U.S. SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-QSB


(Mark One)
[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

     For the quarterly period ended March 31, 2004

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

     For the transition period from _______ to _______

                         Commission file number 0-25455

                              LEXINGTON RESOURCES, INC.
        (Exact name of small business issuer as specified in its charter)

            NEVADA                                                88-0365453
(State or other jurisdiction of                               (I.R.S. Employer
incorporation of organization)                               Identification No.)

                            7473 West Lake Mead Road
                             Las Vegas, Nevada 89128
                    (Address of Principal Executive Offices)

                   (702) 382-5139 (Issuer's telephone number)

                                       n/a
              (Former name, former address and former fiscal year,
                          if changed since last report)

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 registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days.

                                        Yes  X       No
                                             -------   -------

              Applicable  only to issuers  involved  in  bankruptcy  proceedings
during the preceding five years.

                                       N/A

         Check whether the Registrant  filed all documents  required to be filed
by  Section  12, 13 and 15(d) of the  Exchange  Act  after the  distribution  of
securities under a plan confirmed by a court.

                                        Yes                No
                                              -------      -------
<PAGE>

                      Applicable only to corporate issuers

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

Class                                  Outstanding as of May 17, 2004

Common Stock, $.00025 par value        14,483,352*

*After  taking  into effect the reverse  stock  split of  one-for-three  hundred
shares of common stock  effected  August 8, 2003 and the forward  stock split of
three-for-one shares of common stock effected January 26, 2004.

Transitional Small Business Disclosure Format (check one)

     Yes      No  X



PART I.  FINANCIAL INFORMATION

ITEM 1.  INTERIM CONSOLIDATED FINANCIAL STATEMENTS

         CONSOLIDATED BALANCE SHEETS                                          2

         INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS                        3

         INTERMIN CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

         INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS                        4

         NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS                   5

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
            CONDITION OR PLAN OF OPERATION

ITEM 3. CONTROLS AND PROCEDURES

PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS                                                   16

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS                           21

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES                                     22

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                 22

ITEM 5.  OTHER INFORMATION                                                   22

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K                                    22

SIGNATURES                                                                   23

<PAGE>


PART 1. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS
____________________________




                            LEXINGTON RESOURCES, INC.

                         (an exploration stage company)

                    INTERIM CONSOLIDATED FINANCIAL STATEMENTS


                                 MARCH 31, 2004

                                   (unaudited)



















CONSOLIDATED BALANCE SHEETS

INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS


                                       1

<PAGE>



<PAGE>

<TABLE>
<CAPTION>



                            LEXINGTON RESOURCES, INC.
                         (an exploration stage company)

                       INTERIM CONSOLIDATED BALANCE SHEET



                                                                                              March 31, 2004    December 31,
                                                                                                                    2003
_______________________________________________________________________________________________________________________________
                                                                                                (unaudited)

                                                            ASSETS

<S>                                                                                               <C>             <C>
CURRENT ASSETS
   Cash                                                                                           $  146,036      $   351,420
   Prepaid expenses                                                                                        -              450
   Accounts Receivable                                                                                58,190                -
_______________________________________________________________________________________________________________________________
                                                                                                     204,226          351,870

OIL AND GAS PROPERTIES (Note 4)                                                                      502,621          120,000
_______________________________________________________________________________________________________________________________

                                                                                                  $  706,847      $   471,870
============================================================================================= ================ ================


                                      LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

CURRENT LIABILITIES

   Accounts payable and accrued liabilities                                                       $   48,813      $    23,221
   Drilling obligations (Note 5)                                                                     480,000          350,000
   Due to related parties (Note 8)                                                                   790,360          796,467
_______________________________________________________________________________________________________________________________

                                                                                                   1,319,173        1,169,688
_______________________________________________________________________________________________________________________________

CONTINGENCIES AND COMMITMENTS (Notes 1, 4, 5 & 7)

STOCKHOLDERS' EQUITY (DEFICIENCY) (Note 6)
   Common stock $.00025 par value: 200,000,000 shares authorized
   Preferred stock, $.001 par value: 75,000,000 shares authorized
Issued and outstanding:
   14,043,552 common shares                                                                            3,511            3,211
     Additional paid-in capital                                                                    3,950,858          761,937
   Common stock purchase warrants                                                                     12,500           12,500
    Deficit accumulated during the exploration stage                                              (4,579,195)      (1,475,466)
_______________________________________________________________________________________________________________________________

                                                                                                    (612,326)        (697,818)
_______________________________________________________________________________________________________________________________

                                                                                                  $  706,847      $   471,870
===============================================================================================================================


            The accompanying notes are an integral part of these interim consolidated financial statements.

</TABLE>
                                       2

<PAGE>

<TABLE>
<CAPTION>


                            LEXINGTON RESOURCES, INC.
                         (an exploration stage company)

                  INTERIM CONSOLIDATED STATEMENT OF OPERATIONS

                                   (unaudited)

                                                                                                                 For the period
                                                                                               Three months    from Sept 29, 2003
                                                                                              Ended March 31     (inception) to
                                                                                                                    March 31
                                                                                                   2004              2004
_______________________________________________________________________________________________________________________________
                                                                                                 (Note 1)          (Note 1)

<S>                                                                                               <C>               <C>
OIL AND GAS REVENUE                                                                               $   40,690        $   40,690
DEPLETION                                                                                              2,679             2,679
_______________________________________________________________________________________________________________________________
OPERATING INCOME                                                                                      38,011            38,011
_______________________________________________________________________________________________________________________________

EXPENSES
   Consulting - stock based (Note 7)                                                               2,989,221         2,989,221
   General and administrative                                                                                          170,865
                                                                                                     138,126
   Interest expense                                                                                                     23,803
                                                                                                      14,393
_______________________________________________________________________________________________________________________________

                                                                                                   3,141,740         3,183,889
_______________________________________________________________________________________________________________________________

NET LOSS FOR THE PERIOD                                                                         $ (3,103,729)     $ (3,145,878)
========================================================================== ================= ================= =================




BASIC NET LOSS PER SHARE                                                                          $    (0.23)
========================================================================== ================= =================

WEIGHTED AVERAGE COMMON
      SHARES OUTSTANDING                                                                           13,766,629
========================================================================== ================= =================

           The accompanying notes are an integral part of these interim consolidated financial statements.

</TABLE>

                                       3
<PAGE>
<TABLE>
<CAPTION>




                            LEXINGTON RESOURCES, INC.
                         (an exploration stage company)

                  INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS


                                                                                                          For the period from
                                                                                 For the three month       September 29, 2003
                                                                                  period ended March           (inception) to
                                                                                            31, 2004           March 31, 2004
______________________________________________________________________________________________________________________________
                                                                                     (Note 1)                (Note 1)
<S>                                                                                   <C>                     <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income (loss) for the period                                                    $  (3,103,729)          $   (3,145,878)
  Adjustments to reconcile net loss to net cash from operating activities:
       Non-cash consulting fees                                                           2,989,221                2,989,221
       Oil and gas depletion                                                                  2,679                    2,679
  Changes in working capital assets and liabilities
       Prepaid expenses                                                                         450                        -
       Accounts receivable                                                                  (58,190)                 (58,190)
       Accounts payable                                                                      25,592                    9,868
       Accrued interest payable                                                              14,393                   14,393
       Accrued and unpaid fees payable                                                       30,000                   30,000
______________________________________________________________________________________________________________________________

NET CASH FLOWS USED IN OPERATING ACTIVITIES                                                 (99,584)                (157,907)
______________________________________________________________________________________________________________________________

CASH FLOWS FROM INVESTING ACTIVITIES
  Cash acquired on acquisition of Lexington Oil & Gas Co. LLC                                     -                      900
  Oil and gas properties                                                                   (385,300)                (505,300)
______________________________________________________________________________________________________________________________

NET CASH FLOWS USED IN INVESTING ACTIVITIES                                                (385,300)                (504,400)
______________________________________________________________________________________________________________________________

CASH FLOWS FROM FINANCING ACTIVITIES
  Advances payable                                                                          279,500                  558,043
  Proceeds on sale of common stock                                                                -                  250,300
______________________________________________________________________________________________________________________________

NET CASH FLOWS FROM FINANCING ACTIVITIES                                                    279,500                  808,343
______________________________________________________________________________________________________________________________

INCREASE (DECREASE) IN CASH                                                                (205,384)                 146,036

CASH, BEGINNING OF PERIOD                                                                   351,420                        -
______________________________________________________________________________________________________________________________

CASH, END OF PERIOD                                                                      $  146,036                $ 146,036
==============================================================================================================================

SUPPLEMENTAL CASH FLOW INFORMATION (Refer to Note 10.)



        The accompanying notes are an integral part of these interim consolidated financial statements.

</TABLE>

                                       4

<PAGE>


LEXINGTON RESOURCES, INC.
(an exploration stage company)
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004
________________________________________________________________________________
(unaudited)

NOTE 1:  NATURE OF CONTINUED OPERATIONS AND BASIS OF PRESENTATION
________________________________________________________________________________

By Share Exchange Agreement dated November 19, 2003, Lexington  Resources,  Inc.
(formerly Intergold Corporation) ("LRI" or "the Company"), a Nevada corporation,
acquired 100% of the issued and  outstanding  shares of Lexington Oil & Gas Ltd.
Co., (an  exploration  stage company)  ("Lexington"),  in exchange for 9,000,000
(3,000,000 pre January 2004 3:1 forward split) restricted shares of common stock
of the Company  representing  85% of the total issued and outstanding  shares of
the Company at the time. In connection with this transaction,  Intergold changed
its name to Lexington Resources, Inc. (Refer to Note 3.)

