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 September 30, 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 [ ]


                      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 November 9, 2004

Common Stock, $.00025 par value        16,999,038

Transitional Small Business Disclosure Format (check one)

                                 Yes [ ] No [X]


<PAGE>


PART I.  FINANCIAL INFORMATION

ITEM 1.  INTERIM CONSOLIDATED FINANCIAL STATEMENTS

         CONSOLIDATED BALANCE SHEETS

         INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS

         INTERMIN CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

         INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

         NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

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

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

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

ITEM 5.  OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

SIGNATURES


<PAGE>


PART 1. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


                            LEXINGTON RESOURCES, INC.
                         (AN EXPLORATION STAGE COMPANY)

                    INTERIM CONSOLIDATED FINANCIAL STATEMENTS


                               SEPTEMBER 30, 2004
                                   (UNAUDITED)



















CONSOLIDATED BALANCE SHEETS

INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS


<PAGE>

<TABLE>
<CAPTION>

                            LEXINGTON RESOURCES, INC.
                         (an exploration stage company)

                           CONSOLIDATED BALANCE SHEETS

                                                                        September 30,       December 31,
                                                                            2004                2003
________________________________________________________________________________________________________
                                                                         (unaudited)
<S>                                                                      <C>                <C>
                                     ASSETS

CURRENT ASSETS
   Cash                                                                  $ 1,484,637        $    351,420
   Prepaid expenses                                                            7,000                 450
   Accounts Receivable                                                       185,500                   -
   Deferred finance fee (Note 6)                                              30,833                   -
________________________________________________________________________________________________________
                                                                           1,707,970             351,870

FIXED ASSETS, net of depreciation                                              3,163                   -

OIL AND GAS PROPERTIES (Note 4)                                            2,255,353             120,000
________________________________________________________________________________________________________
                                                                         $ 3,966,486        $    471,870
========================================================================================================


               LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

CURRENT LIABILITIES

   Accounts payable and accrued liabilities                              $   799,966        $     23,221
   Drilling obligations (Note 5)                                             862,984             350,000
   Convertible Promissory Notes (Note 6)                                     500,000                   -
   Due to related parties (Note 9)                                           436,226             796,467
________________________________________________________________________________________________________
                                                                           2,599,176           1,169,688
DRILLING OBLIGATIONS (Note 5)                                                225,000                   -
________________________________________________________________________________________________________
                                                                           2,824,176           1,169,688
________________________________________________________________________________________________________

CONTINGENCIES AND COMMITMENTS (Notes 1, 4, 5 & 8)

STOCKHOLDERS' EQUITY (DEFICIENCY) (Note 7)
   Common stock $0.00025 par value: 200,000,000 shares authorized
   Preferred stock, $0.001 par value: 75,000,000 shares authorized
     Issued and outstanding:
        16,282,584 common shares (2003 - 1,563,552)                            3,871               3,211
        Additional paid-in capital                                         7,581,827             761,937
        Common stock purchase warrants                                       207,246              12,500
        Deficit accumulated during the exploration stage                  (6,650,634)         (1,475,466)
________________________________________________________________________________________________________
                                                                           1,142,310            (697,818)
________________________________________________________________________________________________________
                                                                         $ 3,966,486        $    471,870
========================================================================================================

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

</TABLE>


                                      F-2


<PAGE>

<TABLE>
<CAPTION>


                            LEXINGTON RESOURCES, INC.
                         (an exploration stage company)

                  INTERIM CONSOLIDATED STATEMENT OF OPERATIONS

                                   (unaudited)


                                                                                                                  For the period
                                         Three months     Three months      Nine months       Nine months       from Sept 29, 2003
                                             Ended           Ended             Ended             Ended            (inception) to
                                         September 30,    September 30,     September 30,     September 30,       September 30,
                                             2004             2003             2004              2003                  2004
__________________________________________________________________________________________________________________________________
                                                           (Note 1)                             (Note 1)             (Note 1)
<S>                                       <C>              <C>               <C>                 <C>                    <C>

OIL AND GAS REVENUE                       $   211,549      $        -        $   305,756       $        -          $   305,756
__________________________________________________________________________________________________________________________________

EXPENSES
   Depletion                                  105,628               -            112,186                -              112,186
   Operating costs and taxes                   14,458                             21,641                                21,641
__________________________________________________________________________________________________________________________________
                                              120,086                            133,827                               133,827
__________________________________________________________________________________________________________________________________

OPERATING INCOME                               91,463               -            171,929                -              171,929
__________________________________________________________________________________________________________________________________

OTHER EXPENSES
   Consulting - stock based (Note 8)                -               -          2,989,221                -            2,989,221
   General and administrative                 949,459               -          2,307,567                -            2,406,749
   Interest expense                            23,924               -             50,309                -               53,044
__________________________________________________________________________________________________________________________________

                                              973,383               -          5,347,097                -            5,449,014
__________________________________________________________________________________________________________________________________

NET LOSS FOR THE PERIOD                   $  (881,920)     $        -        $(5,175,168)      $        -          $(5,277,085)
==================================================================================================================================

BASIC NET LOSS PER SHARE                  $     (0.06)     $    (0.00)       $     (0.35)      $    (0.00)
=========================================================================================================

WEIGHTED AVERAGE COMMON
      SHARES OUTSTANDING                   15,319,693       9,000,000         14,632,326        9,000,000
=========================================================================================================


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

</TABLE>


                                      F-3


<PAGE>

<TABLE>
<CAPTION>


                            LEXINGTON RESOURCES, INC.
                         (an exploration stage company)

                  INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   (unaudited)

