth certain information regarding the gross costs incurred in the purchase of proved and unproved properties and in development and exploration activities.

	Year Ended April 30,
	2008		2007
Property acquisition costs:
Proved	$	3,482,558	$	-
Unproved		1,868,926		311,626
Exploration costs		314,598		6,473,608
Development costs		-		-
Asset retirement obligation (1)		50,000		-

Total costs incurred	$	5,716,082	$	6,785,234

(1)

Includes non-cash asset retirement obligations accrued in accordance with SFAS No. 143 of $50,000 and $nil, respectively, for the years ended April 30, 2008 and 2007, respectively.

ITEM 3.

LEGAL PROCEEDINGS

Legal Proceedings

In the ordinary course of our business, we may from time to time become subject to routine litigation or administrative proceedings which are incidental to our business. We are not a party to nor are we aware of any existing, pending or threatened lawsuits or other legal actions involving us.

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders, through the solicitation of proxies or otherwise, during the fourth quarter of the fiscal year covered by this report.

PART II

ITEM 5.

MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

“Bid” and ”ask” prices for our common stock have been quoted on the Over-The-Counter Bulletin Board (the “OTCBB”) since April 18, 2005. Through March 28, 2006 our common stock was traded under the symbol “AMPI. ” In connection with our name change that took effect on March 28, 2006, our trading symbol was changed to “TNEN. ”

The following table sets forth the high and low closing bid prices for our common stock for the fiscal quarters indicated as reported on the OTCBB by the National Association of Securities Dealers Composite Feed or other qualified interdealer quotation medium. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.

Quarter Ended	High Bid		Low Bid

April 30, 2008	$	0.34	$	0.17
January 31, 2008	$	0.44	$	0.17
October 31, 2007	$	0.62	$	0.28
July 31, 2007	$	0.83	$	0.43
April 30, 2007	$	2.67	$	0.63
January 31, 2007	$	3.82	$	1.48
October 31, 2006	$	6.02	$	1.90
July 31, 2006	$	2.15	$	1.05

As of July 1, 2008, we had 62 shareholders of record of our common stock. The number of holders of the common stock includes nominees of various depository trust accounts for an undeterminable number of individual stockholders.

Dividends

We have never declared any cash dividends with respect to our common stock. Future payment of dividends is within the discretion of our board of directors and will depend on our earnings, capital requirements, financial condition and other relevant factors. Although there are no material restrictions limiting, or that are likely to limit, our ability to pay dividends on our common stock, we presently intend to retain future earnings, if any, for use in our business and have no present intention to pay cash dividends on our common stock.

Recent Sales of Unregistered Securities

During the past three years, we have issued the following securities without registration under the Securities Act of 1933:

On June 19, 2008 we issued 176,179 shares of our common stock to Prime representing payment of the stock fee due Prime for the three-month period ended March 31, 2008 under the terms of the December 21, 2007 Consulting Agreement therewith. The shares were issued in reliance on Section 4(2) of the Securities Act of 1933, as amended, since the foregoing issuance did not involve a public offering, the recipient had access to information that would be included in a registration statement, the recipient took the shares for investment and not resale, and we took appropriate measures to restrict resale.

On May 20, 2008 we issued an aggregate of 25,000 shares of our common stock to our five advisory board members representing payment of the quarterly fee due to them for the quarter ended April 30, 2008. The shares were issued in reliance on Section 4(2) of the Securities Act of 1933, as amended, since the foregoing issuances did not involve a public offering, the recipient had access to information that would be included in a registration statement, the recipient took the shares for investment and not resale, and we took appropriate measures to restrict resale.

On February 13, 2008 we issued an aggregate of 25,000 shares of our common stock to our five advisory board members representing payment of the quarterly fee due to them for the quarter ended January 31, 2008. The shares were issued in reliance on Section 4(2) of the Securities Act of 1933, as amended, since the foregoing issuances did not involve a public offering, the recipient had access to information that would be included in a registration statement, the recipient took the shares for investment and not resale, and we took appropriate measures to restrict resale.

On March 31, 2008, we issued 1,739,130 shares of our common stock to Valens U.S. SPV I, LLC and Valens Offshore SPV II, Corp. in connection with a $425,000 advance to us on that same date by the Valens entities. The shares were issued in reliance on Section 4(2) of the Securities Act of 1933, as amended, since the foregoing issuances did not involve a public offering, the recipient had access to information that would be included in a registration statement, the recipient took the shares for investment and not resale, and we took appropriate measures to restrict resale.

On January 30, 2008 we issued 167,101 shares of our common stock to Prime representing payment of the stock fee due to Prime for the three-month period ended December 31, 2007 under the terms of the December 21, 2007 Consulting Agreement therewith. The shares were issued in reliance on Section 4(2). The shares were issued in reliance on Section 4(2) of the Securities Act of 1933, as amended, since the foregoing issuance did not involve a public offering, the recipient had access to information that would be included in a registration statement, the recipient took the shares for investment and not resale, and we took appropriate measures to restrict resale.

On December 17, 2007 we issued an aggregate of 275,000 shares of our common stock to our five advisory board members representing payment of the quarterly fee for the three-month period ended October 31, 2007 (25,000 shares) and the annual fee for the year ended October 5, 2007 (250,000 shares). The shares were issued in reliance on Section 4(2) of the Securities Act of 1933, as amended, since the foregoing issuance did not involve a public offering, the recipient had access to information that would be included in a registration statement, the recipient took the shares for investment and not resale, and we took appropriate measures to restrict resale.

On September 19, 2007 we issued 300,000 five year common stock purchase warrants with an exercise price of $0.48 per share to a financial advisor as a finder’s fee. The Warrants were issued in reliance on Section 4(2) of the Securities Act of 1933, as amended, since the foregoing issuance did not involve a public offering, the recipient had access to information that would be included in a registration statement, the recipient took the shares for investment and not resale, and we took appropriate measures to restrict resale.

On September 19, 2007 we issued 1,928,375 shares of our common stock to Prime. The shares were issued in reliance on Section 4(2) of the Securities Act of 1933, as amended, since the foregoing issuance did not involve a public offering, the recipient had access to information that would be included in a registration statement, the recipient took the shares for investment and not resale, and we took appropriate measures to restrict resale.

On September 18, 2007 we issued 976,353 and 976,773 common stock purchase warrants to Valens Offshore SPV II, Corp. and Valens U.S. SPV I, LLC, respectively. The warrants we issued in reliance on Section 4(2) of the Securities Act of 1933, as amended, since the foregoing issuance did not involve a public offering, the recipient had access to information that would be included in a registration statement, the recipient took the shares for investment and not resale, and we took appropriate measures to restrict resale.

On August 30, 2007 we issued an aggregate of 100,000 shares of our common stock in connection with an aggregate of $250,000 in bridge loans we received from two persons on or about August 20, 2007. The shares were issued in reliance on Section 4(2) of the Securities Act of 1933, as amended, since the foregoing issuance did not involve a public offering, the recipient had access to information that would be included in a registration statement, the recipient took the shares for investment and not resale, and we took appropriate measures to restrict resale.

On August 30, 2007 we issued two common stock purchase warrants to one person, each dated August 30, 2007 pursuant to the terms of $250,000 promissory notes dated April 10, 2007 and May 15, 2007. Each warrant is exercisable for a period of three years from the date of issuance. One warrant is exercisable for the purchase of up to 298,333 shares of our common stock at an exercise price of $1.17 per share. The other warrant is exercisable for the purchase of up to 182,249 shares of our common stock at an exercise price of $1.92 per share. Each of the warrants was issued in reliance on Section 4(2) of the Securities Act of 1933, as amended, since the foregoing issuance did not involve a public offering, the recipient had access to information that would be included in a registration statement, the recipient took the shares for investment and not resale, and we took appropriate measures to restrict resale.

On August 30, 2007 we issued an aggregate of 25,000 shares of our common stock to our five advisory board members representing payment of the quarterly fee due to them for the quarter ended July 31, 2007. The shares were issued in reliance on Section 4(2) of the Securities Act of 1933, as amended, since the foregoing issuance did not involve a public offering, the recipient had access to information that would be included in a registration statement, the recipient took the shares for investment and not resale, and we took appropriate measures to restrict resale.

On August 27, 2007 we issued 27,170 shares to one person pursuant to a January 1, 2007 Consulting Agreement. The shares were issued in reliance on Section 4(2) of the Securities Act of 1933, as amended, since the foregoing issuance did not involve a public offering, the recipient had access to information that would be included in a registration statement, the recipient took the shares for investment and not resale, and we took appropriate measures to restrict resale.

On July 6, 2007 we issued 1,832,769 shares of our common stock to one person pursuant to a June 21, 2007 Purchase and Sale Agreement. The shares were issued in reliance on Section 4(2) of the Securities Act of 1933, as amended, since the foregoing issuance did not involve a public offering, the recipient had access to information that would be included in a registration statement, the recipient took the shares for investment and not for resale, and we took appropriate measures to restrict resale.

On May 11, 2007 we issued an aggregate of 25,000 shares of our common stock to our five advisory board members representing payment of the quarterly fee due to them for the quarter ended April 30, 2007. The shares were issued in reliance on Section 4(2) of the Securities Act of 1933, as amended, since the foregoing issuances did not involve a public offering, the recipient had access to information that would be included in a registration statement, the recipient took the shares for investment and not resale, and we took appropriate measures to restrict resale.

On March 30, 2007 we issued a $500,000 convertible promissory note to one non-US purchaser in an offshore transaction in reliance on Regulation S under the Securities Act of 1933, as amended.

On February 27, 2007 we issued an aggregate of 25,000 shares of our common stock to our five advisory board members representing payment of the quarterly fee due to them for the quarter ended January 31, 2007. The shares were issued in reliance on Section 4(2) of the Securities Act of 1933, as amended, since the foregoing issuances did not involve a public offering, the recipient had access to information that would be included in a registration statement, the recipient took the shares for investment and not resale, and we took appropriate measures to restrict resale.

On February 1, 2007 we issued 800,000 units at a price of $2.50 per unit, or $2 million on an aggregate basis, to one non-US purchaser in an offshore transaction in reliance on Regulation S under the Securities Act of 1933, as amended. Each unit consisted of one share of our common stock and one common stock purchase warrant exercisable for the purchase of an additional share of common stock. Each warrant is exercisable for a period of three years at an exercise price of $3.50 per share.

On December 4, 2006 we issued 100,000 shares of our common stock to one non-US person in connection with an April 2006 offshore transaction in reliance on Regulation S under the Securities Act of 1933, as amended. The subscription proceeds from such sale were received by us on April 21, 2006.

On November 29, 2006 we issued an aggregate of 7,145 shares of our common stock to our five advisory board members representing payment of the prorated quarterly fee due to them for the quarter ended October 31, 2006. The shares were issued in reliance on Section 4(2) of the Securities Act of 1933, as amended, since the foregoing issuance did not involve a public offering, the recipient had access to information that would be included in a registration statement, the recipient took the shares for investment and not resale, and we took appropriate measures to restrict resale.

On November 13, 2006 we sold 400,000 units at a price of approximately $2.50 per unit, or $1 million on an aggregate basis, to one non-US purchaser in an offshore transaction in reliance on Regulation S under the Securities Act of 1933, as amended. Each unit consisted of one share of our common stock and one common stock purchase warrant exercisable for the purchase of an additional share of common stock. Each warrant is exercisable for a period of three years at an exercise price of $3.50 per share. The 400,000 shares comprising part of the units were issued on February 6, 2007.

On October 2, 2006 we sold 400,000 units at a price of approximately $2.50 per unit, or $1 million on an aggregate basis, to one non-US purchaser in an offshore transaction in reliance on Regulation S under the Securities Act of 1933, as amended. Each unit consisted of one share of our common stock and one common stock purchase warrant exercisable for the purchase of an additional share of common stock. Each warrant is exercisable for a period of three years at an exercise price of $3.50 per share. The 400,000 shares comprising part of the units were issued on February 6, 2007.

On August 28, 2006 we sold 555,555 units at a price of approximately $3.60 per unit, or $2 million on an aggregate basis, to one non-US person in an offshore transaction in reliance on Regulation S under the Securities Act of 1933, as amended. Each unit consists of one share of our common stock and one common stock purchase warrant exercisable for the purchase of an additional share of common stock. Each warrant is exercisable for a period of three years at an exercise price of $5.00 per share.

On August 11, 2006 we sold 350,000 units at a price of $1.00 per unit, or $350,000 on an aggregate basis, to one non-US person in an offshore transaction in reliance on Regulation S under the Securities Act of 1933, as amended. Each unit consists of one share of our common stock and one common stock purchase warrant exercisable for the purchase of an additional share of common stock. Each warrant is exercisable for a period of three years at an exercise price of $1.70 per share.

On July 27, 2006 we sold 650,000 units at a price of $1.00 per unit, or $650,000 on an aggregate basis, to one non-US person in an offshore transaction in reliance on Regulation S under the Securities Act of 1933, as amended. Each unit consists of one share of our common stock and one common stock purchase warrant exercisable for the purchase of an additional share of common stock. Each warrant is exercisable for a period of three years at an exercise price of $1.70 per share.

On May 9, 2006 we sold 1,250,000 units at a price of $0.80 per unit or $1 million on an aggregate basis to one person in reliance on Regulation S under the Securities Act of 1933, as amended. Each unit consists of one share of our common stock and one common stock purchase warrant exercisable for the purchase of an additional share of common stock. Each warrant is exercisable for a period of 3 years at an exercise price of $1.60 per share.

In March 2006 we sold 100,000 shares of our common stock at a price of $0.50 per share or $50,000 on an aggregate basis to one person in reliance on Regulation S of the Securities Act of 1933, as amended.

Effective January 27, 2006, we issued 10 million shares of our restricted common stock to Massimiliano Pozzoni in consideration of our acquisition of certain Alaska oil & gas leases from Mr. Pozzoni. The sale of the shares to Mr. Pozzoni was made in reliance on Section 4(2) of the Securities Act of 1933, as amended.

Securities Authorized For Issuance Under Equity Compensation Plans

We have no stock option or other equity compensation plans and have never had any such plans.

ITEM 6.

PLAN OF OPERATION

We commenced operation as an oil and gas exploration and development company in February 2006. We presently are engaged in oil and gas activities in Alaska, Texas and Colorado. During the year ended April 30, 2007 we also participated in oil and gas exploration activities in Louisiana.

We only recently began to generate revenues. Our ability to develop and maintain a meaningful level of revenues from operations is dependent on our ability to successfully drill exploration and production wells and complete producing property acquisitions. At the present time, we own interests in two producing wells, which cover approximately 1,150 acres and produce about 500,000 standard cubic feet of gas and six barrels of oil per day, net to the Company.

Alaska Properties

In January and May 2006, we acquired oil and gas leases representing approximately 25,000 acres in the Cook Inlet basin and approximately 10,000 acres in the North Slope basin areas of Alaska. We currently maintain a 100% working interest ownership in our Alaska leases, but may elect to sell a portion of our interests at some point in the future.

In January 2008 we entered into an agreement with Savant Alaska LLC pursuant to which we agreed to assign to Savant certain of our interests in State of Alaska Lease ADL-390839 in exchange for our earning a working interest of up to 2% in a production unit if the test well Savant planned to drill on adjacent acreage was successful. The test well was drilled at the sole expense of Savant and its drilling partners. On April 17, 2008 Savant announced that the Kupcake-1 well had been drilled to its target depth of 10,686 feet but would be plugged and abandoned as it did not result in a commercial discovery of crude oil or natural gas reserves.

Colorado Properties

In June 2007 we acquired certain oil and gas interests and properties in northwest Colorado in an area covering more than 17,000 acres. These oil and gas interests are non-producing properties. We hold a 100% working interest in the leases comprising part of the acquired assets. The acquired leases expire in 2016. We currently are refining our development plans for the area. The purchase price for the interests and properties was approximately $1.4 million, together with an overriding royalty of one to three percent based on the applicable net revenue interest remaining after the landowner’s royalty and existing burdens have been deducted. The purchase price was paid in cash (approximately $345,000) and 1,832,769 shares of our restricted common stock ($1,064,000). In January 2007 we loaned $180,000 to the seller. Repayment of this loan, which bore interest at an annual rate of 5%, was received in full at the closing of the acquisition.

