[As adopted in Release No. 34-32231, April 28, 1993, 58 F.R. 26509]

                     U.S. Securities and Exchange Commission

                             Washington, D.C. 20549

                                   FORM 10-QSB

                                   (Mark One)
              [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended: June 30, 2007
                                                 ----------------

             [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE
                                  EXCHANGE ACT

                        For the transition period from to
                        Commission file number 333-102930

                            Silver Star Energy, Inc.
                     (Exact name of small business issuer as
                            specified in its charter)

                  Nevada                                  90-0220668
--------------------------------------------------------------------------------
        (State or other jurisdiction                    (IRS Employer
      of incorporation or organization)              Identification No.)

       9595 Wilshire Boulevard, Suite 900, Beverly Hills, California 90212
      ---------------------------------------------------------------------
                    (Address of principal executive offices)

                                 (310) 477-2211
                            Issuer's telephone number


               (Former name,  former  address and former fiscal year, if changed
since last report.)

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


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





<PAGE>



                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDING DURING THE PRECEDING FIVE YEARS

         Check whether the registrant  filed all documents and reports  required
to be  filed  by  Section  12,  13 or  15(d)  of  the  Exchange  Act  after  the
distribution of securities under a plan confirmed by a court. Yes ----- No -----


                      APPLICABLE ONLY TO CORPORATE ISSUERS

         State the number of shares  outstanding of each of the issuer's classes
of common equity,  as of the latest  practical  date:  June 30, 2007  96,221,035


         Transitional Small Business Disclosure Format (check one).
Yes      ;  No   X
    ----       -----



<PAGE>



                                     PART I

ITEM 1.  FINANCIAL STATEMENTS

                            SILVER STAR ENERGY, INC.
                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                 (Unaudited)
                                                                                   June 30,          December 31,
ASSETS                                                                               2007               2006
                                                                              ------------------  -----------------
Current Assets
<S>                                                                           <C>                 <C>
  Cash                                                                        $           50,908  $          31,533
  Accounts Receivable                                                                      7,972            455,168
  Prepaid Expense                                                                        148,980              5,000
 Other Receivable                                                                         42,274            255,218
                                                                              ------------------  -----------------

     Total Current Assets                                                                250,134            746,919
                                                                              ------------------  -----------------

Fixed Assets
  Furniture and Fixtures                                                                   7,751              7,751
  Computers                                                                                6,222              6,222
  Vehicles                                                                                64,087             64,087
   Accumulated Depreciation                                                              (36,007)           (27,994)
                                                                              ------------------  -----------------

     Net Fixed Assets                                                                     42,053             50,066
                                                                              ------------------  -----------------

Other Assets
  Oil and gas properties, full cost method, net of depletion of
    $115,103 and $544,633, respectively                                                1,728,546          3,373,034
   Unproved oil and gas properties                                                             -            627,375
  Debt Issue Costs, net of amortization of $480,200 and $282,706                               -            197,494
                                                                              ------------------  -----------------

     Total Other Assets                                                                1,728,546          4,197,903
                                                                              ------------------  -----------------

     Total Assets                                                             $        2,020,733  $       4,994,888
                                                                              ==================  =================
</TABLE>












                                        3

<PAGE>



                            SILVER STAR ENERGY, INC.
                                 BALANCE SHEETS
                                   (Continued)


<TABLE>
<CAPTION>
                                                                                (Unaudited)
                                                                                 June 30,           December 31,
                                                                                   2007                 2006
                                                                            -------------------  ------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
<S>                                                                         <C>                  <C>
  Accounts Payable                                                          $            32,390  $           92,067
  Accrued Liabilities                                                                         -              33,442
  Convertible debentures - current portion                                                    -           3,430,000
  Accrued interest                                                                            -             795,335
                                                                            -------------------  ------------------

     Total Current Liabilities                                                           32,390           4,350,844
                                                                            -------------------  ------------------

Long-Term Liabilities
  Asset retirement obligation                                                                 -              60,000
  Derivative liability                                                                        -             279,074
                                                                            -------------------  ------------------

     Total Long-Term Liabilities                                                              -             339,074
                                                                            -------------------  ------------------

      Total Liabilities                                                                  32,390           4,689,918
                                                                            -------------------  ------------------

Stockholders' Equity
  Preferred stock (Par Value $.001), 5,000,000 shares
    authorized. -0- issued at June 30, 2007 and
    December 31, 2006                                                                         -                   -
  Common Stock (Par Value $.001), 300,000,000 shares
    authorized. 96,221,035 issued and outstanding at
    June 30, 2007 and December 31, 2006                                                  96,221              96,221
  Common stock to be issued, 49,045,225 shares at
     June 30, 2007 and -0- at December 31, 2006                                          49,045                   -
  Paid in Capital in Excess of Par Value                                              8,407,724           6,119,457
  Retained Deficit                                                                   (6,564,647)         (5,910,708)
                                                                            -------------------  ------------------

     Total Stockholders' Equity                                                       1,988,343             304,970
                                                                            -------------------  ------------------

     Total Liabilities and Stockholders' Equity                             $         2,020,733  $        4,994,888
                                                                            ===================  ==================
</TABLE>




                             See accompanying notes.