                                                                                                                     For the period
                                                                                                                               from
                                                                                                   For the Nine       September 29,
                                                                                For the Nine       month period    2003 (inception)
                                                                                month period              ended                  to
                                                                              ended Sept 30,      September 30,       September 30,
                                                                                        2004               2003                2004
___________________________________________________________________________________________________________________________________
                                                                                                  (Note 1)            (Note 1)
<S>                                                                             <C>                 <C>              <C>

CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) for the period                                                $(5,175,168)        $   -            $(5,217,317)
Adjustments to reconcile net loss to net cash from operating activities:
       Non-cash consulting fees                                                   2,989,221             -              2,989,221
       Non-cash finance fees                                                         19,167             -                 19,167
       Oil and gas depletion                                                        112,186             -                112,186
       Depreciation                                                                     332             -                    332
  Changes in working capital assets and liabilities
       Prepaid expenses                                                              (6,550)            -                 (7,000)
       Accounts receivable                                                         (185,500)            -               (185,500)
       Accounts payable                                                             777,745             -                762,021
       Accrued interest payable                                                      24,453             -                 24,453
       Accrued and unpaid fees payable                                               30,000             -                 30,000
___________________________________________________________________________________________________________________________________

NET CASH FLOWS USED IN OPERATING ACTIVITIES                                      (1,414,114)            -             (1,472,437)
___________________________________________________________________________________________________________________________________

CASH FLOWS FROM INVESTING ACTIVITIES
  Cash acquired on acquisition of Lexington Oil & Gas Co. LLC                             -             -                    900
  Fixed assets                                                                       (3,495)            -                 (3,495)
  Oil and gas properties                                                         (2,247,539)            -             (2,367,539)
___________________________________________________________________________________________________________________________________

NET CASH FLOWS USED IN INVESTING ACTIVITIES                                      (2,251,034)            -             (2,370,134)
___________________________________________________________________________________________________________________________________

CASH FLOWS FROM FINANCING ACTIVITIES
  Drilling obligations                                                              737,984             -              1,087,984
  Advances payable                                                                  279,306             -                207,849
  Convertible Promissory Notes                                                      500,000             -                500,000
  Proceeds on sale of common stock                                                3,281,075           100              3,531,375
___________________________________________________________________________________________________________________________________

NET CASH FLOWS FROM FINANCING ACTIVITIES                                          4,798,365           100              5,327,208
___________________________________________________________________________________________________________________________________

INCREASE (DECREASE) IN CASH                                                       1,133,217           100              1,484,637

CASH, BEGINNING OF PERIOD                                                           351,420             -                      -
___________________________________________________________________________________________________________________________________

CASH, END OF PERIOD                                                             $ 1,484,637         $ 100            $ 1,484,637
===================================================================================================================================

SUPPLEMENTAL CASH FLOW INFORMATION (Refer to Note 11)

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

</TABLE>


                                      F-4


<PAGE>


LEXINGTON RESOURCES, INC.
(an exploration stage company)
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 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. LLC, (an exploration stage company) ("Lexington"), in exchange for 9,000,000
(3,000,000 pre January 26, 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
Corporation 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.

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 a working capital
deficit of  $891,206,  has incurred  significant  losses  since  inception,  and
further losses are  anticipated in the development of its oil and gas properties
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 may 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 nine
months ended  September 30, 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.  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.


                                      F-5


<PAGE>


LEXINGTON RESOURCES, INC.
(an exploration stage company)
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 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
production equipment removal and environmental  remediation,  are estimated each
period by management based on current regulations, actual expenses incurred, 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
the forward  stock split  described  in Note 7. 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 26, 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.


                                      F-6


<PAGE>


LEXINGTON RESOURCES, INC.
(an exploration stage company)
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2004
________________________________________________________________________________
(unaudited)


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

The  Company  has  elected to  continue  to  account  for  stock-based  employee
compensation  arrangements  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. In addition, 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. 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.

The following  table  illustrates  the pro forma effect on net income (loss) and
net income (loss) per share as if the Company had accounted for its  stock-based
employee  compensation using the fair value provisions of SFAS No. 123 using the
assumptions as described in Note 8:

<TABLE>
<CAPTION>

                                                                              For the period from
                                                                               September 29, 2003
                                                       Nine months ended          (inception) to
                                                       September 30, 2004      September 30, 2004
                                                       __________________________________________
<S>                                    <C>                <C>                         <C>

Net loss for the period                As reported        $(5,175,168)                $  -
SFAS 123 compensation expense          Pro-forma             (692,051)                   -
                                                       __________________________________________
Net loss for the period                Pro-forma          $ (5,867,219)               $  -
                                                       ==========================================

Pro-forma basic net loss per share     Pro-forma          $     (0.40)                $  -
                                                       ==========================================

</TABLE>


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 26, 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.


                                      F-7


<PAGE>


LEXINGTON RESOURCES, INC.
(an exploration stage company)
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2004
________________________________________________________________________________
(unaudited)


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

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")  re-evaluated 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 post forward 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  Property,  the Atwood Booch
Sand Property, the Jeneva Property and the Sasakwa Gilcrease Sand Property).

Management  of the  Company  decided  not 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 did 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
Humphreys   Purchase  and  Sale   Agreement  and  the  Paluca   Agreement   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.

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).

MANAGEMENT COMPENSATION AGREEMENT

The Company and its  subsidiary  have  negotiated a new  compensation  agreement
("New  Agreement")  with Humphreys for his assistance in overseeing the drilling
operations and the completion,  management of wells, and for his increasing role
in  development  of the  Company on a  performance  basis.  Under the  covenants
provided under the New Agreement and within its effective  term,  Humphreys,  or
his  designate:  (1) will receive  compensation  of $7,500 per month,  effective
April 1, 2004; (2) will be assigned a 10% carried working interest in every well
drilled by the Company on all  properties  held by the  Company,  including  the
Wagnon  property,  (3) will have the right to purchase an  additional 5% working
interest in all wells  drilled by the Company on its  properties  provided  that
funds for this  participation  are paid prior to the commencement of drilling of
said wells;  and (4) will receive a further 200,000 options in the Company to be
granted at $3.00 per share  exercisable for a five year term. These options were
granted in July 2004. (Refer to Note 8.)