Texas Properties

On September 19, 2007 our newly formed, wholly owned subsidiary ICF Energy Corporation (“ICF”) acquired certain oil and gas properties and related assets (the “Prime Assets”) in Brazoria County, Texas from Prime Natural Resources, Inc. (“Prime”) for approximately $3.7 million, including closing and other transaction costs. The purchase price was paid with a combination of cash ($2.4 million), 1,928,375 shares of our restricted common stock valued at approximately $926,000, and the assumption of certain liabilities totaling approximately $343,000.

We financed the purchase of the Prime Assets through the issuance of secured term notes (the “Secured Notes”) to two purchasers (the “Purchasers”). The aggregate principal amount of the Secured Notes totaled $3,750,000. As a result of this transaction, the Purchasers became our and ICF's senior secured lenders. The Secured Notes, which mature on September 18, 2010 (the “Maturity Date”), provide for interest payments on the outstanding principal amount at the rate of 13% per annum. Amortizing payments of principal and interest are due monthly. In addition, we issued common stock purchase warrants to the Purchasers for the purchase of up to 1,953,126 shares of our common stock in connection with the issuance of the Secured Notes and reimbursed the Purchasers’ transaction related costs totaling $336,000.

We will require additional financing to fund development costs associated with our existing prospects as well as for any additional lease acquisitions. No assurance can be given that such additional financing will be available to us as and when needed or, if available, the terms on which it will be available.

We plan to spend up to $5 million during the year ending April 30, 2009 on exploration and development activities such as seismic data acquisition, additional lease acquisition, technical studies and participating in joint venture development and exploration drilling. We will require additional capital to finance these planned expenditures. There can be no assurance that we will be able to secure such additional financing or that any such financing will available on terms acceptable to us. We do not anticipate drilling on our Alaska properties during the next twelve months. Our primary efforts in Alaska will focus on acquiring additional seismic data, conducting further technical evaluation of our Alaska leases, and exploring opportunities to sell a portion of our Alaskan working interests in an effort to reduce our risk and financial exposure.

We may require additional financing to meet our working capital and debt service requirements, including the cost of reviewing and negotiating transactions and other ordinary general and administrative costs such as regulatory compliance, investor relations, consulting and advisory services, Internet/web hosting, executive compensation, office and general expenses, professional fees, travel and entertainment, and rent and related expenses. We estimate that the level of working capital needed for these general and administrative costs for the next 12 months will approximate $1 million. However, this estimate is subject to change, depending on the number of transactions in which we ultimately become involved. In addition, funding will be required for follow-on development of working interest obligations of any successful exploration prospects.

Oil and gas exploration requires significant outlays of capital and in many situations may offer a limited probability of success. We hope to enhance our chances for success by effectively using available technology, rigorously evaluating subsurface data, and, to the extent possible, managing dry hole and financial risks.

We intend to rely on synergistic partnering with sophisticated industry partners. Our ideal partner would tend to be a regionally focused independent oil and gas company that has a demonstrated understanding of the exploration area and technology required to exploit the opportunity as well as the financial resources required therefore. There can be no assurance that we will be able to successfully negotiate any such partnering agreement or raise the necessary financing to invest in such a venture, or that any such venture will yield us any revenues or profits.

We continue to target selected acquisitions of proved on-shore properties in the United States and Canada. We are biased toward acquisitions of long-lived reserves and intend to target negotiated acquisitions. By focusing our efforts on negotiated acquisitions, we seek to avoid competitive bidding situations that are the norm for the sale of these assets and typically result in higher sales prices.

We face competition from firms that are more established, successful, better capitalized and, in many instances, willing to pay more for properties than what we might consider prudent. Our success will depend on the execution of our business plan to

•

identify available transactions;

•

effectively evaluate which transactions are most promising; and

•

negotiate creative transaction structures.

Presently our staff consists of our two executive officers, John Folnovic and Massimiliano Pozzoni. We do not expect significant changes in our number of employees during the next twelve months.

We intend to outsource certain technical and administrative functions on an as-needed basis in order to conduct our operating activities. Our management team will select and hire these contractors and manage and evaluate their work performance.

Business Strategy

We plan to grow our business onshore in the U.S. through a balance of drilling and acquisition. We will focus our efforts regionally to achieve economies of scale with predictable risk and bases of production. Our principal goals are to provide the Company and our shareholders with opportunity, growth and value.

After examining the fundamentals of the North American energy market over the last two years, we have positioned ourselves to pursue the strategies described above based on the following beliefs about the energy industry:

production depletion rates in North America will accelerate;

finding, development and operating costs will continue to increase; and

conventional oil and gas production will soon reach a peak from which there will be no recovery, regardless of higher prices or improved technology.

We believe that these trends are becoming more and more evident each day. The major oil and gas companies have de-emphasized their search for new conventional oil and gas reserves in North America. As a result of the increased depletion rates and reduced discovery efforts, North American conventional production has declined by one-third of previous levels. It is our belief that emerging oil and gas companies, such as us, can effectively position themselves to take advantage of this opportunity. To that end, we have adopted the following objectives:

Lease potentially significant productive acreage in under-explored, neglected, but still highly productive basins such as the Cook Inlet and Beaufort Sea areas in Alaska;

Lease as much of the potentially productive natural gas acreage in unconventional gas plays that we can identify;

Focus exclusively onshore in North America (and away from geopolitical unrest) where we can benefit from the highly trained and experienced workforce, large available seismic and well control database, and readily available drilling and production technologies;

Acquire all of the existing conventional natural gas and oil production and reserves we can afford; and

Engage in low to medium risk exploration and development of oil and gas reserves with sophisticated, industry-leading partners.

We believe that natural gas demand is likely to steadily increase as the U.S. economy grows and as natural gas is increasingly seen as the most practical way to reduce greenhouse gas emissions and reduce the risk of climate change. We believe these factors will lead to continuing natural gas price strength in the years to come. Better technologies applied to unconventional reservoirs in a time of structurally higher natural gas prices will result in the discovery and development of significant new natural gas reserves.

As a result of these trends, we have expanded our focus beyond just Alaska. During the past two years we have aggressively pursued new unconventional gas resource plays with potentially substantial upsides. We believe that this course of action will allow us to be well positioned for future success. Our June 2007 Colorado acquisition is an example of this strategy. Our tactics to execute our strategies and achieve our goals and objectives include:

•

Increasing development of internally generated prospects and opportunities;

•

Funding prospects developed by proven geoscientists;

•

Completing negotiated acquisitions of proved properties;

•

Maintaining tight control of general and administrative and geological and geophysical costs by keeping employee levels low and outsourcing as much of our activities as possible;

•

Designing creative deal structures to access acreage, seismic data, prospects and capital;

•

Arranging necessary financing to execute the business plan; and

•

Using equity ownership incentives to align the interests of our employees and management with that of our shareholders.

As we pursue these objectives, our business will be subject to the risks typically associated with a start-up company in the competitive and volatile oil and gas resources business.

Going Concern

In its report dated July 29, 2008, our auditors, Malone and Bailey, PC expressed an opinion that there is substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that may result from the outcome of this uncertainty. We have generated minimal revenues since our inception. We have an accumulated deficit of $21,005,787 as of April 30, 2008. Our continuation as a going concern is dependent upon future events, including our ability to raise additional capital and to generate positive cash flows.

ITEM 7.

FINANCIAL STATEMENTS

The consolidated financial statements are included beginning immediately following the signature page to this report. See Item 13 for a list of the consolidated financial statements included herein.

ITEM 8.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING, AND FINANCIAL DISCLOSURE

Williams and Webster, P.S., was our principal independent accountant for the fiscal year ended April 30, 2006. On August 31, 2006, we terminated their engagement and on September 1, 2006 we engaged Malone & Bailey, PC, as our principal independent accountant for the fiscal year ending April 30, 2007. The termination of Williams and Webster, P.S. and appointment of Malone & Bailey, PC was approved by our board of directors.

The report of Williams and Webster, P.S. on our financial statements for the year ended April 30, 2006 contained no adverse opinion or disclaimer of opinion, nor was it qualified or modified as to uncertainty, audit scope or accounting principle except that such report was modified to include an explanatory paragraph with respect to our ability, in light of our lack of revenues and history of losses, to continue as a going concern.

In connection with the audit for the year ended April 30, 2006 and during the subsequent interim period through August 31, 2006, there were no disagreements between us and Williams and Webster, P.S. on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to their satisfaction, would have caused Williams and Webster, P.S. to make reference to the subject matter of the disagreement in connection with their reports.

In connection with the audit of the fiscal year ended April 30, 2006 and during the subsequent interim period through August 31, 2006, Williams and Webster, P.S. did not advise us that:

internal controls necessary for us to develop reliable financial statements did not exist;

information had come to their attention that led them to no longer be able to rely on our management’s representations or made them unwilling to be associated with the financial statements prepared by our management;

there was a need to expand significantly the scope of their audit, or that information had come to their attention during such time periods that if further investigated might materially impact the fairness or reliability of either a previously issued audit report or the underlying financial statement; or the financial statements issued or to be issued covering the fiscal periods subsequent to the date of the most recent financial statements covered by an audit report; or

information had come to their attention that they had concluded materially impacted the fairness or reliability of either (i) a previously issued audit report or the underlying financial statements, or (ii) the financial statements issued or to be issued covering the fiscal periods subsequent to the date of the most recent financial statements covered by an audit report.

Prior to the engagement of Malone & Bailey, PC we had no consultations or discussions with Malone & Bailey, PC regarding the application of accounting principles to a specific completed or contemplated transaction, or the type of audit opinion that might be rendered by them on our financial statements. Further, prior to their engagement, we received no oral or written advice from Malone & Bailey, PC of any kind.

ITEM 8A.

CONTROLS AND PROCEDURES

Evaluation of Our Disclosure Controls and Internal Controls

Under the supervision and with the participation of our senior management, including our chief executive officer and chief financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this annual report (the “Evaluation Date”). Based on this evaluation, our chief executive officer and chief financial officer concluded as of the Evaluation Date that our disclosure controls and procedures were effective such that the information relating to us, including our consolidated subsidiaries, required to be disclosed in our Securities and Exchange Commission (“SEC”) reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes of accounting principles generally accepted in the United States. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. In evaluating the effectiveness of our internal control over financial reporting, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control – Integrated Framework.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.

Officers’ Certifications

Appearing as exhibits to this Annual Report are “Certifications” of our Chief Executive Officer and Chief Financial Officer. The Certifications are required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (the “Section 302 Certifications”). This section of the Annual Report contains information concerning the Controls Evaluation referred to in the Section 302 Certification. This information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the quarter ended April 30, 2008 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

ITEM 8B.

OTHER INFORMATION

Not applicable.

PART III

ITEM 9.

DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Executive Officers, Directors and Key Employees

Directors serve until the next annual meeting of the stockholders; until their successors are elected or appointed and qualified, or until their prior resignation or removal. Officers serve for such terms as determined by our board of directors. Each officer holds office until such officer’s successor is elected or appointed and qualified or until such officer’s earlier resignation or removal. No family relationships exist between any of our present directors and officers.

The following table sets forth certain information, as of July 14, 2008, with respect to our directors and executive officers.

Certain biographical information of our directors and officers is set forth below.

John I. Folnovic

Mr. Folnovic has served as our President, Chief Executive Officer and as a Director since June 1, 2006. Mr. Folnovic is an engineer and a 26-year petroleum industry veteran. He formerly served as Vice President and Chief Operating Officer of Dominion Energy Canada Ltd. and President and Chief Executive Officer of Sunmatrix Petroleum Corporation. Mr. Folnovic also has held senior leadership positions in BP Canada and Amoco Canada gas and oil business units. He has led multidisciplinary teams of geologists, geophysicists, engineers, operations and administration staff in managing oil and gas assets generating $300 million in revenue and an annual capital budget of $200 million. He played an instrumental role in the development of BP Canada’s heavy oil assets that were subsequently sold to Canadian Natural Resources and Penn West Petroleum for $1.6 billion. Mr. Folnovic directed operations and a portfolio of assets that produced 60,000 boepd of oil and gas, including thermal heavy oil assets producing 30,000 bpd of bitumen. He was a recipient of the Chairman's Award for his work in implementing project management, risk analysis systems and portfolio management processes within Amoco Canada. He has held numerous technical, business, and operational assignments throughout Northern Canada. From 2003 through May 2006, Mr. Folnovic was Chief Executive Officer of Petrodell Energy Inc., a private oil and gas company based in Alberta, Canada. From 2000 to 2003 Mr. Folnovic served as a Managing Partner of the business consulting firm Myexecutive Inc. and was an acting CEO and a Director of Sunmatrix Petroleum Corporation from 2001 to 2003. From 1998 to 2000, Mr. Folnovic was a Vice President and the Chief Operating Officer of Dominion Energy Canada Ltd.

Massimiliano Pozzoni

Mr. Pozzoni has served as an executive officer and a Director since January 27, 2006. Mr. Pozzoni served as our sole executive officer from January 27, 2006 until June 1, 2006. From June 1, 2006 to the present, Mr. Pozzoni has served as our Secretary, Treasurer, and Chief Financial and Accounting Officer. From March 21, 2008 to the present, Mr. Pozzoni has served as a Director and as the President and Chief Executive and Financial Officer for Cobra Oil & Gas Company, a U.S. public company involved in exploration stage oil and gas activities. From March 2004 until January 18, 2007 Mr. Pozzoni served as an executive officer and Director of Falcon Natural Gas Corp., a U.S. public company engaged in oil and gas operations. From November 2003 to June 1, 2005, Mr. Pozzoni served as the Chief Executive Officer and Director of Gulf Coast Oil & Gas Inc., formerly Otish Mountain Diamond Company, a public reporting company. From September 2001 to July 2003, Mr. Pozzoni attended London Business School on a full-time basis. From June 2002 to August 2002, Mr. Pozzoni was employed as a Summer Associate at Lehman Brothers Inc. From June 1998 to June 2001, Mr. Pozzoni worked as an engineer at Schlumberger Oilfield Services. Mr. Pozzoni received a Bachelor degree in International Business in 1998 from the University of Kansas and an MBA degree from the London Business School in 2003.

Employment Agreements

Effective June 1, 2006 we entered into an Executive Employment Agreement with John Folnovic pursuant to which Mr. Folnovic serves as our President and Chief Executive Officer. The Agreement was extended (the “Amendment”) effective each of June 1, 2007 and 2008 for an additional one-year term. The Executive Employment Agreement, as extended, has a one-year term and is renewable for up to two additional one year terms upon the mutual written consent of the parties. In consideration of Mr. Folnovic’s serving as an executive officer, we are paying or providing him with (i) a base annual salary of $120,000; (ii) reimbursement of applicable business expenses; (iii) the right to participate in all health insurance or other employee benefit plans that we may adopt in the future; and (iv) the right to participate in any incentive programs, stock option plans or bonus programs that we may implement in the future.

The Executive Employment Agreement and the employment relationship created thereby, will terminate upon the death or disability of Mr. Folnovic, and may be terminated by us with or without cause or by Mr. Folnovic for good reason. In the event the Executive Employment Agreement is terminated by us without cause or by Mr. Folnovic for good reason, Mr. Folnovic will be entitled to receive, in addition to any accrued salary, an amount equal to the greater of (i) three months salary or (ii) the remaining salary for the then current term.

On May 28, 2007 John Folnovic entered into a Stock Purchase Agreement with Massimiliano Pozzoni, our principal shareholder, pursuant to which Mr. Pozzoni sold 15,500,000 shares of our common stock to Mr. Folnovic at a price of $0.015 per share or an aggregate of $232,500. Although Mr. Folnovic was given good and marketable title to such shares free and clear of any and all liens, claims, encumbrances and adverse interest of any kind, Mr. Folnovic is not required to pay for the shares until 30 days following the occurrence of a “Liquidity Event”. For purposes of the Stock Purchase Agreement, a Liquidity Event is defined as (i) a Qualified IPO, (ii) a sale of any or all of the shares by Mr. Folnovic resulting in proceeds to Mr. Folnovic with a value of at least $1 million, (iii) receipt by Mr. Folnovic of cash or readily marketable property as dividends from us with respect to the shares (other than stock dividends) in an aggregate amount of at least $1 million or (iv) merger or consolidation of us resulting in cash proceeds or readily marketable proceeds to Mr. Folnovic with respect to the shares of at least $1 million. The term “Qualified IPO” means our first underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, provided that (a) such registration covers the offer and sale of common stock with aggregate proceeds to us of at least $20 million, (b) such common stock is listed for trading either on the New York Stock Exchange, American Stock Exchange or the NASDAQ National Market, and (c) the per share public offering price for such common stock net of underwriter discounts and commissions exceeds $2.50 per share (adjusted appropriately for stock splits, stock dividends, recapitalizations and the like). In the event a Liquidity Event does not occur prior to June 30, 2017, Mr. Folnovic has the right to rescind his acquisition of the shares. In such event, Mr. Folnovic will be entitled to retain all dividends, distributions, or other rights or profits received by him as a result of his ownership of the shares.

