ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This statement contains forward-looking statements within the meaning of the Securities Act. Discussions containing such forward-looking statements may be found throughout this statement. Actual events or results may differ materially from those discussed in the forward-looking statements as a result of various factors, including the matters set forth in this statement.

At the present time we have only nominal overhead costs. Our officers do not receive any payroll and our administrative assistance is now being provided on a reimbursement basis. This situation will remain constant until such time as we have sufficient capital to afford to pay salaries.

We completed the acquisition of our first property on August 25, 2005; a condominium located in Brooklyn, New York, in exchange for $25,000 in cash and 1,900,000 shares of our common stock which was valued at $190,000. In March 2008, we entered into a rescission agreement, the result of which was the cancellation of 1,900,000 common shares in exchange for the condominium property. At the time of the exchange, the condominium was appraised at a fair market value of $200,000 and we recorded a loss of $15,000 on the transaction. As a result of the current real estate environment in the United States, we are currently limiting any potential acquisitions to Eastern European countries.

The Company was the successful bidder in United States Government auctions to purchase certain oil and gas lease rights. The oil and gas leases currently represent approximately 12,000 acres of property located in Crook, Banner, Weston, Goshen, Niobrara, Converse, Campbell, Freemont, Laramie, Sublette and Platt County Wyoming. The Company also holds leases for the uranium rights on approximately 3,500 acres in Wyoming. The Company is negotiating with energy companies to develop the potential resources that may be contained in these properties. The Company has completed several transactions wherein the Company sold the lease rights and retained a royalty interest. No exploration activities have yet taken place.

During fiscal 2008, we prepaid $119,153 as estimated drilling and completion costs for a 25% working interest in three wells in Washington County, Oklahoma. Two of the wells began initial sales in November 2008 and the third well is in process of being re-completed. We have plans to continue to participate in additional drilling prospects as funding becomes available.

We have had only nominal revenues since inception. Our auditors have expressed substantial doubt about our ability to continue as a going concern. Our current assets at November 30, 2008, consist of our cash balance of $234,932. Our ability to continue as a going concern is contingent upon our ability to raise funds through private placements of our common stock and obtaining loans until we establish sufficient business to support our operating costs.

We anticipate requiring substantial capital for investments in energy leases and oil and gas drilling prospects and our operating costs have increased for consultants finding prospects. There can be no assurance that we will be able to continue to find sufficient funding to support our current business plan.

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COMPARISON OF THREE MONTHS ENDED NOVEMBER 30, 2008 AND 2007

During the three-month period ended November 30, 2008 we had total revenues of $4,689 as compared to $5,626 in the comparable 2007 period. During the 2008 period, $4,000 of our revenues were from lease sales and $689 was from our initial oil production. Our 2007 period revenues were all from lease sales.

Non-cash compensation amounted to $480,984 in 2008 as compared to none in 2007. Non-cash compensation is from the amortization of the calculated value of common shares issued for consulting agreements. (Note 5).

During the three-month period ended November 30, 2008, selling, general and administrative expenses amounted to $28,920 as compared to $14,442 in the year earlier period. Increases are consistent with the increased activity.

During the three-month period ended November 30, 2008, we recognized a loss of $18,023 from commodities trading, recognized interest expense of $4,500 and recorded interest income in the amount of $2,345 ($848 from a related party).

OFF-BALANCE SHEET ARRANGEMENTS

None.

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