This acquisition has been accounted for as a reverse  acquisition with Lexington
being treated as the accounting parent and LRI, the legal parent,  being treated
as  the  accounting  subsidiary.   Accordingly,   the  consolidated  results  of
operations  of the Company  include  those of Lexington  for the period from its
inception on  September  29, 2003 and those of LRI since the date of the reverse
acquisition.   There  are  no  comparative  financial  statements  presented  as
Lexington had no operations in 2002.

Lexington is an Oklahoma Limited Liability Corporation incorporated on September
29, 2003.  Lexington is an  exploration  stage  company which was formed for the
purpose of the acquisition and development of oil and natural gas properties.

The consolidated financial statements have been prepared on the basis of a going
concern which  contemplates  the  realization of assets and the  satisfaction of
liabilities  in  the  normal  course  of  business.  The  Company  has  incurred
significant  losses since  inception and further  losses are  anticipated in the
development  of its  products  raising  substantial  doubt  as to the  Company's
ability to continue as a going  concern.  The ability of the Company to continue
as a going  concern is dependent on raising  additional  capital to fund ongoing
research  and  development  and  ultimately  on  generating   future  profitable
operations.

UNAUDITED INTERIM FINANCIAL STATEMENTS
The accompanying  unaudited interim consolidated  financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  information  and with the  instructions  to Form 10-QSB of Regulation
S-B. They do not include all  information  and  footnotes  required by generally
accepted  accounting  principles  for complete  financial  statements.  However,
except  as  disclosed  herein,  there  have  been  no  material  changes  in the
information  disclosed  in the notes to the  financial  statements  for the year
ended  December 31, 2003 included in the Company's  Annual Report on Form 10-KSB
filed  with the  Securities  and  Exchange  Commission.  The  interim  unaudited
consolidated  financial  statements  should be read in  conjunction  with  those
financial  statements included in the Form 10-KSB. In the opinion of Management,
all adjustments considered necessary for a fair presentation,  consisting solely
of normal recurring adjustments, have been made. Operating results for the three
months ended March 31, 2004 are not  necessarily  indicative of the results that
may be expected for the year ending December 31, 2004.

________________________________________________________________________________

NOTE 2:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION
The consolidated  financial  statements  include the accounts of the Company and
its  wholly-owned  subsidiary,  Lexington Oil & Gas Ltd. Co. LLC  ("Lexington").
Lexington  was  acquired  by reverse  acquisition  on  November  19,  2003.  The
acquisition  of  Lexington  has been  accounted  for on the  purchase  method of
accounting.  All significant intercompany transactions and account balances have
been eliminated.

OIL AND GAS PROPERTIES
The  Company  follows  the full cost  method of  accounting  for its oil and gas
operations  whereby all costs related to the acquisition of methane,  petroleum,
and natural gas  interests  are  capitalized.  Such costs include land and lease
acquisition  costs,   annual  carrying  charges  of  non-producing   properties,
geological and geophysical costs, costs of drilling and equipping productive and
non-productive  wells,  and direct  exploration  salaries and related  benefits.
Proceeds from the disposal of oil and gas properties are recorded as a reduction
of the related  capitalized  costs without  recognition of a gain or loss unless
the  disposal  would  result in a change of 20 percent or more in the  depletion
rate. The Company currently operates solely in the U.S.A.

Depletion  and  depreciation  of the  capitalized  costs are computed  using the
units-of-production method based on the estimated proven reserves of oil and gas
determined by independent consultants.

                                       5

<PAGE>


LEXINGTON RESOURCES, INC.
(an exploration stage company)
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004
________________________________________________________________________________
(unaudited)

NOTE 2:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
________________________________________________________________________________

Estimated future removal and site  restoration  costs are provided over the life
of proven  reserves on a  units-of-production  basis.  Costs,  which include the
costs  of  production  equipment  removal  and  environmental  remediation,  are
estimated each period by management  based on current  regulations,  costs,  and
technology and industry  standards.  The charge is included in the provision for
depletion and depreciation and the actual  restoration  expenditures are charged
to the accumulated provision amounts as incurred.

The  Company  applies a ceiling  test to  capitalized  costs to ensure that such
costs do not exceed  estimated  future net revenues  from  production  of proven
reserves  at year end market  prices  less  future  production,  administrative,
financing,  site  restoration,  and  income  tax costs plus the lower of cost or
estimated  market  value  of  unproved  properties.  If  capitalized  costs  are
determined to exceed  estimated  future net  revenues,  a write-down of carrying
value is charged to depletion in the period.

EARNINGS (LOSS) PER SHARE
Basic earnings (loss) per share is computed by dividing  earnings (loss) for the
period by the  weighted  average  number of common  shares  outstanding  for the
period.  Fully diluted earnings (loss) per share reflects the potential dilution
of securities by including other potential common stock,  including  convertible
preferred  shares,  in the weighted average number of common shares  outstanding
for a period  and is not  presented  where  the  effect  is  anti-dilutive.  The
presentation  is only of  basic  earnings  (loss)  per  share as the  effect  of
potential  dilution of securities  has no impact on the current  period's  basic
earnings per share.  Loss per share, as presented,  has been restated to reflect
all share  split  described  in Note 6. The  weighted  average  number of shares
outstanding  prior to the  reverse  acquisition  is deemed  to be the  number of
shares issued in connection with the reverse  acquisition being 9,000,000 shares
(3,000,000 pre January 2004 3:1 forward split).

REVENUE RECOGNITION
Revenue  associated  with the sale of crude oil and natural gas is recorded when
title passes to the customer. Revenues from crude oil and natural gas production
from  properties in which the Company has an interest  with other  producers are
recognized on the basis of the Company's net working interest.

FINANCIAL INSTRUMENTS
The fair  value of the  Company's  financial  assets and  financial  liabilities
approximate their carrying values due to the immediate or short-term maturity of
these financial instruments.

USE OF ESTIMATES
The preparation of financial  statements in conformity  with generally  accepted
accounting principles 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 amounts of revenues and expenses during the period.  Actual results
could differ from those estimates.

STOCK-BASED COMPENSATION
In December  2002, the Financial  Accounting  Standards  Board issued  Financial
Accounting  Standard  No.  148,  "Accounting  for  Stock-Based   Compensation  -
Transition  and  Disclosure"   ("SFAS  No.  148"),  an  amendment  of  Financial
Accounting Standard No. 123 "Accounting for Stock-Based Compensation" ("SFAS No.
123").  The  purpose of SFAS No. 148 is to: (1) provide  alternative  methods of
transition for an entity that voluntarily changes to the fair value based method
of accounting for stock-based  employee  compensation,  (2) amend the disclosure
provisions  to require  prominent  disclosure  about the effects on reported net
income of an entity's  accounting  policy  decisions with respect to stock-based
employee compensation, and (3) to require disclosure of those effects in interim
financial information.  The disclosure provisions of SFAS No. 148 were effective
for the Company for the period ended December 31, 2003.

                                       6

<PAGE>

LEXINGTON RESOURCES, INC.
(an exploration stage company)
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004
________________________________________________________________________________
(unaudited)


NOTE 2:  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
________________________________________________________________________________

The  Company  has  elected  to account  for  stock-based  employee  compensation
arrangements  using the  intrinsic  value based  method in  accordance  with the
provisions of Accounting  Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees",  ("APB No. 25") and comply with the disclosure  provisions
of SFAS No. 123 as amended by SFAS No. 148 as described above. Under APB No. 25,
compensation expense is recognized based on the difference,  if any, on the date
of grant between the estimated fair value of the Company's  stock and the amount
an employee  must pay to acquire the stock.  Compensation  expense is recognized
immediately  for  past  services  and  pro-rata  for  future  services  over the
option-vesting  period.  In addition,  with respect to stock options  granted to
employees,  the Company provides  pro-forma  information as required by SFAS No.
123  showing  the  results  of  applying   the  fair  value   method  using  the
Black-Scholes option pricing model.

In accordance with SFAS No. 123, the Company applies the fair value method using
the  Black-Scholes  option-pricing  model in accounting  for options  granted to
consultants.

The Company accounts for equity  instruments  issued in exchange for the receipt
of goods or services from other than  employees in accordance  with SFAS No. 123
and the  conclusions  reached  by the  Emerging  Issues  Task Force in Issue No.
96-18.   Costs  are  measured  at  the  estimated   fair  market  value  of  the
consideration  received or the  estimated  fair value of the equity  instruments
issued,  whichever is more reliably measurable.  The value of equity instruments
issued for  consideration  other than  employee  services is  determined  on the
earliest  of a  performance  commitment  or  completion  of  performance  by the
provider of goods or services as defined by EITF 96-18.

The  Company  has  also  adopted  the  provisions  of the  Financial  Accounting
Standards  Board  Interpretation  No.44,  Accounting  for  Certain  Transactions
Involving  Stock  Compensation - An  Interpretation  of APB Opinion No. 25 ("FIN
44"), which provides guidance as to certain applications of APB 25.

INCOME TAXES
The Company follows the liability  method of accounting for income taxes.  Under
this method,  deferred tax assets and  liabilities are recognized for the future
tax  consequences  attributable to differences  between the financial  statement
carrying  amounts of existing assets and  liabilities  and their  respective tax
balances.  Deferred tax assets and  liabilities  are measured  using  enacted or
substantially  enacted tax rates  expected to apply to the taxable income in the
years in which those  differences  are expected to be recovered or settled.  The
effect  on  deferred  tax  assets  and  liabilities  of a change in tax rates is
recognized  in income in the  period  that  includes  the date of  enactment  or
substantial enactment. A valuation allowance is provided for deferred tax assets
if it is more  likely  than not that the  Company  will not  realize  the future
benefit, or if future deductibility is uncertain.