The Executive Employment Agreement originally provided Mr. Folnovic with the right to receive one million shares of our common stock at the end of every year of service under the Executive Employment Agreement up to a maximum aggregate of five million shares. In consideration of the Stock Purchase Agreement, Mr. Folnovic agreed to waive this right as set forth in the Amendment.

Massimiliano Pozzoni works for us pursuant to a verbal arrangement under which we currently pay Mr. Pozzoni $5,000 per month and reimburse his reasonable business expenses. Prior to February 1, 2008 we were paying Mr. Pozzoni $10,000 per month.

Term of Office

Our directors are appointed for a period of one year or until such time as their replacements have been elected by our shareholders. The officers of the Company are appointed by our board of directors and hold office until their resignation or removal.

Audit Committee

We do not have a standing audit committee, an audit committee financial expert, or any committee or person performing a similar function. We currently have limited working capital and revenues. Management does not believe that it would be in our best interests at this time to retain independent directors to sit on an audit committee. If we are able to raise sufficient financing in the future, then we will likely seek out and retain independent directors and form audit, compensation, and other applicable committees.

Board of Directors

Our only directors are our two executive officers, neither of which is independent. We do not pay them for attending board meetings. They are reimbursed, however, for their expenses, if any, for attendance at meetings of the Board of Directors. Our Board of Directors may designate from among its members an executive committee and one or more other committees but has not done so to date. We do not have a nominating committee or a nominating committee charter. Further, we do not have a policy with regard to the consideration of any director candidates recommended by security holders. To date this has not been a problem as no security holders have made any such recommendations. Our two directors perform all functions that would otherwise be performed by committees. Given the present size of our board it is not practical for us to have committees. If we are able to grow our business and increase our operations we intend to expand the size of our board and allocate responsibilities accordingly.

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Exchange Act, as amended, requires that our directors, executive officers and persons who own more than 10% of a class of our equity securities that are registered under the Exchange Act to file with the Commission initial reports of ownership and reports of changes of ownership of such registered securities.

To our knowledge, based solely on a review of copies of such reports, no person required to file such a report failed to file a required report with respect to the fiscal year covered by this report.

Code of Ethics

On August 1, 2006 we adopted a Code of Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, persons performing similar functions as well as to our directors and employees. A copy of our Code of Ethics will be provided to any person requesting same without charge. To request a copy of our Code of Ethics please make written request to our President c/o True North Energy Corporation at 2 Allen Center, 1200 Smith Street, 16 ^th Floor, Houston, TC 77002.

ITEM 10.

EXECUTIVE COMPENSATION

The following table sets forth information concerning the total compensation paid or accrued by us during the two fiscal years ended April 30, 2008 and 2007 to (i) all individuals that served as our principal executive officer or acted in a similar capacity for us at any time during the fiscal year ended April 30, 2008; (ii) all individuals that serve as our principal financial officer or acted in a similar capacity for us at any time during the fiscal year ended April 30, 2008; and (iii) all individuals that served as executive officers of ours at any time during the fiscal year ended April 30, 2008 that received annual compensation during the fiscal year ended April 30, 2008 in excess of $100,000.

Summary Compensation Table

Name and Principal Position	Year		Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Non- Equity Incentive Plan Compensation ($)		Change in Pension Value and Non- qualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Total ($)
(a)	(b)		(c)		(d)		(e)		(f)		(g)		(h)		(i)		(j)

John Folnovic, ⁽¹⁾ Chief Executive Officer		2008 2007		120,000 117,828		0 0		0 0		0 0		0 0		0 0		0 0		0 0

Massimiliano Pozzoni, Chief Financial Officer		2008 2007		105,000 130,000		0 0		0 0		0 0		0 0		0 0		0 0		0 0

(1)	John Folnovic has served as our Chief Executive Officer and as a Director since June 1, 2006.

(2)	Massimiliano Pozzoni served as our sole executive officer and as a Director from January 27, 2006 until June 1, 2006. From June 1, 2006 to the present, Mr. Pozzoni has continued to serve as our Secretary, Treasurer, Chief Financial and Accounting Officer and as a Director.

We have not issued any stock options or maintained any stock option or other incentive plans since our inception. We have no plans in place and have never maintained any plans that provide for the payment of retirement benefits or benefits that will be paid primarily following retirement including, but not limited to, tax qualified deferred benefit plans, supplemental executive retirement plans, tax-qualified deferred contribution plans and nonqualified deferred contribution plans. Similarly, except as provided herein with respect to our Executive Employment Agreement with John Folnovic, we have no contracts, agreements, plans or arrangements, whether written or unwritten, that provide for payments to the named executive officers or any other persons following, or in connection with the resignation, retirement or other termination of a named executive officer, or a change in control of us or a change in a named executive officer’s responsibilities following a change in control.

Compensation of Directors

None of our directors receive any compensation for serving as such, for serving on committees of the board of directors or for special assignments. During the fiscal year ended April 30, 2008 there were no other arrangements between us and our directors that resulted in our making payments to any of our directors for any services provided to us by them as directors.

ITEM 11.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth information with respect to the beneficial ownership of our common stock known by us as of July 23, 2008 by:

each person or entity known by us to be the beneficial owner of more than 5% of our common stock;

each of our directors;

each of our executive officers; and

all of our directors and executive officers as a group.

The percentages in the table have been calculated on the basis of treating as outstanding for a particular person, all shares of our common stock outstanding on such date and all shares of our common stock issuable to such holder in the event of exercise of outstanding options, warrants, rights or conversion privileges owned by such person at said date which are exercisable within 60 days of July 23, 2008. Except as otherwise indicated, the persons listed below have sole voting and investment power with respect to all shares of our common stock owned by them, except to the extent such power may be shared with a spouse.

Name and Address of Beneficial Owner	Title of Class	Amount and Nature of Beneficial Ownership(1)	Percentage of Class(2)

Massimiliano Pozzoni 2 Allen Center 1200 Smith Street 16 ^th Floor Houston, TX 77002	Common Stock, par value $0.0001 per share	19,250,000 Shares (Direct)	27.49	%

John Folnovic 2 Allen Center 1200 Smith Street 16 ^th Floor Houston, TX 77002	Common Stock, par value $0.0001 per share	15,500,000 Shares	22.14	%

All officers and directors as a group (2 persons)	Common Stock, par value $0.0001 per share	34,750,000 Shares	49.63	%

(1)

As used herein, the term beneficial ownership with respect to a security is defined by Rule 13d-3 under the Securities Exchange Act of 1934 as consisting of sole or shared voting power (including the power to vote or direct the vote) and/or sole or shared investment power (including the power to dispose or direct the disposition of) with respect to the security through any contract, arrangement, understanding, relationship or otherwise, including a right to acquire such power(s) during the next 60 days. Unless otherwise noted, beneficial ownership consists of sole ownership, voting and investment rights.

(2)

There were 71,016,758 shares of common stock issued and outstanding on July23, 2008.

Changes in Control

Not Applicable.

ITEM 12.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Effective June 1, 2006 we entered into an Executive Employment Agreement with John Folnovic pursuant to which Mr. Folnovic serves as our President and Chief Executive Officer. See Item 9. Employment Agreements.

Massimiliano Pozzoni serves as our Secretary, Treasurer and Chief Financial and Accounting Officer under a verbal month-to-month agreement. See Item 9. Employment Agreements.

Effective January 27, 2006 we issued ten million shares of our restricted common stock to Massimiliano Pozzoni in consideration of our acquisition of certain State of Alaska oil and gas leases from Mr. Pozzoni. See Item 5, Recent Sales of Registered Securities and Item 1, Description of Business.

We believe that all related party transactions have been entered into upon terms no less favorable to us than those that could be obtained from unaffiliated third parties. Our reasonable belief of fair value is based upon proximate similar transactions with third parties or attempts to obtain the consideration from third parties.

ITEM 13. EXHIBITS

Financial Statements		Page

Report of Independent Registered Public Accounting Firm		F-2

Consolidated Balance Sheets as of April 30, 2008 and 2007		F-3

Consolidated Statements of Operations for the years ended April 30, 2008 and 2007		F-4

Consolidated Statements of Cash Flows for the years ended April 30, 2008 and 2007		F-5

Consolidated Statements of Changes in Stockholders’ Equity for the years
ended April 30, 2007 and 2008		F-6

Notes to Consolidated Financial Statements		F-7

Financial Statement Schedules

All financial statement schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.

Exhibits

The following exhibits are included as part of this report:

Exhibit No.	SEC Report Reference No.	Description

3.1	3.1	Articles of Incorporation (1)

3.2	3.2	By-Laws (1)

3.3	Appendix A	Form of Certificate of Amendment to Articles of Incorporation (2)

3.4	Appendix A	Form of Certificate of Amendment to Articles of Incorporation (3)

3.5	3.1	Certificate of Amendment to Articles of Incorporation as filed with the Nevada Secretary of State on October 9, 2007 (20)

4.1	4.1	$500,000 Convertible Promissory Note of Registrant dated March 30, 2007 (4)

4.2	4.1	Secured $125,000 Promissory Note of Registrant dated August 20, 2007 issued to T. Swanson, Inc. (16)

4.3	4.2	Secured $125,000 Promissory Note of Registrant dated August 20, 2007 issued to Uphill Limited Liability Company, Steven J. Revenig, Trustee (16)

4.4	4.1	Convertible $250,000 Promissory Note of Registrant dated April 10, 2007 issued to EH&P Investments AG (18)

4.5	4.2	Convertible $250,000 Promissory Note of Registrant dated May 15, 2007 issued to EH&P Investments AG (18)

4.6	4.3	Warrant of Registrant dated August 30, 2007 issued to EH&P Investments AG for the exercise of 182,249 shares (18)

4.7	4.4	Warrant of Registrant dated August 30, 2007 issued to EH&P Investments AG for the exercise of 298,330 shares (18)

4.8	4.1	$1,874,596 Secured Term Note of Registrant and ICF Energy Corp. dated September 18, 2007 issued to Valens Offshore SPV II, Corp. (19)

4.9	4.2	$1,875,404 Secured Term Note of Registrant and ICF Energy Corp. dated September 18, 2007 issued to Valens Offshore SPV I, LLC (19)

4.10	4.3	Warrant of Registrant dated September 18, 2007 issued to Valens Offshore SPV II, Corp. for the exercise of 976,353 shares (19)

4.11	4.4	Warrant of Registrant dated September 18, 2007 issued to Valens U.S. SPV I, LLC for the exercise of 976,773 shares (19)

4.12	4.5	Warrant of ICF Energy Corporation dated September 18, 2007 issued to Valens Offshore SPV II, Corp. for the exercise of 499 shares (19)

4.13	4.6	Warrant of ICF Energy Corporation dated September 18, 2007 issued to Valens U.S. SPV I, LLC for the exercise of 501 shares (19)

4.14	4.1	Warrant of Registrant dated September 19, 2007 issued to Energy Capital Solutions, LP for the exercise of 300,000 shares (20)

4.15	4.1	$1,964.195.80 Amended and Restated Secured Term Note of Registrant and ICF Energy Corp. dated March 31, 2008 issued to Valens Offshore SPV II, Corp. (22)

4.16	4.2	$1,967,687.04 Amended and Restated Secured Term Note of Registrant and ICF Energy Corp. dated March 31, 2008 issued to Valens U.S. SPV I, LLC (22)

10.1	10.1	Asset Purchase Agreement, dated January 23, 2006 among Registrant, Massimiliano Pozzoni and Kevin Moe (5)

10.2	10.2	Purchase Agreement dated as of May 9, 2006 between Registrant and Daniel K. Donkel and Samuel H. Cade (6)

10.3	10.1	Employment Agreement dated as of June 1, 2006 between Registrant and John Folnovic (7)

10.4	10.1	Participation Agreement effective as of June 7, 2006 between Registrant and Bayou City Exploration Inc. regarding the Frost National Bank Deep Prospect (8)

10.5	10.2	Participation Agreement effective as of June 7, 2006 between Registrant and Bayou City Exploration Inc. regarding the Windfall Prospect (8)

10.6	10.3	Participation Agreement effective as of June 7, 2006 between Registrant and Bayou City Exploration Inc. regarding the Zodiac II Prospect (8)

10.7	10.1	Participation Agreement effective as of July 28, 2006 between Registrant and Whitmar Exploration Company regarding the Deweyville Prospect (9)

10.8	10.2	Amendment to Purchase Agreement dated July 31, 2006 between Registrant and Daniel K. Donkel and Samuel H. Cade (9)

10.9	10.1	Development Agreement effective as of October 1, 2006 between Registrant and BP America Production Company (10)

10.10	10.1	Form of Engagement Letter Agreement with Advisory Board Members dated October 5, 2006 (11)

10.11	10.2	Letter Agreement dated November 13,2 006 (executed November 22, 2006) with Savant Alaska LLC regarding Kupcake Prospect (11)

10.12	10.3	Letter Agreement dated December 1, 2006 with BP America Production Company (11)

10.13	10.1	Development Agreement effective as of January 1, 2007 between Registrant and BP America Production Company (12)

10.14	10.1	Letter Agreement dated March 20, 2007 between Registrant and BP America Production Company (13)

10.15	10.2	Letter Agreement dated March 27, 2007 between Registrant and BP America Production Company (13)

10.16	10.1	Letter of Intent dated March 20, 2007 between Registrant and each of Angel LLC, CN Energy LLC, Swanson Energy Company, LLC, Fuel Exploration, LLC, MHBL Energy, LLC and Rocky Mountain Rig, LLC (4)

10.17	10.1	Purchase and Sale Agreement dated June 21, 2007 between Registrant and Constance Knight (14)

10.18	10.18	Amendment to Executive Employment Agreement between Registrant and John Folnovic made as of May 28, 2007 (15)

10.19	10.1	Purchase and Sale Agreement made as of August 31, 2007 by and between Prime Natural Resources, Inc. and ICF Energy Corporation (17)

10.20	10.01	Securities Purchase Agreement dated as of September 18, 2007 among Registrant, ICF Energy Corporation, Valens U.S. SPV I, LLC as Agent and Valens U.S. SPV I, LLC and Valens Offshore SPV II, Corp. as Purchasers (19)

10.21	10.02	Registration Rights Agreement dated as of September 18, 2007 between Registrant and Valens Offshore SPV II, Corp. (19)

10.22	10.03	Registration Rights Agreement dated as of September 18, 2007 between Registrant and Valens U.S. SPV I, LLC. (19)

10.23	10.04	Registration Rights Agreement dated as of September 18, 2007 between ICF Energy Corp. and Valens Offshore SPV II, Corp. (19)

10.24	10.05	Registration Rights Agreement dated as of September 18, 2007 between ICF Energy Corp. and Valens U.S. SPV I, LLC. (19)

10.25	10.06	Stock Pledge Agreement dated as of September 18, 2007 between Valens U.S. SPV I, LLC, as Agent, and Registrant. (19)

10.26	10.07	Subordination Agreement dated as of September 18, 2007 among EH&P Investments AG, Valens U.S. SPV I, LLC, as Agent, Registrant, and ICF Energy Corporation. (19)

10.27	10.08	Assignment, Bill of Sale and Conveyance dated September 18, 2007 between Prime Natural Resources, Inc. and ICF Energy Corporation. (19)

10.28	10.09	Collateral Assignment dated as of September 18, 2007 among Registrant, ICF Energy Corporation and Valens U.S. SPV I, LLC, as Agent. (19)

10.29	10.10	Master Security Agreement dated as of September 18, 2007 among Registrant, ICF Energy Corporation and Valens U.S. SPV I, LLC, as Agent. (19)

10.30	10.11	Funds Escrow Agreement dated as of September 18, 2007 among Registrant, ICF Energy Corporation, Valens U.S. SPV I, LLC, as Agent, Valens Offshore SPV II, Corp. and Loeb & Loeb, LLP. (19)

10.31	10.12	Agreement to Execute Shareholders’ Agreement dated as of September 18, 2007 among Registrant, ICF Energy Corporation and Valens U.S. SPV I, LLC and Valens Offshore SPV II, Corp. (19)

10.32	10.13	Post Closing Letter Agreement dated as of September 18, 2007 between Registrant and Valens U.S. SPV I, LLC. (19)

10.33	10.14	Piggyback Registration Rights Agreement dated as of September 18, 2007 between Registrant and Prime Natural Resources, Inc. (19)

10.34	10.1	Notes Amendment Agreement dated as of December 7, 2007 by and among Registrant, ICF Energy Corporation, Valens U.S. SPV I, LLC and Valens Offshore SPV II, Corp. (20)

10.35	10.2	Pooling Agreement effective as of July 1, 2007 between Savant Alaska, LLC and Registrant (20)

10.36	10.36	Consulting Agreement dated December 21, 2007 between Prime Natural Resources, Inc. and Registrant (21)

10.37	10.37	Acreage Contribution Contract effective as of January 23, 2008 between Savant Alaska, LLC and Registrant (21)

10.38	*	Consulting Agreement dated June 30, 2008 between Prime Natural Resources, Inc. and Registrant

10.39	10.1	Registration Rights Agreement dated as of March 31, 2008 among Registrant, Valens Offshore SPV II, Corp. and Valens U.S. SPV I, LLC (22)

10.40	10.2	Funds Escrow Agreement dated as of March 31, 2008 among Registrant, ICF Energy Corporation, Valens U.S. SPV I, LLC, Valens Offshore SPV II, Corp. and Loeb & Loeb, LLP. (22)

21	*	List of Subsidiaries of Registrant

23.1	*	Consent of Netherland, Sewell & Associates, Inc.