During the third quarter the Company recorded additional compensation expense to
Humphreys of $100,000 being the estimated  value of his 10% carried  interest in
the Company's wells developed in the period.

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.  ("Oakhills"),  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. (Refer to Note 9.)


                                      F-8


<PAGE>


LEXINGTON RESOURCES, INC.
(an exploration stage company)
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2004
________________________________________________________________________________
(unaudited)


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

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.

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, currently concentrating on coal bed
methane gas and other source 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  primarily  during the
reverse takeover of Lexington Oil & Gas Ltd. Co.

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. 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 interest between Paluca,
Oak Hills and the lessee of the Wagnon Property.

A director and an officer 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.

During the nine  month  period  ended  September  30,  2004 three gas wells (the
Kellster 1-5, Kyndal 2-2 and Bryce 3-2) have been put into production.

The Company is currently preparing to drill a fourth well on the Wagnon Property
(Caleigh 4-2). During the nine month period ended September 30, 2004 the Company
spent $998,662 on drilling expenditures on the Wagnon lease. (Refer to Note 5.)

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.  During the nine month  period  ended  September  30, 2004 the Company
acquired  approximately  1,930 net leasehold  acres under the option.  Under the
terms of the purchase of these  leases,  Lexington  has an undivided  95% - 100%
working  interest in the subject  lands and a minimum 79% net revenue  interest.
The terms of the leases are for two years.

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.  Lexington has an undivided 100% working  interest in subject
lands and an approximate 81% net revenue interest.

SOUTH LAMAR PROSPECT

By agreement dated April 21, 2004,  Lexington  acquired a 100% working interest,
78.5% net revenue interest,  in a three sections (960 acres) of farm-out acreage
in Hughes County,  Oklahoma (the "South Lamar  Prospect")  with the intention to
develop  coal bed  methane  gas  producing  wells.  The term of the lease is two
years.  On July 26,  2004,  the Company  acquired a further  183.98 acres in the
South Lamar prospect and a 100% working  interest and a 79% net revenue interest
in the additional acreage. The term of the lease is two years.


                                      F-9


<PAGE>


LEXINGTON RESOURCES, INC.
(an exploration stage company)
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2004
________________________________________________________________________________
(unaudited)


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

H-9 PROSPECT

By agreement  dated June 29, 2004,  Lexington has obtained an option to purchase
an  undivided  100%  leasehold  interest,   79.25%  net  revenue  interest,   in
approximately  4,600 net leasehold acres in approximately 38 sections of the H-9
Prospect located in Hughes and McIntosh Counties, in the State of Oklahoma.  The
Company  concluded  the purchase of the property on July 29, 2004.  The terms of
leases acquired within the prospect are between three and four years.

On July 19, 2004 the  Company  acquired  an  additional  325 acres of gas target
drillable  acreage in the northeast  portion of Hughes  County,  Oklahoma in the
vicinity of the  approximate  4,600 acres of farm out leases  under  acquisition
(H-9)  Prospect.  Drilling  targets  that  are  included  in the  lease  include
Hartshorne and Booch Coal gas zones with a 100% Working Interest and a 78.3% Net
Revenue  Interest.  The acquired  lease is held by  production.  The term of the
lease is three years.

NOTE 5:  DRILLING OBLIGATIONS
________________________________________________________________________________

During the period ended December 31, 2003 Lexington,  the Company,  and Oakhills
entered  into  drilling   agreements   with  private   investors  (the  "Funding
Investors")  for the funding for the first three wells,  the  Kellster  1-5, the
Kyndal 2-2 and the Bryce 3-2, located on the Wagnon Lease. The Funding Investors
each provided  one-third of the  Authorization  For Expenditure  ("AFE") capital
estimated at $360,000 for the drilling and completion of each of the first three
wells.  As of September  30, 2004,  the Company had received the total  required
funding of $1,080,000  for the drilling and completion of the first three Wagnon
Lease wells and had successfully  drilled and completed the Kellster 1-5 and the
Kyndal 2-2 wells. The Bryce 3-2 well,  representing the third Wagnon Lease well,
was  successfully  drilled  and  completed  in  August,  2004.  The terms of the
drilling  agreements of all wells on the Wagnon Lease are the same for each well
on the property.

Lexington,  the Company,  and Oakhills entered into drilling agreements with the
Funding  Investors for the expected  drilling and  completion of a fourth Wagnon
Lease well,  the  Caleigh  4-2 well that is expected to begin  drilling no later
than the end of November  2004.  As of  September  30,  2004,  $135,000 had been
received  for the drilling of the Caleigh  4-2. As of  September  30, 2004,  the
Company had received a total of $1,215,000  for the drilling and completion of a
total of four wells on Company's Wagnon Lease. Subsequent to September 30, 2004,
an  additional  $270,000 was received,  providing  all AFE capital  required for
intended drilling and completion of the Caleigh 4-2 well.

Wells to be  drilled  on the  Wagnon  Lease  property  carry  royalty  interests
totaling 25% to land owners and property  interest  holders and carried  working
interests of 5% to a land owner,  and 10% to a company  related to a director of
the Company (see Note 3 - Management Compensation  Agreement). A company related
to a director of the Company,  Paluca,  also owns a non-carried working interest
of 5% as part of capital participation funding provided by Paluca.

