U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-K


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


                   For the fiscal year ended December 31, 2008


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


                For the transition period from ______ to _______


                          COMMISSION FILE NO. 000-52139


                            MORGAN CREEK ENERGY CORP.
                 ______________________________________________
                 (Name of small business issuer in its charter)


            NEVADA                                                201777817
_______________________________                              ___________________
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)


                5050 QUORUM DRIVE, SUITE 700, DALLAS, TEXAS 75254
                _________________________________________________
                    (Address of principal executive offices)


                                 (214) 321-0603
                           ___________________________
                           (Issuer's telephone number)


Securities registered pursuant to Section         Name of each exchange on which
            12(b) of the Act:                              registered:
                   NONE


          Securities registered pursuant to Section 12(g) of the Act:
                              COMMON STOCK, $0.001
                                (Title of Class)


Check whether the issuer is not required to file reports  pursuant to Section 13
or 15(d) of the Exchange Act. [ ] Check whether the issuer (i) 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 (ii) has been subject to such filing  requirements  for the
past 90 days.
                                 Yes [X] No [ ]


<PAGE>


Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-K contained in this form, and no disclosure  will be contained,  to
the  best  of  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [X]

Indicate by checkmark  whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

State  issuers  revenues  for its  most  recent  fiscal  year $ -0-.  State  the
aggregate  market  value of the  voting and  non-voting  common  equity  held by
non-affiliates computed by reference to the price at which the common equity was
sold,  or the  average  bid and  asked  price  of such  common  equity,  as of a
specified date within the past 60 days. March 25, 2009: $2,282,429

     ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS

                                       N/A

Check  whether the issuer has filed all  documents  and  reports  required to be
filed by Section 12, 13 and 15(d) of the  Securities  Exchange Act of 1934 after
the distribution of securities under a plan confirmed by a court. Yes[ ] No[ ]

                    APPLICABLE ONLY TO CORPORATE REGISTRANTS

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  March 25, 2009
Common Stock, $0.001                           15,216,196

                       DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference,  briefly describe them
and identify the part of the Form 10-K (e.g.,  Part I, Part II, etc.) into which
the document is incorporated:  (i) any annual report to security  holders;  (ii)
any proxy or information  statement;  and (iii) any prospectus filed pursuant to
Rule 424(b) or (c) of the Securities  Act of 1933 (the  "Securities  Act").  The
listed documents should be clearly described for  identification  purposes (e.g.
annual reports to security holders for fiscal year ended December 24, 1990).

                                       N/A

Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]


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<PAGE>



                            MORGAN CREEK ENERGY CORP.
                                    FORM 10-K

INDEX

Item 1.   Business                                                             4

Item 1A.  Risk Factors                                                        12

Item 1B.  Unresolved Staff Comments                                           24

Item 2.   Properties                                                          24

Item 3.   Legal Proceedings                                                   24

Item 4.   Submission of Matters to a Vote of Security Holders                 24

Item 5.   Market for Registrant's Common Equity, Related Stockholder
          Matters and Issuer Purchases of Equity Securities                   24

Item 6.   Selected Financial Data                                             30

Item 7.   Management's Discussion and Analysis of Financial Condition
          and Results of Operation                                            31

Item 8.   Financial Statements and Supplemental Data                          37

Item 9A.  Controls and Procedures                                             52

Item 9B.  Other Information                                                   53

Item 9.   Changes in and Disagreements With Accountants on Accounting
          and Financial Disclosure                                            53

Item 10.  Directors, Executive Officers and Corporate Governance              54

Item 11.  Executive Compensation                                              61

Item 12.  Security Ownership of Certain Beneficial Owners and Management
          and Related Stockholder Matters                                     66

Item 13.  Certain Relationships and Related Transactions and Director
          Independence                                                        68

Item 14.  Principal Accountant Fees and Services                              69

Item 15.  Exhibits and Financial Statement Schedules                          70


                                       3
<PAGE>


Statements  made in this Form 10-K 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. We intend that
such  forward-looking  statements  be  subject  to the  safe  harbors  for  such
statements.  We wish 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 our control that could cause actual
results and events to differ  materially from  historical  results of operations
and events  and those  presently  anticipated  or  projected.  We  disclaim  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.

AVAILABLE INFORMATION

Morgan  Creek Energy Corp.  files  annual,  quarterly,  current  reports,  proxy
statements,  and other  information with the Securities and Exchange  Commission
(the  "Commission").  You may read and copy documents referred to in this Annual
Report on Form 10-K that have been filed with the Commission at the Commission's
Public Reference Room, 450 Fifth Street, N.W.,  Washington,  D.C. You may obtain
information  on the  operation  of the  Public  Reference  Room by  calling  the
Commission  at  1-800-SEC-0330.  You can also  obtain  copies of our  Commission
filings by going to the Commission's website at http://www.sec.gov


PART I

ITEM 1. BUSINESS

BUSINESS DEVELOPMENT

Morgan Creek Energy Corp. was incorporated under the laws of the State of Nevada
on October 19, 2004 and has been engaged in the business of  exploration  of oil
and gas bearing  properties in the United States since its inception.  After the
effective  date of our  registration  statement  filed with the  Securities  and
Exchange   Commission   (February  14,  2006),  we  commenced   trading  on  the
Over-the-Counter  Bulletin Board under the symbol "MCKE:OB". Our shares are also
traded on the Frankfurt Stock Exchange in Germany under the symbol "M6C".

Please note that throughout this Annual Report,  and unless otherwise noted, the
words "we,"  "our," "us," the  "Company,"  or "Morgan  Creek,"  refers to Morgan
Creek Energy Corp.


                                       4
<PAGE>


RECENT DEVELOPMENTS

APRIL 22, 2008 REVERSE STOCK SPLIT

On April 1,  2008,  our  Board of  Directors  pursuant  to a Board of  Directors
meeting  authorized  and approved a reverse  stock split of one for three of our
total issued and outstanding shares of common stock (the "Reverse Stock Split").

The Reverse Stock Split was  effectuated  based on market  conditions and upon a
determination  by our Board of Directors that the Reverse Stock Split was in our
best interests and of the shareholders. Certain factors were discussed among the
members of the Board of  Directors  concerning  the need for the  Reverse  Stock
Split,  including  the  increased  potential  for  financing.  The intent of the
Reverse Stock Split is to increase the marketability of our common stock.

The  Reverse  Stock  Split was  effectuated  on April 22,  2008 upon  filing the
appropriate  documentation  with NASDAQ.  The Reverse Stock Split  decreased our
total  issued  and  outstanding  shares  of  common  stock  from  41,976,591  to
approximately  13,992,197 shares of common stock. The common stock will continue
to be $0.001 par value.

TRANSFER AGENT

Our transfer agent is Transfer  Online,  Inc., 317 S.W. Alder Street,  2nd Floor
Portland, Oregon 97204.

CURRENT BUSINESS OPERATIONS

We are a natural resource  exploration and production  company currently engaged
in the exploration, acquisition and development of oil and gas properties in the
United States and within North  America.  Our primary  activity and focus is our
leases in New Mexico (the "New Mexico  Prospect").  The leases are  unproven and
were acquired for  approximately  $338,000.  We have leased  various  properties
totaling  approximately  7,576 net acres  within  the State of New  Mexico for a
five-year term in  consideration  for $112,883.  We have a 100% working interest
and an 84.5% net revenue  interest in the leases.  In addition we have  acquired
leases  in  Texas  (the  "Quachita   Prospect").   To  date,  we  have  acquired
approximately  1,971 net acres  within the  Quachita  Prospect  for a three-year
term.  We acquired a 100%  working  interest  and a 77% net revenue  interest in
natural gas targeted Quachita Prospect leases.  The leases are unproven and were
acquired for approximately $338,000.

OIL AND GAS PROPERTIES

The acreage and location of our oil and gas properties is summarized as follows:

                         NET ACRES(*)

     Texas                  1,971
     New Mexico             7,576
                            _____
          Total:            9,547

(*)  Certain of our  interests  in our oil and gas  properties  may be less than
     100%.  Accordingly,  we  have  presented  the  acreage  of our  oil and gas
     properties on a net acre basis.


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<PAGE>


QUACHITA PROSPECT

As of the date of this Annual  Report,  we lease  approximately  1,971 net acres
within  the  Quachita  Trend  in the  State of Texas  for a  three-year  term in
consideration of approximately  $338,000.  We have a 100% working interest and a
77% net revenue interest in the Quachita Prospect leases.

BOGGS #1 WELL.  We completed  the drilling  portion of the Boggs #1 well on July
13, 2007. Subsequently,  we began production testing and evaluation of the well.
Of the five tested zones, four produced  significant  volumes of natural gas. As
formation water was also produced with the natural gas in the tested zones,  the
Boggs #1 is currently under evaluation. We intend to secure all immediate rights
relating to oil and gas in the areas providing  control over any potential major
structural play that develops as a result of this in-depth exploration.

The Boggs #1 had been privately  funded with the funding  investors  receiving a
75% working  interest and a 54% net revenue  interest in exchange for  providing
100% of all drilling and completion costs.  Therefore,  we initially  retained a
25% working  interest and a 23% net revenue interest in the Boggs #1 well. As of
December 31, 2008, we incurred  $1,357,208 in drilling and completion  costs. As
of December  31,  2008,  we had  received a total of  $759,000  in funding  from
private  investors.  On March 24, 2008, we negotiated with the funding investors
to acquire their interest in the Boggs #1 for $759,000 (which amount is equal to
the total amount of the funding investors'  initial  investment) and forgiveness
of any additional  amounts owing.  Effective on March 24, 2008, we completed the
acquisition   and   settlement   through  the  issuance  of   1,265,000   shares
(Post-Reverse  Stock Split) of our  restricted  common stock at $0.63 per share.
The difference between the estimated fair value of the common shares at issuance
and the amount of the debt  settled  totaling  $37,950 was recorded as a finance
cost. See "Item 5. Market for Registrant's  Common Equity,  Related  Stockholder
Matters and Issuer Purchases of Equity Securities.

NEW MEXICO PROSPECT

As of the date of this Annual Report,  we have leased various  properties in the
New Mexico Prospect totaling  approximately  7,576 net acres within the State of
New Mexico for a five year term in  consideration  for $112,883.  We have a 100%
working interest and an 87.5% net revenue interest in the leases  comprising the
New Mexico Prospect.

WESTROCK LAND CORP. OPTION  AGREEMENT.  Effective on October 31, 2008, our Board
of  Directors  authorized  the  execution  of an option  agreement  (the "Option
Agreement") with Westrock Land Corp, a private Texas  corporation  ("Westrock").
In  accordance  with the terms  and  provisions  of the  Option  Agreement:  (i)
Westrock owns all right,  title and interest in and to  approximately  7,763 net
acres of property within the State of New Mexico with a net revenue  interest of
81.5%  pertaining  to 5,746 of the net acres and a 78.5%  net  revenue  interest
pertaining  to 2,017 net acres (the "New Mexico  Leases");  (b)  Westrock has an
option  until June 23,  2009 to  exercise a five year lease at $100 per net acre
for  acquisition  of the 2,017  net  acres;  (iii) we  desire to  acquire a 100%
working  interest  in the New  Mexico  Leases at $50.00 per net acre for a total
purchase price of approximately  $388,150; and (iv) we have until April 16, 2009
to complete our due diligence (the "Option Period").


                                       6
<PAGE>


It is anticipated that in the event the due diligence is completed  satisfactory
to us, the  effective  date of  conveyance  of the  working  interest in the New
Mexico Leases to us will occur on approximately April 16, 2009.

PROPOSED FUTURE BUSINESS OPERATIONS

Our strategy is to complete the further  acquisition  of additional  oil and gas
opportunities  that fall within the criteria of providing a geological basis for
development of drilling initiatives that can provide near term revenue potential
and fast drilling  capital  repatriation  from  production  cash flows to create
expanding reserves. We anticipate that our 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 and
other gas  producing  domains,  and to  implement  the  drilling of new wells to
develop reserves and to provide  revenues.  We plan to build a strategic base of
proven reserves and production.

Our ability to continue to complete  planned  exploration  activities and expand
land  acquisitions and explore  drilling  opportunities is dependent on adequate
capital  resources  being available and further sources of debt and equity being
obtained.  The  two  following  alternatives  provide  the  basis  for  business
development options:

DEVELOPMENT OF CURRENT LEASES

The requirement to raise further funding for oil and gas exploration beyond that
obtained  for the next six month  period  continues  to depend on the outcome of
geological and engineering testing occurring over this interval.  Based upon the
completion of current  property  evaluations  on the Quachita  Prospect,  and if
results  provide  the  basis to  continue  development  and  geological  studies
indicate high probabilities of sufficient production quantities, we will attempt
to raise capital to further our drilling program to establish up to six wells on
leases  in  hand,  build  production  infrastructure  and  pipeline,  and  raise
additional  capital for  drilling on the New Mexico  Prospect  and further  land
acquisitions. This has included the following activity:

     o    Site preparation for entry into current  wellbores  including  roadway
          upgrade and operations  site,  design,  review,  and finalize  testing
          procedures,  book  zone  fracture  and  testing  consultants,  arrange
          equipment required.

     o    Pull old well  tubing,  run test tools in  wellbore,  cut well casing,
          test target gas zones with acid and water.

     o    If gas content  conducive to  production,  complete  well by inserting
          downhole pump and rods, set pumping unit, wellhead, and gas line.

     o    Complete pipeline.

     o    Create well  development  model and  investment  documents  to develop
          wells on subject leases including funding plan.


                                       7
<PAGE>


     o    Create investor communications materials, corporate identity.

     o    Raise funding for well development.

     o    Drill,  complete, and produce from well drilling program and selective
          re-entry programs.

     o    Target  further  leases for  exploration  potential and obtain further
          funding to acquire new development targets.

NEW LEASE ACQUISITION AND DEVELOPMENT

If gas  quality  and  quantities  are  not  deemed  sufficient  from  work to be
conducted  on our  current  leases  during  the first six  months of  operation,
additional land  acquisitions  will be assessed and obtained subject to adequate
capital  resources  being available and further sources of debt and equity being
obtained.  The  following  outlines  anticipated  activities  pursuant  to  this
business option.

     o    Site preparation for entry into current  wellbores  including  roadway
          upgrade and operations  site,  design,  review,  and finalize  testing
          procedures,  book  zone  fracture  and  testing  consultants,  arrange
          equipment required.

     o    Pull old well  tubing,  run test tools in  wellbore,  cut well casing,
          test target gas zones with acid and water,

     o    If gas content not deemed  conducive  to  production,  target  further
          leases for exploration potential and obtain further funding to acquire
          new development targets.

We will require  additional  funding to implement our proposed  future  business
activities.  See "Item 7.  Management's  Discussion  and  Analysis of  Financial
Condition and Results of Operation."

We do not expect to purchase any significant equipment or increase significantly
the number of our employees during the next twelve months.  Our current business
strategy is to obtain resources under contract where possible because management
believes that this strategy,  at its current level of development,  provides the
best services available in the circumstances,  leads to lower overall costs, and
provides the best flexibility for our business operations.

COMPETITION

We operate in a highly  competitive  industry,  competing with major oil and gas
companies,  independent  producers and institutional  and individual  investors,
which are actively seeking oil and gas properties  throughout the world together
with the equipment, labor and materials required to operate properties.  Most of
our competitors have financial  resources,  staffs and facilities  substantially
greater than ours.  The principal  area of  competition  is  encountered  in the
financial  ability to acquire good acreage  positions and drill wells to explore
for oil and  gas,  then,  if  warranted,  drill  production  wells  and  install
production  equipment.  Competition  for the acquisition of oil and gas wells is


                                       8
<PAGE>


intense with many oil and gas properties and/or leases or concessions  available
in a competitive bidding process in which we may lack technological  information
or expertise available to other bidders.  Therefore, we may not be successful in
acquiring and developing  profitable properties in the face of this competition.
No assurance can be given that a sufficient number of suitable oil and gas wells
will be available for acquisition and development.

GOVERNMENT REGULATION

The production and sale of oil and gas are subject to various federal, state and
local  governmental  regulations,  which  may be  changed  from  time to time in
response to economic or political  conditions and can have a significant  impact
upon overall operations. Matters subject to regulation include discharge permits
for drilling  operations,  drilling bonds,  reports concerning  operations,  the
spacing of wells, unitization and pooling of properties,  taxation,  abandonment
and restoration  and  environmental  protection.  These laws and regulations are
under constant review for amendment or expansion.  From time to time, regulatory
agencies  have  imposed  price   controls  and   limitations  on  production  by
restricting  the  rate of flow of oil and  gas  wells  below  actual  production
capacity  in  order  to  conserve  supplies  of oil and  gas.  Changes  in these
regulations could require us to expend significant  resources to comply with new
laws or regulations or changes to current requirements and could have a material
adverse effect on our business operations.

REGULATION OF OIL AND NATURAL GAS PRODUCTION

Our oil and natural gas  exploration,  production  and  related  operations  are
subject to extensive  rules and  regulations  promulgated by federal,  state and
local  authorities  and  agencies.   Failure  to  comply  with  such  rules  and
regulations can result in substantial  penalties.  The regulatory  burden on the
oil and natural gas industry  increases  our cost of doing  business and affects
our profitability. Although we believe we are in substantial compliance with all
applicable  laws  and  regulations,  because  such  rules  and  regulations  are
frequently amended or reinterpreted, we are unable to predict the future cost or
impact of complying with such laws.

Many states require permits for drilling operations,  drilling bonds and reports
concerning  operations and impose other requirements relating to the exploration
and  production  of oil and  natural  gas.  Such  states  also have  statutes or
regulations  addressing  conservation  matters,  including  provisions  for  the
unitization or pooling of oil and natural gas properties,  the  establishment of
maximum rates of production from wells, and the regulation of spacing,  plugging
and abandonment of such wells.

FEDERAL REGULATION OF NATURAL GAS

The Federal Energy Regulatory  Commission ("FERC") regulates  interstate natural
gas transportation  rates and service conditions,  which affect the marketing of
natural gas produced by us, as well as the revenues  received by us for sales of
such production.  Since the mid-1980's,  FERC has issued a series of orders that
have  significantly  altered the  marketing and  transportation  of natural gas.
These orders mandate a fundamental  restructuring  of interstate  pipeline sales
and transportation service,  including the unbundling by interstate pipelines of
the sale,  transportation,  storage and other  components of the city-gate sales
services such pipelines previously performed.  One of FERC's purposes in issuing
the orders was to  increase  competition  within all phases of the  natural  gas


                                       9
<PAGE>


industry. Certain aspects of these orders may be modified as a result of various
appeals and related  proceedings  and it is  difficult  to predict the  ultimate
impact of the  orders on us and  others.  Generally,  the  orders  eliminate  or
substantially reduce the interstate  pipelines'  traditional role as wholesalers
of natural gas in favor of providing  only storage and  transportation  service,
and have  substantially  increased  competition  and  volatility  in natural gas
markets.

The price,  which we may receive  for the sale of oil and  natural gas  liquids,
would be affected  by the cost of  transporting  products  to markets.  FERC has
implemented regulations establishing an indexing system for transportation rates
for oil  pipelines,  which,  generally,  would  index such  rates to  inflation,
subject to certain  conditions and limitations.  We are not able to predict with
certainty the effect,  if any, of these  regulations  on any future  operations.
However,  the regulations may increase  transportation  costs or reduce wellhead
prices for oil and natural gas liquids.

ENVIRONMENTAL MATTERS

Our operations and properties will be subject to extensive and changing federal,
state and local  laws and  regulations  relating  to  environmental  protection,
including  the  generation,  storage,  handling,  emission,  transportation  and
discharge of materials into the environment,  and relating to safety and health.
The recent trend in environmental legislation and regulation generally is toward
stricter  standards,  and  this  trend  will  likely  continue.  These  laws and
regulations may (i) require the  acquisition of a permit or other  authorization
before construction or drilling commences and for certain other activities; (ii)
limit or prohibit  construction,  drilling and other activities on certain lands
lying within wilderness and other protected areas; and (iii) impose  substantial
liabilities for pollution  resulting from our operations.  The permits  required
for  several of our  operations  are  subject to  revocation,  modification  and
renewal  by  issuing  authorities.  Governmental  authorities  have the power to
enforce their  regulations,  and violations are subject to fines or injunctions,
or both. In the opinion of  management,  we are in substantial  compliance  with
current  applicable  environmental law and regulations,  and we have no material
commitments  for  capital  expenditures  to comply with  existing  environmental
requirements.   Nevertheless,   changes  in  existing   environmental  laws  and
regulations or in interpretations thereof could have a significant impact on our
business operations, as well as the oil and natural gas industry in general.

The  Comprehensive  Environmental,  Response,  Compensation,  and  Liability Act
("CERCL ") and  comparable  state  statutes  impose  strict,  joint and  several
liabilities  on owners and  operators of sites and on persons who disposed of or
arranged for the disposal of "hazardous  substances"  found at such sites. It is
not  uncommon for the  neighboring  landowners  and other third  parties to file
claims for personal injury and property damage allegedly caused by the hazardous
substances released into the environment.  The Federal Resource Conservation and
Recovery Act  ("RCRA")  and  comparable  state  statutes  govern the disposal of
"solid waste" and "hazardous  waste" and authorize the imposition of substantial
fines and  penalties  for  noncompliance.  Although  CERCLA  currently  excludes
petroleum from its definition of "hazardous substance," state laws affecting our
operations impose clean-up liability relating to petroleum and petroleum related
products.  In addition,  although  RCRA  classifies  certain oil field wastes as
"non-hazardous," such exploration and production wastes could be reclassified as
a  hazardous  wastes,  thereby  making  such  wastes  subject to more  stringent
handling and disposal requirements.


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<PAGE>


We intend to acquire leasehold  interests in properties that for many years have
produced oil and natural gas.  Although the previous  owners of these  interests
may have  used  operating  and  disposal  practices  that were  standard  in the
industry at the time,  hydrocarbons or other wastes may have been disposed of or
released on or under the properties.  In addition, some of our properties may be
operated  in the  future  by  third  parties  over  which  we have  no  control.
Notwithstanding  our lack of control  over  properties  operated by others,  the
failure of the operator to comply with applicable environmental regulations may,
in certain circumstances, adversely impact our business operations.

The  National  Environmental  Policy Act ("NEPA") is  applicable  to many of our
planned  activities and operations.  NEPA is a broad procedural statute intended
to ensure that  federal  agencies  consider  the  environmental  impact of their
actions by requiring such agencies to prepare  environmental  impact  statements
("EIS") in connection with all federal activities that significantly  affect the
environment.  Although  NEPA is a  procedural  statute  only  applicable  to the
federal  government,  a portion  of our  properties  may be  acreage  located on
federal land. The Bureau of Land  Management's  issuance of drilling permits and
the  Secretary  of the  Interior's  approval  of plans of  operation  and  lease
agreements all constitute federal action within the scope of NEPA. Consequently,
unless the responsible  agency determines that our drilling  activities will not
materially  impact the environment,  the responsible  agency will be required to
prepare an EIS in conjunction with the issuance of any permit or approval.

The  Endangered  Species Act  ("ESA")  seeks to ensure  that  activities  do not
jeopardize endangered or threatened animals, fish and plant species, nor destroy
or modify the  critical  habitat of such  species.  Under ESA,  exploration  and
production  operation,   as  well  as  actions  by  federal  agencies,  may  not
significantly  impair or jeopardize the species or their  habitat.  ESA provides
for criminal  penalties for willful  violations of the Act.  Other statutes that
provide  protection  to  animal  and  plant  species  and that may  apply to our
operations  include,  but are not necessarily  limited to, the Fish and Wildlife
Coordination  Act, the Fishery  Conservation  and Management  Act, the Migratory
Bird Treaty Act and the National Historic  Preservation Act. Although we believe
that our operations are in substantial compliance with such statutes, any change
in these  statutes  or any  reclassification  of a species as  endangered  could
subject us to  significant  expense to modify our  operations  or could force to
discontinue certain operations altogether.

