Summary of CRAFTY ADMIRAL ENTERPRISES LTD

ITEM 2.01. COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.

On April 29, 2006 Crafty Admiral Enterprises, Ltd. entered into a lease purchase agreement (the "Tombaugh Lease") with Alice Ramsey, Reid Weber, Rebecca Daniels, and Paul Weber, owners of Tombaugh Farm in St. Francis County, Arkansas (the "Tombaugh Lessors"). The Company paid $642,006 to the Tombaugh Lessors which equals $450 per Net Mineral Acre for a Paid-Up five (5) year Lease term on 1,426.68 acres. In addition the Tombaugh Lease requires Crafty to pay the Tombaugh Lessors a nineteen percent (19%) royalty of oil and other liquid hydrocarbons produced. The Agreement provides Crafty with an option to extend the primary term of the Tombaugh Lease for five (5) additional years on the same terms.

FORM 10-SB DISCLOSURE

As disclosed elsewhere in this report, on April 29, 2006, Crafty purchased the Tombaugh Lease. Item 2.01(f) of Form 8-K states that if the registrant was a shell company immediately before the transaction disclosed under Item 2.01 (i.e., the lease purchase), the registrant must disclose the information that would be required if the registrant were filing a general form for registration of securities on Form 10 or, as in our case, Form 10-SB.

Accordingly, we are providing below the information that would be included in a Form 10-SB if we were to file a Form 10-SB. Please note that the information provided below relates to the combined Company after the acquisition of Tombaugh Lease, except that information relating to periods prior to the date of the purchase only relate to the Company unless otherwise specifically indicated.

DESCRIPTION OF BUSINESS

Crafty Admiral Enterprises, Inc. was incorporated in the State of Nevada on March 6, 2000. The corporation was originally organized to engage in the business of the sale of classic auto parts to classic auto owners all over the world through its Internet site/online store. We were unsuccessful in implementing the online store and were unable to afford the cost of purchasing, warehousing and shipping the initial inventory required to commence operations. As a result, we ceased operations in July 2002. We were inactive until our sole officer and director determined that it would be in the best interest of the shareholders of the corporation that we should actively seek potential operating businesses and business opportunities with the intent to acquire or merge with such businesses. As we began to identify business opportunities, we determined to seek opportunities in the oil and gas industry. After researching the opportunities in the oil and gas industry, we decided to seek opportunities in the State of Arkansas, where we are currently focusing on identifying and evaluating prospective natural gas properties located in the Fayetteville Shale area. In the nine months ended March 31, 2005, we have raised $995,000 by issuing convertible debentures and $80,000 through a private placement of our shares. We have acquired an oil, gas, and mineral lease covering 1,426 acres and continue to seek additional opportunities.

Management believed that being a reporting company under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), could provide investors and a prospective merger or acquisition candidate with additional information concerning the corporation. In addition, management believed that this may make our company more attractive to an operating business opportunity as a potential business combination candidate. We intend to continue to voluntarily file these periodic reports with the U.S. Securities and Exchange Commission. Any target acquisition or merger candidate will immediately become subject to the same reporting requirements upon consummation of any such business combination.

Thus, in the event we are able to successfully complete an acquisition or merger with another operating business, the resulting combined business must provide audited financial statements for at least the two most recent fiscal years, or in the event that the combined operating business has been in business less than two years, audited financial statements will be required from the period of inception of the target acquisition or merger candidate.

SOURCE OF BUSINESS OPPORTUNITIES

We use various resources in our search for potential business opportunities, including referrals by our officer and director, consultants, advisors, securities broker-dealers, venture capitalists, members of the financial community, business acquaintances and any others who may present management with unsolicited proposals. We may investigate and ultimately acquire a venture that is in its preliminary or development stage, is already in operation, or is in various stages of its corporate existence or development. Management cannot predict at this time the status or nature of any venture in which it may participate. The most likely scenario for a possible business arrangement would involve the acquisition of or merger with an operating business which does not need additional capital, but which merely desires to establish a public trading market for its securities. Management believes that we could provide a potential public vehicle for a private entity interested in becoming a publicly-held corporation without the time and expense typically associated with an initial public offering.

EVALUATION CRITERIA

Once we have identified a particular entity as a potential acquisition or merger candidate, management will seek to determine whether acquisition or merger is warranted or whether further investigation is necessary. Such determination will generally be based on management's knowledge and experience, or with the assistance of outside advisors and consultants evaluating the preliminary information available to them.

