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UNITED STATES**SECURITIES AND EXCHANGE COMMISSION**
  Washington, D.C. 20549

FORM 10-KSB

(Mark One)

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

For the fiscal year ended February 28, 2007

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

For the transition period from [   ] to [ 
 ]

Commission file number 333-125695

FOX PETROLEUM INC.(Name
of small business issuer in its charter)

|Nevada                                           | N/A                                 
|------------------------------------------------ | ------------------------------------
|(State or other jurisdiction of incorporation or | (I.R.S. Employer Identification No.)
|organization)                                    |                                     
|                                                 |                                     
|64 Knightsbridge, London, England                | SW1X 7JF                            
|(Address of principal executive offices)         | (Zip Code)                          

Issuer's telephone number 44-207-590-9630

Securities registered pursuant to Section 12(b) of the Act:

|Title of each class | Name of each exchange on which registered
|------------------- | -----------------------------------------
|None                | None                                     

Securities registered pursuant to Section 12(g) of the Act:

Common Stock(Title of class)

Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12 months
(or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past
90 days. Yes [X] No [   ]

Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B 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-KSB or any amendment to this Form 10-KSB. [   ]

State issuer's revenues for its most recent fiscal year. Nil

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

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 prices of such
common equity, as of a specified date within 60 days. (See definition of
affiliate in Rule 12b-2 of the Exchange Act.)

Note: If determining whether a person is an affiliate will
involve an unreasonable effort and expense, the issuer may calculate the
aggregate market value of the common equity held by non-affiliates on the basis
of reasonable assumptions, if the assumptions are stated.

36,186,792 common shares @ $1.27(1)= $45,957,225.84(1)Average of bid and ask closing prices on
June 12, 2007.

(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS)

Check whether the issuer has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange Act 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 equity stock, as of the latest practicable date.

51,186,792 common shares issued and outstanding as of June
  12, 2007

DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference,
briefly describe them and identify the part of the Form 10-KSB (e.g., Part
I, Part II, etc.) into which the document is incorporated: (1) any annual report
to security holders; (2) any proxy or information statement; and (3) any
prospectus filed pursuant to Rule 424(b) or (c) of the Securities Act of 1933
("Securities Act"). The listed documents should be clearly described for
identification purposes (e.g., annual report to security holders for fiscal
year ended December 24, 1990).

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

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PART I

Item
1.           Description of
Business.

Note Regarding Forward Looking Statements.

This annual report contains forward-looking statements as that
term is defined in section 27A of the United States Securities Act of 1933, as
amended, and section 21E of the United States Securities Exchange Act of 1934,
as amended. These statements relate to future events or our future financial
performance. In some cases, you can identify forward-looking statements by
terminology such as may, should, intend, expect, plan, anticipate,
believe, estimate, project, predict, potential, or continue or the
negative of these terms or other comparable terminology. These statements speak
only as of the date of this annual report. In particular, this annual report
contains forward-looking statements pertaining to the following:

- the quantity of potential natural gas and petroleum reserves;
- potential natural gas and crude oil production levels;
- capital expenditure programs;
- projections of market prices and costs;
- supply and demand for natural gas and crude oil;
- expectations regarding our ability to raise capital and to continually add
  to reserves through acquisitions and development; and
- treatment under governmental regulatory regimes and tax laws.

These statements are only predictions and involve known and
unknown risks, uncertainties and other factors, including the risks, such as

- our ability to establish or find reserves;
- volatility in market prices for natural gas and crude oil;
- liabilities inherent in natural gas and crude oil operations;
- uncertainties associated with estimating natural gas reserves and crude
  oil;
- competition for, among other things, capital, acquisitions of reserves,
  undeveloped lands and skilled personnel;
- political instability or changes of laws in the countries in which we
  operate and risks of terrorist attacks;
- incorrect assessments of the value of acquisitions;
- geological, technical, drilling and processing problems,
- the uncertainty inherent n the litigation process, including the
  possibility of newly discovered evidence on the acceptance of novel legal
  theories, and the difficulties in predicting the decisions of judges and
  juries; and

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- other factors discussed under the section entitled Risk Factors
  commencing on page 6 of this annual report.

These risks may cause our or our industry's actual results,
levels of activity or performance to be materially different from any future
results, levels of activity or performance expressed or implied by these
forward-looking statements.

Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity or performance. Except as required by applicable law,
including the securities laws of the United States, we do not intend to update
any of the forward-looking statements to conform these statements to actual
results.

As used in this annual report and unless otherwise indicated,
the terms we, us and our refer to Fox Petroleum Inc. and/or our wholly
owned subsidiaries, Fox Petroleum (Alaska) Inc. and Fox Energy Exploration
Limited, as the case may be. Unless otherwise specified, all dollar amounts are
expressed in United States dollars and all references to common shares refer
to the common shares in our capital stock.

General Overview

We were incorporated in the state of Nevada on November 4, 2004
under the name Nova Resources Inc. At inception, we were an exploration stage
company engaged in the exploration of our mineral property.

On January 11, 2007, we effected a 6 for 1 forward stock split
of our authorized, issued and outstanding common stock. As a result, our
authorized capital increased from 75,000,000 shares of common stock with a par
value of $0.001 to 450,000,000 shares of common stock with a par value of
$0.001. Our issued and outstanding share capital increased from 8,200,000 shares
of common stock to 49,200,000 shares of common stock.

Because we have not discovered any economically viable mineral
deposit on our mineral property, we decided to change the direction of our
exploration activities to oil and gas sectors when we came across an opportunity
to acquire oil and gas leases from Richard Bullock.

On February 5, 2007, we changed our name to Fox Petroleum
Inc. to better reflect the new direction of our business. The name change was
accomplished through a merger with our wholly owned subsidiary, Fox Petroleum
Inc., that was incorporated for the sole purpose of changing our name, with our
company carrying on as the survival corporation under the new name Fox
Petroleum Inc..

On April 17, 2007, we incorporated another wholly owned
subsidiary, Fox Petroleum (Alaska) Inc., in the State of Alaska in order to
carry out our Alaska operations after completing the Lease Purchase and Sale
Agreement with Fox Petroleum LLC. In order to hold Alaska oil and gas leases, we
either had to be registered in Alaska or operate through an Alaska
subsidiary.

On May 17, 2007, we incorporated another wholly owned
subsidiary, Fox Energy Exploration Limited, in England and Wales to hold assets
in the United Kingdom under the Farm-In Agreement with Granby Enterprises
Limited and Atlantic Petroleum UK Limited.

On May 29, 2007, we entered into the Lease Purchase and Sale
Agreement with Fox Petroleum LLC, a Nevada company to acquire a combined 100%
working interests in 12 state-issued oil and gas leases in Alaskas North Slope
hydrocarbon province subject to a royalty of 16.66667% to the State of Alaska
and a private royalty equal to 5%. Richard Bullock is a 100% owner of Fox
Petroleum LLC. Pursuant to the terms of the Lease Purchase and Sale Agreement,
Fox Petroleum LLC agreed to cause the registered owners of 12 oil and gas leases
to transfer the legal ownership of those leases to us. In consideration for the
oil and gas leases, we agreed to issue 20,000,000 restricted common shares of
our company to Fox Petroleum LLC or such other persons as Fox Petroleum LLC may
direct in writing prior to the closing. Richard Bullock agreed to be our
Chairman after the signing of the Lease Purchase and Sale Agreement. We expect
to complete the transactions in June 2007. Once we acquire the interests in oil
and gas leases in North Slope, Alaska, we will assign our interests to our
wholly owned subsidiary, Fox Petroleum (Alsaka) Inc., in order to carry out our
Alaska operations.

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On June 8, 2007, through our wholly owned UK subsidiary, Fox
Energy Exploration Limited, we entered into the Farm-In Agreement with Granby
Enterprises Limited and Atlantic Petroleum UK Limited. Pursuant to the terms of
the Farm-In Agreement, Granby Enterprises Limited and Atlantic Petroleum UK
Limited agreed to farm-out and assign to us and we agreed to farm-in and acquire
from them a total of 33.33% interests in two UK Petroleum Production Licenses.
These licenses cover three blocks located in the UK North Sea. In consideration
for the interests in the licenses, we agreed to fund 100% of the high resolution
2D seismic survey and reprocessing to be conducted in the third quarter of 2007
and our 33.33% share of the license budget costs from June 1, 2007. In addition
to the acquisition of the 33.33% interests in the licenses, we will be granted
an exclusive, non transferable option to acquire an additional 26.67% interest
in the licenses. The option will be granted and effective upon the completion of
the transfer of above 33.33% interests in the licenses to us and will continue
to be valid and exercisable by us until 28 days after our receiving the
processed seismic data from the high resolution 2D seismic survey and
reprocessing. To acquire the additional 26.67% interest in the licenses, we will
have to pay 46.67% of the cost of an exploration well in addition to our
obligation to fund 33.33% of the cost of the exploration well under the Farm-In
Agreement.

Business Subsequent to the Closing of the Lease Purchase and
  Sale Agreement

We are an exploration stage company engaged in the acquisition,
exploration and, if warranted, development of prospective oil and gas
properties. Following the completion of the transactions contemplated under the
Lease Purchase and Sale Agreement, we will have acquired 12 oil and gas leases
in North Slope, Alaska. We intend to conduct an aggressive exploration and
appraisal program on the leases over the next two years. Please refer to the
information under the heading Description of Property for a detailed
description of our property interests.

Also upon the completion of the transactions contemplated under
the Farm-In Agreement, we will fund 100% of the high resolution 2D seismic
survey and reprocessing over the UK North Sea licenses and we may fund the
drilling of a well on the licenses after receiving the processed seismic data
from the high resolution 2D seismic survey and reprocessing. Please refer to the
information under the heading Description of Property for a detailed
description of our property interests.

In addition to the exploration and development of those
property interests that we are acquiring through the Lease Purchase and Sale
Agreement and the Farm-In Agreement, we are also actively seeking opportunities
in other global regions with a particular focus and interest in the emerging
market sector. We believe that there are many small field developments available
which are in the already proven/near production stage where our strategic
development skills and the experience of our management team would give us an
advantage compared to comparably sized oil companies. Our search has highlighted
several prospects in Russia and the Commonwealth of Independent States as well
as the Caspian region as a whole which are not the subject of a confidentiality
agreement with the principals who hold the rights/licenses to the various
fields. We would also consider entering into a joint venture to develop a small
oil field in this area if the economics and political risk meet our criteria.

Since we are an exploration stage company, there is no
assurance that a commercially viable oil and gas reserve exists on any of our
future properties, and a great deal of further exploration will be required
before a final evaluation as to the economic and legal feasibility for our
future exploration is determined. To date, we do not know if an economically
viable oil and gas reserve exist on any of our properties to be acquired, and
there is no assurance that we will discover one.

Our plan of operation is to conduct exploration work on each of
our future properties in order to ascertain whether any of them possesses
commercially exploitable quantities of oil and gas reserves. There can be no
assurance that such oil and gas reserves exist on any of our future
properties.

Even if we complete our proposed exploration programs on our
future properties and we are successful in identifying an oil and gas reserve,
we will have to spend substantial funds on further drilling and engineering
studies before we will know whether we have a commercially viable oil and gas
reserve.

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Competition

We are an exploration stage company engaged in the acquisition
of prospective oil and gas properties. We compete with other companies for both
the acquisition of prospective properties and the financing necessary to develop
such properties.

We conduct our business in an environment that is highly
competitive and unpredictable. In seeking out prospective properties, we have
encountered intense competition in all aspects of our business as we compete
directly with other development stage companies as well as established
international companies. Many of our competitors are national or international
companies with far greater resources, capital and access to information than us.
Accordingly, these competitors may be able to spend greater amounts on the
acquisition of prospective properties and on the exploration and development of
such properties. In addition, they may be able to afford greater geological
expertise in the exploration and exploitation of and oil and gas properties.
This competition could result in our competitors having resource properties of
greater quality and attracting prospective investors to finance the development
of such properties on more favorable terms. As a result of this competition, we
may become involved in an acquisition with more risk or obtain financing on less
favorable terms.

Government Regulation

The exploration and development of oil and gas properties is
subject to various United States federal, state and local governmental
regulations. Our company may from time to time, be required to obtain licenses
and permits from various governmental authorities in regards to the exploration
of our property interests.

If our company proceeds with the development of our future
properties, we anticipate that we will be subject to increased governmental
regulation. Matters subject to regulation include discharge permits for drilling
operations, drilling and abandonment bonds, reports concerning operations, the
spacing of wells, and pooling of properties and taxation. 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. The production, handling,
storage, transportation and disposal of oil and gas, by-products thereof, and
other substances and materials produced or used in connection with oil and gas
operations are also subject to regulation under federal, state, provincial and
local laws and regulations relating primarily to the protection of human health
and the environment. As we have not proceeded to the development of our future
properties, we have not incurred any expenditures related to complying with such
laws, or for remediation of existing environmental contamination. The
requirements imposed by such laws and regulations are frequently changed and
subject to interpretation, and we are unable to predict the ultimate cost of
compliance with these requirements or their effect on our operations.

Employees

Our company is currently operated by Richard Joseph Moore as
our President and Chief Executive Officer and Alexander James Craven as Vice
President, Finance. On June 8, 2007, Mr. Moore became our President, Chief
Executive Officer and Director and Mr. Craven resigned his position of
President, Chief Executive Officer and Chairman of the Board of Directors and
became Vice President, Finance and retained the positions of Secretary,
Treasurer and Director. On June 8, 2007, Richard Bullock became our Chairman and
Director and will provide consulting services to us for a monthly fee. We intend
to periodically hire independent contractors to execute our exploration and
development activities. Our company may hire additional employees when
circumstances warrant. At present, however, our company does not anticipate
hiring additional employees in the near future.

RISK FACTORS

In addition to other information in this annual report, the
following risk factors should be carefully considered in evaluating our business
because such factors may have a significant impact on our business, operating
results, liquidity and financial condition. As a result of the risk factors set
forth below, actual results could differ materially from those projected in any
forward-looking statements. Additional risks and uncertainties not presently
known to us, or that we currently consider to be immaterial, may also impact our
business, operating results, liquidity and

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financial condition. If any such risks occur, our business,
operating results, liquidity and financial condition could be materially
affected in an adverse manner. Under such circumstances, the trading price of
our securities could decline, and you may lose all or part of your investment.

RISKS RELATING TO OUR BUSINESS AND THE OIL AND GAS INDUSTRY

We have had a history of losses and no revenue to date,
which trend may continue and may negatively impact our ability to achieve our
business objectives.

We have experienced net losses since inception, and expect to
continue to incur substantial losses for the foreseeable future. To date, we
have not generated any revenues from our operations. We will not be able to
generate significant revenues in the future and our management expects operating
expenses to increase substantially over the next 12 months following the
commencement of oil and gas exploration activities. As a result, our management
expects the business to continue to experience negative cash flow for the
foreseeable future and cannot predict when, if ever, our business might become
profitable. In addition to our financing from EuroEnergy Growth Capital S.A., we
may need to raise additional funds, and such funds may not be available on
commercially acceptable terms, if at all. If we are unable to raise funds on
acceptable terms, we may not be able to execute our business plan, take
advantage of future opportunities, or respond to competitive pressures or
unanticipated requirements. This may seriously harm our business, financial
condition and results of operations.

We are an exploration stage company with a limited operating
history, which may hinder our ability to successfully meet our objectives.

We are an exploration stage company with only a limited
operating history upon which to base an evaluation of our current business and
future prospects. We have only begun engaging in the oil and gas exploration and
development business since February 2007 and we do not have an established
history of locating and developing properties that have oil and gas reserves. As
a result, the revenue and income potential of our business is unproven. In
addition, because of our limited operating history, we have limited insight into
trends that may emerge and affect our business. Errors may be made in predicting
and reacting to relevant business trends and we will be subject to the risks,
uncertainties and difficulties frequently encountered by early-stage companies
in evolving markets. We may not be able to successfully address any or all of
these risks and uncertainties. Failure to adequately do so could cause our
business, results of operations and financial condition to suffer.

Market conditions or operation impediments may hinder our
access to oil and gas markets or delay our potential production.

The marketability of potential production from our properties
  depends in part upon the availability, proximity and capacity of pipelines,
  natural gas gathering systems and processing facilities. This dependence is
  heightened where this infrastructure is less developed. Therefore, even if drilling
  results are positive in certain areas of our oil and gas properties, a new gathering
  system may need to be built to handle the potential volume of oil and gas produced.
  We might be required to shut in wells, at least temporarily, for lack of a market
  or because of the inadequacy or unavailability of transportation facilities.
  If that were to occur, we would be unable to realize revenue from those wells
  until arrangements were made to deliver production to market.