NOTE 3 - ACQUISITION OF LEXINGTON OIL & GAS LTD. CO. LLC
________________________________________________________________________________

By Share Exchange  Agreement dated November 19, 2003, the Company  acquired 100%
of the  issued  and  outstanding  shares  of  Lexington  (an  exploration  stage
company),  in exchange  for  9,000,000  (3,000,000  pre January 2004 3:1 forward
split)  restricted  shares of common stock of the  Company.  As a result of this
transaction the former  stockholders of Lexington acquired  approximately 85% of
the total issued and outstanding  shares of the Company as at November 19, 2003,
resulting in a change in control of the Company.

During  January,  2004,  the  parties to the Share  Exchange  Agreement,  Orient
Exploration  Ltd.  ("Orient"),  Douglas  Humphreys  ("Humphreys"),  the Company,
Lexington,  and Paluca  Petroleum Inc.  ("Paluca")  reevaluated the terms of the
original  Share  Exchange  Agreement  and upon further  negotiations  desired to
modify the terms of the original  agreement in the best  interest of all parties
such that: (i) 2,250,000  shares of restricted  Common Stock of the Company held
of record by Humphreys were  transferred to Orient in  consideration  therefore;
(ii) the Company  assigned to Humphreys a 5% carried  working  interest in every
well drilled by the Company on the Wagnon Property;  (iii) the Company agreed to
allow Humphreys to participate up to an additional 5% working  interest in every
well drilled by the Company on the Wagnon  Property;  (iv) the Company agreed to
transfer to Paluca  certain  assets  previously  acquired by the Company  (which
included  working  interests  and net revenue  interests  in certain oil and gas
leases  located on the Doc Cole Property,  the Atwood Booch Sand  Property,  the
Jeneva Property and the Sasakwa Gilcrease Sand Property.

                                       7

<PAGE>


LEXINGTON RESOURCES, INC.
(an exploration stage company)
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004
________________________________________________________________________________
(unaudited)

NOTE 3 - ACQUISITION OF LEXINGTON OIL & GAS LTD. CO. LLC (CONT'D)
________________________________________________________________________________

Management  of the Company  does not intend to proceed with the  acquisition  or
development  of  the  described  properties  as  set  out in  item  (iv)  due to
management's analysis that the properties do not contain the appropriate oil and
gas  development  elements  that form part of the  Company's  current  focus and
criteria for corporate oil and gas development initiatives.

In  order  to  reflect  the  revised   operating   arrangement   resulting  from
modifications  to  the  original  terms  of the  Share  Exchange  Agreement  the
following two agreements were simultaneously executed:

HUMPHREYS PURCHASE AND SALE AGREEMENT
On January 21,  2004,  Orient and Douglas  Humphreys,  a director of the Company
("Humphreys")  entered  into a  purchase  and  sale  agreement  (the  "Humphreys
Purchase  and Sale  Agreement").  Pursuant  to the terms and  provisions  of the
Humphreys  Purchase and Sale Agreement:  Humphreys agreed to transfer  2,250,000
shares of restricted  Common Stock of the Company held of record by Humphreys to
Orient in consideration therefore.

PALUCA AGREEMENT
On January 21, 2004, the Company, Lexington., Paluca, and Humphreys entered into
an agreement whereby: (i) the Company assigned to Humphreys a 5% carried working
interest in every well drilled by the Company on the Wagnon  Property;  (ii) the
Company agreed to allow  Humphreys to participate up to an additional 5% working
interest  in every well  drilled by the  Company on the Wagnon  Property;  (iii)
Humphreys agreed to waive any and all other claims, debts or obligations owed to
Humphreys  by the  Company  or by  Lexington,  and (iv) the  Company  agreed  to
transfer to Paluca  certain  assets  previously  acquired by the Company  (which
included  working  interests  and net revenue  interests  in certain oil and gas
leases  located on the Doc Cole Property,  the Atwood Booch Sand  Property,  the
Jeneva Property and the Sasakwa Gilcrease Sand Property.

Lexington is an Oklahoma Limited Liability Corporation incorporated on September
29, 2003 formed for the purpose of the  acquisition  and  development of oil and
natural gas properties in the United States,  concentrating  on coal bed methane
gas acquisition and production initiatives.

Orient Exploration Ltd. is a private corporation that owns 9,000,000  restricted
common shares in the capital of the Company obtained during the reverse takeover
of Lexington Oil & Gas Ltd. Co.

Paluca  Petroleum Inc. is a private  Oklahoma based oil and gas services company
owned by Doug  Humphreys  and  related  parties  thereto.  Some of the  services
provided by Humphreys to the Company are provided  through this business entity.
Mr. Humphreys is the President of Paluca Petroleum Inc.

Doug  Humphreys  is a director  of the Company  and is the  drilling  operations
manager of Lexington  Oil & Gas Ltd. Co., and also consults to Oak Hills Energy,
Inc., an oil and gas operating company based in Holdenville,  Oklahoma that acts
as "operator" to Lexington. Mr. Humphreys is in charge of oil and gas operations
in Oklahoma.


NOTE 4 - OIL AND GAS PROPERTIES
________________________________________________________________________________

WAGNON LEASE
By agreement dated October 9, 2003,  Lexington acquired an interest in a section
of farm-out acreage with the intention to develop coal bed methane gas producing
wells in Pittsburg  County,  Oklahoma in  consideration  of $120,000.  Lexington
holds a 100% working  interest and a 75% net revenue  interest in  approximately
590.2 gross undeveloped acreage of a potential gas producing property located in
Pittsburg  County,  Oklahoma (the "Wagnon  Property").  The  Company's  interest
relating to the Wagnon  Property is subject to farm-out  agreements  equating to
20%  working  interst  between  Paluca,  Oak Hills  Energy and the lessee of the
Wagnon Property.

Two directors of Lexington  Resources,  Inc.  were minority  owners in Oak Hills
Energy,  Inc. in 2003. Their interest in Oak Hills was purchased by the majority
shareholder on January 26, 2004.


                                       8

<PAGE>

LEXINGTON RESOURCES, INC.
(an exploration stage company)
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004
________________________________________________________________________________
(unaudited)


NOTE 4 - OIL AND GAS PROPERTIES (CONT'D)
________________________________________________________________________________

In  February  2004 a well on the  property  (Kellster  1-5  Well)  was put  into
production and has been producing since the middle of February 2004. The Company
plans to drill two further wells on the Wagnon Property in the second quarter of
2004.  During the period ended March 31, 2004 the Company spent $300,300 in well
drilling costs on the Wagnon property.

COAL CREEK PROSPECT
In March 2004 the  Company  obtained  an option to  purchase  an  undivided  95%
interest in  approximately  2,500 net leasehold  acres in 5 sections of the Coal
Creek  Prospect  located  in  Hughes  and  Pittsburg  Counties,  in the State of
Oklahoma.  The option to purchase was extended from April 11, 2004 and was valid
until April 27, 2004. On April, 27, 2004, the Company  completed the purchase of
available  acreage in the  aggregate  amount of 1,536 acres.  The Company paid a
deposit of $50,000  towards the option in March 2004 and an additional  $200,000
in April 2004 in order to extend the the option to April 27, 2004, and a further
$172,565 to complete the purchase of the aforesaid lands.
PANTHER CREEK PROSPECT
In March 2004 the Company  purchased a 3 year lease of  approximately  300 acres
located in five separate sections to develop the Panther Creek Project in Hughes
County, Oklahoma for $35,000.

SOUTH LAMAR PROSPECT
In March 2004 the Company agreed to conditional  terms to purchase a farm-out of
960 acres  located  in three  separate  sections  to  develop  the  South  Lamar
Prospect.


NOTE 5:  DRILLING OBLIGATIONS
________________________________________________________________________________

During the period  ended  December 31, 2003 the Company  entered  into  drilling
agreements  with 3 private  investors (the "Funding  Investors") for the funding
for the Kellster 5-1 well. The Funding Investors each provided  one-third of the
Authorization  For  Expenditure  ("AFE")  capital  estimated at $360,000 for the
drilling and  completion  of the Kellster  5-1. As at March 31, 2004 the Company
successfully  completed the drilling of this well.  An  additional  $120,000 has
been  received  from one of the private  investors as of March 31, 2004,  of the
expected  $720,000 to  commence  drilling on the next two wells named the Kyndal
2-2 and Bryce 3-2 under the same terms as the  Kellster 1-5 which are planned to
be drilled in the second quarter.

Wells to be drilled on the property will carry royalty interests totaling 25% to
land owners and property interest holders and carried working interests of 5% to
a land owner and 5% to a company related to a director of the Company. A company
related  to a director  of the  Company,  Paluca  Petroleum,  Inc.,  also owns a
non-carried  working  interest  of  10%.  Douglas  Humphreys  is a  director  of
Lexington  Resources,  Inc.  and is the  president of Paluca  Petroleum,  Inc. a
private family owned Oklahoma corporation.

The Funding  Investors  are  provided an 80% working  interest,  60% net revenue
interest,  in the wells  until their  invested  capital for each well is repaid,
after which time the Funding  Investors will revert to a 20.1% working interest,
15.075% net revenue interest in the wells located on the Wagnon Lease.  Oakhills
Energy,  Inc., the operator of the well,  will "back-in" to a reversionary  6.7%
Working Interest after invested capital is repaid to the Funding Investors.  The
Company will back-in to a  reversionary  53.2% Working  Interest.  The Company's
obligation  to the  Funding  Investors  is  limited to the  production  revenues
generated from the wells. Accordingly,  if the well is unsuccessful the drilling
obligation will be written off when such determination is made.


NOTE 6:  STOCKHOLDERS' EQUITY
________________________________________________________________________________

The  authorized  capital of the Company  consists of  200,000,000  voting common
shares with $.00025 par value, and 75,000,000  non-voting  preferred shares with
$.001 par value.

