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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-KSB

(Mark One)

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

For the fiscal year ended February 29, 2008

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

For the transition period from
______________ to ________________

Commission file number 000-52721

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
|organization)                                    | No.)                           
|                                                 |                                
|64 Knightsbridge, London, England, UK            | SW1X 7JF                       
|(Address of principal executive offices)         | (Zip Code)                     

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

Securities registered under Section 12(b) of the Exchange
Act:

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

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

Common Stock(Title of class)

Check whether the issuer is not required to file reports
pursuant to Section 13 or 15(d) of the Exchange Act.[ ]

Check whether the issuer (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.[ ]

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

State issuers revenues for its most recent fiscal year.
$9,356

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.

7,060,000 common shares @ $3.825(1)= $27,004,500(1)Average of bid and ask closing prices on
June 10, 2008.

(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST 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[ ]N/A

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

State the number of shares outstanding of each of the issuers
classes of common equity, as of the latest practicable date. 14,968,245
shares of common stock as of June 10, 2008

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). N/A

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

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ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR ENDED FEBRUARY
29, 2009

TABLE OF CONTENTS

|Page                                                                                                                                                         
|-------------------------------------------------------------------------------------------------------------------------------------------------------------
|PART I                                                                                                                                                       
|ITEM 1. DESCRIPTION OF BUSINESS                                                                                                                              
|ITEM 2. DESCRIPTION OF PROPERTY.                                                                                                                             
|ITEM 3. LEGAL PROCEEDINGS                                                                                                                                    
|ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.                                                                                                 
|PART II                                                                                                                                                      
|ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
        MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES.                           
|ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN
        OF OPERATION.                                                                                   
|RISK FACTORS                                                                                                                                                 
|ITEM 7. FINANCIAL STATEMENTS.                                                                                                                                
|ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
        ACCOUNTING AND FINANCIAL DISCLOSURE.                                                        
|ITEM 8A. CONTROLS AND PROCEDURES.                                                                                                                            
|ITEM 8B. OTHER INFORMATION                                                                                                                                   
|PART III                                                                                                                                                     
|ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL
        PERSONS AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE
        EXCHANGE ACT
|COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE
        ACT OF 1934                                                                                 
|ITEM 10. EXECUTIVE COMPENSATION                                                                                                                              
|ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
        AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.                                             
|ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
        AND DIRECTOR INDEPENDENCE                                                                   
|EUROENERGY GROWTH CAPITAL S.A                                                                                                                                
|DIRECTOR INDEPENDENCE                                                                                                                                        
|ITEM 13. EXHIBITS                                                                                                                                            
|ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                                                                              
|SIGNATURES                                                                                                                                                   

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- 1 -

PART I

Item 1. Description of Business

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 crude oil 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 in the litigation process, including the
  possibility of newly discovered evidence or the acceptance of novel legal
  theories, and the difficulties in predicting the decisions of judges and
  juries; and
- other factors discussed under the section entitled Risk Factors
  commencing on page 22 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.

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In this annual report, 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.

Corporate History

We were incorporated in the State of Nevada on November 4, 2004
under the name Nova Resources Inc. On January 11, 2007, we effected a forward
stock split of our authorized, issued and outstanding shares of common stock on
a 6 new for 1 old basis. 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. On April 21, 2008, we effected a reverse stock split of
our authorized and issued and outstanding shares of common stock on a 1 new for
5 old basis. As a result, our authorized capital decreased from 450,000,000
shares of common stock to 90,000,000 shares of common stock.

At inception, we were a exploration stage company engaged in
the exploration of our mineral property. 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 Fox Petroleum
LLC.

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

On April 18, 2007, we incorporated another wholly owned
subsidiary, Fox Petroleum (Alaska) Inc., in the State of Alaska in order to
carry out our Alaskan operations after completing the lease purchase and sale
agreement with Fox Petroleum LLC.

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 North Slope, Alaska.
These leases are subject to a royalty of 16.67% to the State of Alaska and a
private royalty equal to 5%. In consideration for the oil and gas leases, we
issued 20,000,000 (4,000,000 post-reverse stock split) restricted common shares
of our company to Richard Bullock, the 100% owner of Fox Petroleum LLC.
Acquisitions of 11 oil and gas leases under the agreement with Fox Petroleum LLC
was completed on August 14, 2007, while that of 12th oil and gas lease was
completed effective March 1, 2008. These leases have been assigned to our wholly
owned subsidiary, Fox Petroleum (Alaska) Inc.

Also, 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 and on July 31,
2007, we completed the acquisition of the farm-in interests under the farm-in
agreement. Pursuant to the terms of the farm-in agreement, we acquired a total
of 33.33% interests in a UK petroleum production license. This license P1211
covers blocks 14/9a and 14/14b located in the UK North Sea. In consideration for
the farm-in interests, we agreed to fund 100% of the high resolution 2D seismic
survey and pseudo 3D processing over the license 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
license, we obtained an exclusive, non transferable option to acquire an
additional 26.67% interest in the license. The option will continue to be

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- 3 -

valid and exercisable by us until 28 days after our receiving
the processed seismic data from the high resolution 2D seismic survey and
processing. To acquire the additional 26.67% interest in the license, we will
have to pay 46.67% of the cost of an exploration well in addition to our
existing obligation to fund 33.33% of the cost of the exploration well under the
farm-in agreement.

On October 9, 2007, we entered into a subscription agreement
with Trius Energy, LLC, pursuant to which we acquired a 22.5% joint venture
interest in a gas well called the Spears Gas Unit 2, Well #1 in the Gomez Field,
Pecos County, Texas in consideration for $500,000. The joint venture consists of
Trius Energy, LLCs 72.75% working interest in the Spears Gas Unit 2, Well #1
and was formed to reopen the gas well.

On October 10, 2007, through Fox Petroleum (Alaska) Inc., we
entered into a lease purchase agreement with Daniel Donkel and Samuel Cade to
acquire 6 oil and gas leases located in the Cook Inlet, Alaska in consideration
for $750,000. These leases are subject to a total of 5% overriding royalty
interests to Daniel Donkel and Samuel Cade and a royalty of 16.67% to the State
of Alaska. Acquisitions of 3 oil and gas leases that had been issued were
completed effective March 1, 2008. The other 3 oil and gas leases have been
issued, but are not assigned to us yet.

On October 10, 2007, our wholly owned subsidiary, Fox Petroleum
(Alaska) Inc., entered into a purchase agreement with Daniel Donkel and Samuel
Cade to acquire a 100% working interest on 8 oil and gas leases located in the
North Slope, Alaska in consideration for $250,000 and 400,000 (80,000
post-reverse stock split) shares of our common stock. On November 2, 2007, the
purchase agreement was amended to add our company, Fox Petroleum Inc., as a
party to the purchase agreement. These leases are subject to a total of 5%
overriding royalty interests to Daniel Donkel and Samuel Cade and a royalty of
16.67% to the State of Alaska. Acquisitions of these 8 oil and gas leases were
completed effective March 1, 2008.

On November 8, 2007, through our wholly owned UK subsidiary,
Fox Energy Exploration Limited, we entered into a farm-in agreement with Valiant
North Sea Limited and Petrofac Energy Developments Limited. Pursuant to the
farm-in agreement, Valiant North Sea Limited and Petrofac Energy Developments
Limited agreed to assign a total of 46% interests in the southern part of block
211/17 located in the UK North Sea. In consideration for the 46% interest, we
agreed to pay for 89% of the cost of drilling an exploration well on the
southern part of the block and perform certain related works to the drilling an
exploration well. When we acquire the 46% interest, Valiant North Sea Limited
will have a 30% interest and Petrofac Energy Developments Limited will have a
24% interest.

We are required to spud the exploration well before December
31, 2008 unless the parties agree to a later date. Our primary target for the
exploration well is the Bourbon prospect located in the southern part of block
211/17.

On  January 24, 2008, we agreed to jointly participate with Aimwell Energy Limited  to identify a potential farm-in or acquisition opportunity and transferred  a  4.6% carried interest in the license block to Aimwell Energy Limited until a  full development plan is approved by the U.K. government.  Thereafter, Aimwell Energy Limited will be  responsible for its 4.6% share of the costs (10% of our interest). Michael Rose and Robert Frost, who  became directors of our company effective May 5, 2008, are the beneficial  owners and directors of Aimwell Energy Ltd. Aimwell Energy Ltd. will receive no  cash or stock payment, other than the carried interest.

On February 27, 2008, we entered into an agreement of
intentions to purchase the Geneseo-Edwards Program with Hodgden &
Associates. Pursuant to the agreement, we have an exclusive right to purchase
the program until July 31, 2008. If we purchase the program, the terms of the
agreement will be as follows: (i) the three leases of the program are located in
Ellsworth County, Kansas. A mutual area of interest will be established to cover
the entire leases in addition to some of the surrounding areas. An overriding
royalty in an amount equal to the overriding royalty interests retained by Mr.
Hodgden and

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Dr. Knight, two partners of Hodgden & Associates, will also
be assigned at no cost to Mr. Hodgden and Dr. Knight by us in all additional
acreage acquired in any manner by us within the mutual area of interest; (ii) we
will pay Mr. Hodgden and Dr. Knight $80,000 and Hodgeden and Associates will
sell and assign an 80% net revenue interest (100% working interest) in the three
leases. The landowner royalty on each of these leases is 12.5% and Hodgeden and
Associates will retain an overriding royalty interest of 7.5% in each lease; and
(iii) we will be expected to drill a minimum of ten wells on these leases and we
will have to drill and establish production on each lease before the expiration
date of each lease. The expiration dates of these leases are November 19, 2008,
August 19, 2009, and August 31, 2009. If we fail to drill and establish
production on each lease before the expiration date, we will have to pay
$150,000 per lease lost to Hodgden & Associates. We must be prepared to act
under this agreement by no later than July 31, 2008 by paying $80,000 due to
Hodgeden and Associates for the existing leases. If we fail to do so, we will
have to pay $175,000 to Hodgeden & Assocaites and release Hodgden &
Associates to find another buyer for the Program.

Our Current Business

We are a development stage company engaged in the
identification, 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. We have oil and gas leases in
Alaska, farm-in interests in the licenses covering blocks in the UK North Sea,
and joint venture interests in a gas well in Texas, and an exclusive right to
purchase leases in Kansas.

In addition to the exploration and development activities in
the U.S. and U.K., 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.

There is no assurance that a commercially viable oil and gas
reserve exists on any of our current and 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 and there is no assurance that we will discover one.

Our plan of operation is to conduct exploration work on each of
our 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 properties.

Even if we complete our proposed exploration programs on our
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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- 5 -

Competition

We are a development 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 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 and foreign
governmental regulations. We 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 we proceed with the development of our current and 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, local and
foreign laws and regulations relating primarily to the protection of human
health and the environment. As we have not proceeded to the development of our
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

As of June 10, 2008, we had 5 full-time employees and 7 part
time employees. We have three executive officers. Richard Moore serves as our
President and Chief Executive Officer. Alexander Craven serves as our Vice
President, Finance and Compliance Officer. William MacNee serves as our Chief
Operating Officer.

We periodically hire independent contractors to execute our
acquisition, exploration and development, if any, activities. We may hire
additional employees when circumstances warrant.

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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 350 square feet at
£5,750 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

North Slope

Leases Acquired from Fox Petroleum LLC

On August 14, 2007, we acquired 11 oil and gas leases in North
Slope, Alaska under the lease purchase and sale agreement that we entered into
with Fox Petroleum LLC on May 29, 2007. Effective March 1, 2008, we acquired
12th oil and gas lease under the agreement. These leases have been assigned to
our wholly owned subsidiary, Fox Petroleum (Alaska) Inc. We have combined 100%
working interests in these 12 state-issued oil and gas leases subject to a
royalty of 16.67% to the State of Alaska and a private royalty of 5%.

The 12 leases under the lease purchase and sale agreement
comprise approximately 32,490 acres. Eleven of the leases that we acquired under
the agreement are contiguous and 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
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.

One of these leases expires on August 31, 2012, 8 of these
leases expire on January 31, 2014, and 3 of these leases expire on February 29,
2014. 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.

Leases Acquired from Daniel Donkel and Samuel Cade

On October 10, 2007, our wholly owned subsidiary, Fox Petroleum
(Alaska) Inc., entered into a purchase agreement with Daniel Donkel and Samuel
Cade to acquire a 100% working interest on 8 oil and gas leases located in the
North Slope, Alaska in consideration for $250,000 and 400,000 shares of our
common stock. On November 2, 2007, the purchase agreement was amended to add us
as a party to the purchase agreement. These leases are subject to a total of 5%
overriding royalty interests to Daniel Donkel and Samuel Cade and a royalty of
16.67% to the State of Alaska. Acquisitions of these 8 oil and gas leases were
completed effective March 1, 2008.

The 8 leases under the purchase agreement comprise approximately
  40,747 acres. These leases expire between January 31, 2012 and February 29,
  2012.

Cook Inlet

On October 10, 2007, through Fox Petroleum (Alaska) Inc., we
entered into a lease purchase agreement with Daniel Donkel and Samuel Cade to
acquire 6 oil and gas leases located in the Cook Inlet, Alaska in consideration
for $750,000. These leases are subject to a total of 5% overriding royalty
interests to Daniel Donkel and Samuel Cade and a royalty of 16.67% to the State
of Alaska. Acquisitions of 3 oil and gas

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- 7 -

leases that had been issued were completed effective March 1,
2008. The other 3 oil and gas leases have been issued, but are not assigned to
us yet.

The 6 leases under the lease purchase agreement comprise approximately
  46,000 acres. All of these leases expire on September 30, 2013.

UK North Sea

The Bourbon Prospect

On November 8, 2007, through our wholly owned UK subsidiary,
Fox Energy Exploration Limited, we entered into a farm-in agreement with Valiant
North Sea Limited and Petrofac Energy Developments Limited. Pursuant to the
farm-in agreement, Valiant North Sea Limited and Petrofac Energy Developments
Limited agreed to assign a total of 46% interests in the southern part of block
211/17 (approximately 29,651 acres) located in the UK North Sea. In
consideration for the 46% interest, we agreed to pay for 89% of the cost of
drilling an exploration well on the southern part of the block and perform
certain related works to the drilling an exploration well. When we acquire the
46% interest, Valiant North Sea Limited will have a 30% interest and Petrofac
Energy Developments Limited will have a 24% interest.

We are required to spud the exploration well before December
31, 2008 unless the parties agree to a later date. Our primary target for the
exploration well is the Bourbon prospect located in the southern part of block
211/17.

On  January 24, 2008, we agreed to jointly participate with Aimwell Energy Limited  to identify a potential farm-in or acquisition opportunity and transferred  a  4.6% carried interest in the license block to Aimwell  Energy Limited until a full development plan is approved by the U.K.  government.  Thereafter, Aimwell Energy  Limited will be responsible for its 4.6% share of the costs (10% of our  interest). Michael Rose and Robert Frost, who  became directors of our company effective May 5, 2008, are the beneficial  owners and directors of Aimwell Energy Ltd. Aimwell Energy Ltd. will receive no  cash or stock payment, other than the carried interest.

The Anglesey Prospect

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 and on July 31, 2007, we
completed the acquisition of the farm-in interests under the farm-in agreement.
Pursuant to the terms of the farm-in agreement, we acquired a total of 33.33%
interests in a UK petroleum production license. This license P1211 covers blocks
14/9a and 14/14b located in the UK North Sea. In consideration for the farm-in
interests, we agreed to fund 100% of the high resolution 2D seismic survey and
pseudo 3D processing over the license 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
license, we obtained an exclusive, non transferable option to acquire an
additional 26.67% interest in the license. The option 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 processing. To acquire the
additional 26.67% interest in the license, we will have to pay 46.67% of the
cost of an exploration well in addition to our existing obligation to fund
33.33% of the cost of the exploration well under the farm-in agreement.