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  revert to an  aggregate  20.1%  working
interest,  15.075%  net  revenue  interest,  in the wells  located on the Wagnon
Lease.  Oak Hills,  the operator of the well,  will  "back-in" to a reversionary
6.7% working interest after invested capital is repaid to the Funding  Investors
in the wells  located  on the Wagnon  Lease and the  Company  will  back-in to a
reversionary 53.2% working interest.  The Company's repayment  obligation to the
Funding  Investors is limited to the  production  revenues  generated from wells
located on the Wagnon  Lease.  Accordingly,  if any of the subject  wells on the
Wagnon Lease are unsuccessful the drilling  obligations will be written off when
such  determination  is made.  Management  has  estimated  that the  non-current
portion of the drilling obligations as at September 30, 2004 is $225,000.

As of September 30, 2004,  the Funding  Investors  have been repaid  $127,016 of
their $720,000 investment in the Kellster 1-5 and Kyndall 2-2 wells.


                                      F-10


<PAGE>


LEXINGTON RESOURCES, INC.
(an exploration stage company)
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2004
________________________________________________________________________________
(unaudited)


NOTE 6:  CONVERTIBLE PROMISSORY NOTES
________________________________________________________________________________

On  April  26,  2004,  Lexington  borrowed  $400,000  by  way  of  an  unsecured
convertible  promissory  note  with a  shareholder  due on April 30,  2005.  The
promissory note bears interest accrued monthly at the US prime lending rate plus
one  percent  simple  interest  per  annum.  The  Holder  shall  have the right,
exercisable  in whole or in part,  to  convert  the  outstanding  principal  and
accrued interest  thereunder into fully paid,  nonassessable  restricted  common
shares at a price of $5.00 per share.

On June 30, 2004,  the Company  borrowed an  additional  $100,000  from the same
shareholder  by way of an unsecured  promissory  note due on June 30, 2005.  The
promissory note bears interest accrued monthly at the US prime lending rate plus
one  percent  simple  interest  per  annum.  The  Holder  shall  have the right,
exercisable  in whole or in part,  to  convert  the  outstanding  principal  and
accrued interest  thereunder into fully paid,  nonassessable  restricted  common
shares at a price of $2.50 per share.

Application  of a  relative-fair-value  method has  resulted in the  convertible
promissory  notes  being  recorded  as separate  debt and equity  components.  A
discount  on the  promissory  notes  payable of  $50,000  has been  accrued  and
recorded as a deferred finance fee, to be amortized over the terms of the notes.
The discount was determined based upon a fair value interest rate for comparable
debt of 15% per annum. As of September 30, 2004, $19,167 of the deferred finance
fee has  been  expensed.  The  equity  component,  which is  represented  by the
conversion feature, has a carrying value of $50,000 being the difference between
the face amount of the  convertible  debenture  and its fair value as calculated
above.  The carrying value of the equity component has been recorded as a charge
to shareholders' equity.

On October  29,  2004,  a total of  $500,000  in  promissory  notes and  accrued
interest to that date were settled for private placement in units offered by the
Company at $1.47 per unit,  with each unit comprised of one common share and one
share purchase warrant exerciseable at $1.68 per share (see Note 7).

NOTE 7:  STOCKHOLDERS' EQUITY
________________________________________________________________________________

The  authorized  capital of the Company  consists of  200,000,000  voting common
shares with $0.00025 par value, and 75,000,000  non-voting preferred shares with
$0.001 par value.

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.

STOCK OPTION EXERCISE

On January 22, 2004 the Company issued 1,200,000 pre forward split shares of its
common stock,  upon the exercise of 1,200,000  stock options at $0.167 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  International,  Inc. ("ICI")
which was assigned by ICI to IMT designated  option holders as described in Note
8.

On May 18, 2004 the Company issued 495,000 shares of its common stock,  upon the
exercise of 495,000  stock  options at $1.00 per share for proceeds of $495,000,
which was paid by way of offset of $495,000  originally  advanced to the Company
by ICI, which was assigned to a designated  option holder,  as described in Note
8.

PRIVATE PLACEMENT

On November 26, 2003 the Company  issued  300,000  restricted  common  shares at
$0.83 per  share  plus  one-half  warrant  at $5.00  per  share  for each  share
purchased,  with warrant terms to December 31, 2004.  The total amount raised in
this  financing  was  $250,000.  The value of the warrants  was  estimated to be
$12,500 and was recorded as a separate component of stockholders' equity.


                                      F-11


<PAGE>


LEXINGTON RESOURCES, INC.
(an exploration stage company)
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2004
________________________________________________________________________________
(unaudited)


NOTE 7:  STOCKHOLDERS' EQUITY
________________________________________________________________________________

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,  with warrants terms to December 31, 2005. The total amount raised in
this  financing  was  $1,000,000.  The value of the warrants was estimated to be
$45,000 and was recorded as a separate  component  of  stockholders'  equity.  A
finders  fee of  39,800  restricted  common  shares  was  paid  pursuant  to the
transaction.

SHARE OFFERING

On September 9, 2004 the Company  approved a financing of up to 4,150,000  units
of  restricted  common  shares at a price of $1.47 per share  plus a full  share
purchase  warrant  exerciseable  at a price of $1.68 per  share  for each  share
purchased (the  "September  Unit(s)").  The warrants will expire six months from
the effective date of  registration of the stock and warrants to be issued under
the  offering.  The  amount  approved  to be raised in this  financing  is up to
$6,100,500.  Brokers'  fees payable on the  September  Units are:  cash of 8% of
gross  proceeds,  brokers'  warrants  equal to 4% of the gross  proceeds  (to be
issued under the same terms as the warrants  issued under the  offering),  and a
warrant exercise fee equal to 5% of proceeds  received as a result of the future
exercise  of the  warrants  by the  investors.  The Company has agreed to file a
registration  statement  with the  Securities  and Exchange  Commission  ("SEC")
within 45 days  after  completion  of the  transaction,  covering  the resale of
shares of common stock sold in the private  placement or issuable  upon exercise
of the warrants. Under the terms of the financing, the registration statement is
to become effective within 120 days after the filing date or the Company will be
subject to certain penalty provisions.