                                       9

<PAGE>

LEXINGTON RESOURCES, INC.
(an exploration stage company)
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004
________________________________________________________________________________
(unaudited)

NOTE 6:  STOCKHOLDERS' EQUITY (CONT'D)
________________________________________________________________________________

FORWARD STOCK SPLIT
On January 26, 2004 the Company  forward split its common shares on the basis of
three new shares for each common share outstanding. The par value and the number
of authorized but unissued shares of the Company's  common stock was not changed
as a result of the forward stock split.

Unless  otherwise   noted,  all  references  to  common  stock,   common  shares
outstanding,  average numbers of common shares outstanding and per share amounts
in these  Financial  Statements and Notes to Financial  Statements  prior to the
effective  date of the forward stock split have been restated to reflect the one
for three forward split on a retroactive basis.

On January 22, 2004 the Company  issued  400,000 pre forward split shares of its
common  stock,  upon the exercise of 400,000 pre forward  split stock options at
$0.50 per share for  proceeds  of  $200,000,  which was paid by way of offset of
$200,000  originally  advanced to the Company by  Investor  Communications  Inc.
("ICI") which was assigned by ICI to IMT designated  option holders as described
in Note 7.


NOTE 7:  EMPLOYEE STOCK OPTION PLAN
________________________________________________________________________________

Concurrent  with the  acquisition of Lexington,  all prior stock option plans of
the Company were cancelled. By Directors' Resolution dated November 19, 2003 the
Company adopted a Stock Option Plan ("SOP").  The SOP provides authority for the
Board to grant  Options,  for the  purchase  of a total  number of shares of the
Company's common stock,  not to exceed  1,000,000 pre forward split shares.  The
option  period of options  granted under the SOP shall be up to 10 years and the
option price per share shall be no less than the fair market value of a share of
common stock on the date of grant of the stock option.

In connection  with the reverse  acquisition as described in Note 3, the Company
granted  1,000,000  pre forward  split  options to  consultants  to the Company,
including   950,000  to  International   Market  Trend  AG  ("IMT")  and/or  its
designates.  In accordance with accounting  principles  applicable to accounting
for  business  combinations,  the fair  value of the stock  options  granted  in
connection with a business  combination was included in the determination of the
purchase  price.  The  fair  value  of  these  options  at the  date of grant of
$1,997,581 was estimated  using the  Black-Scholes  option pricing model with an
expected life of 5 years,  a risk free interest rate of 3%, a dividend  yield of
0%, and an expected volatility of 251%.

A summary of the  Company's  stock  options as of March 31,  2004,  and  changes
during the period ended is presented below:

                                                       March 31, 2004
                                               _____________________________
                                                                 Weighted
                                                 Number of        average
                                                  options     exercise price
     Outstanding at beginning of period           1,350,000    $ 0.167/share
     Exercised January 22, 2004                  (1,200,000)    (0.167)/share
     Grant February 2, 2004                       1,000,000       2.00/share
                                               ______________________________

     Exercisable at end of period                 1,150,000      $1.76/share
                                               ============== ===============

In January 2004, 1,200,000 stock options (400,000 pre forward split shares) were
exercised at $0.167 per share  ($0.50 per pre forward  split share) for proceeds
of $200,000 which was paid by way of offset of $200,000  originally  advanced to
the Company by ICI which was assigned by ICI to IMT designated option holders.

On December 31, 2003,  the terms of the Company's SOP were altered,  whereby the
authorized  total number of options was  increased  from  1,000,000  pre forward
split shares to 4,000,000 shares.

On February 2, 2004, an additional 1,000,000 share options were granted; 500,000
exercisable at $1.00 and 500,000 exercisable at $3.00. The term of these options
is five  years.  The  fair  value  of  these  options  at the  date of  grant of
$2,989,221 was estimated  using the  Black-Scholes  option pricing model with an
expected life of 5 years,  a risk free interest rate of 3%, a dividend  yield of
0%, and an expected  volatility  of 251% and has been  recorded as a  consulting
expense in the period ended March 31, 2004. (Refer to Notes 8 and 11)

                                       10

<PAGE>

LEXINGTON RESOURCES, INC.
(an exploration stage company)
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004
________________________________________________________________________________
(unaudited)

NOTE 8:  RELATED PARTY TRANSACTIONS
________________________________________________________________________________

An officer and director of the Company has been contracted by ICI as part of the
management team provided to the Company and its subsidiary.  Although the formal
arrangement  for services to be provided by ICI to the Company ended on December
31, 2003, a month to month  arrangement to provided  services to the Company has
been agreed to as a  transitional  measure.  During the quarter  ended March 31,
2004, a total of $30,000 (2003 - $110,000)  was incurred to ICI for  managerial,
administrative  and investor  relations services provided to the Company and its
subsidiary.  As of March 31,  2004 the  Company  owed ICI a total of $483,370 in
management fees payable which have accrued as described above, loans of $65,998,
and interest of $95,778 accrued at 10% per annum on outstanding loans and unpaid
management fees payable, for a total of $645,146 (2003 - $1,312,280).

During the period  ended  March 31,  2004 the  Company  settled  $200,000 of the
amounts due to ICI in  exchange  for the  issuance of 400,000 pre forward  split
shares of the Company's  common stock by way of exercising  options at $0.50 per
share.

Paluca  Petroleum Inc. has been assigned a 5% carried  Working  Interest in each
well  to be  drilled  on the  Wagnon  lease,  as  partial  compensation  for its
involvement  in  obtaining  and  facilitating  the  execution  of  the  Farm-Out
Agreement  and to  compensate  for Paluca's  services  relating to operation and
completion  of wells to be located on the Wagnon Lease.  In addition,  after all
capital  costs  relating to drilling on wells  relating to the Wagnon  Lease are
repaid to the  private  Funding  Investors,  Paluca has the right to purchase an
additional  5% working  interest in each well to be located on the Wagnon Lease.
As of March 31, 2004 the  Company  has  recorded  $17,500 as a  receivable  from
Paluca as full payment to be received for an additional  5% working  interest of
the Kellster 1-5. (Refer to Notes 4 and 5.)

Of the 1,000,000 stock options granted on February 2, 2004, 105,000 were granted
to officers and  directors and 895,000 stock options were granted to IMT. IMT is
a services consultant to the Company engaged since November, 2003 for an initial
12 month  period to  provide  corporate  planning,  strategy  and  negotiations,
internet based consulting,  and general business consulting services as required
by the Company. (Refer to Note 7.)


NOTE 9:  INCOME TAXES
________________________________________________________________________________

The Company has adopted  FASB No. 109 for  reporting  purposes.  As of March 31,
2004, the Company had net operating loss carry forwards that may be available to
reduce future  years'  taxable  income and will expire  between the years 2006 -
2023.  Availability of loss usage is subject to change of ownership  limitations
under Internal Revenue Code 382. Future tax benefits which may arise as a result
of these losses have not been recognized in these financial statements, as their
realization is determined not likely to occur and  accordingly,  the Company has
recorded a valuation  allowance for the deferred tax asset relating to these tax
loss carryforwards.


NOTE 10 - SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS
________________________________________________________________________________

                                                           Period ended March
                                                                31, 2004
                   _____________________________________________________________
                   Cash paid during the period for:
                            Interest                                   $     -
                            Income taxes                               $     -
                   _____________________________________________________________

During the quarter ended March 31, 2004 the Company:

1.        settled $200,000 of advances due to ICI for 400,000  pre-forward split
          shares of common  shares on the exercise of stock options at $0.50 per
          share  for the  offset of prior  advances  in the  amount of  $200,000
          (refer to Note 6);

                                       11

<PAGE>

LEXINGTON RESOURCES, INC.
(an exploration stage company)
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004
________________________________________________________________________________
(unaudited)

NOTE 10 - SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS
________________________________________________________________________________

2.        issued  1,000,000  stock  options in payment for  consulting  fees.  A
          non-cash  expense of $2,989,221  has been recorded in connection  with
          these options. (See Note 7.)


NOTE 11: SUBSEQUENT EVENTS
________________________________________________________________________________

SOUTH LAMAR PROSPECT
By agreement dated April 21, 2004, Lexington Oil & Gas acquired an interest in a
three section of farm-out acreage with the intention to develop coal bed methane
gas producing  wells in Hughes County,  Oklahoma in  consideration  of $120,000.
Lexington holds a 100% working  interest and a 78.5% net revenue interest in 960
gross  undeveloped  acreage of a potential  gas  producing  property  located in
Hughes County, Oklahoma (the "South Lamar Prospect"). The Company also holds all
other zones except for the Thurman and Jefferson formations. Other zones will be
evaluated for  potential  drilling  opportunities.  The term of the lease is two
years.

COAL CREEK PROSPECT
On April 27, 2004 the Company  closed the  purchase of a lease of 1,536 acres of
the Coal Creek CBM Prospect located in Hughes County,  in the State of Oklahoma.
The  Company  has paid a total of  $422,500  pursuant  to the Coal  Creek  Lease
Purchase Agreement.  Lexington concluded the purchase of the Coal Creek property
as per the  Agreement  dated March 11, 2004.  Under the terms of the purchase of
these leases,  Lexington has an undivided 95% working  interest in subject lands
and a minimum of 79% net revenue  interest.  The terms of the leases are for two
years.

CONVERTIBLE PROMISSORY NOTE
On April 29, 2004 the Company received  $400,000 (four hundred thousand) from an
individual in exchange for a Convertible  Promissory  Note. The term of the note
is for one year at prime  U.S.  prime  plus 1%.  The  investor  has the right to
convert principal and interest of the note at anytime at $5.00 per common share.

PRIVATE PLACEMENT
On May 3, 2004 the Company concluded and issued 400,000 restricted common shares
at $2.50 per  share  plus  one-half  warrant  at $5.00 per share for each  share
purchased.  The total amount raised in this financing was $1,000,000.  A finders
fee of 39,800 restricted common shares was paid pursuant to the transaction.

STOCK OPTIONS
In April 2004 the Company  registered  500,000 common stock options under an S-8
Registration Statement.

