UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, 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: 0-50472

                            New Frontier Energy, Inc.
                            -------------------------
                 (Name of small business issuer in its charter)

              Colorado                                    84-1530098
              --------                                    ----------
    (State or other jurisdiction                 (I.R.S. Identification No.)
 of incorporation or organization)

         1789 W. Littleton Blvd., Littleton, Colorado                 80120
         --------------------------------------------              ----------
         (Address of principal executive offices)                  (Zip Code)

                                 (303) 730-9994
                                 --------------
                         (Registrant's telephone number)

      Securities registered under Section 12 (b) of the Exchange Act: None

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

                          Common Stock, $.001 par value
                          -----------------------------
                                (Title of Class)

Check whether the issuer is not required to file reports pursuant to Section 13
or 15(d) of the Exchange Act. |_| Yes |X| No

Check whether the issuer (1) has 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. |X| Yes |_|
No

Check is 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. |_|

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

The Company's revenues for the fiscal year ended February 29, 2008 were
$757,739.

The aggregate market value of the voting and non-voting common stock held by
non-affiliates of the Registrant as of May 13, 2008 was approximately
$12,573,552 based upon the last reported sale on that date.

The number of the Registrant's shares of $0.001 par value common stock
outstanding as of May 22, 2008 was 11,818,429.

<PAGE>

TABLE OF CONTENTS
--------------------------------------------------------------------------------

                                                                     Page Number
                                     Part I

Items 1 and 2.   Business and Properties                                    1

Item 3.          Legal Proceedings                                         33

Item 4.          Submission of Matters to a Vote of Security Holders       33

                                    PART II

Item 5.          Market for Common Equity and Related Stockholder
                 Matters and Issuer Purchase of Equity Securities.         33

Item 6.          Management's Discussion and Analysis of Financial
                 Condition and Results of Operation                        35

Item 7.          Financial Statements                                      46

Item 8.          Changes in and Disagreements With Accountants on
                 Accounting and Financial Disclosure                       47

Item 8A.         Controls and Procedures                                   47

Item 8A(T).      Controls and Procedures                                   47

Item 8B.         Other Information                                         47

                                    PART III

Item 9.          Directors, Executive Officers, Promoters, Control
                 Persons and Corporate Governance; Compliance with
                 Section 16(a) of the Exchange Act.                        48

Item 10.         Executive Compensation.                                   51

Item 11.         Security Ownership of Certain Beneficial Owners
                 and Management and Related Stockholder Matters.           62

Item 12.         Certain Relationships and Related Transactions,
                 and Director Independence.                                66

Item 13.         Exhibits.                                                 67

Item 14.         Principal Accounting Fees and Services                    69

SIGNATURES                                                                 70

Additional Information

     Descriptions in this Annual Report on Form 10-KSB are qualified in their
entirety by reference to the content of any contract, agreement or other
document described or incorporated herein and are not necessarily complete.
Reference is made to each such contract, agreement or document filed as an
exhibit to this Report or incorporated herein by reference by the Company as
permitted by regulations of the Securities and Exchange Commission (the "SEC" or
the "Commission").

                                       ii

<PAGE>

                           FORWARD-LOOKING STATEMENTS

     This Annual Report on Form 10-KSB contains certain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended (the "Securities Act"), and Section 21E of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and New Frontier Energy, Inc. (the
"Company"), intends that such forward-looking statements be subject to the safe
harbors created thereby. These statements include, among others:

     o    Our business strategy and financial condition;

     o    exploration and development drilling prospects, inventories, projects,
          plans and programs;

     o    Oil and natural gas reserves;

     o    availability and costs of drilling rigs and field services;

     o    The price of oil and gas and the general state of the economy;

     o    The willingness and ability of third parties to honor their
          contractual commitments;

     o    Our ability to raise additional capital, as it may be affected by
          current conditions in the stock market and competition in the oil and
          gas industry for risk capital;

     o    Environmental and other regulations, as the same presently exist and
          may hereafter be amended;

     o    Our ability to identify, finance and integrate other acquisitions of
          properties;

     o    Volatility of our stock price; and

     o    plans, objectives, expectations and intentions.

     These statements may be made expressly in this document or may be
incorporated by reference to documents that we will file with the SEC. You can
find many of these statements by looking for words such as "believes,"
"expects," "anticipates," "estimates" or similar expressions used in this Annual
Report. Although we believe that the expectations reflected in such
forward-looking statements are reasonable, we cannot give any assurance that
such expectations will prove to have been correct. These statements are only
predictions and involve known and unknown risks, uncertainties and other
factors, including the risks in the section entitled "Risk Factors," that may
cause our or our industry's actual results, levels of activity, performance or
achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by these
forward-looking statements. We caution you not to put undue reliance on these
statements, which speak only as of the date of this Annual Report. Further, the
information contained in this Annual Report or incorporated herein by reference
is a statement of our present intention and is based on present facts and
assumptions and may change at any time and without notice, based on changes in
such facts or assumptions.

                                      iii

<PAGE>

     While these forward-looking statements, and any assumptions upon which they
are based, are made in good faith and reflect our current judgment regarding the
direction of our business, actual results will almost always vary, sometimes
materially, from any estimates, predictions, projections, assumptions or other
future performance suggested herein. We undertake no responsibility or
obligation to update publicly these forward-looking statements but may do so in
the future in written or oral statements. Investors should take note of any
future statements made by or on our behalf.

                [REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY]

                                       iv

<PAGE>

                                     PART I

Items 1 and 2. Business and Properties

Overview

     New Frontier Energy, Inc. (the "Company" or "we" or "us") is a domestic
energy company engaged in the exploration for, and development of, oil and
natural gas reserves in the continental United States. We were originally
organized under the laws of the State of Colorado as Storage Finders.com, Inc.
on January 7, 2000.

     In February 2002, we were acquired by Wyoming Oil & Minerals, Inc.
("WYOG"). In mid 2003, we determined to become an independent, but publicly
traded, entity. Accordingly, WYOG transferred certain oil and gas assets and we
assumed certain WYOG liabilities and appointed new management. WYOG declared a
dividend payable by distributing 12,775,616 shares of New Frontier Energy, Inc.
Common Stock to its shareholders. On March 3, 2004, the Board of Directors
authorized a 1 to 4 reverse split of Common Stock to stockholders of record in
order to facilitate the marketability and liquidity of the Common Stock based on
the current market conditions and other relevant factors. The shares were
registered with the Securities and Exchange Commission on Form SB-2 in April
2004, and became quoted on the Over-The- Counter Bulletin Board in May 2004
under the symbol "NFEI.OB." Effective February 28, 2005, we merged Skyline
Resources, Inc. ("Skyline") our wholly owned subsidiary, into the Company in a
tax-free merger.

     The Company owns 82.76% of the limited partnership interests (the "Limited
Partnership Interests") of Slater Dome Gathering, LLLP ("SDG"). SDG owns the
18-mile gas gathering line that transports the Company's natural gas from the
Slater Dome Field to the Questar transportation line in Baggs, Wyoming.

     On December 26, 2007, the Company entered into a Partnership Interest
Purchase Agreement with Natural Resource Group Gathering, LLC ("NRGG") to
acquire NRGG's general partnership interest (the "General Partnership Interest")
in SDG effective as of January 1, 2008. In connection with the purchase of the
General Partnership Interest, the Company was appointed the general partner of
SDG. The General Partnership Interest is equal to 25% of the Percentage
Interests (as defined in SDG's Limited Partnership Agreement) in SDG.

     Prior to December 2006, the Company was non-operating partner with a 30%
working interest in the Slater Dome Field. Effective December 14, 2006, the
Company purchased Cedar Ridge, LLC's ("Cedar Ridge") 36.66667% working interest
(29.33336% net revenue interest) in eleven gas and 2 water disposal wells and
33,949 net acres in the Slater Dome Field located along the eastern edge of the
Greater Green River basin in northwest Colorado and south central Wyoming. The
properties are entirely within the Company's existing leasehold at the Slater
Dome Field. The Company now owns a 66.66667% working interest (53.33% net
revenue interest) in the Slater Dome Field. Pursuant to the Purchase and Sale
Agreement for Cedar Ridge's interests, we were responsible for the obligations
attributable to their interests as of November 1, 2006. Following the
consummation of these interests, we became the operator of the Slater Dome
Field.

                                       1

<PAGE>

Our Business

     We explore for, produce and gather oil and natural gas. During the fiscal
year ended February 29, 2008, we had an interest in five principal properties,
(i) the Slater Dome Field, located in northwest Colorado and south central
Wyoming, (ii) the Flattops Prospect located in southwest Wyoming (the "Flattops
Prospect"), (iii) the Gibraltar Peaks Prospect ("Gibraltar Peaks"), (iv) the
North Slater Dome Prospect ("North Slater Dome Prospect:") located in south
central Wyoming, and (v) the Amber Waves Prospect ("Amber Waves Prospect")
located in northeast Colorado in the Denver Julesburg Basin. The Flattops, North
Slater Dome, Gibralter Peaks, and Amber Waves Prospects are, undeveloped, which
means they do not currently produce any oil or natural gas. The Company is the
operator of the Slater Dome Field, the Amber Waves Prospect, the North Slater
Dome Prospect and the Flattops Prospect. We also own certain royalty interests
in certain wells in the state of Wyoming other than in the Slater Dome Field.

     On July 31, 2007, the Company entered into an amended Farmout Agreement
(the "Amendment") with Clayton Williams Energy, Inc. ("Clayton Williams"),
whereby the Company shall become the operator of and acquire substantially all
of Clayton William's interest in the Focus Ranch Unit (the "Focus Ranch Unit")
leaving Clayton Williams with a 1% working interest, The Focus Ranch Unit
consists of approximately 36,891 gross acres in Routt County Colorado adjacent
to and southeast of the Company's Slater Dome Field and one gas well, the Focus
Ranch Federal 12-1 well.

     Pursuant to the Amendment, Clayton Williams agreed to assign the Focus
Ranch Unit to the Company within seven days of written request by the Company,
but not earlier than August 15, 2007 or later than fifteen (15) days after
production operations under this Agreement have been completed, as determined in
Farmee's sole discretion. At the time of the assignment of the Focus Ranch Unit
to the Company, Clayton Williams shall resign as the operator of the Focus Ranch
Unit and agrees to vote for the Company as the successor operator. Further, in
the Amendment, the Company agreed to waive the condition precedent that the
parties obtain a transfer of rights to the road that leads to the Focus Ranch
Unit. As of the date of this Annual Report, the Focus Ranch Unit had not been
assigned to the Company. The Company plans to test the Federal 12-1 well in July
or August 2008 and take assignment of the Focus Ranch Unit after the testing is
complete.

     SDG owns the 18-mile gas gathering pipeline (the "Gas Gathering Pipeline")
that transports the Company's natural gas from the Slater Dome Field to the
Questar transportation line in Baggs, Wyoming. The Flattops Prospect is
relatively close to the Gas Gathering Pipeline.

     Our executive offices are located at 1789 W. Littleton Blvd., Littleton,
Colorado 80120 and our telephone number is (303) 730-9994.

                                       2

<PAGE>

Description of Properties

     All of our properties are located in the States of Colorado and Wyoming. At
February 29, 2008, we had an interest in 64,435 gross, 43,413 net acres of oil
and gas properties. We had a working interest in 19 gross coal bed methane gas
wells and 12.7 net wells as of February 29, 2008.

     The following table summarizes the Company's interest in oil and gas
properties on February 29, 2008:

            ---------------------------------------------------------
            Proved developed oil and gas acres:     Gross       Net
            ---------------------------------------------------------

            ---------------------------------------------------------
                  Wyoming                              240        160
            ---------------------------------------------------------
                  Colorado                           1,360        907
            ---------------------------------------------------------
                  Total                              1,600      1,067
            ---------------------------------------------------------

            ---------------------------------------------------------
            Undeveloped oil and gas acres:       Gross (1)    Net (1)
            ---------------------------------------------------------

            ---------------------------------------------------------
                  Wyoming                           21,066     17,403
            ---------------------------------------------------------
                  Colorado                          41,769     24,943
            ---------------------------------------------------------
                  Total                             62,835     42,346
            ---------------------------------------------------------

     (1) Does not include the Focus Ranch Unit gross and net acres which are
36,891 gross acres and 30,500 net acres.

     Substantially all of our working interests are held pursuant to leases from
third parties. A title opinion is usually obtained prior to the commencement of
drilling operations on properties. We have obtained title opinions or conducted
a thorough title review on substantially all of our producing properties and
believe that we have satisfactory title to such properties in accordance with
standards generally accepted in the oil and gas industry. We also perform a
title investigation before acquiring undeveloped leasehold interests.

     Slater Dome Field

     The Slater Dome Field is our primary asset and is comprised of 38,870 gross
acres and 32,239 net acres. We acquired our interest in the Slater Dome Field in
2001, when we acquired Skyline. Skyline in turn, acquired its interest in the
Slater Dome Field in November 1998 from Energy Investments, Inc., a privately
held, independent third party. Skyline drilled an exploratory well to test for
gas in 1998 and participated in drilling six additional wells. During the period
from 1998 to 2002, Skyline owned a 33.33% working interest in the Slater Dome
Field. In 2002, Skyline acquired an additional 33.33% interest in the property,
following which it owned a total of approximately 66.67%. In an effort to
diversify its holdings and obtain an operator experienced in coal-bed methane
development and production, Skyline sold a 36.67% undivided working interest in
the Slater Dome Field to Cedar Ridge. That transaction was completed with an
effective date of February 28, 2003.

                                       3

<PAGE>

     Effective November 3, 2006, the Company entered into a Purchase and Sale
Agreement (the "Cedar Ridge Agreement") with Cedar Ridge, whereby the Company
acquired Cedar Ridge's 36.66667% working interest (29.33336% net revenue
interest) in eleven gas and 2 water disposal wells together with 33,949 net
acres in the Slater Dome Field, which was closed effective December 14, 2006.
The purchase price for Cedar Ridge's interest was $8,000,000. In connection with
the purchase of Cedar Ridge's interest, the Company became the operator of the
Slater Dome Field.

     The primary drilling objective in the Slater Dome Field is the lower Iles
coal-bearing formation of the Mesa Verde Group at depths ranging from 700 to
3,200 feet. A secondary objective consists of a group of sands that exist
between the base of the Iles formation and the top of the Mancos shale. The Deep
Creek Sand is the basal sand of this group. The Deep Creek Sand was productive
in the Savery Field just north of the Slater Dome Field. However, there is no
assurance that gas can be produced economically from the Deep Creek Sand or any
other formation in the Slater Dome Field.

     The Company has a permanent surface water discharge permit for the Slater
Dome Field that allows the Company to discharge water on the surface after it
has been purified. During the fiscal year ended February 29, 2008, the Company
entered into an agreement with Watergy Produced Water Solutions, Inc. to
construct, install and operate a water treatment system to treat and purify
water from the Company's operated wells and the water pipeline system in the
Slater Dome Field in compliance with applicable environmental and clean water
laws.

     At February 29, 2008, our estimated proved reserves in the Slater Dome
Field totals 15,561,000 MCF of gas to our interest. The Company drilled eight
wells in the Slater Dome Field during the fiscal year ended February 29, 2008
with no dry holes. At February 28, 2007, our estimated proved reserves in the
Slater Dome Field totaled 12,114,000 MCF of gas to our interest. The Company did
not drill any wells during the fiscal year ended February 28, 2007.

     During the fiscal year ended February 29, 2008, the Slater Dome Field
produced 306,478 MCF of gas, of which 44,027 MCF was used in operations and
262,450 MCF was sold. We intend to drill an additional 4 to 6 wells in the
Slater Dome Field during the fiscal year ended February 28, 2009.

     The North Slater Dome Prospect

     In March 2007, we acquired leases for approximately 600 acres in the North
Slater Dome Prospect in Southwestern Wyoming. We own 100% of the working
interest in approximately 600 gross acres and net acres and are the operator of
this prospect.

                                       4

<PAGE>

     Flattops Prospect

     We acquired fee leases in the Flattops Prospect in fiscal 2006 from
approximately 20 mineral interest owners. We own 100% of the working interest in
approximately 3,276 gross and net acres and are the operator of this prospect.

     The Flattops Prospect is postulated around the Montgomery #1 well in Carbon
County, Wyoming. Kirby Petroleum drilled this well in 1967 to test the Mesa
Verde sands for oil production. Gas was encountered in the Fort Union, Lance and
Almond sections of the Mesa Verde formation. Gas flowed to the surface on a
drill stem test in the Almond section of the Mesa Verde formation at a rate of
147 MCF per day. This well was plugged and abandoned for lack of a gas
transmission line in the region. We believe that additional gas potential exists
in the Mesa Verde coals and sands (6,000'-6,700'), the Lance coals and sands
(2,650'-3,550') and the Fort Union coals (1,825'-1,910'), as well as the Fort
Union Sands.

     In the future, the Company intends to drill the plug out of the Montgomery
well and log and test this well using modern logs and testing. Further, we also
intend to drill and test these same formations in an up-dip position
approximately 1.5 miles due east of the re-entry well. The Gas Gathering
Pipeline is less than one-half mile from the proposed wells, which would provide
the ability to connect the wells into the Gas Gathering Pipeline.

     The Amber Waves Prospect

     In the fall of 2007 we acquired leases for approximately $306,800 in the
Denver Julesberg Basin located in Northeast Colorado from approximately 29
interest owners (the "Amber Waves Prospect"). We own 100% of the working
interest in approximately 6,640 gross acres and 5,041 net acres and are the
operator of the Amber Waves Prospect. We are in the process of marketing this
prospectus to industry partners and will attempt to obtain a promoted or carried
working interest as well as a prospect fee.

     The Gibraltar Peaks Prospect

     Effective July 21, 2006, the Company entered into a Purchase Agreement
(with Infinity Oil & Gas of Wyoming, Inc. ("Infinity"), whereby the Company
acquired a 15% working interest (13.125% net revenue interest) in 15,049 gross
acres, 2,257 net acres in Routt County Colorado. The acreage includes all rights
from the surface of the earth to the base of the Mesa Verde Formation. The
purchase price for the acreage was $35,967. This prospect is southeast of, and
directly adjacent to the Slater Dome Field. We acquired the rights to the
minerals from the surface of the earth to the base of the Mesa Verde Formation.
This prospect is included in the Focus Ranch Unit.

                                       5

<PAGE>

     Focus Ranch Unit

     The Focus Ranch Unit consists of approximately 36,891 gross acres, 30,500
net acres adjacent to and southeast of the Slater Dome Field in northwest
Colorado and one gas well, the Focus Ranch Federal 12-1 well ("Focus Ranch
Unit"). On June 4, 2007, we entered into an agreement to acquire and take over
operations for the Focus Ranch Unit from Clayton Williams Energy, Inc. ("Clayton
Williams"). On July 31, 2007, the Company entered into an amended Farmout
Agreement (the "Amendment") with Clayton Williams, whereby the Company shall
become the operator of and acquire Clayton William's interest in the Focus Ranch
Unit. Clayton Williams will retain a 1% working interest in the Unit and the
Company will acquire the balance of Clayton Williams interest ranging between a
74% and a 99% working interest.

     Pursuant to the Amendment, Clayton Williams agreed to assign the Focus
Ranch Unit to the Company within seven days of written request by the Company,
but not earlier than August 15, 2007 or later than fifteen (15) days after
production operations under this Agreement have been completed, as determined in
Farmee's sole discretion. At the time of the assignment of the Focus Ranch Unit
to the Company, Clayton Williams shall resign as the operator of the Focus Ranch
Unit and agrees to vote for the Company as the successor operator. Further, in
the Amendment the Company agreed to waive the condition precedent that the
parties obtain a transfer of rights to the road that leads to the Focus Ranch
Unit. As of the date of this Annual Report, the Focus Ranch Unit had not been
assigned to the Company. The Bureau of Land Management has placed the Focus
Ranch Unit in suspense pending the results of the testing of the Federal 12-1
well which is expected to be completed by fall 2008.

     Other Properties

     We lease approximately 1,600 square feet of office space located at 1789 W.
Littleton Blvd., Littleton, Colorado 80120, for approximately $2,667 per month.
The lease expires on December 31, 2008. The lease is with Spotswood Properties,
LLC, ("Spotswood") a Colorado limited liability company and an affiliate of Paul
G. Laird, President and Chief Executive Officer of the Company. The Lease is on
terms that the Board of Directors, which includes Mr. Laird, believe are no less
favorable than those that may be obtained from third parties.

     On June 14, 2007, we purchased a 35.5 acre residential property located at
29300 RCR 14A, Steamboat Springs, Colorado 80487 (the "Steamboat Property").
Included on the Steamboat Property is an approximately 4,100 square foot single
family residence. The purchase price for the Steamboat Property was $1,175,000.
In connection with the purchase of the Steamboat Property, the Company entered
into a five-year mortgage in the principal amount of $881,250 (the "Steamboat
Mortgage"), which bears interest at a rate of 7.56% per annum. The Steamboat
Mortgage requires equal monthly payments during the term of the mortgage in the
amount of $8,255.86, with the balance of $698,604 due on June 14, 2012. The
Steamboat Mortgage can be prepaid at any time without penalty. The Company uses
the Steamboat Property as a field office and for housing for its employees
conducting operations in the Slater Dome Field.

                                       6

<PAGE>

Expiration of Leases

     The following table sets forth the gross and net acres subject to leases
that will expire during the periods indicated:

             -------------------------------------------------------
                  Year end               Gross               Net
             -------------------------------------------------------
             February 28, 2009           9,804              9,421
             -------------------------------------------------------
             February 28, 2010          10,798              5,696
             -------------------------------------------------------
             February 28, 2011             751                751
             -------------------------------------------------------

Natural Gas Gathering Pipeline

     Prior to May 2005, there was no operating gathering pipeline available at
the Slater Dome Field to transport our gas. However, SDG, an affiliate of Paul
G. Laird, the Company's President and Chief Executive Officer, completed
construction of the 18-mile Gas Gathering Pipeline to the Slater Dome Field in
May 2005, and we commenced the sale of natural gas in June 2005. The Gas
Gathering Pipeline transports the Company's natural gas from the Slater Dome
Field to a Questar transportation line in Baggs, Wyoming. The Company owns
82.76% of the Limited Partnership Interests of SDG and on December 26, 2007
acquired NRGG's general partnership interest (the "General Partnership
Interest"). In connection with the purchase of the General Partnership Interest,
the Company was appointed the general partner of SDG. The General Partnership
Interest is equal to 25% of the Percentage Interests (as defined in SDG's
Limited Partnership Agreement) in SDG.

     Gas produced from other owners and operators in the area around the Slater
Dome Field may be transported through the Gas Gathering Pipeline for a fee,
assuming the wells are connected to the Gas Gathering Pipeline. The Company and
the other producer at the Slater Dome Field entered into a ten-year gathering
agreement and agreed to pay SDG a fee of $0.50 per MCF, subject to annual
escalations for cost recovery of gas transported through the line, until the
costs of the Gas Gathering Pipeline are recovered and $0.25 thereafter and to
dedicate their gas to the Gas Gathering Pipeline. The original construction
costs for the Gas Gathering Pipeline were $2,609,841. The Company and the other
producer agreed to guarantee two-thirds of the aggregate construction costs, or
$1,739,894 through the producers' payment of gathering fees. The fees may be
increased to cover annual calculations of shortfalls from the minimum daily
quantity ("MDQ"); the fee may be increased at the end of each of the first four
years beginning June 3, 2005. If the total gathering revenue for the preceding
year is less than two-thirds of the construction costs divided by five, SDG may
increase the gathering fee for the year immediately following the year in which
the shortfall occurs by the dollar amount per million British Thermal Units
(MMBtu) necessary to make up the monetary equivalent of the annual shortfall. In
the event that total gas gathering revenue for the preceding year is greater
than two-thirds of the construction costs divided by five, SDG will credit such
excess to the following year's comparison.

                                       7

<PAGE>

     The following table summarizes the MDQ requirements whereby each producer
agrees to deliver a MDQ/MMBtu of gas during the first ten years of operations of
the Gas Gathering Pipeline:

            ----------------------------------------
                                       Minimum
                                Producers' Aggregate
                 Year           MDQ/MMBtu Quantities
            ----------------------------------------
                   1                    1,500
            ----------------------------------------
                   2                    2,000
            ----------------------------------------
                   3                    4,000
            ----------------------------------------
                   5                    5,000
            ----------------------------------------
                   6                    6,000
            ----------------------------------------
                   7                    7,000
            ----------------------------------------
                   8                    8,000
            ----------------------------------------
                   9                    9,000
            ----------------------------------------
                  10                   10,000
            ----------------------------------------

     In March 2005, the Company advanced $1,000,000 to Natural Resource Group
Gathering LLC, the general partner of SDG ("NRGG" or the "General Partner"). In
May 2005, NRGG contributed the Gas Gathering Pipeline and the $1,000,000
obligation to the Company to SDG. Later in May 2005, the Company and SDG agreed
to convert the $1,000,000 advance into Limited Partnership Interests in SDG. In
June 2005, the Company advanced $85,000 to the General Partner for operating
expenses. In July 2005, the Company agreed to convert the advance in the amount
of $85,000 into Limited Partnership Interests and purchased an additional
$515,000 of Limited Partnership Interests. As a result, at February 28, 2006,
the Company owned 59.97% of the Limited Partnership Interests and accordingly,
53.97% of SDG.

     On May 10, 2006, the Company increased its investment in SDG by acquiring
additional Limited Partnership Interests, resulting in an additional 20.51% of
SDG cash distributions until the limited partners in SDG have received cash
distributions equal to their initial capital contributions and 17.10% of cash
distributions thereafter, in exchange for a subordinated convertible debenture
in the amount of $608,194 bearing 2.5% interest and due January 1, 2008. The
$608,194 paid for the additional interests was the actual cost paid by NRGG for
those limited partnership interests. In March 2007, the Company repaid $300,000
of the principal balance of the convertible debenture issued to NRGG and the
balance was repaid on December 26, 2007.

     Effective December 31, 2007 the Company entered into a Purchase and Sale
Agreement with Natural Resource Group Gathering, LLC ("NRGG"), whereby the
Company increased its investment in Slater Dome Gathering, LLLP ("SDG") by
acquiring the general partner's interest for $1,075,000 consisting of $268,750
in cash and executing a promissory note in the amount of $806,250. The Note
bears interest at a rate of 2.5% per annum and is payable in quarterly
installments of $201,562.50 plus interest and is due December 31, 2008. At the
option of the Company, quarterly payments may be deferred until the maturity
date. As a result, the Company owns the 25% general partner's interest together
with 82.76% of the Class A limited partnership interests in SDG.


                                       8

<PAGE>

     In connection with the acquisition of SDG's Limited Partnership Interests,
the Company executed SDG's limited liability limited partnership agreement (the
"Partnership Agreement"). The Partnership Agreement provides that distributions
will be allocated (i) first, to the General Partner (which General Partnership
Interests the Company acquired in December 2007) in the amount of the
Out-of-Pocket Costs (as defined in the Partnership Agreement) to reimburse the
General Partner for such costs; (ii) second, 90% to the Limited Partners of SDG
(pro rata in accordance with their respective Percentage Interests, as defined
in the Partnership Agreement) and 10% to the Company as General Partner until
such time as the Unreturned Capital (as defined in Partnership Agreement) of all
of the Limited Partners is reduced to zero; and (iii) thereafter, 75% to the
Limited Partners (pro rata in accordance with their respective Percentage
Interests) and 25% to the Company as General Partner. Distributions shall be
distributed at such time or times as the General Partner shall determine in its
sole discretion. The Company will receive 84.487% of SDG cash distributions
until the limited partners have received cash distributions equal to their
initial capital contributions and 87.07% of cash distributions thereafter.

     Drilling Activity

     The results of our coal-bed methane gas drilling activity during the year
ended February 29, 2008 and February 28, 2007 is below:

        ----------------------------------------------------------------
                                 February 29, 2008     February 28, 2007
        ----------------------------------------------------------------
                                  Gross       Net       Gross       Net
        ----------------------------------------------------------------
        Development wells:
        ----------------------------------------------------------------
        Productive                  8        5.33         0          0
        ----------------------------------------------------------------
        Dry                         0           0         0          0
        ----------------------------------------------------------------
        Total                       8        5.33         0          0
        ----------------------------------------------------------------

     All of our drilling activities are conducted on a contract basis with
independent drilling contractors.

     Productive wells

     As of February 29, 2008, we had working interests in 19 wells at the Slater
Dome Field. Of the 19 wells, 16 are producing wells (16 gross wells, 10.6 net)
and three are non-producing wells (3 gross wells, 2 net). We also have an
interest in one water disposal well.

     During the fiscal year ended February 28, 2007, no new wells were drilled
or recompleted.

                                       9

<PAGE>

     Gas production volumes and average sales price are as follows:

     The following summarizes the gas production in the Slater Dome Field during
the fiscal years ended February 29, 2008 and February 28, 2007 to the Company's
interest:

                                               Fiscal Years Ended
            --------------------------------------------------------------
                                      February 29, 2008   February 28,2007
            --------------------------------------------------------------
            Gas production in MCF           139,974             25,523
            --------------------------------------------------------------
            Average price per unit:       $    3.98           $   5.11
            --------------------------------------------------------------
            Average production cost
               per unit:                  $   10.71           $  25.61
            --------------------------------------------------------------

     During the fiscal year ended February 29, 2008, the Slater Dome Field
produced 306,478 MCF of gas, of which 44,027 MCF was used in operations and
262,450 MCF was sold. During the fiscal year ended February 28, 2007, the Slater
Dome Field produced 159,303 MCF of gas, of which 43,943 MCF was used in
operations and 115,360 MCF was sold.

     Oil and gas reserve information

     The estimated oil and gas reserves presented below were derived from
reports prepared by Norwest Questa Engineering, Corp., an independent petroleum
engineering firm, for the fiscal years ended February 29, 2008 and February 28,
2007. The reserve estimates are developed using geological and engineering data
and interests and burdens information developed by the Company. Reserve
estimates are inherently imprecise and are continually subject to revisions
based on production history, results of additional exploration and development,
prices of oil and gas and other factors.

     At February 29, 2008, our estimated proved reserves totals 15,561 MCF. The
present value of estimated net revenues before income tax, discounted at 10%, is
$32,611,000, using a price of $7.30 per MMbtu. The values shown in the following
table are not intended to represent the current market value of the estimated
proved oil and gas reserves owned by the Company. The estimated quantities and
estimated net revenues are summarized as follows:

      ---------------------------------------------------------------------
      Estimated Net Proved Reserves                      February 29, 2008
      ---------------------------------------------------------------------
                                                         Net Reserves (MCF)
      ---------------------------------------------------------------------
      Proved Developed                                          4,026
      ---------------------------------------------------------------------
      Proved Undeveloped                                       11,535
      ---------------------------------------------------------------------
      Total Estimated Net Proved Reserves                      15,561
      ---------------------------------------------------------------------

     As of February 28, 2007, the estimated quantities of proved developed and
proved undeveloped reserves net to our interest (all of which are located within
the United States at the Slater Dome Field) were 12,114,000 MCF of gas. The
present value of estimated net revenues before income tax, discounted at 10%,
was $14,319,000, using a price of $5.21 per MMbtu. The estimated quantities and
estimated net revenues are summarized as follows:

                                       10

<PAGE>

      ---------------------------------------------------------------------
      Estimated Net Proved Reserves                      February 28, 2007
      ---------------------------------------------------------------------
                                                         Net Reserves (MCF)
      ---------------------------------------------------------------------
      Proved Developed                                          2,187
      ---------------------------------------------------------------------
      Proved Undeveloped                                        9,926
      ---------------------------------------------------------------------
      Total Estimated Net Proved Reserves                      12,114
      ---------------------------------------------------------------------

     The present value of estimated net revenues before income tax, discounted
at 10% using prices of $7.30 and $5.21 per MMbtu as of February 29, 2008 and
February 28, 2007, respectively, is summarized as follows:

--------------------------------------------------------------------------------
                                          February 29, 2008   February 28, 2007
--------------------------------------------------------------------------------
      Future cash inflows                   $ 113,608,380       $  63,109,300
--------------------------------------------------------------------------------
      Deduct:
--------------------------------------------------------------------------------
         Future production costs              (40,881,780)        (27,077,100)
--------------------------------------------------------------------------------
         Future development costs             (13,240,600)         (8,411,900)
--------------------------------------------------------------------------------
         Future income taxes                  (17,415,200)         (7,243,800)
--------------------------------------------------------------------------------
                                              (71,537,580)        (42,732,800)
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
      Future net cash flows                    42,070,800          20,376,500
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
      Less 10% discount amount                (16,405,900)         (8,120,400)
--------------------------------------------------------------------------------
                                            $  25,664,900       $  12,256,100
--------------------------------------------------------------------------------

     Proved developed reserves are reserves that can be expected to be recovered
through existing wells with existing equipment and operating methods. Proved
undeveloped reserves are proved reserves that are expected to be recovered from
new wells drilled to known reservoirs on undrilled acreage for which the
existence and recoverability of such reserves can be estimated with reasonable
certainty, or from existing wells on which a relatively major expenditure is
required to establish production.

     The data in the tables above represents estimates only. Oil and natural gas
reserve engineering is inherently a subjective process of estimating underground
accumulations of oil and natural gas that cannot be exactly measured. The
accuracy of any reserve estimate is a function of the quality of available data
and engineering and geological interpretation and judgment. Accordingly, reserve
estimates may vary from the quantities of oil and natural gas that are
ultimately recovered. See "Risk Factors."