Management  believes  that  we  are  in  substantial   compliance  with  current
applicable environmental laws and regulations.

RESEARCH AND DEVELOPMENT ACTIVITIES

No research  and  development  expenditures  have been  incurred,  either on our
account or sponsored by customers, to the date of our inception.


                                       11
<PAGE>


EMPLOYEES

We do not employ any  persons on a  full-time  or on a  part-time  basis.  Peter
Wilson is our President/Chief  Executive Officer and William Thomas is our Chief
Financial Officer/Treasurer. These individuals are primarily responsible for all
of our day-to-day  operations.  Other  services are provided by outsourcing  and
consultant and special purpose contracts.

ITEM 1A. RISK FACTORS

An investment in our common stock involves a number of very  significant  risks.
You should carefully  consider the following risks and uncertainties in addition
to  other  information  in  evaluating  our  company  and  its  business  before
purchasing  shares of our common  stock.  Our  business,  operating  results and
financial condition could be seriously harmed due to any of the following risks.
The risks  described  below are all of the material  risks that we are currently
aware of that are facing our company. Additional risks not presently known to us
may also  impair  our  business  operations.  You could lose all or part of your
investment due to any of these risks.

RISKS RELATED TO OUR BUSINESS

WE WILL NEED TO RAISE ADDITIONAL FINANCING TO COMPLETE FURTHER EXPLORATION.

We will  require  significant  additional  financing  in order to  continue  our
exploration activities and our assessment of the commercial viability of our oil
and  gas  properties.  Furthermore,  if the  costs  of our  planned  exploration
programs  are greater than  anticipated,  we may have to seek  additional  funds
through  public or  private  share  offerings  or  arrangements  with  corporate
partners. There can be no assurance that we will be successful in our efforts to
raise  these  required  funds,  or on terms  satisfactory  to us. The  continued
exploration of our oil and gas  properties  and the  development of our business
will depend upon our ability to establish  the  commercial  viability of our oil
and gas properties and to ultimately develop cash flow from operations and reach
profitable operations.  We currently are in the exploration stage and we have no
revenue from operations and we are experiencing  significant negative cash flow.
Accordingly,  the only other  sources  of funds  presently  available  to us are
through the sale of equity. We presently believe that debt financing will not be
an  alternative to us as all of our  properties  are in the  exploration  stage.
Alternatively,  we may finance  our  business by offering an interest in our oil
and gas properties to be earned by another party or parties carrying out further
exploration and development  thereof or to obtain project or operating financing
from financial  institutions,  neither of which is presently intended. If we are
unable to obtain this additional financing,  we will not be able to continue our
exploration activities and our assessment of the commercial viability of our oil
and properties. Further, if we are able to establish that development of our oil
and gas properties is  commercially  viable,  our inability to raise  additional
financing at this stage would  result in our  inability to place our oil and gas
properties into production and recover our investment.

As our oil and gas  properties do not contain any reserves,  we may not discover
commercially  exploitable  quantities of oil or gas on our properties that would
enable us to enter into commercial production,  achieve revenues and recover the
money we spend on exploration.

Our  properties  do not contain  reserves  in  accordance  with the  definitions
adopted by the SEC and there is no assurance that any exploration  programs that
we carry out will establish  reserves.  All of our oil and gas properties are in
the exploration stage as opposed to the development stage and have no known body


                                       12
<PAGE>


of reserves.  The known reserves at these projects have not yet been  determined
to be economic,  and may never be determined to be economic.  We plan to conduct
further  exploration  activities  on our oil and gas  properties,  which  future
exploration  may include the  completion  of  feasibility  studies  necessary to
evaluate  whether  commercial  reserves exist on any of our mineral  properties.
There is a substantial risk that these exploration activities will not result in
discoveries   of   commercially   recoverable   reserves  of  oil  or  gas.  Any
determination that our properties contain commercially recoverable quantities of
oil or  gas  may  not be  reached  until  such  time  that  final  comprehensive
feasibility  studies have been concluded that establish that a potential reserve
is likely to be economic.  There is a substantial  risk that any  preliminary or
final  feasibility  studies  carried  out by us will not  result  in a  positive
determination that our oil and gas properties can be commercially developed.

OUR EXPLORATION ACTIVITIES ON OUR OIL AND GAS PROPERTIES MAY NOT BE COMMERCIALLY
SUCCESSFUL, WHICH COULD LEAD US TO ABANDON OUR PLANS TO DEVELOP THE PROPERTY AND
OUR INVESTMENTS IN EXPLORATION.

Our  long-term  success  depends  on  our  ability  to  establish   commercially
recoverable quantities of oil and natural gas on our properties that can then be
developed into commercially viable operations. Oil and gas exploration is highly
speculative  in nature,  involves many risks and is  frequently  non-productive.
These risks include unusual or unexpected geologic formations, and the inability
to obtain suitable or adequate machinery, equipment or labor. The success of oil
and gas exploration is determined in part by the following factors:

     o    identification  of  potential  oil and natural gas  reserves  based on
          superficial analysis;

     o    availability of government-granted exploration permits;

     o    the quality of management and geological and technical expertise; and

     o    the capital available for exploration.

Substantial  expenditures are required to establish proven and probable reserves
through drilling and analysis,  to develop processes to extract oil and gas, and
to develop the drilling and  processing  facilities  and  infrastructure  at any
chosen site. Whether an oil and gas reserve will be commercially  viable depends
on a number of  factors,  which  include,  without  limitation,  the  particular
attributes of the reserve;  oil and natural gas prices,  which fluctuate widely;
and government regulations,  including, without limitation, regulations relating
to prices, taxes,  royalties,  land tenure, land use, importing and exporting of
oil and gas and environmental  protection. We may invest significant capital and
resources  in  exploration  activities  and abandon such  investments  if we are
unable to identify commercially  exploitable reserves. The decision to abandon a
project may reduce the trading  price of our common stock and impair our ability
to raise future financing.  We cannot provide any assurance to investors that we
will discover or acquire any oil or gas reserves in sufficient quantities on any
of our properties to justify commercial operations. Further, we will not be able
to  recover  the  funds  that we  spend  on  exploration  if we are not  able to
establish  commercially  recoverable  reserves  of  oil  or  natural  gas on our
properties.


                                       13
<PAGE>


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

In considering  whether to invest in our common stock,  you should consider that
there is only limited historical financial and operating  information  available
on which to base your evaluation of our  performance.  Our inception was October
19, 2004 and, as a result, we have a limited operating history.

WE HAVE A HISTORY OF  OPERATING  LOSSES AND THERE CAN BE NO ASSURANCE WE WILL BE
PROFITABLE IN THE FUTURE.

We have a history of operating losses,  expect to continue to incur losses,  and
may never be  profitable,  and we must be  considered  to be in the  exploration
stage.  Further,  we have been  dependent on sales of our equity  securities and
debt financing to meet our cash  requirements.  We have incurred losses totaling
approximately  $6,984,708 from October 19, 2004 (inception) to December 31, 2008
and had incurred  losses of  approximately  $2,021,930  during fiscal year ended
December 31, 2008.  Further, we do not expect positive cash flow from operations
in the near term. There is no assurance that actual cash  requirements  will not
exceed our estimates.  In particular,  additional capital may be required in the
event  that:  (i) the  costs to  acquire  additional  leases  are  more  than we
currently  anticipate;  (ii) drilling and completion  costs for additional wells
increase beyond our expectations; or (iii) we encounter greater costs associated
with general and administrative expenses or offering costs.

Our  development  of and  participation  in what could evolve into an increasing
number of oil and gas prospects may require  substantial  capital  expenditures.
The  uncertainty  and factors  described  throughout this section may impede our
ability to economically find, develop,  produce, and acquire natural gas and oil
reserves. As a result, we may not be able to achieve or sustain profitability or
positive cash flows from operating activities in the future.

WE HAVE RECEIVED A GOING CONCERN OPINION FROM OUR INDEPENDENT  AUDITORS'  REPORT
ACCOMPANYING OUR DECEMBER 31, 2008 AND DECEMBER 31, 2007 FINANCIAL STATEMENTS.

The independent  auditor's  report  accompanying  our December 31, 2008 and 2007
audited  financial  statements  contains  an  explanatory  paragraph  expressing
substantial  doubt  about  our  ability  to  continue  as a going  concern.  The
financial statements have been prepared "assuming that the Company will continue
as a going  concern." Our ability to continue as a going concern is dependent on
raising  additional  capital to fund our operations and ultimately on generating
future profitable operations.  There can be no assurance that we will be able to
raise sufficient  additional  capital or eventually have positive cash flow from
operations  to address  all of our cash flow  needs.  If we are not able to find
alternative sources of cash or generate positive cash flow from operations,  our
business and shareholders will be materially and adversely affected.

WE WILL REQUIRE ADDITIONAL FUNDING IN THE FUTURE.

Based upon our historical  losses from  operations,  we will require  additional
funding  in the  future.  If we cannot  obtain  capital  through  financings  or
otherwise,  our ability to execute our development plans and achieve  production
levels will be greatly limited. Our current development plans require us to make


                                       14
<PAGE>


capital  expenditures for the exploration and development of our oil and natural
gas properties. Historically, we have funded our operations through the issuance
of equity. We may not be able to obtain additional financing on favorable terms,
if at all.  Our future  cash flows and the  availability  of  financing  will be
subject to a number of variables,  including potential production and the market
prices of oil and natural gas. Further, debt financing, if utilized,  could lead
to a diversion  of cash flow to satisfy  debt-servicing  obligations  and create
restrictions on business operations. If we are unable to raise additional funds,
it would have a material adverse effect upon our operations.

AS PART OF OUR  GROWTH  STRATEGY,  WE INTEND TO ACQUIRE  ADDITIONAL  OIL AND GAS
PROPERTIES.

As part of our  growth  strategy,  we intend to acquire  additional  oil and gas
production properties.  Current and subsequent acquisitions may pose substantial
risks to our  business,  financial  condition,  and  results of  operations.  In
pursuing acquisitions,  we will compete with other companies, many of which have
greater financial and other resources to acquire attractive properties.  Even if
we are successful in acquiring additional properties, some of the properties may
not produce  revenues at  anticipated  levels or failure to conduct  drilling on
prospects within specified time periods may cause the forfeiture of the lease in
that prospect.  There can be no assurance  that we will be able to  successfully
integrate  acquired  properties,  which could  result in  substantial  costs and
delays  or  other  operational,   technical,  or  financial  problems.  Further,
acquisitions could disrupt ongoing business  operations.  If any of these events
occur,  it would have a material  adverse effect upon our operations and results
from operations.

WE ARE A NEW ENTRANT INTO THE OIL AND GAS EXPLORATION  AND DEVELOPMENT  INDUSTRY
WITHOUT PROFITABLE OPERATING HISTORY.

Since  inception,  our activities have been limited to  organizational  efforts,
obtaining  working capital and acquiring and developing a very limited number of
properties. As a result, there is limited information regarding property related
production potential or revenue generation  potential.  Further, our Leases have
no probable,  proved or developed  producing  reserves.  As a result, our future
revenues may be limited or non-existent.

The business of oil and gas exploration and development is subject to many risks
and if oil and  natural  gas is found in  economic  production  quantities,  the
potential  profitability  of future  possible oil and gas ventures  depends upon
factors beyond our control.  The potential  profitability of oil and natural gas
properties if economic  quantities  are found is dependent upon many factors and
risks  beyond our  control,  including,  but not limited  to: (i)  unanticipated
ground conditions; (ii) geological problems; (iii) drilling and other processing
problems;  (iv) the  occurrence of unusual  weather or operating  conditions and
other force majeure events;  (v) lower than expected  reserve  quantities;  (vi)
accidents;  (vii)  delays in the  receipt of or  failure  to  receive  necessary
government permits;  (viii) delays in transportation;  (ix) labor disputes;  (x)
government permit restrictions and regulation restrictions;  (xi) unavailability
of materials  and  equipment;  and (xii) the failure of equipment or drilling to
operate in accordance with specifications or expectations.


                                       15
<PAGE>


OUR DRILLING OPERATIONS MAY NOT BE SUCCESSFUL.

We intend to test certain zones in wellbores  already  drilled on certain of the
properties  and  if  results  are  positive  and  capital  is  available,  drill
additional  wells and begin  production  operations from existing and new wells.
There can be no assurance  that our current  well  re-completion  activities  or
future drilling  activities  will be successful,  and we cannot be sure that our
overall drilling success rate or our production  operations  within a particular
area will ever come to fruition,  and if it does, will not decline over time. We
may not recover all or any portion of our capital investment in the wells or the
underlying  leaseholds.  Unsuccessful  drilling activities would have a material
adverse effect upon our results of operations and financial condition.  The cost
of drilling, completing, and operating wells is often uncertain, and a number of
factors  can delay or prevent  drilling  operations  including:  (i)  unexpected
drilling conditions;  (ii) pressure or irregularities in geological  formations;
(iii) equipment failures or accidents; (iv) adverse weather conditions; and (iv)
shortages or delays in availability of drilling rigs and delivery of equipment.

OUR PRODUCTION INITIATIVES MAY NOT PROVE SUCCESSFUL.

The coal beds from which we intend to produce  natural  gas  frequently  contain
water, which may hamper our ability to produce gas in commercial quantities. The
amount of natural gas that can be  commercially  produced  depends upon the coal
quality,  the original gas content of the coal seam,  the thickness of the seam,
the reservoir pressure, the rate at which gas is released from the coal, and the
existence of any natural  fractures  through  which the gas can flow to the well
bore. However,  coal beds frequently contain water that must be removed in order
for the gas to detach from the coal and flow to the well bore.  The average life
of a coal bed well is only five to six years.  Our ability to remove and dispose
of sufficient  quantities of water from the coal seam will determine  whether or
not we can produce coal bed methane in commercial quantities.

There is no guarantee that the potential  drilling  locations we have or acquire
in the future will ever produce  natural gas or oil, which could have a material
adverse effect upon our results of operations.

PROSPECTS  THAT  WE  DECIDE  TO  DRILL  MAY  NOT  YIELD  NATURAL  GAS  OR OIL IN
COMMERCIALLY VIABLE QUANTITIES.

We describe some of our current  prospects in this Annual Report.  Our prospects
are in various stages of  preliminary  evaluation and assessment and we have not
reached the point where we will decide to drill at all on the subject prospects.
However,  the use of seismic data,  historical  drilling logs,  offsetting  well
information,  and other  technologies  and the study of producing  fields in the
same area will not enable us to know conclusively  prior to drilling and testing
whether  natural gas or oil will be present or, if present,  whether natural gas
or oil will be present in sufficient  quantities or quality to recover  drilling
or completion costs or to be economically  viable. In sum, the cost of drilling,
completing  and operating any wells is often  uncertain and new wells may not be
productive.


                                       16
<PAGE>


WE MAY BE UNABLE TO  IDENTIFY  LIABILITIES  ASSOCIATED  WITH THE  PROPERTIES  OR
OBTAIN PROTECTION FROM SELLERS AGAINST THEM.

One of our growth  strategies is to capitalize on opportunistic  acquisitions of
oil and natural gas reserves.  However,  our reviews of acquired  properties are
inherently  incomplete  because it  generally is not feasible to review in depth
every individual  property  involved in each  acquisition.  A detailed review of
records  and  properties  may  not  necessarily  reveal  existing  or  potential
problems,  nor will it permit a buyer to become  sufficiently  familiar with the
properties  to  assess  fully  their   deficiencies   and  potential.   Further,
environmental problems, such as ground water contamination,  are not necessarily
observable  even when an inspection is undertaken.  We may not be able to obtain
indemnification  or other  protections  from the sellers  against such potential
liabilities,  which  would have a material  adverse  effect  upon our results of
operations.

THE  POTENTIAL  PROFITABILITY  OF OIL  AND  GAS  VENTURES  DEPENDS  UPON  GLOBAL
POLITICAL AND MARKET RELATED FACTORS BEYOND OUR CONTROL.

World  prices and markets for oil and gas are  unpredictable,  highly  volatile,
potentially  subject  to  governmental  fixing,   pegging,   controls,   or  any
combination  of these and other  factors,  and  respond to changes in  domestic,
international,  political, social, and economic environments.  Additionally, due
to  worldwide  economic  uncertainty,  the  availability  and cost of funds  for
production  and  other  expenses  have  become  increasingly  difficult,  if not
impossible, to project. These and other changes and events may materially affect
our financial performance. The potential profitability of oil and gas properties
is dependent on these and other factors beyond our control.

PRODUCTION  OR OIL  AND  GAS  RESOURCES  IF  FOUND  ARE  DEPENDENT  ON  NUMEROUS
OPERATIONAL  UNCERTAINTIES SPECIFIC TO THE AREA OF THE RESOURCE THAT AFFECTS ITS
PROFITABILITY.

Production area specifics affect  profitability.  Adverse weather conditions can
hinder drilling  operations and ongoing  production  work. A productive well may
become  uneconomic  in the  event  water or  other  deleterious  substances  are
encountered  which impair or prevent the  production  of oil and/or gas from the
well.  Production  and  treatments  on other wells in the area can have either a
positive or negative effect on our production and wells. In addition, production
from any well  may be  unmarketable  if it is  impregnated  with  water or other
deleterious  substances.  The content of  hydrocarbons is subject to change over
the life of producing wells. The  marketability of oil and gas from any specific
reserve which may be acquired or discovered will be affected by numerous factors
beyond our control. These factors include, but are not limited to, the proximity
and capacity of oil and gas pipelines,  availability of room in the pipelines to
accommodate additional production, processing and production equipment operating
costs and equipment  efficiency,  market  fluctuations of prices and oil and gas
marketing  relationships,  local  and  state  taxes,  mineral  owner  and  other
royalties,  land  tenure,  lease bonus costs and lease damage  costs,  allowable
production,  and  environmental  protection.  These factors cannot be accurately
predicted and the combination of these factors may result in us not receiving an
adequate return on our invested capital.


                                       17
<PAGE>


IF PRODUCTION RESULTS FROM OPERATIONS,  WE ARE DEPENDENT UPON TRANSPORTATION AND
STORAGE SERVICES PROVIDED BY THIRD PARTIES.

We will be  dependent  on the  transportation  and storage  services  offered by
various  interstate and intrastate  pipeline companies for the delivery and sale
of our gas supplies. Both the performance of transportation and storage services
by  interstate  pipelines and the rates charged for such services are subject to
the jurisdiction of the Federal Energy Regulatory Commission or state regulatory
agencies.  An  inability to obtain  transportation  and/or  storage  services at
competitive  rates could hinder our processing and marketing  operations  and/or
affect our sales margins.

OUR RESULTS OF  OPERATIONS  ARE  DEPENDENT  UPON MARKET  PRICES FOR OIL AND GAS,
WHICH FLUCTUATE WIDELY AND ARE BEYOND OUR CONTROL.

If and when  production  from oil and gas  properties  is reached,  our revenue,
profitability,  and cash flow  depend  upon the  prices  and  demand for oil and
natural  gas.  The  markets for these  commodities  are very  volatile  and even
relatively modest drops in prices can significantly affect our financial results
and impede our  growth.  Prices  received  also will affect the amount of future
cash flow available for capital expenditures and may affect our ability to raise
additional  capital.  Lower prices may also affect the amount of natural gas and
oil that  can be  economically  produced  from  reserves  either  discovered  or
acquired.  Factors that can cause price fluctuations  include:  (i) the level of
consumer  product demand;  (ii) domestic and foreign  governmental  regulations;
(iii) the price and availability of alternative  fuels; (iv) technical  advances
affecting  energy  consumption;  (v)  proximity  and  capacity  of oil  and  gas
pipelines and other  transportation  facilities;  (vi)  political  conditions in
natural gas and oil producing regions;  (vii) the domestic and foreign supply of
natural gas and oil;  (viii) the ability of members of Organization of Petroleum
Exporting Countries to agree to and maintain oil price and production  controls;
(ix) the price of foreign imports;  and (x) overall domestic and global economic
conditions.

The  availability  of a ready market for our oil and gas depends  upon  numerous
factors  beyond our control,  including  the extent of domestic  production  and
importation   of  oil  and  gas,  the  relative   status  of  the  domestic  and
international  economies,  the  proximity  of our  properties  to gas  gathering
systems,  the capacity of those  systems,  the  marketing  of other  competitive
fuels,   fluctuations  in  seasonal  demand  and   governmental   regulation  of
production,  refining,  transportation and pricing of oil, natural gas and other
fuels.

THE OIL AND GAS  INDUSTRY IN WHICH WE OPERATE  INVOLVES  MANY  INDUSTRY  RELATED
OPERATING AND IMPLEMENTATION  RISKS THAT CAN CAUSE SUBSTANTIAL LOSSES INCLUDING,
BUT  NOT  LIMITED  TO,  UNPRODUCTIVE  WELLS,  NATURAL  DISASTERS,  FACILITY  AND
EQUIPMENT PROBLEMS AND ENVIRONMENTAL HAZARDS.

Our drilling  activities  are subject to many risks,  including the risk that we
will not  discover  commercially  productive  reservoirs.  Drilling  for oil and
natural gas can be  unprofitable,  not only from dry holes,  but from productive
wells that do not produce  sufficient  revenues to return a profit. In addition,
our drilling and producing operations may be curtailed, delayed or canceled as a
result of other drilling and production, weather and natural disaster, equipment
and service  failure,  environmental  and regulatory,  and site specific related
factors,  including  but not  limited  to: (i)  fires;  (ii)  explosions;  (iii)
blow-outs  and  surface  cratering;  (iv)  uncontrollable  flows of  underground
natural gas, oil, or formation water; (v) natural  disasters;  (vi) facility and
equipment failures; (vii) title problems; (viii) shortages or delivery delays of


                                       18
<PAGE>


equipment and services; (ix) abnormal pressure formations; and (x) environmental
hazards such as natural gas leaks, oil spills,  pipeline ruptures and discharges
of toxic gases.

If any of these events occur, we could incur substantial  losses as a result of:
(i) injury or loss of life;  (ii) severe damage to and  destruction of property,
natural resources or equipment;  (iii) pollution and other environmental damage;
(iv) clean-up responsibilities; (v) regulatory investigation and penalties; (vi)
suspension of our operations; or (vii) repairs necessary to resume operations.

If we were to  experience  any of these  problems,  it could  affect well bores,
gathering  systems and processing  facilities,  any one of which could adversely
affect our  ability to conduct  operations.  We may be  affected by any of these
events more than larger companies, since we have limited working capital.

THE OIL AND GAS INDUSTRY IS HIGHLY COMPETITIVE AND THERE IS NO ASSURANCE THAT WE
WILL BE SUCCESSFUL IN ACQUIRING LEASES.

The oil and natural gas industry is intensely  competitive,  and we compete with
other  companies that have greater  resources.  Many of these companies not only
explore  for and  produce  oil and  natural  gas,  but also  carry  on  refining
operations and market  petroleum and other  products on a regional,  national or
worldwide basis.  These companies may be able to pay more for productive oil and
natural gas properties and exploratory  prospects or define,  evaluate,  bid for
and purchase a greater  number of properties and prospects than our financial or
human resources permit. In addition,  these companies may have a greater ability
to continue  exploration  activities  during  periods of low oil and natural gas
market  prices.  Our  larger  competitors  may be able to absorb  the  burden of
present and future federal,  state,  local and other laws and  regulations  more
easily than we can, which would adversely affect our competitive  position.  Our
ability to acquire additional  properties and to discover reserves in the future
will be dependent  upon our ability to evaluate and select  suitable  properties
and to consummate transactions in a highly competitive environment. In addition,
because we have fewer  financial and human  resources than many companies in our
industry,  we may be at a disadvantage in bidding for exploratory  prospects and
producing oil and natural gas properties.