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- 8 -

The two blocks covered by the license are located off the east
  coast of the United Kingdom which contains the Anglesey Prospect. They are located
  in around 130m water depth some 150 km north-east of St. Fergus, and 30 km north
  of the Claymore field. The blocks comprise approximately 37,065 acres.

Texas

Spears Gas Unit 2, Well #1

On October 9, 2007, we entered into a subscription agreement
with Trius Energy, LLC, pursuant to which we acquired a 22.5% joint venture
interest in a gas well called the Spears Gas Unit 2, Well #1 in the Gomez Field,
Pecos County, Texas in consideration for $500,000. The joint venture consists of
Trius Energy, LLCs 72.75% working interest in the Spears Gas Unit 2, Well #1
and was formed to reopen the gas well.

Drilling activities commenced in November 2007 for the
reworking of the gas well and the initial test production from the gas well came
onstream in early January 2008. It is now being re-entered to perforate the
Wolfcamp zone to boost production.

Kansas

On February 27, 2008, we entered into an agreement of intentions
  to purchase the Geneseo-Edwards Program with Hodgden & Associates. Pursuant
  to the agreement, we have an exclusive right to purchase the program until July
  31, 2008. The program consists of three leases comprising 320 acres and these
  leases are located in Ellsworth County, Kansas. The expiration dates of these
  three leases are November 19, 2008, August 19, 2009, and August 31, 2009.

UK Onshore

On May 28, 2008, we acquired four 10km x 10km UK onshore
license blocks in the south of England. The United Kingdom government made
available this Petroleum Exploration and Development License and awarded the
blocks totaling 400 km sq to our company and Aimwell Energy Ltd. in the latest
round of onshore licensing. We have retained a 90% interest in the four blocks
and Aimwell Energy Ltd. retained a 10% interest.

In return for the license, we will have to shoot 60 km of 2D
seismic within the 6-year term of the license. Interpretation and analysis of
the seismic data acquired will help further define the prospect, after which we
will have an option to drill a well, or simply relinquish the license.

Item 3. Legal Proceedings.

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

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- 9 -

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

None

PART II

Item 5. Market for Common Equity and Related Stockholder
Matters and Small Business Issuer Purchases of Equity Securities.

Market information

Our common stock is quoted on the OTC Bulletin Board under the
symbol FXPT. 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 FXPE. On April 21, 2008,
we effected a 1 for 5 reverse stock split of our authorized, issued and
outstanding common stock and our trading symbol was changed to FXPT.

The following table shows the quarterly range of high and low
bid information for our common stock over the fiscal quarters for the last two
fiscal years as quoted on the OTC Bulletin Board. We obtained the following high
and low bid information from OTC Bulletin Board. Over-the-counter market
quotations reflect inter-dealer prices without retail mark-up, mark-down or
commission, and may not represent actual transactions. Investors should not rely
on historical prices of our common stock as an indication of its future price
performance. The last sale price of our common stock on June 10, 2008, was $3.84
per share.

Quarter Ended
    Bid High
    Bid Low05/31/2006
    $0.00
    $0.0008/31/2006
    $0.00
    $0.0011/30/2006
    $1.75
    $1.5002/28/2007
    $16.3
    $1.3005/31/2007
    $7.50
    $3.0008/31/2007
    $14.9
    $5.0511/30/2007
    $17.8
    $4.3502/29/2008
    $6.75
    $2.35


Transfer Agent

The transfer agent and registrar for our common stock is Empire
Stock Transfer Inc., 2470 St. Rose Pkwy, Suite 304, Henderson, NV 89074; Tel:
702-818-5898, Fax: 702-974-1444; e-mail: info@empirestock.com

Holders of Common Stock

As of May 28, 2008, we have 34 shareholders holding 14,968,245
shares of our common stock.

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- 10 -

Dividends

We have never declared or paid any cash dividends or
distributions on our capital stock. We currently intend to retain our future
earnings, if any, to support operations and to finance expansion and therefore
we do not anticipate paying any cash dividends on our common stock in the
foreseeable future.

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.

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

Our consolidated financial statements are stated in United
States dollars and are prepared in accordance with United States generally
accepted accounting principles. The following discussion should be read in
conjunction with our consolidated financial statements and the related notes
that appear elsewhere in this quarterly report.

Company Overview

We are a development stage company engaged in the
identification, 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. We have oil and gas leases in
Alaska, farm-in interests in the licenses covering blocks in the UK North Sea,
and joint venture interests in a gas well in Texas, and an exclusive right to
purchase leases in Kansas.

Our Oil and Gas Projects

Spears Gas Unit 2, Well #1

On October 9, 2007, we entered into a subscription agreement
with Trius Energy, LLC, pursuant to which we acquired a 22.5% joint venture
interest in a gas well called the Spears Gas Unit 2, Well #1 in the Gomez Field,
Pecos County, Texas in consideration for $500,000. The joint venture consists of
Trius Energy, LLCs 72.75% working interest in the Spears Gas Unit 2, Well #1
and was formed to reopen the gas well.

Drilling activities commenced in November 2007 for the
reworking of the gas well and the initial test production from the gas well came
onstream in early January 2008. It is now being re-entered to perforate the
Wolfcamp zone to boost production.

We are currently considering other similar oil and gas well
re-entry opportunities in this area. Given the nature of the projects, it is not
possible to define exact locations of our targets for 2008. However, we

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- 11 -

intend to participate in a minimum of 4 workover projects
onshore in the United States in 2008 at an estimated cost of $800,000.

Cook Inlet, Alaska

Leases Acquired from Daniel Donkel and Samuel Cade

On October 10, 2007, through Fox Petroleum (Alaska) Inc., we
entered into a lease purchase agreement with Daniel Donkel and Samuel Cade to
acquire 6 oil and gas leases located in the Cook Inlet, Alaska in consideration
for $750,000. These leases are subject to a total of 5% overriding royalty
interests to Daniel Donkel and Samuel Cade and a royalty of 16.67% to the State
of Alaska. Acquisitions of 3 oil and gas leases that had been issued were
completed effective March 1, 2008. The other 3 oil and gases have been issued,
but are not assigned to us yet.

Our primary focus in Alaska for the first quarter of 2008 is
the Catchers Mitt prospect located in the Cook Inlet, Alaska. We have put into
place a four-stage development program on the Catchers Mitt prospect in order
to begin drilling.

Stage one was the purchase of a magnetic airborne survey over
the area. Fugro Airborne Surveys Corp. carried out the survey, which covered
approximately 1,869 line miles. We are analyzing this data in order to optimize
our understanding of where potential reserves are best defined thus enhancing
our choice of drilling locations.

Stage two was our acquisition of a detailed gravity survey from
Photo Gravity Corporation in order to acquire in depth data regarding the
structures and formations on the leases.

Stage three involves the re-interpretation of original and
offset well logs. Our geologists are working with data originally collected from
test wells that were initiated in the early stages of the prospects
exploration. We are reworking this information using the latest available
technology to improve our ability to decide upon exact zones and targets for
drilling and producing hydrocarbons.

Stage four is the purchase of the available seismic data on the
leases. We ordered the seismic data and plan to drill 2 wells during the
2008-2009 drilling season.

North Slope, Alaska

Leases Acquired from Fox Petroleum LLC

On August 14, 2007, we acquired 11 oil and gas leases in North
Slope, Alaska under the lease purchase and sale agreement that we entered into
with Fox Petroleum LLC on May 29, 2007. Effective March 1, 2008, we acquired
12th oil and gas lease under the agreement. These leases have been assigned to
our wholly owned subsidiary, Fox Petroleum (Alaska) Inc. We have combined 100%
working interests in these 12 state-issued oil and gas leases subject to a
royalty of 16.67% to the State of Alaska and a private royalty of 5%.

We intend to conduct an aggressive exploration and appraisal
program on the 12 oil and gas leases acquired under the lease purchase and sale
agreement with Fox Petroleum LLC, over the next two years.

We have already met with industry specialists in Alaska to
discuss the co-ordination of our exploration program with them. We are also
discussing existing seismic data acquisition with several licensed data

---

- 12 -

brokers in the region. The gathering of data on the leases is
ongoing and our consultants are carrying out quality assurance tests on the data
available.

We aim to analyze as much quality information as is 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.

Thereafter, we intend to model the geological structure
surrounding and including the leases based on the direct and offset data
available to us.

We are also in discussions with Petroleum Geo-Services, a major
seismic acquisition company, regarding a new seismic survey across our leases
and beyond. Although negotiations are at an early stage, Petroleum Geo-Services
is monitoring interest across a wide range of Alsakan North Slope exploration
companies with regard to participating in the survey. This would spread the
costs as well as giving the participants new data on their own acreage and fresh
data on the acreage in the region which is yet to be awarded. Given the early
stage of negotiations, there is no assurance that we will reach an agreement
with Petroleum Geo-Services regarding a new seismic survey.

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 accumulation of hydrocarbons.
Electromagnetic and gravity survey processes provide an independent measurement
of the potential for hydrocarbons and could be used to select the prospects with
greatest chance of success.

We are currently discussing with other Alaskan explorers on re-entry.
  We are discussing with Petroleum Geo-Services and another major company on seismic
  data.

Leases Acquired from Daniel Donkel and Samuel Cade

On October 10, 2007, our wholly owned subsidiary, Fox Petroleum
(Alaska) Inc., entered into a purchase agreement with Daniel Donkel and Samuel
Cade to acquire a 100% working interest on 8 oil and gas leases located in the
North Slope, Alaska in consideration for $250,000 and 400,000 shares of our
common stock. On November 2, 2007, the purchase agreement was amended to add us
as a party to the purchase agreement. These leases are subject to a total of 5%
overriding royalty interests to Daniel Donkel and Samuel Cade and a royalty of
16.67% to the State of Alaska. Acquisitions of these 8 oil and gas leases were
completed effective March 1, 2008.

We are currently seeking to acquire all available data on these
  leases, such as seismic, gravity, and magnetic data, which we plan to tie in
  with the existing well logs and other offset and analog data. We are currently
  discussing with other Alaskan explorers on re-entry. We are discussing with
  Petroleum Geo-Services and another major company on seismic data.

UK North Sea

The Anglesey Prospect

On July, 31, 2007, through our wholly owned UK subsidiary, Fox
Energy Exploration Limited, we acquired a total of 33.33% interests in a UK
petroleum production license under a farm-in agreement dated June 8, 2007 with
Granby Enterprises Limited and Atlantic Petroleum UK Limited. The license P1211
covers blocks 14/9a and 14/14b located in the UK North Sea.

---

- 13 -

Pursuant to this farm-in agreement, we paid more than
$2,000,000 cost for the hi-density 2D seismic survey over the Anglesey prospect
located in the license. We acquired the seismic data on the Anglesey prospect
and are currently analyzing these data. Pending the final analysis of all
relevant data, we expect to be able to define a drilling location in the first
quarter of 2008, and hopefully commence drilling programs in the second half of
2008. We may have to spend approximately $4,000,000 for our share of the cost of
drilling an exploration well under the agreement. However, we are in active
negotiations with other UK North Sea venturers to optimize our equity position
in the license by inviting interested parties to participate in drilling the
well in return for a percentage of our interests in the license at a promote
uplift, meaning that we would charge more than 1% of our costs for each 1%
farmed-out (e.g. 1.5% or 2% charged to farminee per 1% farmed-out). This could
substantially reduce our expenditure exposure on the well, but could lead to our
having a reduced holding in the license. Furthermore, there is no assurance that
we will be able to reach an agreement with any of these venturers.

We are completing interpretation of processed data and
finalizing a location of an exploration well. We plan to drill the well once the
location is set.

The Bourbon Prospect

On November 8, 2007, through our wholly owned UK subsidiary,
Fox Energy Exploration Limited, we entered into a farm-in agreement with Valiant
North Sea Limited and Petrofac Energy Developments Limited. Pursuant to the
farm-in agreement, Valiant North Sea Limited and Petrofac Energy Developments
Limited agreed to assign a total of 46% interests in the southern part of block
211/17 located in the UK North Sea. In consideration for the 46% interest, we
agreed to pay for 89% of the cost of drilling an exploration well on the
southern part of the block and perform certain related works to the drilling an
exploration well. When we acquire the 46% interest, Valiant North Sea Limited
will have a 30% interest and Petrofac Energy Developments Limited will have a
24% interest.

We are required to spud the exploration well before December
31, 2008 unless the parties agree to a later date. Our primary target for the
exploration well is the Bourbon prospect located in the southern part of block
211/17.

Under a separate agreement with Aimwell Energy Ltd, we agreed
to transfer a 4.6% carried interest (10% of our acquired interest) to Aimwell
Energy Ltd. in recognition of its experience and technical support in defining
and developing the prospect. Michael Rose and Robert Frost, who became directors
of our company effective May 5, 2008, are the beneficial owners and directors of
Aimwell Energy Ltd. Aimwell Energy Ltd. will receive no cash or stock payment,
other than the carried interest.

On April 15, 2008, we signed a letter of commitment with
Senergy Limited, an international integrated oil services company, to utilize
the Byford Dolphin semi-submersible drilling rig to drill a well on our Bourbon
prospect. Senergy Limited countersigned the letter of commitment on May 5,
2008.

On May 21, 2008, we signed a letter of commitment whereby we agreed to commit to the use of a drilling rig commencing no earlier than October 1, 2008 for a total cost of $8,910,000. We also committed to enter into a well project management and integrated services contract for the management of a well program on the rig. We are also obligated to pay a fee of $1.75% of the operating rig rate in acknowledgement of the value provided with the rig opportunity, if we use the rig, but not the integrated project management services.

---

- 14 -

Kansas

On February 27, 2008, we entered into an agreement of
intentions to purchase the Geneseo-Edwards Program with Hodgden &
Associates. Pursuant to the agreement, we have an exclusive right to purchase
the program until July 31, 2008. The program consists of three leases comprising
320 acres and these leases are located in Ellsworth County, Kansas. The
expiration dates of these three leases are November 19, 2008, August 19, 2009,
and August 31, 2009.

We plan to conduct 10 well drilling program over the next 6 months.
  We are currently trying to obtain a rig and tubulars.

UK Onshore

On May 28, 2008, we acquired four 10km x 10km UK onshore
license blocks in the south of England. The United Kingdom government made
available this Petroleum Exploration and Development License and awarded the
blocks totaling 400 km sq to our company and Aimwell Energy Ltd. in the latest
round of onshore licensing. We have retained a 90% interest in the four blocks
and Aimwell Energy Ltd. retained a 10% interest.

In return for the license, we will have to shoot 60 km of 2D
seismic within the 6-year term of the license. Interpretation and analysis of
the seismic data acquired will help further define the prospect, after which we
will have an option to drill a well, or simply relinquish the license.

Anticipated Cash Requirements

We estimate our minimum operating expenses and working capital
requirements for the next 12 month period to be as follows:

Estimated Operating Expenses For the Next 12 Month PeriodExploration Costs
    $
    35,000,000Employee and Consultant Compensation
    
    1,000,000Professional Fees
    
    350,000General and Administrative Expenses
    
    250,000Total
    $
    36,600,000


Exploration Costs

We estimate that our exploration costs on our leases in Cook
Inlet, Alaska will be approximately $12,000,000 during the next 12 months, which
will include the costs of completing the four-stage development on the Catchers
Mitt prospect.

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- 15 -

We estimate that our exploration costs on our leases in North
Slope, Alaska (mainly to obtain seismic data) will be approximately $5,000,000
during the next 12 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
electromagnetic and gravity survey process.