Even if we are able to establish any oil or gas reserves on our
properties, our ability to produce and market oil and gas is affected and also
may be harmed by:

- inadequate pipeline transmission facilities or carrying capacity;
- government regulation of natural gas and oil production;
- government transportation, tax and energy policies;
- changes in supply and demand; and

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- general economic conditions.

Our future performance is dependent upon our ability to
identify, acquire and develop oil and gas properties, the failure of which could
result in under use of capital and losses.

Our future performance depends upon our ability to identify,
acquire and develop oil and gas reserves that are economically recoverable. Our
success will depend upon our ability to acquire working and revenue interests in
properties upon which oil and gas reserves are ultimately discovered in
commercial quantities, and our ability to develop prospects that contain proven
oil and gas reserves to the point of production. Without successful acquisition
and exploration activities, we will not be able to develop oil and gas reserves
or generate revenues. We cannot provide you with any assurance that we will be
able to identify and acquire oil and gas reserves on acceptable terms, or that
oil and gas deposits will be discovered in sufficient quantities to enable us to
recover our exploration and development costs or sustain our business.

The successful acquisition and development of oil and gas
properties requires an assessment of recoverable reserves, future oil and gas
prices and operating costs, potential environmental and other liabilities, and
other factors. Such assessments are necessarily inexact and their accuracy
inherently uncertain. In addition, no assurance can be given that our
exploitation and development activities will result in the discovery of any
reserves.

We have a very small management team and the loss of any
member of our team may prevent us from implementing our business plan in a
timely manner.

We currently have one executive officer and a limited number of
additional consultants upon whom our success largely depends. We do not maintain
key person life insurance policies on our executive officer or consultants, the
loss of which could seriously harm our business, financial condition and results
of operations. In such an event, we may not be able to recruit personnel to
replace our executive officer or consultants in a timely manner, or at all, on
acceptable terms.

If we are unable to successfully recruit qualified
managerial and field personnel having experience in oil and gas exploration, we
may not be able to continue our operations.

In order to successfully implement and manage our business
plan, we will depend upon, among other things, successfully recruiting qualified
managerial and field personnel having experience in the oil and gas exploration
business. Competition for qualified individuals is intense. We may not be able
to find, attract and retain qualified personnel on acceptable terms. If we are
unable to find, attract and retain qualified personnel with technical expertise,
our business operations could suffer.

Future growth could strain our personnel and infrastructure
resources, and if we are unable to implement appropriate controls and procedures
to manage our growth, we may not be able to successfully implement our business
plan.

We expect to experience rapid growth in our operations, which
will place a significant strain on our management, administrative, operational
and financial infrastructure. Our future success will depend in part upon the
ability of our executive officers to manage growth effectively. This may require
us to hire and train additional personnel to manage our expanding operations. In
addition, we must continue to improve our operational, financial and management
controls and our reporting systems and procedures. If we fail to successfully
manage our growth, we may be unable to execute upon our business plan.

We will have substantial capital requirements that, if not
met, may hinder our growth and operations.

Our future growth depends on our ability to make large capital
expenditures for the exploration and development of our natural gas and oil
properties. Future cash flows and the availability of financing will be subject
to a number of variables, such as:

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- the success of our planned projects in Alaskas North Slope and UK North
  Sea;
- success in locating and producing reserves; and
- prices of natural gas and oil.

Financing might not be available in the future, or we might not
be able to obtain necessary financing on acceptable terms, if at all. If
sufficient capital resources are not available, we might be forced to curtail
our drilling and other activities or be forced to sell some assets on an
untimely or unfavorable basis, which would have an adverse affect on our
business, financial condition and results of operations.

If we obtain additional financing, our existing stockholders
may suffer substantial dilution or we may not have sufficient funds to pay the
interest on our current or future debt.

Additional financing sources will be required in the future to
fund developmental and exploratory drilling. Issuing equity securities to
satisfy our financing requirements could cause substantial dilution to our
existing stockholders.

Additional debt financing could lead to:

- a substantial portion of operating cash flow being dedicated to the payment
  of principal and interest;
- being more vulnerable to competitive pressures and economic downturns; and
- restrictions on our operations.

If we incur indebtedness, our ability to meet our debt
obligations and reduce our level of indebtedness depends on future performance.
General economic conditions, oil and gas prices and financial, business and
other factors affect our operations and future performance. Many of these
factors are beyond our control. We cannot assure you that we will be able to
generate sufficient cash flow to pay the interest on our current or future debt
or that future working capital, borrowings or equity financing will be available
to pay or refinance such debt. Factors that will affect our ability to raise
cash through an offering of our capital stock or a refinancing of our debt
include financial market conditions, the value of our assets and performance at
the time we need capital. We cannot assure you that we will have sufficient
funds to make such payments. If we do not have sufficient funds and are
otherwise unable to negotiate renewals of our borrowings or arrange additional
financing, we might have to sell significant assets. Any such sale could have a
material adverse effect on our business and financial results.

We may not be able to determine reserve potential or
identify liabilities associated with our future properties in Alaska and UK
North Sea and/or other future properties. We may also not be able to obtain
protection from vendors against possible liabilities, which could cause us to
incur losses.

Although we have reviewed and evaluated our future properties
in Alaska and UK North Sea in a manner consistent with industry practices, such
review and evaluation might not necessarily reveal all existing or potential
problems. This is also true for any future acquisitions made by us. Inspections
may not always be performed on every well, and environmental problems, such as
groundwater contamination, are not necessarily observable even when an
inspection is undertaken. Even when problems are identified, a vendor may be
unwilling or unable to provide effective contractual protection against all or
part of those problems, and we may assume environmental and other risks and
liabilities in connection with the acquired properties.

If we or our operators fail to maintain adequate insurance,
our business could be materially and adversely affected.

Our operations are subject to risks inherent in the oil and gas
industry, such as blowouts, cratering, explosions, uncontrollable flows of oil,
gas or well fluids, fires, pollution, earthquakes and other environmental risks.
These risks could result in substantial losses due to injury and loss of life,
severe damage to and destruction of property

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10

and equipment, pollution and other environmental damage, and
suspension of operations. We could be liable for environmental damages caused by
previous property owners. As a result, substantial liabilities to third parties
or governmental entities may be incurred, the payment of which could have a
material adverse effect on our financial condition and results of operations.

Any prospective drilling contractor or operator which we hire
will be required to maintain insurance of various types to cover our operations
with policy limits and retention liability customary in the industry. Therefore,
we do not plan to acquire our own insurance coverage for such prospects. The
occurrence of a significant adverse event on such prospects that is not fully
covered by insurance could result in the loss of all or part of our investment
in a particular prospect which could have a material adverse effect on our
financial condition and results of operations.

The oil and gas industry is highly competitive, and we may
not have sufficient resources to compete effectively.

The oil and gas industry is highly competitive. We compete with
oil and natural gas companies and other individual producers and operators, many
of which have longer operating histories and substantially greater financial and
other resources than we do, as well as companies in other industries supplying
energy, fuel and other needs to consumers. Our larger competitors, by reason of
their size and relative financial strength, can more easily access capital
markets than we can and may enjoy a competitive advantage in the recruitment of
qualified personnel. They may be able to absorb the burden of any changes in
laws and regulation in the jurisdictions in which we do business and handle
longer periods of reduced prices for oil and gas more easily than we can. Our
competitors may be able to pay more for oil and gas leases and properties and
may be able to define, evaluate, bid for and purchase a greater number of leases
and properties than we can. Further, these companies may enjoy technological
advantages and may be able to implement new technologies more rapidly than we
can. Our ability to acquire additional properties in the future will depend upon
our ability to conduct efficient operations, evaluate and select suitable
properties, implement advanced technologies and consummate transactions in a
highly competitive environment.

Exploration and production activities are subject to certain
environmental regulations which may prevent or delay the commencement or
continuance of 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. 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 any such changes may have material adverse effects on our
activities. We are unable to predict the ultimate cost of compliance with such
laws and regulations. Generally, environmental requirements do not appear to
affect us any differently or to any greater or lesser extent than other
companies in the industry. To date we have not been required to spend any
material amount on compliance with environmental regulations. However, we may be
required to do so in future and this may affect our ability to expand or
maintain our operations.

Any change to government regulation/administrative practices
may have a negative impact on our ability to operate and our profitability.

The business of oil and gas exploration and development is
subject to substantial regulation under federal, state, and local laws relating
to the exploration for, and the development, upgrading, marketing, pricing,
taxation, and transportation of oil and gas and related products and other
matters. Amendments to current laws and regulations governing operations and
activities of oil and gas exploration and development operations could have a
material adverse impact on our business. In addition, there can be no assurance
that income tax laws, royalty regulations and government incentive programs
related to our oil and gas properties and the oil and gas industry generally,
will not be changed in a manner which may adversely affect our progress and
cause delays, inability to explore and develop or abandonment of these
interests.

Permits, leases, licenses, and approvals are required from a
variety of regulatory authorities at various stages of exploration and
development. There can be no assurance that the various government permits,
leases, licenses and

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11

approvals sought will be granted in respect of our activities
or, if granted, will not be cancelled or will be renewed upon expiry. There is
no assurance that such permits, leases, licenses, and approvals will not contain
terms and provisions which may adversely affect our exploration and development
activities.

Shortages of rigs, equipment, supplies and personnel could
delay or otherwise adversely affect our cost of operations or our ability to
operate according to our business plans.

If drilling activity increases in North Slope, Alaska or UK
North Sea, a shortage of drilling and completion rigs, field equipment and
qualified personnel could develop. These costs have recently increased sharply
and could continue to do so. The demand for and wage rates of qualified drilling
rig crews generally rise in response to the increasing number of active rigs in
service and could increase sharply in the event of a shortage. Shortages of
drilling and completion rigs, field equipment or qualified personnel could
delay, restrict or curtail our exploration and development operations, which
could in turn harm our operating results.

To the extent that we establish oil and gas reserves, we
will be required to replace, maintain or expand our oil and gas reserves in
order to prevent our reserves and production from declining, which would
adversely affect cash flows and income.

In general, production from oil and gas properties declines
over time as reserves are depleted, with the rate of decline depending on
reservoir characteristics. If we establish reserves, of which there is no
assurance, and we are not successful in our subsequent exploration and
development activities or in subsequently acquiring properties containing proved
reserves, our proved reserves will decline as reserves are produced. Our future
oil and gas production is highly dependent upon our ability to economically
find, develop or acquire reserves in commercial quantities.

To the extent cash flow from operations is reduced, either by
  a decrease in prevailing prices for oil and gas or an increase in finding and
  development costs, and external sources of capital become limited or unavailable,
  our ability to make the necessary capital investment to maintain or expand our
  asset base of oil and gas reserves would be impaired. Even with sufficient available
  capital, our future exploration and development activities may not result in
  additional proved reserves, and we might not be able to drill productive wells
  at acceptable costs.

The geographic concentration of all of our properties in
North Slope, Alaska and UK North Sea subjects us to an increased risk of loss of
revenue or curtailment of production from factors affecting those areas.

The geographic concentration of all of our future leasehold
interests in North Slope, Alaska and future farm-in interests in UK North Sea
means that our properties could be affected by the same event should the regions
experience:

- severe weather;
- delays or decreases in production, the availability of equipment,
  facilities or services;
- delays or decreases in the availability of capacity to transport, gather or
  process production; or
- changes in the regulatory environment.

The oil and gas exploration and production industry
historically is a cyclical industry and market fluctuations in the prices of oil
and gas could adversely affect our business.

Prices for oil and gas tend to fluctuate significantly in
response to factors beyond our control. These factors include:

- weather conditions in the United States and wherever our property
  interests are located;

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12

- economic conditions, including demand for petroleum-based products, in the
  United States and the rest of the world;
- actions by OPEC, the Organization of Petroleum Exporting Countries;
- political instability in the Middle East and other major oil and gas
  producing regions;
- governmental regulations, both domestic and foreign;
- domestic and foreign tax policy;
- the pace adopted by foreign governments for the exploration, development,
  and production of their national reserves;
- the price of foreign imports of oil and gas;
- the cost of exploring for, producing and delivering oil and gas;
- the discovery rate of new oil and gas reserves;
- the rate of decline of existing and new oil and gas reserves;
- available pipeline and other oil and gas transportation capacity;
- the ability of oil and gas companies to raise capital;
- the overall supply and demand for oil and gas; and
- the availability of alternate fuel sources.

Changes in commodity prices may significantly affect our
capital resources, liquidity and expected operating results. Price changes will
directly affect revenues and can indirectly impact expected production by
changing the amount of funds available to reinvest in exploration and
development activities. Reductions in oil and gas prices not only reduce
revenues and profits, but could also reduce the quantities of reserves that are
commercially recoverable. Significant declines in prices could result in
non-cash charges to earnings due to impairment.

Changes in commodity prices may also significantly affect our
ability to estimate the value of producing properties for acquisition and
divestiture and often cause disruption in the market for oil and gas producing
properties, as buyers and sellers have difficulty agreeing on the value of the
properties. Price volatility also makes it difficult to budget for and project
the return on acquisitions and the development and exploitation of projects. We
expect that commodity prices will continue to fluctuate significantly in the
future.

Exploratory drilling involves many risks that are outside
our control which may result in a material adverse effect on our business,
financial condition or results of operations.

The business of exploring for and producing oil and gas
involves a substantial risk of investment loss. Drilling oil and gas wells
involves the risk that the wells may be unproductive or that, although
productive, the wells may not produce oil or gas in economic quantities. Other
hazards, such as unusual or unexpected geological formations, pressures, fires,
blowouts, power outages, sour gas leakage, loss of circulation of drilling
fluids or other conditions may substantially delay or prevent completion of any
well. Adverse weather conditions can also hinder drilling operations. A
productive well may become uneconomic if water or other deleterious substances
are encountered that impair or prevent the production of oil or gas from the
well. In addition, production from any well may be unmarketable if it is
impregnated with water or other deleterious substances. There can be no
assurance that oil and gas will be produced from the properties in which we have
interests.

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13

We are dependent upon the efforts of various third parties
that we do not control and, as a result, we may not be able to control the
timing of development efforts, associated costs, or the rate of production of
reserves (if any).

The success of our business depends upon the efforts of various
third parties that we do not control. At least at the present, we do not plan to
serve as the operator for our projects. As a result, we may have limited ability
to exercise influence over the operations of the properties or their associated
costs. Our dependence on the operator and, where applicable, other working
interest owners for these projects and our limited ability to influence
operations and associated costs could prevent the realization of our targeted
returns on capital in drilling or acquisition activities. The success and timing
of development and exploitation activities on properties operated by others
depend upon a number of factors that will be largely outside of our control,
including:

- the timing and amount of capital expenditures;
- the operator's expertise and financial resources;
- approval of other participants in drilling wells;
- selection of technology;
- the rate of production of the reserves; and
- the availability of suitable drilling rigs, drilling equipment, production
  and transportation infrastructure, and qualified operating personnel.

We will rely upon various companies to provide us with
technical assistance and services. We will also rely upon the services of
geologists, geophysicists, chemists, engineers and other scientists to explore
and analyze oil and gas prospects to determine a method in which the oil and gas
prospects may be developed in a cost-effective manner. Although our management
has relationships with a number of third-party service providers, we cannot
assure you that we will be able to continue to rely on such persons. If any of
these relationships with third-party service providers are terminated or are
unavailable on commercially acceptable terms, we may not be able to execute our
business plan.

We may be unable to retain our leases or licenses and
working interests in our leases or licenses, which would result in significant
financial losses to our company.

Our properties are held under oil and gas leases or licenses.
If we fail to meet the specific requirements of each lease or license, such
lease or license may terminate or expire. We cannot assure you that any of the
obligations required to maintain each lease or license will be met. The
termination or expiration of our leases or licenses will harm our business. Our
property interests will terminate unless we fulfill certain obligations under
the terms of our leases or licenses and other agreements related to such
properties. If we are unable to satisfy these conditions on a timely basis, we
may lose our rights in these properties. The termination of our interests in
these properties will harm our business. In addition, we will need significant
funds to meet capital requirements for the exploration activities that we intend
to conduct on our properties.

Title deficiencies could render our leases worthless which
could have adverse effects on our financial condition or results of operations.

The existence of a material title deficiency can render a lease
worthless and can result in a large expense to our business. It is our practice
in acquiring oil and gas leases or undivided interests in oil and gas leases to
forgo the expense of retaining lawyers to examine the title to the oil or gas
interest to be placed under lease or already placed under lease. Instead, we
rely upon the judgment of oil and gas landmen who perform the field work in
examining records in the appropriate governmental office before attempting to
place under lease a specific oil or gas interest. This is customary practice in
the oil and gas industry. However, we do not anticipate that we, or the person
or company acting as operator of the wells located on the properties that we
will lease or may lease in the future, will

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14

obtain counsel to examine title to the lease until the well is
about to be drilled. As a result, we may be unaware of deficiencies in the
marketability of the title to the lease. Such deficiencies may render the lease
worthless.