31.1	*	Rule 13(a) – 14(a) / 15(d) – 14(a) Certification of Principal Executive Officer

31.2	*	Rule 13(a) – 14(a) / 15(d) – 14(a) Certification of Principal Financial Officer

32.1	*	Rule 1350 Certificate of Chief Executive Officer

32.2	*	Rule 1350 Certificate of Chief Financial Officer

99.1	*	Estimated Reserves and Future Net Revenue Report prepared by Netherland, Sewell & Associates, Inc.

(1) Filed with the Securities and Exchange Commission on June 4, 2004 as an exhibit, numbered as indicated above, to the Registrant’s Registration Statement on Form SB-2 (Registration No. 333-116169), which exhibits are incorporated herein by reference.

(2) Filed with the Securities and Exchange Commission on February 24, 2006 as an exhibit, numbered as indicated above, to the Registrant’s Definitive Information Statement dated February 23, 2006, which exhibit is incorporated herein by reference.

(3) Filed with the Securities and Exchange Commission on May 29, 2007 as an exhibit, numbered as indicated above, to the Registrant’s Definitive Information Statement dated May 29, 2007, which exhibit is incorporated herein by reference.

(4) Filed with the Securities and Exchange Commission on April 5, 2007 as an exhibit, numbered as indicated above, to the Registrant’s Current Report on Form 8-K dated March 20, 2007, which exhibit is incorporated herein by reference.

(5) Filed with the Securities and Exchange Commission on January 27, 2006 as an exhibit, numbered as indicated above, to the Registrant’s Current Report on Form 8-K dated January 23, 2006, which exhibit is incorporated herein by reference.

(6) Filed with the Securities and Exchange Commission on May 17, 2006 as an exhibit, numbered as indicated above, to the Registrant’s Current Report on Form 8-K dated May 9, 2006, which exhibit is incorporated herein by reference.

(7) Filed with the Securities and Exchange Commission on June 6, 2006 as an exhibit, numbered as indicated above, to the Registrant’s Current Report on Form 8-K dated June 1, 2006, which exhibit is incorporated herein by reference.

(8) Filed with the Securities and Exchange Commission on June 12, 2006 as an exhibit, numbered as indicated above, to the Registrant’s Current Report on Form 8-K dated June 7, 2006, which exhibit is incorporated herein by reference.

(9) Filed with the Securities and Exchange Commission on August 1, 2006 as an exhibit, numbered as indicated above, to the Registrant’s Current Report on Form 8-K dated July 27, 2006, which exhibit is incorporated herein by reference.

(10) Filed with the Securities and Exchange Commission on October 10, 2006 as an exhibit, numbered as indicated above, to the Registrant’s Current Report on Form 8-K dated October 6, 2006, which exhibit is incorporated herein by reference.

(11) Filed with the Securities and Exchange Commission on December 15, 2006 as an exhibit numbered as indicated above, to the Registrant’s Quarterly Report on Form 10-QSB for the quarter ended October 31, 2006, which exhibit is incorporated herein by reference.

(12) Filed with the Securities and Exchange Commission on February 8, 2007 as an exhibit, numbered as indicated above, to the Registrant’s Current Report on Form 8-K dated February 7, 2007, which exhibit is incorporated herein by reference.

(13) Filed with the Securities and Exchange Commission on April 2, 2007 as an exhibit, numbered as indicated above, to the Registrant’s Current Report on Form 8-K dated March 26, 2007, which exhibit is incorporated herein by reference.

(14) Filed with the Securities and Exchange Commission on June 29, 2007 as an exhibit, numbered as indicated above, to the Registrant’s Current Report on Form 8-K dated June 21, 2007, which exhibit is incorporated herein by reference.

(15) Filed with the Securities and Exchange Commission on July 30, 2007 as an exhibit, numbered as indicated above, to the Registrant’s Annual Report on Form 10-KSB dated April 30, 2007, which exhibit is incorporated herein by reference.

(16) Filed with the Securities and Exchange Commission on August 28, 2007 as an exhibit, numbered as indicated above, to the Registrant’s Current Report on Form 8-K dated August 23, 2007, which exhibit is incorporated herein by reference.

(17) Filed with the Securities and Exchange Commission on September 7, 2007 as an exhibit, numbered as indicated above, to the Registrant’s Current Report on Form 8-K dated August 31, 2007, which exhibit is incorporated herein by reference.

(18) Filed with the Securities and Exchange Commission on September 19, 2007 as an exhibit, numbered as indicated above, to the Registrant’s Quarterly Report on Form 10-QSB dated July 31, 2007, which exhibit is incorporated herein by reference.

(19) Filed with the Securities and Exchange Commission on September 24, 2007 as an exhibit, numbered as indicated above, to the Registrant’s Current Report on Form 8-K dated September 18, 2007, which exhibit is incorporated herein by reference.

(20) Filed with the Securities and Exchange Commission on December 17, 2007 as an exhibit, numbered as indicated above, to the Registrant’s Quarterly Report on Form 10-QSB dated October 31, 2007, which exhibit is incorporated herein by reference.

(21) Filed with the Securities and Exchange Commission on January 31, 2008 as an exhibit, numbered as indicated above, to the Registrant’s Registration Statement on Form SB-2, which exhibit is incorporated herein by reference.

(22) Filed with the Securities and Exchange Commission on April 4, 2008 as an exhibit, numbered as indicated above, to the Registrant’s Current Report on Form 8-K dated March 31, 2008, which exhibit is incorporated herein by reference.

* Filed herewith.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees .

The aggregate fees billed to us by our principal accountant for services rendered during the fiscal years ended April 30, 2007 and 2006 are set forth in the table below:

Fee Category	Fiscal year ended April 30, 2008		Fiscal year ended April 30, 2007

Audit fees (1)	$	90,516	$	53,800

Audit-related fees (2)		0		0

Tax fees (3)		0		0

All other fees (4)		0		1,200

Total fees	$	90,516	$	55,000

(1) Audit fees consist of fees incurred for professional services rendered for the audit of consolidated financial statements, for reviews of our interim consolidated financial statements included in our quarterly reports on Form 10-QSB and for services that are normally provided in connection with statutory or regulatory filings or engagements.

(2) Audit-related fees consist of fees billed for professional services that are reasonably related to the performance of the audit or review of our consolidated financial statements, but are not reported under “Audit fees.”

(3) Tax fees consist of fees billed for professional services relating to tax compliance, tax planning, and tax advice.

(4) All other fees consist of fees billed for all other services.

Audit Committee’s Pre-Approval Practice .

We do not have an audit committee. Our board of directors performs the function of an audit committee. Section 10A(i) of the Securities Exchange Act of 1934, as amended, prohibits our auditors from performing audit services for us as well as any services not considered to be audit services unless such services are pre-approved by our audit committee or, in cases where no such committee exists, by our board of directors (in lieu of an audit committee) or unless the services meet certain de minimis standards.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	TRUE NORTH ENERGY CORPORATION

Dated: July 29, 2008	By:	/a/ John Folnovic
		John I. Folnovic, President and
		Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on this 29 ^th day of July, 2008.

	/s/ John Folnovic
	John I. Folnovic, President, Chief Executive Officer and Director


	/s/ Massimiliano Pozzoni
	Massimiliano Pozzoni, Secretary, Treasurer, Chief Financial and Accounting Officer and Director

PART II – FINANCIAL INFORMATION

ITEM 7. FINANCIAL STATEMENTS

	PAGE

Report of Independent Registered Public Accounting Firm	F-2

Consolidated Balance Sheets as of April 30, 2008 and 2007	F-3

Consolidated Statements of Operations for the years ended April 30, 2008 and 2007	F-4

Consolidated Statements of Cash Flows for the years ended April 30, 2008 and 2007	F-5

Consolidated Statements of Changes in Stockholders’ Equity for the years ended April 30, 2007 and 2008	F-6

Notes to Consolidated Financial Statements	F-7

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors

True North Energy Corporation

Houston, Texas

We have audited the accompanying consolidated balance sheets of True North Energy Corporation (the “Company”) as of April 30, 2008 and 2007 and the related consolidated statements of operations, stockholders’ equity, and cash flows for the years ended April 30, 2008 and 2007. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of April 30, 2008 and 2007 and the results of operations and cash flows for the years ended April 30, 2008 and 2007, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has had minimal revenues and has accumulated losses since its inception, which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters also are described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Malone & Bailey PC

www.malone-bailey.com

Houston, Texas

July 29, 2008

F-2

TRUE NORTH ENERGY CORPORATION

Consolidated Balance Sheets

	April 30,
	2008			2007

Assets
Current assets:
Cash and cash equivalents	$	228,094		$	267,845
Accounts receivable		274,669			-
Prepaid expenses and other current assets		231,888			385,009
Note receivable		-			180,000
Total current assets		734,651			832,854
Website development, net of accumulated amortization of $17,150 and $9,172, respectively		6,776			14,754
Property and equipment, net of accumulated depreciation of $4,611 and $ 1,875, respectively		6,613			9,349
Oil and gas properties, using successful efforts accounting method, including unproven properties of $2,152,068 and $685,400, respectively (net of accumulated amortization of $756,879 and $-0-, respectively)		4,927,747			685,400
Deferred financing costs, net		554,055			-
Total assets	$	6,229,842		$	1,542,357

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	105,680		$	43,912
Accrued liabilities		1,157,511			98,546
Stock compensation payable		52,117			161,171
Current portion of notes payable		711,121			196,656
Total current liabilities		2,026,429			500,285
Notes payable		2,707,834			250,000
Asset retirement obligation		54,622			-
Total liabilities		4,788,885			750,285

Commitments and contingencies		-			-

Stockholders’ Equity:
Preferred Stock, $0.0001 par value; 20,000,000 shares authorized, no shares issued or outstanding		-			-
Common Stock, par value $.0001; 250,000,000 shares authorized; 71,016,758 and 64,662,700 shares issued and outstanding, respectively		7,102			6,466
Additional paid-in capital		22,439,642			10,007,662
Accumulated deficit		(21,005,787	)		(9,222,056	)
Total stockholders’ equity		1,440,957			792,072
Total liabilities and stockholders’ equity	$	6,229,842		$	1,542,357

See notes to consolidated financial statements.

F-3

TRUE NORTH ENERGY CORPORATION

Consolidated Statements of Operations

	Year Ended April 30,
	2008			2007

Revenues	$	1,225,735		$	-

Costs and expenses:
Lease operating expenses		533,427			107,616
Exploration costs		314,598			6,473,608
Accretion expense		4,622			-
General and administrative:
Compensation and benefits		9,270,008			1,650,439
Legal and accounting		433,847			274,920
Advisory board fees		81,444			210,636
Investor relations		59,221			152,240
Other G&A expenses		259,170			197,903
Unsuccessful merger and acquisition costs		402,258			-
Depreciation, depletion and amortization		767,593			8,638
Total costs and expenses		12,126,188			9,076,000

Loss from operations		(10,900,453	)		(9,076,000	)

Other income (expense):
Interest and other income		4,089			10,876
Interest expense		(887,367	)		(3,986	)

Loss before income taxes		(11,783,731	)		(9,069,110	)
Income taxes		-			-

Net loss	$	(11,783,731	)	$	(9,069,110	)


Basic and diluted loss per common share	$	(0.17	)	$	(0.14	)

Weighted-average common shares outstanding		67,839,554			63,111,430

See notes to consolidated financial statements.

F-4

TRUE NORTH ENERGY CORPORATION

Consolidated Statements of Cash Flows

	Year Ended April 30,
	2008			2007

Cash Flows From Operating Activities
Net loss	$	(11,783,731	)	$	(9,069,110	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, depletion and amortization		767,593			8,638
Stock-based compensation		9,096,776			1,637,636
Amortization of deferred financing costs and debt discount		516,156			-
Unsuccessful merger and acquisition costs		402,258			-
Dry hole costs		287,468			6,196,019
Accretion expense		4,622			-
Changes in operating assets and liabilities:
Accounts receivable		(274,669	)		-
Prepaid expenses and other		85,138			(133,673	)
Accounts payable		61,768			45,834
Accrued liabilities		352,183			65,525
Net cash used in operating activities		(484,438	)		(1,249,131	)

Cash Flows From Investing Activities
Additions to oil and gas properties		(2,930,361	)		(6,507,644	)
Advances to seller in connection with acquisition of oil and gas properties		-			(180,000	)
Purchases of property and equipment		-			(11,224	)
Website development		-			(16,700	)
Net cash used in investing activities		(2,930,361	)		(6,715,568	)

Cash Flows From Financing Activities
Proceeds from issuance of notes payable		4,675,000			250,000
Payments on notes payable		(708,573	)		(54,679	)
Increase in deferred financing costs		(591,379	)		-
Proceeds from issuance of common stock		-			8,000,000
Net cash provided by financing activities		3,375,048			8,195,321

Net increase (decrease) in cash and cash equivalents		(39,751	)		230,622
Cash and cash equivalents, beginning of period		267,845			37,223

Cash and cash equivalents, end of period	$	228,094		$	267,845

Supplemental Disclosure of Cash Flow Information
Cash paid for interest	$	256,275		$	3,986
Income taxes		-			-

Non-Cash Investing and Financing Activities
Common stock issued for oil and gas leases	$	1,988,626		$	-
Discount on notes for relative fair value		909,508			-
Common stock issued to lenders		328,652
Discount on notes for overriding royalty interest granted to lenders		200,000			-
Asset retirement obligation		50,000			-
Assumed liabilities		343,000			-
Common stock issued for deposit on common stock		-			50,000

See notes to consolidated financial statements.