                                       12
<PAGE>

         Statements  made in this Form 10-QSB that are not historical or current
facts  are  "forward-looking  statements"  made  pursuant  to  the  safe  harbor
provisions of Section 27A of the  Securities Act of 1933 (the "Act") and Section
21E of the  Securities  Exchange  Act of 1934.  These  statements  often  can be
identified  by the use of terms  such as  "may,"  "will,"  "expect,"  "believe,"
"anticipate,"  "estimate," "approximate" or "continue," or the negative thereof.
The Company intends that such forward-looking  statements be subject to the safe
harbors for such statements.  The Company wishes to caution readers not to place
undue reliance on any such  forward-looking  statements,  which speak only as of
the date  made.  Any  forward-looking  statements  represent  management's  best
judgment as to what may occur in the future. However, forward-looking statements
are subject to risks,  uncertainties and important factors beyond the control of
the Company that could cause actual results and events to differ materially from
historical  results of operations and events and those presently  anticipated or
projected.  The Company  disclaims  any  obligation  subsequently  to revise any
forward-looking  statements to reflect events or circumstances after the date of
such  statement or to reflect the  occurrence of  anticipated  or  unanticipated
events.

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL  CONDITION OR PLAN OF
        OPERATION

GENERAL

         Lexington Resources,  Inc. is a corporation organized under the laws of
the State of Nevada (the  "Company").  The Company  currently  trades on the OTC
Bulletin  Board under the symbol  "LXRS" and on the  Frankfurt  and Berlin Stock
Exchanges under the symbol "LX1"; WKN: A0BKLP.

CURRENT BUSINESS OPERATIONS

         The Company is a natural  resource  exploration  company engaged in the
acquisition and development of oil and gas properties in the United States.  The
Company  expects  to weight  its  future  development  initiatives  towards  gas
production. The Company is committed to developing into a profitable independent

<PAGE>

oil and gas producer through  systematically  expanding  operations by acquiring
new drilling  targets and booking new  reserves  while  organizing  drilling and
production initiatives on leased properties.

         The Company acquired a section of farm-out acreage in Pittsburg County,
Oklahoma for the  development  and production of coal bed methane gas. There are
no proven  reserves on the property  substantiated  by  independent  engineering
reports,  and methods to  determine  suitability  for gas  production  potential
emanate from  comparable  well data in the area and historic  drilling logs that
identify the gas production  target in the vicinity of the leased  acreage.  The
Company has successfully  completed its first of a planned four to five coal bed
methane  gas  wells on the  subject  acreage.  As of the date of this  Quarterly
Report,  coal bed methane gas production  resulted in  approximately  21,000,000
cubic feet of 0.93 BTU grade gas and produced  gross  revenues of  approximately
$40,000 for the period from February 15, 2004 to the end of first quarter.

         The Company has also consummated the acquisition of certain  additional
coal bed methane gas prospects as more fully described  below,  and is currently
working to complete the  acquisition  of several  prospects that fall within the
criteria of providing a geological basis for development of drilling initiatives
that can provide near term revenue potential, fast drilling capital repatriation
from production cash flows, and undeveloped reserve potential. It is anticipated
that the Company's ongoing efforts, subject to adequate funding being available,
will  continue  to  be  focused  on  successfully  concluding  negotiations  for
additional tracts of prime acreage in the coal bed methane gas producing domain,
and to implement  additional  development  initiatives  by drilling new wells to
prove  undeveloped  reserves.   The  Company  plans  to  continue  building  and
increasing  a strategic  base of proven  reserves and  production  opportunities
within  Oklahoma's  Arkoma basis to increase cash flow and that represent growth
opportunity for the Company and its shareholders  over the immediate,  near, and
long term.

OIL AND GAS PROPERTIES

         As of the date of this Quarterly  Report,  the Company has not reported
or filed any reserve  estimated  with any Federal  agencies,  but has  commenced
limited  production from certain  properties as more fully described  below. The
Company  does  not  maintain  any  developed  acreage.   The  Company  maintains
approximately an aggregate of 3,706 gross undeveloped acreage pursuant to leases
and/or  concessions  as discussed  below.  The following is a description of the
Company's oil and gas properties.

         WAGNON PROPERTY

         The  Company  holds  a 100%  working  interest  and a 75%  net  revenue
interest in approximately 590.2 gross undeveloped acreage of a gas lease located
in Pittsburg County, Oklahoma (the "Wagnon Property"). The gas lease relating to
the Wagnon  Property is pursuant to a farm-out  agreement  from Quinton Rental &
Repair Services, Inc. (the "Farm-Out Agreement").

         During  approximately  January  2004,  the Company  commenced  drilling
operations  on its  first  horizontal  coal bed  methane  gas well to a depth of
approximately  2,400 feet vertically and 2,200  horizontally  (the "Kellster No.
1").  The  Kellster  No. 1 coal bed  methane  gas  well is  currently  producing
approximately 300,000 to 400,000 cubic feet of gas per day.

<PAGE>

         The  Kellster  No. 1 coal bed methane  gas well is still in  dewatering
stages, and production volumes can typically increase as the producing reservoir
strata  further  decreases in water content  exposing  producing  reservoir rock
surfaces  in the well.  Pursuant  to the terms and  provisions  of the  Farm-Out
Agreement,  the  Company is  required to drill a well every six months to retain
farm-out  with a  maximum  number of five  allowable  wells.  Management  of the
Company  plans  to  scale  up  drilling   operations,   and   anticipates   that
approximately  three  additional  wells will be drilled.  As of the date of this
Quarterly  Report,  management  of the Company  plans to have the next two wells
drilled  by the end of the  second  quarter.  Further  geological  work  will be
required if the Company desires to commence  drilling of additional wells beyond
those currently planned.

         The Company has contracted with one of the largest coal bed methane gas
drillers in the State of  Oklahoma.  The Company  may also  contract  with other
drilling  consultants,  geologists  and  engineers to obtain the leading edge of
horizontal drilling and coal bed methane completion for the project.

         Initial drilling funding has been arranged through drilling  agreements
with private  investors.  The Company has entered into drilling  agreements with
three  private  investors for the funding of the Kellster No. 1 coal bed methane
gas well  (collectively,  the "Funding  Agreements").  Pursuant to the terms and
provisions of the Funding  Agreements,  each private investor provided one-third
of the  authorization  for  expenditure  capital  estimated  at $360,000 for the
Kellster  No. 1 coal bed methane gas well.  During  February  2004,  the Company
successfully  completed drilling of the Kellster No. 1 well. The net proceeds of
$38,000  resulting from gas production  beginning  February 15 to March 31, 2004
from the Kellster No. 1 coal bed methane gas well will be utilized for repayment
of working  interest  capital  that  provided  the $350,000 for the drilling and
establishment of the well, and for carried working interests.

         Pursuant to the terms and  provisions  of the Funding  Agreements,  the
private  investors  were  provided  with an 80% working  interest  and a 60% net
revenue  interest in the Kellster No. 1 well,  until their  respective  invested
capital for the  Kellster No. 1 well is repaid,  after which time the  investors
will revert to a 20.1%  working  interest  and a 15.075%  net revenue  interest.
Oakhills  Energy,  Inc., the operator of the Kellster No. 1 well, will "back-in"
to a reversionary  6.7% working  interest after the working  interest capital is
repaid and the Company's subsidiary, Lexington, will "back-in" to a reversionary
53.2%  working  interest.  Pursuant to the further  terms and  provisions of the
Funding  Agreements,  all wells to be drilled on the Wagnon  Property will carry
royalty interests totaling 25% to landowners and property interest holders,  and
a carried working interest of 5% to a landowner,  and 5% to a company related to
Mr.  Douglas  Humphreys,  a director of the Company  (which  company also owns a
non-carried working interest of 10%).

         COAL CREEK PROSPECT

         During  March  2004,  the  Company  entered  into an  option  agreement
expiring  on  April  11,  2004  to  purchase  an   undivided   95%  interest  in
approximately  2,500 net leasehold acres located in the Coal Creek Gas Prospect,
Hughes and Pittsburg Counties, State of Oklahoma (the "Coal Creek Lease Purchase
Agreement").  Pursuant  to the  terms and  provisions  of the Coal  Creek  Lease
Purchase  Agreement,  the Company has paid an  aggregate of $422,500 as follows:
(i) an initial $50,000 during March 2004;  (ii) an additional  $200,000 in order
to extend the  Option to  Purchase  until  April 27,  2004;  and (iii) a further
additional  $172,565 to complete  the  purchase  of the acreage  then  available
totaling  1,536 acres of the lease. Under the  terms and  provisions of the Coal

<PAGE>

Creek  Lease  Purchase  Agreement,  the  Company  has an  undivided  95% working
interest in the subject  lands and a minimum of 79% net  revenue  interest.  The
terms of the leases are for two years.

         PANTHER CREEK PROSPECT

         During March 2004,  the Company  entered  into a purchase  agreement to
acquire a three-year lease of  approximately  300 acres located in five separate
sections in the Panther Creek coal bed methane gas  prospect,  located in Hughes
County,  State of  Oklahoma  (the  "Panther  Creek Lease  Purchase  Agreement").
Pursuant  to the  terms and  provisions  of the  Panther  Creek  Lease  Purchase
Agreement, the Company paid $35,000 to secure the three year lease.

         SOUTH LAMAR PROSPECT

         On April 21, 2004,  the Company  entered  into a purchase  agreement to
acquire an interest in three  sections of farm-out  acreage to develop  coal bed
methane gas wells in Hughes County, State of Oklahoma (the "South Lamar Purchase
Agreement").  Pursuant to the terms and  provisions of the South Lamar  Purchase
Agreement,  the Company  paid an  aggregate  amount of $120,000 and holds a 100%
working  interest  and a 78.5% net  revenue  interest  in 960 gross  undeveloped
acreage to develop gas producing wells.