                                        4

<PAGE>



                            SILVER STAR ENERGY, INC.
                            STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                                    (Unaudited)                            (Unaudited)
                                                           For the Three Months Ended               For the Six Months Ended
                                                                      June 30,                               June 30,
                                                              2007             2006                 2007              2006
                                                       ------------------ ------------------  -----------------   -----------------
<S>                                                    <C>                <C>                 <C>                 <C>
Oil Revenue                                            $           24,947 $           27,819  $          75,799   $         119,390
Gas Revenue                                                        54,306            490,509            668,317             929,945
                                                       ------------------ ------------------  -----------------   -----------------
   Total Income                                                    79,253            518,328            744,116           1,049,335
                                                       ------------------ ------------------  -----------------   -----------------

Expenses
  Production Costs                                                979,845            103,020          1,172,354             206,797
  Consulting and Management Fees                                  123,002          3,268,974            465,085           3,464,799
  General and Administrative                                       99,808            129,416            278,603             312,985
  Professional Fees                                                71,160             59,927            200,218             137,967
                                                       ------------------ ------------------  -----------------   -----------------
     Total Expenses                                             1,273,815          3,561,337          2,116,260           4,122,548
                                                       ------------------ ------------------  -----------------   -----------------

Other Income ( Expense)
   Derivative valuation gain/loss                                 279,073                  -            279,073                   -
   Gain (loss) on disposal of assets                            1,150,511                  -          1,150,511                   -
   Gain (loss) on foreign exchange                                      -             38,237                  -              38,237
   Interest Expense                                              (478,251)          (133,339)          (606,479)           (264,157)
   Interest Income                                                      -                  -                  -               1,552
   Financing Penalty Payouts                                       (2,000)                 -           (104,900)            (68,600)
                                                       ------------------ ------------------  -----------------   -----------------
     Total Other Income (Expense)                                 949,333            (95,102)           718,205            (292,968)
                                                       ------------------ ------------------  -----------------   -----------------


Net Income (Loss)                                      $         (245,229)$       (3,138,111) $        (653,939)  $      (3,366,181)
                                                       ================== ==================  =================   =================

Income (Loss) per Common Share                         $                - $           (0.03)  $          (0.01)   $          (0.03)
                                                       ================== ==================  =================   =================

Weighted Average Shares Outstanding                            96,221,035         92,348,511         96,221,035          88,705,014
                                                       ================== ==================  =================   =================
</TABLE>







                             See accompanying notes.

                                        5

<PAGE>



                            SILVER STAR ENERGY, INC.
                            STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                                          (Unaudited)
                                                                                    For the Six Months Ended
                                                                                             June 30,
                                                                                    2007                 2006
                                                                             ------------------  ------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                          <C>                 <C>
Net Loss                                                                     $         (653,939) $       (3,366,181)
Adjustments used to reconcile net loss to net
  cash provided by (used in) operating activities:
   Depreciation, Amortization and Depletion                                             340,506             244,575
   (Gain) loss on disposal of assets                                                 (1,150,511)                  -
   Derivative valuation (gain) loss                                                    (279,073)                  -
   Write-off of oil and gas properties                                                  627,375                   -
   Expense from issuance of warrants                                                    375,500                   -
   Common stock to be issued for accrued interest                                       931,811
   Common stock issued for expenses                                                           -           3,074,000
(Increase) decrease in other assets & prepaids                                         (143,980)            (59,066)
(Increase) decrease in accounts receivable                                              447,196             132,369
(Increase) decrease in other receivable                                                 212,944           1,176,017
Increase (decrease) in accounts payable                                                 (59,677)            (13,841)
Increase (decrease) in accrued interest                                                (795,335)             33,168
Increase (decrease) in accrued liabilities                                              (33,442)           (128,577)
                                                                             ------------------  ------------------
Net cash used in operating activities                                                  (180,625)          1,092,464
                                                                             ------------------  ------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of oil and gas property                                            3,100,000                   -
Acquisition of oil & gas property interests                                            (500,000)         (1,568,207)
                                                                             ------------------  ------------------
Net cash used by investing activities                                                 2,600,000          (1,568,207)
                                                                             ------------------  ------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on convertible debentures                                                   (2,400,000)           (560,000)
                                                                             ------------------  ------------------
Net Cash Provided by Financing  Activities                                           (2,400,000)           (560,000)
                                                                             ------------------  ------------------
</TABLE>









                                        6

<PAGE>



                            SILVER STAR ENERGY, INC.
                            STATEMENTS OF CASH FLOWS
                                   (continued)

<TABLE>
<CAPTION>
                                                                                          (Unaudited)
                                                                                    For the Six Months Ended
                                                                                            June 30,
                                                                                    2007                 2006
                                                                             ------------------  ------------------
<S>                                                                          <C>                 <C>
Net Increase (Decrease) in
   Cash  and Cash Equivalents                                                            19,375          (1,035,743)
Cash and Cash Equivalents at
   Beginning of the Period                                                               31,533           1,087,163
                                                                             ------------------  ------------------
Cash and Cash Equivalents at
   End of the Period                                                         $           50,908  $           51,420
                                                                             ==================  ==================

SUPPLEMENTAL DISCLOSURE OF CASH
  FLOW INFORMATION:
Interest                                                                     $                -  $                -
Income Taxes                                                                 $                -  $                -
</TABLE>

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES:

         On May 7, 2007, the Company agreed to issue 49,045,225 shares of common
stock in exchange for the remaining  debt  totaling  $1,030,000 of principal and
$931,811 on its convertible  debt. As of June 30, 2007, the common stock has not
been issued.


















                             See accompanying notes.

                                        7

<PAGE>



                            SILVER STAR ENERGY, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 1 - NATURE OF OPERATIONS AND GOING CONCERN

         The accompanying  financial  statements have been prepared on the basis
of accounting principles applicable to a "going concern",  which assume that the
Company  will  continue in  operation  for at least one year and will be able to
realize  its assets  and  discharge  its  liabilities  in the  normal  course of
operations.

         The unaudited  financial  statements  as of June 30, 2007,  and for the
three and six month period then ended,  reflect,  in the opinion of  management,
all adjustments (which include only normal recurring  adjustments)  necessary to
fairly state the financial  position and results of operations for the three and
six months. Operating results for interim periods are not necessarily indicative
of the results which can be expected for full years.

         Several conditions and events cast doubt about the Company's ability to
continue  as  a  "going  concern".   The  Company  has  a  retained  deficit  of
approximately  $6,600,000,  and was in default of the  October 14, 2005 terms of
its  convertible  debenture.  As of June  30,  2007,  the  Company  sold its 40%
interest  North  Franklin  gas  field  to  repay a  portion  of its  convertible
debenture,  leaving  its  Canadian  oil  field  as its  only  revenue  producing
property.  These factors raise  substantial doubt about the Company's ability to
continue as a going concern.