Management may elect to engage outside independent consultants to perform preliminary analyses of potential business opportunities. However, because of our lack of access to substantial capital, we may not have the funds necessary for a complete and exhaustive investigation of any particular opportunity we may find. Further, no member of management is a professional business analyst and management will rely on its own business judgment in formulating the types of businesses that we may acquire. It is quite possible that management will not have any business experience or expertise in the type of business engaged in by any potential acquisition or merger candidate.

In evaluating such potential business opportunities, we will consider, to the extent relevant to the specific opportunity, several factors including potential benefits to the company and its shareholders; working capital, financial requirements and availability of additional financing; history of operation, if any; nature of present and expected competition; quality and experience of management; need for further research, development or exploration; potential for growth and expansion; potential for profits; and other factors deemed relevant to the specific opportunity. Because we have not located or identified any specific business opportunity to date, there are certain unidentified risks that cannot be adequately expressed prior to the identification of a specific business opportunity. There can be no assurance following consummation of any acquisition or merger that the business venture will develop into a going concern or, if the business is already operating, that it will continue to operate successfully. Many of the potential business opportunities available to us may involve new and untested products, processes or market strategies, which may not ultimately prove successful.

As we locate potential business opportunities, each separate potential opportunity will be reviewed and, upon the basis of that review, a suitable legal structure of method of participation will be chosen. The particular manner in which we participates in a specific business opportunity will depend upon the nature of that opportunity, the respective needs and desires of our company and management of the opportunity, and the relative negotiating strength of the parties involved. Actual participation in a business venture may take the form of an asset purchase, lease, joint venture, license, partnership, stock purchase, reorganization, merger or consolidation. We may act directly or indirectly through an interest in a partnership, corporation, or other form of organization; however, we do not intend to participate in opportunities through the purchase of minority stock positions.

FAYETTEVILLE SHALE OPPORTUNITY

As we began to identify business opportunities, we determined to seek opportunities in the oil and gas industry. After researching the opportunities in the oil and gas industry, our management decided to seek opportunities in the State of Arkansas. Currently we are

focused on identifying and evaluating prospective natural gas properties located in the Fayetteville Shale area. As we believe that natural gas is an environmentally friendly fuel that will be increasingly valued in the United States, we believe this area provides and opportunity to participate in natural gas market.

The Fayetteville Shale area is an unconventional gas reservoir located in Arkansas ranging in thickness from 50 to 325 feet and ranging in depth from 1500 to 6500 feet. We plan to acquire leases in the region. Over time, as we acquire properties, we plan to complete the exploration and development stage using modern techniques such as horizontal drilling and 3D seismic analysis.

On April 29, 2006 Crafty entered into a lease purchase agreement (the "Tombaugh Lease") with Alice Ramsey, Reid Weber, Rebecca Daniels, and Paul Weber, owners of Tombaugh Farm in St. Francis County, Arkansas (the "Tombaugh Lessors"). The Company paid $642,006 to the Tombaugh Lessors which equals $450 per Net Mineral Acre for a Paid-Up five (5) year Lease term on 1,426.68 acres. In addition the Tombaugh Lease requires Crafty to pay the Tombaugh Lessors a nineteen percent (19%) royalty of oil and other liquid hydrocarbons produced. The Agreement provides Crafty with an option to extend the primary term of the Tombaugh Lease for five (5) additional years on the same terms. This summary is qualified by the entirety of the terms and conditions set forth in the agreement that is filed as Exhibit 10 to this Form 8-K and is incorporated herein by reference.

RISK FACTORS

RISKS RELATED TO OUR COMPANY AND THE NATURAL GAS INDUSTRY

OUR FUTURE PERFORMANCE IS DEPENDENT UPON OUR ABILITY TO IDENTIFY, ACQUIRE AND DEVELOP NATURAL GAS PROPERTIES.

Our future performance depends upon our ability to find, develop and acquire natural gas reserves that are economically recoverable. Without successful exploration, exploitation or acquisition activities, we will not be able to develop reserves or generate revenues. No assurance can be given that we will be able to find and develop or acquire reserves on acceptable terms, or that commercial quantities of natural gas deposits will be discovered sufficient to enable us to recover our exploration and development costs or sustain our business.