     Future prices received for production and costs may vary, perhaps
significantly, from the prices and costs assumed for purposes of these
estimates. The net future cash flows should not be construed as the current
market value of the reserves. The 10% discount factor used to calculate present
value is not necessarily the most appropriate discount rate. The present value,
no matter what discount rate is used, is materially affected by assumptions as
to timing of future production, which may prove to be inaccurate.

                                       11

<PAGE>

     Business Strategy

     Maximizing the value of our existing assets and locating new growth
projects are the principle elements of our business strategy. Our primary focus
in the next fiscal year is to increase our cash flow and oil and gas reserves by
further developing the Slater Dome Field and to test the Niobrara and Frontier
formations in the Focus Ranch Federal 12-1 well in the Focus Ranch Unit. The
next objective is to internally develop and/or acquire other natural gas
prospects capable of producing significant reserves. We also intend to work
towards marketing the Amber Waves Prospect and will attempt to obtain a prospect
fee and a promoted or carried working interest.

     Coal-bed Methane Gas

     Natural gas consists primarily of methane, which is produced when organic
material is physically turned into coal under normal geologic conditions.
Methane is generally considered a cleaner form of energy than traditional coal
and oil. When the coal and methane conversion process occurs such that the
resultant coal is saturated with water and methane is trapped within the coal,
the result is coal-bed methane ("CBM"). Water permeates coal beds, and the water
pressure traps the gas within the coal. Because coal has a large and complex
internal surface area, it can store volumes of gas six or seven times as large
as a conventional natural gas reservoir of equal rock volume. CBM is kept in
place usually by the presence of water. Thus, the production of CBM in most
cases requires the dewatering of the coal gas to be extracted. Therefore, in a
CBM well, water is produced in large volumes, especially in the early stages of
production. The extraction of CBM involves pumping water from the coal seam
aquifer in order to release the water pressure that is trapping the gas in the
coal. Methane travels with the ground water being pumped from the coal by a well
drilled and equipped with a water pump that is completed in a coal seam that
contains methane. Since methane has very low solubility in water, it separates
from the water in the well before the water enters the pump. Instead of
dewatering the coal seam, the goal is to decrease the hydrostatic pressure above
the coal seam. Water moving from the coal seam to the well bore encourages gas
migration toward the producing well. As this water pressure is released, the gas
will rise and is separated from the water and can be piped away. New CBM wells
often produce water for six to twelve months, and in some cases for longer
periods and then, as the water production decreases, gas production increases as
the coal seams de-water.

     Since CBM at the Slater Dome Field, and potentially in the Flattops
Prospect, is found at relatively shallow predictable depths, exploration and
development costs are generally much lower than for deeper, more geologically
complex, oil and gas exploration projects. The wells drilled and completed to
extract CBM from these shallower coal seams are therefore much more cost
effective to drill and complete. Operating costs, however, for these wells are
usually higher than for conventional free-flowing gas wells due to the need to
pump and dispose of water during the producing life of the well.

     The United States Geological Survey has estimated coal-bed gas resources of
at least 700 trillion cubic feet. About 100 trillion cubic feet of that appears
to be economically recoverable with existing technology. CBM gas currently
accounts for about 7.5% of total natural gas production in the United States.

                                       12

<PAGE>

      Glossary of Terms

      --------------------------------------------------------------------------
      Bcf:                 Billion cubic feet.

      --------------------------------------------------------------------------
      Bcfe:                Billion cubic feet equivalent.

      --------------------------------------------------------------------------
      Gross acre:          An acre in which a working interest is owned, without
                           regard to the size of the interest.

      --------------------------------------------------------------------------
      Gross well:          An oil or gas well in  which a  working  interest  is
                           owned, without regard to the size of the interest.

      --------------------------------------------------------------------------
      Leases:              Full or partial  leasehold  interests  in oil and gas
                           prospects,  authorizing  the owner  thereof  to drill
                           for,  reduce to  possession  and produce and sell oil
                           and gas,  subject to the payment of rentals,  bonuses
                           and/or royalties.

      --------------------------------------------------------------------------
      MCF:                 Thousand cubic feet.

      --------------------------------------------------------------------------
      MMBtu                One million  British Thermal Units. A British Thermal
                           Unit is the  amount  of heat  required  to raise  the
                           temperature  of a  one-pound  mass  of  water  by one
                           degree Fahrenheit.

      --------------------------------------------------------------------------
      MMCF:                One million cubic feet.

      --------------------------------------------------------------------------
      Net acres:           One net acre is deemed  to exist  when the sum of the
                           fractional  working  interests  owned in gross  acres
                           equals one. The number of net acres is the sum of the
                           fractional working interests owned in gross acres.

      --------------------------------------------------------------------------
      Net well:            One net  well is  deemed  to  exist  when  the sum of
                           fractional  working  interests  owned in gross  wells
                           equals one. The number of net wells is the sum of the
                           fractional working interests owned in gross wells.

      --------------------------------------------------------------------------
      Proved Developed     Reserves  that are expected to be  recovered  through
      Reserves:            existing wells with existing  equipment and operating
                           methods.

      --------------------------------------------------------------------------
      Proved Oil and Gas   Estimated  quantities  of crude oil,  natural gas and
      Reserves:            natural gas liquids which  geological and engineering
                           data  demonstrate  with  reasonable  certainty  to be
                           recoverable  in future  years from  known  reservoirs
                           under  existing  economic and  operating  conditions,
                           (i.e.,  prices and costs as of the date the  estimate
                           is made.) Prices include  consideration of changes in
                           existing   prices   provided   only  by   contractual
                           arrangements but not on escalations based upon future
                           conditions.  For a complete  definition of proved oil
                           and  gas  reserves,   see  Rule  4-10(a)(2)(3)(4)  of
                           Regulation  S-X,  available  on the  SEC  website  at
                           (http://www.sec.gov/divisions/corpfin/forms/regsx.htm
                           #gas).

      --------------------------------------------------------------------------
      Proved Undeveloped   Proved  reserves  that are  expected to be  recovered
      Reserves:            from new wells on undrilled  acreage or from existing
                           wells  where  a  relatively   major   expenditure  is
                           required for recompletion.

      --------------------------------------------------------------------------

                                       13

<PAGE>

     Competition

     The oil and natural gas industry is intensely competitive. Our competition
includes major natural resource companies that operate globally, as well as
independent operators located throughout the world, including North America.
Many of these companies have greater financial resources than we do. These
companies may be able to pay more for productive oil and natural gas properties
and exploratory prospects or to define, evaluate, bid for and purchase a greater
number of properties and prospects than our financial or human resources permit.
In addition, these companies may have a greater ability to continue exploration
activities during periods of low oil and natural gas market prices. Our larger
or integrated competitors may be able to absorb the burden of existing, and any
changes to, federal, state, and local regulations more easily than we can, which
would adversely affect our competitive position. Our ability to acquire
additional properties and to discover reserves in the future will be dependent
upon our ability to evaluate and select suitable properties and to consummate
transactions in a highly competitive environment. In addition, because we have
fewer financial and human resources than many companies in our industry, we may
be at a disadvantage in bidding for exploratory prospects and producing oil and
natural gas properties.

     The three largest CBM producers in the lower 48 states are BP Amoco,
Burlington Resources and Phillips Petroleum, all of which produce most of their
CBM production from the San Juan Basin in northwest New Mexico and southwest
Colorado. In addition, the Company considers the following companies
competitors:

     Anadarko Petroleum Corporation ("Anadarko") is among the largest
independent oil and gas exploration and production companies in the world, with
2.43 billion barrels of oil equivalent of proved reserves as of December 31,
2007. Anadarko's major areas of operation are located onshore in the United
States, the deepwater of the Gulf of Mexico and Algeria. Anadarko also has
production in China, Venezuela and Qatar, a development project in Brazil and is
executing strategic exploration programs in several other countries. Anadarko
actively markets natural gas, oil and natural gas liquids production and owns
and operates gas-gathering systems in its core producing areas. In addition, it
is engaged in the hard-minerals business through non-operated joint ventures and
royalty arrangements in several coal and industrial mineral mines located on
lands within and adjacent to its properties that include an 8,000,000-acre strip
running through portions of Colorado, Wyoming and Utah.

     EOG Resources, Inc. ("EOG") explores, develops, produces and markets
natural gas and crude oil primarily in major producing basins in the United
States, as well as in Canada, Trinidad, the United Kingdom North Sea and
selected other international areas. EOG's operations are mainly natural gas and
crude oil exploration and production. At December 31, 2007, EOG's total
estimated net proved reserves were 7,745 billion cubic feet equivalent (Bcfe),
of which 6,669 billion cubic feet (Bcf) were natural gas reserves and 179
million barrels (MMBbl), or 1,076 Bcfe, were crude oil, condensate and natural
gas liquids reserves. At such date, approximately 67% of EOG's reserves (on a
natural gas equivalent basis) were located in the United States, 17% in Canada
and 16% in Trinidad. During 2007, EOG continued to expand its activities
throughout the Rocky Mountain area where it holds approximately 1.3 million net
acres. During 2007, EOG drilled 267 net wells of which 187 net wells were
drilled in the Uinta Basin, Utah, 38 net wells were drilled in the Moxa Arch
area of Wyoming, 20 net wells were drilled in the Williston Basin, North Dakota
and 19 net wells were drilled in the LaBarge Platform, Wyoming.

                                       14

<PAGE>

     The following is a summary of the regional competitors that are active in
the coal-bed methane segment of the industry:

     As of December 31, 2007, Double Eagle Petroleum Co. ("Double Eagle") owns
interests in a total of 888 producing wells. Double Eagle's Eastern Washakie
coal-bed natural gas project is a 40-mile-long trend located between the town of
Baggs and Rawlins in south-central Wyoming. Double Eagle has acquired interests
in 50,937 gross acres (29,735 net acres) along the Atlantic Rim and owns other
interests in acreage outside of the Atlantic Rim area.

     Galaxy Energy Corporation ("Galaxy") is an independent oil and gas company
engaged in lease acquisition, exploration, development and production of natural
gas. As of April 7, 2008, Galaxy had interests in 178 completed wells, 51 wells
in various stages of completion and six water disposal wells in the Powder River
Basin located in Wyoming and Montana.

     The Company believes that Yates Petroleum Corporation, a private
independent oil and gas company, leases approximately 80,000 acres along the
Cherokee Ridge and Fort Union Coal Fairway adjacent to and southwest of the
Slater Dome Prospect.

     Merit Energy Company ("Merit"), is a private firm specializing in direct
investments in oil and gas assets. Merit has net daily production in excess of
99,500 barrels of oil equivalent per day and proved reserves of 418 MMBOE. The
Company believes that Merit holds acreage in the Fort Union Coal production at
South Baggs/West Side Canal directly west of the Slater Dome Prospect.

     Market for Oil and Gas and Major Customers

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

     Effective August 1, 2007, we entered into an agreement with an independent
third party whereby they would market the gas produced from the Slater Dome
Field. During the fiscal year ended February 29, 2008, sales to three
unaffiliated customers were $461,700 (61% of sales), $160,742 (21% of sales) and
$135,297 (18% of sales). During the fiscal year ended February 28, 2007, sales
to one major unaffiliated customer was $198,872 (55% of sales). Due to the
nature of its product, the Company believes that it is not dependent upon any of
these customers.

                                       15

<PAGE>

     Based on the current demand for natural gas and oil, and the availability
of other purchasers, we believe that the loss of the major purchaser of our gas
would not have a material adverse effect on the Company's financial condition
and results of operations.

     Seasonality

     Generally, but not always, the demand for natural gas decreases during the
summer months and increases during the winter months. Pipelines, utilities,
local distribution companies and industrial users utilize natural gas storage
facilities and purchase some of their anticipated winter requirements during the
summer, which can lessen seasonal demand fluctuations.

     Seasonal weather conditions and wildlife restrictions limit our drilling
and producing activities and other oil and natural gas operations. These
seasonal anomalies can pose challenges for meeting our well drilling objectives
and can increase competition for equipment, supplies and personnel during the
spring and summer months, which could lead to shortages and increase costs or
delay our operations.

     Government Regulation

     The production and sale of oil and gas are subject to various federal,
state and local governmental regulations, which may be changed from time to time
in response to economic or political conditions and can have a significant
impact upon overall operations. Matters subject to regulation include drilling
permits, discharge permits for drilling operations, drilling bonds, reports
concerning operations, the spacing of wells, unitization and pooling of
properties, taxation, abandonment and restoration and environmental protection.
These laws and regulations are under constant review for amendment or expansion.
From time to time, regulatory agencies have imposed price controls and
limitations on production by restricting the rate of flow of oil and gas wells
below actual production capacity in order to conserve supplies of oil and gas.
Changes in these regulations could require us to expend significant resources to
comply with new laws or regulations or changes to current requirements and could
have a material adverse effect on the company. The regulatory burden on the oil
and gas industry increases the cost of doing business in the industry and
consequently affects profitability. We are also subject to changing and
extensive tax laws, the effects of which cannot be predicted. Further, SDG is
subject to the jurisdiction of various federal, state and local agencies.

Oil & Gas Regulation

     The governmental laws and regulations which could have a material impact on
the oil and gas exploration and production industry are as follows.

     Drilling and Production

     Our operations are subject to various types of regulation at federal, state
and local levels. These types of regulation include requiring permits for the
drilling of wells, drilling bonds and reports concerning operations. Most
states, and some counties and municipalities in which we operate, also regulate
one or more of the following:

                                       16

<PAGE>

      o     The location of wells;

      o     The method of drilling and casing wells;

      o     The rates of production or "allowables";

      o     The surface use and  restoration of properties  upon which wells are
            drilled; and

      o     The plugging and  abandoning of wells;  and notice to surface owners
            and other third parties.

     State laws regulate the size and shape of drilling and spacing units, or
proration units, governing the pooling of oil and natural gas properties. Some
states allow forced pooling or integration of tracts to facilitate exploration,
while other states rely on voluntary pooling of lands and leases. In some
instances, forced pooling or unitization may be implemented by third parties and
may reduce our interest in the unitized properties. In addition, state
conservation laws establish maximum rates of production from oil and natural gas
wells, generally prohibit the venting or flaring of natural gas and impose
requirements regarding the ratability of production. These laws and regulations
may limit the amount of natural gas and oil we can produce from our wells or
limit the number of wells or the locations at which we can drill. Moreover, each
state generally imposes a production or severance tax with respect to the
production and sale of oil, natural gas and natural gas liquids within its
jurisdiction.

     Natural Gas Sales Transportation

     Historically, federal legislation and regulatory controls have affected the
price of the natural gas we produce and the manner in which we market our
production. The Federal Energy Regulatory Commission ("FERC") has jurisdiction
over the transportation and sale for resale of natural gas in interstate
commerce by natural gas companies under the Natural Gas Act of 1938 and the
Natural Gas Policy Act of 1978.

     FERC also regulates interstate natural gas transportation rates and service
conditions, which affects the marketing of natural gas that we produce, as well
as the revenues we receive for sales of our natural gas. Commencing in 1985,
FERC promulgated a series of orders, regulations and rule-makings that
significantly fostered competition in the business of transporting and marketing
gas. Today, interstate pipeline companies are required to provide
nondiscriminatory transportation services to producers, marketers and other
shippers, regardless of whether such shippers are affiliated with an interstate
pipeline company. Under FERC's current regulatory regime, transmission services
must be provided on an open-access, non-discriminatory, basis at cost-based
rates or at market-based rates if the transportation market at issue is
sufficiently competitive.

     Mineral Act

     The Mineral Leasing Act of 1920 ("Mineral Act") prohibits direct or
indirect ownership of any interest in federal onshore oil and gas leases by a
foreign citizen of a country that denies "similar or like privileges" to
citizens of the United States. Such restrictions on citizens of a
"non-reciprocal" country include ownership or holding or controlling stock in a
corporation that holds a federal onshore oil and gas lease. If this restriction
is violated, the corporation's lease can be canceled in a proceeding instituted
by the United States Attorney General. Although the regulations of the Bureau of
Land Management (which administers the Mineral Act) provide for agency
designations of non-reciprocal countries, there are presently no such
designations in effect.

                                       17

<PAGE>

     Environmental Regulation

     Our activities will be subject to existing federal, state and local laws
and regulations governing environmental quality and pollution control. Our
operations will be subject to stringent environmental regulation by state and
federal authorities, including the Environmental Protection Agency ("EPA"). Such
regulation can increase the cost of such activities. In most instances, the
regulatory requirements relate to water and air pollution control measures.

     Waste Disposal

     The Resource Conservation and Recovery Act ("RCRA") and comparable state
statutes affect oil and gas exploration and production activities by imposing
regulations on the generation, transportation, treatment, storage, disposal and
cleanup of "hazardous wastes" and on the disposal of non-hazardous wastes. Under
the auspices of the EPA, the individual states administer some or all of the
provisions of RCRA, sometimes in conjunction with their own, more stringent,
requirements. Drilling fluids, produced waters and most of the other wastes
associated with the exploration, development and production of crude oil,
natural gas or geothermal energy constitute "solid wastes," which are regulated
under the less-stringent non-hazardous waste provisions, but there is no
guarantee that the EPA or the individual states will not adopt more stringent
requirements for the handling of non-hazardous wastes or categorize some
non-hazardous wastes as hazardous for future regulation.

     CERCLA

     The federal Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA") imposes joint and several liability for costs of
investigation and remediation and for natural resource damages, without regard
to fault or the legality of the original conduct, on certain classes of persons
with respect to the release into the environment of substances designated under
CERCLA as hazardous substances ("Hazardous Substances"). These classes of
persons or potentially responsible parties include the current and certain past
owners and operators of a facility or property where there is or has been a
release or threat of release of a Hazardous Substance and persons who disposed
of or arranged for the disposal of the Hazardous Substances found at such a
facility. CERCLA also authorizes the EPA and, in some cases, third parties to
take actions in response to threats to the public health or the environment and
to seek to recover the costs of such action. Although CERCLA generally exempts
petroleum from the definition of Hazardous Substances in the course of
operations, we may in the future generate wastes that fall within CERCLA's
definition of Hazardous Substances. We may also in the future become an owner of
facilities or properties on which Hazardous Substances have been released by
previous owners or operators. We may in the future be responsible under CERCLA
for all or part of the costs to clean up facilities or property at which such
substances have been released and for natural resource damages.

                                       18

<PAGE>

     Air Emissions

     Our operations are subject to the Federal Clean Air Act, and associated
state laws and regulations, regulate emissions of various air pollutants through
the issuance of permits and the imposition of other requirements. In addition,
EPA has developed, and continues to develop, stringent regulations governing
emissions of toxic air pollutants at specified sources. Major sources of air
pollutants are subject to more stringent, federally imposed permitting
requirements. Administrative enforcement actions for failure to comply strictly
with air pollution regulations or permits are generally resolved by payment of
monetary fines and correction of any identified deficiencies. Alternatively,
regulatory agencies could require us to forego construction, modification or
operation of certain air emission sources.

     Clean Water Act

     The Clean Water Act ("CWA") imposes restrictions and strict controls
regarding the discharge of wastes, including produced waters and other oil and
natural gas wastes, into waters of the United States, a term broadly defined.
Permits must be obtained to discharge pollutants into federal waters. The CWA
provides for civil, criminal and administrative penalties for unauthorized
discharges of oil, hazardous substances and other pollutants. It imposes
substantial potential liability for the costs of removal or remediation
associated with discharges of oil or hazardous substances. State laws governing
discharges to water also provide varying civil, criminal and administrative
penalties and impose liabilities in the case of a discharge of petroleum or its
derivatives, or other hazardous substances, into state waters. In addition, the
EPA has promulgated regulations that may require us to obtain permits to
discharge storm water runoff. In the event of an unauthorized discharge of
wastes, we may be liable for penalties and costs.

     We believe that we are in substantial compliance with current applicable
environmental laws and regulations.

     As the operator of Slater Dome Field, the Amber Waves Prospect and the
Flattops Prospect, the Company is responsible for obtaining all permits and
government permission necessary to operate these properties and permits to drill
wells. Further, the Company, as the General Partner of SDG is responsible for
maintaining easements or other arrangements with owners of the land over which
the Gas Gathering Pipeline is built, as well as operating and maintaining the
Gas Gathering Pipeline.

Research and Development Activities

     No research and development expenditures have been incurred, either on our
account or sponsored by customers, during the past two years.

                                       19

<PAGE>

Employees

     We currently have seven employees, including Paul G. Laird, our President
and Chief Executive Officer and Les Bates, our Chief Financial Officer,
Principal Accounting and Financial Officer, Secretary and Treasurer. Our
executive officers devote such time, as each officer deems necessary to perform
his duties to the Company and are subject to conflicts of interest. None of our
employees is subject to a collective bargaining agreement, and we consider our
relations with our employees to be excellent.

     From time to time, we use the services of clerical and accounting personnel
on a part-time basis and the services of geologists, engineers, landmen and
other professionals on a contract basis as may be necessary for our oil and gas
operations.

Available Information

     Our Internet website address is www.nfeinc.com. We make available, free of
charge, all filings with the SEC and all press releases on this site.
Information on our website is not incorporated by reference into this Form
10-KSB and should not be considered a part of this document.

RISK FACTORS

     Investing in our securities involves risk. In evaluating the Company,
careful consideration should be given to the following risk factors, in addition
to the other information included or incorporated by reference in this annual
report. Each of these risk factors could materially adversely affect our
business, operating results or financial condition, as well as adversely affect
the value of an investment in our common or preferred stock. In addition, the
"Forward-Looking Statements" located in this Form 10-KSB, and the
forward-looking statements included or incorporated by reference herein describe
additional uncertainties associated with our business.

Risks Related To Our Business

     We have a limited operating history.

     We were formally organized in January 2000 and did not commence operation
in the oil and gas industry until February 2001. Since that date, our activities
have been limited to organizational efforts, obtaining working capital and
acquiring and developing our properties. We began producing gas in June 2005. As
a result, there is a limited history of production or generating revenue against
which to compare our revenues during the year ended February 29, 2008.

                                       20

<PAGE>

     The Slater Dome Field is the primary oil and gas property where most of our
capital resources have been employed and we are substantially dependent upon
this one property, which causes our risk to be concentrated.

     Our plan of operation includes efforts to further develop the Slater Dome
Field. If the development of this property is not successful, we will be forced
to seek additional opportunities. Substantially all of our current capital
investment has been spent on the development of the Slater Dome Field. If we are
unable to further develop the Slater Dome Field, we will be forced to seek
additional investments. Investigating and locating suitable properties for
acquisition is expensive and time-consuming. Even if we are successful in
identifying one or more additional properties for acquisition, there is no
assurance that we can obtain such properties at reasonable prices or that
sufficient working capital will be available to finance the acquisitions. As a
result of our dependence on a single property, we may be disproportionately
exposed to the impact of delays or interruptions of production from these wells
or increased expenses caused by significant governmental regulation,
transportation capacity constraints, the availability and capacity of
compression and gas processing facilities, curtailment of production or
interruption of transportation of natural gas produced from the Slater Dome
Field. Our substantial dependence on a single property for cash flow increases
the risk of our future success.

     We have incurred losses from operations and negative cash flow that is
likely to continue until we can economically produce oil or natural gas.

     We have a history of losses from operations and negative cash flow that is
likely to continue until we economically produce oil or natural gas. A
significant portion of our cash flow since inception has come from equity and
debt investments. Unless we economically produce oil and gas in the future,
these losses will continue. If we continue to experience losses from operations
and negative cash flow as we have in the past, there can be no assurance that we
will be able to continue operations as anticipated, if at all. Further, the
price of our Common Stock may be adversely affected.

     We will require additional capital and we may be unable to obtain needed
capital or financing on satisfactory terms, if at all.

     The oil and natural gas industry is capital intensive. We make and expect
to continue to make substantial capital expenditures in our business and
operations for the exploration for and development, production and acquisition
of oil and natural gas reserves. To date, we have financed capital expenditures
primarily with sales of our equity securities, debt financing and cash generated
by operations. To accomplish our plan of operations, we will be required to seek
additional financing. There can be no assurance as to the availability or terms
of any additional financing.

     Even if additional capital is needed, we may not be able to obtain debt or
equity financing on terms favorable to us, or at all. The failure to obtain
additional financing could result in a curtailment of our operations relating to
exploration and development of the Slater Dome Field or of our other prospects,
which in turn could lead to a possible loss of properties and a decline in our
natural gas and oil reserves.

                                       21

<PAGE>

     No assurance of the accuracy of the estimates of oil and gas reserves.

     We have obtained a report on the estimated reserves on our leases on the
Slater Dome Field. Reserve estimates are based upon various assumptions,
including assumptions relating to oil and gas prices, drilling and operating
expenses, production levels, capital expenditures, taxes and availability of
funds. No one can measure underground accumulations of oil and natural gas in an
exact way. As a result, estimated quantities of proved reserves, projections of
future production rates and the timing of development expenditures may be
incorrect. Any significant variance from these assumptions to actual figures
could greatly affect our estimates of reserves, the economically recoverable
quantities of oil and natural gas attributable to any particular group of
properties, the classifications of reserves based on risk of recovery and
estimates of the future net cash flows.

     Further, the present value of future net cash flows from our proved
reserves is not necessarily the same as the current market value of our
estimated oil and natural gas reserves. Actual future net cash flows from our
oil and natural gas properties also will be affected by factors such as:

      o     Actual prices we receive for oil and natural gas;

      o     The amount and timing of actual production;

      o     Supply of, and demand for, oil and natural gas; and

      o     Changes in governmental regulations or taxation.

     The timing of both our production and our incurrence of expenses in
connection with the development and production of oil and natural gas properties
will affect the timing of actual future net cash flows from proved reserves and
thus their actual present value. In addition, the 10% discount factor used when
calculating discounted future net cash flows may not be the most appropriate
discount factor based on interest rates in effect from time to time and risks
associated with us or the oil and natural gas industry in general. Actual future
production, oil and gas prices, revenues, taxes, development expenditures,
operating expenses and quantities of recoverable oil and gas reserves will most
likely vary from those estimates, and any significant variance could have a
material adverse effect on our future results from operations.

     Unless we replace our oil and natural gas reserves, our reserves and
production will decline, which would adversely affect our business, financial
condition and results of operations.

     Producing oil and natural gas reservoirs generally are characterized by
declining production rates that vary depending upon reservoir characteristics
and other factors. As we drill additional wells at the Slater Dome Field, the
rate of decline of these reserves may increase substantially. Thus, our future
oil and natural gas reserves and production and, therefore, our cash flow and
income are highly dependent on our success in efficiently developing and
exploiting our current reserves as well as finding or acquiring additional
economically recoverable reserves. We may not be able to develop, find or
acquire additional reserves to replace our current and future production at
acceptable costs.

                                       22

<PAGE>

     Prospects that we acquire may not yield natural gas or oil in commercially
viable quantities.

     We describe some of our current prospects and our plans to explore those
prospects in this Prospectus. See "Business." A prospect is a property on which
we have identified what we believe, based on available seismic and geological
information, to be indications of natural gas or oil. However, the use of
seismic data and other technologies will not enable us to know conclusively
prior to drilling and testing whether natural gas or oil will be present or, if
present, whether natural gas or oil will be present in sufficient quantities to
recover drilling or completion costs or to be economically viable. If we drill
wells that we identify as dry holes in our current and future prospects, our
drilling success rate may decline and materially harm our business. In sum, the
cost of drilling, completing and operating any well is often uncertain and new
wells may not be productive.

     We are dependent upon the operation of the Gas Gathering Pipeline to
transport our natural gas from the Slater Dome Field to a Questar transportation
line in Baggs, Wyoming.

     We are entirely dependent upon the operation of the Gas Gathering Pipeline
to transport gas produced at the Slater Dome Field to the Questar transportation
line. If the Gas Gathering Pipeline was not available for any reason to
transport gas produced at the Slater Dome Field, it would have an immediate
direct and material adverse effect upon the Company and our results from
operations.

     We are dependent upon transportation and storage services provided by third
parties.

     In addition to our dependence on the Gas Gathering Pipeline, we are
dependent on the transportation and storage services offered by various
interstate and intrastate pipeline companies for the marketing of, delivery and
sale of our gas supplies. Both the performance of transportation and storage
services by interstate pipelines and the rates charged for such services are
subject to the jurisdiction of FERC or state regulatory agencies. An inability
to obtain transportation and/or storage services at competitive rates can hinder
our processing and marketing operations and/or affect our sales margins, which
would have a material adverse effect upon our results from operations.

     We may be required to take write-downs of the carrying values of our oil
and natural gas properties and the Gas Gathering Pipeline.

     Accounting rules require that we review periodically the carrying value of
our oil and natural gas properties and the Gas Gathering Pipeline for possible
impairment. Based on specific market factors and circumstances at the time of
the prospective impairment reviews, and the continuing evaluation of development
plans, production data, rate of flow of gas thought the pipeline, economics and
other factors, we may be required to write down the carrying value of our oil
and natural gas properties or the Gas Gathering Pipeline. A write-down
constitutes a non-cash charge to earnings. We may incur impairment charges in
the future, which could have a material adverse effect on our results of
operations in the periods taken.

                                       23

<PAGE>

     Drilling for and producing natural gas is governed by a number of federal,
state and local laws and regulations, including environmental regulations, which
are beyond our control.

     Many aspects of gathering, processing, marketing and transportation of
natural gas are subject to federal, state and local laws and regulations, which
can have a significant impact upon overall operations. Both transportation and
storage of natural gas by interstate pipelines and the rates charged for such
services are subject to the jurisdiction of FERC or state regulatory agencies.
The construction and operation of gathering lines, plants and other facilities
are subject to environmental laws and regulations that could affect the
financial position or results of operations and may be subject to FERC.

     The production and sale of oil and gas are subject to various federal,
state and local governmental regulations, which may be changed from time to time
in response to economic or political conditions, and we are unable to predict
the ultimate cost of compliance. Matters subject to regulation include discharge
permits for drilling operations, drilling bonds, reports concerning operations,
the spacing of wells, unitization and pooling of properties, taxation and
environmental protection. From time to time, regulatory agencies have imposed
price controls and limitations on production by restricting the rate of flow of
oil and gas wells below actual production capacity in order to conserve supplies
of oil and gas. Changes in these regulations or non-compliance could have a
material adverse effect upon our operations and financial condition.

     Our coalbed methane exploration and production activities does and will
result in the discharge of large volumes of produced groundwater into adjacent
lands and waterways. The ratio of methane gas to produced water varies over the
life of the well. The environmental soundness of discharging produced
groundwater pursuant to water discharge permits has come under increased
scrutiny. Moratoriums on the issuance of additional water discharge permits or
more costly methods of handling these produced waters, may affect future well
development. Compliance with more stringent laws or regulations, more vigorous
enforcement policies of the regulatory agencies, difficulties in negotiating
required surface use agreements with land owners or receiving other governmental
approvals could delay our exploration and production activities in the Slater
Dome Field and in our other prospects and/or require us to make material
expenditures for the installation and operation of systems and equipment for
pollution control and/or remediation, all of which could have a material adverse
effect on our financial condition or results of operations.

     Our drilling activities and prices received from the sale of oil and gas
may be impacted adversely by new taxes.

     The federal, state and local governments in which we operate impose taxes
on the oil and gas products we sell and may impose taxes on our drilling
activities. Recently, there has been a significant amount of discussion by
legislators and presidential administrations concerning a variety of energy tax
proposals. In addition, many states have raised state taxes on energy sources
and additional increases may occur. We cannot predict whether any of these
measures would have a material adverse effect upon our drilling activities or on
oil and natural gas prices.

                                       24

<PAGE>

     We are responsible for all permits and government permits necessary for our
operations in the fields and prospects in which we are the operator and for the
Gas Gathering Pipeline.

     As the operator of Slater Dome Field, the Amber Waves Prospect and the
Flattops Prospect, we are responsible for obtaining all permits and government
permission necessary to operate these properties and to obtain permits for any
new wells that are drilled. Further, the Company, as the General Partner of SDG
is responsible for maintaining easements or other arrangements with owners of
the land over which the Gas Gathering Pipeline is built, as well as operating
and maintaining the Gas Gathering Pipeline. While we do not expect that such
permits or other regulations will be a material impediment to the operation of
our business, there can be no assurance that we will obtain the necessary
permits and easements. The failure to do so would have a material adverse effect
upon our operations and financial condition.

     Our results of operations are dependent upon market prices for oil and
natural gas, which fluctuate widely and are beyond our control.

     Our operations are affected by future oil and natural gas prices that
fluctuate widely, and low prices could have a material adverse effect on our
operations. Our success is dependent largely on the prices received for natural
gas and oil production. Prices received also affect the amount of future cash
flow available for capital expenditures and may affect the ability to raise
additional capital. Lower prices may also affect the amount of natural gas and
oil that can be economically produced from reserves either discovered or
acquired. Further, it could affect the amount of natural gas that is transported
through the Gas Gathering Pipeline owned by SDG, in which we own 82.76% of the
Limited Partnership Interests and the General Partnership Interest which is
equal to 25% of the Percentage Interests (as defined in SDG's Limited
Partnership Agreement).

     Prices for natural gas and oil fluctuate widely.