         The  Company's  general  business  strategy  is to acquire  oil and gas
properties either directly or through the acquisition of operating entities. The
continued  operations  of the  Company  and  the  recoverability  of oil and gas
property  acquisition,  exploration and development  costs is dependent upon the
existence of economically recoverable reserves and the ability of the Company to
obtain  necessary  financing to complete the development of those reserves,  and
upon future profitable  production.  The Company is planning  additional ongoing
equity  financing  by way of  private  placements  to fund its  obligations  and
operations.

         The Company's future capital  requirements will depend on many factors,
including  costs of exploration of the  properties,  cash flow from  operations,
costs to complete well  production,  if warranted,  and  competition  and global
market conditions.

         These  financial  statements do not reflect  adjustments  that would be
necessary  if the Company  were unable to continue as a "going  concern".  While
management believes that the actions already taken or planned, will mitigate the
adverse conditions and events which raise doubt about the validity of the "going
concern" assumption used in preparing these financial  statements,  there can be
no assurance that these actions will be successful.

         If the  Company  were unable to  continue  as a "going  concern",  then
substantial adjustments would be necessary to the carrying values of assets, the
reported amounts of its liabilities, the reported revenues and expenses, and the
balance sheet classifications used.



                                        8

<PAGE>



                            SILVER STAR ENERGY, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 1 - NATURE OF OPERATIONS AND GOING CONCERN (continued)

Organization and Basis of Presentation

         Silver Star Energy,  Inc. (the "Company") was incorporated on September
25,  2002 in the State of Nevada and  commenced  operations  on October 3, 2002.
During the year ended  December  31,  2003,  the  Company  changed its name from
Movito Holdings Ltd. to Silver Star Energy Inc.

Nature of Business

         The Company is in the production stage of the oil and gas industry. The
Company's  primary  objective  is to identify,  acquire and develop  significant
working interest  percentages in underdeveloped oil and gas projects that do not
meet the  requirements of the larger  producers and developers.  During 2003 and
2004 the Company was in the development stage and acquired  interests in several
oil and gas prospects,  and in 2005 and 2006, has set up the extraction  process
and is further continuing that program.

NOTE 2 - SUMMARY OF ACCOUNTING POLICIES

         This summary of  accounting  policies  for Silver Star Energy,  Inc. is
presented to assist in understanding  the Company's  financial  statements.  The
accounting policies conform to generally accepted accounting principles and have
been consistently applied in the preparation of the financial statements.

Cash Equivalents

         For the purpose of  reporting  cash flows,  the Company  considers  all
highly liquid debt  instruments  purchased with maturity of three months or less
to be cash equivalents to the extent the funds are not being held for investment
purposes.

Pervasiveness of Estimates

         The  preparation of financial  statements in conformity  with generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from those estimates.

Concentration of Credit Risk

         The  Company has no  significant  off-balance-sheet  concentrations  of
credit  risk such as foreign  exchange  contracts,  options  contracts  or other
foreign hedging arrangements.

                                        9

<PAGE>



                            SILVER STAR ENERGY, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 2 - SUMMARY OF ACCOUNTING POLICIES (continued)

Earnings per Share

         Basic loss per share has been  computed  by  dividing  net loss for the
year  applicable to the common  stockholders  by the weighted  average number of
shares  of  common  shares  outstanding  during  the  year.  Convertible  equity
instruments such as stock options,  warrants,  convertible  debentures and notes
payable are excluded  from the  computation  of diluted  loss per share,  as the
effect of the assumed exercises would be anti-dilutive.

Fixed Assets

         Fixed   assets  are  recorded  at  cost  and   depreciated   using  the
straight-line  method over the estimated  useful lives of the assets which range
from three to seven years.  Fixed assets  consisted of the following at June 30,
2007 and December 31, 2006:


                                     (Unaudited)
                                       June 30,          December 31,
                                         2007                2006
                                  ------------------  ------------------
Furniture and Fixtures            $            7,751  $            7,751
Computers                                      6,222               6,222
Vehicles                                      64,087              64,087
Less: Accumulated Depreciation               (36,007)            (27,994)
                                  ------------------  ------------------
Total                             $           42,053  $           50,066
                                  ==================  ==================

         One-half  year  depreciation  is taken in the  year of  acquisition  on
certain fixed assets.

         Maintenance  and  repairs are charged to  operations;  betterments  are
capitalized.  The  cost  of  property  sold  or  otherwise  disposed  of and the
accumulated  depreciation  thereon are eliminated  from the property and related
accumulated depreciation accounts, and any resulting gain or loss is credited or
charged to income.

         Total  depreciation  expense for the six months ended June 30, 2007 and
2006 was $8,013 and $8,221, respectively.

Intangibles

         The  Company has adopted the  provisions  of the  Financial  Accounting
Standards  Board ("FASB")  Statement No. 142,  "Goodwill and Intangible  Assets"
("SFAS 142").  Under SFAS 142,  goodwill and intangible  assets with  indefinite
lives will no longer be amortized  and will be tested for  impairment  annually.
The  determination  of any  impairment  would  include a comparison of estimated
future operating cash flows  anticipated  during the remaining life with the net
carrying  value of the asset as well as a  comparison  of the fair  value to the
book value of the Company or the  reporting  unit to which the  goodwill  can be
attributed.

                                       10

<PAGE>



                            SILVER STAR ENERGY, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 2 - SUMMARY OF ACCOUNTING POLICIES (continued)

Oil and Gas Properties

         The Company  follows the full cost method of accounting for its oil and
gas  properties.  Under this  method,  all costs  associated  with  acquisition,
exploration,  and  development of oil and gas properties are  capitalized.  Such
costs  include land and lease  acquisition  costs,  annual  carrying  charges of
non-producing  properties,  geological and geophysical  costs, costs of drilling
and equipping  productive and non-productive  wells, asset retirement costs, and
direct  exploration  salaries  and  related  benefits.   Capitalized  costs  are
categorized as being subject to amortization or not subject to amortization. The
Company operates in two cost centers, being Canada and the U.S.A.