F-5

TRUE NORTH ENERGY CORPORATION

Statements of Changes in Stockholders’ Equity

	Common Stock				Additional Paid-in		Accumulated			Total Stockholders’
	Shares		Amount		Capital		Deficit			Equity

Balance, April 30, 2006		60,100,000	$	6,010	$	481,654	$	(152,946	)	$	334,718
Issuance of common stock from deposit on stock purchase		100,000		10		49,990		-			50,000
Issuance of units consisting of one share of common stock and one warrant		4,405,555		441		7,999,559		-			8,000,000
Issuance of common stock at prices ranging from $0.77 to $3.11 per share in exchange for advisory board services		57,145		5		101,459		-			101,464
Restricted stock grants		-		-		1,375,000		-			1,375,000
Net loss for the year ended April 30, 2007		-		-		-		(9,069,110	)		(9,069,110	)

Balance, April 30, 2007		64,662,700		6,466		10,007,662		(9,222,056	)		792,072
Issuance of common stock for oil and gas properties		3,761,144		376		1,988,250		-			1,988,626
Issuance of common stock to lenders		1,839,130		184		328,468		-			328,652
Issuance of common stock warrants to lenders and others		-		-		909,508		-			909,508
Issuance of common stock at prices ranging from $0.26 to $0.47 per share in exchange for advisory board services		350,000		35		153,463		-			153,498
Restricted stock grants		403,784		41		119,791		-			119,832
Stock compensation		-		-		8,932,500		-			8,932,500
Net loss for the year ended April 30, 2008		-		-		-		(11,783,731	)		(11,783,731	)

Balance, April 30, 2008		71,016,758	$	7,102	$	22,439,642	$	(21,005,787	)	$	1,440,957

See notes to consolidated financial statements.

F-6

TRUE NORTH ENERGY CORPORATION

Notes to Consolidated Financial Statements

NOTE 1 - NATURE AND CONTINUANCE OF OPERATIONS

Organization

True North Energy Corporation (the “Company” or “True North”), formerly Ameriprint International, Ltd. (“Ameriprint”), was incorporated in the state of Nevada in April 2004. True North is engaged in the acquisition, exploration, development and production of oil and gas properties in the United States.

Ameriprint provided printing, advertising and graphic design services to commercial customers. During January 2006 Ameriprint underwent a change of control and operation of its prior business activities was discontinued. Immediately thereafter, Ameriprint was renamed True North and commenced operation as an independent oil and gas entity.

Going Concern

The accompanying financial statements have been prepared on a going concern basis, which implies that True North will continue to realize its assets and discharge its liabilities in the normal course of business. The continuation of True North as a going concern is dependent upon many factors including, but not limited to, continued financial support from its shareholders, receipt of additional financing when and as needed to finance its ongoing business, and the attainment of profitable operations.

True North has had minimal revenues and has accumulated losses since February 1, 2006 (inception). The Company will require additional financing in order to execute its business plan. There can be no assurance that such financing will be available to the Company as and when needed or, if available, the reasonableness of the terms of such financing. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments relative to the recoverability or classification of recorded assets or liabilities that might be necessary should the Company be unable to continue as a going concern.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These financial statements have been prepared on a consistent basis in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission. These consolidated financial statements include the accounts of the Company and its recently formed, wholly owned subsidiary, ICF Energy Corporation (“ICF”). All material intercompany accounts and transactions have been eliminated in consolidation.

F-7

TRUE NORTH ENERGY CORPORATION

Notes to Consolidated Financial Statements – Continued

Use of Estimates

The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could vary from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturities of three months or less at the time of issuance to be cash equivalents.

Accounts Receivable

Accounts receivable primarily consist of accrued revenues from oil and gas production and joint interest expenditures due from joint interest owners in oil and gas properties.

Financial Instruments

The fair values of cash and cash equivalents, accounts receivable, notes receivable, accounts payable and accrued liabilities approximate their carrying values due to the short-term nature of these financial instruments.

Concentrations of Credit Risk

Financial instruments that potentially subject True North to concentration of credit risk consist of cash and cash equivalents. As of April 30, 2008, the Company had cash balances approximating $128,000 in excess of federally insured limits. True North’s cash balances are maintained in bank accounts at large, high-quality financial institutions. Accordingly, management believes that the credit risk associated with its bank deposits is minimal.

Oil and Gas Properties

True North uses the successful efforts method of accounting for its oil and gas activities. Costs to acquire mineral interests in oil and gas properties, to drill and equip exploratory wells that find proved reserves, and to drill and equip development wells and related asset retirement costs are capitalized. Exploration costs, including geological and geophysical expenses, exploratory dry holes and delay rentals, are charged to expense as incurred.

Unproved oil and gas properties that are individually significant are periodically assessed for impairment of value, and a loss is recognized at the time of the impairment by providing an allowance. Capitalized costs associated with oil and gas properties, after consideration of estimated residual values, are depreciated and depleted on a unit-of-production basis over the remaining life of proved developed reserves on a field basis.

F-8

TRUE NORTH ENERGY CORPORATION

Notes to Consolidated Financial Statements – Continued

Asset Retirement Obligations

Asset retirement obligations are recorded in the period in which they are incurred and reasonably estimatable. The Company recognized asset retirement obligations totaling $50,000 associated with the Texas oil and gas properties it acquired in September 2007 (see Note 3). The Company routinely reviews and reassesses its estimates to determine if an adjustment to the value of the asset retirement obligation is required.

Property and Equipment

Property and equipment are valued at cost. Additions are capitalized and depreciated using the straight-line method over estimated useful lives ranging from three to five years. Maintenance and repairs are charged to expense as incurred.

Long-Lived Assets

The carrying value of long-lived and intangible assets is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment is recognized if the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value.

Revenue Recognition

Revenues are recognized for oil and natural gas sales when production is sold to a purchaser at a fixed or determinable price. The Company accounts for its gas imbalances, if any, that result from its normal operations using the sales method, under which the Company recognizes its revenues on all production delivered to the purchaser. There were no gas imbalances as of April 30, 2008.

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with Statement of Financial Accounting Standards No. 123(R), “Share-Based Payment.” In accordance with SFAS 123(R), stock-based compensation includes compensation expense for all share-based payments based on the grant date fair value. Such compensation expense is recognized over the related service period or immediately if the instruments vest immediately.

The Company accounts for stock-based compensation issued to non-employees in accordance with the provisions of SFAS 123(R) and EITF No. 96-18, “Accounting for Equity Investments That Are Issued to Non-Employees for Acquiring, or in Conjunction with Selling Goods or Services.” For expense purposes, the value of common stock issued to non-employees is determined based on the fair value of the services received or the fair value of the equity instruments issued, whichever value is more reliably measurable.

Income Taxes

The Company records a provision for income taxes using the “liability” method as prescribed by FAS No. 109, “Accounting for Income Taxes.” Deferred tax assets and liabilities are included in the financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized.

F-9

TRUE NORTH ENERGY CORPORATION

Notes to Consolidated Financial Statements – Continued

Loss per Share

Loss per share is computed in accordance with FAS No. 128, “Earnings per Share.” FAS 128 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted-average number of shares outstanding during the period (denominator).

Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants.

Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. Common stock warrants were not included in the calculation of diluted EPS as the effect was antidilutive.

Reclassifications

Certain reclassifications have been made to the prior year financial statements to conform to the current presentation.

New Accounting Pronouncements

True North does not expect the adoption of recently issued accounting pronouncements to have a significant impact on its results of operations, financial position or cash flows.

NOTE 3 – OIL AND GAS PROPERTIES

The Company is engaged in oil and gas exploration activities in Alaska, Colorado and Texas. During the year ended April 30, 2007, True North expended approximately $6.5 million for property acquisitions and drilling costs of which approximately $6.2 million was expensed as dry hole costs.

Colorado Leases

In June 2007 the Company acquired certain oil and gas leases covering more than 17,000 acres in Colorado. The purchase price for these leases approximated $1.4 million and was paid with a combination of cash (approximately $345,000 of which approximately $107,000 remains payable) and 1,832,769 shares of the Company’s common stock valued at approximately $1,064,000. The Company advanced the proposed seller $180,000 of the cash consideration during January 2007 in the form of a note receivable. The note bore interest at the rate of 5% per annum and was repaid upon the closing of the Company’s acquisition of the Colorado oil and gas leases.

F-10

TRUE NORTH ENERGY CORPORATION

Notes to Consolidated Financial Statements – Continued

Prime Transaction

On September 19, 2007, the Company acquired certain oil and gas properties and related assets (the “Prime Assets”) in Brazoria County, Texas from Prime Natural Resources, Inc. (“Prime”) for approximately $3.7 million, including closing and other transaction-related costs. The purchase price was paid with a combination of cash ($2.4 million), 1,928,375 shares of the Company’s restricted common stock valued at approximately $926,000, and the assumption of certain assumed liabilities totaling approximately $343,000. The Company’s consolidated statements of operations include the revenues and expenses associated with the acquired assets from the date of acquisition.

The following unaudited pro forma consolidated results of operations have been prepared as if the acquisition of the Prime Assets had occurred as of May 1, 2006. The pro forma information is presented for information purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the acquisition of the Prime Assets been consummated as of that time, nor is it intended to be a projection of future results.

	Years Ended April 30,
	2008			2007

Revenues	$	2,484,041		$	3,011,670
Net loss	$	(11,087,665	)	$	(8,937,948	)
Loss per share – basic and diluted	$	(0.16	)	$	(0.14	)

Savant Agreement

On November 6, 2007 the Company entered into a pooling agreement (the “Pooling Agreement”) with Savant Alaska, LLC (“Savant“) which was given effect as of July 1, 2007. Savant holds leases for the exploration and production of oil and natural gas in an area of Alaska that is contiguous to certain of the Company's North Slope Alaskan interests. Under the Pooling Agreement, True North and Savant agreed to pool certain leasehold interests, on a net acreage basis, and further agreed to jointly drill a test well within the Savant Kupcake Prospect. The test well was planned to be drilled to a depth of 11,000 feet in order to test the Kemik formation. True North was unable to raise its share of the test well drilling costs in time, which would have resulted in it earning a working interest within the pooled area of approximately 8.5%, and in January 2008 the Pooling Agreement was terminated by mutual agreement. Effective January 23, 2008 however, True North entered into an Acreage Contribution Contract (the “Contract”) with Savant, pursuant to which it agreed to conditionally assign to Savant the part of our leasehold interest that was to be the subject of the Pooling Agreement (the “Lease Acreage”) in exchange for Savant’s drilling a test well within the Kupcake Prospect and allowing True North to potentially earn a working interest of up to 2% in the future production unit if the test well was successful. Savant and its partners commenced drilling the test well in March 2008 and completed drilling in April 2008 upon reaching a depth of 10,686 feet. At such time, Savant decided to plug and abandon the test well as it did not result in a commercial discovery of crude oil or natural gas reserves. The entire cost, expense, risk of drilling, production testing, plugging and abandoning of the test well was borne by Savant and its drilling partners. Savant has met all of the requirements under the Contract. Accordingly, the Company is in the process of assigning part of one of its North Slope leases (approximately 90 acres) as contribution acreage to Savant. True North anticipates that the assignment will be completed by the end of 2008. The Company continues to hold a 100% working interest in its remaining North Slope acreage (approximately 9,910 acres).

F-11

TRUE NORTH ENERGY CORPORATION

Notes to Consolidated Financial Statements – Continued

Failed Acquisition

During the year ended April 30, 2008, the Company entered into an agreement to acquire certain oil and gas properties located in Wyoming. True North was unable to raise the financing required to close the contemplated transaction and the agreement expired under its own terms. Direct acquisition costs totaling approximately $402,000 related to this potential acquisition were written off upon expiration of the related agreement.

NOTE 4 – NOTES PAYABLE

Convertible Notes

On March 30, 2007 True North executed an agreement with an off-shore investor pursuant to which it agreed to issue $500,000 of notes payable (the “ Convertible Notes”). Proceeds of the Convertible Notes, which bear interest at the rate of 8% per annum, were received in two equal installments during April and May 2007. Subject to prior conversion or acceleration, the principal balance of the notes is due in a single payment on the third anniversary of the date of each note. Interest on the Convertible Notes originally was payable semi-annually beginning the first day of the first month following 180 days from the respective dates of the Convertible Notes.

On September 18, 2007, the Company and the Convertible Notes lender entered into a subordination agreement. Pursuant to that agreement, the lender agreed to subordinate, in right of payment and priority, the Convertible Notes to the Secured Notes issued in September 2007 (see below). Payment of interest on the Convertible Notes also was postponed until repayment in full of the Secured Notes as a result of the Subordination Agreement.

In connection with the issuance of the Convertible Notes, the Company issued warrants for the purchase of up to 182,249 shares of the Company’s common stock at an exercise price of $1.92 per share as well as warrants for the purchase of up to an additional 298,330 shares of the Company’s common stock at an exercise price of $1.17 per share. These warrants are exercisable for a period of three years from the date of issuance (August 30, 2007).

The fair value of the warrants was estimated using the Black Scholes option-pricing model, which resulted in a total fair value of approximately $126,000 and a relative fair value of approximately $100,000. A discount on the notes payable was recognized in an amount equal to the relative fair value of the warrants. The debt discount is being accreted to interest expense using the effective interest method over the remaining term of the notes. Interest expense resulting from the accretion of the debt discount approximated $26,000 during the year ended April 30, 2008.

F-12

TRUE NORTH ENERGY CORPORATION

Notes to Consolidated Financial Statements – Continued

The conversion option and warrant issuance features of the Convertible Notes were evaluated under FAS 133 and EITF 00-19 for derivative accounting. As neither the conversion option or the warrants were deemed to be liabilities, derivative accounting was determined to not be applicable. The Company also evaluated the conversion option under EITF 98-5 and EITF 00-27 and determined that the conversion option was contingent and ultimately did not result in a beneficial conversion feature.

Bridge Notes

On August 23, 2007 True North received an aggregate of $250,000 in loan proceeds from two persons (the “Lenders”) and issued to each of the Lenders a secured promissory note in the principal amount of $125,000 (the “Bridge Notes”). The Bridge Notes bore interest at the rate of

12% per annum. Subject to earlier payment, at the Company’s option, interest on the unpaid principal amount of the Bridge Notes was payable in monthly installments commencing September 1, 2007 and principal was due and payable on the earlier of November 19, 2007 or 15 days following the closing of the acquisition of the Prime Assets. As more fully described below, the Bridge Notes were repaid in September 2007 upon consummation of the acquisition of the Prime Assets and related financing.

The Company issued 100,000 shares of its restricted common stock to the Lenders in connection with the Bridge Notes. Each Bridge Note was secured by 1,250,000 shares of restricted common stock (the “Stock”) standing in the name of Massimiliano Pozzoni and/or John Folnovic, both of who are officers and significant shareholders of the Company. True North paid each Lender a cash fee of $3,750 to reimburse them for the costs and expenses incurred by them in connection with the loan transaction and further agreed to pay the reasonable fees and disbursements of the Lenders’ respective legal counsels in connection with the enforcement of their rights under the Bridge Notes.

Secured Notes

The Company financed the purchase of the Prime Assets and the repayment of the Bridge Notes through the issuance of senior secured term notes (the “Secured Notes”) to two purchasers (the “Purchasers”). The aggregate principal amount of the Secured Notes totaled $3,750,000. The Secured Notes, which mature on September 18, 2010, bear interest at the rate of 13% per annum.

Amortizing payments of principal and interest are due monthly. During the twelve-month period ending September 18, 2008, the amount of such monthly principal payments is equal to the greater of $100,000 or sixty percent (60%) of the net revenue relating to all oil and gas properties of ICF for the immediately preceding calendar month. Thereafter, the monthly principal payment shall be equal to the greater of $100,000 or eighty percent (80%) of the net revenue relating to all oil and gas properties of ICF for the immediately preceding calendar month, provided, however, such percentage will increase to one hundred percent (100%) upon the occurrence and during the continuance of an event of default.

F-13

TRUE NORTH ENERGY CORPORATION

Notes to Consolidated Financial Statements – Continued

The Purchasers also were granted warrants for the purchase of up to 1,953,126 shares of the Company’s common stock in connection with the issuance of the Secured Notes. These warrants bear an exercise price of $0.48 per share and expire September 18, 2012. The fair value of the warrants was estimated using the Black Scholes option-pricing model, which resulted in a total fair value of approximately $833,000 and a relative fair value of approximately $681,000. A discount on the notes payable was recognized in an amount equal to the relative fair value of the warrants.

In addition to the above, the Company issued an aggregate 5% overriding royalty interest in the oil and gas properties of ICF to the Purchasers. The amount of the overriding royalty interest will reduce to an aggregate 3% rate upon the payment in full of the Secured Notes. The fair value of the overriding royalty interests of $200,000 was estimated using the discounted cash flow method and recorded as a discount to the Secured Notes. The Company’s basis in the Prime Assets was reduced by a like amount.