THE  MARKETABILITY  OF NATURAL  RESOURCES  WILL BE AFFECTED BY NUMEROUS  FACTORS
BEYOND OUR CONTROL,  WHICH MAY RESULT IN US NOT RECEIVING AN ADEQUATE  RETURN ON
INVESTED CAPITAL TO BE PROFITABLE OR VIABLE.

The marketability of natural resources which may be acquired or discovered by us
will be affected by numerous  factors beyond our control.  These factors include
market  fluctuations  in oil and gas  pricing  and  demand,  the  proximity  and
capacity of natural  resource  markets and  processing  equipment,  governmental
regulations,  land tenure,  land use,  regulation  concerning  the importing and
exporting of oil and gas and  environmental  protection  regulations.  The exact
effect of these factors cannot be accurately  predicted,  but the combination of
these  factors may result in us not  receiving  an  adequate  return on invested
capital to be profitable or viable.


                                       19
<PAGE>


OIL AND GAS OPERATIONS ARE SUBJECT TO  COMPREHENSIVE  REGULATION WHICH MAY CAUSE
SUBSTANTIAL  DELAYS OR REQUIRE  CAPITAL  OUTLAYS IN EXCESS OF THOSE  ANTICIPATED
CAUSING AN ADVERSE EFFECT ON OUR BUSINESS OPERATIONS.

Oil and gas operations are subject to federal, state, and local laws relating to
the protection of the environment,  including laws regulating removal of natural
resources from the ground and the discharge of materials  into the  environment.
Oil and gas  operations are also subject to federal,  state,  and local laws and
regulations which seek to maintain health and safety standards by regulating the
design  and  use  of  drilling  methods  and  equipment.  Various  permits  from
government  bodies are required  for drilling  operations  to be  conducted;  no
assurance  can be  given  that  such  permits  will be  received.  Environmental
standards  imposed by federal,  provincial,  or local authorities may be changed
and any such  changes  may have  material  adverse  effects  on our  activities.
Moreover,  compliance  with such laws may cause  substantial  delays or  require
capital outlays in excess of those  anticipated,  thus causing an adverse effect
on us.  Additionally,  we may be subject to  liability  for  pollution  or other
environmental  damages  which  we  may  elect  not  to  insure  against  due  to
prohibitive  premium costs and other reasons.  To date we have not been required
to spend material amounts on compliance with environmental regulations. However,
we may be  required  to do so in the future  and this may affect our  ability to
expand or maintain our operations.

In general,  our  exploration  and production  activities are subject to certain
federal,  state and local laws and regulations relating to environmental quality
and pollution  control.  Such laws and  regulations  increase the costs of these
activities and may prevent or delay the  commencement  or continuance of a given
operation.  Compliance  with these laws and  regulations  has not had a material
effect on our operations or financial  condition to date.  Specifically,  we are
subject  to  legislation   regarding  emissions  into  the  environment,   water
discharges  and  storage and  disposition  of  hazardous  wastes.  In  addition,
legislation  has been  enacted  which  requires  well and  facility  sites to be
abandoned and reclaimed to the satisfaction of state authorities.  However, such
laws and  regulations  are  frequently  changed and we are unable to predict the
ultimate cost of compliance. Generally, environmental requirements do not appear
to affect us any  differently  or to any  greater  or lesser  extent  than other
companies in the industry.

We believe  that our  operations  comply,  in all  material  respects,  with all
applicable  environmental  regulations.  We need  insurance  to protect our self
against risks  associated with the leases  obtained.  The leases allow for entry
onto the properties for the purposes of oil and gas  exploration.  The insurance
we require  relates solely to developments on the properties for the purposes of
oil and gas exploration.

When and if we are  convinced  that our  current  leases  or those  subsequently
acquired are capable of hydrocarbon  production and sales,  and we plan to drill
more than one well, we intend to maintain a $2,000,000  per year limit policy on
bodily  injury and  general  liability  with  regard to risks  incurred  for the
drilling  of up to 25 wells.  This  will  allow for our  growth to  contain  non
contract  labor that would  require us to carry such  additional  insurance  for
risks  pertaining to oil and gas  exploration  conducted  directly by us. Such a
policy  would   include   coverage  for  numerous   locations   for   pollution,
environmental  damage,  chemical spills and commercial general liability,  fire,
and personal injury. Such a policy will not be required until such time and date
as we believe that we will begin a sustained drilling and operating program, and
that at least one well has been  drilled and is producing to justify and warrant
further drilling and a sustained drilling and operating program.


                                       20
<PAGE>


ANY CHANGE TO GOVERNMENT REGULATION/ADMINISTRATIVE PRACTICES MAY HAVE A NEGATIVE
IMPACT ON OUR ABILITY TO OPERATE AND OUR PROFITABILITY.

The laws,  regulations,  policies  or current  administrative  practices  of any
government body,  organization or regulatory  agency in the United States or any
other  jurisdiction,  may be changed,  applied or  interpreted in a manner which
will fundamentally alter our ability to carry on business. The actions, policies
or regulations, or changes thereto, of any government body or regulatory agency,
or other special  interest groups,  may have a detrimental  effect on us. Any or
all of these  situations  may have a negative  impact on our  ability to operate
and/or our profitability.

WE MAY BE UNABLE TO RETAIN KEY EMPLOYEES OR  CONSULTANTS  OR RECRUIT  ADDITIONAL
QUALIFIED PERSONNEL.

Our  extremely  limited  personnel  means  that we  would be  required  to spend
significant  sums of money to locate and train new employees in the event any of
our employees resign or terminate their  employment with us for any reason.  Due
to our  limited  operating  history and  financial  resources,  we are  entirely
dependent on the continued service of Peter Wilson, our Chief Executive Officer,
and William Thomas, our Chief Financial Officer. Further, we do not have key man
life  insurance on either of these  individuals.  We may not have the  financial
resources to hire a replacement  if one or both of our officers were to die. The
loss of service of either of these employees could therefore  significantly  and
adversely affect our operations.

OUR OFFICERS AND DIRECTORS MAY BE SUBJECT TO CONFLICTS OF INTEREST.

Our officers and directors  serve only part time and are subject to conflicts of
interest.  Each devotes part of his working  time to other  business  endeavors,
including consulting relationships with other entities, and has responsibilities
to these other entities. Such conflicts include deciding how much time to devote
to our affairs,  as well as what business  opportunities  should be presented to
us. Because of these  relationships,  our officers and directors will be subject
to conflicts of interest.  Currently, we have no policy in place to address such
conflicts of interest.

NEVADA LAW AND OUR  ARTICLES OF  INCORPORATION  MAY PROTECT OUR  DIRECTORS  FROM
CERTAIN TYPES OF LAWSUITS.

Nevada law provides that our officers and directors  will not be liable to us or
our  stockholders  for monetary  damages for all but certain types of conduct as
officers and directors. Our Bylaws permit us broad indemnification powers to all
persons  against all damages  incurred in  connection  with our  business to the
fullest extent provided or allowed by law. The  exculpation  provisions may have
the effect of  preventing  stockholders  from  recovering  damages  against  our
officers  and  directors  caused by their  negligence,  poor  judgment  or other
circumstances.  The indemnification provisions may require us to use our limited
assets to defend our officers and directors  against  claims,  including  claims
arising out of their negligence, poor judgment, or other circumstances.


                                       21
<PAGE>


RISKS RELATED TO OUR COMMON STOCK

SALES OF A  SUBSTANTIAL  NUMBER OF SHARES OF OUR  COMMON  STOCK  INTO THE PUBLIC
MARKET BY CERTAIN  STOCKHOLDERS MAY RESULT IN SIGNIFICANT  DOWNWARD  PRESSURE ON
THE PRICE OF OUR COMMON  STOCK AND COULD  AFFECT  YOUR  ABILITY  TO REALIZE  THE
CURRENT TRADING PRICE OF OUR COMMON STOCK.

Sales of a substantial number of shares of our common stock in the public market
by certain  stockholders  could  cause a  reduction  in the market  price of our
common stock. As of the date of this Annual Report, we have 15,216,196 shares of
common stock issued and  outstanding  (Post-Reverse  Stock Split).  Of the total
number of issued and outstanding  shares of common stock,  certain  stockholders
are able to resell up to  1,389,233  (Post-Reverse  Stock  Split)  shares of our
common  stock  pursuant to the  Registration  Statement  declared  effective  on
February  14,  2006.  As a  result  of  the  Registration  Statement,  1,389,233
Post-Reverse  Stock  Split  shares  of our  common  stock  were  issued  and are
available for immediate  resale which could have an adverse  effect on the price
of our common stock.

As of the date of this Annual Report, there are 6,969,255  outstanding shares of
our common stock that are restricted  securities as that term is defined in Rule
144 under  the  Securities  Act of 1933,  as  amended  (the  "Securities  Act").
Although the Securities Act and Rule 144 place certain  prohibitions on the sale
of  restricted  securities,  restricted  securities  may be sold into the public
market under certain conditions.  Further, as of the date of this Annual Report,
there are an aggregate of 1,866,668  Stock Options  outstanding and an aggregate
of 1,224,000 Warrants  outstanding.  See "Item 5. Market for Registrant's Common
Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities."

Any  significant  downward  pressure  on the  price of our  common  stock as the
selling stockholders sell their shares of our common stock could encourage short
sales by the selling  stockholders  or others.  Any such short sales could place
further downward pressure on the price of our common stock.

THE TRADING PRICE OF OUR COMMON STOCK ON THE OTC BULLETIN  BOARD WILL  FLUCTUATE
SIGNIFICANTLY AND STOCKHOLDERS MAY HAVE DIFFICULTY RESELLING THEIR SHARES.

As of  the  date  of  this  Annual  Report,  our  common  stock  trades  on  the
Over-the-Counter  Bulletin Board. There is a volatility associated with Bulletin
Board  securities in general and the value of your investment  could decline due
to the  impact of any of the  following  factors  upon the  market  price of our
common  stock:  (i)  disappointing  results from our  discovery  or  development
efforts;  (ii) failure to meet our revenue or profit goals or operating  budget;
(iii)  decline  in demand for our  common  stock;  (iv)  downward  revisions  in
securities  analysts'  estimates or changes in general  market  conditions;  (v)
technological innovations by competitors or in competing technologies; (vi) lack
of funding generated for operations;  (vii) investor  perception of our industry
or our prospects; and (viii) general economic trends.

In addition,  stock markets have experienced  price and volume  fluctuations and
the market prices of securities have been highly  volatile.  These  fluctuations
are often unrelated to operating performance and may adversely affect the market


                                       22
<PAGE>


price of our common  stock.  As a result,  investors may be unable to sell their
shares at a fair price and you may lose all or part of your investment.

ADDITIONAL  ISSUANCE OF EQUITY SECURITIES MAY RESULT IN DILUTION TO OUR EXISTING
STOCKHOLDERS.

Our Articles of  Incorporation  authorize the issuance of  33,333,333  shares of
common stock, which authorized capital was reduced  simultaneously in accordance
with the Reverse  Stock  Split.  Common  stock is our only  authorized  class of
stock.  The board of directors has the authority to issue  additional  shares of
our capital stock to provide additional financing in the future and the issuance
of any such shares may result in a reduction  of the book value or market  price
of  the  outstanding  shares  of our  common  stock.  If we do  issue  any  such
additional   shares,   such   issuance  also  will  cause  a  reduction  in  the
proportionate ownership and voting power of all other stockholders.  As a result
of such dilution, your proportionate ownership interest and voting power will be
decreased  accordingly.  Further,  any such issuance could result in a change of
control.

OUR COMMON STOCK IS  CLASSIFIED  AS A "PENNY STOCK" UNDER SEC RULES WHICH LIMITS
THE MARKET FOR OUR COMMON STOCK.

The SEC has adopted  rules that regulate  broker-dealer  practices in connection
with   transactions  in  "penny  stocks."  Penny  stocks  generally  are  equity
securities with a price of less than $5.00 (other than securities  registered on
certain national securities  exchanges or quoted on the NASDAQ system,  provided
that current price and volume  information  with respect to transactions in such
securities  is provided by the exchange or system).  Penny stock rules require a
broker-dealer, prior to a transaction in a penny stock not otherwise exempt from
those rules, to deliver a standardized risk disclosure  document prepared by the
SEC,  which  specifies  information  about  penny  stocks  and  the  nature  and
significance  of risks of the penny  stock  market.  A  broker-dealer  must also
provide the customer  with bid and offer  quotations  for the penny  stock,  the
compensation  of the  broker-dealer,  and sales person in the  transaction,  and
monthly account statements  indicating the market value of each penny stock held
in the  customer's  account.  In addition,  the penny stock rules  require that,
prior to a transaction  in a penny stock not otherwise  exempt from those rules,
the broker-dealer must make a special written determination that the penny stock
is a suitable  investment for the purchaser and receive the purchaser's  written
agreement to the transaction.  These disclosure requirements may have the effect
of reducing the trading  activity in the secondary market for stock that becomes
subject to those penny stock  rules.  If a trading  market for our common  stock
develops,  our common  stock will  probably  become  subject to the penny  stock
rules, and shareholders may have difficulty in selling their shares.

A MAJORITY OF OUR  DIRECTORS AND OFFICERS ARE OUTSIDE THE UNITED STATES WITH THE
RESULT  THAT IT MAY BE  DIFFICULT  FOR  INVESTORS  TO ENFORCE  WITHIN THE UNITED
STATES ANY JUDGMENTS OBTAINED AGAINST US OR ANY OF OUR DIRECTORS OR OFFICERS.

A majority of our  directors  and officers  are  nationals  and/or  residents of
countries other than the United States, and all or a substantial portion of such
persons'  assets are located outside the United States.  As a result,  it may be
difficult  for  investors  to effect  service  of process  on our  directors  or
officers,  or enforce within the United States or Canada any judgments  obtained


                                       23
<PAGE>


against us or our officers or directors, including judgments predicated upon the
civil  liability  provisions of the securities  laws of the United States or any
state  thereof.  Consequently,  you may be  effectively  prevented from pursuing
remedies under U.S. federal securities laws against them. In addition, investors
may not be able to commence an action in a Canadian  court  predicated  upon the
civil liability provisions of the securities laws of the United States.

ITEM 1B. UNRESOLVED STAFF COMMENTS

As of the date of this Annual Report,  there are no unresolved  comments pending
from the Securities and Exchange Commission.

ITEM 2. PROPERTIES

We lease our principal  office space  located at 5050 Quorum  Drive,  Suite 700,
Dallas,  Texas 75254.  The office costs us  approximately  $3,140  monthly.  The
office and services related thereto are on an annual basis with the office lease
coming due in June 2009.

ITEM 3. LEGAL PROCEEDINGS

Management  is  not  aware  of  any  legal   proceedings   contemplated  by  any
governmental authority or any other party involving us or our properties.  As of
the date of this Annual Report, no director, officer or affiliate is (i) a party
adverse to us in any legal proceeding,  or (ii) has an adverse interest to us in
any legal  proceedings.  Management is not aware of any other legal  proceedings
pending or that have been threatened against us or our properties.

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

During  fiscal year ended  December 31, 2008,  no matters were  submitted to our
stockholders for approval.


                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S  COMMON EQUITY,  RELATED STOCKHOLDER MATTERS AND
        ISSUER PURCHASES OF EQUITY SECURITIES

MARKET FOR COMMON EQUITY

Shares of our common stock commenced trading on the OTC Bulletin Board under the
symbol "MCKE:OB" on approximately  May 24, 2006. The market for our common stock
is limited, and can be volatile. The following table sets forth the high and low
bid prices  relating to our common  stock on a  quarterly  basis for the periods
indicated  as  quoted by the  NASDAQ  stock  market.  These  quotations  reflect
inter-dealer prices without retail mark-up,  mark-down, or commissions,  and may
not reflect actual transactions.


                                       24
<PAGE>


          QUARTER ENDED         HIGH BID       LOW BID

       December 31, 2008          $1.05         $0.21
       September 30, 2008         $2.41         $0.81
       June 30, 2008              $3.00*        $0.79
       March 31, 2008             $0.35         $0.20
       December 31, 2007          $0.76         $0.30
       September 30, 2007         $0.85         $0.45
       June 30, 2008              $1.20         $0.36
       March 31,2008              $0.98         $0.45

*Reflects Reverse Stock Split.

As of March 1, 2009, we had 38  shareholders  of record,  which does not include
shareholders whose shares are held in street or nominee names.

DIVIDEND POLICY

No  dividends  have ever been  declared by the Board of  Directors on our common
stock.  Our  losses  do not  currently  indicate  the  ability  to pay any  cash
dividends,  and we do not indicate the intention of paying cash dividends either
on our common stock in the foreseeable future.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER COMPENSATION PLANS

We have one equity  compensation  plan, the Morgan Creek Energy Corp. 2006 Stock
Option Plan (the "2006 Plan").  The table set forth below  presents  information
relating to our equity compensation plans as of the date of this Annual Report:

<TABLE>
<CAPTION>

                                 NUMBER OF SECURITIES TO BE                                     NUMBER OF SECURITIES
                                  ISSUED UPON EXERCISE OF      WEIGHTED-AVERAGE EXERCISE      REMAINING AVAILABLE FOR
                                    OUTSTANDING OPTIONS,          PRICE OF OUTSTANDING         FUTURE ISSUANCE UNDER
                                    WARRANTS AND RIGHTS       OPTIONS, WARRANTS AND RIGHTS   EQUITY COMPENSATION PLANS
        PLAN CATEGORY                       (A)                           (B)                  (EXCLUDING COLUMN (A))
____________________________     __________________________   ____________________________   _________________________
<C>                                       <C>                               <C>                       <C>

Equity Compensation Plans                   616,668                        $3.30
Approved by Security Holders
(2006 Stock Option Plan)                  1,250,000                         1.00                      3,133,332

Equity Compensation Plans Not
Approved by Security Holders

Warrants                                  1,224,000                        $1.50                            -0-

Total                                     3,090,668

</TABLE>


                                       25
<PAGE>


2006 STOCK OPTION PLAN

On April 3, 2006, our Board of Directors authorized and approved the adoption of
the 2006 Plan effective April 3, 2006,  under which an aggregate of 5,000,000 of
our shares may be issued.  On April 22,  2008,  we effected  the  Reverse  Stock
Split, which decreased the number of shares issuable under the Stock Option Plan
from  5,000,000  shares to 1,666,666  shares.  On April 28,  2008,  our Board of
Directors  approved an amendment to the Stock Option Plan to increase the number
of shares  issuable  under the Stock  Option Plan to an  aggregate  of 5,000,000
shares.

The purpose of the 2006 Plan is to enhance our  long-term  stockholder  value by
offering  opportunities  to our  directors,  officers,  employees  and  eligible
consultants  to acquire  and  maintain  stock  ownership  in order to give these
persons  the  opportunity  to  participate  in our  growth and  success,  and to
encourage them to remain in our service.

The 2006 Plan is to be  administered  by our Board of  Directors  or a committee
appointed by and  consisting  of one or more members of the Board of  Directors,
which shall determine (i) the persons to be granted Stock Options under the 2006
Plan;  (ii) the number of shares  subject to each option,  the exercise price of
each Stock Option;  and (iii) whether the Stock Option shall be  exercisable  at
any time  during  the option  period up to ten (10)  years or whether  the Stock
Option shall be  exercisable in  installments  or by vesting only. The 2006 Plan
provides  authorization  to the Board of  Directors  to grant  Stock  Options to
purchase a total number of shares of Common Stock of the Company,  not to exceed
5,000,000  shares as at the date of  adoption by the Board of  Directors  of the
2006 Plan. At the time a Stock Option is granted under the 2006 Plan,  the Board
of Directors  shall fix and determine the exercise  price at which shares of our
common stock may be acquired.

In the event an optionee  ceases to be employed by or to provide  services to us
for reasons other than cause, retirement,  disability or death, any Stock Option
that is vested and held by such optionee  generally may be exercisable within up
to ninety (90) calendar days after the effective date that his position  ceases,
and after such 90-day period any unexercised  Stock Option shall expire.  In the
event an  optionee  ceases to be  employed  by or to provide  services to us for
reasons of retirement,  disability or death, any Stock Option that is vested and
held by such optionee  generally may be exercisable  within up to one-year after
the effective date that his position ceases,  and after such one-year period any
unexercised Stock Option shall expire.


                                       26
<PAGE>


No Stock Options granted under the Stock Option Plan will be transferable by the
optionee,  and each Stock Option will be exercisable  during the lifetime of the
optionee  subject  to the  option  period  up to ten (10)  years or  limitations
described  above.  Any Stock Option held by an optionee at the time of his death
may be exercised  by his estate  within one (1) year of his death or such longer
period as the Board of Directors may determine.

The exercise price of a Stock Option granted  pursuant to the 2006 Plan shall be
paid in full to us by  delivery  of  consideration  equal to the  product of the
Stock Option in accordance with the requirements of the Nevada Revised Statutes.
Any Stock Option settlement, including payment deferrals or payments deemed made
by way of  settlement  of  pre-existing  indebtedness  may be  subject  to  such
conditions, restrictions and contingencies as may be determined.

GRANT OF STOCK OPTIONS DURING FISCAL YEAR ENDED DECEMBER 31, 2008

On April 30,  2008,  we  authorized  the grant of an aggregate  1,250,000  stock
options to certain of our officers,  directors and  management.  The options are
exercisable  at $1.00  per  share  for a period  of ten  years.  See  "Item  11.
Executive  Compensation" and "Item 12. Security  Ownership of Certain Beneficial
Owners and Management and Related Stockholder Matters."

INCENTIVE STOCK OPTIONS

The 2006 Plan further  provides  that,  subject to the  provisions  of the Stock
Option Plan and prior shareholder approval,  the Board of Directors may grant to
any key  individuals  who are our employees  eligible to receive  options one or
more  incentive  stock  options to purchase the number of shares of common stock
allotted by the Board of Directors (the "Incentive Stock  Options").  The option
price per share of common  stock  deliverable  upon the exercise of an Incentive
Stock  Option  shall be at least  100% of the fair  market  value of the  common
shares of the Company,  and in the case of an Incentive  Stock Option granted to
an optionee  who owns more than 10% of the total  combined  voting  power of all
classes of our stock,  shall not be less than 100% of the fair  market  value of
our common  shares.  The option term of each  Incentive  Stock  Option  shall be
determined by the Board of Directors,  which shall not commence sooner than from
the date of grant and shall terminate no later than ten (10) years from the date
of grant of the Incentive Stock Option, subject to possible early termination as
described above.

COMMON STOCK PURCHASE WARRANTS

As of the date of this Annual Report, there are an aggregate of 1,224,000 common
stock purchase warrants issued and outstanding (the  "Warrants").  During fiscal
year ended December 31, 2008, we issued  1,224,000  Warrants and an aggregate of
314,702 Warrants  expired.  The 1,224,000  Warrants to purchase shares of common
stock and the shares of common stock  underlying  the Warrants  were issued in a
private  placement by us during  fiscal year 2008 at an exercise  price of $1.50
per  share  exercisable  for a period of  twelve  months  from the date of share
issuance.

As of the date of this Annual Report, none of the Warrants have been exercised.


                                       27
<PAGE>


RECENT SALES OF UNREGISTERED SECURITIES

As of the date of this Annual Report and during  fiscal year ended  December 31,
2008, to provide capital, we sold stock in private placement  offerings,  issued
stock in exchange  for our debts or pursuant to  contractual  agreements  as set
forth below.