     For example, natural gas and oil prices declined significantly in 1998 and
2001, and, for an extended period of time, remained below prices obtained in
previous years.

     Factors that can cause price fluctuations include, but are not limited to:

            o     The level of consumer product demand;

            o     Weather conditions;

            o     Domestic and foreign governmental regulations;

            o     The price and availability of alternative fuels;

                                       25

<PAGE>

            o     Political conditions in natural gas and oil-producing regions;

            o     The domestic and foreign supply of natural gas and oil;

            o     The price of foreign imports; and

            o     Overall economic conditions.

     The availability of a ready market for our oil and gas depends upon
numerous factors beyond our control, including the extent of domestic production
and importation of oil and gas, the relative status of the domestic and
international economies, the capacity of the gas transportation systems, the
marketing of other competitive fuels, fluctuations in seasonal demand and
governmental regulation of production, refining, transportation and pricing of
oil, natural gas and other fuels, each of which could have a material adverse
effect upon our results of operations.

     The oil and gas industry in which we operate involves many operating risks
that can cause substantial losses.

     Drilling and production of oil and natural gas involves a variety of
operating risks, including but not limited to:

            o     Fires;

            o     Explosions;

            o     Blow-outs and surface cratering;

            o     Uncontrollable  flows  of  underground  natural  gas,  oil  or
                  formation water;

            o     Natural disasters;

            o     Pipe and cement failures;

            o     Casing collapses;

            o     Embedded oilfield drilling and service tools;

            o     Abnormal pressure and geological formations;

            o     Environmental  hazards such as natural gas leaks,  oil spills,
                  pipeline ruptures; and

            o     discharges of toxic gases.

                                       26

<PAGE>

If any of these events occur, we could incur substantial losses as a result of:

            o     Injury or loss of life;

            o     Severe  damage  to  and   destruction  of  property,   natural
                  resources or equipment;

            o     Pollution and other environmental damage;

            o     Clean-up responsibilities;

            o     Regulatory investigation and penalties;

            o     Suspension of our operations; and

            o     Repairs necessary to resume operations.

     Further, the occurrence of any of these events may impact third parties,
including our employees or employees of our contractors, and lead to injury or
death or property damage. If we were to experience any of these problems, it
could affect well bores, gathering systems and processing facilities, any one of
which could adversely affect our ability to conduct operations. We may be
affected by any of these events more than larger companies, since we have
limited working capital. We currently maintain $1 million of liability
insurance. However, for some risks, we may not obtain insurance if we believe
the cost of available insurance is excessive relative to the risks presented. In
addition, pollution and environmental risks generally are not fully insurable.
If a significant accident or other event occurs and is not fully covered by
insurance, it could adversely affect operations. Moreover, we cannot provide
assurance that we will be able to maintain adequate insurance in the future at
rates considered reasonable.

     Any of these risks can cause substantial losses, including personal injury
or loss of life, damage to or destruction of property, natural resources and
equipment, pollution, environmental contamination or loss of wells and other
regulatory penalties.

     Seasonal weather conditions and wildlife restrictions adversely affect our
ability to conduct drilling activities.

     Oil and natural gas operations in the Rocky Mountains are adversely
affected by seasonal weather conditions and wildlife restrictions on our federal
leases. In the Slater Dome Field, certain drilling and other oil and natural gas
activities can only be conducted during limited times of the year, typically
during the summer months. This limits our ability to operate in this area and
can intensify competition during those times for drilling rigs, oil field
equipment, services, supplies and qualified personnel, which may lead to
periodic shortages. These constraints and the resulting shortages or high costs
could delay our operations and materially increase our operating and capital
costs, which could have a material adverse effect upon the Company and its
results of operations.

                                       27

<PAGE>

     There can be no assurance that any of our wells will become profitable.

     Our wells may become uneconomic in the event water or other deleterious
substances are encountered which impair or prevent the production of oil and/or
gas from the wells. The production of coal bed methane gas requires dewatering
for the coal gas to be extracted, which results in water being produced in large
volumes, especially in the early stages of production. Our ability to remove and
economically dispose of sufficient quantities of water from the coal seam will
determine whether or not we can produce coalbed methane gas in commercial
quantities. In addition, production from any well may be unmarketable if it is
impregnated with water or other deleterious substances. The failure of our wells
as a result of these or other events that impair the production of gas will have
a material adverse effect upon our results of operations.

     Our competitors may have greater resources than we have, and we may not
have the resources necessary to successfully compete with them.

     Our competitors include major oil companies and other independent
operators, most of which have financial resources, staffs and facilities
substantially greater than ours. Competition in the oil and gas industry is
intense. We also face intense competition in obtaining capital for drilling and
acquisitions and are at a competitive disadvantage compared with larger
companies, which may have a material adverse effect upon the results of
operations of the Company.

     We may be unable to retain key employees or recruit additional qualified
personnel.

     Due to the current demand for employees in the oil and gas industry, our
remote location in Colorado and our extremely limited number of employees means
that we could be required to spend significant sums of money to locate and train
new employees if we require additional employees in the future or if any of our
existing employees resign or depart for any reason. Due to our limited operating
history, financial resources and familiarity with our operations, we have a
significant dependence on the continued service of our existing officers, Paul
G. Laird and Les Bates. We do not carry key man life insurance on either Mr.
Laird or Mr. Bates. We may not have the financial resources to hire a
replacement if one or both of our officers were unavailable for any reason. The
loss of service of either of these individuals could, therefore, significantly
and adversely affect our operations.

     Our officers may be subject to conflicts of interest.

     Mr. Laird and Mr. Bates, the Company's executive officers, devote such time
as each officer deems necessary to perform his duties to the Company and are
subject to conflicts of interest. Generally, Messrs Laird and Bates each
dedicate approximately 40 to 50 hours per week for Company business. However,
each officer also devotes other time to other business endeavors and has
responsibilities to other entities. Because of these relationships, such
individuals will be subject to conflicts of interest. Such conflicts include
deciding how much time to devote to our affairs, as well as what business
opportunities should be presented to the Company. As an example of these
potential conflicts, our President, Paul G. Laird, is affiliated with a company
called NRG. His position as an officer, director and principal shareholder of
NRG, and officer and director of the Company creates a potential conflict with
regard to his duties to each entity. Each of our officers and directors has
agreed that any business opportunity that comes to their attention in the future
shall first be presented to the Company. Nonetheless, these relationships
present conflicts, which may exist for the foreseeable future.

                                       28

<PAGE>

     Colorado law and our Articles of Incorporation may protect our directors
from certain types of lawsuits.

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

     Sales of a substantial number of shares of our Common Stock into the public
market may result in significant downward pressure on the price of our Common
Stock and could affect the ability of our stockholders to realize the current
trading price of our Common Stock.

     Sales of a substantial number of shares of our Common Stock in the public
market could cause a reduction in the market price of our Common Stock. As of
May 21, 2008, there were 11,818,429 shares of our Common Stock issued and
outstanding, 27,069.60 shares of our $0.001 par value Series B 12% Cumulative
Convertible Preferred Stock ("Series B") issued and outstanding and 219,000
shares of our 2.5% Series C Cumulative Convertible Preferred Stock ("Series C
Preferred Stock") issued and outstanding. If all of the Company's Series B
Preferred Stock, Series C Preferred Stock, warrants and options to acquire
shares of our Common Stock we currently have outstanding were converted into
shares of Common Stock or were exercised, we would have to issue an additional
67,718,515 shares of our Common Stock for a then total of 79,536,944 shares of
our Common Stock issued and outstanding.

     Further, on June 11, 2007, the Company held a special meeting of
shareholders (the "Special Meeting"). At the Special Meeting, the shareholders
approved and ratified the Company's 2007 Omnibus Long Term Incentive Plan (the
"2007 Plan"), which authorizes the issuance of up to 10,000,000 shares of the
Company's Common Stock that may be issued under the 2007 Plan.

     As a result, a substantial number of our shares of Common Stock may be
issued and may be available for immediate resale, which could have an adverse
effect on the price of our Common Stock.

                                       29

<PAGE>

     The trading price of our Common Stock on the Over-The-Counter Bulletin
Board has fluctuated, and may continue to fluctuate significantly.

     Since June 4, 2004, our Common Stock has traded as low as $0.47 and as high
as $3.25. In addition, the trading volume in our common stock may fluctuate and
cause significant price variations to occur. In addition to the volatility
associated with Over-The-Counter Bulletin Board securities in general, the value
of your investment could decline due to the impact of any of the following
factors upon the market price of our Common Stock:

     o    Changes in the world wide price for oil or natural gas;

     o    Disappointing results from our discovery or development efforts;

     o    Failure to meet our revenue or profit goals or operating budget;

     o    Decline in demand for our Common Stock;

     o    Downward revisions in securities analysts' estimates or changes in
          general market conditions;

     o    Technological innovations by competitors or in competing technologies;

     o    Lack of funding generated for operations;

     o    Investor perception of our industry or our prospects; or

     o    General economic trends.

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

     We may require additional capital in the future which may result in
substantial dilution to your stock holdings.

     We have historically needed to raise capital to fund our operating losses
and may continue to incur operating losses until there are sufficient wells at
the Slater Dome Field and our other prospects to provide economies of scale in
production of the coal-bed methane gas. If capital requirements vary materially
from those currently planned, we may require additional capital sooner than
expected. There can be no assurance that such capital will be available in
sufficient amounts or on terms acceptable to us, if at all. Any sale of a
substantial number of additional shares will cause dilution to your investment
and could also cause the market price of our Common Stock to decline.

     Issuances of additional shares of our stock in the future could dilute
existing shareholders' holdings and may adversely affect the market price of our
Common Stock. As of May 13, 2008, we have the authority to issue, without
stockholder approval, up to 500,000,000, shares of Common Stock (of which, as of
May 13, 2008), 11,716,266 shares were outstanding) and 25,000,000 shares of
preferred stock (of which, as of May 13, 2008, 27,069.60 shares of our Series B
Preferred Stock and 219,000 shares of our Series C Preferred Stock were
outstanding) and to issue options and warrants to purchase shares of our Common
Stock. Because our Common Stock is traded on the Over-The-Counter Bulletin Board
and is not listed on an exchange, we are not required to solicit shareholder
approval prior to issuing large blocks of our stock. Any such future issuances
could be at values substantially below the price paid for our Common Stock by
our current shareholders. In addition, we could issue large blocks of our Common
Stock to fend off unwanted tender offers or hostile takeovers without further
stockholder approval. The issuance of our stock may have a disproportionately
large impact on its price compared to larger companies.

                                       30

<PAGE>

     Our Common Stock is classified as a "penny stock" under SEC rules which
limits the market for our Common Stock.

     Since inception of trading in June 2004, our Common Stock has not traded at
$5 or more per share. Because our stock is not traded on a stock exchange or on
the NASDAQ National Market or the NASDAQ Small Cap Market, if the market price
of the Common Stock is less than $5 per share, the Common Stock is classified as
a "penny stock." SEC Rule 15g-9 under the Exchange Act imposes additional sales
practice requirements on broker-dealers that recommend the purchase or sale of
penny stocks to persons other than those who qualify as an "established
customer" or an "accredited investor." This includes the requirement that a
broker-dealer must make a determination that investments in penny stocks are
suitable for the customer and must make special disclosures to the customers
concerning the risk of penny stocks. Many broker-dealers decline to participate
in penny-stock transactions because of the extra requirements imposed on those
transactions. Application of the penny-stock rules to our Common Stock reduces
the market liquidity of our shares, which in turn affects the ability of holders
of our Common Stock to resell the shares they purchase, and they may not be able
to resell at prices at or above the prices they paid.

     In addition to the shares of our Common Stock underlying shares of our
Series C Preferred Stock and Series B Preferred Stock, as well as warrants and
options that have been issued by the Company, we have a large number of shares
eligible for future sale.

     As of May 13, 2008, we had reserved 625,000 shares of Common Stock for
issuance upon the exercise of options all of which have been granted pursuant to
the 2003 Plan, of which options to purchase 584,333 shares were outstanding. On
November 10, 2006, the Company granted an aggregate of 3,950,000 options to
purchase shares of the Company's common stock to certain officers, directors,
employees, agents and Affiliates, which shares are subject to a vesting
schedule. Further, at the Special Meeting held on June 11, 2007, the common
stock holders of the Company approved and ratified the Company's 2007 Omnibus
Long Term Incentive Plan (the "2007 Plan"), which authorizes the issuance of up
to 10,000,000 shares of the Company's Common Stock that may be issued under the
2007 Plan. As of May 13, 2008, our officers and directors own 305,686 shares of
our Common Stock, or 2.78% of our currently outstanding shares of Common Stock,
which may be sold pursuant to Rule 144. Sales of Common Stock underlying plan
options or by the certain directors may adversely affect the price of the Common
Stock.

                                       31

<PAGE>

     The Series B and Series C Convertible Preferred Stock that we have issued
adversely affects the right of the Common Stockholders.

     Our Series B Preferred Stock pays cumulative preferred dividends equal to
12% per year, provides a preference in payment of dividends, redemption and
liquidation over the Common Stock and Series C Preferred Stock and will, upon
conversion, have all of the rights of our Common Stock. Our Series C Preferred
Stock pays cumulative preferred dividends equal to 2.5% per year, provides a
preference in payment of dividends, redemption and liquidation over the Common
Stock and will, upon conversion, have all of the rights of our Common Stock. Our
Board of Directors has the authority to issue additional preferred stock, which
could discourage potential takeover attempts or could delay or prevent a change
in control through a merger, tender offer, proxy contest or otherwise by making
these attempts more difficult or costly to achieve.

     Two of our shareholders that are controlled by the same individual
collectively own 14.9% of our outstanding Common Stock and have beneficial
ownership of approximately 18.8% of our Common Stock.

     As of May 13, 2008, the Apollo Trust and Echo's Voice LLC had beneficial
ownership of our common stock of 11.5% and 7.7%, respectively. Helen De Bove,
Trustee of the Apollo Trust and manager of Echo's Voice LLC exercises voting and
dispositive power of the securities owned by these entities and has beneficial
ownership of approximately 18.8%. The Apollo Trust and Echo's Voice LLC and Ms.
De Bove, if they convert and exercise the securities they own or over which they
have voting and dispositive power into shares of our Common Stock, may be able
to influence the outcome of all matters submitted to our shareholders for
approval, regardless of the preferences of the minority shareholders.

     Two of Our Series C Shareholders May Acquire a Significant Number of Shares
of Our Common Stock in the Future.

     On December 1, 2006 and in a subsequent closing on January 16, 2007, the
Company held a closing on the sale of an aggregate of 260 investment units (the
"Units") to Iris Energy Holding Corp. and 100 Units to the Vision Opportunity
Master Fund, LP. Each Unit consists of: (i) $50,000 of 2.5% Series C Cumulative
Convertible Preferred Stock, par value $0.001 (the "Series C Preferred"),
convertible into 47,619 shares of the Company's $0.001 par value common stock
(the "Common Stock") at a price of $1.05 per share (the "Conversion Price");
(ii) a three-year warrant to purchase 47,319 shares of Common Stock at an
exercise price of $1.50 per share (the "AC Warrants"); and (iii) a three year
warrant to purchase 23,810 shares of Common Stock at an exercise price of $2.00
per share (the "BC Warrants"). Subject to certain conversion cap limitations,
Iris Energy Holding Corp. and Vision Opportunity Master Fund, LP may acquire a
significant number of shares of our common stock (30,796,480) and (11,844,800),
respectively and may, in the future, be in a position to influence the outcome
of all matters submitted to our shareholders for approval, regardless of the
preferences of the minority shareholders and may lead to a change of control of
the Company.

                                       32

<PAGE>

     Iris Energy Holding Corp. May Appoint Directors to the Board, which may
lead to a Change in Control.

     On July 16, 2007, the Company and Iris Energy Holding Corp., a Samoa
company ("Iris Energy"), entered into an agreement (the "Iris Energy Directors
Agreement") pursuant to which the Company granted to Iris Energy the right to
appoint up to an equal number of members to the board of directors that have not
been previously appointed by Iris Energy as are present on the Company's board
of directors at any time. The Iris Energy Director Agreement is effective as of
December 1, 2006.

     The Iris Energy Directors Agreement provides that the Iris Energy Directors
Agreement terminates immediately on the earlier to occur of the following: (i)
at such time as Iris Energy owns fewer than 35,000 shares of the Company's
Series C Preferred Stock and fewer than 3,500,000 shares of the Company's Common
Stock, (ii) if at any time prior to December 1, 2009 the Company conducts
private or public offerings that aggregate $20,000,000 or more of the Company's
common stock or securities that are convertible into shares of the Company's
common stock; or (iii) December 1, 2009. For a further description of the
anticipate terms of the Iris Energy Directors Agreement, See "Management."
Accordingly, pursuant to the terms of the Iris Energy Directors Agreement, Iris
Energy may appoint an equal number of members to the Board of Directors, which
may lead to a change in control of the Company.

Unresolved Staff Comments

     The Company has no unresolved comments from the SEC Staff regarding
periodic or current reports under the Exchange Act.

Item 3. Legal Proceedings

     We are not currently subject to any legal proceedings, the results of which
would have a material impact on our properties, results of operation or
financial condition. Neither, to the best of our knowledge, are any of our
officers or directors involved in any legal proceedings in which we are an
adverse party.

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

     There were no matters submitted to a vote of security holders during the
quarter ended February 29, 2008.

                                     PART II

Item 5. Market  for Common  Equity and  Related  Stockholder  Matters and Issuer
Purchase of Equity Securities.

      Shares of our  Common  Stock are traded on the  Over-the-Counter  Bulletin
Board under the symbol "NFEI.OB."

     The market for our Common Stock is limited, volatile and sporadic. The
following table sets forth the high and low sales prices relating to our Common
Stock for the last two fiscal years on a quarterly basis, as quoted by NASDAQ.
These quotations reflect inter-dealer prices without retail mark-up, markdown or
commissions and may not reflect actual transactions.

                                       33

<PAGE>

          Quarter Ended                        High Bid      Low Bid

          February 29, 2008                    $   1.22      $  1.07
          November 30, 2007                    $   1.29      $  1.02
          August 31, 2007                      $   1.38      $  1.16
          May 31, 2007                         $   1.40      $  1.11
          February 28, 2007                    $   1.50      $  0.93
          November 30, 2006                    $   1.75      $  1.11
          August 31, 2006                      $   2.25      $  1.20
          May 31, 2006                         $   2.52      $  1.85

Holders

     On May 21, 2008, the closing price of our Common Stock was $1.30. As of May
13, 2008, we had approximately 1,716 shareholders of record, which does not
include shareholders whose shares are held in street or nominee names. We
believe that as of May 13, 2008, there are approximately 2,224 beneficial owners
of our Common Stock.

Dividend Policy

     We have not declared or paid cash dividends on our Common Stock in the
preceding two fiscal years. We currently intend to retain all future earnings,
if any, to fund the operation of our business, and, therefore, do not anticipate
paying dividends in the foreseeable future. Future cash dividends, if any, will
be determined by our board of directors.

Recent Sales of Unregistered Securities

     On January 30, 2008, the Company granted two employees options under the
Company's 2003 Plan to acquire an aggregate of 25,000 shares of our Common Stock
at a price of $1.20 per share. The options vest immediately and expire on
January 30, 2018.

     The options described above were granted based on exemptions from
registration under the Securities Act of 1933, as amended (the "Securities
Act"), and applicable state laws pursuant to Section 4(2) of the Securities Act.

     On or about May 1, 2008, the Company issued an aggregate of 1,637,501
shares of common stock and 2,413.13 shares of our 12% Series B Convertible
Preferred Stock for gross proceeds of $1,953,781 arising from the exercise of
1,542,765 of our Series B Warrants and 18.5625 Placement Agent Warrants, each
unit consisting of (i) 130 shares of 12% Series B Convertible Preferred
shares--face value $13,000, par value $0.001, convertible into 20,000 shares of
the Company's common stock, par value $0.001 at the rate of $0.65 per share with
a face value of $100 per share and (ii) 27,069 detachable warrants to purchase
one share each of common stock at an exercise price of $1.11 per share, which
expired on May 1, 2008.

                                       34

<PAGE>

     The 12% Series B Convertible Preferred Stock and the shares of Common Stock
issued upon exercise of the Series B Warrants described above were granted based
on exemptions from registration under the Securities Act of 1933, as amended
(the "Securities Act"), and applicable state laws pursuant to Section 4(2) of
the Securities Act.

Item 6. Management's Discussion and Analysis of Financial Condition and Results
of Operation

Introduction

     The following discussion contains forward-looking statements that reflect
our plans, estimates and beliefs. Our actual results could differ materially
from those discussed in the forward-looking statements. Factors that could cause
or contribute to such differences include, but are not limited to, those
discussed below and elsewhere in this Annual Report, particularly in the section
entitled "Risk Factors." Our consolidated audited financial statements are
stated in United States Dollars and are prepared in accordance with United
States Generally Accepted Accounting Principles.

     The following discussion and analysis covers our plan of operation for the
next twelve months. It discusses our financial condition at February 29, 2008,
and changes in our financial condition since February 28, 2007, the end of the
prior fiscal year. It also covers our results of operation for the fiscal years
ended February 29, 2008, and February 28, 2007. The following discussion and
analysis should be read in conjunction with the audited financial statements and
the related notes included elsewhere in this Form 10-KSB.

     We were incorporated as Storagefinders.com under the laws of the State of
Colorado on January 7, 2000. In March 2001, we changed our name to New Frontier
Energy, Inc. and commenced operations in the oil and gas industry through the
acquisition of all of the outstanding shares of Skyline Resources, Inc.
("Skyline"). Skyline was operated as our subsidiary through the close of
business on February 28, 2005, at which time it was merged into the Company.

     In February 2002, we were acquired by Wyoming Oil & Minerals, Inc.
("WYOG"). In mid 2003, we determined to become an independent, but publicly
traded, entity. Accordingly, WYOG transferred certain oil and gas assets and we
assumed certain WYOG liabilities and appointed new management. WYOG declared a
dividend payable by distributing 12,775,616 shares of the Company's Common Stock
to its shareholders. On March 3, 2004, the Board of Directors authorized a 1 to
4 reverse split of Common Stock to stockholders of record in order to facilitate
the marketability and liquidity of the Common Stock based on the current market
conditions and other relevant factors. The shares were registered with the
Securities and Exchange Commission on Form SB-2 in April 2004, and became quoted
on the Over-The- Counter Bulletin Board in May 2004 under the symbol "NFEI.OB."

     The Company owns 82.76% of the limited partnership interests (the "Limited
Partnership Interests") of Slater Dome Gathering, LLLP ("SDG"). SDG owns the
18-mile gas gathering line that transports the Company's natural gas from the
Slater Dome Field to the Questar transportation line in Baggs, Wyoming. On
December 26, 2007, the Company entered into a Partnership Interest Purchase
Agreement with Natural Resource Group Gathering, LLC ("NRGG") to acquire NRGG's
general partnership interest (the "General Partnership Interest") in SDG
effective as of December 31, 2007. In connection with the purchase of the
General Partnership Interest, the Company was appointed the general partner of
SDG. The General Partnership Interest is equal to 25% of the Percentage
Interests (as defined in SDG's Limited Partnership Agreement) in SDG.

                                       35

<PAGE>

Plan of Operation

     Our plan of operation is to further develop the Slater Dome Field by
drilling additional wells adjacent or near our existing wells in the southeast
section of the property. We plan to test the Niobrara and Frontier formations in
the Focus Ranch Federal 12-1 well. We also plan to evaluate opportunities to
acquire other interests in oil and gas properties.

Prospect Acquisition Philosophy

     We anticipate undertaking investigation to acquire other interests in oil
and gas properties in the fiscal year ending February 28, 2009. Our objective
will be to acquire properties with immediate development potential or existing
producing properties. Due to our relatively small size and competitive position
in the industry, we do not anticipate acquiring a large inventory of properties
to hold for future development. Rather, one or a small number of properties will
be targeted with immediate development potential.

Selected Financial Data

     The following selected financial data should be read in conjunction with
the financial statements and related notes thereto appearing elsewhere in this
Form 10-KSB. The selected financial data as of February 29, 2008, and February
28, 2007, and for each of the fiscal years ended February 29, 2008, and February
28, 2007, have been derived from our financial statements which have been
audited by our independent auditors and included elsewhere in this Form 10-KSB.
The selected financial data provided below is not necessarily indicative of our
future results of operations or financial performance.

                                                Year Ended
                                         February 29, 2008   February 28, 2007
Statement of Operations Data:

Revenue                                  $         757,739   $         361,181
(Loss) from operations                   $      (6,257,401)  $      (3,745,600)
Other income (expense), net              $         (85,970)  $        (812,162)
Net loss attributable to common
shareholders                             $      (7,363,381)  $      (5,079,469)
Basic and diluted net loss per share     $           (0.89)  $           (0.92)
Weighted average shares outstanding              8,259,108           5,526,142

                                         February 29, 2008   February 28, 2007
Balance Sheet Data:

Working capital                          $       1,345,977   $       8,982,439
Current assets                           $       4,881,911   $      13,673,152
Total assets                             $      26,209,623   $      29,047,723
Current liabilities                      $       3,535,934   $       4,690,713
Long-term liabilities                    $       1,116,151   $         140,000
Total liabilities                        $       4,652,085   $       4,830,713
Minority Interests in Consolidated
Subsidiary                               $         393,592   $         421,091
Total Shareholders' equity               $      21,163,946   $      23,795,919


                                       36

<PAGE>

Results of Operation

Year Ended February 29, 2008 Compared to the Year Ended February 28, 2007

     For the year ended February 29, 2008, we realized a net loss attributable
to common shareholders of $7,363,381, or $0.89 per share, on revenue of
$757,739. This compares with a net loss attributable to common shareholders of
$5,079,496, or $0.92 per share on $361,181 of revenue for the fiscal year ended
February 28, 2007. The loss increased by $2,283,912 or 44.96%.

     Our oil and gas sales increased from $238,385 during the fiscal year ended
February 28, 2007 to $622,442 during the fiscal year ended February 29, 2008, an
increase of $384,057 or 161.11%. The increase in oil and gas revenues is
primarily attributable to the increased production from the Slater Dome Field
together with acquiring 36.66667% working interest effective November 1, 2006.
We sold 139,973 MCF in the fiscal year ended February 29, 2008 compared to
25,524 MCF in the fiscal year ended February 28, 2007.

     During the fiscal year ended February 29, 2008, SDG's gathering fees from
the Gas Gathering Pipeline were $135,297 as compared to $122,796 during the
fiscal year ended February 28, 2007, an increase of $12,501 or 10.18%. The
increase in the gas gathering fees is primarily the result of the increase in
production.

     Exploration costs were $249,848 during the fiscal year ended February 29,
2008 as compared to $205,713 during the fiscal year ended February 28, 2007, an
increase of $44,135 or 21.45%. The primary reason for the increase is related to
increased seismic costs associated with exploration efforts at Slater Dome Field
and in the Amber Waves Prospect. The major components and the changes in
exploration expenses are summarized as follows.

                                                                     Increase
                                            2008         2007       (Decrease)
                                        ---------------------------------------
Geological consulting                   $   149,015   $  128,057   $     20,958
Geophysical & maps                           83,030       58,175         24,855
Delay rentals                                17,803       19,481         (1,678)
                                        ---------------------------------------
                                        $   249,848   $  205,713   $     44,135
                                        =======================================

                                       37

<PAGE>

     Lease operating expenses were $1,498,829 during the fiscal year ended
February 29, 2008 as compared to $642,253 during the fiscal year ended February
28, 2007, an increase of $856,576 or 133.37%. The principal reason for the
increase is that during the fiscal year ended February 29, 2008 we owned 66.7%
of the working interests in the Slater Dome Field as compared with owning 30%
for eight months and 66.7% for four months in the fiscal year ended February 28,
2007. In the fiscal year ended February 29, 2008 we incurred increased costs
associated with reworking our producing wells in 2008 as compared to the same
period ending in 2007 directed towards enhancing the production. The major
components and the changes in lease operating expenses are summarized as follows
and shows a comparison for the changes in working interest between the periods:

                                                                      Increase
                                              2008         2007      (Decrease)
                                          --------------------------------------
Lease operating expenses 30%              $   458,920   $  337,161   $  121,759
Lease operating expenses 36.7%                560,726      187,566      373,160
Rework expenses 30%                           190,458      107,580       82,878
Rework expenses 36.7%                         232,958           --      232,958
Lease operating expenses, Focus Ranch          15,076           --       15,076
Production taxes                               40,691        9,946       30,745
                                          --------------------------------------
                                          $ 1,498,829   $  642,253   $  856,576
                                          ======================================

     In summary, lease-operating expenses increased $121,759 when comparing
identical working interests of 30% and the increase of $373,160 is associated
with the increase of an additional 36.7% in working interests in the Slater Dome
Field. Similarly, rework expenses increased by $82,878 when comparing identical
working interests and the increase of $232,958 is associated with the increased
36.7% working interest at the Slater Dome Field. The increased lease operating
expenses are directly associated with the increased activity at the field and
increased production. The reworking expenses were incurred to increase
production and pursuant to normal operating procedures. The lease operating
expenses associated with the Focus Ranch Unit increased because we did not own
these interests during the nine months ended November 30, 2006. Production taxes
increased as a result of increased revenues.

     Gas gathering costs amounted to $833 during the fiscal year ended February
29, 2008 as compared to $2,578 during the fiscal year ended February 28, 2007, a
decrease of $1,745 or 67.68%. The fluctuation is considered normal in the
ordinary course of business.

     General and administrative expenses were $2,222,795 during the fiscal year
ended February 29, 2008 as compared to $1,546,716 during the fiscal year ended
February 28, 2007, an increase of $676,079 or 43.71%. The major components and
the changes in general and administrative expenses are summarized as follows.

                                                                      Increase
                                             2008          2007      (Decrease)
                                         ---------------------------------------
Employee compensation                    $   938,117   $   727,781   $  210,336
Financial public relations                   624,796       313,449      311,347
Professional fees                            251,964       157,655       94,309
Payroll taxes and employee benefits          155,076       114,246       40,830
Repairs and maintenance                       27,444         8,553       18,891
Management fees SDG                            8,176        15,192       (7,016)
Insurance                                    152,784       137,950       14,834
Travel                                        38,279        69,133      (30,854)
Miscellaneous other costs                     26,159         2,757       23,402
                                         ---------------------------------------
                                         $ 2,222,795   $ 1,546,716   $  676,079
                                         =======================================

                                       38

<PAGE>

     Employee compensation increased $210,336 in the year ended in 2008 compared
with 2007; executive bonuses and compensation increased $199,083 and employee
compensation increased $11,253. Financial public relations increased by $311,347
in the year ended in 2008 compared with 2007; as a result of the increased
activity and related costs associated with presenting the Company to the
financial community. Professional fees increased $94,309 in the year ended in
2008 compared with 2007 because accounting fees decreased $10,750, legal fees
increased $62,803 and engineering consulting increased $34,056; such
fluctuations arose because of the changes in the levels of activity for the
disciplines engaged. Payroll taxes and benefits increased $40,830 in the year
ended in 2008 compared with 2007 principally as a result of increased
compensation and additional field employees added in July 2007 whose salaries
were charged to lease operating expenses. Repairs and maintenance increased
$18,891, $9,806 of which is associated with gathering line maintenance and the
balance of $9,085 is related to normal maintenance of office equipment and is
considered normal in the ordinary course of business. Management fees incurred
by SDG decreased by $7,016 because the SDG managers were compensated based on
gross revenues for its fiscal year ended December 31, 2007 as compared
compensation based on invested capital in the corresponding fiscal year ended
December 31, 2006. Insurance increased $14,834 in the year ended in 2008
compared with 2007 and is considered normal in the ordinary course of business.
Travel decreased $30,854 in the year ended in 2008 compared with 2007 because
business travel was combined with travel associated with financial public
relations and such fluctuation is considered normal in the ordinary course of
business. Miscellaneous other costs increased $23,402 in the year ended in 2008
compared with 2007 and are considered normal in the ordinary course of business.

     Issuance of common stock options increased $929,583 or 67.29% in the year
ended in 2008 compared with 2007. The components of the change are summarized as
follows:


<TABLE>
<CAPTION>
                                                                            Increase
                                                  2008          2007       (Decrease)
                                              ----------------------------------------
<S>                                           <C>           <C>           <C>
Financial public relations firms              $   184,100   $   350,317   $  (166,217)
Employee stock options                             64,700            --   $    64,700
Amortization of non-qualified stock options     2,062,200     1,031,100   $ 1,031,100
                                              ----------------------------------------
                                              $ 2,311,000   $ 1,381,417   $   929,583
                                              ========================================
</TABLE>

     Expenses associated with the granting of options to financial public
relations firms and employee stock options were calculated using the
Black-Scholes method of valuation. The costs of granting options to financial
public relations firms decreased because fewer shares were granted in the year
ended in 2008 compared with 2007. Employee stock options increased because
25,000 shares were granted in the year ended in 2008 compared with none in 2007.
Amortization of non-qualified stock option costs increased in the year ended in
2008 compared with 2007 because they were amortized over 12 months in 2008
versus 6 months in 2007.