On March 31, 2008 the Purchasers made an additional advance to us in the aggregate amount of $425,000. The September 18, 2007 and March 31, 2008 advances are now evidenced by amended notes in the aggregate principal amount of $3,931,883. In consideration of the March 31, 2008 advance we paid certain fees and expenses approximating $34,000 to the Purchasers and affiliated parties and issued an aggregate of 1,739,130 shares of our restricted common stock to the Purchasers.

The aggregate debt discount resulting from the issuance of the warrants, common stock and the overriding royalty interest is being accreted to interest expense using the effective interest method over the remaining term of the notes. Interest expense resulting from the accretion of the debt discount associated with the Secured Notes approximated $257,000 during the year ended April 30, 2008.

The Company incurred aggregate transaction costs of approximately $754,000 in connection with the September and March issuances of the Secured Notes. Such costs include $128,000 representing the estimated fair value associated with warrants awarded to a financial advisor for the purchase of up to 300,000 shares of the Company’s common stock. These warrants have an exercise price of $0.48 per share and expire September 18, 2012. The fair value of the warrants was estimated using the Black Scholes option-pricing model. The deferred financing costs are being amortized using the effective interest method over the remaining term of the Secured Notes.

F-14

TRUE NORTH ENERGY CORPORATION

Notes to Consolidated Financial Statements – Continued

The Company’s borrowing activity is summarized below:

	Balance as of April 30, 2007		Increases			Decreases			Balance as of April 30, 2008

Insurance notes payable	$	196,656	$	-		$	(196,656	)	$	-
Convertible Notes		250,000		250,000			-			500,000
Bridge Notes		-		250,000			(250,000	)		-
Secured Notes		-		4,175,000			(261,917	)		3,913,083
		446,656		4,675,000			(708,573	)		4,413,083
Debt discount		-		(1,277,276	)		283,148			(994,128	)
Carrying value of debt	$	446,656	$	3,397,724		$	(425,425	)	$	3,418,955

Total notes payable									$	3,418,955
Less current portion										(711,121	)
Long-term notes payable									$	2,707,834

Future maturities of long-term debt are as of follows as of April 30, 2008:

Year Ending April 30:
2009	$	1,200,000
2010		1,510,000
2011		2,839,467
2012 and thereafter		-
		5,549,467
Less: interest		(1,136,384	)
	$	4,413,083

NOTE 5 – STOCK-BASED COMPENSATION

During the year ended April 30, 2007 True North entered into an employment agreement with its chief executive officer. Pursuant thereto, that individual was granted five million shares of the Company’s restricted stock issuable ratably at the end of each annual service period. Stock-based compensation expense related to this restricted stock grant included in compensation and benefits in the accompanying statement of operations totaled $1.4 million during the year ended April 30, 2007.

The employment agreement was amended in May 2007 to, among other things, reflect the voluntary revocation of the restricted stock grant. Contemporaneously therewith, True North’s chief executive officer purchased 15.5 million shares of the Company’s common stock from True North’s principal shareholder. True North recognized stock-based compensation expense of approximately $8.9 million during May 2007 in connection with this purchase, which was calculated as the difference between the purchase and market prices of the 15.5 million shares less the previously recognized stock-based compensation expense associated with the original restricted stock grant.

F-15

TRUE NORTH ENERGY CORPORATION

Notes to Consolidated Financial Statements – Continued

True North also recognized stock-based compensation expenses approximating $164,000 and $263,000 during the years ended April 30, 2008 and 2007 related to services provided by members of the Company’s advisory board and other third parties. Stock compensation payable as of April 30, 2008 includes stock compensation expenses associated with 142,760 shares earned through April 30, 2008 that are not issuable by the Company until October 2008.

NOTE 6 – COMMON STOCK

During the year ended April 30, 2007, the Company sold a total of 4,405,555 units to several purchasers in reliance on Regulation S of the Securities Act of 1933, as amended. Each unit consisted of one share of the Company’s common stock and one common stock purchase warrant exercisable for the purchase of an additional share of common stock. Each common stock purchase warrant is exercisable for a period of three years.

The following table summarizes the Company’s sales of units during the year ended April 30, 2007:

							Warrant		Relative Fair Value
Date	Number Of Units		Price Per Unit		Total Proceeds		Exercise Price		Common Stock		C/S Purchase Warrants

May 9, 2006		1,250,000	$	.80	$	1,000,000	$	1.60	$	618,000	$	382,000
July 27, 2006		650,000		1.00		650,000		1.70		381,000		269,000
August 11, 2006		350,000		1.00		350,000		1.70		198,000		152,000
August 28, 2006		555,555		3.60		2,000,000		5.00		1,198,000		802,000
October 2, 2006		400,000		2.50		1,000,000		3.50		580,000		420,000
November 13, 2006		400,000		2.50		1,000,000		3.50		580,000		420,000
January 24, 2007		800,000		2.50		2,000,000		3.50		1,179,000		821,000
Total		4,405,555			$	8,000,000			$	4,734,000	$	3,266,000

The Company also issued 100,000 shares of its common stock during the year ended April 30, 2007 related to a fiscal year 2006 deposit of $50,000 to purchase the Company’s common stock.

NOTE 7 – COMMON STOCK WARRANTS

The Company accounts for stock warrants issued to third parties in accordance with the provisions of EITF Issue No. 96-18, Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services , and EITF 01-9, Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vender’s Products . Under the provisions of EITF 96-18, because none of the Company’s agreements have a disincentive for nonperformance, the Company records a charge for the fair value of the portion of the warrants earned from the point in time when vesting of the warrant becomes probable. Final determination of fair value of the warrants occurs upon actual vesting.

F-16

TRUE NORTH ENERGY CORPORATION

Notes to Consolidated Financial Statements – Continued

During the year ended April 30, 2008, the Company issued warrants to purchase an aggregate of 2,733,705 shares of the Company’s common stock, respectively. Such warrants are exercisable at prices ranging from $0.48 to $1.92 per share and expire at various times through September 2012. All of the warrants granted to date were fully vested on the date of grant. No warrants have been exercised to date. A summary of warrant activity is as follows:

	Number of Warrants		Weighted- Average Exercise Price

Outstanding at April 30, 2007		4,405,555	$	2.74
Granted		2,733,705		0.65
Exercised		-		-
Outstanding at April 30, 2008		7,139,260	$	1.94

The range of warrant prices for shares under warrants and the weighted-average remaining contractual life as of April 30, 2008 is as follows:

Warrants Outstanding and Exercisable
Range of Warrant Exercise Price	Number of Warrants		Weighted- Average Exercise Price		Weighted- Average Remaining Life

Less than $1.00		2,253,126	$	0.48		4.4
$1.00 to $2.00		2,730,579		1.61		1.3
More than $2.00		2,155,555		3.89		1.5
Outstanding at April 30, 2008		7,139,260

NOTE 8 – INCOME TAXES

True North incurred net losses during each of the years ended April 30, 2008 and 2007. As a result, the Company has no current tax liability. The Company’s net deferred tax assets, which consist principally of tax loss carryforwards, have been fully reserved as of April 30, 2008. The Company’s net operating loss carryforward approximated $12.0 million and $9.2 million as of April 30, 2008 and 2007, respectively, and will expire in the years 2024 through 2028.

F-17

TRUE NORTH ENERGY CORPORATION

Notes to Consolidated Financial Statements – Continued

True North’s deferred tax assets consisted of the following as of April 30, 2008:

Deferred Tax Assets	2008			2007

Net operating loss carryforwards	$	4,093,859		$	3,130,623
Oil and gas properties		6,215			-
Property and equipment		(22	)		68
Gross deferred tax assets		4,100,052			3,130,691
Valuation allowance		(4,100,052	)		(3,130,691	)
Net deferred tax assets	$	-		$	-

NOTE 9 – COMMITMENTS

True North pays $300 per month associated with the month-to-month lease of virtual office space in Houston, Texas. True North also subleases office space at a monthly cost of $850 in The Woodlands, Texas. This space is utilized for the Company’s administrative needs including, but not limited to, its banking, oil and gas operations, and public company filing requirements. This sublease expires on July 31, 2008 and is renewable thereafter for additional six-month terms. True North also subleases office space in Golden, Colorado pursuant to a lease that expires December 31, 2008. The rental charge associated with this lease, which is used in conjunction with True North’s recently acquired Colorado leases, is $2,500 per month.

NOTE 10 – RELATED PARTY TRANSACTIONS

During the year ended April 30, 2008, the Company retained the services of a law firm for which a partner is a member of the Company’s advisory board. Legal fees paid to that firm totaled approximately $256,000, substantially all of which related to costs incurred in connection with the acquisition of the Prime Assets. Additionally, during each of the years ended April 30, 2008 and 2007, the Company retained the services of a firm that provides technical consulting services to the oil and gas industry. A partner of that firm serves as a member of the Company’s advisory board. Fees for the technical and advisory services provided by the aforementioned firm approximated $8,000 and $30,000 during the years ended April 30, 2008 and 2007, respectively.

F-18

TRUE NORTH ENERGY CORPORATION

Notes to Consolidated Financial Statements – Continued

NOTE 11 – Supplemental Oil and Gas Information ( Unaudited )

The following disclosures provide unaudited information required by SFAS No. 69, “ Disclosures about Oil and Gas Producing Activities.”

Costs Incurred

Costs incurred in oil and gas property acquisition, exploration and development activities are summarized below for the year-ended April 30, 2008 and 2007:

	2008		2007

Property acquisition costs:
Proved	$	3,482,558	$	-
Unproved		1,868,926		311,626
Exploration costs		314,598		6,473,608
Development costs (asset retirement obligations)		50,000		-
Total costs incurred	$	5,716,082	$	6,785,234

Estimated Quantities of Oil and Natural Gas Reserves

The following estimates of net proved oil and natural gas reserves of the Properties located entirely within the United States of America are based on evaluations prepared by third-party reservoir engineers. Reserves were estimated in accordance with guidelines established by the SEC and the Financial Accounting Standards Board (“FASB”), which require that reserve estimates be prepared under existing economic and operating conditions with no provisions for price and cost changes except by contractual arrangements. Reserve estimates are inherently imprecise and estimates of new discoveries are more imprecise than those of producing oil and gas properties. Accordingly, reserve estimates are expected to change as additional performance data becomes available. All of the Company's oil and natural gas producing activities are located in the United States of America.

A determination of proven reserves as of September 19, 2007 was not prepared. The information presented below for the purchase of reserves in place was determined by adjusting the April 30, 2007 proved reserves for the actual production activity to determine what the proved reserves would have been as of September 19, 2007.

F-19

TRUE NORTH ENERGY CORPORATION

Notes to Consolidated Financial Statements – Continued

Estimated quantities of proved domestic oil and gas reserves and changes in quantities of proved developed reserves for each of the years were as follows:

	Oil (Bbls)			Gas (Mcf)

Total proved reserves – April 30, 2006		-			-
Purchases of reserves in-place		-			-
Production		-			-
Extensions and discoveries		-			-
Sales of reserves in place		-			-
Revisions of previous estimates		-			-
Total proved reserves – April 30, 2007		-			-
Purchases of reserves in-place		9,251			646,266
Production		(1,649	)		(133,147	)
Extensions and discoveries		-			-
Sales of reserves in place		-			-
Revisions of previous estimates		805			(12,120	)
Total proved reserves – April 30, 2008		8,407			500,999

Proved developed reserves
April 30, 2007		-			-
April 30, 2008		8,407			500,999

Standardized Measure of Discounted Future Net Cash Flows

The standardized measure is the estimated excess future cash flows from proved reserves less estimated future production and development costs, estimated plugging and abandonment costs, and a discount factor. Future cash inflows represent expected revenues from production of period-end quantities of proved reserves based on April 30, or year-end prices, and any fixed and determinable future price changes provided by contractual arrangements in existence at year end. Price changes based on inflation, federal regulatory changes and supply and demand are not considered. Average prices used in computing year-end April 30, 2008 future cash flows were $113.14 per barrel for oil and $11.51 per Mcf for natural gas. Estimated future production costs related to period-end reserves are based on April 30 (year-end) costs. Such costs include, but are not limited to, production taxes and direct operating costs. Inflation and other anticipatory costs are not considered until the actual cost change takes effect. A discount rate of 10% is applied to the annual future net cash flows.

F-20

TRUE NORTH ENERGY CORPORATION

Notes to Consolidated Financial Statements – Continued

The standardized measure of discounted future net cash flows relating to the Properties' proved oil and gas reserves for the years ended April 30 are shown below:

	2008			2007

Future cash inflows	$	6,748,200		$	-
Future operating expenses		(1,741,700	)		-
Future development costs		(54,622	)		-
Future income tax expense		-			-
10% annual discount for estimating timing of cash flow		(877,900	)		-

Standardized measure of discounted future net cash flows	$	4,073,978		$	-

Changes in Standardized Measure

Changes in the standardized measure of discounted future net cash flows relating to proved oil and gas reserve for the years ended April 30 are summarized below:

	2008			2007

Changes due to current-year operations:
Sale of oil and gas, net of operating expenses	$	(692,308	)	$	-
Extensions and discoveries		-			-
Development costs incurred		-			-
Purchase of oil and gas properties		2,992,517			-
Changes due to revisions in standardized variables
Prices and operating expenses		1,998,337			-
Income taxes		-			-
Estimated future development costs		-			-
Revision of quantities		(13,703	)		-
Sales of reserves in place		-			-
Accretion of discount		187,032			-
Production rates, timing and other		(397,897	)		-

Net changes		4,073,978			-

Beginning of year		-			-

End of year	$	4,073,978		$	-

F-21

EXHIBIT 10.38

CONSULTING AGREEMENT

This CONSULTING AGREEMENT (the “Agreement”) is entered into as of June 30, 2008 by and between TRUE NORTH ENERGY CORPORATION , a Nevada corporation, with its principal offices at 2 Allen Center, 1200 Smith Street, Houston, TX 77002 (the “Company”) and PRIME NATURAL RESOURCES, INC. with an address at 2500 CityWest Blvd, Suite 1750, Houston, TX 77042 (“Prime”).

WHEREAS, the Company wishes to engage Prime to provide accounting and related services to the Company and the Prime wishes to accept such engagement, all upon the terms and subject to the conditions contained in this Agreement;

NOW, THEREFORE, the parties hereto, in consideration of the mutual consideration and promises contained herein and intending to be bound, hereby agree as follows:

1. Retention of Prime . The Company hereby retains Prime, and Prime agrees to be retained by the Company, upon the terms in, and subject to the conditions of, this Agreement.

2. Term . Subject to Section 7 hereof, the term of this Agreement shall commence on July 1, 2008 (the “Effective Date”) and shall continue in effect for one year thereafter through and including June 30, 2008.

3. Duties of Prime . During the term of this Agreement, Prime shall provide such bookkeeping, accounting and financial reporting services and work with the Company’s chief executive officer as may be directed by the Company from time to time. Prime makes NO WARRANTY, express or implied, as to merchantability, fitness for purpose sold, description, quality or productiveness concerning the services provided hereunder.

4. Compensation .

(a) Consulting Fee: As compensation to Prime for the services to be rendered under this Agreement, the Company shall pay to Prime a consulting fee consisting of a monthly $5,000 cash payment (the “Cash Consulting Fee”) and grant to Prime an issuance of $60,000 in common stock of the Company (the “Stock Consulting Fee”) for each calendar year quarterly period ( i.e. , the three months ending on September 30, 2008, December 31, 2008, March 31, 2009 and June 30, 2009 and each being a “Quarter”).

(b) Payment of Cash Consulting Fee: The Company will pay the Cash Consulting Fee to Prime monthly in advance no later than the 20 ^th day of the month prior to the month in which services will be performed.