As of September 30, 2004,  984,232 September Units had been sold for proceeds of
$1,436,821,  net of a $10,000 agent fee which was charged to additional  paid in
capital.  The fair value of the  warrants  was  estimated  to be $0.147 each and
$144,682 has been recorded as a separate  component of stockholders'  equity. In
connection  with this  portion  of the  financing,  a  brokers'  fee  payable of
$115,746 has been accrued.  The fair value of the 34,448  broker  warrants to be
issued to date has been  estimated  to be $0.147  per  warrant  and as a result,
$5,064 has been recorded as a separate component of stockholders' equity.

Subsequent  to  September  30, 2004 the  Company  placed an  additional  716,454
September  Units.  Of the 716,454  units sold,  376,318 were  non-brokered,  and
340,136  were  brokered.  Proceeds  received  on the  brokered  portion  of this
financing were  $445,000,  net of $55,000 in brokers' and  administration  fees.
Brokers'  warrants payable total 11,905  warrants.  The fair value of the broker
warrants is estimated  to be $0.147 each and thus,  $1,750 will be recorded as a
separate component of stockholders' equity. The non-brokered units in the amount
of  376,318  were  issued  upon:  (1)  settlement  of the  $500,000  convertible
promissory note and accrued interest of approximately $12,637 for 348,733 units;
and (2) pursuant to a non-brokered placee that paid $40,550 for 27,585 units.

SHARE PURCHASE WARRANTS

Share purchase warrants outstanding at September 30, 2004 are:

                                                           Weighted Average
                                                               Remaining
       Range of Exercise Prices                          Contractual Life (yr)
                                    Number of Shares
       _______________________________________________________________________

            $1.66 - $5.00              1,368,680                  .95
       =======================================================================

NOTE 8:  EMPLOYEE STOCK OPTION PLAN
________________________________________________________________________________

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 3,000,000  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.


                                      F-12


<PAGE>


LEXINGTON RESOURCES, INC.
(an exploration stage company)
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2004
________________________________________________________________________________
(unaudited)


NOTE 8:  EMPLOYEE STOCK OPTION PLAN (CONT'D)
________________________________________________________________________________

On December 31, 2003,  the terms of the Company's SOP were altered,  whereby the
authorized  total  number of options  was  increased  from  3,000,000  shares to
4,000,000 shares.

By  Directors'  Resolution  dated July 2, 2004 the  Company  (1)  increased  the
authorized number of options under the SOP from 4,000,000 to 5,000,000;  and (2)
made the new 1,000,000 stock options exercisable at $3.00 per share for a 5 year
term. As of September 30, 2004,  4,200,000  options under the Company's  current
SOP have been granted.

A summary of the  Company's  stock  options as of Sept.  30,  2004,  and changes
during the period ended is presented below:

                                                       Sept. 30,2004
                                              ________________________________
                                              Number of       Weighted 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
     Exercised May 18, 2004                    (495,000)          1.00/share
     Exercised June, 2004                      (320,000)          3.00/share
     Grant July 26,2004                         200,000           3.00/share
                                              ________________________________

     Exercisable at September 30, 2004          535,000          $1.70/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 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.

In April 2004 the Company registered 500,000 common stock options exercisable at
$1.00 per share under an S-8 Registration Statement. On May 18, 2004, 495,000 of
these stock  options were  exercised at $1.00 per share for proceeds of $495,000
which was paid by way of offset of $495,000  originally  advanced to the Company
by ICI which was assigned to a designated option holder.

In June 2004 the Company registered 400,000 common stock options  exercisable at
$3.00 per share under an S-8 Registration Statement.  And, in June 2004, 320,000
of these  stock  options  were  exercised  at $3.00 per share  for  proceeds  of
$960,000.

On July 12,  2004,  200,000  stock  options  were  granted at $3.00 per share to
Humphreys.  The term of these  options  is five  years.  The fair value of these
options at the date of grant of $692,051 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 222% and in
accordance  with the  provisions of SFAS 148, has been  disclosed on a pro-forma
basis in Note 2.

NOTE 9:  RELATED PARTY TRANSACTIONS
________________________________________________________________________________

Although the formal  arrangement  for services to be provided by ICI, a minority
shareholder and consulting services agent to the Company,  ended on December 31,
2003, a month to month arrangement to provide services to the Company was agreed
to as a  transitional  measure  during  the  first  quarter  of the  year.  This
transition period ended March 31, 2004. 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,  no fees were  incurred to ICI for the  balance of the period  ended
September  30, 2004.  As of  September  30, 2004 the Company owed ICI a total in
loans of $71,196 and interest


                                      F-13


<PAGE>


LEXINGTON RESOURCES, INC.
(an exploration stage company)
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2004
________________________________________________________________________________
(unaudited)


NOTE 9:  RELATED PARTY TRANSACTIONS (CONT'D)
________________________________________________________________________________

of $3,032 accrued at 10% per annum on outstanding  loans, for a total of $74,228
(2003 -  $1,263,762).  Subsequent to September  30, 2004 the Company  repaid ICI
$72,761  in loans and  accrued  interest  leaving  a total of $3,033 in  accrued
interest still owing to ICI.

The Company previously  entered into a contract with International  Market Trend
AG ("IMT"),  a private  company to whom certain of the  Company's  directors and
officers provide consulting services relating to oil and gas industry and market
development services.  The Company incurred $30,000 in fees to IMT for the three
month period  ended  September  30, 2004 and has  incurred  $60,000 for the nine
month period ended  September 30, 2004.  (2003 - nil).  Of the  1,000,000  stock
options granted on February 2, 2004,  895,000 stock options were granted to IMT,
or its designates.