RISKS RELATING TO OUR COMMON STOCK

A decline in the price of our common stock could affect our
ability to raise further working capital and adversely impact our ability to
continue operations.

A prolonged decline in the price of our common stock could
reduce liquidity of our common stock and reduce our ability to raise capital.
Because a significant portion of our operations have been and will be financed
through the sale of equity securities, a decline in the price of our common
stock could be especially detrimental to our liquidity and our operations. Such
reductions may force us to reallocate funds from other planned uses and may have
a significant negative effect on our business plan and operations, including our
ability to continue our current operations. If our stock price declines, we can
offer no assurance that we will be able to raise additional capital or generate
funds from operations sufficient to meet our obligations. If we are unable to
raise sufficient capital in the future, we may not be able to have the resources
to continue our normal operations.

The market price for our common stock may also be affected by
our ability to meet or exceed expectations of analysts or investors. Any failure
to meet these expectations, even if minor, may have a material adverse effect on
the market price of our common stock.

If we issue additional shares in the future, it will result
in the dilution of our existing shareholders.

Our articles of incorporation authorizes the issuance of up to
450,000,000 shares of common stock with a par value of $0.001 per share. Our
board of directors may choose to issue some or all of such shares to acquire one
or more businesses or to provide additional financing in the future. The
issuance of any such shares will reduce the book value and market price of the
outstanding shares of our common stock. If we issue any such additional shares,
such issuance will reduce the proportionate ownership and voting power of all
current shareholders. Further, such issuance may result in a change of control
of our corporation.

Trading of our stock may be restricted by the Securities
Exchange Commission's penny stock regulations, which may limit a stockholder's
ability to buy and sell our common stock.

The Securities and Exchange Commission has adopted regulations
which generally define penny stock to be any equity security that has a market
price (as defined) less than $5.00 per share or an exercise price of less than
$5.00 per share, subject to certain exceptions. Our securities are covered by
the penny stock rules, which impose additional sales practice requirements on
broker-dealers who sell to persons other than established customers and
accredited investors. The term accredited investor refers generally to
institutions with assets in excess of $5,000,000 or individuals with a net worth
in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly
with their spouse. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document in a form prepared by the Securities and
Exchange Commission, which provides information about penny stocks and the
nature and level of risks in the penny stock market. The broker-dealer also must
provide the customer with current bid and offer quotations for the penny stock,
the compensation of the broker-dealer and its salesperson in the transaction and
monthly account statements showing the market value of each penny stock held in
the customer's account. The bid and offer quotations, and the broker-dealer and
salesperson compensation information, must be given to the customer orally or in
writing prior to effecting the transaction and must be given to the customer in
writing before or with the customer's confirmation. In addition, the penny stock
rules require that prior to a transaction in a penny stock not otherwise exempt
from these 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 level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of our common stock.

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15

NASD sales practice requirements may also limit a
stockholder's ability to buy and sell our stock.

In addition to the penny stock rules described above, the
National Association of Securities Dealers (NASD) has adopted rules that require
that in recommending an investment to a customer, a broker-dealer must have
reasonable grounds for believing that the investment is suitable for that
customer. Prior to recommending speculative low priced securities to their
non-institutional customers, broker-dealers must make reasonable efforts to
obtain information about the customer's financial status, tax status, investment
objectives and other information. Under interpretations of these rules, the NASD
believes that there is a high probability that speculative low priced securities
will not be suitable for at least some customers. The NASD requirements make it
more difficult for broker-dealers to recommend that their customers buy our
common stock, which may limit your ability to buy and sell our stock and have an
adverse effect on the market for our shares.

Our common stock is illiquid and the price of our common
stock may be negatively impacted by factors which are unrelated to our
operations.

Our common stock currently trades on a limited basis on the OTC
Bulletin Board. Trading of our stock through the OTC Bulletin Board is
frequently thin and highly volatile. There is no assurance that a sufficient
market will develop in our stock, in which case it could be difficult for
shareholders to sell their stock. The market price of our common stock could
fluctuate substantially due to a variety of factors, including market perception
of our ability to achieve our planned growth, quarterly operating results of our
competitors, trading volume in our common stock, changes in general conditions
in the economy and the financial markets or other developments affecting our
competitors or us. In addition, the stock market is subject to extreme price and
volume fluctuations. This volatility has had a significant effect on the market
price of securities issued by many companies for reasons unrelated to their
operating performance and could have the same effect on our common stock.

Because of the early stage of development and the nature of
our business, our securities are considered highly speculative.

Our securities must be considered highly speculative, generally
because of the nature of our business and the early stage of our development. We
are engaged in the business of exploring and, if warranted, developing
commercial reserves of oil and gas. Our properties are in the exploration stage
only and are without known reserves of oil and gas. Accordingly, we have not
generated any revenues nor have we realized a profit from our operations to date
and there is little likelihood that we will generate any revenues or realize any
profits in the short term. Any profitability in the future from our business
will be dependent upon locating and developing economic reserves of oil and gas,
which itself is subject to numerous risk factors as set forth herein. Since we
have not generated any revenues, we will have to raise additional monies through
the sale of our equity securities or debt in order to continue our business
operations.

We do not intend to pay dividends on any investment in the
shares of stock of our company.

We have never paid any cash dividends and currently do not
intend to pay any dividends for the foreseeable future. To the extent that we
require additional funding currently not provided for in our financing plan, our
funding sources may prohibit the payment of a dividend. Because we do not intend
to declare dividends, any gain on an investment in our company will need to come
through an increase in the stocks price. This may never happen and investors
may lose all of their investment in our company.

RISKS RELATED TO OUR COMPANY

Our By-laws contain provisions indemnifying our officers and
  directors against all costs, charges and expenses incurred by them.

Our By-laws provide the indemnification of our directors
against all costs, charges and expenses, including an amount paid to settle an
action or satisfy a judgment, actually and reasonably incurred by him or her,
including an amount paid to settle an action or satisfy a judgment in active
criminal or administrative action or proceeding to which he or she made a party
by reason of his or her being or having been one of our directors. Our By-laws
also

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16

provide the indemnification of our officers against all costs,
charges and expenses incurred by him or them and resulting from his or her
acting as an officer of our company.

Our By-laws do not contain anti-takeover provisions and thus
our management and directors may change if there is a take-over of our
company.

We do not currently have a shareholder rights plan or any
anti-takeover provisions in our By-laws. Without any anti-takeover provisions,
there is no deterrent for a take-over of our company. If there is a take-over of
our company, our management and directors may change.

Because our directors and officers are residents of other
countries other than the United States, investors may find it difficult to
enforce, within the United States, any judgments obtained against our directors
and officers

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 enforce within the United States any judgments
obtained against our officers or directors, including judgments predicated upon
the civil liability provisions of the securities laws of the United States or
any state thereof.

Item
2.           Description of
Property.

Our executive and head offices are located at 64 Knightsbridge,
London SW1X 7JF, England. We lease our offices with a size of 150 square feet at
£1,750 plus value added tax per month. Our current premises are adequate for our
current operations and we do not anticipate that we will require any additional
premises in the foreseeable future.

ALASKA OIL AND GAS LEASES

Pursuant to the terms of the Lease Purchase and Sale Agreement
dated May 29, 2007 that was entered into by Fox Petroleum LLC and us, we will
acquire from Fox Petroleum LLC and persons or entities controlled by or
otherwise associated with Fox Petroleum LLC, certain oil and gas leases located
onshore in the North Slope of Alaska. Under the agreement, we will acquire a
combined 100% working interests in 12 state-issued oil and gas leases subject to
a royalty to the State of Alaska of 16.66667% and a private royalty equal to 5%
in Alaskas North Slope hydrocarbon province.

The leases comprise approximately 32,490 acres (50.8 square
miles or 13,148 hectares) and their details are shown in the table below. After
the lease sale, the State of Alaska reviews landownership in the lease sale area
and the area actually leased may be reduced because a portion of the area may be
owned by entities other than the State of Alaska. The final results of this land
status review are yet to be published. Their ADL number identifies leases in the
public record.

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17

The following table shows details of the subject leases.

State ADL Number
    Lease Sale Tract Number
    Area (acres)
    Area (hectares)
    State Royalty (%)
    Private Royalty (%)390838
    BS2006-0210
    2,560
    1,036
    16.666670
    5.0390844
    BS2006-0231
    2,560
    1,036
    16.666670
    5.0390845
    BS2006-0233
    2,560
    1,036
    16.666670
    5.0390939
    NS2006-0480
    5,701
    2,307
    16.666670
    5.0390991
    NS2006-0851
    2,533
    1,025
    16.666670
    5.0390992
    NS2006-0854
    2,544
    1,029
    16.666670
    5.0391017
    NS2006-1018
    2,560
    1,036
    16.666670
    5.0391018
    NS2006-1021
    2,560
    1,036
    16.666670
    5.0391019
    NS2006-1022
    2,560
    1,036
    16.666670
    5.0391020
    NS2006-1025
    2,560
    1,036
    16.666670
    5.0391021
    NS2006-1028
    2,512
    1,017
    16.666670
    5.0391207
    NS2006-1130
    1,280
    518
    16.666670
    5.0


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18

The eleven leases under Lease Purchase and Sale Agreement are
in a treeless, tundra-covered area of low topographic relief traversed by
channels of the Sagavanirktok River delta and are underlain by continuous
permafrost to a depth of at least 1,000 feet. These leases have an average
elevation of less than 50 feet above sea level. The following is the map showing
the locations of these eleven leases.



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19

The twelfth lease, located further south along the haul road
and pipeline is also in a treeless, tundra-covered area of low topographic
relief, and has an elevation of about 260 feet. The following is the map showing
the location of this lease.



Accessibility

The leases under Lease Purchase and Sale Agreement are close to
the TransAlaska Pipeline and the Dalton Highway. The majority of the leases are
6 to 12 miles from Pump Station 1 on the TransAlaska Pipeline. Oil from any of
these leases could be transported via the existing Badami Pipeline or trucked
via gravel roads and bridges. Oil could be trucked on temporary ice road during
winter months. North Slope gas fields do not have any pipeline to transport the
gas to distant market and there is no local market aside from infield use. The
State of Alaska is now pursuing the development of a new large-diameter gas
pipeline along the Alaska Highway through Canada for the sale of North Slope
gas.

Petroleum Geology

Generally, the discovery of oil reservoirs is dependent on four
factors. Firstly there must be a source rock, which is at a suitable temperature
and pressure to produce hydrocarbons. Secondly there must be a process of
migration, where the hydrocarbons produced in the source rock work their way
upwards through the surrounding strata to the

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20

third essential ingredient in an oil reservoir, the reservoir
rock. A reservoir rock is one of sufficient porosity to contain hydrocarbons and
sufficient permeability to allow the hydrocarbons to flow within the rock.
Finally there is a need for a seal rock and an associated trap structure. This
final element ensures that the produced hydrocarbons that have migrated into the
reservoir rock are trapped there in sufficient quantity for commercial
extraction.

Applying these principles to the leases we are acquiring under
Lease Purchase and Sale Agreement and combined with existing well information
from the area, we believe that the current position is positive. Prior to
commencing any further operations, it has already been proven that there is a
suitable source rock, that migration has occurred and that there is a suitable
reservoir rock present in this area. Over the coming months, we will try to
locate a suitable trap structure where a sufficient quantity of hydrocarbon has
pooled for commercially viable extraction.

Claim

Under the Lease Purchase and Sale Agreement with Fox Petroleum
LLC, we will acquire a combined 100% working interests in 12 state-issued oil
and gas leases in Alaskas North Slope hydrocarbon province subject to a royalty
of 16.66667% to the State of Alaska and a private royalty equal to 5%. Lease
date for all the leases is March 1, 2006. We have the leases for 5 years and
there are no work commitments. We are required to pay $1 per acre in the first
year then increasing by $0.50 per annum up to $3 in the fifth year in order to
maintain the leases.

Prior Work

Operators have drilled wells within the leases covered by the
Lease Purchase and Sale Agreement and in nearby areas based on proprietary
seismic and other geophysical data, interpretations, and correlations with other
wells in the area. In April 1985, Sohio Alaska Petroleum Co. drilled a vertical
well located within the northwest corner of the lease with ADL number 391207. In
October 1969, BP Oil drilled a vertical well located 1.2 miles west of the lease
with ADL number 390991. In May 1975, ARCO Alaska Inc. drilled a well located
within the southwest corner of the lease with ADL number 390845. In March 1988,
ARCO Alaska Inc. drilled a vertical well located in the southeast corner of the
lease with ADL number 390939 and is located near the Trans Alaska Oil Pipeline
and the all-weather Dalton High way.

UK NORTH SEA FARM-IN  ANGLESEY PROSPECT

Pursuant to the Farm-In Agreement dated June 8, 2007, we will
acquire a total of 33.33% interests in two UK Petroleum Production licenses from
Granby Enterprises Limited and Atlantic Petroleum UK Limited. These licenses
cover three blocks located in the UK North Sea. In consideration for the
interests in the licenses, we agreed to fund 100% of the high resolution 2D
seismic survey and reprocessing to be conducted in the third quarter of 2007 and
our 33.33% share of the license budget costs from June 1, 2007. In addition to
the acquisition of the 33.33% interests in the licenses, we will be granted an
exclusive, non transferable option to acquire an additional 26.67% interest in
the licenses. The option will be granted and effective upon the completion of
the transfer of above 33.33% interests in the licenses to us and will continue
to be valid and exercisable by us until 28 days after our receiving the
processed seismic data from the high resolution 2D seismic survey and
reprocessing. To acquire the additional 26.67% interest in the licenses, we will
have to pay 46.67% of the cost of an exploration well in addition to our
obligation to fund 33.33% of the cost of the exploration well under the Farm-In
Agreement.

Work obligations under the licenses granted by the UK
Department of Trade and Industry are as follows:

- the shooting of sufficient high resolution 2D seismic to cover the
  licenses;
- the drilling of a well on the licenses to a depth of 2,500 meters or to 30
  meters into the top Pentland Formation, whichever is the shallower, unless the
  UK Department of Trade and Industry confirms in writing that it would not
  justified to drill such well, having regard to certain technical information
  available at the time.

If the UK Department of Trade and Industry confirms that it
would not be justified to drill a well and thus there is no firm obligation
under the licenses drill a well, the parties under the Farm-In Agreement will
try to reach

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21

unanimous agreement on whether to voluntarily drill a well. If
any party votes against drilling the well, such party will withdraw from the
licenses and will assign its entire percentage interest in the licenses pro rata
to the continuing parties and if all parties vote against drilling the well the
licenses will be relinquished.

Licenses

Of three blocks covered by the licenses, Blocks 14/8a and 14/9a
were awarded to Granby Enterprises Limited as traditional licences in the 23rd
Round of UK licensing, while 14/14b was awarded in the 22nd Round as a promote
licence. The three blocks are currently held by Granby Enterprises Limited and
Atlantic Petroleum UK Limited is in the process of acquiring a 50.00% interest
in the licenses from Granby Enterprises Limited.

Location

The three blocks covered by the licenses are located in 130m
water depth some 150 km north-east of St. Fergus, and 30km north of the
Talisman-operated Claymore field. The following is the map showing the location
of the licenses.



Work Commitments and Prior Work

The work commitments include a new 200 sq km seismic survey.
The current mapping has been done based on a grid of 2D lines from the 1980s
and early 1990s. The later surveys are of good quality, and all lines have been
migrated to give a good grid of typically 2 x 2 km coverage. Eleven offset wells
in adjacent acreage provided well-

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22

to-seismic ties and five horizons have been interpreted within
the blocks and adjacent acreage.

TRYME MINERAL PROPERTY

We own a 100% undivided right, title and interest in and to a
mineral claim known as the Tryme property. There is no assuance that a
commercially viable mineral deposit exists on the property. We have decided to
do no further work on the Tryme Mineral Property and focus our efforts on the
Alaskan and UK North Sea assets that we are acquiring.

Description, Location and Access

The Tryme Mineral property is located near Cross Lake, five
miles south of Thistlewaite Lake in the southern region of the Northwest
Territories, Canada, approximately 80 miles northeast of the city of Yellowknife
at approximately Latitude 63 (0) 05N and Longitude 113 (0) 30W. The property
is accessible by float plane to Gordon Lake or by helicopter. Facilities and
skilled population base at Yellowknife are readily available and will provide
all the necessary services needed for property exploration.