(c) Payment of Stock Consulting Fee: In connection with the Stock Consulting Fee, the Company will issue to Prime an amount of stock equal to the Stock Consulting Fee no later than ten (10) business days of the completion of each Quarter. The number of shares to be issued for each such Quarter will be determined by taking the sum of the shares for each month in such Quarter as the shares for each such month are determined by apportioning a number of shares equal to the amount of $20,000 as based upon the average closing price of the Company’s common stock on the OTC Bulletin Board for the last five business days of each month in each such calendar year quarterly period then ended. In connection with the payment of the Cash Consulting Fee, Prime

shall be granted “piggyback” rights pursuant to which Prime may request that the Company include the stock provided as the Stock Consulting Fee in any registration statement filed with the Securities and Exchange Commission to register other common stock of the Company (other than a registration on Form S-4 or S-8, or any successor or other forms promulgated for similar purposes).

(d) Adjustments: In the event of early termination of this Agreement by either party, Prime’s cash payment for the month in which the Agreement will terminate will be subject to a pro rata adjustment to reflect the number of days in such month that Prime will be providing consulting services. In the event of early termination by the Company “With Cause” or by the Prime other than for “Good Reason,” as such terms are defined in Section 7 hereof, Prime’s stock payment will be subject to a pro rata, downward adjustment to reflect the number of days during which this Agreement was in effect.

(e) Expenses: The Company shall reimburse Prime for all reasonable out-of-pocket business expenses incurred by Prime in the performance of this Agreement. Any single expense amount in excess of $1,000 will require advance written approval from the Company.

5. Status as Independent Contractor . The parties intend and acknowledge that Prime is acting as an independent contractor. The Company shall not be responsible for any withholding in respect of taxes or any other deductions in respect of the fees to be paid to Prime and all such amounts shall be paid without any deduction or withholding. Nothing in this Agreement shall be construed to create any partnership, joint venture or similar arrangement between the Company and Prime or to render either party responsible for any debts or liabilities of the

6. Indemnity and Limitation of Liability . Except as otherwise arising from or attributable to the gross negligence of Prime, the Company shall indemnify, protect, defend and hold Prime and its employees, officers, directors and shareholders harmless from and against any and all liabilities, claims and causes of action, including without limitation, all legal fees and expenses incurred by Prime and its employees, officers, directors and shareholders in the prosecution, defense, settlement or investigation thereof, that shall arise or result from the services performed by Prime hereunder or that may otherwise relate to this Agreement. Neither party hereto shall be liable to the other for any consequential, special, punitive or indirect damages arising out of this Agreement. The maximum liability hereunder of Prime shall be limited to the actual amounts of the Cash Consulting Fee and Stock Consulting Fee that it receives from the Company.

7. Confidentiality . Prime acknowledges that in connection with the services to be rendered under this Agreement, Prime may be provided with confidential business information of the Company. The information will include, but not be limited to, competitive information pertaining to the Company’s employees, business partners, land and lease holdings, financial results and drilling and exploration activities. Prime agrees to keep any information or materials (the “Confidential Information”) in the strictest confidence and not to disclose or disseminate any such Confidential Information to any person, firm or other business entity except to those employees, Prime’s or other independent contractors of the Company as shall be necessary or advisable for the carrying out of the purposes of this Agreement.

All materials relating to the business and affairs of the Company, including, without limitation, all manuals, documents, reports, equipment, working materials, lists of shareholders, customers and clients, and information collected or prepared by the Company or Prime in the course of Prime's engagement, are the property of the Company. Upon the termination of this Agreement for any reason, Prime shall cease the use of such materials, return them to the Company (including all copies and reproductions that may have been made or received), and delete related information from all retrieval systems and databases used by Prime

Information will not be deemed to be Confidential Information restricted by this Section 6 if Prime can show that: (i) the information was in Prime’s possession or within Prime‘s knowledge before the Company disclosed it to Prime; (ii) the information was or became generally known to those who could take economic advantage of it; (iii) Prime obtained the information from a party having the right to disclose it to Prime without violation of any obligation to the Company, or (iv) Prime is required to disclose the information pursuant to legal process (e.g., a subpoena), provided that Prime notifies the Company immediately upon receiving or becoming aware of the legal process in question. No combination of information will be deemed to be within any of the four exceptions in the previous sentence, however, whether or not the component parts of the combination are within one or more exceptions, unless the combination itself and its economic value and principles of operation are themselves within such an exception or exceptions.

8. Termination . Either party may terminate this Agreement for any reason upon 30 days prior written notice, including but not limited to termination by the Company “With Cause” or termination by the Prime for “Good Reason”.

“With Cause” shall be (i) Prime’s willful, material and irreparable breach of this Agreement, (ii) Prime’s willful dishonesty, fraud or material misconduct with respect to the business or affairs of the Company; (iii) Prime’s conviction for a felony; (iv) Prime’s gross negligence in the performance of his duties hereunder, or (v) Prime’s intentional nonperformance of his duties hereunder.

“Good Reason” shall exist if the Company does not pay any material amount of compensation due Prime hereunder within seven (7) days of the due date thereof provided that Prime shall have provided the Company with written notice of such default and given the Company 3 business days to cure such default.

9. Amendments, Modifications, Waivers, Etc . No amendment or modification to this Agreement, nor any waiver of any term or provision hereof, shall be effective unless it shall be in a writing signed by the party against whom such amendment, modification or waiver shall be sought to be enforced. No waiver of any term or provision shall be construed as a waiver of any other term or condition of this Agreement, nor shall it be effective as to any other instance unless specifically stated in a writing conforming with the provisions of this Section 8.

10. Successors and Assigns . This Agreement shall be enforceable against any successors in interest, if any, to the Company and the Prime. Except as specifically provided herein, neither the Company nor the Prime shall assign any of their respective rights or obligations hereunder without the written consent of the other in each instance.

11. Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

12. Notices . Any notices required or permitted to be given under this Agreement shall be effective upon receipt at the respective addresses in the recitals to this Agreement unless the address for notice to either party shall have been changed by a notice given in accordance with this Section 11.

13. Governing Law; Dispute Resolution . This Agreement shall be governed by, and construed in accordance with, the substantive laws of the State of Texas, without regard for principals of conflicts of laws. Any claims, demands, differences, causes of action, disputes, or controversies arising out of or in connection with this Agreement shall, as far as possible, be settled amicably. Failing an amicable settlement within thirty (30) days of the written notification by one Party to the other of such difference or dispute, such difference or dispute shall be referred to arbitration. The arbitration shall be governed by, be conducted under, and finally settled in conformance with the Rules of American Arbitration Association in effect on the date of this Agreement. The arbitral panel shall be composed of three arbitrators. Each Party shall appoint one arbitrator within thirty (30) days of the filing of the arbitration, and the two arbitrators so appointed shall then select the presiding arbitrator within thirty (30) days after the latter of the two arbitrators have been appointed. If a Party fails to appoint its Party-appointed arbitrator or if the two Party-appointed arbitrators cannot reach an agreement on the presiding arbitrator within the specified time period, then the President of the American Arbitration Association shall nominate the remainder of the three arbitrators not yet appointed. The arbitration shall take place in Houston, Texas and the proceedings shall be in the English language.

IN WITNESS WHEREOF, the parties hereto have set their respective hands this 30th day of June 2008.

TRUE NORTH ENERGY CORPORATION		PRIME NATURAL
		RESOURCES, INC.


By:	/s/ John Folnovic		/s/ John R. Hager
	Name: John Folnovic	Name:	John R. Hager
	Title: President	Title:	Chief Financial Officer

EXHIBIT 21

SUBSIDIARIES OF REGISTRANT

ICF ENERGY CORPORATION, a Texas corporation

CERTIFICATIONS

EXHIBIT 31.1

I, John I Folnovic, certify that:

1. I have reviewed this report on Form 10-KSB of True North Energy Corporation.

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

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the 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)) 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 known 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 period covered by this annual report that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and

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 small business issuer’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weakness 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: July 29, 2008	/s/ John Folnovic
		John I. Folnovic Principal Executive Officer

CERTIFICATIONS

EXHIBIT 31.2

I, Massimiliano Pozzoni, certify that:

1. I have reviewed this report on Form 10-KSB of True North Energy Corporation.

(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: July 29, 2008	/s/ Massimiliano Pozzoni
		Massimiliano Pozzoni
		Principal Financial Officer

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 Annual Report of True North Energy Corporation (the “Company”) on Form 10-KSB for the year ended April 30, 2008 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John I, Folnovic, Chief Executive Officer 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;

(1)

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

(2)

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

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

/s/ John Folnovic

Name: John I. Folnovic

Title: Chief Executive Officer

Date: July 29, 2008

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 Annual Report of True North Energy Corporation (the “Company”) on Form 10-KSB for the year ended April 30, 2008 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Massimiliano Pozzoni, Chief Financial Officer 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;

(1)

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

(2)

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

/s/ Massimiliano Pozzoni

Name: Massimiliano Pozzoni

Title: Chief Financial Officer

Date: July 29, 2008

July 17, 2008

Mr. John Folnovic
True North Energy Corporation
1400 Woodloch Forest Drive, Suite 530
The Woodlands, Texas 77380

Dear Mr. Folnovic:

In accordance with your request, we have estimated the proved developed producing and probable reserves and future revenue, as of April 30, 2008, to the True North Energy Corporation (True North) interest in certain oil and gas properties located in Old Ocean Field, Brazoria County, Texas, as listed in the accompanying tabulations. This report has been prepared using constant prices and costs, as discussed in subsequent paragraphs of this letter. The estimates of proved reserves and future revenue in this report have been prepared in accordance with the definitions and guidelines of the U.S. Securities and Exchange Commission (SEC) and conform to the Statement of Financial Accounting Standards No. 69, except that per-well overhead expenses and future income taxes are excluded for all properties. Definitions are presented immediately following this letter. Inasmuch as the SEC does not recognize probable reserves, the sections of this report dealing with such reserves should not be used in filings with the SEC.

As presented in the accompanying summary projections, Tables I and II, we estimate the net reserves and future net revenue to the True North interest in these properties, as of April 30, 2008, to be:

	Net Reserves		Future Net Revenue ($)

	Oil	Gas		Present Worth
Category	(Barrels)	(MCF)	Total	at 10%


Proved Developed Producing	08,407	500,999	05,006,500	4,128,600

Probable	82,595	512,936	11,789,800	6,425,900

The oil reserves shown include crude oil and condensate. Oil volumes are expressed in barrels that are equivalent to 42 United States gallons. Gas volumes are expressed in thousands of cubic feet (MCF) at standard temperature and pressure bases.

The estimates shown in this report are for proved developed producing and probable reserves. Our study indicates that there are no proved developed non-producing or proved undeveloped reserves for these properties at this time. No study was made to determine whether possible reserves might be established for these properties. This report does not include any value that could be attributed to interests in undeveloped acreage beyond those tracts for which undeveloped reserves have been estimated. Reserves categorization conveys the relative degree of certainty; reserves subcategorization is based on development and production status. The estimates of reserves and future revenue included herein have not been adjusted for risk. For each reserves category this report includes one-line summaries of reserves, economics, and basic data by lease.

Future gross revenue to the True North interest is prior to deducting state production taxes and ad valorem taxes. Future net revenue is after deductions for these taxes, future capital costs, and operating expenses but before consideration of federal income taxes. The future net revenue has been discounted at an annual rate of 10 percent to determine its present worth. The present worth is shown to indicate the effect of time on the value of money and should not be construed as being the fair market value of the properties.

For the purposes of this report, we did not perform any field inspection of the properties, nor did we examine the mechanical operation or condition of the wells and their related facilities. We have not investigated possible environmental liability related to the properties; therefore, our estimates do not include any costs due to such possible liability. Also, our estimates do not include any salvage value for the lease and well equipment or the cost of abandoning the properties.

Oil prices used in this report are based on a April 30, 2008, West Texas Intermediate posted price of $110.00 per barrel and are adjusted by lease for quality, transportation fees, and regional price differentials. Gas prices used in this report are based on a April 30, 2008, Henry Hub spot market price of $10.935 per MMBTU and are adjusted by lease for energy content, transportation fees, and regional price differentials. All prices are held constant throughout the lives of the properties.

Lease and well operating costs used in this report are based on operating expense records of True North and include only direct lease- and field-level costs. As requested, these costs do not include the per-well overhead expenses allowed under joint operating agreements, nor do they include the headquarters general and administrative overhead expenses of True North. Lease and well operating costs are held constant throughout the lives of the properties. Capital costs are included as required for workovers, a new development well, and production equipment. The future capital costs are held constant to the date of expenditure.

We have made no investigation of potential gas volume and value imbalances resulting from overdelivery or underdelivery to the True North interest. Therefore, our estimates of reserves and future revenue do not include adjustments for the settlement of any such imbalances; our projections are based on True North receiving its net revenue interest share of estimated future gross gas production.

The reserves shown in this report are estimates only and should not be construed as exact quantities. The reserves may or may not be recovered; if they are recovered, the revenues therefrom and the costs related thereto could be more or less than the estimated amounts. Because of governmental policies and uncertainties of supply and demand, the sales rates, prices received for the reserves, and costs incurred in recovering such reserves may vary from assumptions made while preparing this report. Also, estimates of reserves may increase or decrease as a result of future operations.

In evaluating the information at our disposal concerning this report, we have excluded from our consideration all matters as to which the controlling interpretation may be legal or accounting, rather than engineering and geologic. As in all aspects of oil and gas evaluation, there are uncertainties inherent in the interpretation of engineering and geologic data; therefore, our conclusions necessarily represent only informed professional judgment.

The titles to the properties have not been examined by Netherland, Sewell & Associates, Inc., nor has the actual degree or type of interest owned been independently confirmed. The data used in our estimates were obtained from True North Energy Corporation, public data sources, and the nonconfidential files of Netherland, Sewell & Associates, Inc. and were accepted as accurate. Supporting geologic, field performance, and work data are on

file in our office. We are independent petroleum engineers, geologists, geophysicists, and petrophysicists; we do not own an interest in these properties and are not employed on a contingent basis.

Sincerely,

NETHERLAND, SEWELL & ASSOCIATES, INC.

/s/ C.H. (Scott) Rees III, P.E.

By:

C.H. (Scott) Rees III, P.E.
Chairman and Chief Executive Officer

/s/ Danny D. Simmons, P.E.
By:
Danny D. Simmons, P.E.
President and Chief Operating Officer
Date Signed: July 17, 2008

/s/ David E. Nice, P.G.
By:
David E. Nice, P.G.
Vice President
Date Signed: July 17, 2008

LWC:PSF

Please be advised that the digital document you are viewing is provided by Netherland, Sewell & Associates Inc. (NSAI) as a convenience to our clients. The digital document is intended to be substantively the same as the original signed document maintained by NSAI. The digital document is subject to the parameters, limitations, and conditions stated in the original document. In the event of any differences between the digital document and the original document, the original document shall control and supersede the digital document.

DEFINITIONS OF OIL AND GAS RESERVES

Adapted from U.S. Securities and Exchange Commission Regulation S-X Rule 4-10(a) and the 2007 Petroleum Resources Management System Approved by the Society of Petroleum Engineers

PROVED RESERVES
________________________________________________________________________
The following definitions of proved reserves are set forth in U.S. Securities and Exchange Commission (SEC) Regulation S-X Section 210.4 -10(a). Also included (in italics) are certain subsequent interpretations set forth in the SEC's Corporate Finance Accounting Interpretations and Guidance [SEC Interpretations]; SEC Staff Accounting Bulletins: Topic 12 [SEC Topic 12]; the Statement of Financial Accounting Standards No. 69 [FASB 69]; and the 2007 Petroleum Resources Management System prepared by the Oil and Gas Reserves Committee of the Society of Petroleum Engineers (SPE) and reviewed and jointly sponsored by the World Petroleum Council (WPC), the American Association of Petroleum Geologists (AAPG), and the Society of Petroleum Evaluation Engineers (SPEE) [SPE-PRMS].

Proved Oil and Gas Reserves. Proved oil and gas reserves are the estimated quantities of crude oil, natural gas, and natural gas liquids which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions, i.e., prices and costs as of the date the estimate is made. Prices include consideration of changes in existing prices provided only by contractual arrangements, but not on escalations based upon future conditions.

The determination of reasonable certainty is generated by supporting geological and engineering data. There must be data available which indicate that assumptions such as decline rates, recovery factors, reservoir limits, recovery mechanisms and volumetric estimates, gas-oil ratios or liquid yield are valid. If the area in question is new to exploration and there is little supporting data for decline rates, recovery factors, reservoir drive mechanisms etc., a conservative approach is appropriate until there is enough supporting data to justify the use of more liberal parameters for the estimation of proved reserves. The concept of reasonable certainty implies that, as more technical data becomes available, a positive, or upward, revision is much more likely than a negative, or downward, revision.