We estimate that our exploration costs on our farm-in interests
in the UK North Sea licenses will be approximately $18,000,000 during the next
12 months, which will include drilling 2 exploration wells. These costs may be
substantially reduced depending on our ability to farm out a reasonable
percentage of our interests in the Anglesey and Bourbon prospects. We are
currently negotiating with several North Sea venturers which have shown interest
in participating in the exploration and appraisal of the two prospects. Given
the perceived potential of the prospects by the interested parties, we could
farm out part of our percentage interest on a promote basis whereby the incoming
farminees would acquire such interest by carrying us for a substantial portion
of the cost of drilling the wells.

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 12
month period will be approximately $300,000. We estimate that our employee
compensation expenses for the next 12 month period will be approximately
$700,000.

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 12 month period to be approximately
$350,000.

General and Administrative Expenses

We anticipate spending $250,000 on general and administrative
costs in the next 12 month period. These costs primarily consist of expenses
such as lease payments, office supplies and office equipment.

Liquidity and Capital Resources

As of February 29, 2008, we had cash of $301,601 and working
capital deficit of $329,809, compared to cash of $119,051 and working capital of
$48,609 as of February 28, 2007. 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 or existing shareholders,
and our ability to achieve and maintain profitable operations.

Financing from EuroEnergy Growth Capital S.A.

Share Issuances to EuroEnergy Growth Capital S.A.

On May 17, 2007, we entered into a share issuance agreement
with EuroEnergy Growth Capital S.A. or EuroEnergy whereby EuroEnergy will
advance up to $8,000,000 to our company under our drawdown requests, in exchange
for units of our common stock. Pursuant to the agreement, the price of a unit is
equal to 80% of the volume weighted average of the closing price of common stock
as quoted on Yahoo! Finance for the 10 banking days immediately preceding the
date of our drawdown request. Each unit consists of one common share and one
warrant. One warrant will entitle EuroEnergy to purchase one

---

- 16 -

additional common share at an exercise price equal to 125% of
the unit price. The warrants will be exercisable for three years from the date
of issue.

|1. | On June 1, 2007, we issued 377,358.4 units of our common
      stock to EuroEnergy at a deemed price of $5.30 per unit pursuant to the
      agreement. We gave EuroEnergy our drawdown request on May 17, 2007 in the
      amount of $2,000,000. Each warrant contained in the units entitles the
      holder to purchase one common share at an exercise price of $6.65 per
      common share until May 17, 2010.                   
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                          
|2. | On August 1, 2007, we issued 31,056 units of our common
      stock to EuroEnergy at a deemed price of $8.05 per unit pursuant to the
      agreement. We gave EuroEnergy our drawdown request on July 18, 2007 in the
      amount of $250,000. Each warrant contained in the units entitles the
      holder to purchase one common share at an exercise price of $10.05 per
      common share until August 1, 2010.                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                          
|3. | On September 18, 2007, we issued 44,199.8 units of our
      common stock to EuroEnergy at a deemed price of $9.05 per unit pursuant to
      the agreement. We gave EuroEnergy our drawdown request on August 7, 2007
      in the amount of $400,000. Each warrant contained in the units entitles
      the holder to purchase one common share at an exercise price of $11.30 per
      common share until September 10, 2010.       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4. | On September 18, 2007, we also issued 52,132.8 units of
      our common stock to EuroEnergy at a deemed price of $10.55 per unit
      pursuant to the agreement. We gave EuroEnergy our drawdown request on
      August 21, 2007 in the amount of $550,000. Each warrant contained in the
      units entitles the holder to purchase one common share at an exercise
      price of $13.20 per common share until September 10, 2010.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                          
|5. | On September 27, 2007, we issued 28,708.2 units of our
      common stock to EuroEnergy at a deemed price of $10.45 per unit pursuant
      to the agreement. We gave EuroEnergy our drawdown request on September 9,
      2007 in the amount of $300,000. Each warrant contained in the units
      entitles the holder to purchase one common share at an exercise price of
      $13.05 per common share until October 1, 2007.      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                          
|6. | On October 26, 2007, we issued 16,380.8 units of our
      common stock to EuroEnergy at a deemed price of $12.21 per unit pursuant
      to the agreement. We gave EuroEnergy our drawdown request on October 1,
      2007 in the amount of $200,000. Each warrant contained in the units
      entitles the holder to purchase one common share at an exercise price of
      $15.25 per common share until October 26, 2010.         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                          
|7. | On October 26, 2007, we issued 21,097 units of our common
      stock to EuroEnergy at a deemed price of $11.85 per unit pursuant to the
      agreement. We gave EuroEnergy our drawdown request on October 10, 2007 in
      the amount of $250,000. Each warrant contained in the units entitles the
      holder to purchase one common share at an exercise price of $14.80 per
      common share until October 26, 2010.          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                          
|8. | On October 26, 2007, we issued 35,897.4 units of our
      common stock to EuroEnergy at a deemed price of $9.75 per unit pursuant to
      the agreement. We gave EuroEnergy our drawdown request on October 23, 2007
      in the amount of $350,000. Each warrant contained in the units entitles
      the holder to purchase one common share at an exercise price of $12.20 per
      common share until October 26, 2010.         

---

- 17 -

|9.  | On November 28, 2007, we issued 47,337.2 units of our
      common stock to EuroEnergy at a deemed price of $8.45 per unit pursuant to
      the agreement. We gave EuroEnergy our drawdown request on October 31, 2007
      in the amount of $400,000. Each warrant contained in the units entitles
      the holder to purchase one common share at an exercise price of $10.55 per
      common share until November 28, 2010.                                  
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|10. | On January 24, 2008, we issued 96,153.8 units of our
      common stock to EuroEnergy at a deemed price of $5.20 per unit pursuant to
      the agreement. Each warrant contained in the units entitles the holder to
      purchase one common share at an exercise price of $6.50 per common share
      until January 24, 2011. We gave EuroEnergy our drawdown request on
      November 21, 2007 in the amount of $500,000.                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|11. | On March 26, 2008, we issued 43,478.2 units of our common
      stock to EuroEnergy at a deemed price of $3.45 per unit pursuant to the
      agreement. Each warrant contained in the units entitles the holder to
      purchase one common share at an exercise price of $4.30 per common share
      until January 16, 2011. We gave EuroEnergy our drawdown request on January
  16, 2008 in the amount of $150,000 and received the funds on January 18, 2008.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|12. | On March 26, 2008, we issued 48,387 units of our common
      stock to EuroEnergy at a deemed price of $3.10 per unit pursuant to the
      agreement. Each warrant contained in the units entitles the holder to
      purchase one common share at an exercise price of $3.90 per common share
      until January 30, 2011. We gave EuroEnergy our drawdown request on January
  30, 2008 in the amount of $150,000 and received the funds January 31, 2008.     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|13. | On March 26, 2008, we issued 89,285.8 units of our common
      stock to EuroEnergy at a deemed price of $2.80 per unit pursuant to the
      agreement. Each warrant contained in the units entitles the holder to
      purchase one common share at an exercise price of $3.50 per common share
      until February 11, 2011. We gave EuroEnergy our drawdown request on
  February 11, 2008 in the amount of $250,000 and received the funds February 12, 2008.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|14. | On March 26, 2008, we issued 96,774.2 units of our common
      stock to EuroEnergy at a deemed price of $3.10 per unit pursuant to the
      agreement. Each warrant contained in the units entitles the holder to
      purchase one common share at an exercise price of $3.90 per common share
      until February 26, 2011. We gave EuroEnergy our drawdown request on
  February 26, 2008 in the amount of $300,000 and received the funds February 28.      

Promissory Notes to EuroEnergy Growth Capital S.A.

Because of changes in market conditions, EuroEnergy requested
its financing to be debt financing instead of equity financing.

On April 1, 2008, EuroEnergy loaned a total of $250,000 to our
company. As evidence of the loan, we have executed and delivered to EuroEnergy a
promissory note dated April 1, 2008 in the principal amount of US$250,000, to be
paid on the earlier of (i) the date that we obtain equity financing from a third
party in the minimum amount of $1,000,000 net to our company, or (ii) April 1,
2009. For the period from the date of advance of the loan up to and including
the date that we repay the loan, interest will accrue on the loan on the balance
of principal outstanding at the rate of 10% per annum, calculated and compounded
monthly not in advance, until paid. Interest will be payable in a balloon
payment on the date that we repay the loan.

---

- 18 -

On May 1, 2008, EuroEnergy loaned a total of $150,000 to our
company. As evidence of the loan, we have executed and delivered to EuroEnergy a
promissory note dated May 1, 2008 in the principal amount of US$150,000, to be
paid on the earlier of (i) the date that we obtain equity financing from a third
party in the minimum amount of $1,000,000 net to our company, or (ii) May 1,
2009. For the period from the date of advance of the loan up to and including
the date that we repay the loan, interest will accrue on the loan on the balance
of principal outstanding at the rate of 10% per annum, calculated and compounded
monthly not in advance, until paid. Interest will be payable in a balloon
payment on the date that we repay the loan.

On May 23, 2008, EuroEnergy loaned a total of $50,000 to our
company. As evidence of the loan, we have executed and delivered to EuroEnergy a
promissory note dated May 23, 2008 in the principal amount of US$50,000, to be
paid on the earlier of (i) the date that we obtain equity financing from a third
party in the minimum amount of $1,000,000 net to our company, or (ii) May 23,
2009. For the period from the date of advance of the loan up to and including
the date that we repay the loan, interest will accrue on the loan on the balance
of principal outstanding at the rate of 10% per annum, calculated and compounded
monthly not in advance, until paid. Interest will be payable in a balloon
payment on the date that we repay the loan.

On May 30, 2008 we were loaned $450,000 pursuant to a loan agreement.  The principal and interest is to be paid on the earlier of (i) cash available from operations, (ii) the date that we obtain equity or debt financing from a third party in the minimum amount of $1,000,000, or (iii) August 31, 2008.  This loan bears interest at 12% per annum, calculated annually.  The loan is secured by our assets.  As additional compensation for the loan, we will issue to EuroEnergy 150,000 shares of our common stock.

Future Financing

Based on our current plan of operations, we do not currently
have sufficient amount of cash to satisfy our cash requirements for the next 12
months. We are pursuing various financing alternatives to meet our immediate and
long-term financial requirements.

Under the share issuance agreement with EuroEnergy, we may not
obtain financing from anyone other than EuroEnergy for 24 months from the date
of the share issuance agreement with EuroEnergy, without the prior written
consent of EuroEnergy. EuroEnergy also retains first right of refusal, relating
to any future financing of our company. On April 22, 2008, EuroEnergy gave us a
written consent to seek alternative financing. Pursuant to the share issuance
agreement with EuroEnergy, any proposed new financing is subject to approval of
the terms by EuroEnergy.

We are currently in negotiation to obtain a third party
financing in order to satisfy our cash requirements for our current plan of
operations. We are trying to finalize the financing based on a term sheet which
is described in note 10(d) to the financial statements. No assurances can be
given that the terms noted in the financial statements will be the final terms
or that a formal agreement will be entered into.

There are no assurances that we will be able to obtain funds
required for our continued operations. There can be no assurance that additional
financing will be available to us when needed or, if available, that it can be
obtained on commercially reasonable terms. If we are not able to obtain
additional financing on a timely basis, we will be unable to conduct our
operations as planned, and we will not be able to meet our other obligations as
they become due. In such event, we will be forced to scale down or perhaps even
cease our operations.

Going Concern

Because we are in the development stage, have not yet achieved
profitable operations and are dependent on our ability to raise capital from
stockholders or other sources to meet our obligations and repay our liabilities
arising from normal business operations when they become due, in their report on
our audited

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financial statements for the years ended February 29, 2008 and
February 28, 2007, our independent auditors included an explanatory paragraph
regarding concerns about our ability to continue as a going concern. Our
financial statements contain additional note disclosure describing the
circumstances that lead to this disclosure by our independent auditors.

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:

Development Stage Company

We comply with Financial Accounting Standard Board Statement
(SFAS) No. 7 for its 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.

Mineral Property

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

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.

Costs capitalized, together with the costs of production
equipment, will be 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 when such excess occurs. The full cost ceiling is determined based
on the present value of estimated future net revenues attributed to proved
reserves,

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using current prices less estimated future expenditures plus
the lower of cost and fair value of unproven properties within the cost
centre.

Future net cash flows from proved reserves using period-end,
non-escalated prices and costs are discounted to present value and compared to
the carrying value of oil and gas properties.

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 rate of depletion by more than 25%. Royalties paid
net of any tax credits received are netted with oil and gas sales.

Asset Retirement Obligations

We recognize the fair value of a liability for an asset
retirement obligation in the year in which it is incurred when a reasonable
estimate of fair value can be made. The carrying amount of the related
long-lived asset is increased by the same amount as the liability.

Changes in the liability for an asset retirement obligation due
to the passage of time will be measured by applying an interest method of
allocation. The amount will be recognized as an increase in the liability and an
accretion expense in the statement of operations. Changes resulting from
revisions to the timing or the amount of the original estimate of undiscounted
cash flows are recognized as an increase or a decrease in the carrying amount of
the liability for an asset retirement obligation and the related asset
retirement cost capitalized as part of the carrying amount of the related
long-lived asset. At February 29, 2008, our estimate of asset retirement
obligation was not significant.

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 a plan of action based on the then known facts.

There have been no environmental expenses incurred by our
company.

Advertising Costs

Advertising costs are expensed as incurred or concurrent with
the first time the advertisement takes place.

Foreign Currency Translation

We use the United States of America dollar as our functional
and reporting currency for consistency with registrants of the SEC and in
accordance with the SFAS 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.

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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 parties approximates their fair value because of
the short maturity of these instruments. Unless otherwise noted, it is
managements opinion that our company is 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 SFAS No. 109 Accounting for Income Taxes. Under the assets
and liability method of SFAS 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.

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 SFAS 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 positions. The
interpretation is effective for fiscal years beginning after December 15, 2006.
The adoption of FIN 48 did not have a material impact on our financial position,
results of operations or cash flows.

Basic and Diluted Loss Per Share

We report basic loss per share in accordance with the SFAS No.
128, Earnings Per Share. Basic loss per share is computed using the weighted
average number of shares outstanding during the period. Fully diluted earnings
(loss) per share are computed similar to basic income (loss) per share except
that the denominator is increased to include the number of common stock
equivalents (primarily outstanding options and warrants). Common stock
equivalents represent the dilutive effect of the assumed exercise of the
outstanding stock options and warrants, using the treasury stock method, at
either the beginning of the respective period presented or the date of issuance,
whichever is later, and only if the common stock equivalents are considered
dilutive based upon our net income (loss) position at the calculation date.
Diluted loss per share has not been provided as it would be antidilutive.

Staff Accounting Bulletin No. 108 (SAB 108)

In September 2006, the 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. SAB 108 did not have a material impact on our financial
position or results from operations.

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Recently Issued Accounting Pronouncements

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 particularly
effective for our financial statements issued for our fiscal year beginning
March 1, 2008. We are currently evaluating the timing of adoption and the impact
that adoption might have on our financial position or results of 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 for our fiscal year beginning March 1, 2008. We are
currently evaluating the impact that the adoption of SFAS No. 159 might have on
our financial position or results of operations.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling
Interests in Consolidated Financial Statements. The standard requires all
entities to report noncontrolling (minority) interests as equity in consolidated
financial statements. SFAS No. 160 eliminates the diversity that currently
exists in accounting for transactions between an entity and noncontrolling
interests by requiring they be treated as equity transactions. We are currently
reviewing the guidance, which is effective for fiscal years beginning after
December 15, 2008, to determine the potential impact, if any, on our
consolidated financial statements.