         The  capitalized  costs of oil and gas  properties are amortized on the
unit-of-production  method using  estimates of proved  reserves as determined by
independent  engineers.  Investments  in unproved  properties  are not amortized
until  proved  reserves  associated  with  projects can be  determined  or until
impairment occurs. If the results of an assessment  indicate that the properties
are impaired,  the amount of the impairment is added to the capitalized costs to
be amortized.  Depletion expense for the six months ended June 30, 2007 and 2006
was $135,000 and $122,155, respectively.

         The Company applies a ceiling test to capitalized  costs to ensure that
such costs do not exceed estimated future net revenues from production of proven
reserves  at year end market  prices  less  future  production,  administrative,
financing,  site  restoration,  and  income  tax costs plus the lower of cost or
estimated  market  value  of  unproved  properties.  If  capitalized  costs  are
determined to exceed  estimated  future net  revenues,  a write-down of carrying
value is charged to depletion in the period.

         Proceeds  from the sale of oil and gas  properties  are  recorded  as a
reduction of the related capitalized costs without recognition of a gain or loss
unless such sales involve a significant change in the relationship between costs
and the value of proved reserves or the underlying value of unproved properties,
in which case a gain or loss is recognized.

         The Company is in the process of exploring its unproved oil and natural
gas  properties  and has not yet  determined  whether these  properties  contain
reserves that are economically recoverable.  The recoverability of amounts shown
for  oil  and  natural  gas  properties  is  dependent  upon  the  discovery  of
economically recoverable reserves, confirmation of the Company's interest in the
underlying  oil and gas leases,  the ability of the Company to obtain  necessary
financing to complete their  exploration and  development and future  profitable
production or sufficient proceeds from the disposition thereof.






                                       11

<PAGE>



                            SILVER STAR ENERGY, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 2 - SUMMARY OF ACCOUNTING POLICIES (continued)

Asset Retirement Obligations

         Effective  January 1, 2003, the Company adopted  Statement of Financial
Accounting Standards No. 143, ACCOUNTING FOR ASSET RETIREMENT  OBLIGATIONS "SFAS
143"). This statement  applies to obligations  associated with the retirement of
tangible  long-lived  assets that result from the acquisition,  construction and
development of the assets.  SFAS 143 requires that the fair value of a liability
for a retirement  obligation  be recognized in the period in which the liability
is incurred.  For oil and gas properties,  this is the period in which an oil or
gas well is acquired or drilled. The asset retirement  obligation is capitalized
as part of the carrying  amount of our oil and gas  properties at its discounted
fair value.  The  liability is then  accreted each period until the liability is
settled or the well is sold, at which time the liability is reversed.

Fair Value of Financial Instruments

         In accordance  with the  requirements  of SFAS No. 107, the Company has
determined the estimated  fair value of financial  instruments  using  available
market information and appropriate  valuation  methodologies.  The fair value of
financial  instruments  classified as current assets or liabilities  approximate
carrying value due to the short-term maturity of the instruments.

Foreign currency transactions

         The financial  statements  are presented in United States  dollars.  In
accordance  with Statement of Financial  Accounting  Standards No. 52,  "Foreign
Currency  Translation",  foreign denominated monetary assets and liabilities are
translated  to their United  States dollar  equivalents  using foreign  exchange
rates that  prevailed  at the balance  sheet  date.  Revenue  and  expenses  are
translated at average  rates of exchange  during the year.  Related  translation
adjustments  are  reported  as a separate  component  of  stockholders'  equity,
whereas  gains or  losses  resulting  from  foreign  currency  transactions  are
included in results of operations.

Stock-based compensation

         Effective  January 1, 2006, the company  adopted the provisions of SFAS
No. 123(R).  SFAS No. 123(R) requires employee equity awards to be accounted for
under the fair value method.  Accordingly,  share-based compensation is measured
at grant date,  based on the fair value of the award.  Prior to January 1, 2006,
the company accounted for awards granted to employees under its equity incentive
plans under the intrinsic value method prescribed by Accounting Principles Board
(APB) Opinion No. 25,  "Accounting  for Stock Issued to Employees" (APB 25), and
related  interpretations,  and  provided  the  required  pro  forma  disclosures
prescribed by SFAS No. 123, "Accounting for Stock-Based  Compensation" (SFAS No.
123),  as amended.  No stock  options were granted to employees  during the year
ended December 31, 2006 or 2005 and  accordingly,  no  compensation  expense was
recognized  under APB No. 25 for the year ended  December  31, 2006 or 2005.  In
addition,  no compensation expense is required to be recognized under provisions
of SFAS No. 123(R) with respect to employees.

                                       12

<PAGE>



                            SILVER STAR ENERGY, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 2 - SUMMARY OF ACCOUNTING POLICIES (continued)

         Under the modified  prospective method of adoption for SFAS No. 123(R),
the  compensation  cost  recognized by the company  beginning on January 1, 2006
includes (a) compensation cost for all equity incentive awards granted prior to,
but not yet vested as of January 1,  2006,  based on the  grant-date  fair value
estimated in  accordance  with the original  provisions of SFAS No. 123, and (b)
compensation cost for all equity incentive awards granted  subsequent to January
1, 2006,  based on the grant-date  fair value  estimated in accordance  with the
provisions of SFAS No. 123(R).  The company uses the  straight-line  attribution
method to recognize  share-based  compensation  costs over the service period of
the award.  Upon  exercise,  cancellation,  forfeiture,  or  expiration of stock
options,  or upon vesting or forfeiture of restricted stock units,  deferred tax
assets for options and  restricted  stock units with multiple  vesting dates are
eliminated  for each vesting  period on a first-in,  first-out  basis as if each
vesting  period was a  separate  award.  To  calculate  the excess tax  benefits
available  for  use in  offsetting  future  tax  shortfalls  as of the  date  of
implementation, the company followed the alternative transition method discussed
in FASB Staff Position No. 123(R)-3.