Sub Arctic alder and while lodge pine intermixed with tundra
bogs grow throughout the area and good rock exposure is found along the lake
shores. Winters are cold with generally medium snowfall accumulations and
summers are temperature with adequate precipitation.

Tryme Mineral Property Purchase Agreement

On January 25, 2005, we entered into an agreement with Max
Braden of Yellowknife, Northwest Territories, whereby he sold a 100% undivided
right, title and interest in and to the Tryme mineral claim for $7,000. The
purchase price for the property was determined by negotiating between us and Mr.
Braden.

The Tryme property consists of one mineral claim comprising
1,112 acres. It is recoded under claim number F81799. The claim was created on
May 28, 2003 and is in good standing until May 28, 2008. The claim will expire
on May 28, 2008 unless we complete at least $200 worth of exploration work on
the claim by that date. If this required exploration work is incurred, then the
deadline is extended to May 28, 2009. In subsequent years, we must spend at
least $200 on the claim to extend the expiry date. During the year ended
February 28, 2007, we have spent $5,000 of work on the property.

Infrastructure and Condition of the Property

The Tryme property is free of mineral workings. There is no
equipment or other infrastructure facilities located on the property. There is
no power source located on the property. We will need to use portable generators
if we require a power source for exploration of the Tryme claim.

Mineralization

The Tryme property has gold mineralization associated with
quartz veins and disseminated sulphides that consist of pyrite, galena and
sphalerite. A vein is a mineralized zone having a more or less regular
development in length, width and depth which clearly separates it from
neighbouring rock. Veins containing quartz, a mineral composed of silicon and
oxygen, are often associated with gold mineralization.

Disseminated sulphides are occurrences of rock containing small
particles of valuable minerals that are distributed uniformly through the ore
material. Sulphides, compounds containing sulphur and one additional element,
are often associated with precious metals such as gold and base metals such as
zinc. Pyrite is a combination of iron and sulphur, more commonly known as fools
gold. Galena is a sulphide mineral of lead, while sphalerite is a sulphide
mineral of zinc.

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23

Exploration History

During the 1940s, the Tryme property was drilled by junior
mineral exploration companies. Drilling involves extracting a long cylinder of
rock from the ground to determine amounts of metals at different depths. Pieces
of rock obtained, known as drill core, are analyzed for mineral content. No
recorded results of this exploration are available.

Treminco Explorations Canada Ltd. conducted programs of limited
geological mapping during 1986. Geological mapping involves plotting previous
exploration data relating to a property on a map in order to determine the best
property locations to conduct subsequent exploration work. Treminco Explorations
Canada Ltd. did not conduct any follow up exploration work on the Tryme property
following the mapping.

No other detailed exploration has been completed on the Tryme
property since the 1940s.

Item
3.           Legal
Proceedings.

We know of no material, active or pending legal proceedings
against us, nor are we involved as a plaintiff in any material proceedings or
pending litigation. There are no proceedings in which any of our directors,
officers or affiliates, or any registered beneficial shareholder are an adverse
party or has a material interest adverse to us.

Item
4.           Submissions of
Matters to a Vote of Security Holders.

None.

PART II

Item
5.           Market for Common
Equity and Related Stockholder Matters.

Market Information

Our shares of common stock are currently trading on the OTC
Bulletin Board under the Symbol FXPE.OB. Our shares of common stock were
initially approved for quotation on the OTC Bulletin Board under the name Nova
Resources Inc. under the symbol, NVRS. On January 11, 2007, we effected a 6
for 1 forward stock split of our authorized, issued and outstanding common stock
and our trading symbol was changed to NVAR. On February 5, 2007, we changed
our name to Fox Petroleum Inc. upon completion of our merger with our wholly
owned subsidiary, Fox Petroleum Inc. and our trading symbol was changed to our
current trading symbol, FXPE.OB. The following quotations obtained from Yahoo!
Finance reflect the high and low bids for our common stock based on inter-dealer
prices, without retail mark-up, mark-down or commission and may not represent
actual transactions.

National Association of Securities Dealers
        OTC Bulletin Board(1)Quarter Ended
      High
      LowMay 31, 2007
      1.50
      0.75February 28, 2007
      3.25
      1.25


(1)
    Over-the-counter market quotations reflect inter-dealer
      prices without retail mark-up, mark-down or commission, and may not
      represent actual transactions. There were no quotations reported for our
      shares of common stock as reported on Yahoo! Finance prior to January
      2007.


The closing price of our common stock, as reported by the NASDAQs
  Over-the-Counter Bulletin Board on June 12, 2007, was $1.26.

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24

Holders of our Common Stock

Our common shares are issued in registered form. The transfer
agent and registrar for our common stock is Empire Stock Transfer, Inc., located
at 7251 West Lake Mead Blvd., Suite 300, Las Vegas, Nevada 89701 (Telephone:
(702) 562-4091; Facsimile: (702) 562-4081). As of June 12, 2007, there were
51,186,792 common shares issued and outstanding held by 24 shareholders of
record.

Dividends

Since our inception, we have not paid dividends on our common
stock in the past and do not anticipate paying dividends in the near future. We
intend to retain earnings, if any, for use in our business and do not anticipate
paying any cash dividends. Our directors will determine if and when dividends
should be declared and paid in the future based on our financial position at the
relevant time. All of our shares of common stock are entitled to an equal share
in any dividends declared and paid.

There are no restrictions in our articles of incorporation or
bylaws that prevent us from declaring dividends. The Nevada Revised Statutes,
however, do prohibit us from declaring dividends where, after giving effect to
the distribution of the dividend:

|1. | we would not be able to pay our debts as they become due
      in the usual course of business; or                                                                                                                                          
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                             
|2. | our total assets would be less than the sum of our total
      liabilities plus the amount that would be needed to satisfy the rights of
      shareholders who have preferential rights superior to those receiving the
      distribution.

Securities Authorized for Issuance Under Equity Compensation
Plans

We do not have any equity compensation plans in place.

Recent Sales of Unregistered Securities

On February 23, 2007, we entered into a subscription agreement
for a private placement of 100,000 units at the price of $1.00 per unit for the
total purchase price of $100,000. Each unit consists of one common share and one
common share purchase warrant. One common share purchase warrant entitles the
subscriber to purchase one additional common share at an exercise price of $1.25
per common share for a period of three years. We received the proceeds of
$100,000 in February, 2007, but did not issue the units until June 1, 2007. We
issued the 100,000 units to a non-U.S. person (as that term is defined in
Regulation S of the 1933 Act) in an offshore transaction relying on Regulation S
promulgated under the 1933 Act.

On May 17, 2007, we entered into a share issuance agreement
with EuroEnergy Growth Capital S.A. that will allow EuroEnergy to advance up to
$8,000,000 to us in exchange for units of our company. The advances will be in
minimum $100,000 increments, payable when we give notice under the terms of the
agreement. The units will be issued at a price equal to 80% of the volume
weighted average of the closing price of common share for the 10 banking days
immediately preceding the date of the notice, as quoted on Yahoo! Finance. Each
unit will consist of one common share and one common share purchase warrant.
Each common share purchase warrant will entitle EuroEnergy to purchase an
additional common share at an exercise price equal to 125% of the price of the
units.

On May 17, 2007, we gave notice to EuroEnergy, for an advance
of $2,000,000, pursuant to the agreement. As consideration for the cash advance,
we issued to EuroEnergy 1,886,792 units at a determined price of $1.06 per unit.
Each unit consists of one common share and one common share purchase warrant.
One common share purchase warrant entitles the holder to purchase one common
share at a price of $1.33 per share until May 17, 2010. We issued the 1,886,792
units to a non-U.S. person (as that term is defined in Regulation S of the 1933
Act) in an offshore transaction relying on Regulation S promulgated under the
1933 Act.

---

25

Equity Compensation Plan Information

We currently do not have any stock option or equity
compensation plans or arrangements.

Purchases of Equity Securities by the Issuer and Affiliated
Purchasers

We did not purchase any of our shares of common stock or other
  securities during our fiscal year ended February 28, 2007.

Item
6.           Managements
Discussion and Analysis or Plan of Operation.

Company Overview

We are an exploration stage company engaged in the acquisition,
exploration and, if warranted, development of prospective oil and gas
properties. We were previously engaged in mineral resource exploration. Because
we have not discovered any economically viable mineral deposit on our mineral
property, we decided to change the direction of our exploration activities to
oil and gas sectors.

On May 29, 2007, we entered into the Lease Purchase and Sale
Agreement with Fox Petroleum LLC, a Nevada company, to acquire 12 oil and gas
leases in North Slope, Alaska. Upon completion of the transactions contemplated
under this Lease Purchase and Sale Agreement, we intend to conduct an aggressive
exploration and appraisal program on the leases acquired over the next two
years. Please refer to the information under the heading Description of
Property for a detailed description of our future property interests.

On June 8, 2007, through our wholly owned UK subsidiary, Fox
Energy Exploration Limited, we entered into the Farm-In Agreement with Granby
Enterprises Limited and Atlantic Petroleum UK Limited. Pursuant to the terms of
the Farm-In Agreement, Granby Enterprises Limited and Atlantic Petroleum UK
Limited agreed to farm-out and assign to us and we agreed to farm-in and acquire
from them a total of 33.33% interests in two UK Petroleum Production Licenses.
These licenses cover three blocks located in the UK North Sea. Please refer to
the information under the heading Description of Property for more detailed
description of our future property interests.

PLAN OF OPERATIONS AND CASH REQUIREMENTS

We intend to conduct an aggressive exploration and appraisal
program on the 12 oil and gas leases to be acquired under the Lease Purchase and
Sale Agreement with Fox Petroleum LLC over the next two years. Our starting
point will be to collect and analyse the existing information available to us
from the many geophysical surveys, well drilling and testing activities that
have already taken place in or around the leases since serious exploration and
appraisal commenced in the region.

Our primary aim is to model the geological structure
surrounding and including the leases based on the direct and offset data
available to us. This will involve a detailed analysis and re-interpretation of
several key 2D seismic lines crossing over the leases. Currently we have
identified 8 to 10 lines of seismic available in the public domain. Further
seismic data, readily available at market cost of around $1000 per km, will be
acquired through specialist seismic brokers operating on the North Slope. We are
already in discussion with several licensed data brokers in the region.

In addition to this, it is likely to prove advantageous to
re-process the available seismic data. Seismic data can be altered in many ways
during the processing phase and techniques have improved beyond recognition over
the course of the last decade. Since most of the data in this area is relatively
old, a simple and cost-effective way of enhancing our understanding of the area
is to reprocess the seismic data.

We are also considering the use of Electromagnetic and Gravity
Survey processes to further assist us in defining the most likely whereabouts of
hydrocarbons on the leases. The idea is to use Electromagnetic and Gravity
Survey processes over prospects identified by seismic surveys as containing the
right kind of rock structures for the

---

26

accumulation of hydrocarbons. EM provides an independent
measurement of the potential for hydrocarbons and could be used to select the
prospects with greatest chance of success.

Pursuant to the Farm-In Agreement dated June 8, 2007, we will
also spend approximately $1,800,000 dollars for the hi-density 2D seismic survey
over the licenses located in the UK North Sea to be conducted in the third
quarter of 2007 and we may have to spend approximately $4,000,000 dollars for
drilling an exploration well under the agreement.

Because we entered into the Farm-In Agreement, we plan to
obtain additional advance from EuroEnergy Growth Capital S.A. under our
financing arrangement with EuroEnergy to fund our oil and gas exploration
operations. Obtaining additional funds from EuroEnergy will result in further
dilution in the equity ownership of our shares. There is no assurance that we
will be able to maintain operations at a level sufficient for an investor to
obtain a return on his investment in our common stock. Further, we may continue
to be unprofitable.

We estimate our operating expenses and working capital
requirements for the next twelve month period to be as follows:

Estimated
      Expenses For the Next Twelve Month PeriodLease Acquisition Costs
    $
    30,000Operating ExpensesExploration Costs
    $
    2,400,000Employee and Consultant
      Compensation
    $
    300,000Professional Fees
    $
    100,000General and
      Administrative Expenses
    $
    75,0000Total
    $
    2,905,000


Exploration Costs

We estimate that our exploration costs on our future leases in
North Slope, Alaska will be approximately $600,000 during the next twelve
months, which will include modeling the geological structure surrounding and
including the leases based on the direct and offset data available to us and
re-processing the available seismic data and the use of Eletromagnetic and
Gravity Survey process. We will also pay roughly $1,800,000 for a seismic survey
on the UK North Sea licenses. Depending on the result of the seismic survey, we
may then drill the prospect at a cost to us of $4,000,000.

Employee and Consultant Compensation

Given the early stage of our development and exploration
properties, we intend to continue to outsource our professional and personnel
requirements by retaining consultants on an as needed basis. We estimate that
our consultant and related professional compensation expenses for the next
twelve month period will be approximately $100,000. We estimate that our
employee compensation expenses for the next twelve month period will be
approximately $240,000.

Professional Fees

We expect to incur on-going legal expenses to comply with our
reporting responsibilities as public company under the United States Securities
Exchange Act of 1934, as amended. We estimate our legal and accounting expenses
for the next fiscal year to be approximately $100,000.

---

27

General and Administrative Expenses

We anticipate spending $75,000 on general and administrative
costs in the next twelve month period. These costs primarily consist of expenses
such as lease payments, office supplies and office equipment.

LIQUIDITY AND CAPITAL RESOURCES

Our company's principal cash requirements are for exploration
expenses which we anticipate will rise as we proceed to determine the
feasibility of developing our current or future property interests.

Capital Resources

As of February 28, 2007, we had cash of $119,051 and working
capital of $48,609. Our net cash provided by financing activities during the
year ended February 28, 2007 was $129,975. We have suffered recurring losses
from inception. Our ability to meet our financial liabilities and commitments is
primarily dependent upon the continued financial support of our directors and
shareholders, the continued issuance of equity to new shareholders, and our
ability to achieve and maintain profitable operations.

On October 3, 2006, our director, Alexander James Craven
advanced $10,000 to our company as working capital and on December 20, 2006,
advanced $19,975 to our company for a retainer to retain Clark Wilson LLP as our
legal counsel.

On February 23, 2007, we entered into a subscription agreement
for a private placement of 100,000 units at the price of $1.00 per unit for the
total purchase price of $100,000. Each unit consists of one common share and one
common share purchase warrant. One common share purchase warrant entitles the
subscriber to purchase one additional common share at an exercise price of $1.25
per common share for a period of three years. We received the proceeds of
$100,000 in February, 2007, but did not issue the units until June 1, 2007. We
issued the 100,000 units to a non-U.S. person (as that term is defined in
Regulation S of the 1933 Act) in an offshore transaction relying on Regulation S
promulgated under the 1933 Act.

On May 17, 2007 we entered into a share issuance agreement with
EuroEnergy Growth Capital S.A. that will allow EuroEnergy to advance up to
$8,000,000 to us in exchange for units of our company. The advances will be in
minimum $100,000 increments, payable when we give notice under the terms of the
agreement. The units will be issued at a price equal to 80% of the volume
weighted average of the closing price of common share for the 10 banking days
immediately preceding the date of the notice, as quoted on Yahoo! Finance. Each
unit will consist of one common share and one common share purchase warrant.
Each common share purchase warrant will entitle EuroEnergy to purchase an
additional common share at an exercise price equal to 125% of the price of the
units.

On May 17, 2007, we gave notice to EuroEnergy, for an advance
of $2,000,000, pursuant to the share issuance agreement. As consideration for
the cash advance, we issued to EuroEnergy 1,886,792 units at a determined price
of $1.06 per unit. Each unit consists of one common share and one common share
purchase warrant. One common share purchase warrant entitles the holder to
purchase one common share at a price of $1.33 per share until May 17, 2010. We
issued the 1,886,792 units to a non-U.S. person (as that term is defined in
Regulation S of the 1933 Act) in an offshore transaction relying on Regulation S
promulgated under the 1933 Act.

Capital Expenditure Requirements

Except as disclosed otherwise, as of June 12, 2007, we do not
have any material commitments for capital expenditures and our management does
not anticipate that we will spend additional material amounts on capital
expenditures in the near future.

Under the Lease Purchase and Sale Agreement with Fox Petroleum
LLC, we will acquire a combined 100% working interests in 12 state-issued oil
and gas leases in Alaskas North Slope hydrocarbon province subject to a royalty
of 16.66667% to the State of Alaska and a private royalty equal to 5%. In
consideration for the oil and gas leases, we agreed to issue 20,000,000
restricted common shares of our company to Fox Petroleum LLC or such

---

28

other persons as Fox Petroleum LLC may direct in writing prior
to the closing. We have the leases for 5 years and there are no work
commitments. We are required to pay $1 per acre in the first year then
increasing by $0.50 per annum up to $3 in the fifth year in order to maintain
the leases. The leases comprise approximately 32,490 acres and lease date for
all the leases is March 1, 2006.