During the period  ended  March 31,  2004 the  Company  settled  $200,000 of the
amounts  due to ICI in exchange  for the  issuance  of  1,200,000  shares of the
Company's common stock by way of exercising options at $0.167 per share.

During the period  ended  June 30,  2004 the  Company  settled  $495,000  of the
amounts due to ICI in exchange for 495,000 shares of the Company's  common stock
by way of exercising options at $1.00 per share.

Humphreys  has been assigned a 10% carried  Working  Interest in each well to be
drilled on the Wagnon lease,  as partial  compensation  for his  involvement  in
obtaining  and  facilitating  the  execution  of the Farm-Out  Agreement  and to
compensate for his services  relating to operation and completion of wells to be
located  on the  Wagnon  Lease.  Humphreys  also has the  right to  purchase  an
additional  5% working  interest in each well to be located on the Wagnon Lease.
As of September 30, 2004 the Company has recorded  $27,500 as a receivable  from
Humphreys as full payment to be received for an additional  5% working  interest
in each of the Kellster  1-5, the Kyndal 2-2, and the Bryce (Refer to Notes 3, 4
and 5.)

Refer to Notes 5 and 8.

NOTE 10: INCOME TAXES
________________________________________________________________________________

The Company has adopted FASB No. 109 for reporting purposes. As of September 30,
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 11: SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS

<TABLE>
<CAPTION>

________________________________________________________________________________

                                              Period ended Sept. 30, 2004      Period ended Sept. 30, 2004
       ___________________________________________________________________________________________________
<S>                                                       <C>                              <C>
       Cash paid during the period for:
                Interest                                  $ -                              $ -
                Income taxes                              $ -                              $ -
       ___________________________________________________________________________________________________

</TABLE>


During the nine month period ended September 30, 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 7);

     2.   settled  $495,000 of the  advances  due to ICI in exchange for 495,000
          shares of the Company's  common stock by way of exercising  options at
          $1.00 per share (refer to Note 7); and

     3.   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 (refer to note 8).


                                      F-14


<PAGE>


LEXINGTON RESOURCES, INC.
(an exploration stage company)
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2004
________________________________________________________________________________
(unaudited)


NOTE 12: COMMITMENTS
________________________________________________________________________________

On June 21, 2004 the Company  entered into a one year  contract  with a business
and publicity news placement company and has committed to pay $7,000 a month for
these services.

(Refer to Note 3.)

NOTE 13: SUBSEQUENT EVENTS
________________________________________________________________________________

Refer to Note 7.









                                      F-15


<PAGE>


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

         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.

         In addition,  our business and  operations  are subject to  substantial
risks,  which  increase  the  uncertainty   inherent  in  such   forward-looking
statements.   In  light  of  the  significant   uncertainties  inherent  in  the
forward-looking  information  included herein, the inclusion of such information
should not be regarded as a  representation  by us or any other  person that our
objectives or plans will be achieved.  The Private Securities  Litigation Reform
Act of 1995  contains a safe harbor for  forward-looking  statements on which we
rely in making  such  disclosures.  In  connection  with this safe harbor we are
hereby  identifying  important factors that could cause actual results to differ
materially from those contained in any forward-looking  statements made by or on
our behalf.  Any such  statement is  qualified  by  reference to the  cautionary
statements included in this Quarterly Report.

OVERVIEW

         Lexington Resources,  Inc. is a corporation organized under the laws of
the State of Nevada (the "Company"). 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 "Share Exchange  Agreement").  As a result of the Share Exchange Agreement,
the  acquisition  of Lexington has been  accounted for as a reverse  acquisition
with Lexington being treated as the accounting parent and the Company, the legal
parent, being treated as the accounting subsidiary.

         The Company currently trades on the OTC Bulletin Board under the symbol
"LXRS.OB" and on the Frankfurt and Berlin Stock Exchanges under the symbol "LXR"
and WKN: A0BKLP.

         The Company is a natural  resource  exploration and production  company
engaged in the  acquisition  and  development  of oil and gas  properties in the
United States.

         The Company's wholly owned subsidiary,  Lexington previously acquired a
section of farm-out  acreage in Pittsburg  County,  Oklahoma for the development
and production of coal bed methane gas (the "Wagnon Property").  The Company has
reported  production results for three of the coal bed methane gas wells located
on the Wagnon  Property.  During the quarter ended  September 30, 2004, the coal
bed  methane  gross gas  production  produced  gross  revenues to  Lexington  of
approximately $211,549.

         We have obtained an independent  reserve and economic evaluation report
on the Wagnon  Property  as  of September 1, 2004  conducted  by Fletcher  Lewis
Engineering,  Inc. The report states that proved developed  producing future net
reserves for three  producing  wells in the Wagnon Property are 1,176,008 MCF or
$4,353,737 and a 10% discount present worth of $3,446,997  utilizing a gas price
of $4.57 MCF.


<PAGE>


         As of the date of this Quarterly Report, the Company plans to drill its
fourth  horizontal gas well (the "Caleigh  #4-2).  Site  preparations  have been
completed in advance of the drilling  rig's  arrival.  Management of the Company
anticipates that the Caleigh #4-2 well will utilize existing base infrastructure
and gas  gathering  systems  already  established  earlier by the Company on the
Wagnon lease.  Management anticipates that a larger compressor will be installed
in connection  with the Caleigh #4-2 well to better effect  overall  production.
Management  believes  that  drilling  will  commence  no  later  than the end of
November 2004 and be similar in drilled  depths and drilling  protocols as those
previously  experienced in the drilling in the Wagnon Property.  The Company has
entered into an additional  drilling  agreements with private  investors for the
funding of the Caleigh #4-2 well.  As of September  30, 2004,  $135,000 has been
received by the Company for the drilling of the Caleigh #4-2 well. Subsequent to
September 30, 2004, the Company  received an additional  $270,000 for a total of
$405,000,  which provides all estimated  capital required for intended  drilling
and completion of the Caleigh #4-2 well.