Recent accounting pronouncements

         In June,  2006 the FASB issued FIN 48,  "Accounting  for Uncertainty in
Income Taxes--an  interpretation of FASB Statement No. 109". This Interpretation
clarifies,  among other things,  the accounting for  uncertainty in income taxes
recognized in an  enterprise's  financial  statements  in  accordance  with FASB
Statement No. 109, Accounting for Income Taxes. This Interpretation prescribes a
recognition  threshold and  measurement  attribute  for the financial  statement
recognition and measurement of a tax position taken or expected to be taken in a
tax  return.  This  Interpretation  also  provides  guidance  on  derecognition,
classification,   interest  and  penalties,   accounting  in  interim   periods,
disclosure,  and  transition  is  effective  for fiscal  years  beginning  after
December 15, 2006.  Earlier  application is encouraged if the enterprise has not
yet issued financial statements,  including interim financial statements, in the
period the  Interpretation  is adopted.  FIN 48,  Accounting for  Uncertainty in
Income  Taxes--an  interpretation  of FASB  Statement  No. 109, is effective for
fiscal  years  beginning  after  December  15,  2006.  Earlier   application  is
encouraged if the enterprise has not yet issued financial statements,  including
interim  financial  statements,  in the period the  Interpretation  is  adopted.
Management is evaluating the financial impact of this pronouncement.

         In September  2006, the FASB issued SFAS No. 157,  "Accounting for Fair
Value  Measurements."  SFAS No.  157  defines  fair  value,  and  establishes  a
framework for measuring fair value in generally accepted  accounting  principles
and expandsdisclosure  about fair value measurements.  SFAS No. 157 is effective
for the Company for financial statements issued subsequent to November 15, 2007.
The Company does not expect the new standard to have any material  impact on the
financial position and results of operations.

         In September 2006, the staff of the Securities and Exchange  Commission
issued Staff Accounting Bulletin No. 108 ("SAB 108") which provides interpretive
guidance  on how  the  effects  of the  carryover  or  reversal  of  prior  year
misstatements  should be considered in quantifying a current year  misstatement.
SAB 108 becomes effective in fiscal 2007. Management is evaluating the financial
impact of this pronouncement.

                                       13

<PAGE>



                            SILVER STAR ENERGY, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 2 - SUMMARY OF ACCOUNTING POLICIES (continued)

Revenue Recognition

         The  Company  recognizes  oil and gas  revenue  from its  interests  in
producing  wells as oil and gas is produced and sold from those  wells.  Oil and
gas sold is not significantly  different from the Company's share of production.
Revenues  from  the  purchase,  sale  and  transportation  of  natural  gas  are
recognized  upon  completion  of the  sale  and  when  transported  volumes  are
delivered.  Shipping and handling costs in connection  with such  deliveries are
included in  production  costs.  Revenue under  carried  interest  agreements is
recorded in the period when the net proceeds become  receivable,  measurable and
collection is reasonably  assured.  The time the net revenues become  receivable
and collection is reasonably  assured depends on the terms and conditions of the
relevant agreements and the practices followed by the operator. As a result, net
revenues may lag the production month by one or more months.

NOTE 3 - OIL AND GAS PROPERTIES

         The Company  entered into  agreements  to acquire  interests in various
unproven oil and gas properties as follows:

Alberta Prospects, Canada

         In October 2003, the Company  entered into two agreements  with 1048136
Alberta Ltd.  Pursuant to these  agreements,  the Company  acquired the right to
participate  and earn an interest in two oil and gas exploration and development
projects  located in the province of Alberta,  Canada known  respectively as the
Evi prospect and the Verdigris  prospect.  In February 2004, the Company entered
into  two  agreements  with  1048136  Alberta  Ltd.  to  acquire  the  right  to
participate  and earn an interest in two additional oil and gas  exploration and
development  projects  located in the  province of Alberta  known as the Joarcam
prospect  and the  Buffalo  Lake  prospect.  1048136  Alberta  Ltd. is a private
Alberta company (see Note 6).

         Pursuant  to the  agreements,  the  Company  shall  advance  funds,  as
required, in connection with the drilling, testing,  completion,  capping and/or
abandonment of up to three wells on each of the properties. Once the Company has
completed its funding obligation,  it will have earned the following interest in
each prospect:


         Evi Prospect                                               66.67%
         Verdigris Prospect                                         66.67%
         Joarcam Prospect                                           70.00%
         Buffalo Lake Prospect                                      70.00%






                                       14

<PAGE>



                            SILVER STAR ENERGY, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 3 - OIL AND GAS PROPERTIES (continued)

         In the event the Company  does not provide the funds as  required,  the
Company will retain no interest in the prospects.

         During the year ended  December 31, 2004,  the Company paid  $1,283,149
towards the exploration and development of the oil and gas prospects in Alberta.
During the year ended December 31, 2005,  the Company paid $730,822  towards the
exploration  and  development  of the oil and gas prospects in Alberta.  For the
year ended  December  31,  2006,  $285,975  was spent to install the  production
facilities at the EVI well. All of these costs have been capitalized.

         During 2006,  EVI property was  determined to have proved oil reserves.
Total  capitalized  costs for the EVI  property  were  removed from the unproved
properties and classified as proved properties.  For the year ended December 31,
2006, the Company received  revenues of $213,398 from the EVI property.  For the
three months ended March 31, 2007, the Company received revenues of $50,852 from
the EVI property.  As of December 31, 2006, the total  capitalized costs related
to the EVI property,  net of depletion of $75,103 was 1,262,298.  As of June 30,
2007, the total capitalized costs related to the EVI property,  net of depletion
of $115,103 was $1,228,546.