Under the Farm-In Agreement with Granby Enterprises Limited and
Atlantic Petroleum UK Limited, we are required to spend approximately $1,800,000
dollars for the hi-density 2D seismic survey to be conducted in the third
quarter of 2007 and we may have to spend approximately $4,000,000 dollars for
drilling an exploration well under the agreement.

Off-Balance Sheet Arrangements

We have no significant 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 is
material to stockholders.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

Our financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America.
Because a precise determination of many assets and liabilities is dependent upon
future events, the preparation of financial statements for a period necessarily
involves the use of estimates, which have been made using careful judgment.
Actual results may vary from these estimates. The financial statements have, in
our managements opinion, been properly prepared within the framework of the
significant accounting policies summarized below:

Pre-exploration Stage Company

We comply with Financial Accounting Standard Board Statement
No. 7 and the Securities and Exchange Commission Exchange Act Guide 7 for its
characterization of our company as pre-exploration stage.

Mineral Property

Costs of lease, acquisition, exploration, carrying and
retaining unproven mineral lease properties are expensed as incurred.

Development Stage Company

We comply with Financial Accounting Standard Board Statement
No. 7 for our characterization of our company as a development stage company. We
are devoting substantially all of our present efforts to establish a new
business and none of our planned principal operations have commenced.

Oil and Gas Properties

We follow the full cost method of accounting for oil and gas
operations whereby all costs of exploring for and developing oil and gas
reserves are initially capitalized on a country-by-country (cost centre) basis.
Such costs include land acquisition costs, geological and geophysical expenses,
carrying charges on non-producing properties, costs of drilling and overhead
charges directly related to acquisition and exploration activities.

---

29

Costs capitalized, together with the costs of production
equipment, are depleted and amortized on the unit-of-production method based on
the estimated gross proved reserves. Petroleum products and reserves are
converted to a common unit of measure, using 6 MCF of natural gas to one barrel
of oil.

Costs of acquiring and evaluating unproved properties are
initially excluded from depletion calculations. These unevaluated properties are
assessed periodically to ascertain whether impairment has occurred. When proved
reserves are assigned or the property is considered to be impaired, the cost of
the property or the amount of the impairment is added to costs subject to
depletion calculations.

If capitalized costs, less related accumulated amortization and
deferred income taxes, exceed the full cost ceiling the excess is expensed in
the period such excess occurs. The full cost ceiling is determined based on
the present value of estimated future net revenues attributed to proved
reserves, using current prices less estimated future expenditures plus the lower
of cost and fair value of unproven properties within the cost centre.

Proceeds from a sale of petroleum and natural gas properties
are applied against capitalized costs, with no gain or loss recognized, unless
such a sale would alter the relationship between capitalized costs and proved
reserves of oil and gas attributable to a cost centre. Royalties paid net of any
tax credits received are netted with oil and gas sales.

Environmental Costs

Environmental expenditures that relate to current operations
are expensed or capitalized as appropriate. Expenditures that relate to an
existing condition caused by past operations, and which do not contribute to
current or future revenue generation, are expensed. Liabilities are recorded
when environmental assessments and/or remedial efforts are probable, and the
cost can be reasonably estimated. Generally, the timing of these accruals
coincides with the earlier of completion of a feasibility study or our
commitments to plan of action based on the then known facts. There have been no
environmental expenses incurred by the Company.

Foreign Currency Translation

We use the United States of America dollar as our functional
and reporting currency for consistency with registrants of the Securities and
Exchange Commission and in accordance with the Statement of Financial Accounting
No. 52.

Assets and liabilities denominated in a foreign currency are
translated at the exchange rate in effect at the year end and capital accounts
are translated at historical rates. Income statement accounts are translated at
the average rates of exchange prevailing during the year and are included in the
Comprehensive Income Account in Stockholders Equity, if applicable.

Transactions undertaken in currencies other than the functional
currency of our company are translated using the exchange rate in effect as of
the transaction date. Any exchange gains or losses are included in other income
or expenses on the Statement of Operations, if applicable.

Financial Instruments

The carrying value of cash, accounts payable and accrued
liabilities and due to related party approximates their fair value because of
the short maturity of these instruments. Unless otherwise noted, it is our
managements opinion that we are not exposed to significant interest, currency
or credit risks arising from these financial instruments.

Income Taxes

We use the assets and liability method of accounting for income
  taxes pursuant to Statement of Financial Accounting No. 109 Accounting
  for Income Taxes. Under the assets and liability method of Statement of
  Financial Accounting No. 109, deferred tax assets and liabilities are recognized
  for the future tax consequences attributable to temporary differences between
  the financial statements carrying amounts of existing assets and liabilities
  and their respective tax bases. Deferred tax assets and liabilities are measured
  using enacted tax rates expected to apply to taxable income in the years in
  which those temporary differences are expected to be recovered or settled.

---

30

Basic and Diluted Loss Per Share

We report basic loss per share in accordance with the Statement
of Financial Accounting No. 128, Earnings Per Share. Basic loss per share is
computed using the weighted average number of shares outstanding during the
period. Diluted loss per share has not been provided, as it would be
anti-dilutive.

NEW ACCOUNTING STANDARDS

In June 2006, the Financial Accounting Standards Board (FASB)
issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes.
The interpretation clarifies the accounting for uncertainty in income taxes
recognized in a companys financial statements in accordance with Statement of
Financial Accounting Standards No. 109, Accounting for Income Taxes.
Specifically, the pronouncement prescribes a recognition threshold and a
measurement attribute for the financial statement recognition and measurement of
a tax position taken or expected to be taken in a tax return. The interpretation
also provides guidance on the related derecognition, classification, interest
and penalties, accounting for interim periods, disclosure and transition of
uncertain tax position. The interpretation is effective for fiscal years
beginning after December 15, 2006. The adoption of FIN 48 is not expected to
have a material impact on our consolidated financial position, results of
operations or cash flows; however, we are still analyzing the effects of FIN 48.

In September 2006, the FASB issued SFAS No. 157, Fair Value
Measurements. This Statement defines fair value as used in numerous accounting
pronouncements, establishes a framework for measuring fair value in generally
accepted accounting principles and expands disclosure related to the use of fair
value measures in financial statements. The Statement is to be effective for our
financial statements issued in 2008; however, earlier application is encouraged.
We are currently evaluating the timing of adoption and the impact that adoption
might have on our financial position or results of operations.

In September 2006, the Securities and Exchange Commission
(SEC) issued Staff Accounting Bulletin No. 108 (SAB 108). Due to diversity
in practice among registrants, SAB 108 expressed SEC staff views regarding the
process by which misstatements in financial statements are evaluated for
purposes of determining whether financial statement restatement is necessary.
SAB 108 is effective for fiscal years ending after November 15, 2006, and early
application is encouraged. We do not believe SAB 108 will have a material impact
on our financial position or results from operations.

In December 2006, the FASB issued FASB Staff Position (FSP)
EITF 00-19-2, Accounting for Registration Payment Arrangements. This FSP
specifies that the contingent obligation to make future payments or otherwise
transfer consideration under a registration payment arrangement should be
separately recognized and measured in accordance with FASB No. 5, Accounting
for Contingencies. This FSP is effective immediately for registration payment
arrangements and the financial instruments subject to those arrangements that re
entered into or modified subsequent to December 31, 2006. For registration
payment arrangements and financial instruments subject to those arrangements
that were entered into prior to December 31, 2006, the guidance in the FSP is
effective January 1, 2006 for our company. We do not believe that this FSP will
have a material impact on our financial position or results from operations.

On February 15, 2007, the FASB issued SFAS No. 159 The Fair
Value Option for Financial Assets and Financial Liabilities. This Statement
establishes presentation and disclosure requirements designed to facilitate
comparisons between companies that choose different measurement attributes for
similar types of assets and liabilities. SFAS No. 159 is effective for our
financial statements issued in 2008. We are currently evaluating the impact that
the adoption of SFAS No. 159 might have on our financial position or results of
operations.

---

31

Item
7.           Financial
Statements.

Our financial statements are stated in United States dollars
(US$) and are prepared in accordance with United States Generally Accepted
Accounting Principles.

The following consolidated financial statements are filed as
part of this annual report:

| | Report of Independent Registered Public Accounting Firm,
      dated May 24, 2007
| | ---------------------------------------------------------------------------------
| |                                                                                  
| | Consolidated Balance Sheets                                                      
| |                                                                                  
| | Consolidated Statements of Operations                                            
| |                                                                                  
| | Consolidated Statements of Cash Flows                                            
| |                                                                                  
| | Consolidated Statements of Changes in Stockholders'
      (Deficiency) Equity    
| |                                                                                  
| | Notes to the Consolidated Financial Statements                                   

---

FOX PETROLEUM INC.

(formerly Nova Resources Inc.)

(A Pre-exploration Stage Company)

REPORT AND FINANCIAL STATEMENTS

February 28, 2007 and 2006

(Stated in US Dollars)

---

A PARTNERSHIP OFINCORPORATEDPROFESSIONALS
      AMISANO
        HANSONCHARTEREDACCOUNTANTS




REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders, 
  Fox Petroleum Inc. 
  (formerly Nova Resources, Inc.) 
  (A Pre-exploration Stage Company)

We have audited the accompanying balance sheets of Fox Petroleum
  Inc. (formerly Nova Resources, Inc.) (A Pre-exploration Stage Company) as of
  February 28, 2007 and 2006 and the related statements of operations, cash flows
  and stockholders' equity (deficiency) for the years ended February 28, 2007
  and 2006 and the period from November 4, 2004 (Date of Inception) to February
  28, 2007. These financial statements are the responsibility of the Company's
  management. Our responsibility is to express an opinion on these financial statements
  based on our audits.

We conducted our audits in accordance with the standards of the
  Public Company Accounting Oversight Board (United States of America). Those
  standards require that we plan and perform an 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 audits provide a reasonable basis for our opinion.

In our opinion, these financial statements referred to above
  present fairly, in all material respects, the financial position of Fox Petroleum
  Inc. as of February 28, 2007 and 2006 and the results of its operations and
  its cash flows for the years ended February 28, 2007 and 2006 and the period
  from November 4, 2004 (Date of Inception) to February 28, 2007, in conformity
  with accounting principles generally accepted in the United States of America.



|Vancouver, Canada                                              | AMISANO HANSON     
|-------------------------------------------------------------- | ---------------------
|May 24, 2007, except as to Note 8, which is as of June 8, 2007 | Chartered Accountants





750 WEST PENDER STREET, SUITE 604
      TELEPHONE: 604-689-0188VANCOUVER CANADA
      FACSIMILE: 604-689-9773V6C 2T7
      E-MAIL: amishan@telus.net


---

FOX PETROLEUM INC.(formerly Nova Resources Inc.) 
  (A Pre-exploration Stage Company) 
  BALANCE SHEETS 
  February 28, 2007 and 2006 
  (Stated in US Dollars)

|                                                                |   | 2007     |   |   | 2006    |  
|--------------------------------------------------------------- | - | -------- | - | - | ------- | -
|                                                                |   |          |   |   |         |  
|**ASSETS**                                                      |  
|                                                                |   |          |   |   |         |  
|Current                                                         |   |          |   |   |         |  
|Cash                                                            | $ | 119,051  |   | $ | 17,714  |  
|                                                                |   |          |   |   |         |  
|LIABILITIES                                                     |  
|                                                                |   |          |   |   |         |  
|Current                                                         |   |          |   |   |         |  
|Accounts payable and accrued
      liabilities  Note 5         | $ | 40,467   |   | $ | 23,550  |  
|Due to related parties  Note 5                                 |   | 29,975   |   |   | -       |  
|                                                                |   |          |   |   |         |  
|                                                                |   | 70,442   |   |   | 23,550  |  
|                                                                |   |          |   |   |         |  
|STOCKHOLDERS EQUITY (DEFICIENCY)                               |  
|                                                                |   |          |   |   |         |  
|Capital stock  Notes 3 and 8                                   |   |          |   |   |         |  
|Authorized:                                                     |   |          |   |   |         |  
|450,000,000
      common shares, par value $0.001 per share     |   |          |   |   |         |  
|Issued and outstanding:                                         |   |          |   |   |         |  
|49,300,000
      common shares (2006: 49,200,000 common shares) |   | 49,300   |   |   | 49,200  |  
|Additional paid-in capital  Note 5                             |   | 118,600  |   |   | 9,700   |  
|Deficit accumulated during the pre-exploration stage            |   | (119,291 | ) |   | (64,736 | )
|                                                                |   |          |   |   |         |  
|                                                                |   | 48,609   |   |   | (5,836  | )
|                                                                |   |          |   |   |         |  
|                                                                | $ | 119,051  |   | $ | 17,714  |  
|                                                                |   |          |   |   |         |  
|Nature of Operations  Note 1                                   |   |          |   |   |         |  
|Commitments  Notes 3 and 8                                     |   |          |   |   |         |  
|Subsequent Events  Note 8                                      |   |          |   |   |         |  

SEE ACCOMPANYING NOTES

---

FOX PETROLEUM INC.(formerly Nova Resources Inc.) 
  (A Pre-exploration Stage Company) 
  STATEMENTS OF OPERATIONS 
  for the years ended February 28, 2007 and 2006 and 
  for the period November 4, 2004 (Date of Inception) to February 28, 2007 
  (Stated in US Dollars)

|                                                         |   |              |   |   |               |   |   | November 4,   |  
|-------------------------------------------------------- | - | ------------ | - | - | ------------- | - | - | ------------- | -
|                                                         |   |              |   |   |               |   |   | 2004 (Date of |  
|                                                         |   | Years ended  |   |   | Inception) to |  
|                                                         |   | February 28, |   |   | February 28,  |  
|                                                         |   | 2007         |   |   | 2006          |   |   | 2007          |  
|Expenses                                                 |   |              |   |   |               |   |   |               |  
|Accounting and audit fees                                | $ | 15,520       |   | $ | 12,393        |   | $ | 33,513        |  
|Bank charges                                             |   | 156          |   |   | 261           |   |   | 638           |  
|Filing                                                   |   | 2,977        |   |   | 2,931         |   |   | 6,108         |  
|Legal fees                                               |   | 9,094        |   |   | 16,230        |   |   | 28,124        |  
|Management fees 
      Note 5                           |   | 16,000       |   |   | 6,000         |   |   | 24,000        |  
|Mineral property acquisition and exploration
      costs |   | 5,000        |   |   | 5,000         |   |   | 17,000        |  
|Office and miscellaneous
       Note 4                  |   | 5,808        |   |   | 3,100         |   |   | 9,908         |  
|                                                         |   |              |   |   |               |   |   |               |  
|Net loss for the period                                  | $ | (54,555      | ) | $ | (45,915       | ) | $ | (119,291      | )
|                                                         |   |              |   |   |               |   |   |               |  
|Basic and diluted loss per share                         | $ | (0.00        | ) | $ | (0.00         | ) |   |               |  
|                                                         |   |              |   |   |               |   |   |               |  
|Weighted average number of shares outstanding            |   | 49,201,370   |   |   | 49,200,000    |   |   |               |  

SEE ACCOMPANYING NOTES

---

FOX PETROLEUM INC.(formerly Nova Resources Inc.) 
  (A Pre-exploration Stage Company) 
  STATEMENTS OF CASH FLOWS 
  for the years ended February 28, 2007 and 2006 
  and for the period November 4, 2004 (Date of Inception) to February 28, 2007
  