                                       39

<PAGE>

     Depreciation, depletion and amortization increased $411,931 or 128.77% in
the year ended in 2008 compared with 2007. The components of the increase are
summarized in the following table:

                                                                       Increase
                                                 2008        2007     (Decrease)
                                              ----------------------------------
Producing oil and gas properties              $ 497,100   $ 143,791   $ 353,309
Slater Dome Gathering, LLLP                     130,492     130,492   $      --
Other depreciable assets                        104,243      45,621   $  58,622
                                              ----------------------------------
                                              $ 731,835   $ 319,904   $ 411,931
                                              ==================================

     The increase in depletion on producing properties is attributable to the
increased ownership and production from the Slater Dome Field. Depreciation
associated with other depreciable assets increased because the Company added
additional property and equipment into service.

     Interest income increased $273,837 or 308.09% in the year ended in 2008
compared with 2007 because the Company had more cash invested in interest
bearing instruments.

     Gain or loss from sale of assets was $0 during the year ended 2008 as
compared to $95,127 in 2007. The sale of assets during the fiscal year ended
February 28, 2007 arose from the sale of the Nucla Prospect in the amount of
$185,888 net of its cost in the amount of $94,540 together with miscellaneous
equipment sale proceeds of $3,786. No prospects were sold during the year ended
February 29, 2008.

     Interest expense decreased $7,042 or 7.81% in the year ended in 2008
compared with 2007. The components of the increase are summarized in the
following table:

                                                                       Increase
                                                  2008       2007     (Decrease)
                                                --------------------------------
Convertible debentures                          $ 25,628  $ 65,404   $ (39,776)
Convertible debenture, affiliates                  9,904     12,309      (2,405)
Notes payable                                     47,640     12,501      35,139
                                                --------------------------------
                                                $ 83,172   $ 90,214   $  (7,042)
                                                ================================



     The change in convertible debentures arose because the convertible debt
matured in July 2007 was substantially was converted into shares of our common
stock. The convertible debenture, affiliates interest expense decreased because
the Company made a principal payment in the amount of $300,000 in March 2007 and
the instrument was paid in full in December 2007. The notes payable interest
increased because the Company entered into the Steamboat Mortgage on the
Steamboat Property in June 2007.

     Debt issuance costs, non-cash decreased $540,440 or 59.65% for the year
ended in 2008 compared with 2007. The principal change in debt issuance cost
arises from the maturity of the convertible debentures on or about July 22, 2007
and the completion of the amortization period.

                                       40

<PAGE>

     The minority interest in the income of the consolidated subsidiary
increased $42,624 or 266.28%. This fluctuation relates to the increase in income
from SDG during the two periods compared and arises principally from the
increased volume of natural gas transported in the two periods.

     Preferred stock dividends and distributions to minority interests increased
$455,679 or 90.11% for the year ending in 2008 compared with 2007. The principal
factor in the increase is that the Series C convertible preferred shares have
been outstanding for a full twelve months in 2008 versus a two to three month
period in 2007. The components of the change are summarized in the following
table:

                                                                       Increase
                                                 2008        2007     (Decrease)
                                              ----------------------------------
Series A convertible preferred                $      --   $   3,822   $  (3,822)
Series B convertible preferred                  324,182     358,130     (33,948)
Series C convertible preferred                  554,892      99,633     455,259
Slater Dome Gathering distributions              82,305      44,115      38,190
                                              ----------------------------------
                                              $ 961,379   $ 505,700   $ 455,679
                                              ==================================

     As a result of the above, we generated a net loss attributable to common
shareholders of $7,363,381 during the fiscal year ended February 29, 2008 as
compared to a net loss of $5,079,469 during the fiscal year ended February 28,
2007, an increased net loss of $2,283,912 or 44.96%.

Liquidity and Capital Resources.

     We have not generated positive cash flows from operating activities. The
primary sources of capital have been from sales and other issuances of equity
and debt securities. Our primary use of capital has been for the acquisition,
development and exploration of oil and gas properties. Our working capital
requirements are expected to increase in line with the growth of our business.
We have no lines of credit or other bank financing arrangements. We expect that
working capital requirements will be funded through a combination of our
existing funds, cash flow from operations, issuance of equity and debt
securities. Additional issuances of equity or convertible debt securities will
result in dilution to our current common stockholders.

     Our plan of operations for the fiscal year ending February 28, 2009 call
for us to participate in the drilling of additional wells at Slater Dome Field
and testing the Niobrara formation at the Focus Ranch Unit and (ii) to provide
capital for other lease acquisitions. We believe that the plan of operations for
the fiscal year ending February 28, 2009 will require capital of approximately
$4,500,000. To the extent that additional opportunities present themselves to
the Company, the Company may require additional sources of capital to
participate in these opportunities.

                                       41

<PAGE>

     Further, the Company received proceeds from the exercise of outstanding
warrants issued to the holders of the Company's Series B Preferred Stock
(subsequent to year end through May 1, 2008 when they expired) and placement
agent warrants of $1,953,781. The Company could receive proceeds from 1,889,999
Convertible Debenture warrants and 255,040 Convertible Debenture placement agent
warrants which are exercisable at a price $1.33. and $1.08 respectively The
warrants issued to the holders of the Company's Convertible Debentures and the
related placement agent warrants expire on July 22, 2008. If all of the warrants
issued to the holders of the Company's Convertible Debentures were exercised, it
would result in proceeds to the Company of $2,789,142. However, there can be no
assurance that the price of our common stock will be in excess of the exercise
prices of these warrants or that any of the warrant holders will exercise these
warrants. Management believes that current cash balances plus cash flow from
operations will be sufficient to fund our capital and liquidity needs for at
least the next twelve months.

     The following summarizes the Company's capital resources at February 29,
2008, compared with February 28, 2007:

<TABLE>
<CAPTION>
                                                                                           Increase       Increase
                                               February 29, 2008    February 28, 2007     (Decrease)     (Decrease)
-------------------------------------------------------------------------------------------------------------------
<S>                                            <C>                  <C>                  <C>             <C>
Cash                                           $       3,602,939    $      12,724,234    $ (9,121,295)         -72%
Current assets                                 $       4,881,911    $      13,673,152    $ (8,791,241)         -64%
Total Assets                                   $      26,209,623    $      29,047,723    $ (2,838,100)         -10%
Current liabilities                            $       3,535,934    $       4,690,713    $ (1,154,779)         -25%
Working capital                                $       1,345,977    $       8,982,439    $ (7,636,462)         -85%
Net cash (used) in operating activities        $      (3,048,539)   $      (2,987,472)   $     61,067           -2%
Net cash provided by (used in) investing
activities                                     $      (5,653,729)   $      (8,957,215)   $ (3,303,486)         -37%
Net cash provided by (used in) financing
activities                                     $        (419,027)   $      23,455,496    $(23,874,523)        -102%
</TABLE>

     The decrease in cash, current assets and working capital arises,
principally, because of the Company's drilling activity and development of the
Slater Dome Field. The changes in cash are summarized as follows:

Proceeds from revenues                                            $     757,739
Proceeds from exercising warrants                                       762,296
Operating costs billed to non-affiliates                               (605,436)
Purchase of property and equipment                                   (5,493,729)
Increase in investment in SDG                                          (268,750)
Deposits                                                               (160,000)
Payment of convertible debenture                                       (638,194)
Principal payments on notes payable                                     (21,079)
Preferred stock dividends                                              (111,693)
Distributions to SDG minority interests                                 (82,305)
Operating expenses and other                                         (3,260,144)
                                                                  --------------
                                                                  $  (9,121,295)
                                                                  ==============

Cash Flow from Operating Activities

     As of February 29, 2008, we had a cash balance of $3,602,939. We used
$3,048,539 in operating activities during the fiscal year ended February 29,
2008 as compared to $2,987,472 during the fiscal year ended February 28, 2007.
The decrease in cash used in operating activities in the year ended February 29,
2008 when compared to the year ended February 28, 2007 is discussed in "Results
of Operations" above.

                                       42

<PAGE>

Capital Expenditures

     Cash flows from investing activities consisted primarily of the purchase of
property and equipment. During the fiscal year ended February 29, 2008, the
Company used $5,653,729 in investing activities as compared to $8,957,215 used
in investing activities during the fiscal year ended February 28, 2007. The
Company expended $4,630,532 in drilling wells at and developing the
infrastructure at the Slater Dome Field, $41,578 was used to increase its
undeveloped acreage position at the Slater Dome Field. The Company spent
$306,800 to acquire approximately 5,041 net acres in the Amber Waves Prospect
and $674,820 in other property and equipment purchases.

Financing Activities

     During the fiscal year ended February 29, 2008, the Company used $419,027
in financing activities as compared to $23,455,496 provided by financing
activities during the fiscal year ended February 28, 2007. During the fiscal
year ended February 29, 2008, the Company received $762,296 from common stock
warrant conversions, received $52,000 from the exercise of the placement agent
warrant to purchase Units of Series B Convertible Preferred Stock, paid $638,194
to retire convertible debentures, made $21,879 in principal payments on notes
payable, paid $111,693 in preferred stock dividends and made distributions of
$82,303 to minority interest holders in the consolidated subsidiary. During the
fiscal year ended February 28, 2007, the Company conducted an offering of an
aggregate of $22,225,000 in Series C Preferred Stock.

Recent Accounting Pronouncements

     In February 2007, the FASB issued Statement of Financial Accounting
Standards No. 159, "The Fair Value Option for Financial Assets and Financial
Liabilities, including an amendment of FASB Statement No. 115." ("SFAS 159")
SFAS 159 permits companies to choose to measure many financial instruments and
certain other items at fair value that are not currently required to be measured
at fair value and establishes presentation and disclosure requirements designed
to facilitate comparisons between companies that choose different measurement
attributes for similar types of assets and liabilities. The provisions of SFAS
159 will become effective as of the beginning of the fiscal year that begins
March 1, 2008. The adoption of these new requirements is not expected to have a
material effect on the Company's financial position, results of operations, or
cash flows.

     In December 2007 the FASB issued SFAS No. 141 (revised 2007), "Business
Combinations" ("SFAS No. 141R"), which replaces FSAB Statement NO. 141. SFAS No.
141R will change how business acquisitions are accounted for and will impact
financial statements on both the acquisition date and in subsequent periods.
SFAS No. 141R is effective as of the beginning of an entity's fiscal year that
begins after December 15, 2008. The Company is in the process of evaluating the
impacts, if any, of adopting this pronouncement.

                                       43

<PAGE>

     In December 2007 the FASB issued SFAS No. 160 "Noncontrolling Interests in
Consolidated Financial Statements, an amendment of ARB No. 51" ("SFAS No. 160").
SFAS No. 160 will change the accounting and reporting for minority interests,
which, will be recharacterized as noncontrolling interests and classified as a
component of equity. This statement is effective as of the beginning of an
entity's first fiscal year beginning after December 15, 2008. The Company is in
the process of evaluating the impacts, if any, of adopting this pronouncement.

     In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative
Instruments and Hedging Activities." The new standard is intended to improve
financial reporting about derivative instruments and hedging activities by
requiring enhanced disclosures to enable investors to better understand their
effects on an entity's financial position, financial performance, and cash
flows. It is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008, with early application
encouraged. The Company has not yet determined the impact, if any, of SFAS 161
on its consolidated financial statements.

Critical Accounting Policies and Estimates.

     We believe the following critical accounting policies affect our more
significant judgments and estimates used in the preparation of our financial
statements.

     Reserve Estimates.

     Estimates of oil and natural gas reserves, by necessity, are projections
based on geological and engineering data, and there are uncertainties inherent
in the interpretation of such data, as well as the projection of future rates of
production and the timing of development expenditures. Reserve engineering is a
subjective process of estimating underground accumulations of oil and natural
gas that are difficult to measure. The accuracy of any reserve estimate is a
function of the quality of available data, engineering and geological
interpretation and judgment. Estimates of economically recoverable oil and
natural gas reserves and future net cash flows necessarily depend upon a number
of variable factors and assumptions, such as historical production from the area
compared with production from other producing areas, the assumed effects of
regulations by governmental agencies and assumptions governing future oil and
natural gas prices, future operating costs, severance and excise taxes,
development costs and work-over and remedial costs, all of which may in fact
vary considerably from actual results. For these reasons, estimates of the
economically recoverable quantities of oil and natural gas attributable to any
particular group of properties, classifications of such reserves based on risk
of recovery, and estimates of the future net cash flows expected there from may
vary substantially. Any significant variance in the assumptions could materially
affect the estimated quantity and value of the reserves, which could affect the
carrying value of our oil and gas properties and/or the rate of depletion of the
oil and gas properties. Actual production, revenues and expenditures with
respect to our reserves will likely vary from estimates, and such variances may
be material.

Many factors will affect actual net cash flows, including:

                                       44

<PAGE>

     o    The amount and timing of actual production;

     o    Supply and demand for natural gas;

     o    Curtailments or increases in consumptions by natural gas purchasers;
          and

     o    Changes in governmental regulation or taxation.

     Revenue Recognition

     We record revenues from the sales of natural gas and oil when in the month
that delivery to the customer has occurred and title has transferred. This
occurs when natural gas or oil has been delivered to a pipeline or a tank
lifting has occurred. We receive payment from one to three months after
delivery. At the end of each month, we estimate the amount of production
delivered to purchasers and the price we will receive. Variances between our
estimated revenue and actual payment are recorded in the month the payment is
received. However, differences have been insignificant.

     Oil and Gas Properties, Equipment, and Depreciation.

     We follow the successful-efforts method of accounting for oil and gas
properties. Under this method, all productive costs incurred in connection with
the exploration for, and development of, oil and gas reserves are capitalized.
These capitalized costs include lease acquisition, geological and geophysical
work, delay rentals, and drilling, completing and equipping oil and gas wells,
including salaries, benefits and other internal salary related costs directly
attributable to these activities. Costs associated with production and general
corporate activities are expensed in the period incurred. Interest costs related
to unproved properties and properties under development also are capitalized to
oil and gas properties. If the net investment in oil and gas properties exceeds
an amount equal to the sum of (1) the standardized measure of discounted future
net cash flows from proved reserves and (2) the lower of cost or fair market
value of properties in process of development and unexplored acreage, the excess
is charged to expense as additional depletion. Normal dispositions of oil and
gas properties are accounted for as adjustments of capitalized costs, with no
gain or loss recognized. As a result, we are required to estimate our proved
reserves at the end of each quarter, which is subject to the uncertainties
described above.

     Contractual Obligations

     The following table sets forth information with respect to our contractual
obligations as of February 29, 2008.

                                       45

<PAGE>

                             Payments Due By Period

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
                                                                             More than
                                      Total    1 to 3 years   4 to 5 years    5 years
--------------------------------------------------------------------------------------
<S>                                 <C>        <C>            <C>            <C>
Paul G. Laird Employment
   Contract(1)                      $249,000     $249,000         $ -0-        $ -0-
--------------------------------------------------------------------------------------
Les Bates Employment Contract(1)    $241,500     $241,500         $ -0-        $ -0-
--------------------------------------------------------------------------------------
Spotswood Properties, LLC, office
   lease (2)                        $ 26,670     $ 26,670         $ -0-        $ -0-
--------------------------------------------------------------------------------------
Steamboat Mortgage (3)              $826,146     $297,211         $528,935     $ -0-
--------------------------------------------------------------------------------------
NRGG Promissory Note (4)            $806,250     $806,250         $ -0-        $ -0-
--------------------------------------------------------------------------------------
</TABLE>

(1) Calculated as of February 29, 2008. Messrs. Laird and Bates' employment
agreements expire on October 31, 2009. See "Item 10-Executive Compensation."

(2) We lease approximately 1,600 square feet of office space located at 1789 W.
Littleton Blvd., Littleton, Colorado 80120, for approximately $2,667 per month.
The lease expires on December 31, 2012. The lease is with Spotswood Properties,
LLC, ("Spotswood") a Colorado limited liability company and an affiliate of Paul
G. Laird, President and Chief Executive Officer of the Company. The Lease is on
terms that the Board of Directors, which includes Mr. Laird, believe are no less
favorable than those that may be obtained from third parties.

(3) On June 14, 2007, we purchased a 35.5 acre residential property located at
29300 RCR 14A, Steamboat Springs, Colorado 80487 (the "Steamboat Property"). In
connection with the purchase of the Steamboat Property, the Company entered into
a five-year mortgage in the principal amount of $881,250 (the "Steamboat
Mortgage"), which bears interest at a rate of 7.56% per annum. The Steamboat
Mortgage requires equal monthly payments during the term of the mortgage in the
amount of $8,255.86, with the balance of $698,604 due on June 14, 2012. The
Steamboat Mortgage can be prepaid at any time without penalty.

(4) On December 26, 2007, the Company entered into a Partnership Interest
Purchase Agreement with Natural Resource Group Gathering, LLC ("NRGG") to
acquire NRGG's general partnership interest (the "General Partnership Interest")
in SDG. The purchase price for the General Partnership Interest was $1,075,000
(the "Purchase Price"), which will be paid $268,750 in cash and the issuance by
the Company of a promissory note in the principal amount of $806,250 (the
"Note"). The Note bears interest at a rate of 2.5% per annum, is payable in
quarterly principal and interest installments of $204,722 beginning March 31,
2008 and is due on December 31, 2008 (the "Maturity Date"). The Corporation may
prepay the Note at any time without penalty, and at the option of the
Corporation, the quarterly payments may be deferred until the Maturity Date.

Quantitative and Qualitative Disclosure About Market Risk

     Oil and Gas Price Risk

     Our primary market risk exposure is in the pricing applicable to our
natural gas and oil production. Realized pricing is primarily driven by the
prevailing worldwide price for crude oil and spot market prices applicable to
our U.S. natural gas production. Pricing for natural gas and oil production has
been volatile and unpredictable for several years, and we expect this volatility
to continue in the future. The prices we receive for production depend on many
factors outside of our control including volatility in the differences between
product prices at sales points and the applicable index price. These factors
include, but are not limited to: changes in market demands, the general state of
the economy, weather, pipeline activity and capacity and inventory storage
levels. We are not currently using derivatives at this time to mitigate the risk
of adverse changes in commodity prices, however, we may consider using them in
the future.

Item 7. Financial Statements and Supplementary Data.

     The information required by this item is included in Item 13, "Exhibits."

                                       46

<PAGE>

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

     None.

Item 8A. Controls and Procedures

     Management's Report on Internal Control over Financial Reporting

     Management is responsible for establishing and maintaining adequate
internal control over financial reporting. A company's internal control over
financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted
accounting principles. Because of its inherent limitations, internal control
over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to
the risk that controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may
deteriorate.

     Management, including the Chief Executive Officer and Chief Financial
Officer, has conducted an evaluation of the effectiveness of the Company's
internal control over financial reporting as of February 29, 2008, based on the
criteria for effective internal control described in Internal Control --
Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission. Based on its assessment, management concluded that the
Company's internal control over financial reporting was effective as of February
29, 2008.

     This Annual Report does not include an attestation report of the Company's
independent registered public accounting firm regarding internal control over
financial reporting. Management's report was not subject to attestation by the
Company's independent registered public accounting firm pursuant to temporary
rules of the SEC that permit the Company to provide only management's report in
this Annual Report.

     This report shall not be deemed to be filed for purposes of Section 18 of
the Securities Exchange Act of 1934, or otherwise subject to the liabilities of
that section, and is not incorporated by reference into any filing of the
Company, whether made before or after the date hereof, regardless of any general
incorporation language in such filing.

     Changes in Internal Control over Financial Reporting

     There was no change in our internal control over financial reporting during
the quarter ended February 29, 2008 that has materially affected, or is
reasonably likely to materially affect, our internal control over financial
reporting.

Item 8B. Other Information

     On May 22, 2008, the Board of Directors amended the Bylaws of the Company
to provide that in the event that there is a tie in the voting between the Board
of Directors, the Chairman of the Board of Directors shall cast a deciding vote.
A copy of the amended and restated Bylaws of the Company is attached hereto
as Exhibit 3.1.


                                       47

<PAGE>

                                    PART III

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

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

         ----------------------------------------------------------------
         Name                Age      Position with the Company
         ----------------------------------------------------------------
         Paul G. Laird        52      President, CEO and Director
         ----------------------------------------------------------------
         Les Bates            64      Chief Financial Officer, Principal
                                      Accounting & Financial Officer,
                                      Secretary/Treasurer, and Director
         ----------------------------------------------------------------
         Grant I. Gaeth       76      Director
         ----------------------------------------------------------------

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

     The following information summarizes the business experience of our
officers and directors:

     Paul G. Laird has been the President, Chief Executive Officer and a
director of the Company since April 2003. Mr. Laird was previously a director of
Skyline from June 2003 to February 2005. He is currently the president of NRG, a
privately-held oil and gas exploration and development company, a position he
has held since 1997. Prior to that, he was the vice president of land operations
for Western Alliance Petroleum Corporation and land manager for Canterra
Petroleum, Inc., both private oil and gas companies. During this time, he was
active in oil and gas exploration and development in the states of Montana,
North Dakota, Colorado, Nebraska, Wyoming and Utah. Mr. Laird is a founder of
International Marketing Corporation of Colorado, a private company engaged in
the restaurant business. Mr. Laird is also a manager of NRGG, the former general
partner of SDG. He received a Bachelor of Science in business with an emphasis
in petroleum, land and real estate management from the University of Colorado in
1980.

     Les Bates has been the Chief Financial Officer, Principal Accounting and
Financial Officer, Secretary, Treasurer and a director of the Company since
April 2003. Mr. Bates was previously the Secretary and a director of Skyline
from June 2003 to February 2005. Mr. Bates established Les Bates & Associates,
Inc. in 1974 after five years of working with two of what were then known as
"Big 10" accounting firms. Les Bates & Associates, Inc. has provided a broad
range of auditing, accounting and tax services to public and private
corporations, consisting of oil and gas companies, oil and gas drilling and
development programs, mining and mineral exploration entities, light
manufacturing companies, real estate developers, contractors, alternative energy
companies and private individuals. Mr. Bates has taught oil and gas accounting
classes as an adjunct professor at the University of Colorado - Denver and for
the American Institute of Bankers, Denver chapter.

                                       48

<PAGE>

     Grant I. Gaeth has been a director since April 2003 and has been involved
in exploring for oil and gas since his graduation from Utah State University in
1953. He began his career with The Carter Oil Company and Humble Oil and
Refining Company (Exxon), working as a field geologist in the Colorado Plateau,
Basin and Range geological provinces. He worked on Exxon's geological efforts
along the Colorado River, mapping structural leads throughout the Southern half
of Utah. Mr. Gaeth has been self-employed as an independent consulting geologist
for the last 37 years.

     There are no family relationships among directors or executive officers,
nor any arrangements or understandings between any director and any other person
pursuant to which any director was elected as such. The present term of office
of each director will expire at the next annual meeting of stockholders.

     Our executive officers are elected annually at the first meeting of our
Board of Directors held after each annual meeting of stockholders. Each
executive officer holds office until his successor is duly elected and
qualified, until his resignation or until removed in the manner provided by our
bylaws.

     Currently, we do not have an audit committee and, as such, do not have a
financial expert on our audit committee. We do not have a compensation or
nominating committee of the Board of Directors and the Board of Directors, none
of whom are independent accordingly to Section 121 of the American Stock
Exchange Company Guide, performs such functions on behalf of the Company.

     On December 1, 2006 and in a subsequent closing on January 16, 2007, the
Company held a closing on the sale of an aggregate of 260 investment units to
Iris Energy Holding Corp. (the "Units"). Each Unit consists of: (i) $50,000 of
2.5% Series C Cumulative Convertible Preferred Stock, par value $0.001 (the
"Series C Preferred"), convertible into 47,619 shares of the Company's $0.001
par value common stock (the "Common Stock") at a price of $1.05 per share (the
"Conversion Price"); (ii) a three-year warrant to purchase 47,319 shares of
Common Stock at an exercise price of $1.50 per share (the "AC Warrants"); and
(iii) a three year warrant to purchase 23,810 shares of Common Stock at an
exercise price of $2.00 per share (the "BC Warrants").

     On July 16, 2007, New Frontier Energy, Inc. (the "Company") and Iris Energy
Holding Corp., a Samoa company ("Iris Energy"), entered into an agreement (the
"Iris Energy Directors Agreement") pursuant to which the Company granted to Iris
Energy the right to appoint up to an equal number of members to the board of
directors that have not been previously appointed by Iris Energy as are present
on the Company's board of directors at any time. The Iris Energy Director
Agreement is effective as of December 1, 2006.

                                       49

<PAGE>

     The Iris Energy Directors Agreement provides that the Iris Energy Directors
Agreement terminates immediately on the earlier to occur of the following: (i)
at such time as Iris Energy owns fewer than 35,000 shares of the Company's 2.5%
Series C Cumulative Convertible Preferred Stock, par value $0.001 (the "Series C
Preferred Stock") and fewer than 3,500,000 shares of the Company's $0.001 par
value common stock (the "Common Stock"), (ii) if at any time prior to December
1, 2009 the Company conducts private or public offerings that aggregate
$20,000,000 or more of the Company's common stock or securities that are
convertible into shares of the Company's common stock; or (iii) December 1,
2009. The Iris Energy Director Agreement was filed with the Commission as
Exhibit 10.1 on a current report on Form 8-K on July 31, 2007.

Website and Code of Business Conduct and Ethics

     Our website address is http://www.nfeinc.com. Our website includes a link
to access our forms filed with the Commission. Upon written request, we will
make available free of charge our annual report on Form 10-KSB, quarterly
reports on Form 10-QSB, current reports on Form 8-K, and all amendments to those
reports as soon as reasonably practicable after such material is electronically
filed with or furnished to the SEC.

     On May 17, 2007, the Board of Directors adopted a Code of Ethics that
applies to its principal executive officer, principal financial officer and
principal accounting officer. A copy of the code of ethics applicable to our
principal executive officer, principal financial officer and principal
accounting officer is attached to our Annual Report on Form 10-KSB as exhibit
14.1 filed on May 23, 2007. Additionally, our Code of Ethics is available in
print free of charge to any stockholder who requests it. Requests should be sent
by mail to our corporate secretary at our principal office at 1789 W. Littleton
Blvd., Littleton, Colorado 80120.

Involvement in Certain Legal Proceedings

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

                                       50

<PAGE>

Compliance With Section 16(a) of the Exchange Act

     Section 16(a) of the Exchange Act generally requires the Company's
directors and executive officers and persons who own more than 10% of a
registered class of the Company's equity securities ("10% owners") to file with
the SEC initial reports of ownership and reports of changes in ownership of
Common Stock and other equity securities of the Company. Directors and executive
officers and 10% owners are required by SEC regulations to furnish the Company
with copies of all Section 16(a) forms they file. To the Company's knowledge,
based solely on review of copies of such reports furnished to us and verbal
representations that no other reports were required to be filed during the
fiscal year ended February 29, 2008, all Section 16(a) filing requirements were
met except that (i) Grant Gaeth failed to timely file a Form 4 in November 2007
disclosing one transaction, (ii) Paul Laird failed to timely file several Form
4's in January 2008 disclosing twelve transactions, and (iii) Grant Gaeth failed
to timely file several Form 4s in January and February 2008 disclosing four
transactions. Mr. Gaeth and Mr. Laird each filed Form 4s disclosing these
transactions after their respective due dates.

Corporate Governance

     Committees

     The Company does not have an audit committee, compensation committee,
nominating committee, or other committee of the board that performs similar
functions. The entire board of directors of the Company, of which none of our
directors are considered "independent" as defined in Section 121 of the American
Stock Exchange listing standards, perform the roles of these committees.
Consequently the Company has not designated an audit committee financial expert.

Item 10. Executive Compensation

Compensation Discussion and Analysis

     Our executive compensation program for the named executive officers (NEOs)
is administered by the Company's Board of Directors. We do not have a
compensation committee.

Compensation Objectives

     We believe that the compensation programs for our NEOs should reflect our
performance and the value created for the Company's stockholders. In addition,
the compensation programs should support the short-term and long-term strategic
goals and values of the Company, and should reward individual contributions to
the Company's success. We believe that the structure of the compensation
programs for our executives reflects these objectives. Our compensation programs
consist of three basic components: base salary, short-term compensation and
long-term compensation.

Elements of Compensation

     The elements of our compensation program include: (1) base salary, (2)
short term compensation, and (3) long term compensation.

                                       51

<PAGE>

     Base Salary. Each of the Company's NEO are paid a base salary. Base
salaries for the NEO's are established based on the scope of their performance,
responsibilities, professional qualifications and the other elements of the
executive's compensation. The Company's NEO's base salary is subject to review
and amendment at any time by the board of directors, in its sole and absolute
discretion.

     Short-term Compensation. Short-term compensation consists primarily of cash
bonuses. The Company does not have a formal plan for the determination of
short-term compensation. The short-term components are designed to reward the
contributions of the NEOs toward the Company's annual financial, operational and
strategic goals and reward individual performance.

     Long-term Compensation. Long-term compensation is comprised of various
forms of equity compensation or participation in our royalty and working
interest plan. The long-term elements are designed to assist the Company in
long-term retention of key personnel and if granted equity compensation, to
further align the interests of our NEOs with our shareholders.

     The determination of each element of compensation to the NEOs are entirely
in the discretion of the Board. We do not currently use any specific benchmarks
or performance goals in determining the elements of and the size of awards and
compensation.

Equity Award Practices

     All equity awards are approved before or on the date of grant. The exercise
price of at-the-money stock options and the grant price of all full-value awards
is the closing price on the date of grant.

     Our equity award approval process specifies the individual receiving the
grant, the number of units or the value of the award, the exercise price or
formula for determining the exercise price and the date of grant. The Company
has no program, plan or practice to the timing of its option grants.

Summary Compensation Table

     The following table summarizes the compensation of Paul G. Laird and Les
Bates, the Company's NEOs for the fiscal years ended February 29, 2008 and
February 28, 2007.

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
Name and
Principal                                                Stock    Option         All other
Position             Fiscal Year   Salary     Bonus      Awards   Awards         Compensation   Total ($)
----------------------------------------------------------------------------------------------------------
<S>                  <C>           <C>        <C>        <C>      <C>            <C>            <C>
Paul G. Laird        2008          $158,500   $180,000   $0       $652,595 (1)   $ 8,176 (2)    $999,271
Chief                2007          $115,000   $110,000   $0       $325,000 (1)   $15,192 (3)    $565,192
Executive
Officer and
President
----------------------------------------------------------------------------------------------------------
Les Bates            2008          $150,500   $180,000   $0       $522,076 (1)   $     0        $852,576
Principal            2007          $112,500   $110,000   $0       $260,000 (1)   $     0        $482,500
Accounting
and Financial
Officer
----------------------------------------------------------------------------------------------------------
</TABLE>

                                       52

<PAGE>

(1) Awards to Messrs. Laird and Bates were made on November 10, 2006. The
aggregate number of options granted to Mr. Laird was 1,250,000 which had a SFAS
No. 123(R) value of $1,300,000 or $1.04 per share and the aggregate number of
options granted to Mr. Bates was 1,000,000 and had a SFAS No. 123(R) of
$1,040,000 or $1.04 per share. The amounts recorded in this table are based upon
the compensation cost for such grants recognized by the Company for the fiscal
years ended February 29, 2008 and February 28, 2007. The options are exercisable
at an exercise price of $1.25 per share. The fair value of the options was
estimated on the date of the grant utilizing the Black-Scholes option pricing
model with the following assumptions: expected life of the options is 10 years,
expected volatility of 81%, risk free interest rate of 4.73% and no dividend
yield. The Company accounts for employee stock options under the
"modified-prospective." Under the "modified-prospective" method, compensation
cost is recognized in the financial statements beginning with the effective
date, based on the requirements of SFAS No. 123(R) for all share-based payments
granted after that date, and based on the requirements of SFAS No. 123 for all
unvested awards granted prior to the effective date of SFAS No. 123(R).

(2) Represents accrued management fees from March 1, 2007 to December 31, 2007
paid to Natural Resource Group Gathering LLC, the former general partner of SDG
("NRGG") prior to the sale of the General Partnership Interest to the Company.
Paul G. Laird is a Manager of NRGG.

(3) Represents accrued management fees in the amount of $15,192 to be paid to
Natural Resource Group Gathering LLC, the general partner of SDG ("NRGG"). Paul
G. Laird is a Manager of NRGG.

Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based
Awards Table

Individual Arrangements and Employment Agreements

     The following is a description of the individual arrangements that we have
made with Messrs. Laird and Bates with respect to their compensation. Messrs.
Laird and Bates were each paid during the fiscal year ended February 29, 2008 in
accordance with his employment agreements with us, which are described below. In
addition, Messrs. Laird and Bates also have a Change-in-Control payment that is
described in the "Potential Payments Upon Termination" below.

Paul G. Laird - Chief Executive Officer and President

     Paul G. Laird has been the President, Chief Executive Officer and a
director of the Company since April 2003. Effective August 1, 2006, Mr. Laird's
employment agreement was modified to provide that Mr. Laird would receive base
salary compensation in the amount of $155,000 per annum. Mr. Laird's base salary
compensation is adjusted annually at the rate of inflation as measured by the
federal Consumer Price Index, or $6,000, whichever is greater. The compensation
is subject to annual escalations based on cost-of-living and merit increases
approved by the Board of Directors. Mr. Laird is also eligible for bonuses, to
be determined by the Board of Directors in its sole discretion. Effective
October 31, 2006, Mr. Laird's employment agreement was modified to expire
October 31, 2009; however, it is automatically renewable on an annual basis for
additional one-year increments.