The successful acquisition and development of natural gas properties requires an assessment of recoverable reserves, future natural gas prices and operating costs, potential environmental and other liabilities and other factors. Such assessments are necessarily inexact and their accuracy inherently uncertain. In addition, no assurances can be given that our exploitation and development activities will result in the discovery of any reserves. Our operations may be curtailed, delayed or canceled as a result of lack of adequate capital and other factors, such as title problems, weather, compliance with governmental regulations or price controls, mechanical difficulties, or unusual or unexpected formations, pressures and/or work interruptions. In addition, the costs of exploitation and development may materially exceed initial estimates.

We can provide no assurance that natural gas will be discovered in commercial quantities in any of the properties we currently hold interests in or properties in which we may acquire interests in the future. Our success will depend upon our ability to acquire working and revenue interests in properties upon which gas and oil reserves are ultimately discovered in commercial quantities. While we plan to hire a new management team with significant industry experience, we currently do not have an established history of locating and developing properties that have natural gas reserves.

THE SUCCESSFUL IMPLEMENTATION OF OUR BUSINESS PLAN IS SUBJECT TO RISKS INHERENT IN THE NATURAL GAS BUSINESS.

Our natural gas interests are subject to the economic risks typically associated with exploration, development and production activities, including the necessity of significant expenditures to locate and acquire properties and to drill exploratory wells. In addition, the cost and timing of drilling, completing and operating wells is often uncertain. In conducting exploration and development activities, the presence of unanticipated pressure or irregularities in formations, miscalculations or accidents may cause exploration, development and production activities to be unsuccessful. This could result in a total loss of our investment in a particular property. If exploration efforts are unsuccessful in establishing proved reserves and exploration activities cease, the amounts accumulated as unproved costs will be charged against earnings as impairments.

WE ARE A DEVELOPMENT STAGE COMPANY IMPLEMENTING A NEW BUSINESS PLAN.

We are a development stage company with only a limited operating history upon which to base an evaluation of our current business and future prospects, and we have just begun to implement our business plan. Since our inception, we have suffered recurring losses from operations and have depended on new investments to sustain our operations. During the years ended December 31, 2004 and 2005, and for the three month period ended March 31, 2006, respectively, we reported losses of $ 6,451, $ 18,338 and $8,924. While

we have recently raise capital and are preparing to begin business operations, we remain in the development stage with no assurances that we can achieve profits from operations.

WE WILL NEED ADDITIONAL FINANCING TO FUND THE DEVELOPMENT OF OUR PROPERTIES.

Our future is dependent upon successful completion of the development of our leaseholds and obtaining adequate financing to complete the extraction of natural gas. There is no assurance that we will be successful in obtaining such financing.

DEVELOPMENT OF OUR CURRENT PROJECTS AND EXPANSION OF OUR OPERATIONS WILL REQUIRE SIGNIFICANT CAPITAL EXPENDITURES FOR WHICH WE MAY BE UNABLE TO PROVIDE SUFFICIENT FINANCING.

Our existing capital resources are not sufficient to sustain our current level of operations. Our business model contemplates the development of our current exploration projects and the expansion of our business by identifying and acquiring additional natural gas properties. We intend to rely on external sources of financing to meet the capital requirements associated with the development of our current exploration projects and the expansion of our natural gas operations. We plan to obtain the future funding that we will need through debt and equity markets, but we cannot assure you that we will be able to obtain additional funding when it is required or that it will be available to us on commercially acceptable terms.

We also intend to make offers to acquire natural gas properties in the ordinary course of our business. If these offers are accepted, our capital needs will increase substantially. If we fail to obtain the funding that we need when it is required, we may have to forego or delay potentially valuable opportunities to acquire new natural gas properties or default on existing funding commitments to third parties and forfeit or dilute our rights in existing natural gas property interests.

OUR FUTURE PERFORMANCE IS DIFFICULT TO EVALUATE BECAUSE WE HAVE A LIMITED OPERATING HISTORY.

We were incorporated in March 2000 and we began to implement our current business strategy in the oil and gas industry in 2005. We have had no significant operations and since incorporation our operating cash flow needs have been financed solely through private offerings of our common stock and convertible bonds in addition to loans made to us by our sole officer.