  (Stated in US Dollars)

|                                                                        |   |              |   |   |               |   |   | November 4,   |  
|----------------------------------------------------------------------- | - | ------------ | - | - | ------------- | - | - | ------------- | -
|                                                                        |   |              |   |   |               |   |   | 2004 (Date of |  
|                                                                        |   | Years ended  |   |   | Inception) to |  
|                                                                        |   | February 28, |   |   | February 28,  |  
|                                                                        |   | 2007         |   |   | 2006          |   |   | 2007          |  
|                                                                        |   |              |   |   |               |   |   |               |  
|Cash Flows used in Operating Activities                                 |   |              |   |   |               |   |   |               |  
|Net loss for the
      period                                           | $ | (54,555      | ) | $ | (45,915       | ) | $ | (119,291      | )
|Donated services and rent                                               |   | 9,000        |   |   | 9,000         |   |   | 21,000        |  
|Change in non-cash
      working capital balance related to operations: |   |              |   |   |               |   |   |               |  
|Accounts payable
      and accrued liabilities                          |   | 16,917       |   |   | 15,150        |   |   | 40,467        |  
|Advances
      payable                                                  |   | -            |   |   | (800          | ) |   | -             |  
|                                                                        |   |              |   |   |               |   |   |               |  
|Net cash used in operating activities                                   |   | (28,638      | ) |   | (22,565       | ) |   | (57,824       | )
|                                                                        |   |              |   |   |               |   |   |               |  
|Financing Activities                                                    |   |              |   |   |               |   |   |               |  
|Issuance of common shares                                               |   | 100,000      |   |   | -             |   |   | 146,900       |  
|Advance from related
      parties                                      |   | 29,975       |   |   | -             |   |   | 29,975        |  
|                                                                        |   |              |   |   |               |   |   |               |  
|Net cash provided by financing activities                               |   | 129,975      |   |   | -             |   |   | 176,875       |  
|                                                                        |   |              |   |   |               |   |   |               |  
|Increase (decrease) in cash during the period                           |   | 101,337      |   |   | (22,565       | ) |   | 119,051       |  
|                                                                        |   |              |   |   |               |   |   |               |  
|Cash, beginning of period                                               |   | 17,714       |   |   | 40,279        |   |   | -             |  
|                                                                        |   |              |   |   |               |   |   |               |  
|Cash, end of period                                                     | $ | 119,051      |   | $ | 17,714        |   | $ | 119,051       |  

SEE ACCOMPANYING NOTES

---

FOXPETROLEUMINC.(formerly Nova Resources Inc.) 
  STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIENCY) 
  for the period November 4, 2004 (Date of Inception) to February 28, 2007 
  (Stated in US Dollars)

|                                              |  |                      |  |   |           |  |   |                 |   |   | Deficit     |   |   |         |  
|--------------------------------------------- |  | -------------------- |  | - | --------- |  | - | --------------- | - | - | ----------- | - | - | ------- | -
|                                              |  |                      |  |   |           |  |   |                 |   |   | Accumulated |   |   |         |  
|                                              |  |                      |  |   |           |  |   | Additional      |   |   | During the  |   |   |         |  
|                                              |  | *Common
      Shares |  |   | Paid-in   |  |   | Pre-exploration |   |   |             |  
|                                              |  | Number               |  |   | Par Value |  |   | Capital         |   |   | Stage       |   |   | Total   |  
|                                              |  |                      |  |   |           |  |   |                 |   |   |             |   |   |         |  
|Capital stock issued for cash  at $0.0001667 |  | 29,400,000           |  | $ | 29,400    |  | $ | (24,500         | ) | $ | -           |   | $ | 4,900   |  
| at $0.0016667                               |  | 19,200,000           |  |   | 19,200    |  |   | 12,800          |   |   | -           |   |   | 32,000  |  
| at $0.0166667                               |  | 600,000              |  |   | 600       |  |   | 9,400           |   |   | -           |   |   | 10,000  |  
|Donated services and rent                     |  | -                    |  |   | -         |  |   | 3,000           |   |   | -           |   |   | 3,000   |  
|Net loss for the period                       |  | -                    |  |   | -         |  |   | -               |   |   | (18,821     | ) |   | (18,821 | )
|                                              |  |                      |  |   |           |  |   |                 |   |   |             |   |   |         |  
|Balance, February 28, 2005                    |  | 49,200,000           |  |   | 49,200    |  |   | 700             |   |   | (18,821     | ) |   | 31,079  |  
|                                              |  |                      |  |   |           |  |   |                 |   |   |             |   |   |         |  
|Donated services and rent                     |  | -                    |  |   | -         |  |   | 9,000           |   |   | -           |   |   | 9,000   |  
|Net loss for the year                         |  | -                    |  |   | -         |  |   | -               |   |   | (45,915     | ) |   | (45,915 | )
|                                              |  |                      |  |   |           |  |   |                 |   |   |             |   |   |         |  
|Balance, February 28, 2006                    |  | 49,200,000           |  |   | 49,200    |  |   | 9,700           |   |   | (64,736     | ) |   | (5,836  | )
|                                              |  |                      |  |   |           |  |   |                 |   |   |             |   |   |         |  
|Capital stock issued for cash - at $1.00      |  | 100,000              |  |   | 100       |  |   | 99,900          |   |   | -           |   |   | 100,000 |  
|Donated services and rent                     |  | -                    |  |   | -         |  |   | 9,000           |   |   | -           |   |   | 9,000   |  
|Net loss for the period                       |  | -                    |  |   | -         |  |   | -               |   |   | (54,555     | ) |   | (54,555 | )
|                                              |  |                      |  |   |           |  |   |                 |   |   |             |   |   |         |  
|Balance, August 31, 2006                      |  | 49,300,000           |  | $ | 49,300    |  | $ | 118,600         |   | $ | (119,291    | ) | $ | 48,609  |  

* The common stock issued has been retroactively restated to
  reflect a forward split of 6 new shares for 1 old share, effective on January
  11, 2007. The par value of common stock and additional paid-in capital has been
  retroactively restated to reflect this change.

SEE ACCOMPANYING NOTES

---

FOX PETROLEUM INC.(formerly Nova Resources Inc.) 
  (A Pre-exploration Stage Company) 
  NOTES TO THE FINANCIAL STATEMENTS 
  February 28, 2007 and 2006 
  (Stated in US Dollars)

|Note 1 | Nature of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       | Organization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       | Fox Petroleum Inc. (formerly
        Nova Resources Inc.) (the Company) was incorporated on November
        4, 2004, under the laws of the State of Nevada, USA. The Company is a
        public company whose common shares are listed for trading on the United
        States Over-the- Counter Bulletin Board.                                                                                                                                                                                                                                                                                                                                                          
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       | The Company had acquired a mineral
        property located in the Northwest Territories, Canada and had not yet
        determined whether this property contains reserves that were economically
        recoverable. Subsequent to February 28, 2007, the Company changed the
        direction of its exploration activities from mineral properties to the
        acquisition, exploration, development and production of American and international
        oil and gas projects (Note 8).                                                                                                                                                                              
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       | Merger                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       | By agreement dated January 11,
        2007, a wholly-owned subsidiary of the Company, Fox Petroleum Inc., incorporated
        on January 9, 2007, under the laws of the State of Nevada, was merged
        into the Company for the sole purpose of changing the Companys name.
        The Company became the surviving entity and changed its name from Nova
        Resources Inc. to Fox Petroleum Inc. to further reflect the Companys
        anticipation of pursuing other business opportunities.                                                                                                                                                                
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       | The Companys year-end
        is February 28.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Note 2 | Summary of Significant Accounting
        Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       | The financial statements of
        the Company have been prepared in accordance with accounting principles
        generally accepted in the United States of America. Because a precise
        determination of many assets and liabilities is dependent upon future
        events, the preparation of financial statements for a period necessarily
        involves the use of estimates, which have been made using careful judgment.
        Actual results may vary from these estimates. The financial statements
        have, in managements opinion, been properly prepared within the
        framework of the significant accounting policies summarized below:
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       | Pre-exploration Stage Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       | The Company complies with Financial
        Accounting Standard Board Statement No. 7 and The Securities and Exchange
        Commission Exchange Act Guide 7 for its characterization of the Company
        as pre-exploration stage.                                                                                                                                                                                                                                                                                                                                                                                                                                        

---

Fox Petroleum Inc. (formerly Nova Resources Inc.) 
  (A Pre-exploration Stage Company) 
  Notes to the Financial Statements 
  February 28, 2007 and 2006 
  (Stated in US Dollars)  Page 2

|Note 2 | Summary of Significant Accounting Policies (contd)
|------ | ----------------------------------------------------

Mineral Property

Costs of lease, acquisition, exploration,
  carrying and retaining unproven mineral lease properties are expensed as incurred.

Development Stage Company

The Company complies with Financial
  Accounting Standard Board Statement (SFAS) No. 7 for its characterization
  of the Company as a Development Stage Company. The Company is devoting substantially
  all of its present efforts to establish a new business and none of its planned
  principal operations have commenced.

Oil and Gas Properties

The Company follows the full cost method
  of accounting for oil and gas operations whereby all costs of exploring for
  and developing oil and gas reserves are initially capitalized on a country-by-country
  (cost centre) basis. Such costs include land acquisition costs, geological and
  geophysical expenses, carrying charges on non-producing properties, costs of
  drilling and overhead charges directly related to acquisition and exploration
  activities.

Costs capitalized, together with the
  costs of production equipment, are depleted and amortized on the unit-of-production
  method based on the estimated gross proved reserves. Petroleum products and
  reserves are converted to a common unit of measure, using 6 MCF of natural gas
  to one barrel of oil.

Costs of acquiring and evaluating unproved
  properties are initially excluded from depletion calculations. These unevaluated
  properties are assessed periodically to ascertain whether impairment has occurred.
  When proved reserves are assigned or the property is considered to be impaired,
  the cost of the property or the amount of the impairment is added to costs subject
  to depletion calculations.

If capitalized costs, less related accumulated
  amortization and deferred income taxes, exceed the full cost ceiling
  the excess is expensed in the period such excess occurs. The full cost
  ceiling is determined based on the present value of estimated future net
  revenues attributed to proved reserves, using current prices less estimated
  future expenditures plus the lower of cost and fair value of unproven properties
  within the cost centre.

Proceeds from a sale of petroleum and
  natural gas properties are applied against capitalized costs, with no gain or
  loss recognized, unless such a sale would alter the relationship between capitalized
  costs and proved reserves of oil and gas attributable to a cost centre. Royalties
  paid net of any tax credits received are netted with oil and gas sales.

---

Fox Petroleum Inc. (formerly Nova Resources Inc.) 
  (A Pre-exploration Stage Company) 
  Notes to the Financial Statements 
  February 28, 2007 and 2006 
  (Stated in US Dollars)  Page 3

|Note 2 | Summary of Significant Accounting Policies (contd)
|------ | ----------------------------------------------------

Environmental Costs

Environmental expenditures that relate
  to current operations are expensed or capitalized as appropriate. Expenditures
  that relate to an existing condition caused by past operations, and which do
  not contribute to current or future revenue generation, are expensed. Liabilities
  are recorded when environmental assessments and/or remedial efforts are probable,
  and the cost can be reasonably estimated. Generally, the timing of these accruals
  coincides with the earlier of:

i) completion of a feasibility study:
  or 
  ii) the Companys commitments to a plan of action based on the then known
  facts.

There have been no environmental expenses
  incurred by the Company.

Foreign Currency Translation

The Company uses the United States of
  America dollar as its functional and reporting currency for consistency with
  registrants of the Securities and Exchange Commission (SEC) and
  in accordance with the Statement of Financial Accounting (FAS) No.
  52.

Assets and liabilities denominated in
  a foreign currency are translated at the exchange rate in effect at the year-end
  and capital accounts are translated at historical rates. Income statement accounts
  are translated at the average rates of exchange prevailing during the year and
  are included in the Comprehensive Income Account in Stockholders Equity,
  if applicable.

Transactions undertaken in currencies
  other than the functional currency of the Company are translated using the exchange
  rate in effect as of the transaction date. Any exchange gains or losses are
  included in other income or expenses on the Statement of Operations, if applicable.

Financial Instruments

The carrying value of cash, accounts
  payable and accrued liabilities and due to related party approximates their
  fair value because of the short maturity of these instruments. Unless otherwise
  noted, it is managements opinion that the Company is not exposed to significant
  interest, currency or credit risks arising from these financial instruments.

---

Fox Petroleum Inc. (formerly Nova Resources Inc.) 
  (A Pre-exploration Stage Company) 
  Notes to the Financial Statements 
  February 28, 2007 and 2006 
  (Stated in US Dollars)  Page 4

|Note 2 | Summary of Significant Accounting Policies (contd)
|------ | ----------------------------------------------------

Income Taxes

The Company uses the assets and liability
  method of accounting for income taxes pursuant to FAS No. 109 Accounting
  for Income Taxes. Under the assets and liability method of FAS No. 109,
  deferred tax assets and liabilities are recognized for the future tax consequences
  attributable to temporary differences between the financial statements carrying
  amounts of existing assets and liabilities and their respective tax bases. Deferred
  tax assets and liabilities are measured using enacted tax rates expected to
  apply to taxable income in the years in which those temporary differences are
  expected to be recovered or settled.

Basic and Diluted Loss Per Share

The Company reports basic loss per share
  in accordance with the FAS No. 128, Earnings Per Share. Basic loss
  per share is computed using the weighted average number of shares outstanding
  during the period. Diluted loss per share has not been provided, as it would
  be anti-dilutive.

New Accounting Standards

In June 2006, the Financial Accounting
  Standards Board (FASB) issued FASB Interpretation No. 48, Accounting
  for Uncertainty in Income Taxes. The interpretation clarifies the accounting
  for uncertainty in income taxes recognized in a companys financial statements
  in accordance with Statement of Financial Accounting Standards No. 109, Accounting
  for Income Taxes. Specifically, the pronouncement prescribes a recognition
  threshold and a measurement attribute for the financial statement recognition
  and measurement of a tax position taken or expected to be taken in a tax return.
  The interpretation also provides guidance on the related derecognition, classification,
  interest and penalties, accounting for interim periods, disclosure and transition
  of uncertain tax position. The interpretation is effective for fiscal years
  beginning after December 15, 2006. The adoption of FIN 48 is not expected to
  have a material impact on the Companys consolidated financial position,
  results of operations or cash flows; however, the Company is still analyzing
  the effects of FIN 48.

In September 2006, the FASB issued SFAS
  No. 157, Fair Value Measurements. This Statement defines fair value
  as used in numerous accounting pronouncements, establishes a framework for measuring
  fair value in generally accepted accounting principles and expands disclosure
  related to the use of fair value measures in financial statements. The Statement
  is to be effective for the Companys financial statements issued in 2008;
  however, earlier application is encouraged. The Company is currently evaluating
  the timing of adoption and the impact that adoption might have on its financial
  position or results of operations.

---

Fox Petroleum Inc. (formerly Nova Resources Inc.) 
  (A Pre-exploration Stage Company) 
  Notes to the Financial Statements 
  February 28, 2007 and 2006 
  (Stated in US Dollars)  Page 5

|Note 2 | Summary of Significant Accounting Policies (contd)
|------ | ----------------------------------------------------

New Accounting Standards 
  (contd)

In September 2006, the Securities and
  Exchange Commission (SEC) issued Staff Accounting Bulletin No. 108
  (SAB 108). Due to diversity in practice among registrants, SAB 108
  expressed SEC staff views regarding the process by which misstatements in financial
  statements are evaluated for purposes of determining whether financial statement
  restatement is necessary. SAB 108 is effective for fiscal years ending after
  November 15, 2006, and early application is encouraged. The Company does not
  believe SAB 108 will have a material impact on its financial position or results
  from operations.

In December 2006, the FASB issued FASB
  Staff Position (FSP) EITF 00-19-2, Accounting for Registration
  Payment Arrangements. This FSP specifies that the contingent obligation
  to make future payments or otherwise transfer consideration under a registration
  payment arrangement should be separately recognized and measured in accordance
  with FASB No. 5, Accounting for Contingencies. This FSP is effective
  immediately for registration payment arrangements and the financial instruments
  subject to those arrangements that re entered into or modified subsequent to
  December 31, 2006. For registration payment arrangements and financial instruments
  subject to those arrangements that were entered into prior to December 31, 2006,
  the guidance in the FSP is effective January 1, 2006 for the Company. The Company
  does not believe that this FSP will have a material impact on its financial
  position or results from operations.