In March 2008, the FASB issued SFAS No. 161 Disclosures about
Derivative Instruments and Hedging Activities  An Amendment of FASB Statement
No. 133 (SFAS 161). SFAS 161 requires enhanced qualitative disclosures about
objectives and strategies for using derivatives, quantitative disclosures about
fair value amounts of and gains and losses on derivative instruments, and
disclosures about credit-risk-related contingent features in derivative
agreements. SFAS 161 is effective for financial statements issued for fiscal
years and interim periods beginning after November 15, 2008. We are currently
evaluating the impact of SFAS 161 on our consolidated financial statements.

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 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

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to generate significant revenues in the immediate future and
our management expects operating expenses to increase substantially over the
next 12 months because of our increased 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 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.

Because we are in the development stage, have not yet achieved
profitable operations and are dependent on our ability to raise capital from
stockholders or other sources to meet our obligations and repay our liabilities
arising from normal business operations when they become due, in their report on
our audited financial statements for the years ended February 29, 2008 and
February 28, 2007, our independent auditors included an explanatory paragraph
regarding concerns about our ability to continue as a going concern. Our
financial statements contain additional note disclosure describing the
circumstances that lead to this disclosure by our independent auditors.

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

We are a development 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 our company does 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 three executive officers and a limited number
of full time employees and consultants upon whom our success largely depends. We
do not maintain key person life insurance policies on our executive officers 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 officers 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.

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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:

- the success of our planned projects on North Slope and Cook Inlet in
  Alaska, Pecos County in Texas, and in the 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 properties in Alaska, Texas, 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 properties in
Alaska, Texas, 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,

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- 26 -

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 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

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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, local and foreign 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 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, Texas,
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

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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
Alaska, Texas, 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 leasehold interests
in Alaska, our joint venture interests in Texas, and our 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 is
historically 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;
- 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

---

- 29 -

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.

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.

In general, 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

---

- 30 -

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. We do not anticipate that we,
or the person or company acting as operator of the wells located on the
properties that we lease or may lease in the future, will 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 authorize the issuance of up to
90,000,000 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.

---

- 31 -

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.

Financial Industry Regulatory Authority 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
Financial Industry Regulatory Authority (FINRA) 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
FINRA believes that there is a high probability that speculative low priced
securities will not be suitable for at least some customers. The FINRA
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

---

- 32 -

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.

Our by-laws provide the indemnification of our directors and
officers to the fullest extent legally permissible under the Nevada corporate
law against all expenses, liability and loss reasonably incurred or suffered by
him in connection with any action, suit or proceeding. Furthermore, our by-laws
provides that our board of directors may cause our company to purchase and
maintain insurance for our directors and officers.

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 most of 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.

Most of our directors and officers are nationals and/or residents
  of countries other than the United States, and all or a substantial portion
  of such persons' assets are located outside the United States. As a result,
  it may be difficult for investors to 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 7. Financial Statements.

|FOX PETROLEUM INC.                     
|---------------------------------------
|                                       
|(A Development Stage Company)          
|                                       
|CONSOLIDATED FINANCIAL STATEMENTS      
|                                       
|February 29, 2008 and February 28, 2007
|                                       
|(Stated in US Dollars)                 

F-1

---

| | BDO Dunwoody LLP
    Chartered Accountants |  | #604 – 750 West Pender Street                                             		
    Vancouver, BC, Canada V6C 2T7 		                                    
    Telephone:  (604) 689-0188 	                                    
    Fax:  (604) 689-9773
| | ------------------------------------------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM

To the Stockholders, 
  Fox Petroleum Inc.
  (A Development
  Stage Company)

We have audited the accompanying consolidated balance sheet of
  Fox Petroleum Inc. (the Company) (A Development Stage Company) and its
  subsidiaries as of February 29, 2008 and the related consolidated statements of
  operations, cash flows and stockholders' equity (deficiency) for the year ended
  February 29, 2008 and for the period from November 4, 2004 (Date of Inception)
  to February 29, 2008. 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 audit. We did not audit the consolidated
  financial statements of the Company for the period from November 4, 2004 (Date
  of Inception) to February 28, 2007. Such statements are included in the
  cumulative inception to February 29, 2008 totals of the consolidated statements
  of operations, cash flows and stockholders' equity (deficiency) and reflect a
  net loss of 4% of the related cumulative totals. Those consolidated financial
  statements were audited by other auditors whose report has been furnished to us
  and our opinion, insofar as it relates to the amount for the period from
  November 4, 2004 (Date of Inception) to February 28, 2007 included in the
  cumulative totals, is based solely upon the report of the other auditors.

We conducted our audit in accordance with the standards of the
  Public Company Accounting Oversight Board (United States). Those standards
  require that we plan and perform the audit to obtain reasonable assurance about
  whether the financial statements are free of material misstatement. The Company
  is not required to have, nor were we engaged to perform, an audit of its
  internal control over financial reporting. Our audit included consideration of
  internal control over financial reporting as a basis for designing audit
  procedures that are appropriate in the circumstances, but not for the purpose of
  expressing an opinion on the effectiveness of the Companys internal control
  over financial reporting. Accordingly, we express no such opinion. An audit also
  includes examining, on a test basis, evidence supporting the amounts and
  disclosures in the financial statements, assessing the accounting principles
  used and significant estimates made by management, as well as evaluating the
  overall financial statement presentation. We believe that our audit and the
  report of the other auditors provide a reasonable basis for our opinion.

In our opinion, based on our audit and the report of the other
  auditors, these consolidated financial statements referred to above present
  fairly, in all material respects, the financial position of Fox Petroleum Inc.
  and its subsidiaries as of February 29, 2008 and the results of their operations
  and their cash flows for the year then ended and for the period from November 4,
  2004 (Date of Inception) to February 29, 2008, in conformity with accounting
  principles generally accepted in the United States of America.

The accompanying financial statements referred to above have
  been prepared assuming that the Company will continue as a going concern. As
  discussed in Note 2 to the financial statements, the Company is in the
  development stage, has not yet achieved profitable operations and is dependent
  on its ability to raise capital from stockholders or other sources to meet its
  obligations and repay its liabilities arising from normal business operations
  when they come due. These factors, along with other matters as set forth in Note
  2, raise substantial doubt that the Company will be able to continue as a going
  concern. The financial statements do not include any adjustments that might
  result from the outcome of these uncertainties.

(signed) “BDO Dunwoody LLP”

Chartered Accountants

Vancouver, Canada 
  May 30, 2008

BDO Dunwoody LLP is a Limited Liability Partnership registered in Ontario

F-2

---

|A PARTNERSHIP OF INCORPORATED PROFESSIONALS | AMISANO HANSON
    CHARTERED ACCOUNTANTS
|------------------------------------------- | ----------------------------------------

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM

To the Stockholders, 
  Fox Petroleum Inc.
  (A Development
  Stage Company)

We have audited the accompanying balance sheet of Fox Petroleum
  Inc. (A Development Stage Company) as of February 28, 2007 and the related
  statements of operations, cash flows and stockholders equity (deficiency) for
  the year ended February 28, 2007 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 audit.

We conducted our audit 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 audit provides 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. (A Development Stage Company) as of February 28, 2007 and the
  results of its operations and its cash flows for the year ended February 28,
  2007 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.

The accompanying financial statements referred to above have
  been prepared assuming that the Company will continue as a going concern. As
  discussed in Note 2 to the financial statements, the Company is in the
  development stage, and has not yet achieved profitable operations and is
  dependent on its ability to raise capital from stockholders or other sources to
  sustain operations. These factors, along with other matters as set forth in Note
  2, raise substantial doubt that the Company will be able to continue as a going
  concern. The financial statements do not include any adjustments that might
  result from the outcome of these uncertainties.

|Vancouver, Canada | *“AMISANO HANSON”*   
|----------------- | ---------------------
|May 24, 2007      | Chartered Accountants

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

F-3

---

|FOX PETROLEUM INC.                     
|---------------------------------------
|(A Development Stage Company)          
|CONSOLIDATED BALANCE SHEETS            
|February 29, 2008 and February 28, 2007
|(Stated in US Dollars)                 

|ASSETS                                                         |   | 2008       |   |   | 2007     |  
|-------------------------------------------------------------- | - | ---------- | - | - | -------- | -
|                                                               |   |            |   |   |          |  
|Current                                                        |   |            |   |   |          |  
|Cash  general                                                 | $ | 271,601    |   | $ | 119,051  |  
|
      restricted                                             |   | 30,000     |   |   | -        |  
|Prepaid expenses                                               |   | 63,084     |   |   | -        |  
|                                                               |   |            |   |   |          |  
|                                                               |   | 364,685    |   |   | 119,051  |  
|Oil and gas interests  Notes 4 and 10                         |   | 5,800,917  |   |   | -        |  
|                                                               |   |            |   |   |          |  
|                                                               | $ | 6,165,602  |   | $ | 119,051  |  
|                                                               |   |            |   |   |          |  
|LIABILITIES                                                    |   |            |   |   |          |  
|                                                               |   |            |   |   |          |  
|Current                                                        |   |            |   |   |          |  
|Accounts payable and
      accrued liabilities  Notes 4 and 5 | $ | 664,519    |   | $ | 40,467   |  
|Due to related parties  Note 5                                |   | 29,975     |   |   | 29,975   |  
|                                                               |   |            |   |   |          |  
|                                                               |   | 694,494    |   |   | 70,442   |  
|Advisors fees payable in stock  Note 6(c)                    |   | 35,000     |   |   | -        |  
|                                                               |   |            |   |   |          |  
|                                                               |   | 729,494    |   |   | 70,442   |  
|                                                               |   |            |   |   |          |  
|STOCKHOLDERS EQUITY                                           |   |            |   |   |          |  
|                                                               |   |            |   |   |          |  
|Capital stock  Notes 4, 6, 7 and 10                           |   |            |   |   |          |  
|Authorized:                                                    |   |            |   |   |          |  
|90,000,000 common shares, par value $0.001 per share           |   |            |   |   |          |  
|Issued and outstanding:                                        |   |            |   |   |          |  
|14,968,245 common shares (2007: 9,860,000 common shares)       |   | 14,968     |   |   | 9,860    |  
|Additional paid-in capital                                     |   | 8,168,634  |   |   | 158,040  |  
|Deficit accumulated during the development
      stage         |   | (2,747,494 | ) |   | (119,291 | )
|                                                               |   |            |   |   |          |  
|                                                               |   | 5,436,108  |   |   | 48,609   |  
|                                                               |   |            |   |   |          |  
|                                                               | $ | 6,165,602  |   | $ | 119,051  |  

Ability to Continue as a Going Concern  Note 2
  Commitments
   Notes 4, 6, 7 and 10 
  Subsequent Events  Notes 4, 6 and 10

SEE ACCOMPANYING NOTES

F-4

---

|FOX PETROLEUM INC.                                                            
|------------------------------------------------------------------------------
|(A Development Stage Company)                                                 
|CONSOLIDATED STATEMENTS OF OPERATIONS                                         
|for the years ended February 29, 2008 and February 28,
      2007 and         
|for the period November 4, 2004 (Date of Inception) to
      February 29, 2008
|(Stated in US Dollars)                                                        

|                                                         |   |              |   |   |              |   |   | November 4,   |  
|-------------------------------------------------------- | - | ------------ | - | - | ------------ | - | - | ------------- | -
|                                                         |   |              |   |   |              |   |   | 2004 (Date of |  
|                                                         |   | Year ended   |   |   | Year ended   |   |   | Inception) to |  
|                                                         |   | February 29, |   |   | February 28, |   |   | February 29,  |  
|                                                         |   | 2008         |   |   | 2007         |   |   | 2008          |  
|                                                         |   |              |   |   |              |   |   |               |  
|Expenses:                                                |   |              |   |   |              |   |   |               |  
|Accounting and audit
      fees                          | $ | 63,417       |   | $ | 15,520       |   | $ | 96,930        |  
|Advertising and public relations                         |   | 1,700,375    |   |   | -            |   |   | 1,700,375     |  
|Bank charges                                             |   | 9,684        |   |   | 156          |   |   | 10,322        |  
|Consulting fees  Note 5                                 |   | 208,798      |   |   | -            |   |   | 208,798       |  
|Filing and transfer
      agent                          |   | 10,577       |   |   | 2,977        |   |   | 16,685        |  
|Legal fees                                               |   | 135,734      |   |   | 9,094        |   |   | 163,858       |  
|Management fees  Note
      5                           |   | 185,440      |   |   | 16,000       |   |   | 209,440       |  
|Mineral property acquisition and
      exploration costs |   | -            |   |   | 5,000        |   |   | 17,000        |  
|Office and
      miscellaneous  Note 5                  |   | 167,336      |   |   | 5,808        |   |   | 177,244       |  
|Insurance                                                |   | 19,635       |   |   | -            |   |   | 19,635        |  
|Travel and
      entertainment                           |   | 136,563      |   |   | -            |   |   | 136,563       |  
|                                                         |   |              |   |   |              |   |   |               |  
|Loss before other item                                   |   | (2,637,559   | ) |   | (54,555      | ) |   | (2,756,850    | )
|                                                         |   |              |   |   |              |   |   |               |  
|Other item:                                              |   |              |   |   |              |   |   |               |  
|Interest income                                          |   | 9,356        |   |   | -            |   |   | 9,356         |  
|                                                         |   |              |   |   |              |   |   |               |  
|Net loss for the period                                  | $ | (2,628,203   | ) | $ | (54,555      | ) | $ | (2,747,494    | )
|                                                         |   |              |   |   |              |   |   |               |  
|Basic and diluted loss per share                         | $ | (0.22        | ) | $ | (0.01        | ) |   |               |  
|                                                         |   |              |   |   |              |   |   |               |  
|Weighted average number of shares outstanding            |   | 12,418,848   |   |   | 9,840,274    |   |   |               |  

SEE ACCOMPANYING NOTES

F-5

---

|FOX PETROLEUM INC.                                                            
|------------------------------------------------------------------------------
|(A Development Stage Company)                                                 
|CONSOLIDATED STATEMENTS OF CASH FLOWS                                         
|for the years ended February 29, 2008 and February 28,
      2007 and         
|for the period November 4, 2004 (Date of Inception) to
      February 29, 2008
|(Stated in US Dollars)                                                        

|                                                  |   |              |   |   |              |   |   | November 4,   |  
|------------------------------------------------- | - | ------------ | - | - | ------------ | - | - | ------------- | -
|                                                  |   |              |   |   |              |   |   | 2004 (Date of |  
|                                                  |   | Year ended   |   |   | Year ended   |   |   | Inception) to |  
|                                                  |   | February 29, |   |   | February 28, |   |   | February 29,  |  
|                                                  |   | 2008         |   |   | 2007         |   |   | 2008          |  
|                                                  |   |              |   |   |              |   |   |               |  
|Operating Activities                              |   |              |   |   |              |   |   |               |  
|Net loss for the
      period                     | $ | (2,628,203   | ) | $ | (54,555      | ) | $ | (2,747,494    | )
|Donated services and rent                         |   | -            |   |   | 9,000        |   |   | 21,000        |  
|Shares to be
      issued for advisors fees      |   | 35,000       |   |   | -            |   |   | 35,000        |  
|Change in non-cash working
      capital balances |   |              |   |   |              |   |   |               |  
|related
      to operations:                      |   |              |   |   |              |   |   |               |  
|Prepaid
      expenses                            |   | (63,084      | ) |   | -            |   |   | (63,084       | )
|Accounts payable and accrued liabilities          |   | 194,079      |   |   | 16,917       |   |   | 234,546       |  
|                                                  |   |              |   |   |              |   |   |               |  
|Net cash used in operating activities             |   | (2,462,208   | ) |   | (28,638      | ) |   | (2,520,032    | )
|                                                  |   |              |   |   |              |   |   |               |  
|Investing Activities                              |   |              |   |   |              |   |   |               |  
|Increase in oil and gas
      interests           |   | (3,405,242   | ) |   | -            |   |   | (3,405,242    | )
|Increase in
      restricted cash                 |   | (30,000      | ) |   | -            |   |   | (30,000       | )
|                                                  |   |              |   |   |              |   |   |               |  
|Net cash used in investing activities             |   | (3,435,242   | ) |   | -            |   |   | (3,435,242    | )
|                                                  |   |              |   |   |              |   |   |               |  
|Financing Activities                              |   |              |   |   |              |   |   |               |  
|Issuance of common shares                         |   | 6,050,000    |   |   | 100,000      |   |   | 6,196,900     |  
|Advance from
      related parties                |   | -            |   |   | 29,975       |   |   | 29,975        |  
|                                                  |   |              |   |   |              |   |   |               |  
|Net cash provided by financing activities         |   | 6,050,000    |   |   | 129,975      |   |   | 6,226,875     |  
|                                                  |   |              |   |   |              |   |   |               |  
|Increase in cash and restricted cash during       |   |              |   |   |              |   |   |               |  
|the period                                        |   | 152,550      |   |   | 101,337      |   |   | 271,601       |  
|                                                  |   |              |   |   |              |   |   |               |  
|Cash, beginning of period                         |   | 119,051      |   |   | 17,714       |   |   | -             |  
|                                                  |   |              |   |   |              |   |   |               |  
|Cash and restricted cash, end of period           | $ | 271,601      |   | $ | 119,051      |   | $ | 271,601       |  

