MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

Liquidity and Capital Resources

As of March 31, 2009, we had current assets of $4,334 and current liabilities of $177,210 as compared to current assets of $26,433 and current liabilities of $171,922 as of December 31, 2008. As such, as of March 31, 2009, we had working capital deficit of $172,876 as compared to a working capital deficit of $145,489 as of December 31, 2008. Current liabilities at March 31, 2009 and December 31, 2008, consisted of accounts payable and accrued liabilities, as well as related party payables. Our total assets decreased from $242,593 at December 31, 2008 to $220,434 at March 31, 2009, mainly due to a decrease in cash and cash equivalents, as well as a decrease in other current assets. Our current liabilities increased by $5,288 from December 31, 2008 to March 31, 2009, due to an increase in related party payables.

During the three months ended March 31, 2009, our operating activities used cash of $12,689, the majority of which consisted of our net loss of $28,779 and a decrease in accounts payable of $9,712, partially offset by an increase in related party payables of $15,000 and other items. During the three months ended March 31, 2008, our operating activities provided us cash of $2,640, the majority of which consisted of an increase in accounts payable of $86,875 and an increase in related party accounts payable of $14,860, partially offset by our net loss of $100,014.

During the three months ended March 31, 2009, our investing activities provided us $Nil, as opposed to using cash of $11,120 during the three months ended March 31, 2008. The use of cash in the three months ended March 31, 2008, was attributable to the purchase of working interests in oil and gas properties.

During the three months ended March 31, 2009, our financing activities provided us $Nil, as opposed to providing us cash of $1,000 during the three months ended March 31, 2008. Cash provided to us during the three months ended March 31, 2008, was due to proceeds from a short term note payable.

We expect total cash commitments for the remainder of the fiscal year to be approximately $100,000. The majority of the $100,000 cash commitments for the year are what we estimate our general and administrative expenses to be, which would include approximately $10,000 for legal fees, $35,000 for accounting fees, $45,000 for management fees, and the remainder in general working capital.

We do not have sufficient resources at the present time to fund such cash commitments and we will require further funding in order to pay these cash commitments for 2009.

We also own interests in four leases in the Alberta Oil Sands in Alberta, Canada. For the remainder of fiscal 2009, we have approximately $1,000 in annual rental payments due to the Alberta Crown for our Alberta Oil Sands leases. As of the date of this Quarterly Report, we had incurred $721 in annual rental payments to the Alberta Crown for one Alberta Oil Sands lease.

We may have further cash commitments on our Alberta Oil Sands lease interests in addition to those described above. We plan to pay our expenses with the cash reserves that we currently have and from private placements of our common stock, however such funds may, and likely will, be insufficient to pay all of our expenses.

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During the remainder of the fiscal year ending December 31, 2009, we do not have any cash commitments in connection with other projects.

We plan to raise additional funds in order to drill or participate in the drilling of our oil sands leases, make annual payments to the Alberta Crown for our various leases, and to generally meet our future corporate obligations. We plan to raise funds through the sale of our common stock or through loans.
There is no guarantee that we will be successful in arranging the required financing. Unless we raise funds through the sale of our common stock or through loans, we cannot drill further wells that have not yet been paid for, or acquire new properties. There is no assurance that we will be able to raise adequate capital.

Our future success will be materially dependent upon our ability to satisfy additional financing requirements. We are reviewing our options to raise equity capital. In order to satisfy our requisite budget, we have held and will continue to conduct negotiations with various investors. We cannot predict whether these negotiations will result in additional investment income for us.

Funding for our operations may not be available under favorable terms, if at all. If adequate funds are not available, we may be required to further curtail operations significantly or to obtain funds by entering into arrangements with collaborative partners or others that may require us to relinquish rights that we would not otherwise relinquish.

Results of Operations.

Our Statement of Operations for the three months ended March 31, 2009 indicated a net loss of $28,779 (nil per common share), compared to a net loss of $100,014 (nil per common share), for the three months ended March 31, 2008.

For the three months ended March 31, 2009, we had loss from operations of $26,074, compared to $101,838 for the three months ended March 31, 2008. The decrease of total expenses of $75,764 from the three months ended March 31, 2008 to the three months ended March 31, 2009, resulted primarily from a decrease in stock options granted for consulting and consulting fees incurred of $60,000, as well as to a decrease in legal and professional fees of $11,531.

Our comprehensive loss for the three months ended March 31, 2009 was $29,179 compared to $100,014 for the three months ended Match 31, 2008.

Risks Associated with Operations and Expansion

There are certain risks associated with the oil and gas business, including, but not limited to, severe fluctuations in oil and gas prices, strict regulatory requirements, uncertainty of oil and gas reserves and severe market fluctuations. There can be no assurance that such risks will not have a material adverse effect on our business, results of operations and financial condition.

We do not anticipate any significant research and development within the next 12 months, nor do we anticipate that we will lease or purchase any significant equipment within the next 12 months. We do not anticipate a significant change in the number of our employees within the next 12 months.

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Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital resources or capital reserves.

FORWARD LOOKING STATEMENTS

Certain matters discussed or referenced in this report specifies forward-looking statements of our management. Forward-looking statements are statements that estimate the happening of future events and are not based on historical fact. Forward-looking statements may be identified by the use of forward-looking terminology such as "may", "will", "could", "expect", "estimate", "anticipate", "probable", "possible", "should", "continue", or similar terms, variations of those terms or the negative of those terms. Actual results may differ materially from those contemplated by the forward-looking statements.

The assumptions used for purposes of the forward-looking statements specified in the following information represent estimates of future events and are subject to uncertainty as to possible changes in economic, legislative, industry, and other circumstances. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and, accordingly, no opinion is expressed on the achievability of those forward-looking statements. No assurance can be given that any of the assumptions relating to the forward-looking statements specified in the following information are accurate, and we assume no obligation to update any such forward-looking statements.

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