On February 15, 2007, the FASB issued
  SFAS No. 159 The Fair Value Option for Financial Assets and Financial
  Liabilities. This Statement establishes presentation and disclosure requirements
  designed to facilitate comparisons between companies that choose different measurement
  attributes for similar types of assets and liabilities. SFAS No. 159 is effective
  for the Companys financial statements issued in 2008. The Company is currently
  evaluating the impact that the adoption of SFAS No. 159 might have on its financial
  position or results of operations.

|Note 3 | Capital Stock
        Note 8                                                                                                                                                                                                                                                                                                                                                                                          
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                        
|       | Commitments                                                                                                                                                                                                                                                                                                                                                                                                            
|       |                                                                                                                                                                                                                                                                                                                                                                                                                        
|       | Share Purchase Warrants                                                                                                                                                                                                                                                                                                                                                                                                
|       |                                                                                                                                                                                                                                                                                                                                                                                                                        
|       | At February 28, 2007, there
        are 100,000 (2006: NIL) share purchase warrants outstanding entitling
        the holders thereof the right to acquire one common share for each warrant
        held at $1.25 per share until February 23, 2010. These warrants were issued
        in conjunction with the 100,000 common stock issued pursuant to the private
        placement of 100,000 units at $1 per unit.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                        
|       | A summary of changes in the
        Companys warrants for the years ended February 28, 2007 and 2006
        is presented below:                                                                                                                                                                                                                                                                                      

---

Fox Petroleum Inc. (formerly Nova Resources Inc.) 
  (A Pre-exploration Stage Company) 
  Notes to the Financial Statements 
  February 28, 2007 and 2006 
  (Stated in US Dollars)  Page 6

|Note 3 | Capital Stock (contd)
|------ | -----------------------
|       |                        
|       | Commitments (contd)  
|       |                        
|       | Share Purchase Warrants

| |                          |  | 2007      |  |   | 2006     | 
| | ------------------------ |  | --------- |  | - | -------- | 
| |                          |  |           |  |   | Weighted | 
| |                          |  |           |  |   | Average  | 
| |                          |  | Number of |  |   | Exercise | 
| |                          |  | Warrants  |  |   | Price    | 
| |                          |  |           |  |   |          | 
| | Outstanding, beginning   |  |           |  |   |          | 
| | of year                  |  | -         |  |   | -        | 
| | Granted                  |  | 100,000   |  | $ | 1.25     | 
| |                          |  |           |  |   |          | 
| | Outstanding, end of year |  | 100,000   |  | $ | 1.25     | 

|Note 4 | Mineral Property                                                                                                                                                                                                                 
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                  
|       | Tryme Claim                                                                                                                                                                                                                      
|       |                                                                                                                                                                                                                                  
|       | During the year ended February
        28, 2007, the Company abandoned its interest in the Tryme claim.                                                                                                                          
|       |                                                                                                                                                                                                                                  
|Note 5 | Related Party Transactions Note 8                                                                                                                                                                                               
|       |                                                                                                                                                                                                                                  
|       | The President and director of
        the Company has provided management services and office premises at no
        charge. The fair value of these services has been recorded as additional
        paid-in capital as follows:

| |                 |   |              |  |   |               |  |   | November 4,   | 
| | --------------- | - | ------------ |  | - | ------------- |  | - | ------------- | 
| |                 |   |              |  |   |               |  |   | 2004 (Date of | 
| |                 |   | Years ended  |  |   | Inception) to | 
| |                 |   | February 28, |  |   | February 28,  | 
| |                 |   | 2007         |  |   | 2006          |  |   | 2007          | 
| |                 |   |              |  |   |               |  |   |               | 
| | Management fees | $ | 16,000       |  | $ | 6,000         |  | $ | 24,000        | 
| | Rent            |   | 3,000        |  |   | 3,000         |  |   | 7,000         | 
| |                 |   |              |  |   |               |  |   |               | 
| |                 | $ | 19,000       |  | $ | 9,000         |  | $ | 31,000        | 

Included in accounts payable and accrued
  liabilities at February 28, 2007, is $10,000 (2006: $Nil) owed to a director
  of the Company for unpaid management fees.

The amounts due to related parties are
  unsecured, non-interest bearing and have no specific terms for repayment. These
  amounts are due to the director of the Company and a company controlled by the
  director of the Company.

---

Fox Petroleum Inc. (formerly Nova Resources Inc.) 
  (A Pre-exploration Stage Company) 
  Notes to the Financial Statements 
  February 28, 2007 and 2006 
  (Stated in US Dollars)  Page 7

|Note 6 | Deferred Tax Assets                                                                  
|------ | -------------------------------------------------------------------------------------
|       |                                                                                      
|       | The significant components of the Companys
      deferred tax assets are as follows:

| |                                |   | February 28, |  
| | ------------------------------ | - | ------------ | -
| |                                |   | 2007         |  
| |                                |   |              |  
| | Deferred tax assets            |   |              |  
| | Non-capital loss carry forward | $ | 18,269       |  
| | Valuation allowance            |   | (18,269      | )
| |                                |   |              |  
| |                                | $ | -            |  

|       | The amount taken into income
        as deferred tax assets must reflect that portion of the income tax loss
        carry forwards that is more likely than not to be realized from future
        operations. The company has chosen to provide an allowance of 100% against
        all available income tax loss carry forwards, regardless of their time
        of expiry.
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                 
|Note 7 | Corporation Income Tax Losses                                                                                                                                                                                                                                                                                                                                                   
|       |                                                                                                                                                                                                                                                                                                                                                                                 
|       | No provision for income taxes
        has been provided in these financial statements due to the net loss. At
        February 28, 2007, the Company has accumulated non-capital losses totaling
        $88,290, which is available to reduce taxable income in future taxation
        years. These losses expire beginning in 2025.                                          
|       |                                                                                                                                                                                                                                                                                                                                                                                 
|Note 8 | Subsequent Events                                                                                                                                                                                                                                                                                                                                                               

| | a) | On April 17, 2007, the Company incorporated
        a wholly owned subsidiary, Fox Petroleum (Alaska) Inc., in the State of
        Alaska.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                            
| | b) | On May 17, 2007, the Company:                                                                                                              
| |    |                                                                                                                                            
| |    | i)                                                                                                                                         
| |    |                                                                                                                                            
| |    | ii)                                                                                                                                        

---

Fox Petroleum Inc. (formerly Nova Resources Inc.) 
  (A Pre-exploration Stage Company) 
  Notes to the Financial Statements 
  February 28, 2007 and 2006 
  (Stated in US Dollars)  Page 8

|Note 8 | Subsequent Events (contd)
|------ | ---------------------------

| | c) | By an agreement dated May 22, 2007, the Company engaged
        an independent analyst to provide continuing research coverage regarding
        the Company beginning May 22, 2007 until May 31, 2009. The Company is
        required to pay $5,000 before commencement of work and twenty-four installments
        of $1,750.                                                                                                                                                                                                            
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | d) | On May 29, 2007, the Company entered into a Lease Purchase
        and Sale Agreement with a company to acquire a combined 100% working interest
        in 12 state-issued oil and gas leases in the north slope of Alaska subject
        to a royalty of 16.66667% to the State of Alaska and a private royalty
        equal to 5%. In consideration for the oil and gas leases the Company will
        issue 20,000,000 restricted common shares of the Company within five days
        of the assignment of the lease to the Company.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | e) | Pursuant to a farm-in agreement dated June 8, 2007,
        the Company agreed to acquire a 33.33% interest in two UK petroleum production
        licenses (Licenses). The Licenses are located in the UK North
        Sea. As consideration for the Licenses, the Company agreed to fund 100%
        of the seismic costs and its 33.33% share of the License budget costs
        as agreed by the parties.                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | The Company may have the option to acquire an additional
        26.67% interest in the License. The option is effective from completion
        of the transfer of the assigned interest to the Company and shall continue
        to be valid and exercisable until 28 days after receipt by the Company
        of the processed seismic data. To acquire the option, the Company shall
        pay an additional 46.67% of the dry-hole costs of an exploration well.                                                                    
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | f) | By agreements dated in June 2007, the Company agreed
        to pay three directors of the Company a total amount of $20,000 per month
        on a month to month basis for consulting and employment services to the
        Company.                                                                                                                                                                                                                                                                                                      

---

- 23 -

Item
8.           Changes In and
Disagreements With Accountants on Accounting and Financial Disclosure.

None.

Item
8A.         Disclosure Controls and
Procedures

As required by Rule 13a-15 under the Exchange Act, we have
carried out an evaluation of the effectiveness of the design and operation of
our company's disclosure controls and procedures as of the end of the period
covered by this annual report, being February 28, 2007. This evaluation was
carried out under the supervision and with the participation of our company's
management, including our company's President and Chief Executive Officer and
our companys Vice President, Finance.

Our management does not expect that our disclosure controls or
our internal controls over financial reporting will prevent all error and fraud.
A control system, no matter how well conceived and operated, can provide only
reasonable, but no absolute, assurance that the objectives of a control system
are met. Further, any control system reflects limitations on resources, and the
benefits of a control system must be considered relative to its costs. These
limitations also include the realities that judgments in decision-making can be
faulty and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some
persons, by collusion of two or more people or by management override of a
control. A design of a control system is also based upon certain assumptions
about potential future conditions; over time, controls may become inadequate
because of changes in conditions, or the degree of compliance with the policies
or procedures may deteriorate. Because of the inherent limitations in a
cost-effective control system, misstatements due to error or fraud may occur and
may not be detected.

Based upon that evaluation, our company's President and Chief
Executive Officer and our companys Vice President, Finance concluded that our
company's disclosure controls and procedures are effective as at the end of the
period covered by this report. There have been no changes in our internal
controls over financial reporting that occurred during the period covered by
this report that have materially affected, or are reasonably likely to
materially affect our internal controls over financial reporting.

Disclosure controls and procedures are controls and other
procedures that are designed to ensure that information required to be disclosed
in our company's reports filed or submitted under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the
Securities and Exchange Commission's rules and forms. Disclosure controls and
procedures include controls and procedures designed to ensure that information
required to be disclosed in our company's reports filed under the Exchange Act
is accumulated and communicated to management, including our President and Chief
Executive Officer and our Vice President, Finance as appropriate, to allow
timely decisions regarding required disclosure.

PART III

Item
9.           Directors,
Executive Officers, Promoters, Control Persons and Corporate Governance;
Compliance with Section 16(a) of the Exchange Act.

Directors and Executive Officers, Promoters and Control
Persons

The following individuals serve as the directors and executive
officers of our company. All directors of our company hold office until the next
annual meeting of our shareholders or until their successors have been elected
and qualified. The executive officers of our company are appointed by our board
of directors and hold office until their death, resignation or removal from
office.

---

- 24 -

Name
      Position Held with our Company
      Age
      Date First Elected or
      AppointedRichard Joseph Moore
    President, Chief
      Executive Officer and Director
    48
    June 8, 2007Alexander James Craven
    Vice President,
      Finance, Secretary, Treasurer and Director
    24
    November 4,
      2004Richard Bullock
    Chairman and Director
    59
    June 8, 2007


BUSINESS EXPERIENCE

The following is a brief account of the education and business
experience during at least the past five years of each director, executive
officer and key employee of our company, indicating the person's principal
occupation during that period, and the name and principal business of the
organization in which such occupation and employment were carried out.

Richard Joseph Moore, President, Chief Executive Officer and
Director

Mr. Richard Joseph Moore has acted as our President and Chief
Executive Officer since June 8, 2007. Mr. Moore is an oil and gas industry
veteran with nearly 30 years experience across almost every aspect of the
industry in both commercial and technical activities. In the last two years, Mr.
Moore has been a consultant to the oil industry on new field development and has
been a lecturer in Russian universities and academies, where he taught both
business and personal career development, comparing the methods used by the
Eastern and Western business communities. From 1998 to 2004, Mr. Moore worked
with Chaparral Resources, Inc./KAZ Commertz Group. Mr. Moore held the position
of Vice President-Finance and Chief Financial Officer of Chaparral Resources,
Inc., a publicly listed company in the U.S., since November 2002. Mr. Moore also
served as Finance Director for Closed Type JSC Karakudukmunay, an operating
subsidiary of Chaparral Resources, Inc. from 1998 to 2003.

Alexander James Craven, Vice President, Finance, Secretary,
Treasurer and Director

Mr. Alexander James Craven has acted as our Vice President,
Finance since June 8, 2007 and Secretary, Treasurer and Director since our
incorporation on November 4, 2004. Mr. Craven was our President and Chief
Executive Officer from November 4, 2004 to June 8, 2007. From September 2001 to
January 2002, Mr. Craven provided full-time marketing, website design and video
conferencing services to ITCC, a private company in Batley, West Yorkshire,
England. From February 2003 to September 2003, he was employed as a management
accountant with Mahony Green and Co. Accountants based in Workshop,
Nottinghamshire. From 1995 to 2002, Mr. Craven acted as a part-time accounting
consultant to Swiss Financial Services Company, a Geneva based money management
company. Mr. Craven studied the economics at the University of Sheffield in
England and is currently a candidate for the prestigious institute of Chartered
Financial Analysts.

Richard Bullock, Chairman and Director

Mr. Richard Bullock has acted as our Chairman and Director
since June 8, 2007. Mr. Bullock has been an independently employed investment
consultant during the last 5 years. Mr. Bullock specializes in the management of
start-up and development stage ventures as well as investment valuation. His
career as an independent business consultant spans more than 25 years, and
includes the supervision of drilling, exploration, and production programs for
resource-based companies.

Mr. Bullocks public company management involvements include
the development and execution of annual and quarterly financial Statements,
prospectuses, asset acquisitions, and share issuance. Mr. Bullock has also
managed

---

- 25 -

the listing and/or regulatory administration of approximately
30 public companies.

Mr. Bullock has been a director of Yellowcat Uranium PLC since
August, 2006. Yellowcat Uranium PLC has been a reporting issuer in the United
Kingdom since February, 2007. Over the past two decades, Mr. Bullocks executive
activities have included serving as director and senior officer for a number of
private corporations in Canada, the USA, and internationally. Other roles
involved acquisition and merger implementation, as well as all aspects of
contract negotiation, development and enforcement.

Mr. Bullock has lectured at both the Ryerson Polytechnical
Institute and Centennial College in Toronto, Canada, and is published by various
government departments.

Involvement in Certain Legal Proceedings

None of our directors, executive officers, promoters or control
persons have been involved in any of the following events during the past five
years:

|1. | 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;                                                                                                                  
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                        
|2. | any conviction in a criminal proceeding or being subject
        to a pending criminal proceeding (excluding traffic violations and other
        minor offences);                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                        
|3. | 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 his involvement in any type of business, securities
        or banking activities; or
|   |                                                                                                                                                                                                                                                                                                                                        
|4. | being found by a court of competent jurisdiction (in
        a civil action), 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

All proceedings of our board of directors were conducted by
resolutions consented to in writing by all the directors and filed with the
minutes of the proceedings of the directors. Such resolutions consented to in
writing by the directors entitled to vote on that resolution at a meeting of the
directors are, according to the corporate laws of the state of Nevada and the
bylaws of our company, as valid and effective as if they had been passed at a
meeting of the directors duly called and held.

Our company currently does not have nominating, compensation or
audit committees or committees performing similar functions nor does our company
have a written nominating, compensation or audit committee charter. Our board of
directors does not believe that it is necessary to have such committees because
it believes that the functions of such committees can be adequately performed by
the board of directors.

Our company does not have any defined policy or procedure
requirements for shareholders to submit recommendations or nominations for
directors. The board of directors believes that, given the early stage of our
development, a specific nominating policy would be premature and of little
assistance until our business operations develop to a more advanced level. Our
company does not currently have any specific or minimum criteria for the
election of nominees to the board of directors and we do not have any specific
process or procedure for evaluating such nominees. The board of directors
assesses all candidates, whether submitted by management or shareholders, and
makes recommendations for election or appointment.

A shareholder who wishes to communicate with our board of
directors may do so by directing a written request

---

- 26 -

addressed to our Chief Executive Officer, at the address
appearing on the first page of this current report.

Audit Committee Financial Expert

Our board of directors has determined that we do not have a
board member that qualifies as an audit committee financial expert as defined
in Item 401(e) of Regulation S-B, nor do we have a board member that qualifies
as independent as the term is used in Item 7(d)(3)(iv)(B) of Schedule 14A
under the Securities Exchange Act of 1934, as amended, and as defined by Rule
4200(a)(14) of NASDAQ Marketplace Rules.

We believe that our board of directors is capable of analyzing
and evaluating our financial statements and understanding internal controls and
procedures for financial reporting. The board of directors of our company does
not believe that it is necessary to have an audit committee because our company
believes that the functions of an audit committees can be adequately performed
by our board of directors. In addition, we believe that retaining an independent
director who would qualify as an audit committee financial expert would be
overly costly and burdensome and is not warranted in our circumstances given the
early stages of our development.

Section 16(a) Beneficial Ownership Compliance

Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires our executive officers and directors and persons who own more
than 10% of a registered class of our equity securities to file with the
Securities and Exchange Commission initial statements of beneficial ownership,
reports of changes in ownership and annual reports concerning their ownership of
our shares of common stock and other equity securities, on Forms 3, 4 and 5,
respectively. Executive officers, directors and greater than 10% shareholders
are required by the Securities and Exchange Commission regulations to furnish us
with copies of all Section 16(a) reports they file.

Based solely on our review of the copies of such forms received
by our company, or written representations from certain reporting persons that
no Form 5s were required for those persons, we believe that, during the fiscal
year ended February 28, 2007, all filing requirements applicable to our
officers, directors and greater than 10% beneficial owners as well as our
officers, directors and greater than 10% beneficial owners of our subsidiaries
were complied with, with the exception of the following:

Name
    Number ofLate
      Reports
    Number of Transactions NotReported on a Timely Basis
    Failure to FileRequired FormsAlexander James Craven
    1(1)
    1
    1(1)


|(1) | As of June 13, 2007, Mr. Craven did not file a Form 3 -
      Initial Statement of Beneficial Ownership of
Securities.
|--- | ----------------------------------------------------------------------------------------------------------------------

Item
10.         Executive Compensation.