                                       53

<PAGE>

     During the fiscal year ended February 29, 2008, Mr. Laird received a Base
Salary of $158,500 and was granted an aggregate of $180,000 in cash bonuses. On
April 9, 2007, Mr. Laird was granted a $80,000 cash bonus and on December 13,
2007 was granted an additional $100,000 cash bonus. The short-term components of
compensation for the Company's NEOs are designed to reward the contributions of
the NEOs toward the Company's annual financial, operational and strategic goals
and reward individual performance. The bonus amounts were determined arbitrarily
by the board of directors of the Company based upon their analysis of Mr.
Laird's performance during the fiscal year ended February 29, 2008. During the
fiscal year ended February 29, 2008, the board of directors considered the
significance of Mr. Laird's contributions in obtaining the amendment to the
Focus Ranch Unit agreement and the drilling program conducted between June 2007
to December 2007 in determining that Mr. Laird should be awarded a greater bonus
amount than that awarded during the fiscal year ended February 28, 2007. The
board of directors does not currently have a formula in place to determine the
amount of bonus compensation to be paid to Mr. Laird.

     In his position as President and Chief Executive Officer, Mr. Laird
exercises detailed supervision over the operations of the Company and is
ultimately responsible for the operations of the Company, including but not
limited to land acquisitions and exploration and development of the Company's
properties. Mr. Laird further performs all duties incident to the title of Chief
Executive Officer and President and such other duties as from time to time may
be assigned to him by the Board of Directors. Mr. Bates' is responsible for all
duties incident to the title of Principal Accounting and Financial Officer,
Secretary and Treasurer. The board of directors has considered these factors and
Mr. Laird's increased responsibilities as the President and Chief Executive
Officer of the Company in compensating Mr. Laird as compared to Mr. Bates.
During the fiscal year ended February 29, 2008, Mr. Laird was compensated $8,500
more in Base Salary compared to Mr. Bates.

Les Bates - Principal Accounting and Financial Officer and Secretary and
Treasurer

     Les Bates has been the Chief Financial Officer, Principal Accounting and
Financial Officer, Secretary, Treasurer and a director of the Company since
April 2003. Effective August 1, 2006, Mr. Bates' employment agreement was
modified to provided that Mr. Bates would receive base salary compensation in
the amount of $150,000 per annum. Mr. Bates' base salary compensation is
adjusted annually at the rate of inflation as measured by the federal Consumer
Price Index, or $6,000, whichever is greater. The compensation is subject to
annual escalations based on cost-of-living and merit increases approved by the
Board. Mr. Bates is also eligible for bonuses, to be determined by the Board, in
its sole discretion. Effective October 31, 2006, Mr. Bates' employment agreement
was modified to expire October 31, 2009; however, it is automatically renewable
on an annual basis for additional one-year increments.

     During the fiscal year ended February 29, 2008, Mr. Bates received a Base
Salary of $150,500 and was granted an aggregate of $180,000 in cash bonuses. On
April 9, 2007, Mr. Bates was granted a $80,000 cash bonus and on December 13,
2007 was granted an additional $100,000 cash bonus. The short-term components of
compensation for the Company's NEOs are designed to reward the contributions of
the NEOs toward the Company's annual financial, operational and strategic goals
and reward individual performance. The bonus amounts were determined arbitrarily
by the board of directors of the Company based upon their analysis of Mr. Bates'
performance during the fiscal year ended February 29, 2008. During the fiscal
year ended February 29, 2008, the board of directors considered the significance
of Mr. Bates' contributions in obtaining the amendment to the Focus Ranch Unit
agreement and the drilling program conducted between June 2007 to December 2007
in determining that Mr. Bates should be awarded a greater bonus amount than that
awarded during the fiscal year ended February 28, 2007. The board of directors
does not currently have a formula in place to determine the amount of bonus
compensation to be paid to Mr. Bates.

                                       54

<PAGE>

     Messrs. Laird and Bates are also officers, directors and principal
shareholders of Natural Resources Group, Inc., a Colorado corporation ("NRGI").
NRGI is an inactive company that was previously engaged in the business of the
acquisition and sale of oil and gas prospects. Due to the inactive status of
NRGI, Messrs. Laird and Bates do not believe that there is any conflict of
interest in connection with their positions with NRGI. The Company's Board of
Directors intend to adopt board resolutions that will set forth the policies and
procedures for dealing with potential conflicts of interest between the Company
and its officers and directors. Messrs Laird and Bates each dedicate
approximately 40 to 50 hours per week for Company business.

Outstanding Equity Awards at Fiscal Year End

     The following table sets forth information concerning options awards to
Messrs. Laird and Bates at the fiscal year ended February 29, 2008. The Company
did not grant any stock options or stock awards during the fiscal year ended
February 29, 2008.

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
Option Awards
----------------------------------------------------------------------------------------------------
                                      Number of      Number of
                                      Securities     Securities
                                      Underlying     Underlying
                                      Unexercised    Unexercised      Option      Option
                                      Options (#)    Options (#)      Exercise    Expiration
Name             Grant Date           Exercisable    Unexercisable    Price       Date
----------------------------------------------------------------------------------------------------
<S>              <C>                  <C>            <C>              <C>         <C>
Paul G. Laird    May 13, 2005          75,000              0          $1.15       May 13, 2015
                 -----------------------------------------------------------------------------------
                 November 10, 2006    937,500        312,500 (1)      $1.25       November 10, 2016
                 -----------------------------------------------------------------------------------
                 June 1, 2004          25,000              0          $1.00       June 1, 2014
                 -----------------------------------------------------------------------------------
                 October 25, 2004     100,000              0          $0.75       October 25, 2014
----------------------------------------------------------------------------------------------------
Les Bates        May 13, 2005          75,000              0          $1.15       May 13, 2015
----------------------------------------------------------------------------------------------------
                 November 10, 2006    750,000        250,000 (2)      $1.25       November 10, 2016
                 -----------------------------------------------------------------------------------
                 June 1, 2004          25,000              0          $1.00       June 1, 2014
                 -----------------------------------------------------------------------------------
                 October 25, 2004     100,000              0          $0.75       October 25, 2014
----------------------------------------------------------------------------------------------------
</TABLE>

(1) On November 10, 2006, the Company granted Paul G. Laird 1,250,000 options to
acquire shares of the Company's Common Stock which are exercisable at a price of
$1.25. The Stock Options vest at a rate of 156,250 shares each fiscal quarter
ending November 30, February 28, May 31 and August 31 through November 30, 2008.

                                       55

<PAGE>

(2) On November 10, 2006, the Company granted Les Bates 1,000,000 options to
acquire shares of the Company's Common Stock which are exercisable at a price of
$1.25. The Stock Options vest at a rate of 125,000 shares each fiscal quarter
ending November 30, February 28, May 31 and August 31 through November 30, 2008.

     On May 19, 2005, the Company granted 100,000 shares of its restricted stock
to Messrs Laird and Bates, which vested immediately on that date as compensation
for services. The Company's Common Stock closed at $1.17 on that day.

Option Exercises During Fiscal Year

     There were no options exercised by the NEO's during the year ended February
29, 2008.

Potential Payments Upon Termination

Cash Compensation.

     Messrs. Laird and Bates' employment agreements contain provisions under
which the Company will be obligated to pay Mr. Laird and Mr. Bates certain
compensation upon their termination. The following tables set forth the details
of the estimated payments and benefits that would be provided to Mr. Laird and
Mr. Bates in the event that their employment with us is terminated for any
reason, including a termination for cause, resignation or retirement, a
constructive termination, a without cause termination, death, long term
disability, and termination in connection with a change in control.

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
                                                                                             Termination
                                                                                             in
                                                                                             Connection
                         Termination                                                         with a
                         by Mutual     Illness or   With    Without           Resignation/   Change
Paul G. Laird            Agreement     incapacity   cause   cause             retirement     in Control
---------------------------------------------------------------------------------------------------------
<S>                      <C>           <C>          <C>     <C>               <C>            <C>
Cash Compensation        $0            $0 (1)       $0      $277,333 (2)(3)   $0 (4)         $794,603
---------------------------------------------------------------------------------------------------------
Unvested Stock Options   $0            $0           $0      $      0 (5)      $0             $      0
---------------------------------------------------------------------------------------------------------
</TABLE>

(1) Reflects amount paid to Mr. Laird after a determination by the board that
Mr. Laird is ill or incapacitated and written notice is delivered to Mr. Laird.
Does include the amounts due to Mr. Laird during a two month period prior to a
determination by the board that Mr. Laird is ill or incapacitated.

(2) Upon termination without cause, the Company shall (i) make a lump sum cash
payment to Mr. Laird within 10 days after termination is effective of an amount
equal to (1) Mr. Laird's base salary accrued to the date of termination; (2)
unreimbursed expenses accrued to the date of termination; (3) an amount equal to
the greater of (a) Mr. Laird's annual base salary (i.e., 12 months of base
salary), or (b) amounts remaining due to Mr. Laird as base salary (assuming that
payments under his employment agreement were made until expiration of the
initial term or if applicable the renewal term), and (4) any other amounts due
to Mr. Laird under his employment agreement. This amount represents amounts
remaining due to Mr. Laird as base salary for the remaining term of his
employment agreement.

(3) For purposes of this table, we have assumed Mr. Laird's termination on
February 29, 2008.

                                       56

<PAGE>

(4) Mr. Laird may terminate his employment by giving the Company 60 days prior
written notice, which termination shall be effective on the 60th day following
such notice. Reflects amount to be paid to Mr. Laird following 60 day notice
provision.

(5) All unvested stock options will immediately vest upon a termination without
cause. Mr. Laird's unvested stock options granted on November 10, 2006 are
exercisable at a price of $1.25 per share, which exceeded the closing price of
the Company's common stock on February 29, 2008, which was $1.15 per share,
accordingly no additional compensation would result from the immediate vesting
of Mr. Laird's 312,500 unvested options.

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
                                                                                             Termination
                                                                                             in
                                                                                             Connection
                         Termination                                                         with a
                         by Mutual     Illness or   With    Without           Resignation/   Change
Les Bates                Agreement     incapacity   cause   cause             retirement     in Control
---------------------------------------------------------------------------------------------------------
<S>                      <C>           <C>          <C>     <C>               <C>            <C>
Cash Compensation        $0            $0 (1)       $0      $269,000 (2)(3)   $0 (4)         $771,320
---------------------------------------------------------------------------------------------------------
Unvested Stock Options   $0            $0           $0      $      0 (5)      $0             $      0
---------------------------------------------------------------------------------------------------------
</TABLE>

(1) Reflects amount paid to Mr. Bates after a determination by the board that
Mr. Bates is ill or incapacitated and written notice is delivered to Mr. Bates.
Does include the amounts due to Mr. Bates during a two month period prior to a
determination by the board that Mr. Bates is ill or incapacitated.

(2) Upon termination without cause, the Company shall (i) make a lump sum cash
payment to Mr. Bates within 10 days after termination is effective of an amount
equal to (1) Mr. Bates' base salary accrued to the date of termination; (2)
unreimbursed expenses accrued to the date of termination; (3) an amount equal to
the greater of (a) Mr. Bates' annual base salary (i.e., 12 months of base
salary), or (b) amounts remaining due to Mr. Bates as base salary (assuming that
payments under his employment agreement were made until expiration of the
initial term or if applicable the renewal term), and (4) any other amounts due
to Mr. Bates under his employment agreement. This amount represents amounts
remaining due to Mr. Bates as base salary for the remaining term of his
employment agreement.

(3) For purposes of this table, we have assumed Mr. Bates' termination on
February 29, 2008.

(4) Mr. Bates may terminate his employment by giving the Company 60 days prior
written notice, which termination shall be effective on the 60th day following
such notice. Reflects amount to be paid to Mr. Bates following 60 day notice
provision.

(5) All unvested stock options will immediately vest upon a termination without
cause. Mr. Bates' unvested stock options granted on November 10, 2006 are
exercisable at a price of $1.25 per share, which exceeded the closing price of
the Company's common stock on February 29, 2008, which was $1.15 per share,
accordingly no additional compensation would result from the immediate vesting
of Mr. Bates' 250,000 unvested options.

     If, at any time during the term of Mr. Laird and/or Mr. Bates' employment
agreements there is a change of control of the Company and Mr. Laird and/or Mr.
Bates' employment is terminated by the Company, upon the mutual agreement of the
parties, for illness or incapacity, without cause, or by resignation or
retirement (each as more specifically set forth in the respective employment
agreements) within the greater of one (1) year following the change of control
or the remaining term of the employment agreements (the "Change of Control
Date"), the Company shall pay to Mr. Laird and/or Mr. Bates (a) the balance of
all amounts due from the Change of Control Date until the end of the term of the
employment agreement plus (b) an amount equal to 2.99 times the sum of (i) his
respective annual Base Salary (as defined in the employment agreements) as in
effect on the date of termination plus (ii) the amount of bonus paid in the
prior year to Mr. Laird and/or Mr. Bates', and (c) any other amounts due to Mr.
Laird and/or Mr. Bates' under any other provision of their employment
agreements. This amount shall be paid to Mr. Laird and/or Mr. Bates' in one lump
sum as soon as practicable, but in no event later than one hundred twenty (120)
days, after the date that employment is terminated. In addition to the lump sum
payment referenced in the preceding sentence, the Company shall pay to Mr. Laird
and/or Mr. Bates' any accrued and unpaid bonuses at the same time as the lump
sum payment is made.

                                       57

<PAGE>

     A change of control is defined in the employment agreements to mean the
occurrence of one or more of the following three events:

     (1) Any person becomes a beneficial owner (as such term is defined in Rule
13d-3 promulgated under the Securities Exchange Act of 1934, as amended)
directly or indirectly of securities representing 33% or more of the total
number of votes that may be cast for the election of directors of the Company;

     (2) Within two years after a merger, consolidation, liquidation or sale of
assets involving the Company, or a contested election of a Company director, or
any combination of the foregoing, the individuals who were directors of the
Company immediately prior thereto shall cease to constitute a majority of the
Board of Directors; or

     (3) Within two years after a tender offer or exchange offer for voting
securities of the Company, the individuals who were directors of the Company
immediately prior thereto shall cease to constitute a majority of the Board of
Directors.

     Further, if any payment or distribution by the Company to Mr. Laird and/or
Mr. Bates is determined to be subject to the excise tax imposed by Section 4999
of the Internal Revenue Code, Mr. Laird and/or Mr. Bates shall be entitled to
receive a payment on an after-tax basis equal to the excise tax imposed.

Effects of Termination Events or Change in Control on Unvested Equity Awards

     All unvested stock option awards granted to Messrs. Laird and Bates provide
that upon a change of control, the unvested stock options shall immediately vest
and be exercisable immediately.

Compensation of Non-Management Directors

     The following table provides certain information concerning the
compensation of the Company's non-management director, Grant Gaeth for the
fiscal year ended February 29, 2008.

       -------------------------------------------------------------------------
       Director Compensation
       -------------------------------------------------------------------------
                     Fees
                     Earned or
                     Paid in     Stock    Option         All other
       Name          Cash        Awards   Awards         Compensation   Total
       -------------------------------------------------------------------------
       Grant Gaeth   $0          $0       $261,038(1)    $85,000(2)     $346,038
       -------------------------------------------------------------------------

                                       58

<PAGE>

     (1)  On November 10, 2006, the Company granted Grant Gaeth 500,000 options
          to acquire shares of the Company's Common Stock which are exercisable
          at a price of $1.25. The stock options vest at a rate of 62,500 shares
          each fiscal quarter ending November 30, February 28, May 31 and August
          31 through November 30, 2008. These stock options have a strike price
          of $1.25 per share and a SFAS No. 123(R) value of $1.04 per share. As
          of February 29, 2008, 375,000 of these options had vested and were
          exercisable and 125,000 of these options remained unvested. The
          amounts in this column reflect the compensation cost recognized by the
          Company for the fiscal year ended February 29, 2008.

     (2)  Reflects consulting fees paid to GeoEx, Ltd, an entity controlled by
          Grant Gaeth, that provides geological consulting services.

Cash Compensation.

     We have not paid any cash compensation to our directors for their service
on our Board of Directors. However, we intend to pay $100 per meeting to our
directors for the foreseeable future.

Liability Insurance.

     The Company has provided liability insurance for its directors and officers
since April 13, 2005. American International Specialty Lines Insurance Company
is the underwriter of the current coverage, which extends until April 13, 2009.
The annual cost of this coverage is approximately $25,000.

Stock Option and Stock Grant Plan

     On June 6, 2003, we adopted the New Frontier Energy, Inc. Stock Option and
Stock Grant Plan (the "2003 Plan"). The 2003 Plan allows for the issuance of
incentive (qualified) options, non-qualified options and the grant of stock or
other equity incentives to our employees, consultants, directors and others
providing service of special significance to our company. The 2003 Plan is
administered by a committee to be appointed by our Board of Directors, or in the
absence of that appointment, by the Board itself. The 2003 Plan provides for the
issuance of up to 625,000 shares or options.

     Incentive stock options may be granted only to statutory employees.
Non-qualified options and stock grants may be made to employees, consultants,
directors and other individuals or entities determined by the committee.
Incentive and non-qualified options may be granted to the same individual, in
the discretion of the committee. The terms of the options or the grants,
including the number of shares covered by the option or award, the exercise
price, vesting schedule, and term, are determined in the sole discretion of the
committee, except that incentive options must satisfy the requirements of the
Internal Revenue Code applicable to incentive options. No option may be
exercised more than ten years from the date of grant. The 2003 Plan expires in
2013.

     As of May 13, 2008, we had granted 584,333 options to acquire shares of our
common stock pursuant to the 2003 Plan with a weighted average exercise price of
$0.89 per share. As of May 13, 2008, there were no options to acquire shares of
our common stock available for grant under the 2003 Plan.

                                       59

<PAGE>

2007 Omnibus Long Term Incentive Plan

     On June 11, 2007, the shareholders of the Company approved and ratified the
Company's 2007 Omnibus Long Term Incentive Plan (the "2007 Plan"), which
authorizes the issuance of up to 10,000,000 shares of the Company's Common Stock
that may be issued under the 2007 Plan.

     The purposes of the 2007 Plan are to provide those who are selected for
participation in the 2007 Plan with added incentives to continue in the
long-term service of the Company and to create in such persons a more direct
interest in the future success of the operations of the Company by providing
such persons an opportunity to acquire or increase a direct proprietary interest
in the operations and future success of the Company. The 2007 Plan is also
designed to provide a financial incentive that will help the Company attract,
retain and motivate the most qualified employees, consultants and advisors. The
2007 Plan is administered by a committee of the members of the board of
directors, or in the absence of appointment of a committee, by the entire Board
of Directors.

     Pursuant to the terms of the 2007 Plan, the committee may grant incentive
stock options ("Incentive Options") within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), non-qualified stock
options ("Non-Qualified Options"), restricted stock awards, stock grants and
stock appreciation rights (collectively the "Awards") to Eligible Employees and
Eligible Consultants, each as defined in the 2007 Plan. Eligible Consultants are
those consultants and advisors to the Company who are determined, by the
committee, to be individuals whose services are important to the Company and who
are eligible to receive Awards, other than Incentive Options, under the Plan.
The number of Eligible Consultants will vary from time to time.

     Stock options granted under the 2007 Plan may be either Incentive Options
or Non-Qualified Options. The exercise price of a stock option granted under the
2007 Plan will be determined by the committee at the time the option is granted,
the exercise price may or may not be the fair market value of our Common Stock.
Stock options are exercisable at the times and upon the conditions that the
committee may determine, as reflected in the applicable option agreement. The
committee will also determine the maximum duration of the period in which the
option may be exercised, which may not exceed ten years from the date of grant.
All of the shares available for issuance under the Plan may be made subject to
Incentive Options.

     The option exercise price must be paid in full at the time of exercise, and
is payable (in the discretion of the committee) by any one of the following
methods or a combination thereof:

     o    in cash or cash equivalents,

     o    the surrender of previously acquired shares of our Common Stock,

     o    authorization for us to withhold a number of shares otherwise payable
          pursuant to the exercise of an option, or

     o    to the extent permitted by applicable law, through any other procedure
          acceptable to the committee.

                                       60

<PAGE>

     The 2007 Plan provides for awards of our Common Stock that are subject to
restrictions on transferability imposed under the 2007 Plan and other
restrictions that may be determined by the committee in its discretion. Such
restrictions will lapse on terms established by the committee. Except as may be
otherwise provided under the award agreement relating to the restricted stock, a
participant granted restricted stock will have all the rights of a stockholder.

     The 2007 Plan provides that the committee, in its discretion, may award
Stock Appreciation Rights ("SARs"), either in tandem with stock options or
freestanding and unrelated to options. From time to time during the duration of
the 2007 Plan, the committee may, in its sole discretion, adopt one or more
incentive compensation arrangements for Participants pursuant to which the
Participants may acquire shares of Stock, whether by purchase, outright grant,
or otherwise.

     The maximum number of shares of Common Stock that are authorized for
issuance under the 2007 Plan is 10,000,000.

     The Board of Directors may modify or terminate the 2007 Plan or any portion
of the 2007 Plan at any time (subject to participant consent where such change
would adversely affect an award previously granted to the participant), except
that an amendment that requires stockholder approval in order for the 2007 Plan
to continue to comply with any law, regulation or stock exchange requirement
will not be effective unless approved by the requisite vote of our stockholders.
In addition, the 2007 Plan or any outstanding option may not be amended to
effectively decrease the exercise price of any outstanding option unless first
approved by the stockholders. No awards may be granted under the 2007 Plan after
the day prior to the tenth anniversary of its adoption date, but awards granted
prior to that time can continue after such time in accordance with their terms.

     As of May 13, 2008, no awards have been issued or granted under the 2007
Plan.

Securities Authorized For Issuance Under Compensation Plans

     The table set forth below presents the securities authorized for issuance
with respect to the 2003 Plan and the 2007 Plan under which equity securities
are authorized for issuance as of February 29, 2008.

<TABLE>
<CAPTION>
      -------------------------------------------------------------------------------------
                                          Equity Compensation Plan Information
      -------------------------------------------------------------------------------------
                                                                     Number of securities
                             Number of                               remaining available
                             securities to be                        for future issuance
                             issued upon         Weighted-average    under equity
                             exercise of         exercise price of   compensation plans
                             outstanding         outstanding         (excluding securities
                             options, warrants   options, warrants   reflected in the 1st
      Plan Category          and rights          and rights          column)
      -------------------------------------------------------------------------------------
<S>                          <C>                 <C>                 <C>
      Equity Compensation
      Plans approved by
      security holders         584,333                $0.89                    10,000,000
      -------------------------------------------------------------------------------------
      Equity Compensation
      Plans not approved
      by security holders    3,950,000 (1)            $1.25                             0
      -------------------------------------------------------------------------------------
      Total                  4,534,333                   --                    10,000,000
      -------------------------------------------------------------------------------------
</TABLE>

                                       61

<PAGE>

(1) On November 10, 2006, the Company granted certain officers, directors,
employees and agents of the Company an aggregate of 3,950,000 options (of which
2,962,500 have vested) to acquire shares of the Company's Common Stock which are
exercisable at a price of $1.25. These stock options vest at a rate of 12.5%
each fiscal quarter ending November 30, February 28, May 31 and August 31
through November 30, 2008 and expire on November 30, 2016. These options are
non-qualified options and were not granted pursuant to any stock option plan.
For additional details on options granted to the Company's officers and
directors, see "Item 10. Executive Compensation" and "Recent Sales of
Unregistered Securities."

Royalty and Working Interest Plan

     On May 17, 2007, the Board of Directors adopted the Company's Royalty and
Working Interest Plan (the "Royalty Plan") effective as of October 31, 2006.
Pursuant to the Royalty Plan, a committee consisting of members of the board of
directors shall administer the Royalty Plan and may select an overriding royalty
or similar interest of an exploratory or development property or property for
distribution to the participants of the Royalty Plan. The selection of
properties is to be determined by the Board of Directors or a committee thereof,
and it will be based upon all relevant factors such as sound corporate
management and existing royalty burdens on the properties. The participants in
the plan and the total overriding royalty or similar interest set aside for
distribution to the participants in a property shall be determined by the
committee of the Royalty Plan.

     On May 12, 2008, the Board of Directors granted an aggregate of 2% in
overriding royalty interests in the eight wells drilled on the Slater Dome Field
in the fiscal year ended February 29, 2008, including 0.50% to Buffalo
Resources, LLC, an affiliate of Paul G. Laird and 0.50% to Wolverine Resources,
LLC, an affiliate of Les Bates and 0.25% to Geo, Ex., Ltd., an affiliate of
Grant Gaeth.

     As of May 13, 2008, no royalty payments have been made to any of the
individuals or entities granted overriding royalty interests in the eight wells
drilled on the Slater Dome Field.

                                       62

<PAGE>

Item 11: Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters.

     The following table sets forth, as of May 13, 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 and
by each of our current directors and executive officers. Each person has sole
voting and investment power with respect to the shares of Common Stock, except
as otherwise indicated. Beneficial ownership consists of a direct interest in
the shares of Common Stock, except as otherwise indicated.

                [REMAINDER OF THIS PAGE LEFT BLANK INTENTIONALLY]

                                       63

<PAGE>

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
                                                                           Percent of
Name and Address of                                                        Beneficial
Beneficial Owner                          Amount of Beneficial Ownership   Ownership
--------------------------------------------------------------------------------------
<S>                                       <C>                              <C>
Paul G. Laird (1)                                   1,439,301                    11.1%
1789 W. Littleton Blvd.
Littleton, Colorado 80120

--------------------------------------------------------------------------------------
Les Bates (2)                                       1,216,620                     9.5%
1789 W. Littleton Blvd.
Littleton, Colorado 80120

--------------------------------------------------------------------------------------
Grant I. Gaeth (3)                                    574,001                     4.7%
1789 W. Littleton Blvd.
Littleton, Colorado 80120

--------------------------------------------------------------------------------------
John D. McKey, Jr. (4)                                993,307                     8.3%
7737 S.E. Loblolly Bay Dr.
Hobe Sound, FL 33455

--------------------------------------------------------------------------------------
Candace McKey (5)                                     993,307                     8.3%
7737 S.E. Loblolly Bay Dr.
Hobe Sound, FL 33455

--------------------------------------------------------------------------------------
Echo's Voice LLC (6)                                  915,072                     7.7%
1535 Falmouth Ave.
New Hyde Park, NY 16040

--------------------------------------------------------------------------------------
Apollo Trust (7)                                    1,395,359                    11.5%
1535 Falmouth Ave.
New Hyde Park, NY 16040

--------------------------------------------------------------------------------------
Aviel Faliks (8)                                      981,302                     8.2%
24 Rozmus Ct.
Allendale, NJ 07401

--------------------------------------------------------------------------------------
Robert Hill (9)                                       690,485                     5.9%
700 High Street
Denver, Colorado 80218

--------------------------------------------------------------------------------------
Helen De Bove (10)                                  2,310,431                    21.5%
1535 Falmouth Ave.
New Hyde Park, NY  16040

--------------------------------------------------------------------------------------
Iris Energy Holding Corp. (11)                      1,300,000                    9.99%
L/2 Maxkar Bldg. PO Box 1225
Apia, Samoa

--------------------------------------------------------------------------------------
Vision Opportunity Master Fund, LP (12)             1,241,724                    9.99%
20 West 55th Street 5th Floor
New York, NY 10019

--------------------------------------------------------------------------------------
Roger May (13)                                        758,500                     6.2%
12970 West 20th Ave., Unit D
Golden, Colorado 80403

--------------------------------------------------------------------------------------
Luke Fichthorn                                        676,724                     5.8%
John Fichthorn
155 East 53rd Street
29th Floor
New York, NY 10022 (14)

--------------------------------------------------------------------------------------
Officers & Directors as a Group                     2,813,051                   22.15%
--------------------------------------------------------------------------------------
</TABLE>

                                       64

<PAGE>

     (1)  Includes (i) 126,000 shares of Common Stock, (ii) options to acquire
          25,000 shares of Common Stock from the Company at a price of $1.00,
          expiring in 2013, (iii) options to acquire 100,000 shares of Common
          Stock from the Company at a price of $0.75, expiring in 2014, (iv)
          options to acquire 75,000 shares of Common Stock from the Company at a
          price of $1.15, expiring in 2015, that were granted on May 13, 2005,
          (v) options to acquire 1,093,750 shares of Common Stock from the
          Company at a price of $1.25, which expire on November 10, 2016, and
          (vi) 19,551 shares owned by Natural Resources Group, Inc., of which
          Mr. Laird is an officer, director and principal shareholder.

     (2)  Includes (i) 122,069 shares of Common Stock, (ii) options to acquire
          25,000 shares of Common Stock from the Company at a price of $1.00,
          expiring in 2013, (iii) options to acquire 100,000 shares of Common
          Stock from the Company at a price of $0.75, expiring in 2014, (iv)
          options to acquire 75,000 shares of Common Stock from the Company at a
          price of $1.15, expiring in 2015 that were granted on May 13, 2005,
          (v) options to acquire 875,000 shares of Common Stock from the Company
          at a price of $1.25, which expire on November 10, 2016, and (vi)
          19,551 shares owned by Natural Resources Group, Inc., of which Mr.
          Bates is an officer.

     (3)  Includes (i) 30,667 shares of Common Stock owned directly by Mr. Gaeth
          and 21,000 shares owned by GeoEx, Ltd., an entity in which Mr. Gaeth
          is an affiliate, (ii) options to acquire 59,333 shares of Common Stock
          from the Company at a price of $0.75, expiring in 2014, (iii) options
          to acquire 437,500 shares of Common Stock from the Company at a price
          of $1.25, which expire on November 10, 2016, and (iv) 19,551 shares
          owned by Natural Resources Group, Inc., of which Mr. Gaeth is an
          officer.

     (4)  Includes (i) 439,807 shares owned directly by Mr. McKey and (ii)
          100,000 warrants to acquire shares of our Common Stock at a price of
          $2.00 per share. Also includes 353,500 shares owned directly by Mr.
          McKey's wife, Candace McKey, and 100,000 warrants to acquire shares of
          our Common Stock held by Candace McKey at a price of $2.00 per share,
          of which he disclaims beneficial ownership.

     (5)  Includes (i) 353,500 shares owned directly by Ms. McKey and (ii)
          100,000 warrants to acquire shares of our Common Stock at a price of
          $2.00 per share. Also includes 439,807 shares owned by Ms. McKey's
          husband, John D. McKey, Jr., and 100,000 warrants to acquire shares of
          our Common Stock held by Mr. McKey of which she disclaims beneficial
          ownership.

     (6)  Includes (i) 726,450 shares of Common Stock held by Echo's Voice, LLC
          and (ii) 188,622 shares of Common Stock to be offered upon the
          exercise of warrants issued to the holders of our Debentures. Helen
          Del Bove, manager of Echo's Voice LLC, exercises dispositive and
          voting power with respect to the shares of Common Stock owned by
          Echo's Voice LLC.

     (7)  Includes (i) 1,018,117 shares of Common Stock held by Apollo Trust and
          (ii) 377,242 shares of Common Stock to be offered upon the exercise of
          warrants issued to the holders of our Debentures, and (iii) Helen Del
          Bove, Trustee of the Apollo Trust, exercises dispositive and voting
          power with respect to the shares of Common Stock owned by the Apollo
          Trust.

     (8)  Includes (i) 698,370 shares of Common Stock held by Mr. Faliks and
          (ii) 282,932 shares of Common Stock to be offered upon the exercise of
          warrants issued to the holders of our Debentures.

                                       65

<PAGE>

     (9)  Includes: (i) 364,985 shares of Common Stock held directly by Robert
          and Laura Hill, (ii) 200,000 held by Mr. Hill's family foundation over
          which Mr. and Ms. Hill have voting and dispositive power, (iii)
          100,000 shares held in the Robert Hill and Laura Hill Revocable Trust
          and (iv) 25,500 shares of Common Stock held by Mr. and Ms. Hill as
          custodians.

     (10) Includes (i) 726,450 shares of Common Stock held by Echo's Voice, LLC,
          (ii) 188,622 shares of Common Stock to be offered upon the exercise of
          warrants issued to the holders of our Debentures held by Echo's Voice,
          LLC, (iii) 1,018,117 shares of Common Stock held by Apollo Trust and
          (iv) 377,242 shares of Common Stock to be offered upon the exercise of
          warrants issued to the holders of our Debentures held by the Apollo
          Trust. Helen Del Bove, as manager of Echo's Voice LLC and Trustee of
          the Apollo Trust, exercises dispositive and voting power over these
          shares of Common Stock.

     (11) Includes 1,300,000 shares of Common Stock to be offered upon
          conversion of the shares of Series C Preferred Stock. Mr. Michel
          Escher, the owner of Private Structured Investment Company Ltd., the
          director of Iris Energy and Mr. Sean Browne exercises dispositive and
          voting power with respect to the shares of Common Stock owned by Iris
          Energy.

     (12) Includes 516,724 shares of common stock and 725,000 shares of Common
          Stock to be offered upon conversion of the shares of Series C
          Preferred Stock. Adam Benewitz exercises dispositive and voting power
          with respect to the shares of Common Stock owned by the Vision
          Opportunity Master Fund, LP.

     (13) Represents (i) 258,500 shares of Common Stock owned by Mr. May, and
          (ii) 500,000 options to acquire shares of Common Stock from the
          Company at a price of $2.00 per share that expire on December 28,
          2009.