         During 2005,  the Joarcam  property in Alberta was  determined  to have
proved oil reserves.  The total  capitalized costs for the Joarcam property were
removed from the unproved  properties and classified as proved  properties.  For
2005, the Company received  $305,235 in revenues from the Joarcam  property.  On
November  10, 2005,  the Company  sold its interest in the Joarcam  property for
$1,930,225. Total capitalized costs relating to the Joarcam property at November
10, 2005 were  $962,545,  and total  depletion  expense  relating to the Joarcam
property at November 10, 2005 was $73,811.  The Company recognized a gain on the
sale of the Joarcam  property of $1,041,491.  The Company  received  proceeds of
$965,108  and  recorded  a  receivable  of  $965,117  related to the sale of the
property.  During the period ended June 30,  2006,  the  receivable  of $965,117
related to the sale of the Joarcam property was received by the Company.

         During the  quarter  ended  June 30,  2007,  the  Company  executed  an
agreement  with MB Gas, Inc.  ("MB"),  a private  Alberta,  Canada,  oil and gas
exploration  company,  whereby the Company  acquired an interest in the revenues
generated by MB from its oil and gas operations.  The Company advanced  $500,000
to MB in return for the assignment of revenue from MB's oil and gas  operations.
The $500,000 has been capitalized as part of proved oil and gas properties.

California Prospects, U.S.A.

         On December 5, 2003,  the Company  entered  into two option  agreements
with Archer  Exploration,  Inc. (Archer) to acquire Archer's interest in certain
unproven oil and gas prospects located in the State of California, U.S.A., known
as North Franklin Prospect and Winter Pinchout Prospect.




                                       15

<PAGE>



                            SILVER STAR ENERGY, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 3 - OIL AND GAS PROPERTIES (continued)

         To  earn an  assignment  of 100% of  Archer's  interests  in the  North
Franklin Prospect, being a 100% working interest (76% net revenue interest), the
Company  made an initial  cash payment of $85,000 and is required to pay $15,000
at spud of the initial test well and $25,000 at  completion  of the initial test
well.  In  addition,  the  Company is  responsible  for all  expenses  for lease
extensions and rental of existing leases  (including a 20% fee),  acquisition of
any  additional  leases  (including  a 20% fee) and  costs  in  connection  with
drilling and completion of the initial test well.

         Pursuant to the agreement, Archer retained a 2.5% overriding royalty, a
5% working  interest  through the  completion  of the initial  test well and the
right to participate in a 5% working interest.

         The Company had an agreement to farm-out a 35% working  interest in the
North Franklin Project to Fidelis Energy,  Inc. (see Note 6). Under the terms of
the  agreement,  Fidelis  would  contribute  $500,000  towards the  drilling and
completion  of the  Archer-Whitney  #1 well and  participate  as a full  working
interest partner on all further costs including drilling of any additional wells
on the project.

         To earn an  assignment  of 100% of  Archer's  interests  in the  Winter
Pinchout Prospect, being a 100% working interest (76% net revenue interest), the
Company  made an initial cash payment of $100,000 and is required to pay $15,000
at spud of the  initial  test  well of the first  three  prospects  drilled  and
$25,000 at  completion  of the initial test well of each  prospect  drilled.  In
addition,  the Company is responsible for all expenses for acquisition of leases
acquired  (including  a 20% fee),  acquisition  and  analysis  of seismic  data,
drilling and completion of the initial test well on the first  prospect  drilled
and a monthly management fee in the amount of $10,000 commencing January 2004.

         Pursuant to the agreement,  Archer retains a 2.5% overriding royalty, a
5% working  interest  through the  completion  of the initial  test well and the
right to participate in a 10% working interest.

         In August 2004, the Company  executed  acquisition  and joint operating
agreements on five natural gas prospects in California with Archer  Exploration,
Inc. Pursuant to the agreements, the Company has acquired a 7.5% carried working
interest  on four  of the  prospects  and has  acquired  a 25%  carried  working
interest in the fifth  prospect.  The Company is carried on all costs related to
the prospect through the licensing,  permitting,  drilling and completion of the
first well on each project. In the event of a successful gas well being drilled,
the Company,  following  testing and  completion,  would be responsible  for the
working interest costs of well tie-in and pipeline.  The Company would also be a
working interest participant on any additional gas wells drilled.

         During the year ended December 31, 2003,  the Company  incurred a total
of $405,000 in  acquisition  and  exploration  costs  relating to the California
prospects. During the year ended December 31, 2004, the Company incurred a total
of $898,204 in acquisition,  exploration  and development  costs relating to the
California  prospects.  During the year ended  December  31,  2005,  the Company
incurred a total of $756,675 in acquisition,  exploration and development  costs
relating to the California  prospects.  During the year ended December 31, 2006,
the Company  incurred a total of  $1,081,515  in  acquisition,  exploration  and
development costs relating to the California prospects.

                                       16

<PAGE>



                            SILVER STAR ENERGY, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 3 - OIL AND GAS PROPERTIES (continued)

         During 2005, the North Franklin  property was determined to have proved
gas  reserves.  Total  capitalized  costs for the North  Franklin  property were
removed from the unproved  properties and classified as proved  properties.  For
2005,  the Company  received  revenues  of  $1,372,675  from the North  Franklin
property.  As of December 31, 2005, the total  capitalized  costs related to the
North Franklin  property,  net of depletion of $132,121 was $1,345,384.  For the
three months  ended March 31, 2007 and 2006,  the Company  received  revenues of
$569,495 and $505,754 from the North Franklin Property. As of December 31, 2006,
the total  capitalized  costs  related to the North  Franklin  property,  net of
depletion of $469,530 was $2,110,736.

         On May 7,  2007,  the  Company  sold its 40%  interest  North  Franklin
property for $3,100,000. As of the date of the sale, the Company had capitalized
$2,514,019  in costs  related to the North  Franklin  property  and had recorded
total depletion of $564,530.  The Company recognized a gain of $1,150,511 on the
sale of the North Franklin property.

         During the quarter ended June 30, 2007,  capitalized  costs of $627,375
in unproved  properties  related to the Winter Pinchout Prospect was written-off
and expensed.