WE MAY HAVE ONLY NOMINAL CONTROL OVER THE TIMING OR SCOPE OF THE WORK DONE ON OUR PROPERTIES AND WILL BE DEPENDENT UPON OTHER PARTIES TO COMMENCE AND CONTINUE PRODUCTION.

We may have only nominal control over the drilling of the wells on our properties. Other parties may be responsible for all drilling, field operations and related administrative services related to our wells. The Company and our advisors will have to choose the locations for drilling the wells and may not have control over the timing of drilling the wells as we will have no control upon the availability of drilling rigs. We will be dependent on our technical advisors to successfully develop the wells. We will be dependent on the evaluation of data obtained through geophysical and geological analyses, production data and engineering studies, the results of which are often inconclusive or subject to varying interpretations. If we are unsuccessful in developing our wells or there is no production on our properties, we may lose our entire investment in those properties.

WE MAY EXPERIENCE INSTABILITY IN PRODUCTION FROM THE WELLS ON OUR PROPERTIES AND RESULTS MAY BE LESS THAN ANTICIPATED

While we will endeavor forecast production as accurately as possible, actual production may be less than our forecasts or estimates. If production is significantly less than forecast, or if production is non-existent, we may not be able to continue as a viable entity.

WE RELY HEAVILY UPON RESERVE ESTIMATES WHEN DETERMINING WHETHER OR NOT TO INVEST IN A PARTICULAR OIL OR GAS PROPERTY.

The natural gas reserve information that we use in evaluating natural gas prospects is based on reserve estimates involving a great deal of uncertainty. Different reserve engineers may make different estimates of reserves and cash flows based on the same available data. Reserve estimates depend in large part upon the reliability of available geologic and engineering data, which is inherently imprecise. Geologic and engineering data are used to determine the probability that a reservoir of natural gas exists at a particular location, and whether natural gas are recoverable from a reservoir. Recoverability is ultimately subject to the accuracy of data including, but not limited to, geological characteristics of the reservoir, structure, reservoir fluid properties, the size and boundaries of the drainage area, reservoir pressure, and the anticipated rate of pressure depletion. The evaluation of these and other factors is based upon available seismic data, computer modeling, well tests and information obtained from production of natural gas from adjacent or similar properties, but the probability of the existence and recoverability of reserves is less than 100% and actual recoveries of proved reserves can differ from estimates.

Reserve estimates also require numerous assumptions relating to operating conditions and economic factors, including the price at which recovered natural gas can be sold, the costs of recovery, assumptions concerning future operating costs, severance and excise taxes, development costs and workover and remedial costs, prevailing environmental conditions associated with drilling and production sites, availability of enhanced recovery techniques, ability to transport natural gas to markets and governmental and other regulatory factors, such as taxes and environmental laws. A negative change in any one or more of these factors could result in quantities of natural gas previously estimated as proved reserves becoming uneconomic. For example, a decline in the market price of oil or natural gas to an amount that is less than the cost of recovery of such natural gas in a particular location could make production commercially impracticable. The risk that a decline in price could have that effect is magnified in the case of reserves requiring sophisticated or expensive production enhancement technology and equipment, such as some types of heavy oil. Each of these factors, by having an impact on the cost of recovery and the rate of production, will also affect the present value of future net cash flows from estimated reserves.

In addition, the 10% discount factor, which is required by the Securities and Exchange Commission to be used to calculate discounted future net cash flows for reporting purposes, is not necessarily the most appropriate discount factor based on interests rates in effect from time to time and risks associated with us or the natural gas industry in general.

OUR BUSINESS MAY BE HARMED IF WE ARE UNABLE TO RETAIN OUR INTERESTS IN LEASES.

All of our properties are or will be held under interests in natural gas leases. If we fail to meet the specific requirements of each lease, the lease may be terminated or otherwise expire. We cannot assure you that we will be able to meet our obligations under each lease. The termination or expiration of our working interest relating to a lease could harm our business, financial condition and results of operations.

We will need significant additional funds to meet capital calls, drilling and other production costs in our effort to explore, produce, develop and sell the natural gas and oil produced by our leases. We may not be able to obtain any such additional funds on terms acceptable to us, or at all.

TITLE DEFICIENCIES COULD RENDER OUR LEASES WORTHLESS.