     (14) Luke Fichthorn and John Fichthorn are the beneficial owners of an
          aggregate of 676,724 shares of Common Stock held by Dialectic
          Antithesis Offshore, Ltd. and Dialectic Antithesis Partners LP.
          Neither Dialectic Antithesis Offshore, Ltd. nor Dialectic Antithesis
          Partners LP own 5% or greater of the Company's common stock.

Changes In Control

     We know of no arrangements, including the pledge of our securities by any
person, that might result in a change in control, other than the Iris Energy
Directors Agreement, the conversion of our outstanding Series B 12% Cumulative
Convertible Preferred Stock, 2.5% Series C Cumulative Convertible Preferred
Stock or exercise of outstanding warrants in certain circumstances.

Item 12. Certain Relationships and Related Party Transactions

     Raymond McElhaney and Bill M. Conrad, directors of the Company who resigned
on February 25, 2005 are considered "promoters," and took initiative in
organizing the business of our Company.

     During the fiscal year ended February 28, 2005, the Company issued 60,000
shares of its Common Stock to Messrs. McElhaney and Conrad, in consideration for
cancellation of accrued compensation in the amount of $45,000. Such compensation
was accrued in the fiscal year ended February 28, 2003, when the directors were
also the Company's operating officers. Market value of the Company's Common
Stock on the date of issue was $0.47 per share. The difference between the
market value of the stock and the accrued compensation was credited to
additional paid-in capital.

                                       66

<PAGE>

     We lease approximately 1,600 square feet of office space located at 1789 W.
Littleton Blvd., Littleton, Colorado 80120, for approximately $2,667 per month.
The lease expires on December 31, 2008. The lease is with Spotswood Properties,
LLC, ("Spotswood") a Colorado limited liability company and an affiliate of Paul
G. Laird, President and Chief Executive Officer and a director of the Company.
The Lease is on terms that the Board of Directors, which includes Mr. Laird,
believe are no less favorable than those that may be obtained from third
parties. The aggregate amount of payments due to Spotswood from February 29,
2008 during the remaining term of the lease is $26,674. Spotswood was paid
$32,000 and $32,004 during the fiscal years ended February 29, 2008 and February
28, 2007, respectively.

     The Company paid GeoEx, Ltd., a corporation in which Grant Gaeth, a
director of the Company, is an officer, directors and principal shareholder for
geologic consulting $85,000 and $77,250 during the fiscal years ended February
29, 2008 and February 28, 2007, respectively.

     During the year ended February 29, 2008 and February 28, 2007, SDG accrued
management fees in the amount of $8,176 and $15,192, respectively to NRGG, an
entity owned 50% by Paul G. Laird, President and Chief Executive Officer of the
Company.

     Paul Laird, President and Chief Executive Officer of the Company, is an
officer, director and principal shareholder of NRG and a manager of NRGG, the
former General Partner of SDG, the partnership organized for the construction of
the Gas Gathering Pipeline from the Company's Slater Dome Field, in which the
Company owns 82.76% of the limited partnership interests in SDG and the General
Partnership Interest.

     On May 10, 2006, the Company increased its investment in SDG by acquiring
additional Limited Partnership Interests from NRGG, resulting in an additional
20.51% of SDG cash distributions until the limited partners in SDG have received
cash distributions equal to their initial capital contributions and 17.10% of
cash distributions thereafter, in exchange for a subordinated convertible
debenture in the amount of $608,194 bearing 2.5% interest and due January 1,
2008. Paul Laird, our President and Chief Executive Officer is a manager of
NRGG, the general partner of SDG. In March 2007, the Company repaid $300,000 of
the convertible debenture issued to NRGG and the balance was repaid in December
2007.

     Effective October 30, 2006, the Company issued a convertible promissory
note in the principal amount of $600,000 (the "Note") to Aviel Faliks. On
January 16, 2007, Mr. Faliks converted the principal amount of the Note and all
accrued and unpaid interest in the aggregate amount of $612,500 into Units (as
defined above) in the Company's offering of Series C Preferred Stock. Aviel
Faliks beneficially owns 9.3% of the Company's Common Stock.

     On December 28, 2006, the Company entered into a consulting agreement with
Roger P. May ("May") to provide various financial public relations services for
the Company (the "May Consulting Agreement"). The term of the May Consulting
Agreement was twelve months and expired on December 31, 2007. Pursuant to the
May Consulting Agreement, May was paid $404,500. Further, May was granted a
three-year warrant to purchase 500,000 shares of the Company's Common Stock at a
price of $2.00 per share. May beneficially owns 6.2% of the Company's Common
Stock.

                                       67

<PAGE>

     On December 26, 2007, the Company entered into a Partnership Interest
Purchase Agreement with Natural Resource Group Gathering, LLC ("NRGG") to
acquire NRGG's general partnership interest (the "General Partnership Interest")
in SDG. The purchase price for the General Partnership Interest was $1,075,000
(the "Purchase Price"), which will be paid $268,750 in cash and the issuance by
the Company of a promissory note in the principal amount of $806,250 (the
"Note"). The Note bears interest at a rate of 2.5% per annum, is payable in
quarterly principal and interest installments of $204,721 beginning March 31,
2008 and is due on December 31, 2008 (the "Maturity Date"). The Corporation may
prepay the Note at any time without penalty, and at the option of the
Corporation, the quarterly payments may be deferred until the Maturity Date.
Paul Laird, the Company's President, Chief Executive Officer and a member of the
board of directors is a manager of and owns 50% of the membership interests of
NRGG.

Item 13. Exhibits

(a)   Financial Statements

      Audit Report of Independent Registered Public Accounting Firm         F-1
      Balance Sheet                                                         F-2
      Statement of Operations                                               F-3
      Statement of Cash Flows                                               F-4
      Statements of Stockholders' Equity                                    F-5
      Notes to Financial Statements                                         F-6

(b)   Exhibits

      The  following is a list of exhibits  filed or  incorporated  by reference
      into this Report:

      Exhibit No.   Description

       3.1          Amended and Restated Bylaws

      31.1          Certifications  pursuant to Rule 13a-14(a) or 15d-14(a)
                    under the Securities Exchange Act of 1934, as amended.

      31.2          Certifications pursuant to Rule 13a-14(a) or 15d-14(a)
                    under the Securities Exchange Act of 1934, as amended.

      32.1          Certifications pursuant to 18 U.S.C. Section 1350, as
                    adopted pursuant to Section 906 of the Sarbanes-Oxley Act
                    of 2002.

      23.1          Consent of Questa Engineering Corp.

      99.1          Reserve Estimate and Economic Evaluation Report Effective
                    February 29, 2008 prepared by Norwest Questa Engineering,
                    Corp.

                                       68

<PAGE>

Item 14. Principal Accountant Fees and Services

     The Company currently has no audit committee of the Board of Directors and
is not required to maintain such a committee since its stock is not quoted on
NASDAQ or traded on any national securities exchange. Accordingly, all material
decisions affecting the Company's audited financial statements, periodic
disclosure with the SEC and its relationship with its auditors are addressed by
the entire Board. The Board currently has no policies and procedures relating to
the pre-approval of audit and audit related services.

Audit Fees

     The Company estimates that it will pay Stark Winter Schenkein & Co., LLP,
an aggregate of $32,000 for an audit of its fiscal year ended February 29, 2008
financial statements. During the fiscal year ended February 28, 2007, Stark
Winter Schenkein & Co., LLP billed the Company an aggregate of $31,300 for an
audit of its 2007 financial statements.

Audit-Related Fees

     During the fiscal year ended February 29, 2008, Stark Winter Schenkein &
Co., LLP billed the Company an aggregate of $33,800 and during the fiscal year
ended February 28, 2007, Stark Winter Schenkein & Co., LLP billed the Company
$17,550 in fees for review of its quarterly financial statements.

All Other Fees

     During the fiscal year ended February 29, 2008, Stark Winter Schenkein &
Co., LLP billed the Company an aggregate of $6,350 in connection with
Registration Statements on Form SB-2 and S-1 filed with the SEC. During the
fiscal year ended February 28, 2007, Stark Winter Schenkein & Co., LLP billed
the Company an aggregate of $7,400 in fees in connection with Registration
Statements on Form SB-2 filed with the SEC during fiscal 2007.

                                       69

<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                              NEW FRONTIER ENERGY, INC.

                                              By: /s/ Paul G. Laird
                                                  ------------------------------
                                                  Paul G. Laird, President

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


Date: May 23, 2008      /s/ Paul G. Laird
                        ------------------------------------------------
                        Paul G. Laird, President, CEO and Director

Date: May 23, 2008      /s/ Les Bates
                        ------------------------------------------------
                        Les Bates, Secretary/Treasurer, Principal Accounting and
                        Financial Officer and Director

Date: May 23, 2008      /s/ Grant I. Gaeth
                        ------------------------------------------------
                        Grant I. Gaeth, Director

                                       70

<PAGE>
                            NEW FRONTIER ENERGY, INC.

                        CONSOLIDATED FINANCIAL STATEMENTS

                     FOR THE PERIOD ENDED FEBRUARY 29, 2008



                                TABLE OF CONTENTS

                                                                        Page
                                                                        ----

Report of Independent Registered Public Accounting Firm                  F-1

Consolidated Financial Statements
     Balance Sheet                                                       F-2
     Statements of Operations                                            F-3
     Statements of Changes in Stockholders' Equity                       F-4
     Statements of Cash Flows                                            F-5

Notes to Consolidated Financial Statements                               F-6





<PAGE>



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





Shareholders and Board of Directors
New Frontier Energy, Inc.


We have audited the accompanying consolidated balance sheet of New Frontier
Energy, Inc. as of February 29, 2008, and the related consolidated statements of
operations, stockholders' equity, and cash flows for the years ended February
29, 2008 and February 28, 2007. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits 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 by management, as well as evaluating
the overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of New Frontier Energy,
Inc. as of February 29, 2008, and the results of its operations, and its cash
flows for the years ended February 29, 2008 and February 28, 2007, in conformity
with accounting principles generally accepted in the United States of America.



/s/ Stark Winter Schenkein & Co., LLP
-------------------------------------
Denver, Colorado
May 20, 2008



                                       F-1

<PAGE>

<TABLE>
<CAPTION>
                            NEW FRONTIER ENERGY, INC.
                           CONSOLIDATED BALANCE SHEET
                                February 29, 2008

                                     ASSETS
CURRENT ASSETS
<S>                                                                     <C>
      Cash                                                              $  3,602,939
      Accounts receivable, trade                                             972,292
      Prepaid expenses                                                       306,680
                                                                        ------------
           Total current assets                                            4,881,911
                                                                        ------------

PROPERTY AND EQUIPMENT, NET OF ACCUMULATED DEPRECIATION
  AND DEPLETION OF $1,342,734                                             21,134,412
                                                                        ------------

OTHER ASSETS
      Deposits                                                               193,300
                                                                        ------------

                                                                        $ 26,209,623
                                                                        ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
      Accounts payable                                                  $    809,397
      Notes payable, affiliates                                              806,250
      Current portion of long term debt                                       34,020
      Dividends payable                                                    1,523,536
      Accrued expenses                                                       308,066
      Accrued interest                                                         2,672
      Accrued interest, affiliates                                             3,534
      Accounts payable, affiliates                                            48,459
                                                                        ------------
           Total current liabilities                                       3,535,934
                                                                        ------------

LONG TERM LIABILITIES

      Long term debt                                                         826,151
      Asset retirement obligation                                            290,000

MINORITY INTEREST IN CONSOLIDATED SUBSIDIARY                                 393,592

STOCKHOLDERS' EQUITY
      Preferred stock, $.001 par value, 25,000,000 shares authorized:
         Series A Convertible, 100,000 shares authorized
         none issued and outstanding                                              --
         Series B Convertible, 36,036 shares authorized
         24,675 issued and outstanding                                            25
         Series C Convertible, 230,000 shares authorized
         219,500 issued and outstanding                                          220
      Common stock, $.001 par value, 500,000,000 shares authorized,
         10,178,078 shares issued and outstanding                             10,178
      Additional paid in capital                                          39,710,397
      Accumulated (deficit)                                              (18,556,874)
                                                                        ------------
                                                                          21,163,946
                                                                        ------------
                                                                        $ 26,209,623
                                                                        ============
</TABLE>

        See accompanying notes to the consolidated financial statements.

                                       F-1


<PAGE>
<TABLE>
<CAPTION>

                            NEW FRONTIER ENERGY, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                                              Year Ended
                                                        February 29,   February 28,
                                                            2008          2007
                                                        -----------    -----------
<S>                                                     <C>            <C>
Operating revenues
       Oil and gas sales                                $   622,442    $   238,385
       Gathering fees                                       135,297        122,796
                                                        -----------    -----------
                                                            757,739        361,181
                                                        -----------    -----------

Operating expenses
       Exploration costs, including dry holes               249,848        205,713
       Lease operating expenses                           1,498,829        642,253
       Cost of gas gathering                                    833          2,578
       General and administrative                         2,222,795      1,546,716
       General and administrative, stock compensation     2,311,000      1,389,617
       Depreciation, depletion and amortization             731,835        319,904
                                                        -----------    -----------
            Total operating expenses                      7,015,140      4,106,781
                                                        -----------    -----------

(Loss) from operations                                   (6,257,401)    (3,745,600)
                                                        -----------    -----------

Other income (expense)
       Interest income                                      362,719         88,882
       Gain (loss) on sale of assets                             --         95,127
       Interest expense                                     (83,172)       (90,214)
       Debt issuance costs, non-cash                       (365,517)      (905,957)
                                                        -----------    -----------
            Other income (expense), net                     (85,970)      (812,162)
                                                        -----------    -----------

(Loss) before income taxes                               (6,343,371)    (4,557,762)
                                                        -----------    -----------

Income taxes
       Current                                                   --             --
       Deferred                                                  --             --
                                                        -----------    -----------
                                                                 --             --
                                                        -----------    -----------

Minority interest in net (income) loss of
       consolidated subsidiary                              (58,631)       (16,007)
                                                        -----------    -----------

Net (loss)                                               (6,402,002)    (4,573,769)
Preferred stock dividends and distributions
       to minority interests                               (961,379)      (505,700)
                                                        -----------    -----------

Net (loss) attributable to common shareholders          $(7,363,381)   $(5,079,469)
                                                        ===========    ===========

Net (loss) per common share
       Basic and diluted                                $     (0.89)   $     (0.92)
                                                        ===========    ===========

Weighted average shares outstanding
       Basic and diluted                                  8,259,108      5,526,142
                                                        ===========    ===========
</TABLE>


        See accompanying notes to the consolidated financial statements.

                                       F-2

<PAGE>
<TABLE>
<CAPTION>

                           NEW FRONTIER ENERGY, INC.
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
               YEARS ENDED FEBRUARY 28, 2007 AND FEBRUARY 29, 2008



                                                      Series A Preferred    Series B Preferred    Series C Preferred
                                                        $.001 Par Value      $.001 Par Value       $.001 Par Value
                                                       Shares     Amount    Shares      Amount    Shares      Amount
                                                     ---------    -------  ----------   ------   --------   --------
<S>                                                     <C>            <C>  <C>            <C>    <C>         <C>
Balance February 28, 2006                               50,000    $    50   30,657.25   $  31          --   $     --

   Issuance of common stock for services                    --         --       --         --          --         --
   Conversion of Series A Preferred Stock
   and accrued dividends to common stock               (50,000)       (50)      --         --          --         --
   Conversion of Series B Preferred to common stock         --         --   (2,167)        (3)         --         --
   Exercise Series B Common Stock warrants                  --         --       --         --          --         --
   Exercise of common stock warrants                        --         --       --         --          --         --
   Exercise of common stock options                         --         --       --         --          --         --
   Intrinsic value of convertible debt                      --         --       --         --          --         --
   Issuance  of common stock warrants                       --         --       --         --          --         --
   Conversion of convertible debt and interest
     to common stock                                        --         --       --         --          --         --
   Issuance of Series C Preferred Stock                     --         --       --         --     222,250        222
   Series C preferred stock issuance costs                  --         --       --         --          --         --
   Timing differences due to subsidiary year end            --         --       --         --          --         --
   Preferred stock dividends                                --         --       --         --          --         --
   Distribution from consolidated entity (Note 1)           --         --       --         --          --         --
   Net (loss) for the year                                  --         --       --         --          --         --
                                                     ---------    -------  ----------   ------   --------   --------
Balance February 28, 2007                                   --         --      28,490      28     222,250        222

   Conversion of Series B Preferred to common stock         --         --      (4,335)      (4)        --         --
   Exercise Series B Common Stock warrants                  --         --          --       --         --         --
   Conversion of Series C Preferred to common stock         --         --          --       --     (2,750)        (2)
   Conversion of convertible debt and interest
    to common stock                                         --         --          --       --         --         --
   Issuance  of common stock warrants                       --         --          --       --         --         --
   Exercise placement agent warrants                        --         --         520        1         --         --
   Series C preferred stock issuance costs                  --         --          --       --         --         --
   Minority interest in consolidated subsidiary             --         --          --       --         --         --
   Timing differences due to subsidiary year end            --         --          --       --         --         --
   Preferred stock dividends                                --         --          --       --         --         --
   Distribution from consolidated entity (Note 1)           --         --          --       --         --         --
   Net (loss) for the year                                  --         --          --       --         --         --
                                                     ---------    -------  ----------   ------   --------   --------
Balance February 29, 2008                                   --    $    --      24,675   $   25    219,500   $    220
                                                     =========    =======  ==========   ======   ========   ========
</TABLE>


<TABLE>
<CAPTION>
                            NEW FRONTIER ENERGY, INC.
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
               YEARS ENDED FEBRUARY 28, 2007 AND FEBRUARY 29, 2008
                                   CONTINUED


                                                           Common Stock       Additional
                                                           $.001 Par Value     Paid-in     Accumulated
                                                       Shares         Amount   Capital      (Deficit)          Total
                                                      -----------    ------- ------------  ------------    ------------
<S>                                                    <C>             <C>      <C>          <C>              <C>
Balance February 28, 2006                              4,078,819     $ 4,078  $ 9,994,442  $ (6,114,024)   $  3,884,577

   Issuance of common stock for services                   4,000           4        8,196            --           8,200
   Conversion of Series A Preferred Stock
   and accrued dividends to common stock                 395,806         396        6,928            --           7,274
   Conversion of Series B Preferred to common stock      333,423         334         (331)           --              --
   Exercise Series B Common Stock warrants             1,159,914       1,160    1,599,520            --       1,600,680
   Exercise of common stock warrants                      37,500          37       56,213            --          56,250
   Exercise of common stock options                       28,667          29       21,471            --          21,500
   Intrinsic value of convertible debt                        --          --       33,451            --          33,451
   Issuance  of common stock warrants                         --          --    1,381,417            --       1,381,417
   Conversion of convertible debt and interest
     to common stock                                      19,064          19       22,856            --          22,875
   Issuance of Series C Preferred Stock                       --          --   22,224,778            --      22,225,000
   Series C preferred stock issuance costs                    --          --     (401,326)           --        (401,326)
   Timing differences due to subsidiary year end              --          --       35,492            --          35,492
   Preferred stock dividends                                  --          --           --      (461,585)       (461,585)
   Distribution from consolidated entity (Note 1)             --          --           --       (44,117)        (44,117)
   Net (loss) for the year                                    --          --           --    (4,573,769)     (4,573,769)
                                                      -----------    -------  -----------  ------------    ------------
Balance February 28, 2007                              6,057,193       6,057   34,983,107   (11,193,495)     23,795,919

   Conversion of Series B Preferred to common stock       666,924        667         (663)           --             --
   Exercise Series B Common Stock warrants                686,753        687      761,609            --        762,296
   Conversion of Series C Preferred to common stock       261,904        262         (260)           --             --
   Conversion of convertible debt and interest
    to common stock                                     2,505,304      2,505    2,703,774            --      2,706,279
   Issuance  of common stock warrants                          --         --    2,311,000            --      2,311,000
   Exercise placement agent warrants                           --         --       51,999            --         52,000
   Series C preferred stock issuance costs                     --         --      (34,709)           --        (34,709)
   Minority interest in consolidated subsidiary                --         --   (1,075,000)           --     (1,075,000)
   Timing differences due to subsidiary year end               --         --        9,540            --          9,540
   Preferred stock dividends                                   --         --           --      (879,074)      (879,074)
   Distribution from consolidated entity (Note 1)              --         --           --       (82,303)       (82,303)
   Net (loss) for the year                                     --         --           --    (6,402,002)    (6,402,002)
                                                      -----------    -------  -----------  ------------    ------------
Balance February 29, 2008                              10,178,078    $10,178  $39,710,397  $(18,556,874)   $ 21,163,946
                                                      ============   =======  ===========  ============    ============
</TABLE>


        See accompanying notes to the consolidated financial statements.

                                       F-3

<PAGE>
<TABLE>
<CAPTION>
                            NEW FRONTIER ENERGY, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                                  Year Ended
                                                                          February 29,    February 28,
                                                                              2008           2007
                                                                          ------------    ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                       <C>             <C>
    Net (loss)                                                            $ (6,402,002)   $ (4,573,769)
    Adjustments to reconcile net (loss) to net cash
      (used in) operating activities:
        Depreciation, depletion and amortization                               731,835         319,904
        Debt issuance costs, noncash                                           365,517         905,957
        Minority interest in net income  (loss) of
          consolidated subsidiary                                               58,631          16,007
         Interest on convertible debenture                                      15,428          15,838
        Stock compensation                                                   2,311,000       1,389,617
        (Increase) decrease in assets:
           Accounts receivable, trade                                         (603,348)       (314,889)
           Prepaid expense                                                     273,294        (551,663)
        Increase (decrease) in liabilities:
           Accounts payable                                                    160,896        (122,226)
           Accrued expenses                                                     40,210         395,159
                                                                          ------------    ------------

      Net cash (used in) operating activities                               (3,048,539)     (2,520,065)
                                                                          ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES:

    Increase in other assets                                                  (160,000)        (33,300)
    Purchase of property and equipment                                      (5,493,729)     (8,923,915)
                                                                          ------------    ------------

      Net cash (used in) investing activities                               (5,653,729)     (8,957,215)
                                                                          ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES:

    Payment of  convertible debentures                                         (30,000)             --
    Payment of  convertible debentures affiliate                              (608,194)             --
    Proceeds from notes payable                                                     --         600,000
    Payment of notes payable                                                   (21,079)             --
    Proceeds from common stock warrant conversions                             762,296       1,678,430
    Proceeds from issuance of preferred stock                                       --      21,625,000
    Preferred stock dividends paid                                            (111,692)        (37,983)
    Issuance of common stock                                                    52,000              --
    Cost of issuance of equity for cash                                        (34,709)       (401,326)
    Purchase of minority interest                                             (268,750)             --
    Minority interest in subsidiary                                            (76,596)         35,492
    Distributions to minority interest holders in
     consolidated subsidiary                                                   (82,303)        (44,117)
                                                                          ------------    ------------

      Net cash provided by (used in) financing activities                     (419,027)     23,455,496
                                                                          ------------    ------------

INCREASE (DECREASE) IN CASH                                                 (9,281,595)     11,978,216

BEGINNING BALANCE                                                           12,724,234         746,018
                                                                          ------------    ------------

ENDING BALANCE                                                            $  3,442,639    $ 12,724,234
                                                                          ============    ============

Cash paid for income taxes                                                $         --    $         --
                                                                          ============    ============
Cash paid for interest                                                    $     73,847    $         --
                                                                          ============    ============

Supplemental schedule of non-cash investing and financing activities:

      Series B preferred stock converted to common stock                  $        667    $        333
      Series A preferred stock converted to common stock                  $         --    $        385
      Series A preferred stock dividends converted to common stock        $         --    $      7,274
      Intrinsic value of conversion feature of convertible debt           $         --    $     33,451
      Conversion of convertible debentures and interest to common stock   $  2,706,279    $     22,876
      Purchase of facility with a note payable                            $    881,250    $         --
      Purchase of general partnership interest in subsidiary              $    806,250    $    608,194
      Convertible debt conversion to Series C preferred stock             $         --    $    600,000
</TABLE>
        See accompanying notes to the consolidated financial statements.

                                       F-4

<PAGE>

                            NEW FRONTIER ENERGY, INC.

                   Notes to Consolidated Financial Statements

                                February 29, 2008



1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ORGANIZATION

New Frontier Energy, Inc. (or the "Company") was incorporated as Storage
Finders.com under the laws of Colorado on January 7, 2000. In March 2001 the
Company changed its name to New Frontier Energy, Inc. The Company is an oil and
gas exploration company operating primarily in Colorado and Wyoming.

Effective February 6, 2002, Wyoming Oil & Minerals, Inc. ("Wyoming") completed a
share exchange with the Company. Under the terms of the share exchange, the
shareholders of the Company surrendered their shares in exchange for shares of
Wyoming. The Company's shareholders became shareholders in Wyoming, and the
Company became a wholly owned subsidiary of Wyoming until June 30, 2003.

On June 30, 2003, Wyoming's Board of Directors approved a dividend in the form
of the common stock of its subsidiary, New Frontier. The dividend was paid in
the form of one share of New Frontier common stock for every four shares of
common stock of Wyoming. Shareholders of record of Wyoming as of the close of
business on June 30, 2003, the record date, were issued a certificate
representing one share of New Frontier for each four shares of Wyoming they held
at that date.

The Company owns 82.76% of the limited partnership interests (the "Limited
Partnership Interests") and 100% of the general partnership interest in Slater
Dome Gathering, LLLP ("SDG"). SDG owns the 18-mile gas gathering line that
transports the Company's natural gas from the Slater Dome Field to the Questar
transportation line in Baggs, Wyoming. SDG is considered a variable interest
entity under Financial Accounting Standards Board ("FASB") Interpretation No.
46-R, "Consolidation of Variable Interest Entities." FIN 46-R, and has been
consolidated into our financial statements, effective March 31, 2005. The
gathering line was completed on June 3, 2005. The Company began selling gas in
June 2005. SDG, a calendar year-end company, was formed on September 1, 2004,
and was inactive until it received its initial funding on May 18, 2005. In
December 2007, the Company purchased the general partner interests in SDG from
an affiliate. SDG is treated as an 87.07% owned subsidiary.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company and
those of SDG. All significant inter-company accounts and transactions have been
eliminated.

In December 2003, the FASB issued FIN No. 46-R, which modifies certain
provisions and effective dates of FIN No. 46, sets forth the criteria to be used
in determining whether an investment in a variable interest entity should be
consolidated. These provisions are based on the general premise that if a
company controls another entity through interests other than voting interests,
that company should consolidate the controlled entity. The Company consolidated
SDG under the provisions of FIN No. 46-R through December 2007, when SDG became
an 87.07% owned subsidiary through the purchase of all of its general partner
interests (see Note 2).

SDG has a calendar year end of December 31, 2007, which is consolidated with the
Company effective February 29, 2008. Any timing differences are recorded as
additional paid-in capital in the accompanying financial statements.

REVENUE RECOGNITION

The Company records revenues from the sales of natural gas and oil delivery to
the customer has occurred and title has transferred. This occurs when natural
gas or oil has been delivered to a pipeline or a tank lifting has occurred. The
Company receives payment from one to three months after delivery. At the end of
each month, the Company estimates the amount of production delivered to
purchasers and the price to be received. Variances between estimated revenue and
actual payment are recorded in the month the payment is received. However,
differences have been insignificant.

ACCOUNTS RECEIVABLE

The Company uses the direct write-off method for bad debts; this method expenses
uncollectible accounts in the year they become uncollectible. Any difference
between this method and the allowance method is not material.

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with an original maturity of
three months or less to be cash equivalents.

                                      F-6
<PAGE>

                            NEW FRONTIER ENERGY, INC.

                   Notes to Consolidated Financial Statements

                                February 29, 2008

NET INCOME (LOSS) PER COMMON SHARE

The Company calculates net income (loss) per share as required by Statement of
Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share." Basic
earnings (loss) per share is calculated by dividing net income (loss) by the
weighted average number of common shares outstanding for the period. Diluted
earnings (loss) per share is calculated by dividing net income (loss) by the
weighted average number of common shares and dilutive common stock equivalents
outstanding. During the periods when they are anti-dilutive, common stock
equivalents, if any, are not considered in the computation.

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Estimates of oil and gas reserve quantities
provide the basis for calculation of depletion, depreciation, and amortization,
and impairment, each of which represents a significant component of the
financial statements. Actual results could differ from those estimates.

CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to concentrations of
credit risk consist primarily of cash equivalents. The Company places its cash
equivalents with a high credit quality financial institution. The Company
periodically maintains cash balances at a commercial bank in excess of the
Federal Deposit Insurance Corporation insurance limit of $100,000. At February
29, 2008, the Company's uninsured cash balance was $708,320.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value estimates discussed herein are based upon certain market assumptions
and pertinent information available to management as of February 29, 2008. The
respective carrying values of certain on-balance-sheet financial instruments
approximated their fair values. These financial instruments include cash,
accounts receivable, accounts payable, notes payable and accrued expenses. Fair
values were assumed to approximate carrying values for these financial
instruments because they are short term in nature, their carrying amounts
approximate fair values, or they are receivable or payable on demand. The
carrying value of the Company's long-term debt approximates its fair value based
on current market conditions for similar debt instruments.

ACCOUNTING FOR OIL AND GAS ACTIVITIES

The Company uses the successful efforts method of accounting for oil and gas
producing activities. Under this method, acquisition costs for proved and
unproved properties are capitalized when incurred. Exploration costs, including
geological and geophysical costs, the costs of carrying and retaining unproved
properties, and exploratory dry hole drilling costs are expensed. Development
costs, including the costs to drill and equip development wells and successful
exploratory drilling costs that locate proved reserves are capitalized. In
addition, the Company limits the total amount of unamortized capitalized costs
to the value of future net revenues, based on current prices and costs.

Unproved oil and gas properties are periodically assessed for impairment of
value, and a loss is recognized at the time of impairment by providing an
impairment allowance together with a charge to operations.

Revenues from the sale of oil and gas production are recognized when title
passes, net of royalties.

DEPRECIATION AND DEPLETION

Depreciation and depletion of the capitalized costs for producing oil and gas
properties are provided by the unit-of-production method based on proved oil and
gas reserves. Uncompleted wells and equipment are reflected at the Company's
incurred cost and represent costs of drilling and equipping oil and gas wells
that are not completed as of the balance sheet date. The costs of unproved
leases, which become productive, are reclassified to proved properties when
proved reserves are discovered in the property. Unproved oil and gas interests
are carried at original acquisition costs, including filing and title fees.

                                      F-7
<PAGE>

                            NEW FRONTIER ENERGY, INC.

                   Notes to Consolidated Financial Statements

                                February 29, 2008

REAL PROPERTY AND EQUIPMENT

Real property and equipment consists of furniture, fixtures and equipment and
are recorded at cost and depreciated using the straight-line method over the
estimated useful lives of five to seven years.

The gas gathering line is recorded at cost and is being depreciated on a
straight-line basis over an estimated 20 year useful life. The useful life may
be limited to the useful life of current and future recoverable reserves
serviced by the pipeline.

Maintenance and repairs are charged to expense as incurred.

Real property consists of the Steamboat Property and is depreciated over its
estimated useful life of 30 years

IMPAIRMENT OF LONG LIVED ASSETS

SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets,"
requires that an asset be evaluated for impairment when the carrying amount of
an asset exceeds the sum of the undiscounted estimated future cash flows of the
asset. In accordance with the provisions of SFAS No. 144, the Company reviews
the carrying values of its long-lived assets whenever events or changes in
circumstances indicate that such carrying values may not be recoverable. If,
upon review, the sum of the undiscounted pretax cash flows is less than the
carrying value of the asset group, the carrying value is written down to
estimated fair value. Individual assets are grouped for impairment purposes at
the lowest level for which there are identifiable cash flows that are largely
independent of the cash flows of other groups of assets, generally on a
field-by-field basis. The fair value of impaired assets is determined based on
quoted market prices in active markets, if available, or upon the present values
of expected future cash flows using discount rates commensurate with the risks
involved in the asset group. The long-lived assets of the Company, which are
subject to evaluation, consist primarily of oil and gas properties. The
Company's evaluation has not resulted in a charge to operations for impairment
in either fiscal 2008 or 2007.

INCOME TAXES

The Company accounts for income taxes in accordance with SFAS No. 109,
"Accounting for Income Taxes" and FASB Interpretation No. 48--Accounting for
Uncertainty in Income Taxes, an interpretation of FASB Statement No 109 ("FIN
48"), which require the liability method of accounting for income taxes. The
liability method requires the recognition of deferred tax assets and liabilities
for future tax consequences of temporary differences between the financial
statement basis and the tax basis of assets and liabilities.

STOCK-BASED COMPENSATION

The Company accounts for stock-based compensation in accordance with SFAS No.
123(R), "Share-based Payment" ("SFAS No. 123R") which requires companies to
measure all stock compensation awards using a fair value method and recognize
the related compensation cost in its financial statements. This statement
replaces SFAS No. 123 "Accounting for Stock Based Compensation," and supersedes
ABP Opinion No. 25, "Accounting for Stock Issued to Employees." Beginning with
the Company's quarterly period that began on March 1, 2006, the Company adopted
the provisions of SFAS No. 123R and is required to expense the fair value of
employee stock options and similar awards in the financial statements.