         On  November  9, 2004,  the  Company  announced  that it had reached an
agreement with Oak Hills Drilling and Operating,  LLC, ("Oakhills  Drilling") to
drill a ten  well  program.  Oakhills  Drilling  is an  Oklahoma  based  private
drilling  contractor  that will  provide the Company with drill rig and drilling
expertise  required for  Lexington to execute its planned  drilling  initiatives
according to the Company's timetable.

         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 a certain aggregate amount and holds a 100% working
interest  and a 78.5% net  revenue  interest in 960 gross  undeveloped  acres to
develop gas producing  wells.  On July 26, 2004, the Company  acquired a further
184 acres in the South Lamar Prospect and a 100% working  interest and a 79% net
revenue interest in the additional acreage.

         On July 12,  2004,  the Company,  Lexington  and Douglas  Humphreys,  a
director of the Company, entered into an agreement (the "Agreement"),  regarding
Mr.  Humphreys'  assistance  in  overseeing  the  drilling  operations  and  the
completion and management of wells.  Pursuant to the terms and provisions of the
Agreement:  (i) Mr.  Humphreys  will be paid  compensation  of $7,500  per month
effective  April 1, 2004;  (ii) the Company  will  assign a 10% carried  working
interest  in every well  drilled by the  Company on all  properties  held by the
Company,  including the Wagnon Property; (iii) Mr. Humphreys will have the right
to  purchase  an  additional  5% working  interest  in all wells  drilled by the
Company on its properties  provided that funds for this  participation  are paid
prior to the  commencement of drilling of said wells;  and (iv) the Company will
grant to Mr.  Humphreys an  additional  200,000  Stock  Options to be granted at
$3.00  per share  exercisable  for a five year term  (such  Stock  Options  were
granted in July 2004).  During the third quarter the Company recorded additional
compensation  expense to Humphreys of $100,000 being the estimated  value of his
10% carried interest in the Company's wells developed in the period.

         On November 1, 2004 the Company  completed  the sale of an aggregate of
1,351,953  Units (the  "Units") of the Company at a purchase  price of $1.47 per
Unit for gross proceeds of approximately $1,987,371.  Further, the holder of two
outstanding promissory notes from the Company, in the aggregate principal amount
of $500,000, exchanged the promissory notes for Units, resulting in the issuance
of an additional 348,733 Units. Each Unit consists of one share of the Company's
$0.00025 par value common stock (the "Common Stock") and one warrant to purchase
a share of the  Corporation's  common  stock at an exercise  price of $1.68 (the
"Warrants").  The  Warrants  are  exercisable  for a term  of 180  days  after a
registration  statement  filed by the  Corporation  for the resale of the Common
Stock and the shares of common stock  underlying  the Warrants has been declared
effective by the Securities and Exchange Commission.


<PAGE>


RESULTS OF OPERATION

         As a result of the  Share  Exchange  Agreement,  discussed  above,  the
acquisition  of Lexington has been accounted for as a reverse  acquisition  with
Lexington  being  treated as the  accounting  parent and the Company,  the legal
parent, being treated as the accounting  subsidiary.  In accordance with reverse
acquisition  accounting,  the consolidated  results of operations of the Company
include  those of Lexington  for all periods  presented and those of the Company
subsequent  to the date of the reverse  acquisition.  Because  Lexington  had no
operations for the period September 29, 2003 to September 30, 2003,  comparative
results of operation are not presented or discussed.

THREE-MONTH  PERIOD ENDED SEPTEMBER 30, 2004 COMPARED TO THE-MONTH  PERIOD ENDED
SEPTEMBER 30, 2003

         During the  three-month  period ended  September 30, 2004,  the Company
generated $211,549 in gross revenue primarily from the sale of gas produced from
the coal bed methane gas wells on the Wagnon  Property which started  production
in mid February  2004.  Depletion  and  operating  costs during the  three-month
period ended  September  30, 2004 was  $120,086,  resulting in operating  income
during the period of $91,463.

         During the  three-month  period ended  September 30, 2004,  the Company
recorded $973,383 in other  expenses.  Other  expenses consisted of: (i)
$949,459 as general and  administrative  expenses,  and (ii) $23,924 as interest
expense.  General and administrative  expenses consisted of corporate  overhead,
financial and  administrative  contracted  services,  marketing,  and consulting
costs.

         As a result of the above,  the Company's  net loss for the  three-month
period ended  September  30, 2004 was  approximately  ($881,920)  or ($0.06) per
share.

NINE-MONTH  PERIOD ENDED SEPTEMBER 30, 2004 COMPARED TO NINE-MONTH  PERIOD ENDED
SEPTEMBER 30, 2003

         During the  nine-month  period ended  September  30, 2004,  the Company
generated  $305,756 in gross revenue from the sale of gas produced from coal bed
methane gas wells on the Wagnon  Property,  which as a result of  depletion  and
operating  costs was  reduced  by  $133,827  resulting  in  operating  income of
$171,929.

         During the  nine-month  period ended  September  30, 2004,  the Company
recorded  $5,347,097 in other  expenses  which  consisted  primarily of: (i)
$2,989,221 in stock-based  compensation  relating to the fair valuation of stock
options  granted to consultants;  (ii) $2,307,567 as general and  administrative
expenses;  and (iii)  $50,309 as interest  expense.  General and  administrative
expenses  generally include  corporate  overhead,  financial and  administrative
contracted services, marketing, and consulting costs.

         As a result of the above,  the  Company's  net loss for the  nine-month
period ended September 30, 2004 was $5,175,168.