         As of June 30,  2007,  the  Company  no longer  had any  properties  in
California.

Kansas Prospects, U.S.A.

         During  2005,  the  Company  acquired  an  interest in some oil and gas
properties in Kansas.  As of December 31, 2005, the Company had spent $54,286 on
these properties.  During the year ended December 31, 2006, the Company incurred
$20,000 in costs related to this property.  These costs were capitalized as part
of unproved properties. In June 2006, the Company abandoned the Kansas property,
and the capitalized cost of $74,286 was expensed.

NOTE 4 - ASSET RETIREMENT OBLIGATION

         Effective  January 1, 2003, the Company adopted  Statement of Financial
Accounting Standards No. 143, ACCOUNTING FOR ASSET RETIREMENT OBLIGATIONS ("SFAS
143"). This statement  applies to obligations  associated with the retirement of
tangible  long-lived  assets that result from the acquisition,  construction and
development of the assets.

         SFAS 143 requires  that the fair value of a liability  for a retirement
obligation be  recognized in the period in which the liability is incurred.  For
oil and gas  properties,  this is the  period  in  which  an oil or gas  well is
acquired or drilled.  The asset retirement  obligation is capitalized as part of
the carrying amount of the asset at its discounted fair value.  The liability is
then  accreted  each period until the liability is settled or the asset is sold,
at which time the liability is reversed.






                                       17

<PAGE>



                            SILVER STAR ENERGY, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 4 - ASSET RETIREMENT OBLIGATION (continued)

         The  Company  identified  and  estimated  all of its  asset  retirement
obligations  for  tangible,  long-lived  assets as of  January  1,  2003.  These
obligations  were for  plugging and  abandonment  costs for depleted oil and gas
wells. The Company had no proved reserves in 2003 or 2004, therefore the Company
did not record an asset  retirement  obligation.  During the year ended December
31, 2005, the Company  estimated its asset retirement  obligation to be $45,000,
for three gas wells at the North  Franklin  property.  Upon  recognition of this
asset  retirement  obligation,  a  liability  of $45,000  was  recorded  and the
capitalized costs of proved properties was increased by $45,000.

         During the year ended  December 31, 2006, a fourth  producing  gas well
was operating at the North Franklin  property.  The Company  estimated the asset
retirement  obligation  for this well to be $15,000.  Upon  recognition  of this
asset retirement obligation,  an additional liability of $15,000 was recorded in
the  asset  retirement  obligation  and  the  capitalized  costs  of the  proved
properties was increased by $15,000.

         During the quarter  ended June 30,  2007,  the  Company  sold the North
Franklin  property and the asset  retirement  obligation of $60,000 was reversed
and removed from capitalized  costs. At June 30, 2007 and December 31, 2006, the
asset retirement obligation was $0 and $60,000, respectively.

NOTE 5 - CONCENTRATIONS

         As of June 30, 2007,  approximately  100% of the Company's revenues are
from oil  property  in  Canada.  The loss of these  wells,  or a  disruption  in
production  from these  wells,  would  adversely  effect the  operations  of the
Company.

NOTE 6 - COMMON STOCK

         On November  20,  2003,  the  Company  restructured  its share  capital
whereby the total common shares  presently  issued and  outstanding  was forward
split on a 1 (old) to 12 (new)  basis.  Effective  January  5, 2004 the  Company
restructured  its share capital whereby the total common shares presently issued
and outstanding was forward split on a 1 (old) to 2 (new) basis.  All references
to common stock,  common shares  outstanding,  average  numbers of common shares
outstanding  and per share amounts in these  Financial  Statements  and Notes to
Financial  Statements  prior to the  effective  date of the forward stock splits
have been  restated  to reflect  the 12:1 and the 2:1 common  stock  splits on a
retroactive basis.

         On December  5, 2003,  the Company  received  $500,000 in  subscription
proceeds  from a director and officer for the purchase of 444,444  common shares
of the company's  stock pursuant to a Regulation S Private  Placement  Financing
which was  announced on November 25, 2003 and whereby the Company plans to issue
up to  3,555,556  common  shares of its capital  stock.  During the three months
ended March 31, 2004,  the Company  received  subscription  proceeds of $750,000
pursuant to the Private Placement Financing. During the three months ended March
31, 2004,  1,112,102  shares were issued in  accordance  with the  $1,250,000 in
subscription proceeds received.

                                       18

<PAGE>



                            SILVER STAR ENERGY, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 6 - COMMON STOCK (continued)

         On March 23,  2004,  the Company  entered  into an  agreement  with two
shareholders  for the  shareholders  to surrender  for  cancellation  24,600,000
regulation 144 restricted shares of the Company's common stock.

         During the three  months  ended June 30,  2004,  the  Company  received
subscription  proceeds of $630,000 pursuant to the Private Placement  Financing.
During the three  months  ended June 30,  2004,  661,915  shares  were issued in
accordance with the $630,000 in subscription proceeds received.

         On June 30, 2004, the Company received share  subscription  proceeds of
$275,000 for 500,000  shares of restricted  common stock pursuant to the Private
Placement  Financing  announced on November  25,  2003.  During the three months
ended  September 30, 2004,  500,000  shares were issued in  accordance  with the
$275,000 in subscription proceeds received.

         On August 18, 2004,  the Company issued  250,000  restricted  shares of
common stock for $25,000 in accounts payable.

         On October 18, 2004, the Company issued  156,000  restricted  shares of
common stock for consulting expense of $15,600.

         On November 23, 2004, the Company issued 362,394 shares of common stock
for debt issue  costs of  $350,000  associated  with the  Company's  issuance of
convertible debt.

         On April 28, 2006, the Company issued  1,200,000 shares of common stock
for consulting services valued at $324,000.

         On May 3, 2006, the Company issued 10,000,000 shares of common stock to
its officers and directors for services valued at $2,750,000.