PRIVATE PLACEMENT OFFERINGS

SEPTEMBER 2008 PRIVATE PLACEMENT

During  fiscal year ended  December 31, 2008,  we completed a private  placement
offering (the "September 2008 Private Placement Offering"), whereby we issued an
aggregate  of 1,224,000  units at $0.75 per unit for gross  proceeds of $918,000
excluding  finders  fees of  ($20,913).  Each unit  consists of one share of our
restricted  common  stock  and  one  non-transferable   share  purchase  warrant
exercisable  at $1.50 per share for a period of twelve  months  from the date of
share issuance.  The September 2008 Private Placement  Offering was completed in
reliance on Regulation S of the Securities Act. Sales were made to only non-U.S.
residents.  The September  2008 Private  Placement  Offering was not  registered
under  the  Securities  Act or under any  state  securities  laws and may not be
offered or sold without registration with the Securities and Exchange Commission
or an applicable  exemption from the  registration  requirements.  The per share
price  of  the  September  2008  Private  Placement   Offering  was  arbitrarily
determined  by our Board of  Directors  based upon  analysis of certain  factors
including, but not limited to, stage of development, industry status, investment
climate, perceived investment risks, our assets and net estimated worth.

FEBRUARY 2008 PRIVATE PLACEMENT - OTHER ISSUANCES

On February 13, 2008, we closed a private placement offering (the "February 2008
Private Placement Offering"), whereby we issued an aggregate of 7,576,068 shares
Pre-Reverse  Stock Split (2,525,356 shares  Post-Reverse  Stock Split) of common
stock for settlement of related party advances and accrued  interest at a deemed
issuance  price of $0.75 per share in settlement  of an aggregate  $1,515,214 in
debt due and owing by us to certain non-U.S.  residents.(The  difference between
the estimated fair value of the common shares at issuance and the amount of debt
settled  totaling  $378,803 was recorded as a finance  cost).  The February 2008
Private  Placement  Offering was  completed  in reliance on  Regulation S of the
Securities  Act. Sales were made to only non-U.S.  residents.  The February 2008
Private Placement  Offering was not registered under the Securities Act or under
any state  securities  laws and may not be offered or sold without  registration
with the Securities and Exchange Commission or an applicable  exemption from the
registration  requirements.  The per share price of the  February  2008  Private
Placement  Offering was  arbitrarily  determined by our Board of Directors based
upon  analysis  of certain  factors  including,  but not  limited  to,  stage of
development,  industry status,  investment climate,  perceived investment risks,
our assets and net estimated worth.


                                       28
<PAGE>


DEBT SETTLEMENT

Our Board of Directors,  pursuant to a Board of Directors' meeting held on April
1, 2008,  approved and  authorized the settlement of an aggregate of $917,123 in
current  indebtedness  (the "Debt  Settlement")  by the issuance of an aggregate
4,585,616 shares Pre-Reverse Stock Split (1,528,538 Post-Reverse Stock Split) of
our  restricted  common stock at $0.63 ($0.21 Pre Reverse Stock Split) per share
effective as of March 24, 2008. (The difference between the estimated fair value
of the common shares at issuance and the amount of debt settled totaling $45,857
was recorded as a finance  cost).  The  aggregate  4,585,616  shares  (1,528,538
shares  Post-Reverse Stock Split) of common stock were issued to seven creditors
(each a "Creditor")  pursuant to the terms and conditions of those certain $0.21
Share for Debt Private  Placement  Subscription  Agreements  (collectively,  the
"Subscription  Agreements")  as entered into between us and each such  Creditor.
The shares issued to the funding investors  relating to the acquisition of their
interest in the Boggs#1 is included in this issuance.

The Debt Settlement was made to five non-United  States Creditors in reliance on
Rule 903 of Regulation S promulgated  under the Securities Act and to two United
States  accredited  Creditors in reliance on Section 4(2) of the Securities Act.
The securities  issued in the Debt Settlement have not been registered under the
Securities Act or under any state securities laws and may not be offered or sold
without  registration with the United States Securities and Exchange  Commission
or an applicable exemption from the registration requirements.

There were no  finders'  fees or  commission  payable by us upon the  successful
completion of the Debt Settlement and Related Party Debt Settlement.

Our Board of Directors approved and authorized the settlement of an aggregate of
$1,515,214 in related party  advances and accrued  interest (the "Related  Party
Debt Settlement") by the issuance of an aggregate  7,576,068 shares  Pre-Reverse
Stock Split (2,525,356 shares Post-Reverse Stock Split) of our restricted common
stock at $0.25  ($0.75  Post  Reverse  Stock  Split) per share  effective  as of
February 13,  2008.  (The  difference  between the  estimated  fair value of the
common shares at issuance and the amount of debt settled  totaling  $378,803 was
recorded as a finance cost). The aggregate  7,576,068 shares  (2,525,356  shares
Post-Reverse Stock Split) of common stock were issued to related parties (each a
"Related Party").

The Related Party Debt Settlement was made to 4 non-United  States  Creditors in
reliance on Rule 903 of Regulation S promulgated under the Securities Act and to
two United  States  accredited  Creditors  in  reliance  on Section  4(2) of the
Securities Act. The securities  issued in the Related Party Debt Settlement have
not been registered  under the Securities Act or under any state securities laws
and may not be  offered or sold  without  registration  with the  United  States
Securities  and  Exchange  Commission  or  an  applicable   exemption  from  the
registration requirements.

There were no  finders'  fees or  commission  payable by us upon the  successful
completion of the Related Party Debt Settlement.


                                       29
<PAGE>


REVERSE STOCK SPLIT

On April 1,  2008,  our  Board of  Directors  pursuant  to a Board of  Directors
meeting authorized and approved the Reverse Stock Split. The Reverse Stock Split
was effectuated based on market conditions and upon a determination by our Board
of Directors  that the Reverse Stock Split was in our best  interests and of the
shareholders.  Certain  factors were discussed among the members of the Board of
Directors  concerning  the need  for the  Reverse  Stock  Split,  including  the
increased  potential for financing.  The intent of the Reverse Stock Split is to
increase the  marketability  of our common  stock.  The Reverse  Stock Split was
effectuated  on April 22, 2008 upon filing the  appropriate  documentation  with
NASDAQ.  The Reverse  Stock Split  decreased  our total  issued and  outstanding
shares of common stock from  41,976,589 to  approximately  13,992,196  shares of
common stock. The common stock will continue to be $0.001 par value.

ITEM 6. SELECTED FINANCIAL DATA

The following selected  financial  information is qualified by reference to, and
should  be read in  conjunction  with our  financial  statements  and the  notes
thereto,  and "Management's  Discussion and Analysis of Financial  Condition and
Results of Operation"  contained elsewhere herein. The selected income statement
data for fiscal years ended December 31, 2008 and 2007 and the selected  balance
sheet  data as of  December  31,  2008  and 2007 are  derived  from our  audited
consolidated financial statements which are included elsewhere herein.













                                       30
<PAGE>

<TABLE>
<CAPTION>

                                                                             FOR THE PERIOD FROM
                                        FISCAL YEARS ENDED DECEMBER 31       OCTOBER 19, 2004
                                        ______________________________       (INCEPTION) TO
                                               2008 AND 2007                 DECEMBER 31, 2008
                                        ______________________________       ___________________
<S>                                      <C>                <C>                  <C>

STATEMENT OF OPERATIONS DATA

GENERAL AND ADMINISTRATIVE EXPENSES
    Investor relations expenses          $  159,944         $    9,120           $   322,018

    Consulting expenses                     228,502            189,991               856,960

    Management fees - related party         263,386            312,990               888,083

    Management fees - stock based           436,955                -0-             1,964,125
    compensation

    Impairment of oil and gas                   -0-                -0-             1,273,410
    properties

    Office and general                      262,956            156,639               619,700

    Professional Fees                       245,527            148,281               635,752

NET LOSS BEFORE FOLLOWING               ($1,597,270)         ($817,021)          ($6,560,048)
OTHER EXPENSE

    Financing Costs                        (424,660)               -0-              (424,660)

NET LOSS                                ($2,021,930)         ($817,021)          ($6,984,708)

BALANCE SHEET DATA

TOTAL ASSETS                             $1,843,630         $1,758,091

TOTAL LIABILITIES                           635,121          2,718,691

STOCKHOLDERS EQUITY                      $1,208,509         ($ 960,600)
(DEFICIT)

</TABLE>


ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATION

The  summarized  financial data set forth in the table below is derived from and
should be read in  conjunction  with our audited  financial  statements  for the
period from inception (October 19, 2004) to fiscal year ended December 31, 2008,
including  the notes to those  financial  statements  which are included in this
Annual Report.  The following  discussion should be read in conjunction with our
audited financial statements and the related notes that appear elsewhere in this
Annual Report. The following discussion contains forward-looking statements that
reflect our plans,  estimates  and  beliefs.  Our actual  results  could  differ
materially from those discussed in the forward looking statements.  Factors that
could cause or contribute to such  differences  include,  but are not limited to
those discussed  below and elsewhere in this Annual Report,  particularly in the
section entitled "Risk Factors".  Our audited financial statements are stated in
United  States  Dollars  and are  prepared  in  accordance  with  United  States
Generally Accepted Accounting Principles.

We are an exploration  stage company and have not generated any revenue to date.
The above  table sets  forth  selected  financial  information  for the  periods
indicated.  We have incurred recurring losses to date. Our financial  statements
have been  prepared  assuming  that we 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 we be unable to continue in operation.

We expect we will  require  additional  capital to meet our long term  operating
requirements. We expect to raise additional capital through, among other things,
the sale of equity or debt securities.

RESULTS OF OPERATION

FISCAL YEAR ENDED  DECEMBER 31, 2008 COMPARED TO FISCAL YEAR ENDED  DECEMBER 31,
2007.

Our net loss for fiscal year ended December 31, 2008 was  ($2,021,930)  compared
to a net loss of  ($817,021)  during  fiscal  year ended  December  31, 2007 (an
increase of  $1,204,909).  During fiscal years ended December 31, 2008 and 2007,
we did not generate any revenue.

During  fiscal  year  ended   December  31,  2008,   we  incurred   general  and
administrative  expenses  of  approximately   $1,597,270  compared  to  $817,021
incurred  during fiscal year ended  December 31, 2007 (an increase of $780,249).
These  general and  administrative  expenses  incurred  during fiscal year ended
December  31, 2008  consisted  of: (i)  investor  relations  of $159,944  (2007:
$9,120);  (ii) consulting fees of $228,502 (2007:  $189,991);  (iii)  management
fees - related party of $263,386 (2007: $312,990);  (iv) management fees - stock
based compensation of $436,955 (2007:  $-0-); (v) office and general of $262,956
(2007: $156,639); and (vi) professional fees of $245,527 (2007: $148,281).


                                       31
<PAGE>


During  fiscal  years ended  December  31, 2008 and 2007,  we did not record any
impairment of oil and gas properties.  Thus, general and administrative expenses
incurred  during  fiscal year ended  December  31, 2008  compared to fiscal year
ended December 31, 2007 increased  primarily due to the incurrence of management
fees - stock based  compensation  relating  to the  valuation  of stock  options
granted to our  officers  and  directors.  General and  administrative  expenses
increased  further due to the increase in investor  relations,  consulting fees,
office and general  expenses and  professional  fees  relating to the  increased
scope of business  operations.  General and  administrative  expenses  generally
include corporate overhead,  financial and administrative  contracted  services,
marketing, and consulting costs.

Of the $1,597,270 incurred as general and administrative  expenses during fiscal
year ended December 31, 2008, we incurred  consulting expenses of $30,000 (2007-
$120,000) payable to International  Market Trend, Inc. ("IMT"). In addition,  on
March 24, 2008, we settled an aggregate amount of $86,873 in consulting fees and
advances due and owing to IMT through the issuance of 434,366 shares Pre-Reverse
Stock Split (144,788  shares Post Reverse Stock Split) of our restricted  common
stock. An officer and director of IMT is also one of our shareholders. See "Item
5. Market for Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities."

Of the $1,597,270 incurred as general and administrative  expenses during fiscal
year ended December 31, 2008, we incurred management fees of $263,386 payable to
our  officers  and   directors.   Moreover,   as  part  of  their   compensation
arrangements,  our Chief  Geologist and Operations  Manager each received and is
assigned up to a 1.5% overriding  royalty interest in any oil and gas properties
which are directly  introduced  by the  respective  officer to us. During fiscal
year ended December 31, 2008, we recorded related additional compensation to the
respective  officers of $4,486,  which  reflects the  estimated  cost of royalty
interests  earned during the fiscal year. In addition,  during fiscal year ended
December 31, 2008, we settled an aggregate  $71,250 for management  fees due and
owing to our former President,  Marcus Johnson,  through the issuance of 356,250
shares Pre Reverse Stock Split (118,750  shares Post Reverse Stock Split) of our
restricted  common  stock.  See  "Item 5.  Market  for  Common  Equity,  Related
Stockholder  Matters and Issuer  Purchases of Equity  Securities"  and "Item 11.
Executive Compensation."

Financing  costs incurred during fiscal year ended December 31, 2008 of $424,660
(2008:  $-0-)  were  recorded  as  other  expense  resulting  in a net  loss  of
($2,021,930).  Our net loss  during  fiscal  year ended  December  31,  2008 was
($2,021,930)  or  ($0.15)  per share  compared  to a net loss of  ($817,021)  or
($0.08) per share  during  fiscal year ended  December  31,  2007.  The weighted
average  number of shares  outstanding  was  13,833,323  for  fiscal  year ended
December 31, 2008 compared to 9,938,302 for fiscal year ended December 31, 2007.


                                       32
<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

FISCAL YEAR ENDED DECEMBER 31, 2008

As at fiscal year ended  December 31, 2008,  our current assets were $40,687 and
our current  liabilities  were  $635,121,  which  resulted in a working  capital
deficiency of  ($594,434).  As at fiscal year ended  December 31, 2008,  current
assets were comprised of: (i) $14,883 in cash; and (ii) $25,804 in other current
assets.  As at fiscal year ended  December 31, 2008,  current  liabilities  were
comprised of: (i) $303,959 in accounts payable and accrued liabilities; and (ii)
$331,162 in Notes Payable - related parties.

As at December 31,  2008,  our total assets were  $1,843,630  comprised  of: (i)
$40,687  in  current  assets;  and  (ii)  $1,802,943  in  unproven  oil  and gas
properties.  The  slight  increase  in total  assets  during  fiscal  year ended
December 31, 2008 from fiscal year ended  December 31, 2007 was primarily due to
the increase in valuation of the unproved oil and gas properties.

As at December 31, 2008, our total liabilities were $635,121  comprised entirely
of current  liabilities.  The decrease in  liabilities  during fiscal year ended
December 31, 2008 from fiscal year ended  December 31, 2007 was primarily due to
the  settlement  of: (i) an aggregate  $1,515,214 in related party  advances and
accrued interest in current  indebtedness  (the "Related Party Debt Settlement")
by the  issuance  of an  aggregate  7,576,068  shares Pre  Reverse  Stock  Split
(2,525,356  shares Post Reverse Stock Split) of our  restricted  common stock at
$0.25 ($0.75 Post Reverse Stock Split) per share; and (ii) an aggregate $917,123
in related party  advances and the  acquisition  of the interest in the Boggs #1
well (the "Debt Settlement") by the issuance of an aggregate of 4,585,616 shares
Pre Reverse  Stock  Split  (1,528,538  shares Post  Reverse  Stock  Split).  The
difference between the estimated fair value of the common shares at issuance and
the amount of the debt settled in the Related Party Debt Settlement and the Debt
Settlement  totaled  $378,803  and  $45,857,  respectively,  was included on the
recorded  finance  costs.  See  "Item  5.  Market  for  Common  Equity,  Related
Stockholder Matters and Issuer Purchases of Equity Securities."

Stockholders'  Deficit  increased from ($960,600) for fiscal year ended December
31, 2007 to  Stockholders'  Equity of $1,208,509  for fiscal year ended December
31, 2008.

CASH FLOWS FROM OPERATING ACTIVITIES

We have not generated positive cash flows from operating activities.  For fiscal
year ended  December 31, 2008,  net cash flows used in operating  activities was
($1,194,461), consisting primarily of a net loss of ($2,021,930). Net cash flows
used  in  operating   activities   was  adjusted  by  $436,955  in  stock  based
compensation  and $424,660 in financing  costs. Net cash flows used in operating
activities was further changed by $59,420  relating to an accrual due to related
parties,  ($85,653) in accounts payable and accrued liabilities,  and a decrease
of ($7,913) related to other current assets.  For fiscal year ended December 31,
2007,  net cash flows used in operating  activities was  ($385,194),  consisting
primarily  of a net loss of  ($817,021),  and  changed by  $269,877  in accounts
payable and accrued liabilities,  $191,086 due to related parties and a decrease
of ($29,136) in other current assets.


                                       33
<PAGE>


CASH FLOWS FROM INVESTING ACTIVITIES

For fiscal  year  ended  December  31,  2008,  net cash flows used in  investing
activities was ($78,841) for acquisition of oil and gas  properties.  For fiscal
year ended  December 31, 2007,  net cash flows used in investing  activities was
($1,479,032) for the acquisition of oil and gas properties.

CASH FLOWS FROM FINANCING ACTIVITIES

We have  financed  our  operations  primarily  from either  advancements  or the
issuance  of equity and debt  instruments.  For fiscal year ended  December  31,
2008, net cash flows provided from financing  activities was $1,272,087 compared
to $1,874,500 for fiscal year ended December 31, 2007. Cash flows from financing
activities  for fiscal year ended  December  31, 2008  consisted  of $897,087 in
proceeds on sale and  subscriptions  of common stock and a net total of $375,000
in advances  from related  parties.  Cash flows from  financing  activities  for
fiscal year ended December 31, 2007  consisted of $759,000 in drilling  advances
and $1,115,500 in advances from related parties.

We expect that working capital requirements will continue to be funded through a
combination  of our  existing  funds and further  issuances of  securities.  Our
working capital requirements are expected to increase in line with the growth of
our business.

PLAN OF OPERATION AND FUNDING

Existing working capital, further advances and debt instruments, and anticipated
cash flow are expected to be adequate to fund our  operations  over the next six
months.  We have no  lines  of  credit  or other  bank  financing  arrangements.
Generally,  we have  financed  operations  to date  through the  proceeds of the
private  placement  of  equity  and debt  instruments.  In  connection  with our
business plan, management anticipates additional increases in operating expenses
and capital expenditures relating to: (i) oil and gas operating properties; (ii)
possible drilling  initiatives on current properties and future properties;  and
(iii) future  property  acquisitions.  We intend to finance these  expenses with
further issuances of securities,  and debt issuances.  Thereafter,  we expect we
will need to raise  additional  capital and generate  revenues to meet long-term
operating  requirements.  Additional  issuances  of equity or  convertible  debt
securities will result in dilution to our current  shareholders.  Further,  such
securities  might have rights,  preferences  or privileges  senior to our 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,  we may not be  able  to  take  advantage  of  prospective  new  business
endeavors or opportunities,  which could  significantly and materially  restrict
our business operations.

During  fiscal year ended  December 31, 2008,  we completed a private  placement
consisting  of  1,224,000  units at the price of $0.75 per unit for total  gross
proceeds of $918,000  excluding  finders fees of  $(20,913).  During fiscal year
ended December 31, 2008, we closed a private placement offering under Regulation
S of the  Securities  Act  pursuant to which we issued an aggregate of 7,576,068
shares Pre Reverse Stock Split  (2,525,356  shares Post Reverse Stock Split) and
received gross  proceeds of $1,515,214,  of which all consisted of settlement of
debt relating to amounts  previously  advanced to us by one of our  shareholders
and related accrued interest. Effective March 24, 2008, we also closed a further


                                       34
<PAGE>


private placement  offering under Regulation S of the Securities Act pursuant to
which we issued an  aggregate  of  4,585,616  shares  Pre  Reverse  Stock  Split
(1,528,538  shares Post  Reverse  Stock  Split and  received  gross  proceeds of
$962,980,  of which all consisted of settlement of debt and  acquisition  of the
interest in the Boggs #1 well.

MATERIAL COMMITMENTS

During fiscal year ended  December 31, 2007, an aggregate of $1,365,500  was due
and owing to one of our shareholders relating to advances. Subsequently,  during
fiscal year ended December 31, 2008,  additional advances were made by this same
shareholder  to us of $885,000 for an  aggregate  amount of  $2,250,500  due and
owing.  During fiscal year ended  December 31, 2008, we repaid  $500,000 to this
shareholder.  Further,  the  shareholder  assigned the amount of  $1,515,214  to
various  assignees  and  settled  the  $1,515,214  pursuant  to the  issuance of
7,576,068  shares Pre Reverse Stock Split  (2,525,356  shares Post Reverse Stock
Split) of our restricted  common stock at $0.25 ($0.75 Post Reverse Stock Split)
per share. The difference  between the estimated fair value of the common shares
at issuance and the amount of debt settled  totaling  $378,803 was recorded as a
finance  cost. As a result,  as at December 31, 2008, an aggregate  $310,000 was
due and owing to this shareholder,  which bears interest at 8% per annum and has
no specific repayment terms. As at December 31, 2008, total accrued interest was
$19,164.

PURCHASE OF SIGNIFICANT EQUIPMENT

We do not intend to purchase any  significant  equipment  during the next twelve
months.

OFF-BALANCE SHEET ARRANGEMENTS

As of the date of this  Annual  Report,  we do not have  any  off-balance  sheet
arrangements  that have or are  reasonably  likely  to have a current  or future
effect on our financial condition,  changes in financial condition,  revenues or
expenses,  results of operations,  liquidity,  capital  expenditures  or capital
resources that are material to investors.

GOING CONCERN

The independent auditors' report accompanying our December 31, 2008 and December
31, 2007  financial  statements  contains an  explanatory  paragraph  expressing
substantial  doubt  about  our  ability  to  continue  as a going  concern.  The
financial  statements  have been prepared  "assuming  that we will continue as a
going concern," which  contemplates  that we will realize our assets and satisfy
our liabilities and commitments in the ordinary course of business.

RECENT ACCOUNTING PRONOUNCEMENTS

In May 2008, the FASB issued SFAS No. 163,  ACCOUNTING  FOR FINANCIAL  GUARANTEE
INSURANCE CONTRACTS ("SFAS 163"). SFAS 163 clarifies how SFAS 60, ACCOUNTING AND
REPORTING BY INSURANCE  ENTERPRISES  applies to  financial  guarantee  insurance
contracts  issued  by  insurance  enterprises,  including  the  recognition  and
measurement of premium revenue and claim liabilities.  It also requires expanded
disclosures about financial guarantee insurance contracts. SFAS 163 is effective


                                       35
<PAGE>


for our interim period commencing  January 1, 2009, except for disclosures about
an insurance enterprise's  risk-management  activities,  which are effective for
our interim  period  commencing  July 1, 2008.  We do not expect the adoption of
SFAS 163 to have a material  impact on our  financial  position,  cash flows and
results of operations.

In March  2008,  the FASB  issued SFAS No.  161,  DISCLOSURES  ABOUT  DERIVATIVE
INSTRUMENTS AND HEDGING ACTIVITIES ("SFAS 161"). SFAS 161 is intended to improve
financial  reporting  about  derivative  instruments  and hedging  activities by
requiring  enhanced  disclosures to enable investors to better  understand their
effects on an  entity's  financial  position,  financial  performance,  and cash
flows. SFAS 161 achieves these improvements by requiring  disclosure of the fair
values of derivative instruments and their gains and losses in a tabular format.
It also  provides  more  information  about an entity's  liquidity  by requiring
disclosure of  derivative  features that are credit  risk-related.  Finally,  it
requires  cross-referencing within footnotes to enable financial statement users
to locate important information about derivative  instruments.  SFAS 161 will be
effective for financial  statements  issued for fiscal years and interim periods
beginning  after November 15, 2008 and will be adopted by the Company  beginning
in the first  quarter  of 2009.  The  Company  does not  expect  there to be any
significant  impact of adopting SFAS 161 on its financial  position,  cash flows
and results of operations.