LIQUIDITY AND CAPITAL RESOURCES

         Generally,  the Company has  financed  operations  to date  through the
proceeds of the private  placement of equity and debt securities.  In connection
with the Company's business plan, management anticipates additional increases in
operating  expenses  and  capital  expenditures  relating  to:  (i)  oil and gas
operating   properties,   (ii)   drilling   initiatives,   and  (iii)   property
acquisitions.  The  Company  intends  to finance  these  expenses  with  further
issuances of securities by the Company and revenues from operations. Thereafter,
the Company  expects it will need to raise  additional  capital and increase its
revenues to meet long-term operating requirements.


<PAGE>


         The  Company  has not  generated  positive  cash flows  from  operating
activities.  For the nine-month  period ended September 30, 2004, net cash flows
used in operating activities was $1,414,114,  consisting primarily of a net loss
of  $5,175,168.  Net cash flows used in  operating  activities  was  adjusted by
$2,989,221  to reconcile  the non-cash  expense of the grant of 2,200,000  stock
options.

         During the nine-months ended September 30, 2004, net cash flows used in
investing  activities  was  $2,251,034,  which was  primarily  the result of the
acquisition of the oil and gas properties.

         During the  nine-months  ended  September 30, 2004, net cash flows from
financing activities was $4,798,368  pertaining primarily to $3,281,075 received
from proceeds on sale of Common Stock,  $500,000  received pursuant to the issue
of  convertible  promissory  notes and  $737,984  in drilling  obligations  from
private third parties.

         As of the  nine-month  period ended  September 30, 2004,  the Company's
current assets were  $1,707,970  and its current  liabilities  were  $2,599,176,
resulting  in a working  capital  deficit of  $891,206.  We expect that  working
capital  requirements  will continue to be funded  through a combination  of our
existing funds,  cash flow from operations and further  issuances of securities.
Our  working  capital  requirements  are  expected  to increase in line with the
growth of our business.

         Additional  issuances of equity or  convertible  debt  securities  will
result  in  dilution  to  the  Company's  current  shareholders.  Further,  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.

         The independent  auditors'  report  accompanying  our December 31, 2003
consolidated  financial  statements contain an explanatory  paragraph expressing
substantial  doubt about the Company's  ability to continue as a going  concern.
The  consolidated  financial  statements  have been prepared  "assuming that the
Company will continue as a going concern," which  contemplates  that the Company
will  realize its assets and  satisfy its  liabilities  and  commitments  in the
ordinary course of business.

ITEM 3. 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 September
30, 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
nine-month period ended September 30, 2004 that has materially  affected,  or is
reasonably  likely to materially  affect,  the Company's  internal  control over
financial reporting.


<PAGE>


PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

         On approximately  September 10, 2004, the Company filed a Complaint for
Replevin  and Damages  naming its transfer  agent,  X-Clearing  Corporation,  as
defendant, Case No. 04-CV-7556, in the District Court for the City and County of
Denver,  State of Colorado (the "Complaint for  Replevin"),  regarding a dispute
between the Company and X-Clearing  Corporation  concerning  the  termination of
X-Clearing  Corporation as the Company's transfer agent and the termination fees
which  may be due and  owing  as a result  of such  termination.  The  Complaint
alleged that: (i) the defendant was wrongfully retaining the transfer records of
the Company and the Company was entitled to immediate and permanent  possession,
use and  disposition of the transfer  records;  (ii) the defendant  breached its
contract with the Company; and (iii) the defendant breached its fiduciary duties
and obligations to the Company.

         On August 27, 2004, the Company and X-Clearing Corporation entered into
a settlement agreement (the "Settlement Agreement").  Pursuant to the Settlement
Agreement,  the  terms of which  are  confidential,  the  Company  received  its
transfer  records  and such  records  have been  provided to the  Company's  new
transfer  agent,  "Transfer  Online" of Portland,  Oregon,  and all  outstanding
issues relating to this litigation are fully settled.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

PRIVATE PLACEMENT OFFERING OF 1,351,953 UNITS AND
EXCHANGE OF CONVERTIBLE PROMISSORY NOTE

         On November 1, 2004 the Company  completed  the sale of an aggregate of
1,351,953  Units (the  "Units") of the Company at a purchase  price of $1.47 per
Unit for gross proceeds of approximately $1,987,371.  Further, the holder of two
outstanding promissory notes from the Company, in the aggregate principal amount
of $500,000, exchanged the promissory notes for Units, resulting in the issuance
of an additional 348,733 Units. Each Unit consists of one share of the Company's
$0.00025 par value common stock (the "Common Stock") and one warrant to purchase
a share of the  Corporation's  common  stock at an exercise  price of $1.68 (the
"Warrants").  The  Warrants  are  exercisable  for a term  of 180  days  after a
registration  statement  filed by the  Corporation  for the resale of the Common
Stock and the shares of common stock  underlying  the Warrants has been declared
effective by the Securities and Exchange Commission.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

     None.

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

         None.

ITEM 5. OTHER INFORMATION

         On  approximately  July 21, 2004, the board of directors of the Company
approved the  selection of a new transfer  agent for the Company.  The Company's
transfer agent is:  Transfer  Online,  Inc., 317 SW Alder Street,  Second Floor,
Portland, Oregon 97204, tel. (503) 227-2950, fax (503) 227-6874.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

         A. Exhibits:

         10.1. Agreement between Lexington Resources, Inc. and Douglas Humphreys
               dated July 12, 2004.

         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 Certification of Chief Executive Officer  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.

         32.2 Certification of Chief Financial Officer  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.


         B. Reports on Form 8-K:

                  None.


<PAGE>


                                   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: November 15, 2004       By: /s/ GRANT ATKINS
                                   ___________________________
                                       Grant Atkins
                                       President and
                                       Chief Executive Officer



Dated: November 15, 2004       By: /s/ VAUGHN BARBON
                                   ___________________________
                                       Vaughn Barbon
                                       Chief Financial Officer