         MIDDLECREEK PROSPECT

         During May 2004,  the Company  entered  into an  agreement to acquire a
320-acre  drilling  target  at $175 per  acre in the  Middlecreek  Gas  Prospect
located in Hughes County, State of Oklahoma. The agreement includes wells on the
property  with minor  production  from the  Gilchrease  zone and  represents  an
average 70% net revenue  interest and a 100% working  interest.  Rights to drill
all geological zones are also included and primary gas targets include the Caney
shale and Hartshorne coal zones with further  possibilities in the Booch, Stuart
and Savannah zones.

         Management  anticipates  that drilling  operations will commence before
the end of May 2004,  which  includes a proposed  vertical well into Caney shale
zone at an estimated  depth of 4,500 feet.  Management  of the Company  believes
that this acquisition  brings drillable acreage for the Company to approximately
3,706 acres with properties in the Wagnon,  Panther, Coal Creek, South Lamar and
Middlecreek prospects, as discussed above, all located in the State of Oklahoma.

ACQUISITION OF LEXINGTON OIL & GAS LTD. CO.

         SHARE EXCHANGE AGREEMENT

         On November 19,  2003,  Intergold  Corporation  (now known as Lexington
Resources,  Inc.),  Lexington Oil & Gas Ltd. Co., an Oklahoma limited  liability
company  ("Lexington"),  and  the  shareholders  of  Lexington  (the  "Lexington
Shareholders")  entered  into a  share  exchange  agreement  (the  "Agreement").
Pursuant to the terms of the Share Exchange Agreement:  (i) the Company acquired
from the Lexington  Shareholders  one hundred  percent  (100%) of the issued and
outstanding  shares of common stock of  Lexington;  and (ii) the Company  issued
3,000,000 (pre-forward stock split) shares of its restricted Common Stock to the
Lexington  Shareholders in proportion to their respective  holdings in Lexington
(of which as of the date of this  Quarterly  Report,  Humphreys has  transferred
750,000  pre-forward  stock split shares to Orient  Exploration  Ltd., a private
corporation ("Orient")).

         PURCHASE AND SALE AGREEMENTS.  During January, 2004, the parties to the
Share Exchange Agreement, Orient, Douglas Humphreys ("Humphreys"),  the Company,
Lexington  Oil &  Gas  Ltd.  Co.,  an  Oklahoma  limited  liability  corporation
("Lexington"),  Paluca  Petroleum  Inc.,  a private  Oklahoma  based oil and gas
services company ("Paluca") reevaluated the terms of the original Share Exchange
Agreement and upon further negotiations desired to modify the terms of the Share
Exchange Agreement as follows:  (i) 750,000  (pre-forward stock split) shares of
restricted  Common  Stock  of the  Company  held of  record  by  Humphreys  were
transferred to Orient in consideration  therefore;  (ii) the Company assigned to
Humphreys a 5% carried working  interest in every well drilled by the Company on
the Wagnon Property;  (iii) the Company agreed to allow Humphreys to participate
up to an additional 5% working  interest in every well drilled by the Company on
the Wagnon  Property;  (iv) the Company  agreed to  transfer  to Paluca  certain
assets previously  acquired by the Company (which included working interests and
net  revenue  interests  in certain  oil and gas leases  located on the Doc Cole

<PAGE>

Property,  the Atwood Booch Sand Property,  the Jeneva  Property and the Sasakwa
Gilcrease Sand Property, as previously disclosed in prior filings)

         In  order  to  reflect  the  revised  operating  situation  arrangement
resulting from  modifications to the Share Exchange  Agreement the following two
agreements were simultaneously executed.

         HUMPHREYS/ORIENT  AGREEMENT.  On January 21, 2004, Orient and Humphreys
entered into an agreement (the  "Humphreys/Orient  Agreement").  Pursuant to the
terms and  provisions of the  Humphreys/Orient  Agreement,  Humphreys  agreed to
transfer 750,000  (pre-forward stock split) shares of restricted Common Stock of
the Company held of record by Humphreys to Orient.

         PALUCA AGREEMENT. On January 21, 2004, the Company,  Lexington,  Paluca
and Humphreys  entered into an agreement (the "Paluca  Agreement").  Pursuant to
the terms and provisions of the Paluca  Agreement:  (i) the Company  assigned to
Humphreys a 5% carried working  interest in every well drilled by the Company on
the Wagnon  Property;  (ii) the Company agreed to allow Humphreys to participate
up to an additional 5% working  interest in every well drilled by the Company on
the Wagnon  Property;  (iii) Humphreys agreed to waive any and all other claims,
debts or obligations owed to Humphreys by the Company or by Lexington,  and (iv)
the Company agreed to transfer to Paluca certain assets  previously  acquired by
the Company  (which  included  working  interests  and net revenue  interests in
certain oil and gas leases  located on the Doc Cole  Property,  the Atwood Booch
Sand Property,  the Jeneva Property and the Sasakwa Gilcrease Sand Property,  as
previously disclosed in prior filings). Mr. Douglas Humphreys, a director of the
Company, is the sole officer and director and majority shareholder of Paluca.

         Therefore,  as of the date of this Quarterly Report,  management of the
Company does not intend to proceed with the  acquisition  or  development of the
above-described  properties as disclosed in previous filings due to management's
analysis  that  the  properties  do not  contain  the  appropriate  oil  and gas
development  elements that form part of the Company's current focus and criteria
for corporate oil and gas development initiatives.

RESULTS OF OPERATION

THREE-MONTH PERIOD ENDED MARCH 31, 2004

         The Company's net loss for the three-month  period ended March 31, 2004
was approximately  ($3,103,729).  During the three-month  period ended March 31,
2004, the Company  generated $40,690 in gross revenue primarily from the sale of
gas  produced  from the  Kellster  No. 1 coal bed methane gas well that  started
production in mid February,  2004,  which gross revenue was reduced by $2,679 in
estimated  depletion  and  operating  costs,  resulting in  operating  income of
$38,011.

         During the  three-month  period  ended March 31,  2004,  the  Company's
operating  expenses  consisted  primarily  of:  (i)  $2,989,221  in  stock-based
compensation  relating  to the  fair  valuation  of  stock  options  granted  to
consultants;  (ii) $138,126 as general and  administrative  expenses;  and (iii)
$14,393 as interest  expense.  General  and  administrative  expenses  generally
include corporate overhead, financial and administrative contracted services and
consulting costs. Operating expenses increased primarily due to the recording of
the non-cash  expense of $2,989,221  in  connection  with the grant of 2,200,000
stock   options   (400,000   pre-Forward   Stock  Split  options  and  1,000,000

<PAGE>

post-Forward  Stock Split  options).  See "Part II. Other  Information.  Item 2.
Changes in Securities and Use of Proceeds."

         Of the $138,126  incurred as operating  expenses during the three-month
period  ended March 31, 2004,  an  aggregate of $30,000 was incurred  payable to
Investor  Communications  International,  Inc. ("ICI") for amounts due and owing
for operational  management,  administrative and financial services rendered. As
of March 31,  2004,  the Company  owned ICI an  aggregate  amount of $483,370 in
accrued  management  fees  payable,  loans of $65,998  and  interest  of $95,778
accrued  at ten  percent  (10%)  per  annum  on  outstanding  loans  and  unpaid
management fees for a total $645,146.  The Company's  President/Chief  Executive
Officer, Grant Atkins, and Chief Financial Officer, Vaughn Barbon, were employed
by ICI and formed part of the management team provided by ICI to the Company.

         During the  three-month  period ended March  31,2004,  the Company paid
$-0- to ICI.  During the  three-month  period ended March 31, 2004,  the Company
settled $200,000 of the amounts due and owing ICI pursuant to which ICI assigned
its right,  title and interest into such debt to certain  designated  holders of
Stock  Options,  and the  Company  agreed to accept such  assignment  of debt as
payment for the exercise price of $0.50 per share of 400,000  (pre-Forward Stock
Split)  Stock  Options  held by such  designated  holders.  See "Part II.  Other
Information. Item 2. Changes in Securities and Use of Proceeds."

         The Company and ICI entered  into a two-year  consulting  services  and
management   agreement   dated  January  1,  1999  (the   "Consulting   Services
Agreement"),  whereby ICI performs a wide range of  management,  administrative,
financial,  marketing and public company services including, but not limited to,
the following:  (i) international  business relations and strategy  development,
(ii) shareholder  liaison,  (iii) corporate public relations,  press release and
public information distribution, (iv) property exploration management, including
administration of metallurgical development, metallurgical liaison, BLM liaison,
engineering  company  liaison,   drilling  administration,   geologist  liaison,
mapping, survey and catalogue,  geostatistical liaison,  environmental research,
geological reports  compilation and due diligence efforts,  (v)  administration,
including  auditor  and  legal  liaison,  media  liaison,  corporate  minutebook
maintenance and record keeping,  corporate  secretarial  services,  printing and
production,  office and general duties, and (vi) financial and business planning
services,  including  capital and  operating  budgeting,  banking,  bookkeeping,
documentation,   database  records,  preparation  of  financial  statements  and
creation of annual reports.  On January 1, 2001, the Company and ICI renewed the
Consulting  Services Agreement for an additional  two-year period.  Although the
Consulting  Services  Agreement had ended on December 31, 2003, a month-to-month
agreement to provide services has been  established  between the Company and ICI
as a transitional measure.

         As discussed above, the net loss incurred during the three-month period
ended March 31, 2004 is attributable  primarily to the recording of the non-cash
expense of $2,989,221 in  connection  with the grant of 2,200,000  stock options
(400,000 pre-Forward Stock Split options and 1,000,000  post-Forward Stock Split
options).  The Company's net loss during the three-month  period ended March 31,
2004 was  approximately  ($3,103,729) or ($0.23) per share. The weighted average
number of shares  outstanding  was 13,766,629 for the  three-month  period ended
March 31, 2004 (which have been  restated in  accordance  with the forward stock
split of three-for-one shares of common stock effected January 26, 2004).