In February 2007, the Financial  Accounting  Standards Board issued Statement of
Financial  Accounting  Standards  No. 159, THE FAIR VALUE  OPTION FOR  FINANCIAL
ASSETS AND FINANCIAL  LIABILITIES - INCLUDING AN AMENDMENT OF FASB STATEMENT NO.
115 ("SFAS No. 159").  This statement permits entities to choose to measure many
financial instruments and certain other items at fair value. The objective is to
improve  financial  reporting  by providing  entities  with the  opportunity  to
mitigate  volatility in reported earnings caused by measuring related assets and
liabilities  differently  without  having  to  apply  complex  hedge  accounting
provisions.  This  Statement  is  expected  to  expand  the  use of  fair  value
measurement,   which  is  consistent  with  the  Board's  long-term  measurement
objectives for accounting for financial instruments. This statement is effective
as of the  beginning  of our first  fiscal year that begins  after  November 15,
2007,  although  earlier adoption is permitted.  Effective  January 1, 2008, the
Company  adopted  this  statement.  To date,  the Company  has not applied  this
standard to the measurement of any reported amounts.  Accordingly,  the adoption
of this  standard did not have any impact on the Company's  financial  position,
cash flows or results of operations.

In December  2007,  the FASB issued  SFAS No.  160,  NONCONTROLLING  INTEREST IN
CONSOLIDATED FINANCIAL STATEMENTS,  AN AMENDMENT OF ARB NO. 51 ("SFAS No. 160"),
which will change the  accounting  and reporting for minority  interests,  which
will  be  recharacterized  as  noncontrolling  interests  and  classified  as  a
component of equity  within the  consolidated  balance  sheets.  SFAS No. 160 is
effective as of the beginning of an entity's  first fiscal year  beginning on or
after  December 15, 2008.  Earlier  adoption is  prohibited.  Management has not
determined the effect that adopting this  statement  would have on our financial
position or results of operations.

In  December  2007,  the FASB  issued  SFAS No.  141  (Revised  2007),  BUSINESS
COMBINATIONS  ("SFAS No.  141R").  SFAS No. 141R will change the  accounting for
business combinations. Under SFAS No. 141R, an acquiring entity will be required
to recognize all the assets acquired and liabilities assumed in a transaction at
the  acquisition-date  fair value with  limited  exceptions.  SFAS No. 141R will


                                       36
<PAGE>


change the accounting  treatment and disclosure for certain  specific items in a
business   combination.   SFAS  No.  141R  applies   prospectively  to  business
combinations  for which the acquisition date is on or after the beginning of the
entity's first annual  reporting period beginning on or after December 15, 2008.
Accordingly,  any business combinations completed by us prior to January 1, 2009
will be recorded and  disclosed  following  existing  GAAP.  Management  has not
determined the effect that adopting this  statement  would have on our financial
position or results of operations.

In  September  2006,  FASB issued SFAS No. 157,  FAIR VALUE  MEASURE  ("SFAS No.
157"). This Statement defines fair value,  establishes a framework for measuring
fair  value  in  generally  accepted  accounting   principles  (GAAP),   expands
disclosures  about fair value  measurements,  and applies under other accounting
pronouncements that require or permit fair value measurements. SFAS No. 157 does
not require any new fair value measurements.  However, the FASB anticipates that
for some entities, the application of SFAS No. 157 will change current practice.
SFAS No. 157 is  effective  for  financial  statements  issued for fiscal  years
beginning  after  November  15,  2007,  which for the Company is the fiscal year
beginning January 1, 2008. The adoption of this standard did not have any impact
on the Company's financial position, cash flows or results of operations.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA



                            MORGAN CREEK ENERGY CORP.

                         (An Exploration Stage Company)

                              FINANCIAL STATEMENTS

                                DECEMBER 31, 2008























REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

BALANCE SHEETS

STATEMENTS OF OPERATIONS

STATEMENT OF STOCKHOLDER'S EQUITY

STATEMENTS OF CASH FLOWS

NOTES TO FINANCIAL STATEMENTS


                                       37
<PAGE>


                         DEJOYA GRIFFITH & COMPANY, LLC
                   __________________________________________
                   CERTIFIED PUBLIC ACCOUNTANTS & CONSULTANTS


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To The Board of Directors and Stockholders
Morgan Creek Energy, Corp.
Las Vegas, Nevada

We have audited the  accompanying  balance sheets of Morgan Creek Energy,  Corp.
(An Exploration Stage Company) as of December 31, 2008 and 2007, and the related
statements of operations,  stockholder's  deficit,  and cash flows for the years
then ended and from  inception  (October 19,  2004) to December 31, 2008.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility is to express an opinion on the financial statements based on our
audit.

We  conducted  our audit in  accordance  with  standards  of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audit  provides  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Morgan Creek Energy,  Corp. as
of December  31, 2008 and 2007,  and the  results of their  operations  and cash
flows for the years then ended and from inception (October 19, 2004) to December
31, 2008 in conformity  with  accounting  principles  generally  accepted in the
United States.

The accompanying  financial  statements have been prepared  assuming the Company
will  continue  as a going  concern.  As  discussed  in Note 1 to the  financial
statements,  the Company has suffered  recurring losses from  operations,  which
raise  substantial  doubt  about its  ability to  continue  as a going  concern.
Management's  plans in regard to these matters are also described in Note 1. The
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.

De Joya Griffith & Company, LLC

/s/ DE JOYA GRIFFITH & COMPANY, LLC
___________________________________
Henderson, NV
April 6, 2009


________________________________________________________________________________

                 2580 Anthem Village Drive, Henderson, NV 89052
               Telephone (702) 563-1600 * Facsimile (702) 920-8049


                                       38
<PAGE>

<TABLE>
<CAPTION>

                            MORGAN CREEK ENERGY CORP.
                         (An Exploration Stage Company)

                                 BALANCE SHEETS
                                                                       December 31,       December 31,
                                                                           2008               2007
                                                                         (Audited)          (Audited)
______________________________________________________________________________________________________
<S>                                                                    <C>                <C>
                                     ASSETS
CURRENT ASSETS
   Cash                                                                $     14,883       $     16,098
   Other current assets                                                      25,804             17,891
______________________________________________________________________________________________________

TOTAL CURRENT ASSETS                                                         40,687             33,989


OIL AND GAS PROPERTIES, unproven (Note 3)                                 1,802,943          1,724,102
______________________________________________________________________________________________________

TOTAL ASSETS                                                           $  1,843,630       $  1,758,091

======================================================================================================

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)


CURRENT LIABILITIES
   Accounts payable and accrued liabilities                            $    303,959       $    389,612
   Due to related parties (Note 6)                                          331,162          1,570,079
   Drilling advances payable                                                      -            759,000
______________________________________________________________________________________________________

TOTAL CURRENT LIABILITIES                                                   635,121          2,718,691
______________________________________________________________________________________________________


GOING CONCERN (Note 1)


STOCKHOLDERS' EQUITY(DEFICIT) (Note 4)
Common stock, 33,333,333 shares authorized with $0.001 par value
Issued and outstanding
   15,216,196 common shares (December 31, 2007 - 9,938,302)                  15,216              9,938
   Additional paid-in-capital                                             8,178,001          3,992,240
   Deficit accumulated during exploration stage                          (6,984,708)        (4,962,778)
______________________________________________________________________________________________________

TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                                      1,208,509           (960,600)
______________________________________________________________________________________________________

TOTAL LIABILITIES & STOCK HOLDERS' EQUITY (DEFICIT)                    $  1,843,630       $  1,758,091
======================================================================================================


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

</TABLE>


                                       39
<PAGE>

<TABLE>
<CAPTION>

                            MORGAN CREEK ENERGY CORP.
                         (An Exploration Stage Company)

                            STATEMENTS OF OPERATIONS


                                                        Year ended         Year ended        October 19, 2004
                                                       December 31,       December 31,        (inception) to
                                                           2008              2007            December 31, 2008
______________________________________________________________________________________________________________
                                                         (Audited)         (Audited)             (Audited)
<S>                                                    <C>                <C>                  <C>

GENERAL AND ADMINISTRATIVE EXPENSES

   Investor relations                                  $    159,944       $      9,120         $    322,018
   Consulting fees                                          228,502            189,991              856,960
   Management fees - related party                          263,386            312,990              888,083
   Management fees - stock based compensation               436,955                  -            1,964,125
   Impairment of oil and gas properties (Note 3)                  -                  -            1,273,410
   Office and general                                       262,956            156,639              619,700
   Professional fees                                        245,527            148,281              635,752
______________________________________________________________________________________________________________

NET OPERATING LOSS                                       (1,597,270)          (817,021)          (6,560,048)


OTHER EXPENSE
   Financing Costs                                         (424,660)                 -             (424,660)
______________________________________________________________________________________________________________

TOTAL OTHER EXPENSE                                        (424,660)                 -             (424,660)
______________________________________________________________________________________________________________

NET LOSS                                               $ (2,021,930)      $   (817,021)        $ (6,984,708)
==============================================================================================================



BASIC LOSS PER COMMON SHARE                            $      (0.15)      $      (0.08)
======================================================================================

WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING-BASIC                                 13,833,323          9,938,302
======================================================================================


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

</TABLE>


                                       40
<PAGE>

<TABLE>
<CAPTION>

                            MORGAN CREEK ENERGY CORP.
                         (An Exploration Stage Company)

                   STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
      FOR THE PERIOD FROM OCTOBER 19, 2004 (INCEPTION) TO DECEMBER 31, 2008

                                                                                                Deficit
                                                              Common Stock                    accumulated       Total
                                                          ____________________   Additional     during      Stockholders'
                                                          Number of               Paid in     exploration      Equity
                                                           Shares      Amount     Capital        stage        (Deficit)
_________________________________________________________________________________________________________________________
<S>                                                       <C>         <C>        <C>          <C>           <C>

Balance, October 19, 2004                                         -   $      -   $        -   $         -   $           -

Common stock issued for oil and gas property
   at $0.075 per share - November 19, 2004                8,000,000      8,000      592,000             -         600,000

Capital distribution to founding share holder
   on acquisition of oil and gas property (Note 3)                -          -     (600,000)            -        (600,000)

Common stock issued for cash at $0.075 per share
   - November 26, 2004 and December 15, 2004              4,583,333      4,583      339,167             -         343,750

Common stock issued for cash at $0.375 per share
   - December 15, 2004                                      880,267        880      329,220             -         330,100

Net loss for the period                                           -          -            -       (23,729)        (23,729)
_________________________________________________________________________________________________________________________

Balance, December 31, 2004                               13,463,600     13,463      660,387       (23,729)        650,121


Common stock issued for cash at $0.375 per share
   - March 9, 2005                                           93,333         93       34,907             -          35,000

Net loss for the year                                             -          -            -      (204,026)       (204,026)
_________________________________________________________________________________________________________________________

Balance, December 31, 2005                               13,556,933     13,556      695,294      (227,755)        481,095


Common stock issued for cash at $4.50 per share
   - October 16, 2006                                       314,702        315    1,414,843             -       1,416,158

Common stock issued for oil and gas property
   at $5.25 per share - October 17, 2006 (Note 3)            66,667         67      349,933             -         350,000

Stock-based compensation                                          -          -    1,527,170             -       1,527,170

Restricted common shares cancelled
   - December 19, 2006                                   (4,000,000)    (4,000)       4,000             -               -

Net loss for the year                                             -          -            -    (3,918,002)     (3,918,002)
_________________________________________________________________________________________________________________________

Balance, December 31, 2006                                9,938,302      9,938    3,992,240    (4,145,757)       (143,579)


Net loss for the year                                             -          -            -      (817,021)       (817,021)
_________________________________________________________________________________________________________________________

Balance, December 31, 2007                                9,938,302      9,938    3,992,240    (4,962,778)       (960,600)


Shares for debt at $0.75 per  share - February 13, 2008   2,525,356      2,525    1,891,492             -       1,894,017

Shares for debt at $0.63 per  share - March 24, 2008      1,528,538      1,529      961,451             -         962,980

Common stock issued for cash at $0.75 per share
   - July 3, 2008 and October 23, 2008                    1,224,000      1,224      895,863             -         897,087

Stock based compensation - options                                -          -      436,955             -         436,955

Net loss for the year                                             -          -            -    (2,021,930)     (2,021,930)
_________________________________________________________________________________________________________________________

Balance, December 31, 2008 (audited)                     15,216,196   $ 15,216   $8,178,001   $(6,984,708)  $  (1,208,509)
=========================================================================================================================


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

</TABLE>

                                       41
<PAGE>

<TABLE>
<CAPTION>

                            MORGAN CREEK ENERGY CORP.
                         (An Exploration Stage Company)

                            STATEMENTS OF CASH FLOWS

                                                                                                      October 19, 2004
                                                                          Year Ended                   (inception) to
                                                                      December 31, 2008                 December 31,
                                                                   2008               2007                  2008
______________________________________________________________________________________________________________________
<S>                                                            <C>                <C>                   <C>

CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss for the period                                     $ (2,021,930)      $    (817,021)        $ (6,984,708)
   Adjustments to reconcile net loss
      to net cash used in operating activities:
      - Stock based compensation                                    436,955                   -            1,964,125
      - Impairment of oil and gas properties                              -                   -            1,273,410
      - Financing costs                                             424,660                   -              424,660
CHANGES IN OPERATING ASSETS AND LIABILITIES
      - Other current assets                                         (7,913)            (29,136)             (50,804)
      - Due to related parties accrued                               59,420             191,086              288,589
      - Accounts payable and accrued liabilities                    (85,653)            269,877              264,282
______________________________________________________________________________________________________________________

NET CASH USED IN OPERATING ACTIVITIES                            (1,194,461)           (385,194)          (2,820,446)
______________________________________________________________________________________________________________________

CASH FLOWS FROM INVESTING ACTIVITIES
   Oil and gas property expenditures                                (78,841)         (1,479,032)          (2,761,266)
______________________________________________________________________________________________________________________

NET CASH FLOWS USED IN INVESTING ACTIVITIES                         (78,841)         (1,479,032)          (2,761,266)
______________________________________________________________________________________________________________________

CASH FLOWS FROM FINANCING ACTIVITIES
   Proceeds on sale and subscriptions of common stock               897,087                   -            3,022,095
   Drilling Advances                                                      -             759,000              759,000
   Advances from related parties-net                                375,000           1,115,500            1,815,500
______________________________________________________________________________________________________________________

NET CASH PROVIDED BY FINANCING ACTIVITIES                         1,272,087           1,874,500            5,596,595
______________________________________________________________________________________________________________________

INCREASE (DECREASE)  IN CASH                                         (1,215)             10,274               14,883

CASH, BEGINNING OF PERIOD                                            16,098               5,824                    -
______________________________________________________________________________________________________________________

CASH, END OF PERIOD                                            $     14,883       $      16,098         $     14,883
======================================================================================================================

SUPPLEMENTAL CASH FLOW INFORMATION AND
   NONCASH INVESTING AND FINANCING ACTIVITIES:
      Cash paid for interest                                   $          -       $           -         $          -
      Cash paid for income taxes                               $          -       $           -         $          -
      Common stock issued for acquisition of oil and
         gas property                                          $          -       $           -         $    950,000
      Transfer of bond against settlement of debt              $          -       $      25,000         $     25,000
      Non-cash sale of oil and gas property                    $          -       $      65,000         $     65,000
      Common stock issued for settlement of debts (Note 4)     $  2,856,997       $           -         $  2,856,997



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

</TABLE>


                                       42
<PAGE>


                            MORGAN CREEK ENERGY CORP.
                         (An Exploration Stage Company)

                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2008
                                    (AUDITED)
________________________________________________________________________________


NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION
________________________________________________________________________________

Morgan Creek Energy Corp. (the  "Company") is an exploration  stage company that
was  organized to enter into the oil and gas  industry.  The Company  intends to
locate, explore, acquire and develop oil and gas properties in the United States
and within North America.  The primary  activity and focus of the Company is its
leases  in  Texas  ("Quachita  Prospect").  To date  the  Company  has  acquired
approximately  1,971 net acres.  During the  production  testing and  evaluation
period on the first well on the property,  the Boggs #1, four of the five tested
zones produced significant volumes of natural gas. Analysis of the gas indicates
a "sweet"  condensate rich gas with BTU values of 1,000. This quality will yield
a premium price over the current U.S.  average  natural gas price.  As formation
water was also produced  with the natural gas in the tested zones,  the Boggs #1
is currently under evaluation.

During the period the Company has begun leasing  acreage in New Mexico.  To date
the Company has acquired approximately 7,576 net acres. Subsequent to the period
ending  December  31,  2008,  the  Company  entered  into an option  to  acquire
approximately 7,763 additional net acres in New Mexico. (Refer to Note 8)

GOING CONCERN

The Company  commenced  operations  on October 19, 2004 and has not realized any
revenues  since  inception.  As  of  December  31,  2008,  the  Company  has  an
accumulated deficit of $6,984,708 and a working capital deficit of $594,434. The
ability of the Company to continue as a going  concern is  dependent  on raising
capital  to fund  ongoing  operations  and  carry  out  its  business  plan  and
ultimately to attain  profitable  operations.  Accordingly,  these factors raise
substantial doubt as to the Company's ability to continue as a going concern. To
date the Company has funded its initial  operations by way of private placements
of common stock and advances from related parties.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
________________________________________________________________________________

ORGANIZATION

The Company  was  incorporated  on October 19, 2004 in the State of Nevada.  The
Company's fiscal year end is December 31.

BASIS OF PRESENTATION

These financial  statements are presented in United States dollars and have been
prepared  in  accordance  with  United  States  generally  accepted   accounting
principles.

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. Under this method, all productive and
non-productive  costs  incurred  in  connection  with  the  exploration  for and
development of oil and gas reserves 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.

Depreciation  and depletion of proved oil and gas  properties is computed on the
units-of-production   method  based  upon  estimates  of  proved  reserves,   as
determined by  independent  consultants,  with oil and gas being  converted to a
common unit of measure based on their relative energy content.

The costs of acquisition  and  exploration  of unproved oil and gas  properties,
including  any  related  capitalized   interest  expense,  are  not  subject  to
depletion,  but  are  assessed  for  impairment  either  individually  or  on an
aggregated  basis. The costs of certain  unevaluated  leasehold acreage are also
not  subject to  depletion.  Costs not  subject to  depletion  are  periodically
assessed for possible  impairment  or  reductions  in  recoverable  value.  If a
reduction in  recoverable  value has  occurred,  costs  subject to depletion are
increased or a charge is made  against  earnings  for those  operations  where a
reserve base is not yet established.


                                       43
<PAGE>


                            MORGAN CREEK ENERGY CORP.
                         (An Exploration Stage Company)

                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2008
                                    (AUDITED)
________________________________________________________________________________


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
________________________________________________________________________________

OIL AND GAS PROPERTIES (CONTINUED)

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 which limits such costs
to the aggregate of the estimated  present value,  using a ten percent  discount
rate of the estimated  future net revenues from production of proven reserves at
year end at 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.

ASSET RETIREMENT OBLIGATIONS

The Company has adopted the  provisions of SFAS No. 143,  "Accounting  for Asset
Retirement Obligations." SFAS No. 143 requires the fair value of a liability for
an asset  retirement  obligation  to be  recognized in the period in which it is
incurred  if a  reasonable  estimate of fair value can be made.  The  associated
asset  retirement  costs are  capitalized as part of the carrying  amount of the
related oil and gas properties.

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.  Significant  areas  requiring  management's
estimates  and  assumptions  are  the   determination   of  the  fair  value  of
transactions  involving  common  stock and  financial  instruments.  Other areas
requiring estimates include deferred tax balances and asset impairment tests.

CASH AND CASH EQUIVALENTS

For the statements of cash flows, all highly liquid investments with maturity of
three months or less are considered to be cash  equivalents.  There were no cash
equivalents  as of December 31, 2008 and 2007 that  exceeded  federally  insured
limits.

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.

EARNINGS (LOSS) PER COMMON SHARE

Basic earnings (loss) per share includes no dilution and is computed by dividing
income available to common stockholders by the weighted average number of common
shares  outstanding for the period.  Dilutive earnings (loss) per share reflects
the  potential  dilution of  securities  that could share in the earnings of the
Company.  Dilutive  earnings (loss) per share is equal to that of basic earnings
(loss) per share as the effects of stock options and warrants have been excluded
as they are anti-dilutive.

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
substantive  enactment.  As at December 31, 2008,  the Company had net operating
loss carryforwards,  however, due to the uncertainty of realization, the Company
has provided a full  valuation  allowance for the deferred tax assets  resulting
from these loss carryforwards.


                                       44
<PAGE>


                            MORGAN CREEK ENERGY CORP.
                         (An Exploration Stage Company)

                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2008
                                    (AUDITED)
________________________________________________________________________________


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
________________________________________________________________________________

STOCK-BASED COMPENSATION

On January 1, 2006, the Company adopted the fair value recognition provisions of
Financial Accounting Standards Board ("FASB") Statement No. 123(R),  SHARE-BASED
PAYMENT,   ("SFAS   123R").   The   Company   adopted   SFAS   123R   using  the
modified-prospective-transition  method.  Under this method,  compensation  cost
recognized for the year ended December 31, 2006 includes:  a) compensation  cost
for all share-based payments granted prior to, but not yet vested as of December
31, 2005,  based on the grant-date  fair value  estimated in accordance with the
original  provisions of SFAS 123, and b)  compensation  cost for all share-based
payments  granted  subsequent to December 31, 2005, based on the grant-date fair
value  estimated in  accordance  with the  provisions of SFAS 123R. In addition,
deferred  stock  compensation  related to  non-vested  options is required to be
eliminated  against  additional  paid-in capital upon adoption of SFAS 123R. The
results for the prior periods were not restated.

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 ("EITF") 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.

RECENT ACCOUNTING PRONOUNCEMENT

In May 2008, the FASB issued SFAS No. 163,  ACCOUNTING  FOR FINANCIAL  GUARANTEE
INSURANCE CONTRACTS ("SFAS 163"). SFAS 163 clarifies how SFAS 60, ACCOUNTING AND
REPORTING BY INSURANCE  ENTERPRISES  applies to  financial  guarantee  insurance
contracts  issued  by  insurance  enterprises,  including  the  recognition  and
measurement of premium revenue and claim liabilities.  It also requires expanded
disclosures about financial guarantee insurance contracts. SFAS 163 is effective
for the  Company's  interim  period  commencing  January  1,  2009,  except  for
disclosures about an insurance enterprise's  risk-management  activities,  which
are effective for the Company's  interim  period  commencing  July 1, 2008.  The
Company  does not expect the  adoption of SFAS 163 to have a material  impact on
the Company's financial position, cash flows and results of operations.

In March  2008,  the FASB  issued SFAS No.  161,  DISCLOSURES  ABOUT  DERIVATIVE
INSTRUMENTS AND HEDGING ACTIVITIES ("SFAS 161"). SFAS 161 is intended to improve
financial  reporting  about  derivative  instruments  and hedging  activities by
requiring  enhanced  disclosures to enable investors to better  understand their
effects on an  entity's  financial  position,  financial  performance,  and cash
flows. SFAS 161 achieves these improvements by requiring  disclosure of the fair
values of derivative instruments and their gains and losses in a tabular format.
It also  provides  more  information  about an entity's  liquidity  by requiring
disclosure of  derivative  features that are credit  risk-related.  Finally,  it
requires  cross-referencing within footnotes to enable financial statement users
to locate important information about derivative  instruments.  SFAS 161 will be
effective for financial  statements  issued for fiscal years and interim periods
beginning after November 15, 2008,  will be adopted by the Company  beginning in
the first quarter of 2009.  The Company does not expect the adoption of SFAS 161
to have a material impact on the Company's  financial  position,  cash flows and
results of operations.