MAJOR CUSTOMERS

Sales to three major unaffiliated customers for the year ended February 29, 2008
were $461,700 (61% of sales), $160,742 (21% of sales) and $135,297 (18% of
sales), respectively. Sales to one major unaffiliated customer for the year
ended February 28, 2007 was $198,872 (55% of sales). Accounts receivable from
two major unaffiliated customers at February 29, 2008 were $651,212 (67% of
accounts receivable) and $100,459 (11% of accounts receivable). The Company,
however, believes that it is not dependent upon any of these customers due to
the nature of its product. The terms of the sales agreement provide the Company
may terminate by giving written notice thirty days prior to the anniversary date
of the agreement.


                                      F-8
<PAGE>

                            NEW FRONTIER ENERGY, INC.

                   Notes to Consolidated Financial Statements

                                February 29, 2008

DEBT WITH DETACHABLE WARRANT AND/OR BENEFICIAL CONVERSION FEATURE

The Company accounts for the issuance of detachable stock purchase warrants in
accordance with Accounting Principles Board Opinion No. 14 ("APB No. 14"),
whereby the fair value of the debt and the detachable warrants are separately
measured and the proceeds from the debt are allocated on a pro-rata basis to
both the debt and the detachable warrants. The resulting discount from the fair
value of the debt allocated to the warrant, which is accounted for as paid-in
capital, is amortized over the estimated life of the debt.

In accordance with the provisions of Emerging Issues Task Force ("EITF") Issue
No. 98-5 and EITF No. 00-27, a portion of the proceeds received are allocated to
any embedded beneficial conversion feature, based on the difference between the
effective conversion price of the proceeds allocated to the convertible debt and
the fair value of the underlying common stock on the date the debt is issued. In
addition, the detachable stock purchase warrants proceeds are first allocated to
the stock purchase warrants and the debt, and then the resulting debt proceeds
are allocated between the beneficial conversion feature, which is accounted for
as paid-in capital, and the initial carrying amount of the debt. The discount
resulting from the beneficial conversion feature is amortized over the estimated
life of the debt.

ASSET RETIREMENT OBLIGATIONS

In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations," which addresses financial accounting and reporting for obligations
associated with the retirement of tangible long-lived assets and the associated
asset retirement costs. SFAS No. 143 applies to legal obligations associated
with the retirement of long-lived assets that result from the acquisition,
construction, development, and normal use of the asset. The Company's asset
retirement obligations relate primarily to the retirement of oil and gas
properties and related production facilities, lines, and other equipment used in
the field operations, together with the gas gathering pipeline. SFAS No. 143
requires that the fair value of a liability for an asset retirement obligation
be recognized in the period in which it is incurred, if a reasonable estimate of
fair value can be made. The fair value of the liability is added to the carrying
amount of the associated asset. This additional carrying amount is then
depreciated over the life of the asset. The liability increases due to the
passage of time based on the time value of money until the obligation is
settled.

The Company recognized $150,000 and $77,300 implementing SFAS No. 143 for the
fiscal years ended February 29, 2008 and February 28, 2007, respectively, in oil
and gas properties reflected in the present value of the future asset retirement
obligation, and an offsetting increase in liabilities represents the
establishment of an asset retirement obligation liability.

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

In July 2006, the FASB released FASB Interpretation No. 48--Accounting for
Uncertainty in Income Taxes, an interpretation of FASB Statement No 109 ("FIN
48"). FIN 48 clarifies the accounting and reporting for uncertainties in income
taxes recognized in an enterprise's financial statements in accordance with
Statement of Financial Accounting Standards No 109--Accounting for Income Taxes
("SFAS 109") and prescribes a recognition threshold and measurement attribute
for financial statement recognition and measurement of a tax position taken or
expected to be taken in a tax return. FIN 48 is effective for fiscal years
beginning after December 15, 2006 with the impact of adoption to be reported as
a cumulative effect of an accounting change. The Company adopted FIN 48
effective March 1, 2007. The adoption of this accounting principle did not have
an effect on the Company's financial position, results of operations or cash
flows.

RECENT ACCOUNTING PRONOUNCEMENTS

In February 2007, the FASB issued Statement of Financial Accounting Standards
No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities,
including an amendment of FASB Statement No. 115." ("SFAS 159") SFAS 159 permits
companies to choose to measure many financial instruments and certain other
items at fair value that are not currently required to be measured at fair value
and establishes presentation and disclosure requirements designed to facilitate
comparisons between companies that choose different measurement attributes for
similar types of assets and liabilities. The provisions of SFAS 159 will become
effective as of the beginning of the fiscal year that begins March 1, 2008. The
adoption of these new requirements is not expected to have a material effect on
the Company's financial position, results of operations, or cash flows.

                                      F-9
<PAGE>

                            NEW FRONTIER ENERGY, INC.

                   Notes to Consolidated Financial Statements

                                February 29, 2008

In December 2007 the FASB issued SFAS No. 141 (revised 2007), "Business
Combinations" ("SFAS No. 141R"), which replaces FASB Statement No. 141. SFAS No.
141R will change how business acquisitions are accounted for and will impact
financial statements on both the acquisition date and in subsequent periods.
SFAS No. 141R is effective as of the beginning of an entity's fiscal year that
begins after December 15, 2008. The Company is in the process of evaluating the
impact, if any, of adopting this pronouncement.

In December 2007 the FASB issued SFAS No. 160"Noncontrolling Interests in
Consolidated Financial Statements, an amendment of ARB No. 51" ("SFAS No. 160").
SFAS No. 160 will change the accounting and reporting for minority interests,
which, will be recharacterized as noncontrolling interests and classified as a
component of equity. This statement is effective as of the beginning of an
entity's first fiscal year beginning after December 15, 2008. The Company is in
the process of evaluating the impacts, if any, of adopting this pronouncement.

In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative
Instruments and Hedging Activities." The new standard is intended to improve
financial reporting about derivative instruments and hedging activities by
requiring enhanced disclosures to enable investors to better understand their
effects on an entity's financial position, financial performance, and cash
flows. It is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008, with early application
encouraged. The Company has not yet determined the impact, if any, of SFAS 161
on its consolidated financial statements.

RECLASSIFICATIONS

Certain amounts reported in the Company's financial statements for the year
ended February 28, 2007, may have been reclassified to conform to the current
year presentation.

2.   SLATER DOME GATHERING, LLLP

Effective December 31, 2007 the Company entered into a Purchase and Sale
Agreement with Natural Resource Group Gathering, LLC ("NRGG"), whereby the
Company increased its investment in Slater Dome Gathering, LLLP ("SDG") by
acquiring the general partner's interest for $1,075,000 consisting of $268,750
in cash and executing a promissory note in the amount of $806,250. The Note
bears interest at a rate of 2.5% per annum and is payable in quarterly
installments of $201,562.50 plus interest and is due December 31, 2008. At the
option of the Company, quarterly payments may be deferred until the maturity
date. As a result, the Company owns the 25% general partner's interest together
with 82.76% of the Class A limited partnership interests in SDG. The Company
will receive 84.487% of SDG cash distributions until the limited partners have
received cash distributions equal to their initial capital contributions and
87.07% of cash distributions thereafter.

The purchase price was based on a valuation analysis of the gathering line by an
independent consulting firm that provides engineering project management, due
diligence and expert witness services to the oil and gas pipeline industry.

Through December 31, 2007, SDG is considered a variable-interest entity under
FIN No. 46-R and has been consolidated in the Company's financial statements.

SDG is considered a variable-interest entity under FIN No. 46-R and has been
consolidated effective March 31, 2005.

The Company executed SDG's limited liability limited partnership agreement (the
"Partnership Agreement"). The Partnership Agreement provides that distributions
will be allocated (i) first, to the Company as the General Partner in the amount
of the Out-of-Pocket Costs (as defined in the Partnership Agreement) to
reimburse the Company as the General Partner for such costs; (ii) second, 90%
shall be distributed to the Limited Partners of SDG (pro rata in accordance with
their respective Percentage Interests), as defined in the Partnership Agreement
and 10% shall be distributed to the Company as the General Partner until such
time as the Unreturned Capital (as defined in Partnership Agreement") of all of
the Limited Partners is reduced to zero; and (iii) thereafter, 75% to the
Limited Partners (pro rata in accordance with their respective Percentage
Interests) and 25% to the Company as the General Partner. Distributions shall be
distributed at such time or times as the Company as the General Partner shall
determine in its sole discretion. The General Partnership interest has a 10% and
25% carried interest before and after payout respectively. The Company receives
2% of gross receipts as a management fee. Further, the Company, along with the
other working interest owners at the property located at the Slater Dome
Prospect, have agreed to pay SDG a fee of $0.50 per million British Thermal
Units ("MMBtu") of gas transported through the line until the costs of the
gathering pipeline are recovered and $0.25 thereafter and to dedicate their gas
to the gathering pipeline. The producers at the Slater Dome Prospect have
entered into a ten year agreement with SDG whereby each producer agrees to
deliver a minimum daily quantity ("MDQ") of gas during the first five years
following the date the line starts transporting gas. The following table
summarizes the MDQ requirements:

                                      F-10
<PAGE>

                            NEW FRONTIER ENERGY, INC.

                   Notes to Consolidated Financial Statements

                                February 29, 2008

                               Minimum Producers' Aggregate
                  Year            MDQ/MMBtu Quantities
                    1                     1,500
                    2                     2,000
                    3                     4,000
                    5                     5,000
                    6                     6,000
                    7                     7,000
                    8                     8,000
                    9                     9,000
                    10                    10,000


The producers have agreed to guarantee two-thirds of the original construction
costs amounting to $2,609,841 through producers' payment of gathering fees. The
fees may be increased to cover annual calculations of shortfalls from the MDQ;
the fee may be increased at the end of each of the first four years beginning
June 3, 2005. If the total gathering revenue for the preceding year is less than
two-thirds of the construction costs divided by five, SDG may increase the
gathering fee for the year immediately following the year in which the shortfall
occurs by the dollar amount per MMBtu necessary to make up the monetary
equivalent of the annual shortfall. In the event the total gathering revenue for
the proceeding year is greater than two-thirds of the construction costs divided
by five, SDG will credit such excess to the following year's comparison.

3.   PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

     Natural gas gathering line                    $  2,600,164
     Proved oil and gas properties                    8,469,524
     Unproved oil and gas properties                  9,873,660
     Real property, furniture and equipment           1,533,798
                                                   ------------
                                                     22,477,146
     Less accumulated depreciation and depletion     (1,342,734)
                                                   ------------

     Net property and equipment                    $ 21,134,412
                                                   ============

                                      F-11
<PAGE>

                            NEW FRONTIER ENERGY, INC.

                   Notes to Consolidated Financial Statements

                                February 29, 2008

Effective November 3, 2006, the Company entered into a Purchase and Sale
Agreement (the "Cedar Ridge Agreement") with Cedar Ridge, LLC. ("Cedar Ridge"),
whereby the Company acquired Cedar Ridge's 36.66667% working interest (29.33336%
net revenue interest) in eleven gas and 2 water disposal wells together with
33,949 net acres in the Slater Dome Field, which was closed effective December
14, 2006. The purchase price for Cedar Ridge's interest was $8,000,000. In the
transaction, The Company acquired estimated proved reserves of 8,214,000 MCF of
natural gas, according to an independent reservoir engineering firm. After the
transaction was completed the Company owned a 66.66667% working interest in the
Slater Dome field and became the operator.

Total depreciation and depletion of property and equipment amounted to $731,835
and $319,904 for the years ended February 29, 2008, and February 28, 2007,
respectively.

4.   LONG-TERM DEBT

On June 15, 2007, the Company acquired a facility (the "Steamboat Property") to
be used as a field office and provide lodging while Company personnel are
working the Slater Dome Field area. The purchase price for the Steamboat
Property was $1,175,000. In connection with the purchase of the Steamboat
Property, the Company entered into a five-year mortgage in the principal amount
of $881,250 (the "Steamboat Mortgage"), which bears interest at a rate of 7.56%
per annum. The Steamboat Mortgage requires equal monthly payments during the
term of the mortgage in the amount of $8,256, with the balance of $698,604 due
on June 14, 2012. The Steamboat Mortgage can be prepaid at any time without
penalty. The Steamboat Mortgage is collateralized by the Steamboat Property. The
current portion of the Steamboat Mortgage amounts to $34,020 with the balance of
$826,151 being long term. The following summarizes the future maturities of
long-term debt during the following fiscal years ending:

                    February 28, 2009      $ 34,020
                    February 28,2010         38,092
                    February 28,2011         41,074
                    February, 29, 2012       44,289
                    February 28, 2013       702,696
                                           --------
                                           $860,171
                                           ========

5.   CONVERTIBLE DEBENTURES

On July 22, 2005, the Company closed on the sale (the "Offering") to accredited
investors of 92 investment units (the "Units") at a purchase price of $30,000
per Unit for gross and net proceeds of $2,760,000, of which $145,200 have been
converted into shares of common stock. Each Unit consists of: (i) $30,000 of
2.5% two-year Convertible Debentures, convertible into 25,000 shares of Common
Stock, $0.001 par value common stock (the "Common Stock") of the Company at the
rate of $1.20 per share, the market value of the shares at the date the Company
entered into the Placement Agent Agreement described below (the "Debentures")
and (ii) a three-year warrant to purchase 12,500 shares of New Frontier Energy
Common Stock at an exercise price of $2.00 per share (the "Warrants"). The
original Debenture conversion rate of $1.20 was adjusted to $1.08 and the
original Warrant exercise price was adjusted from $2.00 to $1.33 on January 16,
2007 along with an increase in the number of warrant shares to 13,861 per unit
pursuant to anti-dilution rights. On or about July 22, 2007, the holders of the
previously unconverted Debentures in the principal and interest amount of
$2,706,279 converted the Debentures into 2,505,304 shares of Common Stock at a
price of $1.08 per share (the "Converted Debentures"). Debentures in the
principal amount of $30,000 and interest of $1,500 was paid in cash to the
holders. The Warrants are exercisable at $1.33 per Share of Common Stock and
have a call feature provided that the Company's Common Stock has been trading at
not less than $4.50 per share for twenty consecutive trading days and the
underlying shares are subject to an effective registration statement that has
been continuously effective for a minimum of 30 days.



                                      F-12
<PAGE>

                            NEW FRONTIER ENERGY, INC.

                   Notes to Consolidated Financial Statements

                                February 29, 2008

Effective June 28, 2005, the Company entered into a Placement Agent Agreement
with Westminster Securities Corporation ("Westminster" or the "Placement
Agent"), pursuant to which Westminster would act as the exclusive placement
agent for the Company with respect to the Offering. For acting as Placement
Agent, Westminster or its designees received 170,000 shares of Common Stock, or
8% of the number of Shares of Common Stock underlying the Debentures sold by
Westminster (the "Placement Agent Shares"). The Placement Agent Shares were
valued at $236,300, based on an average closing price of $1.39 during the period
of services. Further, Westminster or its designees received Warrants to purchase
10% of (i) the number of Shares of Common Stock underlying the Debentures sold
by Westminster (assuming the initial conversion price of $1.20) and (ii) the
number of shares of Common Stock underlying the Warrants issued (assuming the
initial exercise price of $2.00).

The Warrants were valued using the Black-Scholes option pricing model based on
the market price of the Common Stock at the commitment date. The Warrant
valuation of $1,509,798 has been allocated to additional paid-in capital. After
allocating value to the Warrants, the Company used the intrinsic value method to
determine that all of the remaining proceeds should be allocated to the embedded
beneficial conversion feature which amounted to $268,358. The total cost
associated with the offering in the amount of $1,778,156 was amortized over 24
months commencing July 22, 2005. Amortization expense amounted to $349,673 and
$888,350 for the years ended February 29, 2008, and February 28, 2007
respectively, and is included in Debt issuance costs, non-cash in the
accompanying financial statements.

6.   CONVERTIBLE DEBT, AFFILIATES

On May 10, 2006, the Company issued convertible subordinated debt in the amount
of $608,194 (the "Affiliate Debenture"). The Affiliate Debenture bears 2.5%
interest and was due January 1, 2008, convertible into 304,097 shares of the
$0.001 par value common stock (the "Common Stock") of the Company at the rate of
$2.00 per share. The market value of the shares in the date the Company entered
into the Agreement was $2.11 per share. The Affiliate Debenture was subordinated
to payment of principal and interest to the Company's outstanding Debentures due
July 22, 2007. The Affiliate Debenture conversion rate of $2.00 was adjusted to
$1.33 on January 16, 2007 pursuant to anti-dilution rights. On March 26, 2007,
the Company paid $300,000 on the principal balance. On December 31, 2007, the
Company paid $320,801 to retire in full the convertible subordinated debenture
issued to NRGG. The payment was comprised of $308,194 in principal together with
accrued interest of $12,607. The Company's President and Chief Executive Officer
is a manager and owns 50% of the membership interests of NRGG.

The Company used the intrinsic value method to determine allocation to the
embedded beneficial conversion feature. As such, $33,451 was credited to
additional paid-in capital. The total allocation of $33,451 was amortized over
19 months. Amortization expense during the years ended February 29, 2008 and
February 28, 2007 was $15,844 and $17,607 respectively, and is included in Debt
issuance costs, non-cash in the accompanying financial statements.

7.   ASSET RETIREMENT OBLIGATIONS

The implementation of SFAS No. 143 during fiscal 2007 resulted in an increase of
$150,000 in oil and gas properties reflected in the present value of the future
asset retirement obligation, and an offsetting increase in liabilities
represents the establishment of an asset retirement obligation liability.

                                      F-13
<PAGE>

                            NEW FRONTIER ENERGY, INC.

                   Notes to Consolidated Financial Statements

                                February 29, 2008

A reconciliation of the Company's asset retirement obligation liability as of
February 29, 2008 and February 28, 2007 is as follows:


                                                  February 29,  February 28,
                                                      2008          2007
                                                   ----------    ----------
     Beginning asset retirement obligation         $  140,000    $   62,700
     Liabilities incurred                             150,000        77,300
     Changes in estimates                                  --            --
     Accretion expense                                     --            --
                                                   ----------    ----------
     Ending asset retirement obligation            $  290,000    $  140,000
                                                   ==========    ==========

8.   INCOME TAXES

The Company accounts for income taxes under SFAS No. 109, "Accounting for Income
Taxes," which requires, use of the liability method. SFAS No. 109 provides that
deferred tax assets and liabilities are recorded based on the differences
between the tax bases of assets and liabilities and their carrying amounts for
financial reporting purposes, referred to as temporary differences. Deferred tax
assets and liabilities at the end of each period are determined using the
currently-enacted tax rates applied to taxable income in the periods in which
the deferred tax assets and liabilities are expected to be settled or realized.
The provision for income taxes differs from the amount computed by applying the
statutory federal income tax rate to income before provision for income taxes.
The Company's estimated effective tax rate of 38.95% is offset by a reserve due
to the uncertainty regarding the realization of the deferred tax asset. It is
more likely than not that the net tax deferred benefits will not be realized.

The provision (benefit) for income taxes consists of the following components:

                          February 29,    February 28,
                             2008            2007
                          ------------    ------------
            Current       $        ---    $        ---
            Deferred      $        ---    $        ---

                                      F-14

<PAGE>
                            NEW FRONTIER ENERGY, INC.

                   Notes to Consolidated Financial Statements

                                February 29, 2008


The tax effects of temporary differences and carry forwards that give rise to
significant portions of deferred tax assets and liabilities consist of the
following:



                                               February 29,    February 28,
                                                   2008            2007
                                               -----------     -----------
     Deferred tax assets:
      Net operating loss carry forwards        $ 6,180,300     $ 3,514,300
     Deferred tax liabilities:
      Property and equipment                    (1,844,000)       (707,100)
                                               -----------     -----------
                                                 4,336,000       2,807,200
     Less valuation allowance                   (4,336,000)     (2,807,200)
                                               -----------     -----------
                                               $        --     $        --
                                               ===========     ===========


A reconciliation of the statutory U.S. federal rate and effective rates is as
follows:

     Statutory U.S. federal rate                34.00%
     State income taxes                          4.95%
                                             --------
                                                38.95%
     Net operating loss                        (38.95%)
                                             --------
                                                   --%
                                             ========


The Company's provision for income taxes differs from applying the statutory
United States federal income tax rate to income before income taxes. The primary
differences result from net operating losses.

The Company has a consolidated tax loss carry forward of $15,866,500, which
expires through 2018. However, because of the Section 382 limitation, the
portion of the Company's total net operating loss carry forward which may be
utilized through expiration is not currently known, but it is more likely than
not that the tax loss carry forwards will not be utilized before expiration.

9.   STOCKHOLDERS' EQUITY

SERIES A CONVERTIBLE PREFERRED STOCK

On March 1, 2004, we issued 50,000 shares of Series A Preferred Stock. Effective
November 8, 2004, the Series A Preferred Stock Certificate of Designation was
amended to provide that the Series A Preferred Stock would rank in pari passu to
the Series B Preferred Stock for payment of dividends, redemption, and
liquidation. The Series A Preferred Stock paid a cumulative, preferential cash
dividend at the rate of 18% of the $5.00 issue price per year, payable monthly
in arrears. Pursuant to the terms of the Series A Preferred Stock, the holders
of the Series A Preferred Stock could convert any or all of the shares into
shares of our Common Stock at the rate of $0.65 per share and unless previously
concerted, all of the Series A Preferred Stock will automatically convert into
Common Stock on the two-year anniversary of the issue date, or March 1, 2006. On
March 1, 2006, the Series A Preferred Stock automatically converted into 384,615
shares of the Company's Common Stock.

                                      F-15
<PAGE>
                            NEW FRONTIER ENERGY, INC.

                   Notes to Consolidated Financial Statements

                                February 29, 2008


During the year ended February 28, 2007, the holder converted the accrued
dividends on the Series A Preferred Stock in the amount of $7,274 to 11,191
shares of Common Stock.

As of February 29, 2008, there are no shares of the Series A Preferred Stock
outstanding.

SERIES B CONVERTIBLE PREFERRED STOCK

Effective November 1, 2004, the board of directors of the Company approved an
amendment to the Company's Articles of Incorporation to provide for the issuance
of up to 36,036 shares of Series B 12% Cumulative Convertible Preferred Stock,
$0.001 par value (the "Series B Preferred Stock"). The issue price of the Series
B Preferred Stock is $100.00 per share (the "Series B Issue Price"). The Series
B Preferred Stock ranks in pari passu with the Series A Preferred for payment of
dividends, redemption, and liquidation. Each share of Series B Preferred Stock
shall be convertible, at the option of the Holder, into that number of shares of
Common Stock determined by dividing the Series B Issue Price of the aggregate
number of shares of Series B Preferred Stock being converted plus any accrued
and unpaid dividends by $.65 per share, unless otherwise adjusted. The Series B
Preferred Stock pays a cumulative, preferential cash dividend equal to 12% of
the Series B Issue Price per year and is payable quarterly in arrears. The
dividend is payable out of funds legally available for that purpose and will
accumulate during any period when it is not paid.

During the year ended February 28, 2005, the Company issued 32,175 shares of
Series B Preferred Stock in connection with a private placement, realizing gross
proceeds of $3,217,500 offset by offering expenses in the amount of $456,524
resulting in proceeds to the Company of $2,760,976.

The Series B Preferred Stock has customary weighted-average anti-dilution rights
with respect to any subsequent issuance of Common Stock or Common Stock
equivalents at a price less than $0.65 per share, and otherwise in connection
with forward or reverse stock splits, stock dividends, recapitalizations, and
the like. The anti-dilution provisions shall not apply to certain employee stock
options and shares issued in connection with certain mergers and acquisitions.

Except as otherwise provided in the Series B Preferred Stock Certificate of
Designation with respect to matters that adversely affect the rights of the
holders of the Series B Preferred Stock, and as otherwise required by law, the
Series B Preferred Stock has no voting rights.

Upon any liquidation, dissolution, or winding-up of the Company, whether
voluntary or involuntary, the holders of the Series B Preferred Stock shall be
entitled to receive out of the assets of the Company, whether such assets are
capital or surplus, for each share of Series B Preferred Stock an amount equal
to the stated value ($100.00) of the Series B Preferred Stock per share plus any
accrued and unpaid dividends thereon and any other fees or liquidated damages
owing. If the assets of the Company are insufficient to pay such amounts in
full, then the entire assets to be distributed to the holders of the Series B
Preferred Stock shall be distributed among the holders of the Series B Preferred
Stock and the holders of the Series A Preferred Stock ratably in accordance with
the respective amounts that would be payable on such shares if all amounts
payable thereon were paid in full.

On or after February 1, 2007, and in the event the closing bid price of the
Company's Common Stock has closed for 20 consecutive trading days at a price not
less than $1.30 (subject to adjustment), the Company may deliver notice to
holders of the Series B Preferred Stock of the Company's irrevocable election to
redeem all or part of the Series B Preferred Stock. The redemption price is to
be an amount equal to the stated value ($100.00) of the Series B Preferred Stock
per share plus any accrued and unpaid dividends thereon and any other fees or
liquidated damages owing. The Company must provide 30 days' written notice to
the holders of the Series B Preferred Stock.

During the year ended February 29, 2008, 4,335 Series B Preferred shares were
converted to 666,924 shares of common stock. During the year ended February 28,
2007, 2,167 Series B Preferred shares were converted to 333,423 shares of Common
Stock. During the year ended February 28, 2006, 1,517.75 Series B Preferred
shares were converted to 233,500 shares of Common Stock.

As of February 29, 2008, there are 24,675 shares of Series B Preferred Stock
issued and outstanding.

During the year ended February 29, 2008, the Company paid cash dividends on the
Series B Preferred Stock in the amount of $104,710. The Company recorded accrued
dividends of $324,181 as of and for the year ended February 29, 2008. The
Company paid cash dividends in the amount of $37,983 and reported dividends of $
357,741 on the Series B Preferred Stock for the year ended February 28, 2007.

                                      F-16
<PAGE>
                            NEW FRONTIER ENERGY, INC.

                   Notes to Consolidated Financial Statements

                                February 29, 2008

SERIES C CONVERTIBLE PREFERRED STOCK

Effective November 22, 2006, the board of directors of the Company approved an
amendment to the Company's Articles of Incorporation to provide for the issuance
of up to 230,000 shares of Series C 2.5% Cumulative Convertible Preferred Stock
par value $0.001 (the "Series C Preferred Stock")

During the year ended February 28, 2007 the Company issued an aggregate of
444.50 investment units (the "Units"). Each Unit consists of: (i) $50,000 of
2.5% Series C Cumulative Convertible Preferred Stock, par value $0.001 (the
"Series C Preferred"), convertible into 47,619 shares of the Company's $0.001
par value common stock (the "Common Stock") at a price of $1.05 per share (the
"Conversion Price"); (ii) a three-year warrant to purchase 47,619 shares of
Common Stock at an exercise price of $1.50 per share (the "AC Warrants"); and
(iii) a three year warrant to purchase 23,810 shares of Common Stock at an
exercise price of $2.00 per share (the "BC Warrants"). In connection with the
purchase of a 200 Unit block, the Company agreed to grant that purchaser the
right to appoint an equal number of members of the board of directors that have
not been appointed by that entity as are present on the Board at any time. The
Company issued 222,250 shares of Series C Preferred Stock (444.5 units)
realizing gross proceeds of $22,225,000, of which $600,000 was received in
advance on a note payable that was subsequently converted to Series C Preferred
Stock, offset by offering expenses in the amount of $401,326 resulting in
proceeds to the Company of $21,823,674.

The stated value and issue price of the Series C Preferred stock is $100.00 per
share. Holders of the Series C Preferred Stock are entitled to receive
cumulative dividends at the rate of 2.5% per annum, payable quarterly on January
31, April 30, July 31 and October 31, beginning with January 31, 2007. The form
of dividend payments may be, at the Company's option, in cash or shares of the
Company's $0.001 par value common stock (the "Common Stock"), or a combination
thereof. The Series C Preferred is convertible into shares of Common Stock at
the rate of $1.05 per share.

The Series C Preferred Stock has customary weighted-average anti-dilution rights
with respect to any subsequent issuance of Common Stock or Common Stock
equivalents at a price less than $1.05 per share, and otherwise in connection
with forward or reverse stock splits, stock dividends, recapitalizations, and
the like. The anti-dilution provisions shall not apply to employee stock options
and shares issued in connection with certain mergers and acquisitions.

Except as otherwise provided in the Series C Preferred Stock Certificate of
Designation with respect to matters that adversely affect the rights of the
holders of the Series C Preferred Stock, and as otherwise required by law, the
Series C Preferred Stock shall have no voting rights.

Upon any liquidation, dissolution or winding-up of the Company, whether
voluntary or involuntary, the holders of the Series C Preferred Stock shall be
entitled to receive out of the assets of the Company, whether such assets are
capital or surplus, for each share of Series C Preferred Stock an amount equal
to the stated value ($100.00) of the Series C Preferred Stock per share plus any
accrued and unpaid dividends thereon and any other fees or liquidated damages
owing. If the assets of the Company are insufficient to pay such amounts in
full, then the entire assets to be distributed to the holders of the Series C
Preferred Stock shall be distributed among the holders of the Series C Preferred
Stock ratably in accordance with the respective amounts that would be payable on
such shares if all amounts payable thereon were paid in full.

The Company has the right to redeem the Series C Preferred commencing six months
from a final closing date in the event the closing bid price of the Company's
Common Stock has closed for 20 consecutive trading days at a price not less than
$3.00 (subject to adjustment) by delivering notice to holders of the Series C
Preferred Stock. The maximum aggregate number of Series C Preferred Stock which
may be redeemed pursuant to any such redemption notice in any given week shall
be that number of shares of Series C Preferred Stock for which the underlying
Common Stock (together with any accrued dividends payable in Common Stock
thereon) are less than or equal to 25% of the average daily trading volume of
the Common Stock for the 20 Trading Days preceding each such redemption notice
date.

During the year ended February 29, 2008, 2,750 Series C Preferred shares were
converted to 261,904 shares of Common Stock.

During the year ended February 29, 2008, the Company paid cash dividends on the
Series C Preferred Stock in the amount of $6,983 and recorded accrued dividends
of $554,895 as of and for the year ended February 29, 2008. During the year
ended February 28, 2007, the Company recorded accrued dividends on the Series C
Preferred Convertible in the amount of $99,633.


                                      F-17
<PAGE>
                            NEW FRONTIER ENERGY, INC.

                   Notes to Consolidated Financial Statements

                                February 29, 2008

WARRANTS

During the year ended February 29, 2008, the board of directors approved the
issuance of Warrants and Stock Options to investor relations firms, employees
and others.

During the year ended February 28, 2007, the board of directors approved the
issuance of Warrants (the "Warrants") to purchase common stock in connection
with the issuance of Series C 2.5% Cumulative Convertible Preferred Stock and
Warrants and Stock Options to investor relations firms, employees and others.

SERIES A CONVERTIBLE PREFERRED STOCK AND NOTE PAYABLE WARRANTS

In connection with the Series A Preferred Stock, the Company issued warrants to
purchase 150,000 shares of Common Stock in October 2004, which were adjusted to
203,072 on January 16, 2007 because of the anti-dilution rights. The Warrants
originally provided the holder of the warrants the right to purchase shares of
the Company's Common Stock at an exercise price of $1.50, which was adjusted to
$1.11 on January 16, 2007. The Warrants expired unexercised on May 1, 2008.

SERIES B CONVERTIBLE PREFERRED STOCK WARRANTS

The Company issued 4,950,000 warrants in connection with the Series B Preferred
Stock placement, adjusted to 5,180,391 on January 16, 2007 because of the
anti-dilution rights. The warrants originally provided the holder warrants to
purchase shares of the Company's Common Stock at an exercise price of $1.50,
which was adjusted to $1.11 on January 16, 2007 pursuant to anti-dilution
rights. Subsequent to year end, warrants were exercised to purchase 1,542,765
shares of common stock for proceeds of $1,712,469. The remaining warrants
expired May 1, 2008.

The warrants had customary weighted-average anti-dilution rights with respect to
any subsequent issuance of Common Stock or Common Stock equivalents at a price
less than $1.11 per share (subject to adjustment), and otherwise in connection
with forward or reverse stock splits, stock dividends, recapitalizations, and
the like. The anti-dilution provisions did not apply to employee stock options
and shares issued in connection with certain mergers and acquisitions.

In the event the shares of Common Stock underlying the Warrants are subject to
an effective registration statement that has been continuously effective for a
minimum of 30 days and the closing bid price of the Company's Common Stock has
closed for 20 consecutive trading days at a price not less than $3.50 (subject
to adjustment), the Company may redeem the Warrants upon 30 days' written notice
to the holders of the Warrants at a redemption price of $0.01 per Warrant Share.

PLACEMENT AGENT WARRANT SERIES B PREFERRED STOCK

In connection with the offer and sale of our Series B Preferred Stock, the
Company granted a warrant to purchase 24.75 units of the Series B Preferred
Stock offering at a purchase price of $13,000 per Unit (the "Placement Agent
Warrant"). Each Unit consists of (i) $13,000 of Series B Preferred Stock,
convertible into 20,000 shares of Common Stock at the rate of $0.65 per Share;
and (ii) a three-year warrants to purchase 27,131 shares of Common Stock at an
exercise price of $1.11 per share on the same terms and conditions as the
warrants issued to the Series B Preferred Stock holders. The Placement Agent
Warrant expired on May 1, 2008. During the year ended February 29, 2008, the
Company received $52,000 for the purchase of four Units. The Series B Preferred
Stock shares were simultaneously converted into 80,000 shares of Common Stock.
In connection with this transaction, warrants to purchase 108,108 shares of
Common Stock at $1.11, expiring May 1, 2008, were issued.