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

         The Company's financial  statements have been prepared assuming that it
will continue as a going concern and,  accordingly,  do not include  adjustments
relating to the  recoverability  and realization of assets and classification of
liabilities  that might be necessary should the Company be unable to continue in
operation.

THREE-MONTH PERIOD ENDED MARCH 31, 2004

         As of the  three-month  period  ended  March 31,  2004,  the  Company's
current assets were $204,226 and its current liabilities were $1,319,173,  which
resulted  in a working  capital  deficit of  $1,114,947.  As of the  three-month
period ended March 31, 2004, the Company's total assets were $706,847 consisting
of: (i)  $146,036  in cash;  (ii)  $58,190  in  accounts  receivable;  and (iii)
$502,621 in valuation of oil and gas properties.  As of the  three-month  period
ended March 31, 2004, the Company's total liabilities were $1,319,173 consisting
of: (i) $790,360 due to related parties;  (ii) $480,000 in drilling obligations;
and (iii)  $48,813 in accounts  payable and  accrued  liabilities.  See "Part I.
Financial Information.  Item 2. Management's  Discussion and Analysis or Plan of
Operation - Material Commitments."

         Stockholders'  deficit  decreased from ($697,818) for fiscal year ended
December 31, 2003 to ($612,326) for the three-month period ended March 31, 2004.

         The  Company  has not  generated  positive  cash flows  from  operating
activities. For the three-month period ended March 31, 2004, net cash flows used
in operating  activities  was ($99,584),  consisting  primarily of a net loss of
($3,103,729), which was adjusted by $2,989,221 to reconcile net loss to net cash
from  operating  activities  relating  to the  non-cash  expense of the grant of
2,200,000 stock options.

         Net cash flows used in  investing  activities  was  ($385,300)  for the
three-month period ended March 31, 2004 pertaining to the acquisition of the oil
and gas properties.

         Net  cash  flows  from  financing   activities  was  $279,500  for  the
three-month period ended March 31, 2004 pertaining to advances payable.

PLAN OF OPERATION

         As of the date of this  Quarterly  Report,  there  has  been no  income
realized  from the business  operations of the Company.  The  Company's  primary
source of  financing  during  the prior  fiscal  years has been  from,  advances
provided to the Company as debt and private placement offerings.

         In accordance  with the  acquisition  of  Lexington,  management of the
Company  anticipates  a possible  increase  in  operating  expenses  and capital
expenditures relating to oil and gas operating properties and acquisitions.  The
Company may finance these expenses with further issuances of Common Stock of the
Company in addition  to the private  drilling  funding  agreements.  The Company
believes that any  anticipated  private  placements  of equity  capital and debt
financing, if successful,  may be adequate to fund the Company's operations over
the next six  months.  Thereafter,  the  Company  expects  it will need to raise
additional  capital to meet long-term  operating  requirements.  The Company may
encounter  business  endeavors  that require  significant  cash  commitments  or
unanticipated  problems  or  expenses  that could  result in a  requirement  for
additional cash before that time. If the Company raises additional funds through
the  issuance of equity or  convertible  debt  securities  other than to current
shareholders,  the  percentage  ownership of its current  shareholders  would be

<PAGE>

reduced, and such securities might have rights, preferences or privileges senior
to its common stock.  Additional  financing may not be available upon acceptable
terms,  or at all. If adequate  funds are not  available or are not available on
acceptable  terms,  the Company may not be able to take advantage of prospective
new  business  endeavors  or  opportunities,   which  could   significantly  and
materially restrict the Company's business operations.

MATERIAL COMMITMENTS

         A  significant  commitment  for the Company for fiscal year 2004 is the
principal amount of $645,146 due and owing to ICI.

         A significant and estimated  commitment for the Company for fiscal year
2004  relates to the  drilling  agreements  with three  private  investors  (the
"Funding Investors") for the funding for the Kellster No. 1 coal bed methane gas
well. The Funding  Investors each provided  one-third of the  authorization  for
expenditures  capital  estimated  at $360,000  for the  Kellster  No. 1 coal bed
methane gas well. As at March 31, 2004, $340,000 was advanced by the Company for
drilling costs. A further $120,000 in capital from certain Funding Investors was
received as at March 31, 2004 for the funding of drilling to be conducted on the
Company's Wagnon Lease.

         A  significant  commitment  for the Company for fiscal year 2004 is the
principal amount of $400,000 due and owing pursuant to a convertible  promissory
note dated April 26, 2004 (the "Convertible  Promissory Note").  Pursuant to the
terms and provisions of the Convertible  Promissory Note, the holder thereof has
the right to  convert  principal  and  interest  at  anytime at $5.00 per Common
Share. The term of the Convertible  Promissory Note is for one year and interest
accrues at the prime rate +1.

OFF-BALANCE SHEET ARRANGEMENTS

         As of the date of this Quarterly Report,  the Company does not have any
off-balance  sheet  arrangements  that  have  or are  reasonably  like to have a
current  or future  effect on the  Company's  financial  condition,  changes  in
financial  condition,  revenues or expenses,  results of operations,  liquidity,
capital  expenditures or capital  resources that are material to investors.  The
term "off-balance sheet arrangement" generally means any transaction,  agreement
or other  contractual  arrangement  to which an entity  unconsolidated  with the
Company is a party, under which the Company has (i) any obligation arising under
a guarantee  contract,  derivative  instrument or variable  interest;  or (ii) a
retained or contingent  interest in assets transferred to such entity or similar
arrangement  that serves as credit,  liquidity  or market risk  support for such
assets.

RECENT ACCOUNTING PRONOUNCEMENTS

         In June 2002,  the FASB  issued  SFAS No.  146,  "Accounting  for Costs
Associated  with Exit or Disposal  Activities."  Such  standard  requires  costs
associated with exit or disposal  activities  (including  restructurings)  to be
recognized  when the costs are incurred,  rather than at a date of commitment to
an exit or disposal plan. SFAS No. 146 nullifies EITF Issue No. 94-3, "Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity (including Certain Costs Incurred in a Restructuring)."  Under SFAS No.
146, a liability related to an exit or disposal activity is not recognized until
such  liability has actually  been incurred  whereas under EITF Issue No. 94-3 a

<PAGE>

liability  was  recognized  at the time of a  commitment  to an exit or disposal
plan.  The  provisions  of this  standard  are  effective  for exit or  disposal
activities  initiated  after December 31, 2002. The adoption of SFAS 146 did not
have a  material  effect on the  Company's  financial  position  or  results  of
operations.

         In May 2003, SFAS 150,  "Accounting for Certain  Financial  Instruments
with Characteristics of both Liabilities and Equity", was issued. This Statement
establishes  standards  for  how  an  issuer  classifies  and  measures  certain
financial  instruments with  characteristics  of both liabilities and equity. It
requires that an issuer classify a financial instrument that is within its scope
as a liability (or an asset in some  circumstances).  Many of those  instruments
were previously classified as equity. Generally, a financial instrument, whether
in the form of shares or otherwise,  that is mandatorily  redeemable,  i.e. that
embodies  an  unconditional  obligation  requiring  the  issuer  to redeem it by
transferring its shares or assets at a specified or determinable date (or dates)
or upon an event that is certain to occur, must be classified as a liability (or
asset in some  circumstances).  In some cases,  a financial  instrument  that is
conditionally  redeemable  may  also be  subject  to the  same  treatment.  This
Statement does not apply to features that are embedded in a financial instrument
that is not a derivative (as defined) in its entirety. For public entities, this
Statement is effective for financial  instruments entered into or modified after
May 31, 2003.  The adoption of SFAS 150 did not affect the  Company's  financial
position or results of operations.

         In  November  2002,  the  FASB  issued  FASB   Interpretation  No.  45,
"Guarantor's  Accounting for Disclosure  Requirements for Guarantees,  Including
Indirect  Guarantees  of  Indebtedness  of  Others,  an  interpretation  of FASB
Statements  No. 5, 57 and 107 and  rescission  of FASB  Interpretation  No.  34,
Disclosure of Indirect  Guarantees of Indebtedness of Others" ("FIN 45"). FIN 45
clarifies the requirements for a guarantor's  accounting for, and disclosure of,
certain  guarantees  issued and  outstanding.  It also  requires a guarantor  to
recognize,  at the  inception of a guarantee,  a liability for the fair value of
the obligation  undertaken in issuing the guarantee.  This  interpretation  also
incorporates without reconsideration the guidance in FASB Interpretation No. 34,
which is being  superseded.  The adoption of FIN 45 did not affect the Company's
financial position or results of operations.

         In  January  2003,  the  FASB  issued  FASB   Interpretation   No.  46,
Consolidation of Variable  Interest  Entities,  an  interpretation of Accounting
Research Bulletins ("ARB") No. 51, Consolidated Financial Statements ("FIN 46").
Fin 46 applies  immediately to variable  interest entitles created after January
31, 2003,  and in the first  interim  period  beginning  after June 15, 2003 for
variable interest entities created prior to January 31, 2003. The interpretation
explains  how to  identify  variable  interest  entities  and how an  enterprise
assesses  its  interest  in a  variable  interest  entity to decide  whether  to
consolidate that entity.  The  interpretation  requires existing  unconsolidated
variable interest entities to be consolidated by their primary  beneficiaries if
the entities do not effectively disperse risks among parties involved.  Variable
interest  entities  that  effectively  disperse  risks will not be  consolidated
unless a single  party  holds an  interest  or  combination  of  interests  that
effectively recombines risks that were previously dispersed. The adoption of FIN
46 did not affect the Company's financial position or results of operations.