Non-cash transactions  Note 8

SEE ACCOMPANYING NOTES

F-6

---

|FOX PETROLEUM INC.                                                            
|------------------------------------------------------------------------------
|(A Development Stage Company)                                                 
|CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
      (DEFICIENCY)            
|for the period November 4, 2004 (Date of Inception) to
      February 29, 2008
|(Stated in US Dollars)                                                        

|                                                           |  |                |  |   |           |  |   |            |   |   |                 |  |   | Deficit     |   |   |         |  
|---------------------------------------------------------- |  | -------------- |  | - | --------- |  | - | ---------- | - | - | --------------- |  | - | ----------- | - | - | ------- | -
|                                                           |  |                |  |   |           |  |   |            |   |   |                 |  |   | Accumulated |   |   |         |  
|                                                           |  |                |  |   |           |  |   | Additional |   |   |                 |  |   | During the  |   |   |         |  
|                                                           |  | *Common Shares |  |   | Paid-in   |  |   | Share      |   |   | Pre-exploration |  |   |             |  
|                                                           |  | Number         |  |   | Par Value |  |   | Capital    |   |   | Subscriptions   |  |   | Stage       |   |   | Total   |  
|                                                           |  |                |  |   |           |  |   |            |   |   |                 |  |   |             |   |   |         |  
|Capital stock issued for cash
              at $0.0008333 |  | 5,880,000      |  | $ | 5,880     |  | $ | (980       | ) | $ | -               |  | $ | -           |   | $ | 4,900   |  
|
      at $0.0083333                                      |  | 3,840,000      |  |   | 3,840     |  |   | 28,160     |   |   | -               |  |   | -           |   |   | 32,000  |  
|
      at $0.0833333                                      |  | 120,000        |  |   | 120       |  |   | 9,880      |   |   | -               |  |   | -           |   |   | 10,000  |  
|Donated services and rent                                  |  | -              |  |   | -         |  |   | 3,000      |   |   | -               |  |   | -           |   |   | 3,000   |  
|Net loss for the period                                    |  | -              |  |   | -         |  |   | -          |   |   | -               |  |   | (18,821     | ) |   | (18,821 | )
|                                                           |  |                |  |   |           |  |   |            |   |   |                 |  |   |             |   |   |         |  
|Balance, February 28, 2005                                 |  | 9,840,000      |  |   | 9,840     |  |   | 40,060     |   |   | -               |  |   | (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                                 |  | 9,840,000      |  |   | 9,840     |  |   | 49,060     |   |   | -               |  |   | (64,736     | ) |   | (5,836  | )
|Capital stock issued for cash  at $5.00                   |  | 20,000         |  |   | 20        |  |   | 99,980     |   |   | -               |  |   | -           |   |   | 100,000 |  
|Donated services and rent                                  |  | -              |  |   | -         |  |   | 9,000      |   |   | -               |  |   | -           |   |   | 9,000   |  
|Net loss for the year                                      |  | -              |  |   | -         |  |   | -          |   |   | -               |  |   | (54,555     | ) |   | (54,555 | )
|                                                           |  |                |  |   |           |  |   |            |   |   |                 |  |   |             |   |   |         |  
|Balance, February 28, 2007                                 |  | 9,860,000      |  |   | 9,860     |  |   | 158,040    |   |   | -               |  |   | (119,291    | ) |   | 48,609  |  

/contd

SEE ACCOMPANYING NOTES

F-7

---

Continued

|FOX PETROLEUM INC.                                                            
|------------------------------------------------------------------------------
|(A Development Stage Company)                                                 
|CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
      (DEFICIENCY)            
|for the period November 4, 2004 (Date of Inception) to
      February 29, 2008
|(Stated in US Dollars)                                                        

|                                                                          |  |                |  |  |           |  |   |            |  |   |                 |  |   | Deficit     |   |   |            |  
|------------------------------------------------------------------------- |  | -------------- |  |  | --------- |  | - | ---------- |  | - | --------------- |  | - | ----------- | - | - | ---------- | -
|                                                                          |  |                |  |  |           |  |   |            |  |   |                 |  |   | Accumulated |   |   |            |  
|                                                                          |  |                |  |  |           |  |   | Additional |  |   |                 |  |   | During the  |   |   |            |  
|                                                                          |  | *Common Shares |  |  | Paid-in   |  |   | Share      |  |   | Pre-exploration |  |   |             |  
|                                                                          |  | Number         |  |  | Par Value |  |   | Capital    |  |   | Subscriptions   |  |   | Stage       |   |   | Total      |  
|                                                                          |  |                |  |  |           |  |   |            |  |   |                 |  |   |             |   |   |            |  
|Balance, February 28, 2007                                                |  | 9,860,000      |  |  | 9,860     |  |   | 158,040    |  |   | -               |  |   | (119,291    | ) |   | 48,609     |  
|Capital stock issued for oil and gas interests                            |  |                |  |  |           |  |   |            |  |   |                 |  |   |             |   |   |            |  
|
      Note 4(i)                                                         |  | 4,000,000      |  |  | 4,000     |  |   | 997,702    |  |   | -               |  |   | -           |   |   | 1,001,702  |  
|Capital stock issued for cash
                      Note 6(a)            |  | 1,028,245      |  |  | 1,028     |  |   | 6,048,972  |  |   | -               |  |   | -           |   |   | 6,050,000  |  
|Capital stock issued for oil and gas                                      |  |                |  |  |           |  |   |            |  |   |                 |  |   |             |   |   |            |  
|interests
                                              
      at $12.05 |  | 80,000         |  |  | 80        |  |   | 963,920    |  |   | -               |  |   | -           |   |   | 964,000    |  
|Share subscriptions                                                       |  | -              |  |  | -         |  |   | -          |  |   | 35,000          |  |   | -           |   |   | 35,000     |  
|Net loss for the year                                                     |  | -              |  |  | -         |  |   | -          |  |   | -               |  |   | (2,628,203  | ) |   | (2,628,203 | )
|                                                                          |  |                |  |  |           |  |   |            |  |   |                 |  |   |             |   |   |            |  
|Balance, February 29, 2008                                                |  | 14,968,245 $   |  |  | 14,968    |  | $ | 8,168,634  |  | $ | 35,000          |  | $ | (2,747,494  | ) | $ | 5,471,108  |  

|* | The common stock issued has been retroactively restated
      to reflect a reverse split of 1 new share for 5 old shares, effective
      April 21, 2008. The par value of common stock and additional paid-in
      capital has been retroactively restated to reflect these
      changes.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

SEE ACCOMPANYING NOTES

F-8

---

|FOX PETROLEUM INC.                            
|----------------------------------------------
|(A Development Stage Company)                 
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|February 29, 2008 and February 28, 2007       
|(Stated in US Dollars)                        

|Note 1 | Nature of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       | Fox Petroleum Inc. (the Company) (A Development Stage
      Company) was incorporated as Nova Resources Inc. 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.                                                                                                                                                                                                                                                                                                                                                                                               
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       | 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 had acquired a mineral property located in
      the Northwest Territories, Canada and had not determined whether this
      property contained reserves that were economically recoverable. During the
      year ended February 29, 2008, the Company changed the direction of its
      exploration activities from mineral properties to the acquisition,
      exploration and development of American and other International oil and
      gas projects (Note 4) and abandoned its mineral property.                                                                                                                                                                                                          
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       | The Companys year-end is February 28.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Note 2 | Ability to Continue as a Going Concern                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       | The Company is a development stage company with oil and
      gas interests in Alaska, the North Sea and Texas and has not yet
      determined whether these properties contain reserves that are economically
      recoverable. The recoverability of amounts from the properties will be
      dependent upon the discovery of economically recoverable reserves,
      confirmation of the Companys interest in the underlying properties, the
      ability of the Company to obtain necessary financing to satisfy the
      expenditure requirements under the property agreements and to complete the
      development of the properties and upon future profitable production or
      proceeds for the sale thereof.

F-9

---

|Fox Petroleum Inc.                            
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|February 29, 2008 and February 28, 2007       
|(Stated in US Dollars)  Page 2               

|Note 2 | Ability to Continue as a Going Concern
      (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       | These financial statements have been prepared in
      accordance with generally accepted accounting principles applicable to a
      going concern, which assumes that the Company will be able to meet its
      obligations and continue its operations for its next fiscal year.
      Realization values may be substantially different from carrying values as
      shown and these financial statements do not give effect to adjustments
      that would be necessary to the carrying values and classification of
      assets and liabilities should the Company be unable to continue as a going
      concern. At February 29, 2008, the Company has a working capital
      deficiency of $329,809, has not yet achieved profitable operations, has
      accumulated losses of $2,747,494 since its inception and expects to incur
      further losses in the development of its business. The Companys ability
      to continue as a going concern is dependent upon its ability to generate
      future profitable operations and/or to obtain the necessary financing to
      meet its obligations and repay its liabilities arising from normal
      business operations when they come due. Management has no formal plan in
      place to address this concern but considers that the Company will be able
      to obtain additional funds by equity financing and/or related party
      advances, however there is no assurance of additional funding being
      available or on acceptable terms, if at all (Note 10).
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Note 3 | 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:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       | Principles of Consolidation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       | These consolidated financial statements include the
      accounts of the Company and Fox Energy Exploration Limited, a wholly owned
      inactive subsidiary incorporated in England and Wales on May 17, 2007 and
      Fox Petroleum (Alaska) Inc., a wholly owned inactive subsidiary
      incorporated in Alaska, U.S.A. on April 18, 2007. All significant inter-
      company transactions and balances have been eliminated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

F-10

---

|Fox Petroleum Inc.                            
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|February 29, 2008 and February 28, 2007       
|(Stated in US Dollars)  Page 3               

|Note 3 | 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.                                                                                                                                                                                                                                                                                                                                                                   
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       | 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, will be 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 when 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.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       | Future net cash flows from proved reserves using
      period-end, non-escalated prices and costs are discounted to present value
      and compared to the carrying value of oil and gas properties.                                                                                                                                                                                                                                                                                                
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       | 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 rate of depletion by more
      than 25%. Royalties paid net of any tax credits received are netted with
      oil and gas sales.                                                                                                                                                                                

F-11

---

|Fox Petroleum Inc.                            
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|February 29, 2008 and February 28, 2007       
|(Stated in US Dollars)  Page 4               

|Note 3 | Summary of Significant Accounting Policies (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|       | Asset Retirement Obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|       | The Company recognizes the fair value of a liability for
      an asset retirement obligation in the year in which it is incurred when a
      reasonable estimate of fair value can be made. The carrying amount of the
      related long-lived asset is increased by the same amount as the liability.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|       | Changes in the liability for an asset retirement
      obligation due to the passage of time will be measured by applying an
      interest method of allocation. The amount will be recognized as an
      increase in the liability and an accretion expense in the statement of
      operations. Changes resulting from revisions to the timing or the amount
      of the original estimate of undiscounted cash flows are recognized as an
      increase or a decrease in the carrying amount of the liability for an
      asset retirement obligation and the related asset retirement cost
      capitalized as part of the carrying amount of the related long-lived
      asset. At February 29, 2008, the Companys estimate of asset retirement
      obligation was not significant.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|       | 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 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|       | Advertising Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|       | Advertising costs are expensed as incurred or concurrent
      with the first time the advertisement takes place.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|       | 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
      SFAS 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.                                                                                                                                                                                                                                                                                                                                                                                    

F-12

---

|Fox Petroleum Inc.                            
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|February 29, 2008 and February 28, 2007       
|(Stated in US Dollars)  Page 5               

|Note 3 | Summary of Significant Accounting Policies (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | Foreign Currency Translation (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | 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 parties 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | The Company uses the assets and liability method of
      accounting for income taxes pursuant to SFAS No. 109 Accounting for
      Income Taxes. Under the assets and liability method of SFAS 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.                                                                                                                                                                                                                                                                                                                                                                 
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | 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 SFAS 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 positions. The interpretation is effective for
      fiscal years beginning after December 15, 2006. The adoption of FIN 48 did
      not have a material impact on the Companys financial position, results of
      operations or cash flows.