In February 2007, the Financial  Accounting  Standards Board issued Statement of
Financial  Accounting  Standards  No. 159, THE FAIR VALUE  OPTION FOR  FINANCIAL
ASSETS AND FINANCIAL  LIABILITIES - INCLUDING AN AMENDMENT OF FASB STATEMENT NO.
115 ("SFAS No. 159").  This statement permits entities to choose to measure many
financial instruments and certain other items at fair value. The objective is to
improve  financial  reporting  by providing  entities  with the  opportunity  to
mitigate  volatility in reported earnings caused by measuring related assets and
liabilities  differently  without  having  to  apply  complex  hedge  accounting
provisions.  This  Statement  is  expected  to  expand  the  use of  fair  value
measurement,   which  is  consistent  with  the  Board's  long-term  measurement
objectives for accounting for financial instruments. This statement is effective
as of the  beginning  of the  Company's  first  fiscal  year that  begins  after
November 15, 2007, although earlier adoption is permitted.  Effective January 1,
2008, the Company adopted this  statement.  To date, the Company has not applied
this  standard to the  measurement  of any reported  amounts.  Accordingly,  the
adoption of this  standard  did not have any impact on the  Company's  financial
position, cash flows or results of operations.

In December  2007,  the FASB issued  SFAS No.  160,  NONCONTROLLING  INTEREST IN
CONSOLIDATED FINANCIAL STATEMENTS,  AN AMENDMENT OF ARB NO. 51 ("SFAS No. 160"),
which will change the  accounting  and reporting for minority  interests,  which
will  be  recharacterized  as  noncontrolling  interests  and  classified  as  a
component of equity within the consolidated balance sheets.


                                       45
<PAGE>


                            MORGAN CREEK ENERGY CORP.
                         (An Exploration Stage Company)

                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2008
                                    (AUDITED)
________________________________________________________________________________


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
________________________________________________________________________________

RECENT ACCOUNTING PRONOUNCEMENT (CONTINUED)

SFAS No. 160 is effective as of the  beginning of an entity's  first fiscal year
beginning on or after December 15, 2008.  Earlier  adoption is  prohibited.  The
Company has not yet determined the effect,  if any, that adopting this statement
would  have on the  Company's  financial  position,  cash  flows or  results  of
operations.

In  December  2007,  the FASB  issued  SFAS No.  141  (Revised  2007),  BUSINESS
COMBINATIONS  ("SFAS No.  141R").  SFAS No. 141R will change the  accounting for
business combinations. Under SFAS No. 141R, an acquiring entity will be required
to recognize all the assets acquired and liabilities assumed in a transaction at
the  acquisition-date  fair value with  limited  exceptions.  SFAS No. 141R will
change the accounting  treatment and disclosure for certain  specific items in a
business   combination.   SFAS  No.  141R  applies   prospectively  to  business
combinations  for which the acquisition date is on or after the beginning of the
entity's first annual  reporting period beginning on or after December 15, 2008.
Accordingly, any business combinations completed by the Company prior to January
1, 2009 will be recorded and disclosed  following existing GAAP. The Company has
not yet determined the effect,  if any, that adopting this statement  would have
on the Company's financial position, cash flows or results of operations.

In  September  2006,  FASB issued SFAS No. 157,  FAIR VALUE  MEASURE  ("SFAS No.
157"). This Statement defines fair value,  establishes a framework for measuring
fair  value  in  generally  accepted  accounting   principles  (GAAP),   expands
disclosures  about fair value  measurements,  and applies under other accounting
pronouncements that require or permit fair value measurements. SFAS No. 157 does
not require any new fair value measurements.  However, the FASB anticipates that
for some entities, the application of SFAS No. 157 will change current practice.
SFAS No. 157 is  effective  for  financial  statements  issued for fiscal  years
beginning  after  November  15,  2007,  which for the Company is the fiscal year
beginning January 1, 2008. The adoption of this standard did not have any impact
on the Company's financial position, cash flows or results of operations.

NOTE 3 - OIL AND GAS PROPERTIES
________________________________________________________________________________

(a) QUACHITA PROSPECT

The Company has leased  various  properties  totalling  approximately  1,971 net
acres within the Quachita  Trend within the state of Texas for a three year term
in consideration for $338,353. The Company has a 100% Working Interest and a 77%
N.R.I. in the leases.

BOGGS #1

On June 7, 2007,  the  Company  began  drilling  its first well on the  Quachita
Prospect  (Boggs  #1).  During  2007 the Company  began  production  testing and
evaluation  of the well. Of the five tested  zones,  four  produced  significant
volumes of natural gas. As formation  water was also  produced  with the natural
gas in the tested zones, the Boggs # 1 is currently under  evaluation.  To date,
$1,357,208  has been  incurred on drilling and  completion  expenditures  on the
Boggs #1. The Boggs #1 was initially privately funded with the funding investors
receiving a 75% Working  Interest and a 54% Net Revenue Interest in exchange for
providing 100% of all drilling and completion  costs.  To December 31, 2007, the
Company had incurred  $1,335,781 of costs on Boggs #1 and had received  $759,000
in funding from the private investors. On March 24, 2008, the Company negotiated
with the funding  investors to acquire their  interest in the well for an amount
equal to the  total  amount  of their  initial  investment  being  $759,000  and
forgiveness  of any  additional  amounts  owing.  Effective  March 24, 2008, the
Company  completed  this  acquisition  and  settlement  through the  issuance of
1,265,000 shares of common stock at $0.63 per share (refer to Note 4).

(b) NEW MEXICO PROSPECT

The Company to date has leased various properties totalling  approximately 7,576
net acres  within the state of New Mexico for a five year term in  consideration
for $112,883. The Company has a 100% Working Interest and an 84.5% N.R.I. in the
leases.  On October 31, 2008,  the Company  entered into an agreement to acquire
from  Westrock  Land  Corp.  approximately  and  additional  7,763  net acres of
property  within the State of New  Mexico for a five year term in  consideration
for  $388,150.  The  Company  optioned  to acquire a 100%  working  interest  in
approximately  7,763 net acres;  consisting  of a 78.5% N.R.I.  in the leases in
approximately 2,017 net acres and an 81.5% N.R.I. in the leases in approximately
5,746 net acres.  Under the terms of the  agreement  the Company has until April
16, 2009 to complete the transactions.


                                       46
<PAGE>


                            MORGAN CREEK ENERGY CORP.
                         (An Exploration Stage Company)

                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2008
                                    (AUDITED)
________________________________________________________________________________


NOTE 4 - STOCKHOLDERS' EQUITY (DEFICIT)
________________________________________________________________________________

(a) SHARE CAPITAL

The Company's  capitalization  is  33,333,333  common shares with a par value of
$0.001 per share.

On April 22, 2008, the directors of the Company approved a special resolution to
undertake a reverse split of the common stock of the Company on a basis of 1 new
share for 3 old shares.  On July 26, 2006, the directors of the Company approved
a special resolution to undertake a further forward split of the common stock of
the  Company on a basis of 2 new shares for 1 old share.  On May 10,  2006,  the
directors of the Company  approved a special  resolution  to undertake a forward
split of the  common  stock of the  Company on a basis of 2 new shares for 1 old
share.

All references in these financial  statements to number of common shares,  price
per share and weighted average number of common shares  outstanding prior to the
2:1 forward stock split on May 10, 2006, the 2:1 forward split on August 8, 2006
and the 3:1 reverse  stock split on April 22, 2008 have been adjusted to reflect
these stock splits on a retroactive basis, unless otherwise noted.

On December 19, 2006, a founding  shareholder of the Company returned  4,000,000
restricted  shares of common stock to treasury and the shares were  subsequently
cancelled  by  the  Company.  The  shares  were  returned  to  treasury  for  no
consideration to the shareholder.

(b) PRIVATE PLACEMENTS

On November 26, 2004,  the Company  issued  2,066,666  shares of common stock at
$0.075 per share for proceeds of $155,000.

On December 15, 2004,  the Company  issued  2,516,667  shares of common stock at
$0.075 per share for proceeds of $188,750 and 880,267  shares of common stock at
$0.375 per share for proceeds of $330,100.

On March 9, 2005, the Company issued 93,333 shares of common stock at a price of
$0.375 per share for proceeds of $35,000.

On October 16, 2006,  the Company  completed a private  placement  consisting of
314,702 units at $4.50 per unit for proceeds of  $1,416,158.  Each unit consists
of one common share and one non-transferable  share purchase warrant exercisable
at $9.00 per share for the period  commencing  on October 16, 2006 and ending on
October 16, 2008,  being the day which is the earlier of 24 months from the date
of  issuance  of the units or 18  months  from the  effective  date of a planned
registration statement.  Of this private placement,  187,778 of the units issued
were  in  exchange  for  $845,000  previously  advanced  to  the  Company  by  a
shareholder.  The  estimated  fair value of the warrants at the date of grant of
$592,210,  which has been included in additional paid in capital, was determined
using the  Black-Scholes  option pricing model with an expected life of 2 years,
risk  free  interest  rate of  4.49%,  a  dividend  yield of 0% and an  expected
volatility of 153%.

During 2008, the Company completed a private  placement  consisting of 1,224,000
units at $0.75 per unit for total gross proceeds of $918,000 and finders fees of
(20,913).  Each unit consists of one common share and one non-transferable share
purchase  warrant  exercisable at $1.50 per share for a period of 12 months from
the date of share issuance. A finders fee of 3.5% ($20,913) was paid on $597,500
of the private placement proceeds received.

(c) OTHER ISSUANCES

On February 13, 2008, the Company issued  2,525,356  shares of common stock at a
price of $0.75 per share on  settlement  of related  party  advance  and accrued
interest totaling $1,515,214. The difference between the estimated fair value of
the common  shares  issued at issuance and the amount of debt  settled  totaling
$378,803 was recorded as a finance cost during the period (refer to Note 6).

On March 24,  2008,  the Company  issued  1,528,538  shares of common stock at a
price of $0.63  per  share on  settlement  of  related  party  advances  and the
acquisition  of the  interest  in the  Boggs  #1 well  totalling  $962,980.  The
difference between the estimated fair value of the common shares at issuance and
the amount of debt  settled  totaling  $45,857 was  recorded  as a finance  cost
during the period (refer to Notes 3 and 6).


                                       47
<PAGE>


                            MORGAN CREEK ENERGY CORP.
                         (An Exploration Stage Company)

                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2008
                                    (AUDITED)
________________________________________________________________________________


NOTE 4 - STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)
________________________________________________________________________________

(d) SHARE PURCHASE WARRANTS

Details of the Company's  share purchase  warrants  issued and outstanding as of
December 31, 2008 are as follows:

Exercise price     Number of warrants to purchase shares      Expiry Date
_____________________________________________________________________________

    $1.50                       397,000                       June 27, 2009
    $1.50                       827,000                       October 23, 2009

The Company's share purchase warrants activity for the period ended December 31,
2008 is summarized as follows:

                                                               Weighted average
                                           Weighted average      remaining In
                              Number of     exercise Price     contractual life
                              Warrants        per share           (in years)
________________________________________________________________________________

Balance, December 31, 2006      314,702         $ 9.00               1.80
Issued                                -              -                  -
Expired                               -              -                  -
Exercised                             -              -                  -
________________________________________________________________________________

Balance, December 31, 2007      314,702           9.00               0.80
Issued                        1,224,000           1.50               0.71
Expired                        (314,702)          9.00                  -
Exercised                             -              -                  -
________________________________________________________________________________

Balance, December 31, 2008    1,224,000         $ 1.50               0.71
================================================================================

All warrants are exercisable as at December 31, 2008.

NOTE 5 - STOCK OPTION PLAN
________________________________________________________________________________

On April 3, 2006, the Board of Directors of the Company  ratified,  approved and
adopted a Stock  Option Plan for the Company in the amount of  1,666,667  shares
with an exercisable period up to 10 years. In the event an optionee ceases to be
employed by or to provide  services to the Company for reasons other than cause,
any Stock  Option that is vested and held by such  optionee  may be  exercisable
within up to ninety  calendar  days after the  effective  date that his position
ceases. No Stock Option granted under the Stock Option Plan is transferable. Any
Stock  Option held by an optionee at the time of his death may be  exercised  by
his estate  within one year of his death or such  longer  period as the Board of
Directors may  determine.  On April 28, 2008,  the Board of Directors  deemed it
necessary  to approve an  amendment  to the Stock Option Plan to an aggregate of
5,000,000 shares.

As approved by the Board of directors, on December 12, 2006, the Company granted
616,668  stock  options to certain  officers,  directors  and  management of the
Company at $3.30 per share.  The term of these options are five years. The total
fair value of these  options at the date of grant was estimated to be $1,527,170
and was recorded as a stock based  compensation  expense  during 2006.  The fair
value of these  options was estimated  using the  Black-Scholes  option  pricing
model  with the  following  assumptions:  expected  life of 3 years;  risk  free
interest rate of 4.49%; dividend yield of 0% and expected volatility of 187%.

As approved by the Board of  Directors on April 30,  2008,  the Company  granted
1,250,000  stock options to certain  officers,  directors and  management of the
Company at $1.00 per share.  The term of these options are ten years.  The total
fair value of these  options at the date of grant was  estimated  to be $436,955
and was recorded as a stock based  compensation  expense during the period.  The
fair value of these options was estimated using the Black-Scholes option pricing
model  with the  following  assumptions:  expected  life of 10 years;  risk free
interest rate of 3.77%; dividend yield of 0% and expected volatility of 210%.


                                       48
<PAGE>


                            MORGAN CREEK ENERGY CORP.
                         (An Exploration Stage Company)

                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2008
                                    (AUDITED)
________________________________________________________________________________


NOTE 5 - STOCK OPTION PLAN (CONTINUED)
________________________________________________________________________________

The Company's stock option  warrants  activity for the period ended December 31,
2008 is summarized as follows:

                                                               Weighted average
                                           Weighted average      remaining In
                              Number of     exercise Price     contractual life
                               Options        per share           (in years)
________________________________________________________________________________

Balance, December 31, 2006      616,668       $   3.30               4.95
Granted                               -              -
Expired                               -              -                  -
Exercised                             -              -                  -
________________________________________________________________________________

Balance, December 31, 2007      616,668           3.30               3.95
Granted                       1,250,000           1.00
Expired                               -              -                  -
Exercised                             -              -                  -
________________________________________________________________________________

Balance, December 31, 2008    1,866,668       $   1.76               7.22
================================================================================

All options are exercisable as at December 31, 2008.

NOTE 6 - RELATED PARTY TRANSACTIONS
________________________________________________________________________________

INTERNATIONAL MARKET TREND, INC. ("IMT")

An officer  and  director of IMT, a private  company,  is a  shareholder  of the
Company.  During 2008, the Company  incurred  consulting  fees of $30,000 to IMT
(2007 -  $120,000).  On  March  24,  2008,  the  Company  converted  $86,873  in
consulting  fees and advances  through the issuance of 144,788 commons shares of
the Company at $0.63 per share. (Refer to Note 4).

On June 13,  2008,  the Company  repaid a  shareholder  of the Company  that had
advanced $10,000 to the Company. The amount was unsecured,  non-interest bearing
and without specific repayment terms.

As of December  31,  2007,  $1,365,500  was owed to a separate  shareholder  for
advances  made to the  Company.  During  2008,  this  shareholder  made  further
advances to the Company of $885,000 and $500,000 was repaid to the  shareholder.
On February 13, 2008, the Company issued  2,525,356  shares of common stock at a
price of $0.75 per share on  settlement  of related  party  advance  and related
accrued  interest  totaling  $1,894,017  (Refer to Note 4).  As a result,  as of
December  31, 2008,  $310,000 was owed which bears  interest at 8% per annum and
has no specific repayment terms. As of December 31, 2008, total accrued interest
was $19,164 (December 31, 2007 - $66,456).

MANAGEMENT FEES

During 2008,  the Company paid  officers and directors  $263,386 for  management
fees (2007 -$311,250).  As of December 31, 2008 total amount owing in management
fees was $7,070.

During  2008,  the Company  converted  $71,250 of  management  fees owing to the
President of the Company  through the issuance of 118,750  common  shares of the
Company at $0.63 per share (Refer to Note 4).

As part of their  compensation  agreements  the  Company's  chief  Geologist and
Operations Manager (hereafter  referred to as "Executives") each received and is
assigned up to 1.5%  overriding  royalty  interest in any oil and gas properties
which are directly introduced by the Executives to the Company. During 2008, the
Company  recorded  related  additional  compensation to the Executives of $3,386
(2007 - $1,739), being the estimated cost of royalty interests earned during the
year.


                                       49
<PAGE>


                            MORGAN CREEK ENERGY CORP.
                         (An Exploration Stage Company)

                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2008
                                    (AUDITED)
________________________________________________________________________________


NOTE 7 - INCOME TAXES
________________________________________________________________________________

The Company has adopted the FASB No. 109 for reporting purposes.  As of December
31,  2008,  and 2007 the  Company  had net  operating  loss  carry  forwards  of
approximately  $4,596,000 and $3,436,000  respectively  that may be available to
reduce future years' taxable income through 2028.  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.

At December 31, 2008 and 2007,  the Company had a federal  operating  loss carry
forward of $4,595,923 and $3,435,608, respectively.

The provision for income taxes  consisted of the  following  components  for the
years ended December 31:
                                         2008                   2007
                                      ___________           ___________
Current:
     Federal                                   --                    --
     State                                     --                    --
Deferred:                                      --                    --
                                      ___________           ___________
                                               --                    --
                                      ===========           ===========

Components of net deferred tax assets,  including a valuation allowance,  are as
follows at December 31:

                                         2008                  2007
                                      ___________           ___________
Deferred tax assets:
Net operating loss carryforward       $ 4,595,923           $ 3,435,608
                                      ___________           ___________

      Total deferred tax assets         1,608,573             1,202,463
Less: Valuation Allowance              (1,608,573)           (1,202,463)
                                      ___________           ___________

    Net Deferred Tax Assets           $        --           $        --
                                      ===========           ===========

The valuation allowance for deferred tax assets as of December 31, 2008 and 2007
was $1,608,573 and  $1,202,463,  respectively.  In assessing the recovery of the
deferred  tax assets,  management  considers  whether it is more likely than not
that some portion or all of the  deferred  tax assets will not be realized.  The
ultimate  realization of deferred tax assets is dependent upon the generation of
future taxable income in the periods in which those temporary differences become
deductible.  Management considers the scheduled reversals of future deferred tax
assets,  projected future taxable income, and tax planning  strategies in making
this assessment.  As a result, management determined it was more likely than not
the deferred tax assets would be realized as of December 31, 2008 and 2007.

Reconciliation  between  the  statutory  rate and the  effective  tax rate is as
follows at December 31:

                                         2008                  2007
                                      ___________           ___________

Federal statutory tax rate                  (35.0)%               (35.0)%
                                      ___________           ___________
Change in valuation allowance                35.0 %                35.0 %
                                      ___________           ___________

Effective tax rate                              0 %                   0 %
                                      ===========           ===========


                                       50
<PAGE>


                            MORGAN CREEK ENERGY CORP.
                         (An Exploration Stage Company)

                          NOTES TO FINANCIAL STATEMENTS
                                DECEMBER 31, 2008
                                    (AUDITED)
________________________________________________________________________________


NOTE 8 - SUBSEQUENT EVENTS
________________________________________________________________________________


Effective  on January 8, 2009,  the Board of Directors  (the  "Board") of Morgan
Creek  Energy  Corp.,  a  Nevada   corporation  (the  "Company")   accepted  the
resignation  of D. Bruce  Horton  dated  January 8, 2009 as the Chief  Financial
Officer/Secretary/Treasurer  of the Company.  Mr. Horton  remains as a member of
the Board of Directors of the Company. Therefore, the Board of Directors remains
comprised of Marcus  Johnson,  D. Bruce Horton,  Erik Essiger,  Peter Wilson and
Angelo Viard.

Effective as of January 8, 2009, the Board of Directors  accepted the consent of
William    Thomas   dated    January   8,   2009   as   the   Chief    Financial
Officer/Secretary/Treasurer of the Company. M Thomas' biography is as follows:















                                       51
<PAGE>


ITEM 9A. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

     We have  performed  an  evaluation  under  the  supervision  and  with  the
participation of our management, including our Chief Executive Officer (CEO) and
Chief Financial Officer (CFO), of the  effectiveness of our disclosure  controls
and procedures,  (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange
Act).  Based on that  evaluation,  our  management,  including  our CEO and CFO,
concluded  that our  disclosure  controls and  procedures  were  effective as of
December 31, 2008 to provide reasonable  assurance that information  required to
be  disclosed  by us in the reports  filed or submitted by us under the Exchange
Act is recorded,  processed,  summarized  and  reported  within the time periods
specified in the SEC's rules and forms.

MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

     The Company's  management is responsible for  establishing  and maintaining
adequate internal control over financial reporting (as defined in Rule 13a-15(f)
under the Exchange Act). Under the supervision and with the participation of the
Company's  management,  including  the chief  executive  officer  and  principal
financial  officer,  we evaluated the effectiveness of our internal control over
financial  reporting  as of  December  31,  2008.  In  making  this  assessment,
management   used  the  criteria  set  forth  by  the  Committee  of  Sponsoring
Organizations of the Treadway Commission ("COSO") in Internal Control-Integrated
Framework.

     This Annual Report does not include an attestation report of our registered
public  accounting  firm De Joya  Griffith &  Company,  LLC  regarding  internal
control  over  financial  reporting.  Management's  report  was not  subject  to
attestation by our registered public accounting firm pursuant to temporary rules
of the SEC that  permit us to provide  only  management's  report in this Annual
Report on Form 10-K.

INHERENT LIMITATIONS ON EFFECTIVENESS OF CONTROLS

     We  believe  that a  controls  system,  no  matter  how well  designed  and
operated,  cannot provide absolute assurance that the objectives of the controls
system are met, and no  evaluation  of controls can provide  absolute  assurance
that all control  issues and instances of fraud,  if any,  within a company have
been detected.  Our  disclosure  controls and procedures are designed to provide
reasonable assurance of achieving their objectives, and our CEO and our CFO have
concluded that these  controls and  procedures are effective at the  "reasonable
assurance" level.

CHANGES IN INTERNAL CONTROLS

The  Company's  management  had  remediated  the material  weaknesses  that were
reported  from its 10-K/A for the fiscal year end  December  31, 2007 which were
filed on 10/2/2008.  A) Management  implemented an audit committee that oversees
and monitors the Company's  financials (See Paragraph on Audit committee  report
below).  B)  Adequate  segregation  of duties  were put in place to  reduce  the
likelihood that errors  (intentional or unintentional) will remain undetected by
providing for separate processing by different  individuals at various stages of
a transaction  and for  independent  reviews of the work  performed.  No further
significant  changes were  implemented  in our internal  controls over financial
reporting  during  the  period  covered  by this  report  that  have  materially
affected,  or are reasonably likely to materially  affect,  our internal control
over financial reporting.


                                       52
<PAGE>


AUDIT COMMITTEE REPORT

The Board of Directors has  established an audit  committee.  The members of the
audit  committee  are Mr.  Marcus  Johnson,  Mr.  Angelo  Viard and Mr. D. Bruce
Horton.  All of the members of the audit committee are "independent"  within the
meaning of Rule 10A-3 under the Exchange  Act. The current  audit  committee was
organized on December 18, 2008 and operates under a written  charter  adopted by
our Board of Directors.

The audit  committee has received and reviewed the written  disclosures  and the
letter from De Joya Griffith & Company,  LLC required by Independence  Standards
Board  Standard  No. 1,  Independence  Discussions  with  Audit  Committees,  as
amended.

Based on the reviews and discussions  referred to above, the audit committee has
recommended to the Board of Directors that the financial  statements referred to
above be  included  in our  Annual  Report on Form 10-K for  fiscal  year  ended
December 31, 2008 filed with the Securities and Exchange Commission.