Existing economic and operating conditions are the product prices, operating costs, production methods, recovery techniques, transportation and marketing arrangements, ownership and/or entitlement terms and regulatory requirements that are extant on the effective date of the estimate. An anticipated change in conditions must have reasonable certainty of occurrence; the corresponding investment and operating expense to make that change must be included in the economic feasibility at the appropriate time. These conditions include estimated net abandonment costs to be incurred and duration of current licenses and permits.

If oil and gas prices are so low that production is actually shut-in because of uneconomic conditions, the reserves attributed to the shut-in properties can no longer be classified as proved and must be subtracted from the proved reserve data base as a negative revision. Those volumes may be included as positive revisions to a subsequent year's proved reserves only upon their return to economic status. [SEC Interpretations]

A standardized measure of discounted future net cash flows relating to an enterprise's interests in (a) proved oil and gas reserves (paragraph 10) and (b) oil and gas subject to purchase under long-term supply, purchase, or similar agreements and contracts in which the enterprise participates in the operation of the properties on which the oil or gas is located or otherwise serves as the producer of those reserves (paragraph 13) shall be disclosed as of the end of the year. The standardized measure of discounted future net cash flows relating to those two types of interests in reserves may be combined for reporting purposes. The following information shall be disclosed in the aggregate and for each geographic area for which reserve quantities are disclosed in accordance with paragraph 12:

a.	Future cash inflows. These shall be computed by applying year-end prices of oil and gas relating to the enterprise's proved reserves to the year-end quantities of those reserves. Future price changes shall be considered only to the extent provided by contractual arrangements in existence at year-end.

b.	Future development and production costs. These costs shall be computed by estimating the expenditures to be incurred in developing and producing the proved oil and gas reserves at the end of the year, based on year-end costs and assuming continuation of existing economic conditions. If estimated development expenditures are significant, they shall be presented separately from estimated production costs.

c.	Future income tax expenses. These expenses shall be computed by applying the appropriate year-end statutory tax rates, with consideration of future tax rates already legislated, to the future pretax net cash flows relating to the enterprise's proved oil and gas reserves, less the tax basis of the properties involved. The future income tax expenses shall give effect to permanent differences and tax credits and allowances relating to the enterprise's proved oil and gas reserves.

d.	Future net cash flows. These amounts are the result of subtracting future development and production costs and future income tax expenses from future cash inflows.

e.	Discount. This amount shall be derived from using a discount rate of 10 percent a year to reflect the timing of the future net cash flows relating to proved oil and gas reserves.

f.	Standardized measure of discounted future net cash flows. This amount is the future net cash flows less the computed discount. [FASB 69]

Definitions - Page 1 of 4

DEFINITIONS OF OIL AND GAS RESERVES

Adapted from U.S. Securities and Exchange Commission Regulation S-X Rule 4-10(a) and the 2007 Petroleum Resources Management System Approved by the Society of Petroleum Engineers

Reservoirs are considered proved if economic producibility is supported by either actual production or conclusive formation test. The area of a reservoir considered proved includes (A) that portion delineated by drilling and defined by gas-oil and/or oil-water contacts, if any; and (B) the immediately adjoining portions not yet drilled, but which can be reasonably judged as economically productive on the basis of available geological and engineering data. In the absence of information on fluid contacts, the lowest known structural occurrence of hydrocarbons controls the lower proved limit of the reservoir.

Proved reserves may be attributed to a prospective zone if a conclusive formation test has been performed or if there is production from the zone at economic rates. It is clear to the SEC staff that wireline recovery of small volumes (e.g. 100 cc) or production of a few hundred barrels per day in remote locations is not necessarily conclusive. Analyses of open-hole well logs which imply that an interval is productive are not sufficient for attribution of proved reserves. If there is an indication of economic producibility by either formation test or production, the reserves in the legal and technically justified drainage area around the well projected down to a known fluid contact or the lowest known hydrocarbons, or LKH may be considered to be proved.

In order to attribute proved reserves to legal locations adjacent to such a well (i.e. offsets), there must be conclusive, unambiguous technical data which supports reasonable certainty of production of such volumes and sufficient legal acreage to economically justify the development without going below the shallower of the fluid contact or the LKH. In the absence of a fluid contact, no offsetting reservoir volume below the LKH from a well penetration shall be classified as proved.

Upon obtaining performance history sufficient to reasonably conclude that more reserves will be recovered than those estimated volumetrically down to LKH, positive reserve revisions should be made. [SEC Interpretations]

Economic producibility of estimated proved reserves can be supported to the satisfaction of the Office of Engineering if geological and engineering data demonstrate with reasonable certainty that those reserves can be recovered in future years under existing economic and operating conditions. The relative importance of the many pieces of geological and engineering data which should be evaluated when classifying reserves cannot be identified in advance. In certain instances, proved reserves may be assigned to reservoirs on the basis of a combination of electrical and other type logs and core analyses which indicate the reservoirs are analogous to similar reservoirs in the same field which are producing or have demonstrated the ability to produce on a formation test. [SEC Topic 12]

Reserves which can be produced economically through application of improved recovery techniques (such as fluid injection) are included in the "proved" classification when successful testing by a pilot project, or the operation of an installed program in the reservoir, provides support for the engineering analysis on which the project or program was based.

If an improved recovery technique which has not been verified by routine commercial use in the area is to be applied, the hydrocarbon volumes estimated to be recoverable cannot be classified as proved reserves unless the technique has been demonstrated to be technically and economically successful by a pilot project or installed program in that specific rock volume. Such demonstration should validate the feasibility study leading to the project. [SEC Interpretations]

Estimates of proved reserves do not include the following:

(A)	oil that may become available from known reservoirs but is classified separately as "indicated additional reserves";

(B)	crude oil, natural gas, and natural gas liquids, the recovery of which is subject to reasonable doubt because of uncertainty as to geology, reservoir characteristics, or economic factors;

(C)	crude oil, natural gas, and natural gas liquids, that may occur in undrilled prospects; and

(D)	crude oil, natural gas, and natural gas liquids, that may be recovered from oil shales, coal, gilsonite and other such sources.

Geologic and reservoir characteristic uncertainties such as those relating to permeability, reservoir continuity, sealing nature of faults, structure and other unknown characteristics may prevent reserves from being classified as proved. Economic uncertainties such as the lack of a market (e.g. stranded hydrocarbons), uneconomic prices and marginal reserves that do not show a positive cash flow can also prevent reserves from being classified as proved. Hydrocarbons "manufactured" through extensive treatment of gilsonite, coal and oil shales are mining activities reportable under Industry Guide 7. They cannot be called proved oil and gas reserves. However, coal bed methane gas can be classified as proved reserves if the recovery of such is shown to be economically feasible.

In developing frontier areas, the existence of wells with a formation test or limited production may not be enough to classify those estimated hydrocarbon volumes as proved reserves. Issuers must demonstrate that there is reasonable certainty that a market exists for the hydrocarbons and that an economic method of extracting, treating and transporting them to market exists or is feasible and is likely to exist in the near future. A commitment by the company to develop the necessary production, treatment and transportation infrastructure is essential to the attribution of proved undeveloped reserves. Significant lack of progress on the development of such reserves may be evidence of a lack of such commitment.

Definitions - Page 2 of 4

DEFINITIONS OF OIL AND GAS RESERVES

Adapted from U.S. Securities and Exchange Commission Regulation S-X Rule 4-10(a) and the 2007 Petroleum Resources Management System Approved by the Society of Petroleum Engineers

Affirmation of this commitment may take the form of signed sales contracts for the products; request for proposals to build facilities; signed acceptance of bid proposals; memos of understanding between the appropriate organizations and governments; firm plans and timetables established; approved authorization for expenditures to build facilities; approved loan documents to finance the required infrastructure; initiation of construction of facilities; approved environmental permits etc. Reasonable certainty of procurement of project financing by the company is a requirement for the attribution of proved reserves. An inordinately long delay in the schedule of development may introduce doubt sufficient to preclude the attribution of proved reserves.

The history of issuance and continued recognition of permits, concessions and commerciality agreements by regulatory bodies and governments should be considered when determining whether hydrocarbon accumulations can be classified as proved reserves. Automatic renewal of such agreements cannot be expected if the regulatory body has the authority to end the agreement unless there is a long and clear track record which supports the conclusion that such approvals and renewal are a matter of course. [SEC Interpretations]

Companies should report reserves of natural gas liquids which are net to their leasehold interests, i.e., that portion recovered in a processing plant and allocated to the leasehold interest. It may be appropriate in the case of natural gas liquids not clearly attributable to leasehold interests ownership to follow instructions to Item 3 of Securities Act Industry Guide 2 and report such reserves separately and describe the nature of the ownership. [SEC Topic 12]

Proved Developed Oil and Gas Reserves. Proved developed oil and gas reserves are reserves that can be expected to be recovered through existing wells with existing equipment and operating methods. Additional oil and gas expected to be obtained through the application of fluid injection or other improved recovery techniques for supplementing the natural forces and mechanisms of primary recovery should be included as "proved developed reserves" only after testing by a pilot project or after the operation of an installed program has confirmed through production response that increased recovery will be achieved.

Currently producing wells and wells awaiting minor sales connection expenditure, recompletion, additional perforations or bore hole stimulation treatment would be examples of properties with proved developed reserves since the majority of the expenditures to develop the reserves has already been spent.

Proved developed reserves from improved recovery techniques can be assigned after either the operation of an installed pilot program shows a positive production response to the technique or the project is fully installed and operational and has shown the production response anticipated by earlier feasibility studies. In the case with a pilot, proved developed reserves can be assigned only to that volume attributable to the pilot's influence. In the case of the fully installed project, response must be seen from the full project before all the proved developed reserves estimated can be assigned. If a project is not following original forecasts, proved developed reserves can only be assigned to the extent actually supported by the current performance. An important point here is that attribution of incremental proved developed reserves from the application of improved recovery techniques requires the installation of facilities and a production increase. [SEC Interpretations]

Developed Producing Reserves. Developed Producing Reserves are expected to be recovered from completion intervals that are open and producing at the time of the estimate. Improved recovery reserves are considered producing only after the improved recovery project is in operation.

Developed Non-Producing Reserves. Developed Non-Producing Reserves include shut-in and behind-pipe Reserves. Shut-in Reserves are expected to be recovered from (1) completion intervals which are open at the time of the estimate but which have not yet started producing, (2) wells which were shut-in for market conditions or pipeline connections, or (3) wells not capable of production for mechanical reasons. Behind-pipe Reserves are expected to be recovered from zones in existing wells which will require additional completion work or future recompletion prior to start of production. In all cases, production can be initiated or restored with relatively low expenditure compared to the cost of drilling a new well. [SPE-PRMS]

Proved Undeveloped Reserves. Proved undeveloped oil and gas reserves are reserves that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion. Reserves on undrilled acreage shall be limited to those drilling units offsetting productive units that are reasonably certain of production when drilled. Proved reserves for other undrilled units can be claimed only where it can be demonstrated with certainty that there is continuity of production from the existing productive formation. Under no circumstances should estimates for proved undeveloped reserves be attributable to any acreage for which an application of fluid injection or other improved recovery technique is contemplated, unless such techniques have been proved effective by actual tests in the area and in the same reservoir.

The SEC staff points out that this definition contains no mitigating modifier for the word certainty. Also, continuity of production requires more than the technical indication of favorable structure alone (e.g. seismic data) to meet the test for

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DEFINITIONS OF OIL AND GAS RESERVES

Adapted from U.S. Securities and Exchange Commission Regulation S-X Rule 4-10(a) and the 2007 Petroleum Resources Management System Approved by the Society of Petroleum Engineers

proved undeveloped reserves. Generally, proved undeveloped reserves can be claimed only for legal and technically justified drainage areas offsetting an existing productive well (but structurally no lower than LKH). If there are at least two wells in the same reservoir which are separated by more than one legal location and which show communication (reservoir continuity), proved undeveloped reserves could be claimed between the two wells, even though the location in question might be more than an offset well location away from any of the wells. In this illustration, seismic data could be used to help support this claim by showing reservoir continuity between the wells, but the required data would be the conclusive evidence of communication from production or pressure tests. The SEC staff emphasizes that proved reserves cannot be claimed more than one offset location away from a productive well if there are no other wells in the reservoir, even though seismic data may exist. The use of high-quality, well calibrated seismic data can improve reservoir description for performing volumetrics (e.g. fluid contacts). However, seismic data is not an indicator of continuity of production and, therefore, can not be the sole indicator of additional proved reserves beyond the legal and technically justified drainage areas of wells that were drilled. Continuity of production would have to be demonstrated by something other than seismic data.

In a new reservoir with only a few wells, reservoir simulation or application of generalized hydrocarbon recovery correlations would not be considered a reliable method to show increased proved undeveloped reserves. With only a few wells as data points from which to build a geologic model and little performance history to validate the results with an acceptable history match, the results of a simulation or material balance model would be speculative in nature. The results of such a simulation or material balance model would not be considered to be reasonably certain to occur in the field to the extent that additional proved undeveloped reserves could be recognized. The application of recovery correlations which are not specific to the field under consideration is not reliable enough to be the sole source for proved reserve calculations.

Reserves cannot be classified as proved undeveloped reserves based on improved recovery techniques until such time that they have been proved effective in that reservoir or an analogous reservoir in the same geologic formation in the immediate area. An analogous reservoir is one having at least the same values or better for porosity, permeability, permeability distribution, thickness, continuity and hydrocarbon saturations.

(g)	Topic 12 of Accounting Series Release No. 257 of the Staff Accounting Bulletins states:

	In certain instances, proved reserves may be assigned to reservoirs on the basis of a combination of electrical and other type logs and core analyses which indicate the reservoirs are analogous to similar reservoirs in the same field which are producing or have demonstrated the ability to produce on a formation test.

If the combination of data from open-hole logs and core analyses is overwhelmingly in support of economic producibility and the indicated reservoir properties are analogous to similar reservoirs in the same field that have produced or demonstrated the ability to produce on a conclusive formation test, the reserves may be classified as proved. This would probably be a rare event especially in an exploratory situation. The essence of the SEC definition is that in most cases there must at least be a conclusive formation test in a new reservoir before any reserves can be considered to be proved. [SEC Interpretations]

PROBABLE AND POSSIBLE RESERVES

The SPE-PRMS sets forth additional categorizations beyond proved reserves. However, inasmuch as the SEC does not recognize probable or possible reserves, the sections of this report dealing with such reserves should not be used in filings with the SEC.

Probable Reserves. Probable Reserves are those additional Reserves which analysis of geoscience and engineering data indicate are less likely to be recovered than Proved Reserves but more certain to be recovered than Possible Reserves.

It is equally likely that actual remaining quantities recovered will be greater than or less than the sum of the estimated Proved plus Probable Reserves (2P). In this context, when probabilistic methods are used, there should be at least a 50% probability that the actual quantities recovered will equal or exceed the 2P estimate. Probable Reserves may be assigned to areas of a reservoir adjacent to Proved where data control or interpretations of available data are less certain. The interpreted reservoir continuity may not meet the reasonable certainty criteria. Probable estimates also include incremental recoveries associated with project recovery efficiencies beyond that assumed for Proved.

Possible Reserves. Possible Reserves are those additional reserves which analysis of geoscience and engineering data indicate are less likely to be recoverable than Probable Reserves.

The total quantities ultimately recovered from the project have a low probability to exceed the sum of Proved plus Probable plus Possible (3P), which is equivalent to the high estimate scenario. When probabilistic methods are used, there should be at least a 10% probability that the actual quantities recovered will equal or exceed the 3P estimate. Possible Reserves may be assigned to areas of a reservoir adjacent to Probable where data control and interpretations of available data are progressively less certain. Frequently, this may be in areas where geoscience and engineering data are unable to clearly define the area and vertical reservoir limits of commercial production from the reservoir by a defined project. Possible estimates also include incremental quantities associated with project recovery efficiencies beyond that assumed for Probable.

Definitions - Page 4 of 4