F-13

---

|Fox Petroleum Inc.                            
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|February 29, 2008 and February 28, 2007       
|(Stated in US Dollars)  Page 6               

|Note 3 | Summary of Significant Accounting Policies (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       | Basic and Diluted Loss Per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       | The Company reports basic loss per share in accordance
      with the SFAS No. 128, Earnings Per Share. Basic loss per share is
      computed using the weighted average number of shares outstanding during
      the period. Fully diluted earnings (loss) per share are computed similar
      to basic income (loss) per share except that the denominator is increased
      to include the number of common stock equivalents (primarily outstanding
      options and warrants). Common stock equivalents represent the dilutive
      effect of the assumed exercise of the outstanding stock options and
      warrants, using the treasury stock method, at either the beginning of the
      respective period presented or the date of issuance, whichever is later,
      and only if the common stock equivalents are considered dilutive based
      upon the Companys net income (loss) position at the calculation date.
      Diluted loss per share has not been provided as it would be antidilutive.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       | Staff Accounting Bulletin No. 108 (SAB 108)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       | In September 2006, the 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. SAB 108 did
      not have a material impact on the Companys financial position or results
      from operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       | Recently Issued Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       | 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 particularly effective for the Companys financial
      statements issued for its fiscal year beginning March 1, 2008. The Company
      is currently evaluating the timing of adoption and the impact that
      adoption might have on its financial position or results of 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 for its fiscal
      year beginning March 1, 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.                                                                                                                                                                                                                                                                                                                                                           

F-14

---

|Fox Petroleum Inc.                            
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|February 29, 2008 and February 28, 2007       
|(Stated in US Dollars)  Page 7               

|Note 3 | Summary of Significant Accounting Policies (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       | Recently Issued Accounting Pronouncements (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       | In December 2007, the FASB issued SFAS No. 160,
      Noncontrolling Interests in Consolidated Financial Statements. The
      standard requires all entities to report noncontrolling (minority)
      interests as equity in consolidated financial statements. SFAS No. 160
      eliminates the diversity that currently exists in accounting for
      transactions between an entity and noncontrolling interests by requiring
      they be treated as equity transactions. The Company is currently reviewing
      the guidance, which is effective for fiscal years beginning after December
      15, 2008, to determine the potential impact, if any, on its consolidated
      financial statements.                                                 
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       | In March 2008, the FASB issued SFAS No. 161 Disclosures
      about Derivative Instruments and Hedging Activities  An Amendment of FASB
      Statement No. 133 (SFAS 161). SFAS 161 requires enhanced qualitative
      disclosures about objectives and strategies for using derivatives,
      quantitative disclosures about fair value amounts of and gains and losses
      on derivative instruments, and disclosures about credit-risk-related
      contingent features in derivative agreements. SFAS 161 is effective for
      financial statements issued for fiscal years and interim periods beginning
      after November 15, 2008. The Company is currently evaluating the impact of
      SFAS 161 on its consolidated financial statements.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Note 4 | Oil and Gas Interests Note 10                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

| |                     |   |                   |  |   |           |  |   |           |  |   | February 28, | 
| | ------------------- | - | ----------------- |  | - | --------- |  | - | --------- |  | - | ------------ | 
| |                     |   | February 29, 2008 |  |   | 2007      | 
| |                     |   | United            |  |   | United    |  |   |           |  |   |              | 
| |                     |   | States            |  |   | Kingdom   |  |   | Total     |  |   | Total        | 
| |                     |   |                   |  |   |           |  |   |           |  |   |              | 
| | Unproved properties |   |                   |  |   |           |  |   |           |  |   |              | 
| | - acquisition costs | $ | 3,533,282         |  | $ | -         |  | $ | 3,533,282 |  | $ | -            | 
| | - exploration costs |   | 67,168            |  |   | 2,200,467 |  |   | 2,267,635 |  |   | -            | 
| |                     |   |                   |  |   |           |  |   |           |  |   |              | 
| |                     | $ | 3,600,450         |  | $ | 2,200,467 |  | $ | 5,800,917 |  | $ | -            | 

| | i) | 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. These leases are subject to a royalty of 16.66667% to the State
      of Alaska and a private royalty equal to 5% of net revenue. In
      consideration for the oil and gas leases, the Company issued 4,000,000
      restricted common shares of the Company valued at $1,001,702, the
      transferors historical cost. The valuation is based the SEC Staff
      Accounting Bulletin, Topic 5, G.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-15

---

|Fox Petroleum Inc.                            
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|February 29, 2008 and February 28, 2007       
|(Stated in US Dollars)  Page 8               

|Note 4 | Oil and Gas Interests Note
      10 - (contd)
|------ | -----------------------------------------------
|       |                                                
|       | i)                                             
|       |                                                
|       |                                                
|       |                                                
|       | ii)                                            
|       |                                                
|       | iii)                                           
|       |                                                
|       | iv)                                            
|       |                                                
|       | v)                                             

F-16

---

|Fox Petroleum Inc.                            
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|February 29, 2008 and February 28, 2007       
|(Stated in US Dollars)  Page 9               

|Note 4 | Oil and Gas
      Interests Note 10 - (contd)                                                                        
|------ | -----------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                        
|       | vi)                                                                                                                    
|       |                                                                                                                        
|       |                                                                                                                        
|       |                                                                                                                        
|       | vii)                                                                                                                   
|       |                                                                                                                        
|Note 5 | Related Party
      Transactions Notes 4 and 10                                                                       
|       |                                                                                                                        
|       | Directors and officers
      of the Company provide consulting and management services to the Company
      as follows:

| |                          |   |              |  |   |              |  |   | November 4,   | 
| | ------------------------ | - | ------------ |  | - | ------------ |  | - | ------------- | 
| |                          |   | Year         |  |   | Year         |  |   | 2004 (Date of | 
| |                          |   | ended        |  |   | ended        |  |   | Inception) to | 
| |                          |   | February 29, |  |   | February 28, |  |   | February 29,  | 
| |                          |   | 2008         |  |   | 2007         |  |   | 2008          | 
| |                          |   |              |  |   |              |  |   |               | 
| | Consulting fees          | $ | 154,728      |  | $ | -            |  | $ | 154,728       | 
| | Management fees          |   | 185,440      |  |   | 16,000       |  |   | 209,440       | 
| | Office and miscellaneous |   | -            |  |   | 3,000        |  |   | 7,000         | 
| |                          |   |              |  |   |              |  |   |               | 
| |                          | $ | 340,168      |  | $ | 19,000       |  | $ | 371,168       | 

F-17

---

|Fox Petroleum Inc.                            
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|February 29, 2008 and February 28, 2007       
|(Stated in US Dollars)  Page 10              

|Note 5 | Related Party
      Transactions Notes 4 and 10  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|       | Included in management fees is $Nil (2007: $6,000) for
      the fair value of services contributed by an officer of the Company and
      $Nil (2007: $3,000) for the fair value of office premises contributed by
      an officer of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|       | Included in accounts payable and accrued liabilities at
      February 29, 2008 is $22,438 (2007: $10,000) owed to directors of the
      Company for expenses incurred on behalf of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|       | 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
      a director of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Note 6 | Capital Stock Notes 4, 7 and 10                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|       | Effective January 11, 2007 the Company effected a forward
      stock spilt of the authorized, issued and outstanding shares of common
      stock on a six new for one old basis. Authorized capital increased from
      75,000,000 common shares to 450,000,000 common shares. Effective April 21,
      2008 the Company effected a reverse stock split of authorized, issued and
      outstanding shares of common stock on a one new for five old basis.
      Authorized capital decreased from 450,000,000 to 90,000,000 and
      outstanding common stock decreased from 74,841,228 to 14,968,246 shares.
      These financial statements have been retroactively restated to reflect
      these changes.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|       | Commitments:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|       | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

F-18

---

|Fox Petroleum Inc.                            
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|February 29, 2008 and February 28, 2007       
|(Stated in US Dollars)  Page 11              

|Note 6 | Capital Stock
      Notes 4, 7 and 10  (contd)
|------ | -------------------------------------------------
|       |                                                  
|       | Commitments: 
      (contd)                    
|       |                                                  
|       | a)                                               
|       |                                                  
|       |                                                  

| |                    |  | Number of |  |   | Issue |  |   | Total     | 
| | ------------------ |  | --------- |  | - | ----- |  | - | --------- | 
| | Issue Date         |  | Units     |  |   | Price |  |   | Proceeds  | 
| |                    |  |           |  |   |       |  |   |           | 
| | May 17, 2007       |  | 377,358   |  | $ | 5.30  |  | $ | 2,000,000 | 
| | August 1, 2007     |  | 31,056    |  | $ | 8.05  |  |   | 250,000   | 
| | September 18, 2007 |  | 44,199    |  | $ | 9.05  |  |   | 400,000   | 
| | September 18, 2007 |  | 52,133    |  | $ | 10.55 |  |   | 550,000   | 
| | September 27, 2007 |  | 28,708    |  | $ | 10.45 |  |   | 300,000   | 
| | October 26, 2007   |  | 16,381    |  | $ | 12.21 |  |   | 200,000   | 
| | October 26, 2007   |  | 21,097    |  | $ | 11.85 |  |   | 250,000   | 
| | October 26, 2007   |  | 35,897    |  | $ | 9.75  |  |   | 350,000   | 
| | November 28, 2007  |  | 47,337    |  | $ | 8.45  |  |   | 400,000   | 
| | January 16, 2008   |  | 43,478    |  | $ | 3.45  |  |   | 150,000   | 
| | January 24, 2008   |  | 96,154    |  | $ | 5.20  |  |   | 500,000   | 
| | January 30, 2008   |  | 48,387    |  | $ | 3.10  |  |   | 150,000   | 
| | February 11, 2008  |  | 89,286    |  | $ | 2.80  |  |   | 250,000   | 
| | February 26, 2008  |  | 96,774    |  | $ | 3.10  |  |   | 300,000   | 
| |                    |  |           |  |   |       |  |   |           | 
| |                    |  | 1,028,245 |  |   |       |  | $ | 6,050,000 | 

F-19

---

|Fox Petroleum Inc.                            
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|February 29, 2008 and February 28, 2007       
|(Stated in US Dollars)  Page 12              

|Note 6 | Capital Stock Notes 4, 7 and
      10  (contd)
|------ | -------------------------------------------------
|       |                                                  
|       | Commitments:  (contd)                          
|       |                                                  
|       | b)                                               
|       |                                                  
|       |                                                  

| | Number of |  | Exercise |  |  |                    | 
| | --------- |  | -------- |  |  | ------------------ | 
| | Warrants  |  | Price    |  |  | Expiry Date        | 
| |           |  |          |  |  |                    | 
| | 20,000    |  | $6.25    |  |  | February 23, 2010  | 
| | 377,358   |  | $6.65    |  |  | May 17, 2010       | 
| | 31,056    |  | $10.05   |  |  | August 1, 2010     | 
| | 44,199    |  | $11.30   |  |  | September 10, 2010 | 
| | 52,133    |  | $13.20   |  |  | September 10, 2010 | 
| | 28,708    |  | $13.05   |  |  | October 1, 2010    | 
| | 16,381    |  | $15.25   |  |  | October 26, 2010   | 
| | 21,097    |  | $14.80   |  |  | October 26, 2010   | 
| | 35,897    |  | $12.20   |  |  | October 26, 2010   | 
| | 47,337    |  | $10.55   |  |  | November 28, 2010  | 
| | 43,478    |  | $4.30    |  |  | January 16, 2011   | 
| | 96,154    |  | $6.50    |  |  | January 24, 2011   | 
| | 48,387    |  | $3.90    |  |  | January 30, 2011   | 
| | 89,286    |  | $3.50    |  |  | February 11,2011   | 
| | 96,774    |  | $3.90    |  |  | February 26, 2011  | 
| |           |  |          |  |  |                    | 
| | 1,048,245 |  |          |  |  |                    | 

The summary of the changes in the
  Companys share purchase warrants for the years ended February 29, 2008 and
  February 28, 2007 is presented below:

| |                           |  | February 29, 2008 |  |   | February 28, 2007 | 
| | ------------------------- |  | ----------------- |  | - | ----------------- | 
| |                           |  |                   |  |   | Weighted          | 
| |                           |  |                   |  |   | Average           | 
| |                           |  | Number of         |  |   | Exercise          | 
| |                           |  | Warrants          |  |   | Price             | 
| |                           |  |                   |  |   |                   | 
| | Balance, beginning of the |  |                   |  |   |                   | 
| | year                      |  | 20,000            |  | $ | 6.25              | 
| | Issued                    |  | 1,028,246         |  | $ | 7.36              | 
| |                           |  |                   |  |   |                   | 
| | Balance, end of year      |  | 1,048,246         |  | $ | 7.34              | 

The remaining average life of the warrants at February 29, 2008
  is 2.57 years (February 28, 2007: 2.99 years).

F-20

---

|Fox Petroleum Inc.                            
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|February 29, 2008 and February 28, 2007       
|(Stated in US Dollars)  Page 13              

|Note 6 | Capital Stock Notes 4, 7 and
      10  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       | Commitments:  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Note 7 | Commitments Notes 4, 6 and
      10                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Note 8 | Non-cash Transaction                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       | Investing and financing activities
      that do not have a direct impact on current cash flows are excluded from
      the statements of cash flows. During the year ended February 29, 2008, the
      Company issued 4,000,000 common shares valued at $1,001,702, the
      transferors historical cost, and issued 80,000 common shares valued at
      $964,000, the fair value of the common shares, as consideration for the
      purchase of oil and gas interests. Accounts payable includes $429,973 of
      expenditures related to oil and gas projects. These transactions were
      excluded from the statements of cash flows.

F-21

---

|Fox Petroleum Inc.                            
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|February 29, 2008 and February 28, 2007       
|(Stated in US Dollars)  Page 14              

|Note 9 | Deferred Tax Assets                                                                                                                                      
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                          
|       | The Company's income tax expense for the years
      ended February 29, 2008 and February 28, 2007 differed from the United
      States statutory rates:

| |                                                          |   | 2008     |   |   | 2007    |  
| | -------------------------------------------------------- | - | -------- | - | - | ------- | -
| |                                                          |   |          |   |   |         |  
| | Effective tax rate                                       |   | 35%      |   |   | 35%     |  
| |                                                          |   |          |   |   |         |  
| | Statutory rate applied to loss before
      income taxes | $ | (920,000 | ) | $ | (19,000 | )
| | Increase in income taxes resulting from:                 |   |          |   |   |         |  
| | Non-deductible
      expenses                            |   | 12,000   |   |   | 4,900   |  
| | Change in valuation allowance                            |   | 908,000  |   |   | 14,100  |  
| |                                                          |   |          |   |   |         |  
| | Income tax expense                                       | $ | -        |   | $ | -       |  

The significant components of the
  Companys deferred tax assets are as follows:

| |                                         |   | 2008     |   |   | 2007    |  
| | --------------------------------------- | - | -------- | - | - | ------- | -
| |                                         |   |          |   |   |         |  
| | Deferred tax assets                     |   |          |   |   |         |  
| | Net operating losses
      carryforward | $ | 942,000  |   | $ | 34,000  |  
| | Less: valuation allowance               |   | (942,000 | ) |   | (34,000 | )
| |                                         |   |          |   |   |         |  
| | Deferred tax assets                     | $ | -        |   | $ | -       |  

At February 29, 2008, the Company has
  incurred accumulated net operating losses in the United States of America
  totalling approximately $2,691,000 which are available to reduce taxable income
  in future taxation years.

These losses expire as follows:

| | Year of Expiry |   | Amount    | 
| | -------------- | - | --------- | 
| |                |   |           | 
| | 2024           | $ | 16,000    | 
| | 2025           |   | 37,000    | 
| | 2027           |   | 45,000    | 
| | 2028           |   | 2,593,000 | 
| |                |   |           | 
| |                | $ | 2,691,000 | 

F-22

---

|Fox Petroleum Inc.                            
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|February 29, 2008 and February 28, 2007       
|(Stated in US Dollars)  Page 15              

|Note 9  | Deferred Tax Assets (contd)                                                                                                                                                                                                                                                                                                                                 
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |                                                                                                                                                                                                                                                                                                                                                               
|        | The amount taken into income as deferred tax assets must
      reflect that portion of the income tax loss carryforwards 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 carryforwards, regardless of their time of expiry.
|        |                                                                                                                                                                                                                                                                                                                                                               
|        | As at February 29, 2008, the Company is in arrears on
      filing its statutory income tax returns and the amounts presented above
      are based on estimates. The actual losses available could differ from
      these estimates.                                                                                                                        
|        |                                                                                                                                                                                                                                                                                                                                                               
|Note 10 | Subsequent Events Notes 4 and 6                                                                                                                                                                                                                                                                                                                              
|        |                                                                                                                                                                                                                                                                                                                                                               
|        | a)                                                                                                                                                                                                                                                                                                                                                            
|        |                                                                                                                                                                                                                                                                                                                                                               
|        | b)                                                                                                                                                                                                                                                                                                                                                            
|        |                                                                                                                                                                                                                                                                                                                                                               
|        | c)                                                                                                                                                                                                                                                                                                                                                            
|        |                                                                                                                                                                                                                                                                                                                                                               
|        |                                                                                                                                                                                                                                                                                                                                                               
|        |                                                                                                                                                                                                                                                                                                                                                               
|        |                                                                                                                                                                                                                                                                                                                                                               
|        |                                                                                                                                                                                                                                                                                                                                                               
|        | d)                                                                                                                                                                                                                                                                                                                                                            

F-23

---

|Fox Petroleum Inc.                            
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|February 29, 2008 and February 28, 2007       
|(Stated in US Dollars)  Page 16              

|Note 10 | Subsequent Events Notes 4
      and 6  (contd)
|------- | -------------------------------------------------
|        |                                                  
|        | e)                                               
|        |                                                  
|        |                                                  
|        |                                                  
|        |                                                  
|        |                                                  
|        |                                                  
|        |                                                  
|        | f)                                               
|        |                                                  
|        | g)                                               
|        |                                                  
|        | h)                                               
|        |                                                  
|        | i)                                               

F-24

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- 33 -

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

None.