ITEM 9B. OTHER INFORMATION

Not applicable.


NOTES TO FINANCIAL STATEMENTS.

ITEM  9.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
          FINANCIAL DISCLOSURE

Effective  July 31, 2007,  our Board of Directors  appointed De Joya  Griffith &
Company, LLC (De Joya Griffith) as our principal  independent  registered public
accounting firm.

The reports of De Joya  Griffith  on our  financial  statements  for each of the
fiscal years ended December 31, 2008 and 2007 did not contain an adverse opinion
or disclaimer of opinion, nor were they modified as to uncertainty,  audit scope
or accounting principles, other than to state that there is substantial doubt as
to our  ability to continue as a going  concern.  During our fiscal  years ended
December 31, 2008 and 2007, there were no  disagreements  between us and De Joya
Griffith,  whether or not resolved,  on any matter of  accounting  principles or
practices,  financial  statement  disclosure,  or auditing  scope or  procedure,
which,  if not  resolved to the  satisfaction  of De Joya  Griffith,  would have
caused De Joya  Griffith  to make  reference  thereto  in their  reports  on our
audited financial statements.


                                       53
<PAGE>


                                    PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

IDENTIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS

All of our directors  hold office until the next annual  general  meeting of the
shareholders or until their  successors are elected and qualified.  Our officers
are  appointed  by our board of directors  and hold office  until their  earlier
death, retirement, resignation or removal.

Our  directors  and executive  officers,  their ages and  positions  held are as
follows:

NAME                  AGE     POSITION WITH THE COMPANY

Peter Wilson           41     President,   Chief  Executive   Officer/Principal
                              Executive Officer and a Director

William D. Thomas      57     Secretary/Treasurer,   Chief  Financial  Officer,
                              and Principal Accounting Officer

Marcus Johnson         60     Director,   Compensation   Committee  member  and
                              Audit Committee member

D. Bruce Horton        64     Director,   Compensation   Committee  member  and
                              Audit Committee member

Erik Essiger           43     Director

Angelo Viard           36     Director,   Compensation   Committee  member  and
                              Audit Committee member

Thomas Markham III     58     Chief Geologist

BUSINESS EXPERIENCE

The following is a brief  account of the  education  and business  experience of
each director,  executive officer and key employee during at least the past five
years,  indicating each person's principal occupation during the period, and the
name and principal business of the organization by which he or she was employed,
and including other directorships held in reporting companies.

PETER WILSON.  Mr. Wilson has been our  President/Chief  Executive Officer and a
member of our Board of  Directors  since  September  29,  2008.  During the past
fifteen  years,  Mr. Wilson has been involved in the senior level  management of
public companies.  His experience spans a wide range of project  development and
contract negotiations within the mining, energy and real estate industries.  Mr.


                                       54
<PAGE>


Wilson has focused on the  creation  and  implementation  of market  strategies,
contract  negotiations and financing  options for maximum return on investments.
His business experience includes diverse international assignments in the United
Kingdom,  Canada,  the United  States,  Switzerland  and Norway.  Mr. Wilson has
worked  extensively  with overseas  investor groups and within the E&P market in
Louisiana and Texas.

From approximately 2007 through the current date, Mr. Wilson is the president of
Hana Mining Ltd., a publicly  listed  exploration  company  seeking to develop a
copper-silver  project in Botswana,  Africa.  During approximately 2005 to 2006,
Mr. Wilson served as the  president and chief  executive  officer of Sun Oil and
Gas Corp. During  approximately  1997 to 2005, Mr. Wilson was a director and the
vice president of International  Operations for Petroreal Oil Corp., a small oil
producer engaged in energy asset purchases  aggregating more than  $130,000,000.
During  approximately  1993 to 1999, Mr. Wilson was the vice president of Samoth
Equity  Corporation (now Sterling Center Corp.),  where he began his involvement
with capital markets and finance.  Samoth Equity  Corporation  gained prominence
through the 1990s and grew to a  $150,000,000  TSX-listed  real estate  merchant
banking  organization  involved in lending  throughout the  southwestern  United
States and Canada.

Mr.  Wilson  continues  to serve as an  advisor to  several  public and  private
Houston-based  E&P  companies,  and  serves  as  a  director  of  Offset  Energy
Corporation operating in the GOM and Houston,  Texas.

WILLIAM    THOMAS.     Mr.    Thomas    has    been    our    Chief    Financial
Officer/Secretary/Treasurer  since January 8, 2009.  Mr. Thomas has thirty years
of  experience  in the finance  and  accounting  areas for the natural  resource
sector.  Currently,  Mr. Thomas is also the chief financial  officer of Mainland
Resources, Inc., a Nevada corporation that trades on the OTC Bulletin Board, and
the chief  financial  officer and a director of Uranium  International  Corp., a
Nevada  corporation  that trades on the OTC Bulletin  Board and chief  financial
officer and director of Mira Resources,  an Canadian public  resources  company.
Mr.  Thomas has held various  successive  management  positions  with Kerr McGee
Corporation's China operations based in Beijing,  China, ending in 2004 with his
final  position  as  director of business  services.  For a brief  period  after
leaving Kerr McGee,  Mr. Thomas acted as a  self-practitioner  in the accounting
and finance field. In July 2007, he took on the role of chief financial  officer
for two public  resource  companies;  Hana  Mining Inc.  and NWT  Uranium  Corp.
Recently,  Mr. Thomas  resigned from NWT Uranium Corp. but continues to serve as
CFO for Hana Mining. Mr. Thomas was previously general manager (1999-2002),  and
finance and administration manager (1996-1999) of Kerr McGee's China operations.
While in China, Mr. Thomas was responsible for finance including  Sarbanes Oxley
reporting, budgeting, treasury, procurement,  taxation, marketing, insurance and
business  development,   including  commercial  negotiations  with  the  Chinese
partner,  China  National  Offshore  Oil Co (CNOOC) and other  Chinese and joint
venture  partners.  Mr. Thomas  focused  heavily on supporting  exploration  and
development  operations  for  three  operated  blocks in Bohai  Bay,  as well as
evaluation and negotiation of new venture blocks in East China Sea and the South
China Sea. He was also  responsible for the liaison with CNOOC and other Chinese
oil companies,  Kerr McGee US management and joint venture  partners,  where his
main  focus was to ensure  cost  effective  and  timely  achievement  of various
approved work programs and budgets.  He was also Chief  Representative  for Kerr
McGee on the Joint Management  Committee (JMC). Mr. Thomas  previously worked as


                                       55
<PAGE>


manager of fixed asset  accounting  for Kerr McGee  Corporation's  US operations
(1996),   as  finance   director  of  Kerr  McGee's  UK   operations   based  in
London/Aberdeen  (1992-1996),  and Kerr McGee's Canadian  operations in Calgary,
Alberta,  Canada (1984-1992),  including the predecessor  company,  Maxus Canada
Ltd, which was acquired by Kerr McGee Ltd. Over the course of his career, he has
been involved in all aspects of managing accounting, budgeting, human resources,
administration,   insurance,   taxation  and  other  business   support  aspects
surrounding gas properties for Kerr McGee.  Mr. Thomas was responsible to ensure
compliance with COPAS, SEC, FASB and international  accounting  regulations.  He
participated on a team that developed the Oracle accounting  system  application
to the Kerr McGee's  worldwide  operations.  He was most notably involved in the
company's  initial  entry  into  both  China and the UK North Sea - start ups of
local and expatriate  personnel that eventually  developed into core areas (over
$1 Billion) for Kerr McGee,  including the company's first operated offshore oil
fields in China (CFD 1-1) and the UK (Gryphon).  In his early career, Mr. Thomas
also held senior management  positions in the finance divisions of Norcen Energy
Ltd of  Calgary,  Alberta  (1981-1984),  Denison  Mines  Ltd of  Ontario  Canada
(1978-1981)  and Algoma Steel  Corporation of Sault Ste Marie,  Ontario,  Canada
(1977). He was also a Senior Auditor for the accounting firm,  Coopers & Lybrand
in Toronto,  Canada  (1975-1977).  Mr. Thomas attained his Chartered  Accountant
(CA) designation from the Canadian  Institute of Chartered  Accountants in 1977.
He holds an Honors  Bachelor of  Commerce  and Finance  from the  University  of
Toronto, Ontario, Canada.

MARCUS   JOHNSON:   Mr.   Johnson  was  our   President   and  Chief   Executive
Officer/Principal  Executive  Officer until April 30, 2008, and remains a member
of our Board of Directors,  a member of the Compensation  Committee and a member
of the Audit  Committee.  He has been a member of our Board of  Directors  since
October 25, 2006. Mr. Johnson,  AIA, has previously been active in management in
both the  private  and public  sectors as a  consultant  to  management  with an
emphasis  on  investor  relations  and  awareness.  Mr.  Johnson  has  performed
consulting services for Intergold Corporation, now known as Lexington Resources,
Inc., and Vega-Atlantic Corporation, now known as Transax International Limited.
Mr. Johnson is a professional  architect and a member of the American  Institute
of Architects. Mr. Johnson has been the professional architectural consultant of
record on various commercial projects and is a consultant to Exterior Research &
Design,  LLC,  where he is  currently  retained  as an  expert  for  determining
architectural  management  standards.  Mr.  Johnson is also the chief  executive
officer and director to Geneva  Resources,  Inc.  since  October  2006.

D. BRUCE HORTON. Mr. Horton was our Chief Financial  Officer/Secretary/Treasurer
until his  resignation  in January 8, 2009, and remains a member of our Board of
Directors,  a member  of the  Compensation  Committee  and a member of the Audit
Committee.  He has been one of our directors  since August 21, 2006.  During the
past five years,  Mr. Horton has been active in the financial  arena in both the
private and public sectors as an accountant and financial management  consultant
with an emphasis on corporate financial  reporting,  financing and tax planning.
Mr. Horton has specialized in corporate management,  re-organization, merger and
acquisition, international tax structuring, and public and private financing for
over thirty years.  From 1972 through 1986, Mr. Horton was a partner in a public
accounting firm. In 1986, Mr. Horton  co-founded the Clearly  Canadian  Beverage
Corporation,  of which he was a director and chief  financial  officer from June
1986 to May 1997.  He is a principal  consultant in Calneva  Financial  Services
Ltd. that provides  accounting and financial  management  consulting services as
well as investment banking services focusing on venture capital opportunities in
Asia. Mr. Horton is also an officer and director of Geneva Resources, Inc. since
May 2006, which is a publicly traded company.


                                       56
<PAGE>


ERIK ESSIGER.  Mr. Essiger has been one of our directors  since August 21, 2006.
Mr.  Essiger has more than fifteen years of experience in corporate  finance and
lead advisory services relating to strategic and commercial development projects
across a wide  variety of  sectors  and  including,  in  particular,  within the
industrial, automotive, business services, retail and consumer goods sectors. In
this respect, Mr. Essiger has performed various commercial and strategy services
as both an external  consultant and as a board member and managing director of a
number of companies,  including a venture capital company.  During the past five
years,  Mr.  Essiger  has been:  (i) the  Managing  Director  and the founder of
Precisetech  GmbH, a corporate finance advisory company focused on international
M&A  transactions  (from  October  2004  to  present);  (ii)  a  member  of  the
Supervisory Board of Corix Capital AG (from December 2003 to present); (iii) the
Senior Manager, Transaction Services Strategy Group, with PricewaterhouseCoopers
AG,  heading  up the  commercial  and due  diligence  practice  of that group in
Germany which  provided  services  mainly to private  equity clients of the firm
(from April 2003 to September  2004);  and (iv) a member of the Executive  Board
(Vorstand)  of MultiMedia  Technologies  AG, a producer of  set-top-boxes  and a
company  operating  in the  fields of  interactive  digital  television  and the
streaming  media  market  (from  July 2000 to July  2002) Mr.  Essiger  also has
extensive  international  experience in corporate  restructuring;  especially in
Germany,  Russia,  Hong  Kong  and  Switzerland;  and  he  was a  member  of the
German-Russian  co-operation  council. Mr. Essiger is also a director of Uranium
Energy Corp., a publicly traded company.

ANGELO VIARD.  Mr. Viard has been one of our directors since September 29, 2008.
Mr.  Viard is also a member of the  Compensation  Committee  and a member of the
Audit  Committee.  During the past ten years,  Mr.  Viard has been  involved  in
providing  companies  with  advisory  services  including,  but not  limited to,
managerial,  investment strategy, finance,  information technology,  compliance,
accounting,  business  development,  mergers and acquisitions,  and capital fund
raising in a wide range of  industry  sectors  across the United  States,  South
America and Europe. From approximately June 2007 through current date, Mr. Viard
has been the president/chief executive officer of VCS Group, Inc. formerly known
as "Viard  Consulting  Services".  His role as  director  of  advisory  services
requires  development of an advisory  services  sector.  Mr.  Viard's  functions
include full  budgeting  responsibilities,  management  of budgets and planning,
creation of policies  and  administrative  procedures  to  restructure  business
processes,  authoring multi-company employee manuals, design work order tracking
and billing  interface  systems for  accounting,  and updating  business  plans,
accounting  structures and  organizational  changes to maximize business growth.
From  approximately  August  2006  through  June  2007,  Mr.  Viard  was  the IT
operations  manager for Bare Escentuals  where he was responsible for developing
and  coordinating  multiple  related  projects in alignment  with  strategic and
tactical  company  goals,  served as a primary  customer  advocate,  planned and
coordinated long term systems strategy, and managed the day to day operations of
the  IT  department,  including  LAN/WAN  architecture,  telecommunications  and
hardware/software  support  and  development.  From  approximately  August  2005
through  August  2006,   Mr.  Viard  was  a  senior  IT  audit   consultant  for
PricewaterhouseCoopers  LLP where he was  responsible  for determining the audit
documentation,  strategy  and plan.  From  approximately  December  2004 through
August 2005, Mr. Viard was the chief executive officer and founder of Technology
Mondial Inc.,  which was a start-up company  specializing in broadband  wireless


                                       57
<PAGE>


technology in Costa Rica and management and  development of wireless  connection
planning for Latin America.  Mr. Viard was also previously  employed with OpenTV
Inc, where he was manager of information  system and  technology,  Thomas Weisel
Partners LLC where he was an information  technology brokerage services manager,
BancBoston  Robertson Stephens & Co. where he was a senior system engineer,  and
Environmental Chemical Corporation where he was a technical analyst.

Mr. Viard holds a master in computer  science,  a BS in business  management and
administration,  and an A/A in computer  business  administration  and  network.

THOMAS ALDEN MARKHAM II: Mr. Markham has been our Chief Geologist and one of our
directors  since  August  21,  2006.  Mr.  Markham  resigned  from our  board of
directors on April 30, 2008 and remains our Chief  Geologist.  Mr.  Markham is a
professional geologist specializing in evaluations and management of oil and gas
plays in the  mid-continental  U.S. Since receiving his Masters of Geology,  Mr.
Markham  has  focused on oil and gas plays.  He began his  career  working  with
BEPCO,  ARCO and then  TENNECO,  acting as geologist on a wide range of projects
spanning  over 12 years of  development  on leading  plays  including the Pinon,
Allen Hill, Brunson Ranch, J.D. Shale, Brown Bassett Extension and NYY projects.
During this period, he directed 15 Ph D-level geologists and managed exploration
budgets up to $21 million.  Mr. Markham has recently acted as Chief Geologist in
charge of the supervision and generation of a 21,000 acre Pennsylvanian gas play
in the Permian Basin. Mr. Markham was instrumental in the play's development and
finalized  negotiations  with the Osage Tribe of Oklahoma for drilling rights on
57-quarter  sections  (9,120  acres).  He has  been an  independent  oil and gas
geologist  managing  project  generation and evaluation for various industry and
non-industry groups primarily in the Mid Continent. Mr. Markham has successfully
drilled and completed  proprietary prospects (while providing the supervision of
seismic, leasing, drilling, completion, and production activities) of 88 oil and
gas wells (to 10,500') in Texas, New Mexico, and Oklahoma. He was the generating
geologist  of a 5 TCFG  overthrust  play in Central  Texas,  he  finalized a New
Mexico San Andres  stratigraphic  play (50 to 100 MMBO at 4,000')  and a Permian
Basin  Devonian  structural  play and managed the  screening  and  evaluation of
Springer - Atoka sub-basin  prospects of the Anadarko Basin (3-D). Mr. Markham's
work has been published in the American Gas Journal and he has been invited on a
technical  tour of the former Soviet Union to review oil and gas assets.  He was
also guest speaker at the American  Association  of Petroleum  Landman's  (AAPL)
"Buying  Oil and Gas  Properties"  seminar.  He  continues  to carry out Reserve
Evaluation for non-industry groups including the FDIC (Federal Deposit Insurance
Corp. - Wichita and Dallas Branches) and the IRS (Internal Revenue Service). Mr.
Markham is not a director or officer of any other U.S. reporting company.

FAMILY RELATIONSHIPS

There are no family relationships among our directors or officers.


                                       58
<PAGE>


INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS

During the past five years, none of our directors, executive officers or persons
that may be deemed  promoters is or have been  involved in any legal  proceeding
concerning:  (i) any  bankruptcy  petition  filed by or against any  business of
which such person was a general partner or executive  officer either at the time
of the bankruptcy or within two years prior to that time; (ii) any conviction in
a  criminal  proceeding  or  being  subject  to a  pending  criminal  proceeding
(excluding traffic violations and other minor offenses);  (iii) being subject to
any order, judgment or decree, not subsequently reversed,  suspended or vacated,
of any court of competent  jurisdiction  permanently or  temporarily  enjoining,
barring,  suspending or otherwise limiting  involvement in any type of business,
securities or banking  activity;  or (iv) being found by a court, the Securities
and Exchange  Commission or the  Commodity  Futures  Trading  Commission to have
violated a federal or state  securities or commodities law (and the judgment has
not been reversed, suspended or vacated).

COMMITTEES OF THE BOARD OF DIRECTORS

AUDIT COMMITTEE

As of the date of this Annual  Report,  Messrs.  Johnson,  Viard and Horton have
been appointed as members to our Audit  Committee.  All of the three members are
"independent" within the meaning of Rule 10A-3 under the Exchange Act and are in
addition financial experts. The Audit Committee operates under a written charter
adopted by the Board of Directors  on November 20, 2004.  The Board of Directors
pursuant to a special meeting held on December 18, 2008 adopted an amended audit
committee charter and responsibilities.

The Audit Committee's  primary function is to provide advice with respect to our
financial  matters  and to  assist  the Board of  Directors  in  fulfilling  its
oversight responsibilities regarding finance,  accounting, and legal compliance.
The Audit Committee's primary duties and responsibilities  will be to: (i) serve
as an independent and objective party to monitor our financial reporting process
and internal  control system;  (ii) review and appraise the audit efforts of our
independent  accountants;  (iii) evaluate our quarterly financial performance as
well as our  compliance  with laws and  regulations;  (iv) oversee  management's
establishment and enforcement of financial policies and business practices;  and
(v) provide an open avenue of communication  among the independent  accountants,
management and the Board of Directors.

COMPENSATION COMMITTEE

As of the date of this Annual  Report,  Messrs.  Johnson,  Viard and Horton have
been  appointed  as  members to our  Compensation  Committee.  The  Compensation
Committee  operates  under a written  charter  adopted by the Board of Directors
pursuant to a special meeting held on December 18, 2008.

         OVERVIEW OF COMPENSATION PROCESS

The Compensation  Committee of our Board of Directors is responsible for setting
the compensation of our executive officers, overseeing the Board's evaluation of
the performance of our executive  officers and  administering  our  equity-based
incentive plans, 401(k) plan and deferred compensation plan, among other things.


                                       59
<PAGE>


The  Compensation  Committee  undertakes  these  responsibilities  pursuant to a
written  charter  adopted  by  the  Compensation  Committee  and  the  Board  of
Directors,  which  will  be  reviewed  at  least  annually  by the  Compensation
Committee.   The   charter   may   be   viewed   in   full   on   our   website,
www.morgancreekcorp.com  under the  "Corporate  Governance"  tab on the Investor
Relations page.

The  Compensation  Committee is composed solely of  "non-employee  directors" as
defined in Rule 16b-3 of the rules  promulgated under the Exchange Act, "outside
directors" for purposes of regulations promulgated pursuant to Section 162(m) of
the Internal  Revenue Code ("IRC"),  and  "independent  directors" as defined in
Section  303A of the New  York  Stock  Exchange  ("NYSE")  corporate  governance
listing  standards,  in each case as determined  by the Board of Directors.  Our
Board of Directors  recommends  Compensation  Committee membership based on such
knowledge,  experience  and  skills  that  it  deems  appropriate  in  order  to
adequately perform the responsibilities of the Compensation  Committee.  Messrs.
Johnson, Horton and Viard serve as members of the Compensation Committee.

The  Compensation  Committee  annually  reviews  executive  compensation and our
compensation  policies to ensure that the Chief Executive  Officer and the other
executive officers are rewarded  appropriately for their contributions to us and
that the overall compensation strategy supports the objectives and values of our
organization,  as well as stockholder interests. The Compensation Committee will
conduct  this  review and  compensation  determination  through a  comprehensive
process involving a series of meetings typically  occurring in the first quarter
of each year.

         COMPENSATION PHILOSOPHY

The fundamental objective of our executive  compensation policies is to attract,
retain and motivate  executive  leadership for us that will execute our business
strategy,  uphold our values and  deliver  results  and  long-term  value to our
stockholders.   Accordingly,   the  Compensation   Committee  seeks  to  develop
compensation  strategies  and programs  that will  attract,  retain and motivate
highly qualified and high-performing executives through compensation that is:

         (i) PERFORMANCE BASED: a significant  component of compensation  should
be determined based on whether or not we meet certain performance  criteria that
in the view of our Board of Directors are indicative of our success;

         (ii) STOCKHOLDER  BASED:  equity incentives should be used to align the
interests of our executive officers with those of our stockholders;

         (iii) FAIR:  compensation  should take into account  compensation among
similarly  situated  companies,  our success  relative to peer companies and our
overall pay scale.

It is the Compensation  Committee's  goal to have a substantial  portion of each
executive  officer's  compensation  contingent upon our performance,  as well as
upon  his  or  her  individual   performance.   The   Compensation   Committee's
compensation  philosophy for an executive officer emphasizes an overall analysis
of  the   executive's   performance   for   the   year,   projected   role   and
responsibilities,  required  impact on execution of our  strategy,  external pay
practices,  total  cash and total  direct  compensation  positioning,  and other
factors  the  Compensation   Committee  deems   appropriate.   The  Compensation
Committee's  philosophy  also considers  employee  retention,  vulnerability  to
recruitment  by other  companies and the difficulty  and costs  associated  with


                                       60
<PAGE>


replacing executive talent. Based on these objectives, compensation programs for
similarly situated companies and the philosophies of the Compensation Committee,
the  Compensation  Committee has determined that we should provide our executive
officers  compensation  packages  composed of the following  elements:  (i) base
salary,  which reflects  individual  performance and is designed primarily to be
competitive with salary levels at comparably sized companies; and (ii) long-term
stock-based incentive awards which strengthen the mutuality of interests between
executive officers and our stockholders.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

Section 16(a) of the Exchange Act requires our  directors and officers,  and the
persons who  beneficially own more than ten percent of our common stock, to file
reports of ownership and changes in ownership  with the  Securities and Exchange
Commission.  Copies of all filed  reports  are  required to be  furnished  to us
pursuant to Rule 16a-3  promulgated  under the Exchange Act. Based solely on the
reports received by us and on the  representations of the reporting persons,  we
believe that these persons have complied with all applicable filing requirements
during the fiscal year ended December 31, 2008.