                                      F-18
<PAGE>
                            NEW FRONTIER ENERGY, INC.

                   Notes to Consolidated Financial Statements

                                February 29, 2008

2.5% CONVERTIBLE DEBENTURE WARRANTS

In connection with the offer and sale of the Debentures, the Company issued
1,150,000 warrants adjusted to 1,716,451 on January 16, 2007 pursuant to
anti-dilution rights. The warrants provide the holders the right to purchase
shares of the Company's Common Stock at an exercise price of $1.33 after
adjusting for anti-dilution. The estimated fair value of these warrants was
recorded as debt issuance costs in the amount of $966,000 and was determined
using the Black - Scholes Model. Each warrant expires July 22, 2008. The fair
value has been recorded as debt issuance costs at the inception of the
agreements and amortized over the term of the debt.

The warrants have customary weighted-average anti-dilution rights with respect
to any subsequent issuance of Common Stock or Common Stock equivalents at a
price less than $1.33 per share (subject to adjustment), and otherwise in
connection with forward or reverse stock splits, stock dividends,
recapitalizations, and the like. The anti-dilution provisions shall not apply to
certain employee stock options and shares issued in connection with certain
mergers and acquisitions. In the event the shares of Common Stock underlying the
warrants are subject to an effective registration statement that has been
continuously effective for a minimum of 30 days and the closing bid price of the
Company's Common Stock has closed for 20 consecutive trading days at a price not
less than $4.00 (subject to adjustment), the Company may redeem the warrants
upon 30 days' written notice to the holders of the warrants at a redemption
price of $0.01 per warrant share.

PLACEMENT AGENT WARRANT 2.5% CONVERTIBLE DEBENTURE

In connection with the placement of the Series B Preferred Stock issue on July
22, 2005, the Placement Agent or its designees received three-year warrants to
purchase 230,000 shares adjusted to 255,040 on January 16, 2007 pursuant to
anti-dilution rights and 115,000 shares adjusted to 173,533 at $1.08 and $1.33
per share, respectively after adjusting for anti-dilution. Using the Black
Scholes Model, the fair values of these warrants were estimated at $143,000 and
$96,600, respectively. The fair value has been recorded as debt issuance costs
at the inception of the agreements and amortized over the term of the debt.

The warrants have customary weighted-average anti-dilution rights with respect
to any subsequent issuance of Common Stock or Common Stock equivalents at a
price less than $1.08 and $1.33 per share, respectively (subject to adjustment),
and otherwise in connection with forward or reverse stock splits, stock
dividends, recapitalizations, and the like. The anti-dilution provisions shall
not apply to certain employee stock options and shares issued in connection with
certain mergers and acquisitions.

SERIES C CONVERTIBLE PREFERRED STOCK WARRANTS

AC Warrants

The AC Warrants are three year warrants issued between December 1, 2006 and
January 16, 2007, are exercisable at $1.50 per common share and have a call
feature (the "AC Redemption") for $0.01 per share provided that the Company's
Common Stock has been trading at not less than $3.50 per share for twenty
consecutive trading days and the underlying shares of Common Stock are subject
to an effective registration statement that has been continuously effective for
a minimum of thirty days. The AC Redemption shall take effect, which date shall
be at least 65 calendar days after the redemption notice is sent to Holder,
provided, however, that the maximum aggregate redemption amount for all holders
of the same class as the AC Warrant (the "Aggregate Redemption Amount") per
calendar week shall be 25% of the average daily trading volume of the Company's
Common Stock for the 20 trading days preceding each such redemption notice. The
Aggregate Redemption Amount shall be applied on a pro-rata basis to each holder
of warrants of the same class as the AC Warrant based upon the respective number
of shares of Common Stock underlying each holder's warrants.



                                      F-19
<PAGE>
                            NEW FRONTIER ENERGY, INC.

                   Notes to Consolidated Financial Statements

                                February 29, 2008

The AC Warrants have customary weighted-average anti-dilution rights with
respect to any subsequent issuance of Common Stock or Common Stock equivalents
at a price less than $1.50 per share (subject to adjustment), and otherwise in
connection with forward or reverse stock splits, stock dividends,
recapitalizations, and the like. The anti-dilution provisions shall not apply to
employee stock options and shares issued in connection with certain mergers and
acquisitions.

The AC Warrants have certain conversion cap limitations which prevent the
Company and the holders of the AC Warrants from effecting any exercise of the AC
Warrants to the extent that, after giving effect to the exercise, a holder and
its affiliates would beneficially own in excess of certain beneficial ownership
limitations. The "Beneficial Ownership Limitation" is (i) 4.99% of the number of
shares of the Common Stock outstanding immediately after giving effect to the
issuance of shares of Common Stock issuable upon exercise of the AC Warrants
held by the applicable holder, with respect to any holder whose initial number
of Warrant Shares under the AC Warrants is less than 5,000,000, and (ii) 9.99%
of the number of shares of the Common Stock outstanding immediately after giving
effect to the issuance of shares of Common Stock issuable upon exercise of the
AC Warrants held by the applicable holder, with respect to any holder whose
initial number of Warrant Shares hereunder is 5,000,000 or more. The Beneficial
Ownership Limitation with respect to a holder subject to the 4.99% limitation
described in part (i) of the definition of Beneficial Ownership Limitation, may
be waived by such holder, at the election of such holder, upon not less than 61
days' prior notice to the Corporation, to change the Beneficial Ownership
Limitation to 9.99% of the number of shares of the Common Stock outstanding
immediately after giving effect to the issuance of shares of Common Stock upon
exercise of the AC Warrant held by the applicable holder. Upon such a change by
a holder of the Beneficial Ownership Limitation from such 4.99% limitation to
such 9.99% limitation, the Beneficial Ownership Limitation shall not be further
waived. The Beneficial Ownership Limitation with respect to a holder subject to
the 9.99% limitation may not be waived by such holder. The Beneficial Ownership
Limitation shall terminate with respect to any Warrant Shares being redeemed by
the Company, which termination shall be effective 60 days subsequent to the
transmission of a Redemption Notice to the holder.

As of February 29, 2008, there were 21,166,658 AC Warrants issued and
outstanding and none had been exercised and the expiration date is as follows:

        December 1, 2009               9,523,800
        December 29, 2009              2,061,911
        January 16, 2010               9,580,947
                                   -------------
                                      21,166,658
                                   =============
BC Warrants

The BC Warrants are three year warrants issued between December 1, 2006 and
January 16, 2007, are exercisable at $2.00 per common share and have a call
feature (the "BC Redemption") for $0.01 per share provided that the Company's
Common Stock has been trading at not less than $4.00 per share for twenty
consecutive trading days and the underlying shares of Common Stock are subject
to an effective registration statement that has been continuously effective for
a minimum of thirty days. The BC Redemption shall take effect, which date shall
be at least 65 calendar days after the redemption notice is sent to Holder,
provided, however, that the maximum aggregate redemption amount for all holders
of the same class as the BC Warrant (the "BC Aggregate Redemption Amount") per
calendar week shall be 25% of the average daily trading volume of the Company's
Common Stock for the 20 trading days preceding each such redemption notice. The
BC Aggregate Redemption Amount shall be applied on a pro-rata basis to each
holder of warrants of the same class as the BC Warrant based upon the respective
number of shares of Common Stock underlying each holder's warrants.

The BC Warrants have customary weighted-average anti-dilution rights with
respect to any subsequent issuance of Common Stock or Common Stock equivalents
at a price less than $2.00 per share (subject to adjustment), and otherwise in
connection with forward or reverse stock splits, stock dividends,
recapitalizations, and the like. The anti-dilution provisions shall not apply to
employee stock options and shares issued in connection with certain mergers and
acquisitions.

                                      F-20
<PAGE>
                            NEW FRONTIER ENERGY, INC.

                   Notes to Consolidated Financial Statements

                                February 29, 2008

The BC Warrants have certain conversion cap limitations which prevent the
Company and the holders of the BC Warrants from effecting any exercise of the BC
Warrants to the extent that, after giving effect to the exercise, a holder and
its affiliates would beneficially own in excess of certain beneficial ownership
limitations. The "Beneficial Ownership Limitation" is (i) 4.99% of the number of
shares of the Common Stock outstanding immediately after giving effect to the
issuance of shares of Common Stock issuable upon exercise of the BC Warrants
held by the applicable holder, with respect to any holder whose initial number
of Warrant Shares under the BC Warrants is less than 5,000,000, and (ii) 9.99%
of the number of shares of the Common Stock outstanding immediately after giving
effect to the issuance of shares of Common Stock issuable upon exercise of the
BC Warrants held by the applicable holder, with respect to any holder whose
initial number of Warrant Shares hereunder is 5,000,000 or more. The Beneficial
Ownership Limitation with respect to a holder subject to the 4.99% limitation
described in part (i) of the definition of Beneficial Ownership Limitation, may
be waived by such holder, at the election of such holder, upon not less than 61
days' prior notice to the Corporation, to change the Beneficial Ownership
Limitation to 9.99% of the number of shares of the Common Stock outstanding
immediately after giving effect to the issuance of shares of Common Stock upon
exercise of the BC Warrant held by the applicable holder. Upon such a change by
a holder of the Beneficial Ownership Limitation from such 4.99% limitation to
such 9.99% limitation, the Beneficial Ownership Limitation shall not be further
waived. The Beneficial Ownership Limitation with respect to a holder subject to
the 9.99% limitation may not be waived by such holder. The Beneficial Ownership
Limitation shall terminate with respect to any Warrant Shares being redeemed by
the Company, which termination shall be effective 60 days subsequent to the
transmission of a Redemption Notice to the holder.

As of February 29, 2008, there were 10,583,545 BC Warrants issued and
outstanding and none had been exercised and the expiration date is as follows:

          December 1, 2009        4,762,000
          December 29, 2009       1,030,973
          January 16, 2010        4,790,572
                               ------------
                                 10,583,545
                               ============

PLACEMENT AGENT WARRANTS FOR SERIES C OFFERING

For acting as the placement agent for the sale of the Series C Preferred Stock,
the Placement Agent or its designees are entitled to receive warrants to
purchase 439,287 shares of the Company's Common Stock at a price of $1.05 per
share (the "Placement Agent Warrant"), 439,287 shares of the Company's Common
Stock at a price of $1.50 per share on similar terms as the AC Warrants (the "AC
Placement Agent Warrants") and 219,645 shares of the Company's Common Stock at a
price of $2.00 per share on similar terms as the BC Warrants (the "BC Placement
Agent Warrants"). The AC Placement Agent Warrants and the BC Placement Agent
Warrants are included in the amount of AC Warrants and BC Warrants issued and
outstanding. Each of the Placement Agent Warrants, AC Placement Agent Warrants
and BC Placement Agent Warrants expires on January 16, 2010.

The AC Placement Agent Warrants may be called on the same terms as the AC
Redemption. The BC Placement Agent Warrants may be called on the same terms as
the BC Redemption.

NONQUALIFIED STOCK OPTIONS

On January 30, 2008, the Company issued a three-year nonqualified stock option
for 100,000 shares of Common Stock at an exercise price of $2.00 per share to an
unrelated party for shareholder relations services rendered. The closing price
of the stock on January 30, 2008 was $1.20 per share. Using the Black-Scholes
model with estimated volatility of 69.08%, risk-free interest rate of 4.11%, and
a life of three years, the estimated fair value of the grant is $41,400 which
was recorded as general and administrative, stock compensation expense.

On December 31, 2007, the Company issued a three-year nonqualified stock option
for 100,000 shares of Common Stock at an exercise price of $2.00 per share to an
unrelated party for shareholder relations services rendered. The closing price
of the stock on December 31, 2007 was $1.17 per share. Using the Black-Scholes
model with estimated volatility of 69.08%, risk-free interest rate of 4.04%, and
a life of three years, the estimated fair value of the grant is $40,200 which
was recorded as general and administrative, stock compensation expense.

On October 15, 2007, the Company issued a three-year stock purchase warrant for
350,000 shares of Common Stock at an exercise price of $2.00 per share to an
unrelated party for shareholder relations services. The closing price of the
stock on October 15, 2007, was $1.15 per share. Using the Black-Scholes model
with estimated volatility of 72.41%, risk-free interest rate of 4.25%, and a
life of three years, the estimated fair value of the grant is $143,900, which
was recorded as general and administrative expense, stock compensation expense.


                                      F-21
<PAGE>
                            NEW FRONTIER ENERGY, INC.

                   Notes to Consolidated Financial Statements

                                February 29, 2008

On November 10, 2006, the Company granted certain employees and agents of the
Company an aggregate of 3,950,000 options to acquire shares of the Company's
Common Stock, which are exercisable at a price of $1.25. These stock options
vest at a rate of 12.5% each fiscal quarter ending November 30, February 28, May
31 and August 31 and expire on November 30, 2014. The Company's stock closed at
$1.24 on November 10, 2006. The fair value of the options was estimated on the
date of the grant utilizing the Black-Scholes option pricing model with the
following assumptions: expected life of the options is 10 years, expected
volatility of 81%, risk free interest rate of 5% and no dividend yield. The fair
value for the options granted was approximately $1.04 per share. The value of
the options was recorded at $4,124,400 and $515,550 is being amortized quarterly
as the options vest. During the fiscal years ended February 29, 2008 and
February 28, 2007, $2,062,000 and $1,031,100, respectively, were charged to
general and administrative stock compensation expense.

STOCK PURCHASE WARRANT TO INVESTOR RELATIONS FIRM

On December 28, 2006, the Company issued a three-year nonqualified stock option
for 500,000 shares of Common Stock at an exercise price of $2.00 per share for
shareholder relations services rendered. The closing price of the stock on
December 28, 2006, was $1.45 per share. Using the Black-Scholes model with
estimated volatility of 82.75%, risk-free interest rate of 4.73%, and a life of
three years, the estimated fair value of the grant is $350,317, which was
recorded as general and administrative, stock compensation expense in the fiscal
year ended February 28, 2007.




                                      F-22
<PAGE>
                            NEW FRONTIER ENERGY, INC.

                   Notes to Consolidated Financial Statements

                                February 29, 2008

The following table summarizes information about fixed-price stock options and
warrants outside of the plans at February 29, 2008 and February 28, 2007.
<TABLE>
<CAPTION>

                                           February 29, 2008        February 28, 2007
                                        ----------------------   -----------------------
                                                      Weighted                  Weighted
                                                      Average                   Average
                                                      Exercise                  Exercise
                                          Shares      Price        Shares       Price
                                        ----------    --------   ----------    --------
<S>                                     <C>           <C>         <C>          <C>
     Beginning of period                40,128,657    $   1.34    7,340,838    $   1.35
       Granted                             658,108    $   2.00   32,250,203    $   1.34
       Anti-dilution warrants issued            --    $  --       1,735,030    $   1.19
       Exercised                          (686,753)   $   1.11   (1,197,414)   $   1.38
       Expired                                  --    $     --           --    $     --
                                        ----------    --------   ----------    --------
     End of period                      40,100,012    $   1.59   40,128,657    $   1.34
                                        ==========    ========   ==========    ========
</TABLE>

On November 10, 2006, 3,950,000 non-incentive options were granted which vest
493,750 shares each fiscal quarter over two years. The remaining contractual
life for the $1.25 non-incentive stock options is 8.70 years.

               Non-incentive Stock Option Plan Shares Exercisable

                             February 29, 2008    February 28, 2007
                           --------------------- ------------------
                                        Weighted           Weighted
                                        Average            Average
                                        Exercise           Exercise
                            Shares      Price     Shares   Price
                           ---------   --------  -------   --------
     Beginning of period     987,500   $   1.25       --   $     --
       Granted             1,975,000   $   1.25  987,500   $   1.25
       Exercised                  --   $     --       --   $     --
       Expired                    --   $     --       --   $     --
                           ---------   --------  -------   --------
     End of period         2,962,500   $   1.25  987,500   $   1.25
                           =========   ========  =======   ========

As a result of the grant of stock options to certain employees and others during
the year ended February 29, 2008 the following increase in options and warrants
summarized as follows:

                                                        Number
                                                      of Shares
                                                     Exercisable
               ------------------------------        -----------
               Options exercisable at $1.20               25,000
               Warrants exercisable at $1.11             108,108
               Warrants exercisable at $2.00             550,000
                                                     -----------
                                                         683,108
                                                     ===========

                                      F-23
<PAGE>
                            NEW FRONTIER ENERGY, INC.

                   Notes to Consolidated Financial Statements

                                February 29, 2008

EQUITY INCENTIVE PLAN STOCK OPTION PLAN

In August 2006, the Board of Directors adopted an incentive stock option plan
reserving 10,000,000 shares of the Company's $0.001 par value common stock for
issuance pursuant to the plan which was adopted on June 11, 2007 at a special
meeting of the shareholders. No options have been granted under the plan.

On June 6, 2003, the Board of Directors adopted the New Frontier Energy, Inc.
Stock Option and Stock Grant Plan ("The Plan"). The Plan allows for the issuance
of incentive (qualified) options and non-qualified options and the grant of
stock or other equity incentives to employees, consultants, directors, and
others providing service of special significance to our company. The Plan is
administered by a committee to be appointed by the Board of Directors, or in the
absence of that appointment, by the Board itself. The Plan provides for the
issuance of up to 625,000 shares or options. No option may be exercised more
than ten years from the date of grant. The Plan expires in 2013. On January 30,
2008, the Company issued two ten-year qualified stock options for an aggregate
of 25,000 shares of Common Stock at an exercise price of $1.20 per share to
certain employees. The closing price of the stock on January 30, 2008 was $1.20
per share. Using the Black-Scholes model with estimated volatility of 69.08%,
risk-free interest rate of 4.11%, and a life of ten years, the estimated fair
value of the grants is $23,300 which was recorded as general and administrative,
stock compensation expense.

The changes in the outstanding stock options during the years ended February 29,
2008 and February 28, 2007 are summarized as follows:

                             February 29, 2008    February 28, 2007
                           ---------------------  -----------------
                                        Weighted           Weighted
                                        Average            Average
                                        Exercise           Exercise
                            Shares      Price     Shares   Price
                           ---------   --------  -------   --------
     Beginning of period     559,333   $   0.88  588,000   $   0.88
       Granted                25,000   $   1.20       --   $     --
       Exercised                  --   $   0.75  (28,667)  $   0.75
       Expired                    --   $     --       --   $     --
                           ---------   --------  -------   --------
     End of period           584,333   $   0.89  559,333   $   0.88
                           =========   ========  =======   ========


                                      F-24
<PAGE>
                            NEW FRONTIER ENERGY, INC.

                   Notes to Consolidated Financial Statements

                                February 29, 2008

At February 29, 2008, the weighted average remaining contractual life for the
$1.00 options is 5.27 years, the weighted average remaining contractual life for
the $0.75 options is 6.66 years, the remaining weighted average remaining
contractual life for the $1.15 options is 7.20 years, and the remaining weighted
average remaining contractual life for the $1.20 options is 9.92 years.

The following table summarizes the options and warrants outstanding and
exercisable at February 29, 2008:


                                      Weighted
                                      Average
        Range                        Remaining    Weighted
         of              Number     Contractual   Average
      Exercise         of Shares      Life in     Exercise
        Price         Outstanding      Years       Price
     --------------   -----------   -----------   --------
     $0.75 to $1.50    31,713,300      1.48       $  1.38
     $1.51 to $2.75    11,933,545      2.15       $  2.01
                      -----------
                       43,646,845
                      ===========


10.  COMMITMENTS LAWS AND REGULATIONS

The Company is subject to extensive federal, state, and local environmental laws
and regulations. These requirements, which change frequently, regulate the
discharge of materials into the environment. The Company believes it is in
compliance with existing laws and regulations.

EMPLOYMENT AGREEMENTS

The Company has written employment agreements with its two executive officers.
Pursuant to their employment agreements, said officers devote such time as each
deems necessary to perform their duties to the Company and are subject to
conflicts of interest. The employment agreements expire on October 31, 2009;
however, they are automatically renewable on an annual basis for additional
one-year increments. Pursuant to the employment agreements, the Officers receive
base salary compensation in the aggregate amount of $305,004 per annum, adjusted
annually at the rate of inflation as measured under the federal Consumer Price
Index or ($6,000), whichever is greater. The compensation is subject to annual
escalations based on cost of living and merit increases approved by the Board.

The employment agreements contain provisions under which the Company will be
obligated to pay the executive officers all compensation for the remainder of
their employment agreements and 2.99 times their annual salary if a change of
control, as defined in the employment agreements occurs.

11.  BUSINESS SEGMENT INFORMATION

The Company operates in two business segments: oil and gas exploration and gas
gathering. Operating results and other financial data for the years ended
February 29, 2008 and February 28, 2007 is presented for the principal business
segments as follows:
<TABLE>
<CAPTION>
                                               Oil & Gas     Gas Gathering   Consolidated
                                             ------------    ------------    ------------
February 29, 2008
<S>                                          <C>             <C>             <C>
  Revenues                                   $    622,442    $    135,297    $    757,739
  Income (loss) before taxes                 $ (6,303,024)   $    (40,347)   $ (6,343,371)
  Total assets                               $ 23,815,167    $  2,394,456    $ 26,209,623
  Property additions                         $  5,493,729    $         --    $  5,493,729
  Interest expense                           $    (83,172)   $         --    $    (83,172)
  Debt issuance costs, non-cash              $   (365,517)   $         --    $   (365,517)
  Depreciation, depletion and amortization   $    601,343    $    130,492    $    731,835
February 28, 2007
  Revenues                                   $    238,385    $    122,796    $    361,181
  Loss before taxes                          $ (4,505,936)   $    (51,827)   $ (4,557,762)
  Total assets                               $ 26,498,297    $  2,549,426    $ 29,047,723
  Property additions                         $  8,923,915    $         --    $  8,923,915
  Interest expense                           $    (90,214)   $         --    $    (90,214)
  Debt issuance costs, non-cash              $   (905,957)   $         --    $   (905,957)
  Depreciation, depletion and amortization   $    189,412    $    130,492    $    319,904
</TABLE>

                                      F-25
<PAGE>
                            NEW FRONTIER ENERGY, INC.

                   Notes to Consolidated Financial Statements

                                February 29, 2008

12.  RELATED PARTIES

The Company  executed an office lease for office space in  Littleton,  Colorado,
with  Spotswood   Properties,   LLC,  a  Colorado  limited   liability   company
("Spotswood"), and an affiliate of the president, effective January 1, 2006, for
a  three-year  term,  which  is  renewable  under  terms  and  conditions  to be
negotiated.  The  lease  provides  for the  payment  of $2,667  per  month  plus
utilities  and other  incidentals.  The  president  of the  Company  owns 50% of
Spotswood.  The Company is of the opinion that the terms of the lease is no less
favorable than could be obtained from an unaffiliated party.  Spotswood was paid
$32,000 in fiscal years 2008 and 2007.

The Company paid a  corporation  controlled by one of the directors for geologic
consulting $85,000 and $77,250 in fiscal 2008, and 2007, respectively.

SDG accrued management fees in the amounts of $8,176 and $15,192 in fiscal 2008,
and 2007, respectively to an entity 50% owned by the president of the Company.

Effective December 31, 2007 the Company entered into a Purchase and Sale
Agreement with Natural Resource Group Gathering, LLC ("NRGG"), whereby the
Company increased its investment in Slater Dome Gathering, LLLP ("SDG") by
acquiring the general partner's interest for $1,075,000 consisting of $268,750
in cash and executing a promissory note in the amount of $806,250. The Note
bears interest at a rate of 2.5% per annum and is payable in quarterly
installments of $201,562.50 plus interest and is due December 31, 2008. At the
option of the Company, quarterly payments may be deferred until the maturity
date. As a result, the Company owns the 25% general partner's interest together
with 82.76% of the Class A limited partnership interests in SDG. The Company
will receive 84.487% of SDG cash distributions until the limited partners have
received cash distributions equal to their initial capital contributions and
87.07% of cash distributions thereafter.

The purchase price was based on a valuation analysis of the gathering line by an
independent consulting firm that provides engineering project management, due
diligence and expert witness services to the oil and gas pipeline industry.

The purchase price was based on a valuation analysis of the gathering line by an
independent consulting firm that provides engineering project management, due
diligence and expert witness services to the oil and gas pipeline industry.

The Company's President and Chief Executive Officer is a manager and owns 50% of
the membership interests of NRGG, the general partner of SDG, through December
31, 2007.

The Company's President and Chief Executive Officer is a manager and owns 50% of
the membership interests of NRGG.

13.  MARKET RISK

The Company's major market risk exposure is in the pricing applicable to its oil
and gas production. Realized pricing is primarily driven by the prevailing
worldwide price for crude oil and spot prices applicable to its natural gas
production. Historically, prices received for oil and gas production have been
volatile and unpredictable and price volatility is expected to continue.


                                      F-26
<PAGE>
                            NEW FRONTIER ENERGY, INC.

                   Notes to Consolidated Financial Statements

                                February 29, 2008

14.  DISCLOSURES ABOUT OIL AND GAS PRODUCING ACTIVITIES

The Company has incurred the following costs, both capitalized and expensed, in
respect to its oil and gas property acquisition. Exploration and development
activities are summarized as follows (all in the United States):

                                              February 29,         February 28,
                                                  2008                 2007
                                              ------------         ------------
Property Acquisition Costs:
  Proved properties                           $         --         $  1,041,000
  Unproved properties                         $    182,451         $  7,467,727
  Exploration costs                           $    249,848         $    205,713
  Development costs                           $  4,586,950         $    709,753


     Results of operations for oil and gas producing activities

The results of operations for oil and gas producing activities, excluding
capital expenditures and corporate overhead and interest costs, are as follows
(all in the United States):

                                                    February 29,    February 28,
                                                       2008            2007
                                                    -----------     -----------
Operating Revenues                                  $   622,442     $   238,385
                                                    -----------     -----------
Costs and expenses:
Production                                            1,498,829         642,253
Exploration                                             249,848         205,713
Depletion, depreciation
  and amortization                                      497,100         143,791
                                                    -----------     -----------
Total costs and expenses                              2,245,777         991,757
                                                    -----------     -----------
(Loss) from oil and gas producing activities        $(1,623,335)    $  (753,372)
                                                    ===========     ===========

15.  SUPPLEMENTARY OIL AND GAS INFORMATION (UNAUDITED)

At February 29, 2008 and February 28, 2007, the estimated oil and gas reserves
presented herein were derived from reports prepared by Questa Engineering,
Corp., an independent petroleum engineering firm. The Company cautions that
there are many inherent uncertainties in estimating proved reserve quantities
and in projecting future production rates and the timing of development
expenditures. Accordingly, these estimates are likely to change as future
information becomes available, and these changes could be material. The
properties included in the oil and gas reserve estimates are those properties at
the Slater Dome Prospect that are connected to the gas gathering pipeline at
February 29, 2008 and February 28, 2007.

Proved oil and gas reserves are the estimated quantities of crude oil,
condensate natural gas, and natural gas liquids which geological and engineering
data demonstrate with reasonable certainty to be recoverable in future years
from known reservoirs under existing economic and operating conditions. Proved
developed reserves are reserves expected to be recovered through existing wells
with existing equipment and operating methods.

Proved undeveloped reserves are reserves that are expected to be recovered from
new wells on undrilled acreage. Reserves on undrilled acreage shall be limited
to those drilling units offsetting productive units that are reasonably certain
of production when drilled.


                                      F-27
<PAGE>

                            NEW FRONTIER ENERGY, INC.

                   Notes to Consolidated Financial Statements

                                February 29, 2008


Estimated Oil and Gas Reserve Quantities.

Estimated quantities of proved developed and proved undeveloped reserves (all of
which are located within the United States), as well as the changes in proved
developed reserves during the periods indicated, are presented in the following
tables:

                                                         Natural Gas in MCF
                                                       2008             2007
                                                   -----------      -----------
Balance, beginning of fiscal year                   12,114,000        6,006,000
Revisions of previous estimates                             --       (2,106,000)
Extensions and discoveries                           3,587,000               --
Sales of reserves in place                                  --               --
Improved recovery                                           --               --
Purchase of reserves                                 8,214,000
Production                                            (140,000)         (25,500)
                                                   -----------      -----------
Proved developed net reserves at the
end of the fiscal year                              15,561,000       12,114,000
                                                   ===========      ===========


All of the Company's oil and gas reserves are classified as proved developed or
proved undeveloped.

Standardized Measure of Discounted Future Net Cash Flow

The table below has been developed utilizing procedures prescribed by SFAS 69
"Disclosures about Oil and Gas Producing Activities" and based on natural gas
reserves and production volumes estimated by the Company. It may be useful for
certain comparison purposes, but should not be solely relied upon in evaluating
the Company or its performance. Further, information contained in the following
tables should not be considered as representative or realistic assessments of
future cash flows, nor should the Standardized Measure of Discounted Future Net
Cash Flows be viewed as representative of the current value of the Company.

The Company is of the opinion that the following factors should be taken into
account in reviewing the following information:

     o    Future costs and selling prices will probably differ from these
          required to be used in these calculations;

     o    Due to future market conditions and governmental regulations, actual
          rates of production achieved in future years may vary significantly
          from the rate of production assumed in these calculations;

     o    Selection of a 10% discount rate, as required by SFAS 69, is arbitrary
          and may not be reasonable as a measure of risk inherent in realizing
          future net oil and gas revenues; and

     o    Future net revenues may be subject to different rates of income
          taxation.

                                      F-28
<PAGE>
                            NEW FRONTIER ENERGY, INC.

                   Notes to Consolidated Financial Statements

                                February 29, 2008

The table below sets forth a standardized measure of the estimated discounted
future net cash flow attributable to the Company's proved oil and gas reserves.
Estimated future cash inflows were computed by applying prices of $7.30 and
$5.21 per MCF of natural gas to the estimated future production of proved oil
and gas reserves at February 29, 2008 and February 28, 2007 respectively. There
were no extensions, discoveries or improved recoveries for the year ended
February 28, 2007. The future production and development costs represent the
estimated future expenditures to be incurred in developing and producing the
proved reserves, assuming continuation of existing economic conditions.
Discounting the annual net cash flows at 10% illustrates the impact of timing on
these future cash flows.

Standardized measure of cash flows:

                                                   February 29,     February 28,
                                                       2008             2007
                                                   ------------     ------------
Future cash inflows                                $113,608,380     $ 63,109,300
                                                   ------------     ------------
Deduct:
  Future production costs                            40,881,780       27,077,100
  Future development costs                           13,240,600        8,411,900
  Future income taxes                                17,415,200        7,243,800
                                                   ------------     ------------
                                                     71,537,580       42,732,800
                                                   ------------     ------------

Future net cash flows                                42,070,800       20,376,500

Less 10% discount amount                             16,405,900        8,120,400
                                                   ------------     ------------
Standardized measure of discounted
   future net cash flows relating to
   proved oil and gas reserves                     $ 25,664,900     $ 12,256,100
                                                   ============     ============


Principal changes in the Standardized Measure for the years ended February 29,
2008 and February 28, 2007 are summarized as follows:
<TABLE>
<CAPTION>

                                                       February 29,    February 28,
                                                           2008            2007
                                                       ------------    ------------
<S>                                                    <C>             <C>
Standard measure as of beginning of fiscal year        $ 12,256,100    $  6,873,700
                                                       ------------    ------------
Sales of gas produced, net of production costs             (876,387)       (403,868)
Extensions and discoveries                               32,229,489              --
Net change in prices and production costs related to
  future production                                      11,513,580     (16,241,460)
Development costs incurred during the year               (4,586,950)             --
Changes in estimated future development costs            (4,828,700)     (3,909,100)
Purchases of reserves in place                                   --      43,698,480
Revisions of quantity estimates                                  --     (10,193,120)
Changes in discount                                      (8,285,500)     (3,087,400)
Net change in income taxes                              (10,171,400)     (3,195,800)
Changes in timing and other                              (1,585,332)     (1,285,332)
                                                       ------------    ------------

Aggregate change                                         13,408,800       5,382,400
                                                       ------------    ------------
Standardized measure, as of the end of
   the fiscal year                                     $ 25,664,900    $ 12,256,100
                                                       ============    ============
</TABLE>

                                      F-29
<PAGE>
                            NEW FRONTIER ENERGY, INC.

                   Notes to Consolidated Financial Statements

                                February 29, 2008


16.  SUBSEQUENT EVENTS

Issuance of Common Stock

Subsequent to February 29, 2008, the Company issued an aggregate of 1,637,501
shares of common stock and 2,413.13 shares of Series B preferred stock arising
from the exercise of 1,542,765 Series B warrants and 18.5625 Placement Agent
Warrants, each unit consisting of (i) 130 shares of 12% Series B Convertible
Preferred shares--face value $13,000, par value $0.001, convertible into 20,000
shares of the Company's common stock, par value $0.001 at the rate of $0.65 per
share with a face value of $100 per share and (ii) 27,069 detachable warrants to
purchase one share each of common stock at an exercise price of $1.11 per share,
which expired on May 1, 2008. Cash proceeds in the aggregate were $1,953,781.





                                      F-30
<PAGE>