Item 8A. Controls and Procedures.

As required by Rule 13a-15 under the Securities Exchange Act of
1934, 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 29, 2008. This
evaluation was carried out under the supervision and with the participation of
our company's management, including our President and Chief Executive Officer
and our 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 President and Chief Executive
Officer and our Vice President, Finance concluded that our 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 and Compliance Officer as
appropriate, to allow timely decisions regarding required disclosure.

Management's Report on Internal Control over Financial
Reporting

Management is responsible for establishing and maintaining
adequate internal control over financial reporting (as defined in Rule 13a-15(f)
under the Securities Exchange Act of 1934). Management has assessed the
effectiveness of our internal control over financial reporting as of February
29, 2008 based on criteria established in Internal Control-Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission.
As a result of this assessment, management concluded that, as of February 29,
2008, our internal control over financial reporting was effective in providing
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles.

---

- 34 -

This annual report does not include an attestation report of
our registered public accounting firm regarding internal control over financial
reporting. Managements report was not subject to attestation by our registered
public accounting firm pursuant to temporary rules of the Securities and
Exchange Commission that permits us to provide only managements report in this
annual report.

Item 8B. Other Information.

Effective June 10, 2008, we entered into board of advisors termination
  agreements with Aimwell Energy Limited (a company controlled by Robert Frost
  and Michael Rose, two of our directors), Black Gold Consulting Inc. (a company
  controlled by William MacNee, our Chief Operating Officer and director), and
  John Spence, our director, and Jonathan Wood, our director. We entered into
  these agreements in order to terminate board of advisors agreements that we
  previously entered into with them. In consideration for the services performed,
  we agreed to issue 20,000, 10,000, 10,000, 10,000 shares of our common stock
  to Aimwell Energy Limited, Black Gold Consulting Inc., John Spence, and Jonathan
  Wood, respectively.

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 our directors and executive
officers at the date of this annual report. 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 at the pleasure
of our board of directors.

Name
      Position Held with our Company
      Age
      Date First Elected or AppointedRichard Moore
    President, Chief Executive
      Officer, Chairman, and Director
    49
    June 8, 2007Alexander Craven
    Vice President, Finance,
      Compliance Officer, Secretary, Treasurer, and Director
    25
    November 4, 2004William MacNee
    Chief Operating Officer and
      Director
    53
    May 5, 2008Robert Frost
    Director
    57
    May 5, 2008Michael Rose
    Director
    50
    May 5, 2008John Spence
    Director
    58
    May 5, 2008Jonathan Wood
    Director
    45
    May 5, 2008


Significant Employees

As at the date of this annual report, our significant
employees, their ages, positions held, and duration of such, are as follows:

---

- 35 -

Family relationships

There are no family relationships among our directors or
officers.

Business Experience

The following is a brief account of the education and business
experience of our directors and executive officers during at least the past five
years, indicating their business experience, principal occupations during the
period, and the names and principal businesses of the organizations by which
they were employed.

Richard Moore

Richard Moore has acted as our Chairman since May 5, 2008 and
President, Chief Executive Officer and director since June 8, 2007. He an oil
and gas industry veteran with nearly 30 years experience across almost every
aspect of the industry in both commercial and technical activities. Before
becoming our President and Chief Executive Officer, he worked as a consultant to
the oil industry on new field development and as 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, he worked with Chaparral Resources, Inc./KAZ
Commertz Group. He 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. He also served as Finance Director for Closed Type
JSC Karakudukmunay, an operating subsidiary of Chaparral Resources, Inc. from
1998 to 2003.

Alexander Craven

Alexander Craven has acted as our Compliance Officer since May
5, 2008 and Vice President, Finance since June 8, 2007 and Secretary, Treasurer
and Director since our incorporation on November 4, 2004. He was our President
and Chief Executive Officer from November 4, 2004 to June 8, 2007. From
September 2001 to January 2002, he 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, he acted as a part-time accounting
consultant to Swiss Financial Services Company, a Geneva based money management
company. He studied the economics at the University of Sheffield in England and
is currently a candidate for the prestigious institute of Chartered Financial
Analysts.

William MacNee

William MacNee has acted as our Chief Operating Officer and
director since May 5, 2008. He has a Ph.D. in electrical engineering, he brings
more than 30 years of international oil, gas, metals and minerals experience. He
has worked throughout North and South America, Western Africa, Eastern Siberia
and extensively in Kazakhstan and Kyrgystan.

He is skilled at project management, with knowledge in the
areas of facilities planning, construction and implementation, gathering
systems, process engineering and production operations planning and processing.
From April 2006 to April 2008, he was on contract to Petrofac International and
was based in Eastern Siberia as their Operations Manager on the Kovytka gas
field for the client TNKBP. From March 2003 to March 2006, he held the position
of Project Manager for Arctic Construction International where he handled
contracts in the Tengiz field for Chevron and also in the Kashagan oil field for
the Northern Constructors Consortium.

---

- 36 -

He received his Doctor of Science (Ph.D.) with Electrical
Engineering Major at Concordia College and University, USA in July 2003

Robert Frost

Robert Frost has acted as our director since May 5, 2008. He is
a geophysicist. From October 2006, he has been a geophysicist and director of
Chartwell Energy Ltd., a company engaged in geophysical consulting. From May
2006, he has been a geophysicist and director of Aimwell Energy Ltd., a company
engaged in oil and gas exploration. From 1993 to 2007, he was a geophysicist and
director of Geoprognosis Ltd., a company engaged in geophysical consultancy.
From 1996 to 2006, he was a geophysicist and director of Wimbledon Oil & Gas
Ltd., a company engaged in oil and gas exploration.

He attended Bristol University from 1970 to 1973 and received
his BSc.(Honours) in Physics.

Michael Rose

Michael Rose has acted as our director since May 5, 2008. He is
a geologist. From February 2007, he has been a non-executive director of
Rheochem Plc. Rheochem Plc. is a company engaged in oilfield services and listed
on AIM and ASX. He is the chairman of the Rheochems remuneration committee and
is also a member of its audit committee. From May 2006, he has been a geologist,
director and company secretary of Aimwell Energy Ltd, a company engaged in oil
and gas exploration. From January 1999, he was a geologist and partner of
Michael Rose Geoconsulting, a company engaged in geological consultancy. From
February 2003 to September 2006, he was a geologist and director of Wimbledon
Oil & Gas Ltd., a company engaged in oil and gas exploration.

He attended Leicester University, UK from 1976 to 1979 where he
received his BSc (Honours) in Geology and Chemistry.

John Spence

John Spence has acted as our director since May 5, 2008. For 25
years he drilled locations across the USA as a contractor, consultant and for
the second half of his career, as a senior manager and member of the Parker
drilling team. In the latter part of his career, he has worked in the
international arena and in particular Russia and the CIS with drilling
operations in the Ukraine, Sakhalin and Kazakhstan. From September 2006, he has
been a consultant drilling manager of Ken Sary LLP  Kazakhstan. From March 2006
to September 2006, he was a consultant drilling manager of KKM  Kazakhstan.
From August 2004 to January 2006, he was a consultant drilling manager of Uzpec
 Uzbekistan. From September 1999 to May 2004, he was a consultant drilling
manager of KKM  Kazakhstan.

Jonathan Wood

Jonathan Wood has acted as our director since May 5, 2008. He
has extensive experience in building economic models, negotiating with
institutions and government authorities, creating accounting systems,
restructuring finances, putting hedges in place, conducting due diligence and
developing reporting structures.

His work in the oil and gas industry has seen him spend three
yeas on Sakhalin Island, six years in Kazakhstan, and the last three years in
Uzbekistan. From June 2004, he has been the Finance Director and Sales and
Marketing Director and Head of Representation of Uzpec Limited (later
reorganized into Soyuzneftegaz Vostok. From 1999 to June 2004, he was the CFO
and Finance Director of Chaparral Resources Inc., an oil and gas exploration and
production company, and Kanakuduicmunay Jsc.

---

- 37 -

Involvement in Certain Legal Proceedings

None of our directors, executive officers, promoters, and
control persons has 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 offenses);                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                
|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.             

Compliance with Section 16(a) of the Securities Exchange Act
of 1934

Section 16(a) of the Securities Exchange Act of 1934 requires
our executive officers and directors and persons who own more than 10% of our
common stock 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 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 SEC regulations to furnish us
with copies of all Section 16(a) reports that they file.

Based solely on our review of the copies of such forms received
by us, or written representations from certain reporting persons, we believe
that during fiscal year ended February 29, 2008, all filing requirements
applicable to our officers, directors and greater than 10% percent beneficial
owners were complied with, with the exception of the following:

Name
      Number of Late Reports
      Number of Transactions Not
      Reported on a Timely Basis
      Failure to File Required
      FormsRichard Moore
    2(1)
    2(1)
    N/AAlexander Craven
    25(2)
    25(2)
    N/ARichard Bullock
    1(3)
    1(3)
    N/A


(1) Richard Moore filed a late Form 3 
Initial Statement of Beneficial Ownership of Securities and a late Form 4 
Statement of Changes in Beneficial Ownership.

(2) Alexander Craven filed one late
Form 3  Initial Statement of Beneficial Ownership of Securities and 24 late
Form 4s - Statement of Changes in Beneficial Ownership.

(3) Richard Bullock filed a late Form 3
 Initial Statement of Beneficial Ownership of Securities.

---

- 38 -

Code of Ethics

Effective April 17, 2008, our board of directors adopted a code
of conduct and ethics that applies to all directors, officers, and employees.
Our code of conduct and ethics was filed as exhibit 14.1 to our current report
on Form 8-K filed with the Securities and Exchange Commission on May 9, 2008.

Audit Committee and Audit Committee Financial Expert

We have an audit committee which consists of Jonathan Wood,
John Spence, and Robert Frost. Jonathan Wood was elected to serve as chairman.
Our board of directors has determined that Mr. Wood qualifies as an audit
committee financial expert and is independent.

Item 10. 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 29, 2008; 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,

who we will collectively refer to as our named executive
officers, of our company for the years ended February 29, 2008 and February 28,
2007, are set out in the following summary compensation table:

---

- 39 -

SUMMARY COMPENSATION TABLEName and Principal Position
      Year
      Salary ($)
      Bonus ($)
      Stock Awards
      ($)
      Option Awards ($)
      Non- Equity Incentive
      Plan Compensation ($)
      Nonqualified Deferred
      Compensation Earnings ($)
      All Other
      Compensation ($)
      Total ($)Richard Moore(1)President and Chief
      Executive Officer
    2008 2007
    130,704(4)
        N/A
    10,000(4)
        N/A
    Nil 
        N/A
    Nil
        N/A
    Nil
        N/A
    Nil
        N/A
    Nil
        N/A
    140,704
        N/AAlexander Craven Vice President, Finance and
      Compliance Officer, Secretary and Treasurer(2)
    2008 2007
    103,740(4)
        16,000
    Nil
        Nil
    Nil
        Nil
    Nil
        Nil
    Nil
        Nil
    Nil
        Nil
    Nil
        Nil
    103,740
        16,000William MacNee(3)Chief Operating
      Officer
    2008 2007
    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/A


| | (1) | Mr. Moore became our President and Chief Executive Officer
        on June 8, 2007.
| | --- | -----------------------------------------------------------------------------------
| |     |                                                                                    
| | (2) | Mr. Craven became our Compliance Officer on May 5, 2008.                           
| |     |                                                                                    
| | (3) | Mr. MacNee became our Chief Operating Officer on May
        5, 2008.              
| |     |                                                                                    
| | (4) | GBP to USD converted at the rate on February 29, 2008.                             

Employment Contracts and Termination of Employment
Arrangements

Richard Moore

On June 8, 2007, we entered into an employment agreement with
Richard Moore, pursuant to which Mr. Moore serves as our President and Chief
Executive Officer. Pursuant to the employment agreement, we paid Mr. Moore
$12,000 per month and agreed to reimburse him for all reasonable travelling and
other expenses incurred by him in connection with his services to us. Mr. Moore
was required to work at a minimum of 3 days per week for us and is entitled to a
minimum annual vacation of four weeks. The term of the agreement is for an
indefinite period and the agreement may be terminated with or without cause.

On October 19, 2007, we amended the employment agreement to
increase the salary of Mr. Moore to £9,000 per month, payable in £4,500
bi-monthly instalments, in arrears, commencing November 1, 2007. Mr. Moore
agreed to work for a minimum of 5 days per week for us.

On May 22, 2008, we entered into a bonus agreement with Mr.
Moore, whereby we agreed to pay a bonus in the amount of £5,000 and issue 5,000
restricted common shares in the capital of our company for his services as a
director and officer of our company.

---

- 40 -

Alexander Craven

Since January 2007, Alexander Craven had received a salary of
$5,000 per month and, on June 8, 2007, we entered into a written consulting
agreement with Alexander Craven, pursuant to which we agreed to 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 the agreement may be terminated with or without cause.

On October 19, 2007, we amended the consulting agreement to
increase the fee to £7,000 monthly, commencing October 1, 2007.

Stock Option Plan

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

Stock Options/SAR Grants

We did not grant any options or stock appreciation rights
during our fiscal year ended February 29, 2008.

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

There were no options exercised during our fiscal year ended
February 29, 2008 by any officer or director of our company.

Directors Compensation

We did not pay director's fees or other cash compensation for
services rendered as a director during our fiscal year ended February 29,
2008.

Effective May 6, 2008, we adopted a compensation policy for our
independent directors pursuant to which we will compensate each independent
director, as follows:

(i) a fee of $1,000 per month;

(ii) 1,000 restricted shares of our
common stock per month;

(iii)a fee of $1,000 per each quarterly
board meeting attended.

Our board of directors determined that Robert Frost, Michael
Rose, John Spence, and Jonathan Wood are independent directors.

We have no present formal plan for compensating our
non-independent directors for their services in their capacities 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

---

- 41 -

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 and Related Stockholder Matters.

The following table sets forth, as of June 10, 2008, 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
      Percentage of
      Class(1)Richard Moore President and Chief Executive Officer,
      Chairman and Director 1115 Finchley Road London, England NW11
      0QD
    Common Stock
    1,200,000
    8.02%Alexander Craven Vice President, Finance, Compliance
      Officer, Secretary, Treasurer and Director 64 Knightsbridge
      London, England SW1X 7JF, UK
    Common Stock
    1,680,000
    11.2%William MacNee c/o Kostas Homes 29 Marko Balabanov
      Street Varna, 9000 Bulgaria
    Common Stock
    Nil
    NilRobert Frost Cottage in the Wood Rotherfield Lane
      Mayfield, East Sussex TN20 6ET UK
    Common Stock
    Nil
    NilMichael Rose 10 Rosebery Avenue Harpenden, Herts,
      AL5 2QP UK
    Common Stock
    Nil
    NilJohn Spence 10303 Norfolk Avenue Lubbock, Texas
      79423
    Common Stock
    Nil
    Nil


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- 42 -

Name and Address of Beneficial Owner
      Title of Class
      Amount and Nature of
      Beneficial Ownership
      Percentage of
      Class(1)Jonathan Wood 48 Zarbog Street Tashkent, Uzbekistan
    Common Stock
    Nil
    NilRichard Bullock 2 Firview Place Port Moody, British
      Columbia V3H 5H6 Canada
    Common Stock
    4,000,000
    26.7%EuroEnergy Growth Capital S.A. Salduba Building, Top
      Floor rd 53 East Street Urbanizacion Obarrio, Panama 5
    Common Stock
    (2) 2,056,490
    (2) 12.9%Directors and Executive Officers as a Group (7 persons)
    Common 
      Stock
    2,880,000
    19.2%


|(1) | Based on 14,968,245 shares of common stock issued and
      outstanding as of June 10, 2008. 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) | Includes warrants to purchase an aggregate of 1,028,245
      shares of common stock exercisable within 60 days of June 10,
  2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

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

Except as disclosed herein, no director, executive officer,
shareholder holding at least 5% of shares of our common stock, or any family
member thereof, had any material interest, direct or indirect, in any
transaction, or proposed transaction since the year ended February 28, 2007, in
which the amount involved in the transaction exceeded or exceeds the lesser of
$120,000 or one percent of the average of our total assets at the year end for
the last three completed fiscal years.