ADDITIONAL CORPORATE GOVERNANCE POLICIES

Our  Board of  Directors  considered  additional  corporate  governance  issues,
structure, policies and principles.  Therefore, pursuant to a Board of Directors
meeting held on December 18, 2008, our Board of Directors  adopted the following
documents as additional governing corporate governance documents  (collectively,
the Corporate  Governance  Documents"):  (i) Morgan Creek Energy Corp. Corporate
Governance Principles;  (ii) Morgan Creek Energy Corp. Nominating and Governance
Committee  Charter and  Responsibilities;  (iii) Morgan Creek Energy Corp. Board
Committees  Policy;  (iv) Morgan Creek Energy Corp. Code of Business Conduct and
Ethics;  (v)  Morgan  Creek  Energy  Corp.  Code of  Conduct  for the  Board  of
Directors; (vi) Morgan Creek Energy Corp. Corporate Governance Guideline;  (vii)
Morgan Creek Energy  Corp.  Corporate  Governance  Policy'  (viii)  Morgan Creek
Energy  Corp.  Conflict  of Interest  Policy;  (ix) Morgan  Creek  Energy  Corp.
Whistleblower   Policy;   (x)  Morgan  Creek   Energy  Corp.   Board  Roles  and
Responsibilities.

The  Corporate  Governance  Documents  may be  viewed  in full  on our  website,
www.morgancreekcorp.com  under the  "Corporate  Governance"  tab on the Investor
Relations page.

ITEM 11. EXECUTIVE COMPENSATION

The  following  table sets forth the  compensation  paid to our Chief  Executive
Officer and those  executive  officers that earned in excess of $100,000  during
fiscal years ended December 31, 2008 and 2007 and 2006 (collectively, the "Named
Executive Officers"):


                                       61
<PAGE>


SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>

_______________________________________________________________________________________________________________________________
                                                                     NON-EQUITY    NON-QUALIFIED     ALL OTHER
                                                                   INCENTIVE PLAN     DEFERRED     COMPENSATION
                                                                    COMPENSATION    COMPENSATION
NAME AND                                       STOCK    OPTION                        EARNINGS
PRINCIPAL                  SALARY    BONUS    AWARDS    AWARDS                                                      TOTAL
POSITION          YEAR    ($) (1)     ($)       ($)     ($)(2)          ($)            ($)             ($)         ($)(2)(3)
_______________________________________________________________________________________________________________________________
<S>               <C>         <C>      <C>       <C>     <C>             <C>           <C>             <C>          <C>

Marcus            2006        -0-     -0-       -0-     $412,748         ---            ---             ---         $412,748
Johnson, prior
President and     2007    $71,250     -0-       -0-          -0-         ---            ---             ---           71,250
CEO               2008        -0-     -0-       -0-      $87,500         ---            ---         $71,250          158,750
_______________________________________________________________________________________________________________________________
David
Urquhart,
prior
President and
CEO               2008    $42,000     -0-       -0-     $175,000         ---            ---             ---         $217,000
_______________________________________________________________________________________________________________________________
Thomas            2007   $120,869     -0-       -0-          -0-         ---            ---            ----         $120,869
Markham, Chief
Geologist         2008   $111,693     -0-       -0-      $87,500         ---            ---            ----          199,193
_______________________________________________________________________________________________________________________________

<FN>
(1)  This  amount  represents  fees  accrued  and/or  paid  by us to  the  Named
     Executive  Officers  during the past year pursuant to  consulting  services
     provided in connection  with their  respective  position as Chief Executive
     Officer and Chief Geologist. During fiscal year ended December 31, 2008, we
     paid: (i) $158,750 to Marcus Johnson, our prior  President/Chief  Executive
     Officer  represented by the valuation of the grant of 250,000 Stock Options
     valued at  $87,500  and  settlement  of the salary  accrued  and owing from
     fiscal year ended  December  31, 2007 of $71,250 by the issuance of 356,250
     shares of common  stock;  and (ii)  $199,193 to Thomas  Markham,  our Chief
     Geologist,  represented  by the  valuation  of the grant of  250,000  Stock
     Options valued at $87,500 and salary of $111,693.  During fiscal year ended
     December  31, 2007,  we accrued:  (i) $71,250 to Marcus  Johnson,  our then
     President/Chief   Executive  Officer;   and  paid:  (ii)  $120,000  and  an
     additional  $869 in  accordance  with the 1.5%  royalty  interest to Thomas
     Markham,  our then Chief  Geologist.  During fiscal year ended December 31,
     2006, we also paid certain executive officers the following amounts,  which
     did not exceed $100,000 and, therefore, not required to be disclosed in the
     Summary  Compensation  Table:  (i)  $60,000  and an  additional  $4,795  in
     accordance  with the 1.5%  royalty  interest to Thomas  Markham,  our Chief
     Geologist;  and (ii) $35,000 to Grant Atkins,  our previous Chief Financial
     Officer.


                                       62
<PAGE>


(2)  This amount represents the fair value of these Stock Options at the date of
     grant which was estimated using the Black-Scholes option pricing model.

(3)  The amount paid to Marcus  Johnson  during  fiscal year ended  December 31,
     2008 includes the aggregate  amount of $71,250 in debt due and owing to Mr.
     Johnson by the issuance of 356,250 Pre Reverse Stock Split shares  (118,750
     post  reverse  stock  split) of our  restricted  common  stock at $0.20 per
     share.

</FN>
</TABLE>


STOCK OPTIONS/SAW GRANTS IN FISCAL YEAR ENDED DECEMBER 31, 2008

The following  table sets forth  information as at December 31, 2008 relating to
Stock Options that have been granted to the Named Executive Officers:

<TABLE>
<CAPTION>
___________________________________________________________________________________________________________________________________
                                          OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
___________________________________________________________________________________________________________________________________
                                                OPTION AWARDS                                    STOCK AWARDS
                                                                                                                        Equity
                                                                                                                        Incentive
                                                                                                           Equity       Plan
                                                                                                           Incentive    Awards:
                                                                                                           Plan         Market or
                                                                                                           Awards:      Payout
                                             Equity                                              Market    Number of    Value of
                                             Incentive Plan                                      Value of  Unearned     Unearned
                 Number of    Number of      Awards: Number                          Number of   Shares    Shares,      Shares,
                 Securities   Securities     of Securities                           Shares or   or Units  Units or     Units or
                 Underlying   Underlying     Underlying                              Units of    of Stock  Other        Other
                 Unexercised  Unexercised    Unexercised     Option                  Stock That  That      Rights That  Rights That
                 Options      Options        Unearned        Exercise  Option        Have Not    Have Not  Have Not     Have Not
                 Exercisable  Unexercisable  Options         Price     Expiration    Vested      Vested    Vested       Vested
Name                 (#)          (#)            (#)           ($)     Date            (#)        ($)        (#)          (#)
___________________________________________________________________________________________________________________________________
<S>               <C>             <C>           <C>           <C>      <C>            <C>         <C>        <C>           <C>

Marcus Johnson,   250,000         -0-           -0-                                   -0-         -0-        -0-           -0-
prior President/
CEO

Thomas Markham,   250,000         -0-           -0-                                   -0-         -0-        -0-           -0-
Chief Geologist

</TABLE>


                                       63
<PAGE>


The following table sets forth information  relating to compensation paid to our
directors during fiscal year ended December 31, 2008, 2007 and 2006:

<TABLE>
<CAPTION>

DIRECTOR COMPENSATION TABLE
_____________________________________________________________________________________________________________________________
                                                                             Change in
                                                                             Pension
                                                                             Value and
                      Fees                                Non-Equity         Nonqualified
                      Earned or                           Incentive          Deferred              All
                      Paid in     Stock      Option       Plan               Compensation         Other
                      Cash        Awards     Awards       Compensation       Earnings          Compensation       Total
Name                    ($)        ($)         ($)              ($)              ($)                ($)             ($)
_____________________________________________________________________________________________________________________________
<S>                   <C>           <C>      <C>                <C>              <C>               <C>         <C>

Marcus Johnson,
Chairman
  2006                                             (3)
  2007                    -0-       -0-      $412,748           -0-              -0-               -0-          $412,748
  2008                    -0-       -0-           -0-           -0-              -0-               -0-               -0-
                          -0- (1)   -0-       $87,500           -0-              -0-               -0-          $ 87,500


Thomas Markham
   2006               $64,794       -0-            (3)          -0-              -0-               -0-          $477,542
   2007                   -0-       -0-      $412,748           -0-              -0-               -0-               -0-
   2008                   -0- (2)   -0-           -0-           -0-              -0-               -0-          $ 87,500
                     $ 87,500

Erik Essinger                                      (3)
   2006               $97,118       -0-      $206,374           -0-              -0-               -0-          $303,492
   2007                   -0-       -0-           -0-           -0-              -0-               -0-               -0-
   2008                   -0- (4)   -0-           -0-           -0-              -0-               -0-               -0-

Steve Jewett
  2006                    -0-       -0-            (3)          -0-              -0-               -0-         $  41,275
  2007                    -0-       -0-       $41,275           -0-              -0-               -0-               -0-
  2008 (5)                -0-       -0-           -0-           -0-              -0-               -0-               -0-
                          -0-

D. Bruce Horton (3)
  2006                    -0-       -0-       $41,275           -0-              -0-               -0-          $ 41,275
  2007                    -0-       -0-           -0-           -0-              -0-               -0-               -0-
  2008                    -0-       -0-           -0-           -0-              -0-               -0-               -0-

David Urquhart                                     (3)
 2008                     -0- (6)   -0-      $175,000           -0-              -0-               -0-          $175,000

Peter Wilson                                       (3)
 2008                     -0- (7)   -0-           -0-           -0-              -0-               -0-               -0-

Angelo Viard              -0-       -0-           -0-           -0-              -0-               -0-               -0-


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<PAGE>


<FN>
(1)  Marcus Johnson  received $87,500 during fiscal year ended December 31, 2008
     in  accordance  with  settlement  of amounts due and owing  relating to his
     salary as executive  compensation  by way of issuance of 356,250  shares of
     common stock.

(2)  Thomas Markham  received the $111,693 during fiscal year ended December 31,
     2008 and $64,794  during  fiscal year ended  December 31, 2006 as executive
     compensation  in connection  with his role as our Chief  Geologist.  Thomas
     Markham  resigned  from the Board of  Directors  effective  as of April 30,
     2008.

(3)  This amount represents the fair value of these options at the date of grant
     which was estimated using the Black-Scholes option pricing model.

(4)  Erik Essiger received $97,118 during fiscal year ended December 31, 2006 as
     compensation  for  services  rendered  to us in  connection  with  business
     related  consulting  and  promotional  services  performed in Europe on our
     behalf.

(5)  Stephen  Jewett  resigned  from the  Board  of  Directors  effective  as of
     December 18, 2008.

(6)  David Urquhart  received $42,000 during fiscal year ended December 31, 2008
     as compensation  in connection  with his role as our prior  President/Chief
     Executive  Officer.  Mr.  Urquhart  resigned  from the  Board of  Directors
     effective as of August 8, 2008.

(7)  Peter Wilson  received $3,000 during fiscal year ended December 31, 2008 as
     executive  compensation in connection with his role as our  President/Chief
     Executive Officer  commencing  September 29, 2008. Mr. Wilson also became a
     member of our Board of Directors effective as of September 29, 2008.

</FN>
</TABLE>


EMPLOYMENT AND CONSULTING AGREEMENTS

MARKHAM CONSULTING SERVICES AGREEMENT

On  approximately  August 1, 2006, we entered into a  month-to-month  consulting
services  agreement  with Thomas  Markham,  our Chief  Geologist  (the  "Markham
Consulting  Services  Agreement").  In  accordance  with the  verbal  terms  and
provisions of the Markham Consulting Services  Agreement:  (i) Mr. Markham shall
provide to us all necessary  services and perform all duties associated with his
executive  position  as Chief  Geologist;  (ii) we shall  pay to Mr.  Markham  a
monthly fee of  $10,000;  and (iii) Mr.  Markham  shall  receive a 1.5%  royalty
interest in all properties Mr. Markham  introduces to us which are  subsequently
acquired by us.


                                       65
<PAGE>


During fiscal years ended December 31, 2008 and December 31, 2007, respectively,
we paid an aggregate of $120,000 and $120,000,  respectively,  to Mr. Markham in
accordance with the monthly fee and an additional $1,693 and $870, respectively,
in accordance with the amounts earned under the royalty interest.

During  fiscal year ended  December 31, 2006, we paid an aggregate of $60,000 to
Mr.  Markham in  accordance  with the  monthly fee and an  additional  $4,795 in
accordance with the amounts earned under the royalty interest

URQUHART EXECUTIVE SERVICE AGREEMENT

On  April  30,  2008,  we  entered  into an  executive  service  agreement  with
Westhampton Ltd., an Alberta corporation ("Westhampton") and David Urquhart (the
"Executive  Agreement").  In  accordance  with the terms and  provisions  of the
Executive  Agreement,  Mr.  Urquhart  through  Westhampton  provided  to us such
services as required  relating to his  executive  position as our  President and
Chief Executive Officer.  In accordance with the further terms and provisions of
the  Executive  Agreement,  we paid to  Westhampton a monthly fee of $10,000 and
granted to Mr. Urquhart 500,000 Stock Options exercisable at $1.00 per share for
a ten year period.  The  Executive  Agreement  may be terminated by either party
upon thirty days notice.

Effective on August 8, 2008, our Board of Directors  accepted the resignation of
David  Urquhart as our  President/Chief  Executive  Officer  and a director.  We
received notice of Mr. Urquhart's resignation  approximately September 19, 2008.
The resignation of Mr. Urquhart is not a result of any  disagreement  between us
or Mr. Urquhart  pertaining to matters  relating to our operations,  policies or
practices. Therefore, the Executive Agreement was terminated effective August 8,
2008.

ITEM 12.  SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL  OWNERS AND  MANAGEMENT AND
          RELATED STOCKHOLDER MATTERS

As of the date of this Annual  Report,  the  following  table sets forth certain
information with respect to the beneficial ownership of our common stock by each
stockholder known by us to be the beneficial owner of more than 5% of our common
stock and by each of our current directors and executive  officers.  Each person
has sole voting and investment power with respect to the shares of common stock,
except  as  otherwise  indicated.  Beneficial  ownership  consists  of a  direct
interest in the shares of common stock, except as otherwise indicated. As of the
date of this Annual Report,  there are 15,216,196  shares of common stock issued
and outstanding.


                                       66
<PAGE>


                                         AMOUNT AND
                                         NATURE OF          PERCENTAGE OF
NAME AND ADDRESS                         BENEFICIAL         BENEFICIAL
OF BENEFICIAL OWNER(1)                   OWNERSHIP(1)       OWNERSHIP

DIRECTORS AND OFFICERS:

Marcus Johnson                           1,658,966 (2)          10.90%
2020 Prospect Way
Bellingham, Washington 98229

D. Bruce Horton                             16,166 (3)            Nil
2443 Alder Street
Vancouver, British Columbia
Canada, V6H 4A4

Thomas Markham                           1,125,000 (4)           7.40%
8801 Christian Court
Plano, Texas 75025

Peter Wilson                                   -0-                -0-
69 Glenmore Drive
West Vancouver, British Columbia
Canada V7S 1A5

Erik Essiger                               166,666 (5)           1.09%
P.O. Box 37491 Dubai
United Arab Emeriates

William D. Thomas                           53,332 (6)           nil %
17314 State Highway Suite 306
Houston, Texas 77064

Angelo Viard                                 1,650                Nil
190 Cleaveland Road #3
Pleasant Hill, California 94523

All executive officers and directors     2,563,745 (7)          16.85%
as a group (7 persons)

*     Less than one percent.

(1)  Under Rule 13d-3, a beneficial owner of a security includes any person who,
     directly or indirectly, through any contract,  arrangement,  understanding,
     relationship,  or otherwise has or shares: (i) voting power, which includes
     the power to vote, or to direct the voting of shares;  and (ii)  investment
     power,  which  includes the power to dispose or direct the  disposition  of
     shares.  Certain shares may be deemed to be beneficially owned by more than
     one person (if, for example,  persons  share the power to vote or the power
     to  dispose  of  the  shares).  In  addition,   shares  are  deemed  to  be
     beneficially  owned by a person if the person has the right to acquire  the
     shares (for example, upon exercise of an option) within 60 days of the date
     as of which the information is provided. In computing the


                                       67
<PAGE>

     percentage  ownership of any person,  the amount of shares  outstanding is
     deemed to include the amount of shares  beneficially  owned by such person
     (and only such person) by reason of these acquisition rights. As a result,
     the percentage of outstanding  shares of any person as shown in this table
     does not necessarily reflect the person's actual ownership or voting power
     with respect to the number of shares of common stock actually  outstanding
     as of the  date of  this  Annual  Report.  As of the  date of this  Annual
     Report,  there are 41,976,589  shares issued and  outstanding.  Beneficial
     ownership amounts reflect the Reverse Stock Split.

(2)  This figure includes:  (i) 1,118,750  shares of common stock;  (ii) 166,666
     Stock Options to purchase 166,666 shares of our common stock at an exercise
     price of $3.30 per share  expiring on December 15, 2011;  and (iii) 250,000
     Stock  Options to purchase  250,000  shares of our common stock at exercise
     price of $1.00 per share expiring on April 30, 2018.

(3)  This figure  includes 16,666 Stock Options to purchase 16,666 shares of our
     common stock at an exercise  price of $3.30 per share  expiring on December
     15, 2011.

(4)  This figure  includes:  (i) 208,333  shares of common  stock;  (ii) 166,666
     Stock Options to purchase 500,000 shares of our common stock at an exercise
     price of $1.10 per share  expiring on December 15, 2011;  and (iii) 250,000
     Stock Options to purchase 250,000 shares of our common stock at an exercise
     price of $1.00 per share expiring on April 30, 2018.

(5)  This figure  includes:  (i) 83,333 shares of common stock;  and (ii) 83,333
     Stock Options to purchase  83,333 shares of our common stock at an exercise
     price of $1.10 per share expiring on December 15, 2011.

(6)  This figure  includes:  (i) 26,666 shares of common stock;  and (ii) 26,666
     warrants to purchase 26,666 shares of our common stock at an exercise price
     of $1.50 per share expiring on June 27, 2009.

(7)  This figure includes:  (i) 1,437,082  shares of common stock;  (ii) 599,997
     Stock Options to purchase  599,997  shares of our common stock at $3.30 per
     share  expiring  on December  15,  2011;  (iii)  500,000  Stock  Options to
     purchase 500,000 shares of our restricted common stock at an exercise price
     of $1.00 per share expiring on April 30, 2018; and (iv) 26,666  warrants to
     purchase  26,666  shares of our common stock at an exercise  price of $1.50
     per share expiring on June 27, 2009.

CHANGES IN CONTROL

We are unaware of any contract, or other arrangement or provision, the operation
of which may at a subsequent date result in a change of control of our company.

ITEM  13.  CERTAIN   RELATIONSHIPS   AND  RELATED   TRANSACTIONS   AND  DIRECTOR
           INDEPENDENCE

Except for the transactions described below, none of our directors,  officers or
principal  stockholders,  nor any associate or affiliate of the foregoing,  have
any  interest,  direct  or  indirect,  in any  transaction  or in  any  proposed
transactions,  which has materially affected or will materially affect us during
fiscal year ended December 31, 2008.


                                       68
<PAGE>


EMPLOYMENT AND CONSULTING AGREEMENTS

MARKHAM CONSULTING SERVICES AGREEMENT

On  approximately  August 1, 2006, we entered into a  month-to-month  consulting
services  agreement  with Thomas  Markham,  our Chief  Geologist  (the  "Markham
Consulting  Services  Agreement").  In  accordance  with the  verbal  terms  and
provisions of the Markham Consulting Services  Agreement:  (i) Mr. Markham shall
provide to us all necessary  services and perform all duties associated with his
executive  position  as Chief  Geologist;  (ii) we shall  pay to Mr.  Markham  a
monthly fee of  $10,000;  and (iii) Mr.  Markham  shall  receive a 1.5%  royalty
interest in all properties Mr. Markham  introduces to us which are  subsequently
acquired by us.

ITEM 14.PRINCIPAL ACCOUNTING FEES AND SERVICES

During fiscal year ended December 31, 2008, we incurred approximately $43,000 in
fees to our principal independent  accountant for professional services rendered
in connection  with the audit of our financial  statements for fiscal year ended
December  31,  2008  and for the  review  of our  financial  statements  for the
quarters ended March 31, 2008, June 30, 2008 and September 30, 2008.

During fiscal year ended December 31, 2007, we incurred approximately $42,142 in
fees  to  our  principal  independent  accountants  ($33,142  to  Dale  Matheson
Carr-Hilton Labonte LLP and $9,000 to De Joya Griffth) for professional services
rendered in  connection  with the audit of our financial  statements  for fiscal
year ended December 31, 2007 and for the review of our financial  statements for
the quarters ended March 31, 2007, June 30, 2007 and September 30, 2007.

During fiscal year ended  December 31, 2008, we did not incur any other fees for
professional services rendered by our principal  independent  accountant for all
other non-audit  services which may include,  but is not limited to, tax-related
services, actuarial services or valuation services.


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<PAGE>


ITEM 15. EXHIBITS AND FINANCIAL SCHEDULES

The following exhibits are filed as part of this Annual Report.

EXHIBIT
  NO.       DOCUMENT

3.1         Articles of Incorporation (1)

3.2         Bylaws (1)

4.1         Chapman Oil and Gas Lease (2)

4.2         Hurley Oil and Gas Lease (2)

4.3         Lease Assignment between Geneva Energy Corp. And Morgan Energy Corp.
            dated December 17, 2004 (2)

4.4         Fletcher Lewis Letter (3)

4.5         Fletcher Lewis Consent dated December 31, 2004 (3)

4.6         American News Publishing Letter dated January 13, 2006 (3)

10.1        Asset Purchase Agreement between Morgan Creek Energy Corp. and
            Geneva Energy Corp. Dated December 15, 2004 (1)

10.1        Charter of Audit Committee (1)

10.2        Executive Services Agreement between Morgan Creek Energy Corp,
            Westhampton Ltd., and David Urquhart dated April 30, 2008. (5)

10.3        Option Agreement between Morgan Creek Energy Corp. nd Westrock Land
            Corp dated October 31, 2008.  (6)

14          Code of Business Conduct (1)

16          Letter of Dale Matheson Carr-Hilton LaBonte LLP Chartered
            Accountants (4)

31.1        Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)
            or 15d-14(a) of The Securities Exchange Act.

31.2        Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)
            or 15d-14(a) of The Securities Exchange Act.

32.1        Certification of Chief Executive Officer and Chief Financial Officer
            under Section 1350 as Adopted Pursuant to Section 906 of the
            Sarbanes-Oxley Act.

(1)  Incorporated by reference from Form SB-2 filed with the Commission on April
     11, 2005.

(2)  Incorporated  by reference  from Form SB-2/A filed with the  Commission  on
     June 14, 2005.

(3)  Incorporated  by reference  from Form SB-2/A filed with the  Commission  on
     January 13, 2006.

(4)  Incorporated  by reference  from Form Current  Report on 8-K filed with the
     Commission on August 3, 2008.

(5)  Incorporated  by reference  from Form Current  Report on 8-K filed with the
     Commission on April 5, 2008.

(6)  Incorporated  by reference  from Form Current  Report on 8-K filed with the
     Commission on November 5, 2008.


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<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.

                                   MORGAN CREEK ENERGY CORP.

Dated: April 13, 2009

                                   By: /s/ PETER WILSON
                                       _________________________________________
                                           Peter Wilson
                                           President/Chief Executive Officer



Dated: April 13, 2009

                                   By: /s/ WILLIAM D. THOMAS
                                       _________________________________________
                                           William D. Thomas
                                           Treasurer/Chief Financial Officer





















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