The existence of a material title deficiency can render a lease worthless and can result in a large expense to our business. The Company has historically relied upon the judgment of natural gas lease brokers or landmen who perform the field work in examining records in the appropriate governmental office before attempting to place under lease a specific mineral interest. This is customary practice in the natural gas industry. However, we anticipate that we, or the person or company acting as operator of the wells located on the properties that we lease, will examine title prior to any well being drilled. Even after taking these precautions, deficiencies in the marketability of the title to the leases may still arise. Such deficiencies may render the lease worthless.

WE ARE NOT OBLIGATED TO FOLLOW ANY PARTICULAR CRITERIA FOR THE ACQUISITION OF ADDITIONAL NATURAL GAS PROPERTIES.

Even though we now employ general criteria for the acquisition of natural gas properties, we are not obligated to follow any specific criteria and may change our criteria from time to time. Our shareholders will not have the opportunity to evaluate or approve any changes in the criteria we use or how we apply those criteria in pursuing the acquisition of additional natural gas properties.

A SUBSTANTIAL OR EXTENDED DECLINE IN NATURAL GAS PRICES COULD REDUCE OUR FUTURE REVENUE AND EARNINGS.

The price we receive for future natural gas production will heavily influence our revenue, profitability, access to capital and rate of growth. Natural gas is a commodity and its price is subject to wide fluctuations in response to relatively minor changes in supply and demand. Historically, the markets for natural gas have been volatile and natural gas prices are significantly above historic levels. These markets will likely continue to be volatile in the future and current record prices natural gas may decline in the future. The prices we may receive for any future production, and the levels of this production, depend on numerous factors beyond our control. These factors include the following:

o changes in global supply and demand for oil and natural gas;

o actions by the Organization of Petroleum Exporting Countries, or OPEC;

o political conditions, including embargoes, which affect other oil-producing activities;

o levels of global oil and natural gas exploration and production activity;

o levels of global oil and natural gas inventories;

o weather conditions affecting energy consumption;

o technological advances affecting energy consumption; and

o prices and availability of alternative fuels.

Lower natural gas prices may not only decrease our future revenues but also may reduce the amount of natural gas that we can produce economically. A substantial or extended decline in natural gas prices may reduce our earnings, cash flow and working capital.

Drilling for and producing natural gas are high risk activities with many uncertainties that could substantially increase our costs and reduce our profitability.

Natural gas exploration is subject to numerous risks beyond our control; including the risk that drilling will not result in any commercially viable natural gas reserves. Failure to successfully discover natural gas resources at our properties may result in the entire loss of the funds we expend. The decisions to develop or otherwise exploit sites will depend in part on the evaluation of resource estimates based on assumptions that may turn out to be inaccurate.

The total cost of drilling, completing and operating wells will be uncertain before drilling commences. Overruns in budgeted expenditures are common risks that can make a particular project uneconomical. Further, many factors may curtail, delay or cancel drilling, including the following:

o delays imposed by or resulting from compliance with regulatory requirements;

o pressure or irregularities in geological formations;

o shortages of or delays in obtaining equipment and qualified personnel;

o equipment failures or accidents;

o adverse weather conditions;

o reductions in Natural gas prices;

o land title problems; and

o limitations in the market for Natural gas.

WE CURRENTLY HAVE NO PROVEN RESERVES AND THEREFORE MAY FACE DIFFICULTIES RAISING FINANCING TO FUND OUR OPERATIONS.

We have not discovered any natural gas, and therefore we have no gas reserves or any revenue that would otherwise be generated from reserves. Accordingly, we are unable to finance any of our overhead costs or obligations and will be required to fund any costs and expenses by offering additional debt or equity securities.

WE MAY INCUR SUBSTANTIAL LOSSES AND BE SUBJECT TO SUBSTANTIAL LIABILITY CLAIMS AS A RESULT OF OUR NATURAL GAS OPERATIONS.

Our operations will be subject to risks associated with natural gas operations. Losses and liabilities arising from uninsured and underinsured events could materially and adversely affect the payment of production revenues from the wells, if any. Our natural gas exploration activities will be subject to all of the operating risks associated with drilling for and producing natural gas, including the possibility of:

o environmental hazards, such as uncontrollable flows of natural gas, brine, well fluids, toxic gas or other pollution into the environment, including groundwater contamination;

o abnormally pressured formations;

o mechanical difficulties, such as stuck oilfield drilling and service tools and casing collapse; . . .