Executive Compensation

The particulars of compensation paid to the following persons:

|(a) | our principal executive officer;                                                                                                                                                                                                       
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                        
|(b) | each of our two most highly compensated executive
      officers who were serving as executive officers at the end of the year
      ended February 28, 2007; and                                                                      
|    |                                                                                                                                                                                                                                        
|(c) | up to two additional individuals for whom disclosure
      would have been provided under (b) but for the fact that the individual
      was not serving as our executive officer at the end of the year ended
      February 28, 2007,

---

- 27 -

who we will collectively refer to as
our named executive officers, of our company for the years ended February 28,
2007 and 2006, are set out in the following summary compensation table, except
that no disclosure is provided for any named executive officer, other than our
principal executive officers, whose total compensation does not exceed $100,000
for the respective fiscal year:

SUMMARY COMPENSATION
        TABLEName and
        Principal Position
      Year
      Salary
        ($)
      Bonus
        ($)
      Stock
        Awards ($)
      Option
        Awards ($)
      Non-Equity Incentive
        Plan Compensati on ($)
      Change in Pension Value and Nonqualified Deferred Compensation
        Earnings ($)
      All Other
        Compensati on ($)
      Total
        ($)Richard Joseph 
        Moore(1)
        President and 
        Chief Executive 
        Officer
      2007 
        2006
      N/A 
        N/A
      N/A 
        N/A
      N/A 
        N/A
      N/A 
        N/A
      N/A 
        N/A
      N/A 
        N/A
      N/A 
        N/A
      N/A 
        N/AAlexander James 
        Craven 
        Vice President, 
        Finance, Secretary 
        and Treasurer
      2007 
        2006
      16,000 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil


|(1) | Mr. Moore became our President and Chief Executive
      Officer on June 8, 2007.
|--- | ---------------------------------------------------------------------------------

No executive officer of our company received annual salary and
bonus in excess of $100,000 for our company's prior fiscal year ended February
28, 2007.

Employment Contracts and Termination of Employment
Arrangements

On June 11, 2007, we entered into an employment agreement with
Richard Joseph Moore, pursuant to which Mr. Moore will serve as our President
and Chief Executive Officer. Mr. Moore is required to work a minimum of three
days per week for us. In consideration for Mr. Moores services, we will pay him
a salary of $12,000 per month. We will also reimburse Mr. Moore for all
reasonable traveling and other expenses incurred by him in connection with his
services to us. In addition, Mr. Moore is entitled to a minimum annual vacation
of four weeks. The term of the agreement is for an indefinite period and may be
terminated with or without cause, according to the terms of the agreement.

Since January 2007, Alexander James Craven, our Vice President,
Finance, has received a salary of $5,000 per month. On June 12, 2007, Mr. Craven
entered into a consulting agreement with us, pursuant to which we will pay Mr.
Craven $5,000 per month and all reasonable travelling and other expenses
incurred by him in connection with his duties to us. The term of the agreement
is for an indefinite period and may be terminated with or without cause,
according to the terms of the agreement.

On June 12, 2007, Richard Bullock, our Chairman and Director,
entered into a consulting agreement with us, pursuant to which we will pay Mr.
Bullock $3,000 per month and all reasonable travelling and other expenses
actually and properly incurred by him in connection with his duties. The term of
the agreement is for an indefinite period and may be terminated with or without
cause, according to the terms of the agreement.

Stock Option Plan

Currently, our company does not have a stock option plan in
favor of any director, officer, consultant or employee of our company.

---

- 28 -

Stock Options/SAR Grants

Our company did not grant any options or stock appreciation
rights during our fiscal year ended February 28, 2007.

Aggregated Option Exercises in Last Fiscal Year and Fiscal
Year-End Values

There were no options exercised during our fiscal year ended
February 28, 2007 by any officer or director of our company.

Directors Compensation

We reimburse our directors for expenses incurred in connection
with attending board meetings but did not pay director's fees or other cash
compensation for services rendered as a director during our fiscal year ended
February 28, 2007.

We have no present formal plan for compensating our directors
for their service in their capacity as directors. Directors are entitled to
reimbursement for reasonable travel and other out-of-pocket expenses incurred in
connection with attendance at meetings of our board of directors. The board of
directors may award special remuneration to any director undertaking any special
services on behalf of our company other than services ordinarily required of a
director. Members of special or standing committees may be allowed like
reimbursement and compensation for attending committee meetings.

Indebtedness of Directors, Senior Officers, Executive
Officers and Other Management

None of the directors or executive officers of our company or
any associate or affiliate of our company during the last two fiscal years, is
or has been indebted to our company by way of guarantee, support agreement,
letter of credit or other similar agreement or understanding currently
outstanding.

Item 11. Security Ownership of Certain Beneficial Owners and
Management.

Principal Stockholders

The following table sets forth, as of June 12, 2007, 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, as well as by each of our current directors and executive officers as a
group. 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.

Name and Address of
      Beneficial Owner
    Title of
      Class
    Amount and
      Nature of Beneficial
      Ownership(1)
    Percentage
      of Class(1)Richard Joseph Moore President and Chief Executive
      Officer and Director 1115 Finchley Road London, England NW11
      0QD
    Common Stock
    6,000,000(2)
    11.72%(2)


---

- 29 -

Name and Address of Beneficial Owner
      Title of Class
      Amount and Nature of
      Beneficial Ownership(1)
      Percentage of
      Class(1)Alexander James Craven Vice President, Finance,
      Secretary, Treasurer and Director 64 Knightsbridge London,
      England SW1X 7JF
    Common Stock
    9,000,000(2)
    17.58%(2)Richard Bullock Chairman and Director 2 Firview
      Place Port Moody, British Columbia, Canada V3H 5H6
    Common Stock
    Nil(3)
    Nil(3)Directors and Executive Officers as a Group (3 persons)
    Common Stock
    15,000,000
    29.30%


|(1) | Based on 51,186,792 shares of common stock issued and
      outstanding as of June 12, 2007. Except as otherwise indicated, we believe
      that the beneficial owner of the common stock listed above, based on
      information furnished by such owners, have sole investment and voting
      power with respect to such shares, subject to community property laws
      where applicable. Beneficial ownership is determined in accordance with
      the rules of the Securities and Exchange Commission and generally includes
      voting or investment power with respect to securities. Shares of common
      stock subject to options or warrants currently exercisable, or exercisable
      within 60 days, are deemed outstanding for purposes of computing the
      percentage ownership of the person holding such option or warrants, but
      are not deemed outstanding for purposes of computing the percentage
      ownership of any other person.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(2) | Mr. Richard Joseph Moore purchased 6,000,000 restricted
      common shares out of 15,000,000 shares held by Mr. Alexander James Craven
      on June 11, 2007. Pursuant to an escrow agreement to which Mr. Craven and
      Mr. Moore have entered, 6,000,000 restricted common shares are to be held
      by an escrow agent, Clark Wilson LLP. Subject to certain adjustments, the
      escrow agent will release 500,000 shares of common stock to Mr. Moore
      every three month starting July 20, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(3) | Mr. Richard Bullock is a 100% owner of Fox Petroleum LLC.
      Upon the completion of the transactions contemplated under the Lease
      Purchase and Sale Agreement dated May 29, 2007, we will issue 20,000,000
      restricted common shares to Fox Petroleum LLC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

Item
12.         Certain Relationships
and Related Transactions, and Director Independence.

During the last two years and except as disclosed below, none
of the following persons has had any direct or indirect material interest in any
transaction to which our company was or is a party, or in any proposed
transaction to which our company proposes to be a party:

(a) any director or officer of our company;

(b) any proposed director of officer of our company;

(c) any person who beneficially owns, directly or indirectly,
shares carrying more than 5% of the voting rights attached to our common stock;
or

(d) any member of the immediate family of any of the foregoing
persons (including a spouse, parents, children, siblings, and in-laws).

---

- 30 -

On October 3, 2006, our director, Alexander James Craven
advanced $10,000 to our company as working capital and on December 20, 2006,
advanced $19,975 to our company for a retainer to retain Clark Wilson LLP as our
legal counsel.

On June 11, 2007, we entered into an employment agreement with
Richard Joseph Moore, pursuant to which Mr. Moore will serve as our President
and Chief Executive Officer. Mr. Moore is required to work a minimum of three
days per week for us. In consideration for Mr. Moores services, we will pay him
a salary of $12,000 per month. We will also reimburse Mr. Moore for all
reasonable traveling and other expenses incurred by him in connection with his
services to us. In addition, Mr. Moore is entitled to a minimum annual vacation
of four weeks. The term of the agreement is for an indefinite period and may be
terminated with or without cause, according to the terms of the agreement.

On June 8, 2007, Alex Craven, Richard Joseph Moore, our
company, and Clark Wilson LLP entered into an escrow agreement in which Mr.
Craven and Mr. Moore have agreed that 6,000,000 restricted shares of our common
stock sold by Mr. Craven to Mr. Moore are to be held by an escrow agent, Clark
Wilson LLP. Subject to certain adjustments, the escrow agent will release
500,000 shares of common stock to Mr. Moore every three month starting July 20,
2007.

Since January 2007, Alexander James Craven, our Vice President,
Finance, has received a salary of $5,000 per month. On June 12, 2007, Mr. Craven
entered into a consulting agreement with us, pursuant to which we will pay Mr.
Craven $5,000 per month and all reasonable travelling and other expenses
incurred by him in connection with his duties to us. The term of the agreement
is for an indefinite period and may be terminated with or without cause,
according to the terms of the agreement.

On June 12, 2007, Richard Bullock, our Chairman and Director,
entered into a consulting agreement with us, pursuant to which we will pay Mr.
Bullock $3,000 per month and all reasonable travelling and other expenses
actually and properly incurred by him in connection with his duties. The term of
the agreement is for an indefinite period and may be terminated with or without
cause, according to the terms of the agreement.

Our directors are not independent. Alexander James Craven and
Richard Joseph Moore are executive officers of our company and Richard Bullock
is a 100% owner of Fox Petroleum LLC from which we will acquire oil and gas
leases in consideration for 20,000,000 restricted common shares of our company
under the Lease Purchase and Sale Agreement dated May 29, 2007. The
determination of independence of directors has been made using the definition of
independent director contained under Rule 4200(a)(15) of the Rule of National
Association of Securities Dealers.

Item
13.         Exhibits

Exhibits required by Item 601 of Regulation S-B

|Exhibit | Description                                                                                                                                                                                                                                 
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|No.     |                                                                                                                                                                                                                                             
|        |                                                                                                                                                                                                                                             
|(3)     | Articles of
      Incorporation and By-laws                                                                                                                                                                                                 
|        |                                                                                                                                                                                                                                             
|3.1     | Articles of Incorporation (incorporated by reference from
      our registration statement on Form Sb-2 filed August 19, 2005)                                                                                                              
|        |                                                                                                                                                                                                                                             
|3.2     | By-laws (incorporated by reference from our registration
      statement on Form SB-2 filed August 19, 2005)                                                                                                                                
|        |                                                                                                                                                                                                                                             
|3.3     | Certificate of change filed with the Secretary of State
      of Nevada on January 2, 2007 and which is effective on January 11, 2007
      (incorporated by reference from our current report on Form 8- K filed on
      January 12, 2007)
|        |                                                                                                                                                                                                                                             
|3.4     | Article of Merger filed with the Secretary of State of
      Nevada on January 11, 2007 (incorporated by reference from our current
      report on Form 8-K filed on February 7, 2007)                                                     
|        |                                                                                                                                                                                                                                             
|(10)    | Material Contracts                                                                                                                                                                                                                          

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|10.1   | Mineral Property
        Purchase Agreement dated January 25, 2005 (incorporated by reference from
        our registration statement on Form SB-2 filed August 19, 2005)
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                          
|10.2   | Private Placement
        Subscription Agreement dated February 23, 2007 (incorporated by reference
        from our current report on Form 8-K filed on June 1, 2007)   
|       |                                                                                                                                                                          
|10.3   | Lease Purchase
        and Sale Agreement dated May 29, 2007 ((incorporated by reference from
        our current report on Form 8-K filed on May 31, 2007)              
|       |                                                                                                                                                                          
|10.4   | Share Issuance
        Agreement date May 17, 2007 (incorporated by reference from our current
        report on Form 8-K filed on June 1, 2007)                         
|       |                                                                                                                                                                          
|10.5*  | Farm-In
        Agreement dated June 7, 2007                                                                                                                             
|       |                                                                                                                                                                          
|10.6*  | Employment
        Agreement dated June 11, 2007                                                                                                                         
|       |                                                                                                                                                                          
|10.7*  | Escrow
        Agreement dated June 8, 2007                                                                                                                              
|       |                                                                                                                                                                          
|10.8*  | Consulting
        Agreement dated June 8, 2007                                                                                                                          
|       |                                                                                                                                                                          
|10.9*  | Consulting
        Agreement dated June 8, 2007                                                                                                                          
|       |                                                                                                                                                                          
|10.10* | Share Purchase Agreement dated
      June 8, 2007                                                                                                                        
|       |                                                                                                                                                                          
|(21)   | Subsidiaries                                                                                                                                                             
|       |                                                                                                                                                                          
|21.1   | Fox Petroleum
        (Alaska) Inc., incorporated in Alaska                                                                                                              
|       |                                                                                                                                                                          
|21.2   | Fox Energy Exploration
        Limited, incorporated in England and Wales                                                                                                
|       |                                                                                                                                                                          
|(31)   | Section 302
        Certification                                                                                                                                        
|       |                                                                                                                                                                          
|31.1*  | Section
        302 Certification of Richard Joseph Moore                                                                                                                
|       |                                                                                                                                                                          
|31.2*  | Section
        302 Certification of Alexander James Craven                                                                                                              
|       |                                                                                                                                                                          
|(32)   | Section 906
        Certification                                                                                                                                        
|       |                                                                                                                                                                          
|32.1*  | Section
        906 Certification of Richard Joseph Moore and Alexander James Craven                                                                                     

*Filed herewith

Item
14.         Principal Accountant
Fees and Services

Audit Fees

The aggregate fees billed by Amisano Hanson, Chartered
Accountants, for professional services rendered for the audit of our annual
financial statements for review and of our quarterly interim financial
statements and in connection with statutory and regulatory filings were $15,277
for the fiscal year ended February 28, 2007 and $11,646 for the fiscal year
ended February 28, 2006. This category also includes the review of interim
financial statements and services in connection with registration statements and
other filings with the Securities and Exchange Commission.

Tax Fees

For the fiscal years ended February 28, 2007 and 2006, Amisano
Hanson, Chartered Accountants billed $nil and $nil, respectively, for fees for
tax compliance, tax advice and tax planning services.

We do not use Amisano Hanson, Chartered Accountants for
financial information system design and implementation. These services, which
include designing or implementing a system that aggregates source data
underlying the financial statements or generates information that is significant
to our financial statements, are provided internally or by other service
providers. We do not engage Amisano Hanson, Chartered Accountants to provide
compliance outsourcing services.

Effective May 6, 2003, the Securities and Exchange Commission
adopted rules that require that before Amisano Hanson, Chartered Accountants is
engaged by us to render any auditing or permitted non-audit related service, the
engagement be:

- approved by our audit committee (which consists of our entire board of
  directors); or
- entered into pursuant to pre-approval policies and procedures established
  by the board of directors, provided the policies and procedures are detailed
  as to the particular service, the board of directors is informed of each
  service, and such policies and procedures do not include delegation of the
  board of

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- 32 -

directors' responsibilities to
management.

The board of directors pre-approves all services provided by
our independent auditors. All of the above services and fees were reviewed and
approved by the board of directors either before or after the respective
services were rendered.

The board of directors has considered the nature and amount of
  fees billed by Amisano Hanson, Chartered Accountants and believes that the provision
  of services for activities unrelated to the audit is compatible with maintaining
  Amisano Hanson, Chartered Accountants independence.

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- 33 -

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

FOX PETROLEUM INC.

/s/ Richard Joseph Moore By: Richard Joseph Moore,
President, Chief Executive Officer and Director (Principal Executive
Officer) Dated: June 13, 2007



In accordance with the Exchange Act, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.



/s/ Richard Joseph Moore By: Richard Joseph Moore,
President, Chief Executive Officer and Director (Principal Executive
Officer) Dated: June 13, 2007



/s/ Alexander James Craven By: Alexander James
Craven, Vice President, Finance, Secretary, Treasurer and Director
(Principal Financial Officer and Principal Accounting Officer) Dated:
June 13, 2007

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