<PAGE>

ITEM III. CONTROLS AND PROCEDURES

         An  evaluation  was  conducted  under  the  supervision  and  with  the
participation of the Company's management, including Grant Atkins, the Company's
President  and  Chief  Executive  Officer,  and  Vaughn  Barbon,  the  Company's
Treasurer and Chief Financial  Officer,  of the  effectiveness of the design and
operation of the Company's  disclosure  controls and  procedures as at March 31,
2004.  Based on that  evaluation,  Mr. Atkins and Mr. Barbon  concluded that the
Company's  disclosure  controls and procedures were effective as of such date to
ensure that information required to be disclosed in the reports that the Company
files or submits  under the  Securities  Exchange  Act of 1934,  as amended,  is
recorded,  processed,  summarized and reported within the time periods specified
in  Commission  rules and forms.  Such  officers  also confirm that there was no
change in the Company's  internal  control over financial  reporting  during the
three-month  period  ended March 31, 2004 that has  materially  affected,  or is
reasonably  likely to materially  affect,  the Company's  internal  control over
financial reporting.

AUDIT COMMITTEE REPORT

         The Board of Directors has established an audit committee.  The members
of the audit committee are Mr. Steve Jewett, Mr. Doug Humphreys,  and Mr. Norman
MacKinnon.  Each  member of the audit  committee  is  "independent"  within  the
meaning of Rule 10A-3 under the Exchange Act. The audit  committee was organized
in April  2004 and  operated  under a written  charter  adopted  by the Board of
Directors.

         The audit  committee  has  review and  discussed  with  management  the
Company's  unaudited  financial  statements as of and for the three-month period
ended March 31, 2004. The audit  committee has also discussed with Dale Matheson
Carr-Hilton  LaBonte  the matters  required  to be  discussed  by  Statement  on
Auditing Standards No. 61,  Communication with Audit Committees,  as amended, by
the  Auditing  Standards  Board of the American  Institute  of Certified  Public
Accountants.   The  audit  committee  has  received  and  reviewed  the  written
disclosures and the letter from Dale Matheson  Carr-Hilton  LaBonte  required by
Independence Standards Board Standard No. 1, Independence Discussions with Audit
Committees, as amended, and has discussed with Dale Matheson Carr-Hilton LaBonte
their independence.

         Based on the  reviews  and  discussions  referred  to above,  the audit
committee has recommended to the Board of Directors that the unaudited financial
statements  referred to above be included in the Company's  Quarterly  Report on
Form  10-QSB for the  three-month  period  ended  March 31,  2004 filed with the
Securities and Exchange Commission.


PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

         No report required.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

PRIVATE PLACEMENT OFFERING

         As of the date of this Quarterly Report, the Company has terminated its
private  placement  offering under  Regulation S and Rule 506 of Regulation D of
the Securities Act of 1933, as amended (the "1933 Securities Act").  Pursuant to
the terms of the private  placement,  the Company offered 1,000,000 units in the

<PAGE>

capital of the Company (the "Unit"),  at a subscription price of $2.50 per Unit,
with each such Unit being comprised of one share of restricted  Common Stock and
one-half of one  non-transferable  share purchase warrant (the "Warrant").  Each
such whole Warrant  entitles the holder thereof to purchase one additional share
of  restricted  Common  Stock at an  exercise  price of $5.00 per  Warrant for a
period  commencing  on the date of the  issuance  of the Unit by the Company and
ending on December 31, 2005.  The Company sold 400,000  Units at $2.50 per Unit,
consisting of 400,000  shares of restricted  Common Stock and 200,000  Warrants,
for aggregate gross proceeds of $1,000,000.  The per share price of the offering
was  arbitrarily  determined  by the Board of Directors  based upon  analysis of
certain factors  including,  but not limited to, stage of development,  industry
status, investment climate, perceived investment risks, assets and net estimated
worth of the Company.  The Company  issued shares of restricted  Common Stock to
one U.S. investor, who was deemed an accredited investor as that term is defined
under  Regulation  D, and to ten  non-U.S.  resident  investors.  The  investors
executed  subscription  agreements  and  acknowledged  that the securities to be
issued  have  not  been  registered  under  the 1933  Securities  Act,  that the
investors  understood the economic risk of an investment in the securities,  and
that the investors had the  opportunity to ask questions of and receive  answers
from  the  Company's  management  concerning  any and  all  matters  related  to
acquisition of the securities. No underwriter was involved in the transaction. A
finders'  fee was paid by the  issuance  of 39,800  restricted  shares of Common
Stock.

FORWARD STOCK SPLIT

         On January 14, 2004, the Board of Directors of the Company  pursuant to
minutes of written consent in lieu of a special meeting  authorized and approved
a forward stock split of  three-for-one  of the Company's issued and outstanding
shares of Common Stock (the "Forward Stock Split").

         The Forward Stock Split was effectuated  based on market conditions and
upon a determination  by the Board of Directors that the Forward Stock Split was
in the best  interests  of the  Company  and the  shareholders.  In the  Board's
judgment the Forward  Stock Split would  result in an increase in the  Company's
trading  float of  shares  of  Common  Stock  available  for sale  resulting  in
facilitation of investor  liquidity and trading volume potential.  The intent of
the Forward  Stock  Split was to increase  the  marketability  of the  Company's
Common Stock.

         The Forward Stock Split was  effectuated  with a record date of January
26, 2004 upon filing the  appropriate  documentation  with  NASDAQ.  The Forward
Stock Split  increased the  Company's  issued and  outstanding  shares of Common
Stock from 4,281,184 to  approximately  12,843,552  shares of Common Stock.  The
Common Stock will continue to be $0.00025 par value.

STOCK OPTION PLAN

         On December 31, 2003,  the Board of Directors of the Company  ratified,
approved and confirmed the adoption of a new Stock Option Plan,  which  provided
authorization  to the Board of Directors to grant up to 4,000,000  Stock Options
to  directors,  officers,  employees  and  consultants  of the  Company  and its
subsidiaries. Options granted under the Stock Option Plan shall be at prices and
for terms as determined  by the Board of Directors  with terms not to exceed ten
(10) years.


<PAGE>

         During April 2004,  the Company  caused to be filed with the Securities
and Exchange Commission a registration statement on "Form S-8 - For Registration
Under the  Securities  Act of 1933 of  Securities  to Be  Offered  to  Employees
Pursuant to Employee  Benefit  Plans".  The S-8  registration  statement  became
effective registering Stock Options under the Stock Option Plan in the aggregate
amount of 500,000 Stock Options  exercisable  at an exercise  price of $1.00 per
share.

STOCK OPTIONS GRANTED

         In accordance  with the terms and  provisions of the Stock Option Plan,
and as of the date of this  Quarterly  Report,  the  Board of  Directors  of the
Company  has  granted  an  aggregate  of  2,000,000  Stock  Options  as  follows
(4,000,000  Stock Options  post-Forward  Stock Split):  (i) 50,000 Stock Options
(pre-Forward  Stock Split)  exercisable at $0.50 per share to Douglas  Humphreys
expiring February 12, 2013; (ii) 950,000 Stock Options (pre-Forward Stock Split)
exercisable at $0.50 per share to IMT and/or IMT's employees or consultants who,
in such capacities,  rendered bona fide services on behalf of the Company (which
all such shares were subject to a S-8  registration  statement as filed with the
Securities and Exchange  Commission);  (iii) 500,000 Stock Options (post-Forward
Stock Split)  exercisable at $1.00 per share to IMT and two directors (which all
such shares were subject to the S-8 registration  statement  referenced above as
filed with the  Securities  and Exchange  Commission);  and (iv)  500,000  Stock
Options (post-Forward Stock Split) exercisable at $3.00 per share to IMT and one
director.

STOCK OPTIONS EXERCISED/ICI DEBT SETTLEMENT

         Of the 4,000,000 aggregate Stock Options granted, and as of the date of
this Annual  Report:  (i) 868,870 Stock Options  (pre-Forward  Stock Split) have
been  exercised at $0.50 per share for $434,435 in settlement  and assignment of
debt in accordance  with the terms of the  respective  notice and  agreements of
exercise of option  (2,606,610  Stock Options  post-Forward  Stock Split);  (ii)
81,130 Stock Options  (pre-Forward Stock Split) have been exercised at $0.50 per
share for $40,565 by  employees or  consultants  of IMT in  accordance  with the
terms of the  respective  notice and  agreements of exercise of option  (243,390
Stock  Options  post-Forward  Stock  Split);  and (iii)  400,000  Stock  Options
(pre-Forward Stock Split) have been exercised at $0.50 per share for $200,000 in
settlement of debt to ICI and  assignment of debt by ICI in accordance  with the
terms of the respective  notice and agreements of exercise of option  (1,200,000
post-Forward Stock Split).

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

         No report required.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         No report required.

ITEM 5. OTHER INFORMATION

         No report required.

ITEM 5. OTHER INFORMATION

         No report required.

<PAGE>


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

         Exhibits:

         31.1 Certification  of Chief Executive  Officer  pursuant to Securities
              Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a).
         31.2 Certification  of Chief Financial  Officer  pursuant to Securities
              Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a).
         32.1 Certifications  pursuant to  Securities  Exchange Act of 1934 Rule
              13a- 14(b) or 15d-14(b)  and 18 U.S.C.  Section  1350,  as adopted
              pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

         Reports on Form 8-K:

         Report on Form 8-K filed on May 4, 2004  regarding Item 5. Other Events
         and Regulation FD Disclosure.


SIGNATURES

         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                             LEXINGTON RESOURCES, INC.

Dated: May 13, 2004                          By: /s/ Grant Atkins
                                             ___________________________
                                             Grant Atkins, President and
                                             Chief Executive Officer


Dated: May 13, 2004                          By: /s/ Vaughn Barbon
                                             ______________________________
                                             Vaughn Barbon, Chief Financial
                                             Officer