Richard Bullock

Richard Bullock was our Chairman and director from June 8, 2007
to May 1, 2008 and owns 26.7% of the issued and outstanding shares of our common
stock as of June 10, 2008.

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- 43 -

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 North Slope, Alaska.
These leases are subject to a royalty of 16.67% to the State of Alaska and a
private royalty equal to 5%. In consideration for the oil and gas leases, we
issued 20,000,000 (4,000,000 post-reverse stock split) restricted common shares
of our company to Richard Bullock, the 100% owner of Fox Petroleum LLC.
Acquisitions of 11 oil and gas leases under the agreement with Fox Petroleum LLC
was completed on August 14, 2007, while that of 12th oil and gas lease was
completed effective March 1, 2008. These leases have been assigned to our wholly
owned subsidiary, Fox Petroleum (Alaska) Inc.

On June 8, 2007, we entered into a consulting agreement with
  Richard Bullock, our former Chairman and director, pursuant to which we 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. On May
  1 , 2008, we terminated this agreement.

Aimwell Energy Limited

Michael Rose and Robert Frost are the beneficial owners and
directors of Aimwell Energy Ltd.

On November 8, 2007, through our wholly owned UK subsidiary,
Fox Energy Exploration Limited, we entered into a farm-in agreement with Valiant
North Sea Limited and Petrofac Energy Developments Limited. Pursuant to the
farm-in agreement, Valiant North Sea Limited and Petrofac Energy Developments
Limited agreed to assign a total of 46% interests in the southern part of block
211/17 located in the UK North Sea.

On January 24, 2008, we agreed to jointly participate with Aimwell Energy Limited to identify a potential farm-in or acquisition opportunity and transferred a 4.6% carried interest in the license block to Aimwell Energy Limited until a full development plan is approved by the U.K. government.  Thereafter, Aimwell Energy Limited will be responsible for its 4.6% share of the costs (10% of our interest). Michael Rose and Robert Frost, who became directors of our company effective May 5, 2008, are the beneficial owners and directors of Aimwell Energy Ltd. Aimwell Energy Ltd. will receive no cash or stock payment, other than the carried interest.

On May 28, 2008, we acquired four 10km x 10km UK onshore
license blocks in the south of England. The United Kingdom government made
available this Petroleum Exploration and Development License and awarded the
blocks totaling 400 km sq to our company and Aimwell Energy Ltd. in the latest
round of onshore licensing. We have retained a 90% interest in the four blocks
and Aimwell Energy Ltd. retained a 10% interest.

In return for the license, we will have to shoot 60 km of 2D
seismic within the 6-year term of the license. Interpretation and analysis of
the seismic data acquired will help further define the prospect, after which we
will have an option to drill a well, or simply relinquish the license.

Board of Advisors

Effective August 17, 2008, we appointed William MacNee, Robert
Frost, Michael Rose, John Spence, and Jonathan Wood to our board of advisors. We
also entered into board of advisors agreements with Aimwell Energy Limited (a
company controlled by Robert Frost and Michael Rose), Black Gold Consulting Inc.
(a company controlled by William MacNee), John Spence, and Jonathan Wood,
whereby we agreed to grant 20,000, 10,000, 10,000, and 10,000 shares of our
common stock, respectively, for each completed year of the services.

Effective May 5, 2008, all five of them became our directors
and the board of advisors was dissolved. Also effective June 10, 2008, we
entered into board of advisors termination agreements, whereby we

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- 44 -

terminated the board of advisors agreements and agreed to issue
20,000, 10,000, 10,000, 10,000 shares of our common stock to Aimwell Energy
Limited, Black Gold Consulting Inc., John Spence, and Jonathan Wood,
respectively, for the services performed by them.

Richard Moore and Alexander Craven

For information regarding compensation of Richard Moore, our
President and Chief Executive Officer and Alexander Craven, our Vice President,
Finance and Compliance Officer, please see Item 10. Executive
Compensation.

EuroEnergy Growth Capital S.A.

EuroEnergy Growth Capital S.A. owns 1,028,245 shares of our
common stock (representing 6.87% of our issued and outstanding shares of common
stock as of June 10, 2008) and warrants to purchase 1,208,245 shares of our
common stock.

For information regarding the transactions with EuroEnergy
Growth Capital S.A., please see Item 6. Managements Discussion and Analysis or
Plan of Operation - Liquidity and Capital Resources.

Director Independence

Our board of directors is presently composed of seven
directors, consisting of Richard Moore, Alexander Craven, William MacNee, Robert
Frost, Michael Rose, John Spence, and Jonathan Wood. Richard Bullock was our
director from June 8, 2007 to May 1, 2008.

Our board of directors determined that Robert Frost, Michael
Rose, John Spence, and Jonathan Wood are independent directors under a
definition of independent director of the American Stock Exchange. We believe
that Richard Bullock was also an independent director under the same
definition.

We have following committees and committee members.

Audit Committee
      Compensation Committee
      Nominating CommitteeJonathan Wood (Chair)
    Jonathan Wood (Chair)
    John Spence (Chair)John Spence
    John Spence
    Michael RoseRobert Frost
    Michael Rose
    Robert Frost


All of our committee members are independent under the
applicable committee independence standards of the American Stock Exchange.

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- 45 -

Item 13. Exhibits

Exhibits required by Item 601 of Regulation S-B

Exhibit No.
    Description(3)
    (i) Articles of Incorporation and (ii)
      By-laws3.1
    Articles of Incorporation (incorporated by
      reference from our registration statement on Form SB-2 filed on August 19,
      2005)3.2
    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)3.3
    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)3.4
    Certificate of Change filed with the Secretary
      of State of Nevada on April 4, 2008 (incorporated by reference from our
      current report on Form 8-K filed on April 21, 2008)3.5
    Amended and Restated Bylaws (incorporated by
      reference from our current report on Form 8-K filed on April 30, 2008)(10)
    Material Contracts10.1
    Private Placement Subscription Agreement dated
      February 23, 2007 (incorporated by reference from our current report on
      Form 8-K filed on June 1, 2007)10.2
    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)10.3
    Share Issuance Agreement dated May 17, 2007
      (incorporated by reference from our current report on Form 8-K filed on
      June 1, 2007)10.4
    Farm-In Agreement dated June 8, 2007
      (incorporated by reference from our annual report on Form 10-KSB filed on
      June 13, 2007)10.5
    Employment Agreement dated June 11, 2007
      (incorporated by reference from our annual report on Form 10-KSB filed on
      June 13, 2007)10.6
    Escrow Agreement dated June 8, 2007
      (incorporated by reference from our annual report on Form 10-KSB filed on
      June 13, 2007)10.7
    Consulting Agreement dated June 12, 2007
      (incorporated by reference from our annual report on Form 10-KSB filed on
      June 13, 2007)10.8
    Consulting Agreement dated June 12, 2007
      (incorporated by reference from our annual report on Form 10-KSB filed on
      June 13, 2007)10.9
    Subscription Agreement between Trius Energy,
      LLC and our company (incorporated by reference from our current report on
      Form 8-K filed on October 19, 2007)10.10
    Amendment to Employment Agreement dated October
      19, 2007 (incorporated by reference from our quarterly report on Form
      10-QSB filed on October 22, 2007)10.11
    Amendment to Consulting Agreement dated October
      19, 2007 (incorporated by reference from our quarterly report on Form
      10-QSB filed on October 22, 2007)10.12
    Farm-Out Agreement dated November 8, 2007
      between Valiant North Sea Limited, Petrofac Energy Developments Limited
      and Fox Energy Exploration Limited (incorporated by reference from our
      current report on Form 8-K filed on November 23, 2007)10.13
    Purchase Agreement (North Slope Leases) dated
      October 10, 2007 (incorporated by reference from our current report on
      Form 8-K filed on November 28, 2007)10.14
    Amendment Agreement No. 1 to Purchase Agreement
      (North Slope Leases) dated November 2, 2007 (incorporated by reference
      from our current report on Form 8-K filed on November 28, 2007)10.15
    Purchase Agreement (Cook Inlet) dated October
      10, 2007 (incorporated by reference from our current report on Form 8-K
      filed on November 28, 2007)10.16
    Finder Agreement with Partners Consulting, Inc.
      dated February 15, 2008 (incorporated by reference from our current report
      on Form 8-K filed on March 21, 2008)10.17
    Promissory Note dated April 1, 2008 to
      EuroEnergy Growth Capital S.A. (incorporated by reference from our current
      report on Form 8-K filed on May 9, 2008)


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- 46 -

Exhibit No.
    Description10.18
    Letter of Commitment with Senergy Limited (incorporated
    by reference from our current report on Form 8-K filed on May 9, 2008)10.19
    Promissory Note dated May 1, 2008 to EuroEnergy Growth
      Capital S.A. (incorporated by reference from our current report on Form
      8-K filed on May 21, 2008)10.20
    Bonus Agreement dated May 22, 2008 between Richard Moore
      and our company (incorporated by reference from our current report on Form
      8-K filed on May 28, 2008)10.21
    Agreement of Intention to Sell/Purchase the
      Geneseo-Edwards Program between Hodgden & Assocaites and our company
      (incorporated by reference from our current report on Form 8-K filed on
      May 29, 2008)10.22
    Promissory Note dated May 23, 2008 to EuroEnergy Growth
      Capital S.A. (incorporated by reference from our current report on Form
      8-K filed on June 6, 2008)10.23*
    Board of Advisors Agreement dated July 19, 2007 with
      Aimwell Energy Limited10.24*
    Board of Advisors Agreement dated July 19, 2007 with
      Black Gold Consulting Inc.10.25*
    Board of Advisors Agreement dated August 2007 with John
      Spence10.26*
    Board of Advisors Agreement dated August 2007 with
      Jonathan Wood10.27*
    Board of Advisors Termination Agreement dated June 10,
      2008 with Aimwell Energy Limited10.28*
    Board of Advisors Termination Agreement dated June 10,
    2008 with Black Gold Consulting Inc.10.29*
    Board of Advisors Termination Agreement dated June 10,
    2008 with John Spence10.30*
    Board of Advisors Termination Agreement dated June 10,
    2008 with Jonathan Wood10.31*
      Agreement dated January 24, 2008
          with Aimwell Energy limited10.32*
    Loan Agreement with EuroEnergy Growth Capital S.A.14.1
    Code of Conduct and Ethics (incorporated by reference
      from our current report on Form 8-K filed on May 9, 2008)16.1
    Letter from Amisano Hanson, Chartered Accountants, dated
      February 19, 2008 (incorporated by reference from our current report on
      Form 8-K/A filed on March 19, 2008)(21)
    Subsidiaries21.1
    Fox Petroleum (Alaska) Inc., incorporated in Alaska21.2
    Fox Energy Exploration Limited, incorporated in England
      and Wales(31)
    Section 302 Certification31.1*
    Section 302 Certification of Richard Moore31.2*
    Section 302 Certification of Alexander Craven(32)
    Section 906 Certification32.1*
    Section 906 Certification of Richard Moore32.2*
    Section 906 Certification of Alexander Craven99.1
    Audit Committee Charter (incorporated by reference from
      our current report on Form 8-K filed on May 9, 2008)99.2
    Compensation Committee Charter (incorporated by reference
      from our current report on Form 8-K filed on May 9, 2008)99.3
    Nominating Committee Charter (incorporated by reference
  from our current report on Form 8-K filed on May 9, 2008)


*Filed herewith

Item 14. Principal Accountant Fees and Services

The aggregate fees billed for the most recently completed
fiscal year ended February 29, 2008 and for fiscal year ended February 28, 2007
for professional services rendered by the principal accountant for the audit of
our annual financial statements and review of the financial statements included
in our quarterly reports on Form 10-QSB and services that are normally provided
by the accountant in connection with statutory and regulatory filings or
engagements for these fiscal periods were as follows:

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- 47 -

Year EndedFebruary 29, 2008
    February 28, 2007Audit Fees
    $51,595
    $15,277Audit Related Fees
    Nil
    NilTax Fees
    Nil
    NilAll Other Fees
    Nil
    NilTotal
    $51,595
    $15,277


Our 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.

Our board of directors has considered the nature and amount of
fees billed by our independent auditors and believes that the provision of
services for activities unrelated to the audit is compatible with maintaining
our independent auditors independence.

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- 48 -

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 Moore*                                                                                                                                                                       | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|By: Richard Moore                                                                                                                                                                         | 
|President, Chief Executive Officer, Chairman, and Director                                                                                                                                | 
|(Principal Executive Officer)                                                                                                                                                             | 
|Dated: June 13, 2008                                                                                                                                                                      | 
|                                                                                                                                                                                          | 
|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 Moore*                                                                                                                                                                      | 
|By: Richard Moore                                                                                                                                                                         | 
|President, Chief Executive Officer, Chairman, and Director                                                                                                                                | 
|(Principal Executive Officer)                                                                                                                                                             | 
|Dated: June 13, 2008                                                                                                                                                                      | 
|                                                                                                                                                                                          | 
|                                                                                                                                                                                          | 
|/s/ *Alexander Craven*                                                                                                                                                                    | 
|By: Alexander Craven                                                                                                                                                                      | 
|Vice President, Finance, Compliance Officer,                                                                                                                                              | 
|Secretary, Treasurer and Director                                                                                                                                                         | 
|(Principal Financial Officer and Principal Accounting
      Officer)                                                                                                                      | 
|Dated: June 13, 2008                                                                                                                                                                      | 
|                                                                                                                                                                                          | 
|                                                                                                                                                                                          | 
|/s/ *William MacNee*                                                                                                                                                                      | 
|By: William MacNee                                                                                                                                                                        | 
|Chief Operating Officer and Director                                                                                                                                                      | 
|Dated: June 13, 2008                                                                                                                                                                      | 
|                                                                                                                                                                                          | 
|                                                                                                                                                                                          | 
|/s/ *Robert Frost*                                                                                                                                                                        | 
|By: Robert Frost                                                                                                                                                                          | 
|Director                                                                                                                                                                                  | 
|Dated: June 13, 2008                                                                                                                                                                      | 
|                                                                                                                                                                                          | 
|                                                                                                                                                                                          | 
|/s/ *Michael Rose*                                                                                                                                                                        | 
|By: Michael Rose                                                                                                                                                                          | 
|Director                                                                                                                                                                                  | 
|Dated: June 13, 2008                                                                                                                                                                      | 

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- 49 -

|/s/ *John Spence*    | 
|-------------------- | 
|By: John Spence      | 
|Director             | 
|Dated: June 13, 2008 | 
|                     | 
|/s/  *Jonathan Wood* | 
|By: Jonathan Wood    | 
|Director             | 
|Dated: June 13, 2008 | 

---