         On May 7, 2007, the Company agreed to issue 49,045,225 shares of common
stock in exchange for the remaining  debt  totaling  $1,030,000 of principal and
$931,811 on its convertible  debt. As of June 30, 2007, the common stock has not
been issued.

         As of June 30, 2007, the Company has not adopted a stock option plan or
granted any stock  options and  accordingly  has not  recorded  any  stock-based
compensation.

NOTE 7- RELATED PARTY TRANSACTIONS

         Pursuant  to  consulting   agreements   dated  November  15,  2003  and
renegotiated July 1, 2005 the Company agreed to pay $15,000 per month to the CFO
and director of the Company and $20,000 per month to the  President and director
of the Company.


                                       19

<PAGE>



                            SILVER STAR ENERGY, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 7- RELATED PARTY TRANSACTIONS (continued)

         During 2003 and 2004,  the Company  entered  into  several  acquisition
agreements  with  1048136  Alberta  Ltd.  (see Note 4).  The  Company's  current
president,  Robert  McIntosh,  was a director of 1048136  Alberta  Ltd.  and had
resigned  from that  position  prior to his  involvement  with the Company.  Sak
Narwal, a shareholder of the Company, was also a director of 1048136 Alberta Ltd
and Scott  Marshall,  the majority  shareholder of 1048136  Alberta Ltd., is the
spouse of Naomi Patricia  Johnston,  owner of a 11.76%  interest in the Company.
Despite the  existence of these related  parties,  the  consideration  exchanged
under the  Agreements  described  above was negotiated at "arms length," and the
directors  and  executive  officers of the Company used criteria used in similar
uncompleted  proposals  involving  the Company in comparison to those of 1048136
Alberta Ltd.

         The Company has a "working  interest"  relationship  with joint venture
partner Fidelis Energy Inc. (FDEI: OTC: BB) (see Note 4). Both companies have an
interest in the North  Franklin  gas  project in  Sacramento,  California.  More
recently,  in January  2005,  Fidelis  entered  into an  agreement to acquire an
interest in two oil wells at the Joarcam Project located in Alberta Canada.  The
Company  was  earning a 70%  working  interest  in the entire  Joarcam  Project.
Fidelis also entered into an agreement for the first right of refusal to acquire
the remaining 30% working interest on all future drilling  locations at Joarcam.
Silver  Star and  Fidelis  collectively  acquired  a 100%  working  interest  at
Joarcam.  On October 6, 2005 the 100%  working  interest  at Joarcam was sold to
Enermark, Inc.

         In  addition,  Silver Star and Fidelis  management  work closely in the
evaluation of other potential, jointly feasible exploration prospects. Also, the
two companies share a common origin in that certain  beneficial  shareholders of
both companies have contributed to their formation.

NOTE 8 - INCOME TAXES

         As of December 31,  2006,  the Company had a net  operating  loss carry
forward for income tax reporting  purposes of approximately  $5,552,391 that may
be offset against future taxable income through 2026. Current tax laws limit the
amount of loss  available  to be offset  against  future  taxable  income when a
substantial  change in  ownership  occurs.  Therefore,  the amount  available to
offset future taxable income may be limited. No tax benefit has been reported in
the financial statements, because the Company believes there is a 50% or greater
chance the  carry-forwards  will expire unused.  Accordingly,  the potential tax
benefits of the loss  carry-forwards are offset by a valuation  allowance of the
same amount.


                                           2006                2005
Net Operating Losses                $         832,852   $         173,082
Valuation Allowance                          (832,852)           (173,082)
                                    ------------------  ------------------
                                    $               -   $                -
                                    ==================  ==================






                                       20

<PAGE>



                            SILVER STAR ENERGY, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 8 - INCOME TAXES (continued)

         The provision for income taxes differs from the amount  computed  using
the federal US statutory income tax rate as follows:


                                                 2006              2005
Provision (Benefit) at US Statutory Rate    $       659,770  $         (8,727)
Increase (Decrease) in Valuation Allowance         (659,770)            8,727
                                            ----------------  ----------------
                                            $             -   $             -
                                            ================  ================

         The Company  evaluates its valuation  allowance  requirements  based on
projected future operations.  When  circumstances  change and causes a change in
management's  judgment  about the  recoverability  of deferred  tax assets,  the
impact of the change on the valuation is reflected in current income.

NOTE 9 - LEASE COMMITMENT

         On December 1, 2005,  the Company  entered into a lease  agreement  for
approximately 129 square feet of office space at 9595 Wilshire Blvd., Suite 900,
in Beverly Hills, California.  The lease expired November 30, 2006 and continues
on a month to month basis after that date.  The lease  payments  were $1,814 per
month. On December 1, 2006, the Company has contracted a Business  Identity Plan
Agreement  (BIP) at the same  address  for a fee of $300 per  month.  This is an
annual contract and replaces the former lease agreement.

         The minimum  future lease payments under these leases for the next five
years are:


               Year Ended December 31,
                                        2007              $       3,600
                                        2008                          -
                                        2009                          -
                                        2010                          -
                                        2011                          -
                                                          -------------
  Total minimum future lease payments                     $       3,600
                                                          =============












                                       21

<PAGE>



                            SILVER STAR ENERGY, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 10 - CONVERTIBLE DEBENTURES

         On March 10, 2005,  the Company  executed a  Convertible  Debenture for
$550,000.  The note is due and  payable in full on or before  March 10, 2006 and
carries an  interest  rate of 5% per annum.  The notes are  convertible,  at the
discretion  of the  holder,  into  shares of common  stock of the  Company  at a
conversion  price of $1.00 per share. On March 30, 2005, the Company  executed a
Convertible  Debenture for  $200,000.  The note is due and payable in full on or
before  March 10, 2006 and carries an interest  rate of 5% per annum.  The notes
are convertible, at the discretion of the holder, into shares of common stock of
the Company at a conversion  price of $1.00 per share. On December 13, 2005, the
Company paid $134,424 towards this note. On June 30, 2006, this note was paid in
full.

         On April 8, 2005,  the Company  executed a  Convertible  Debenture  for
$160,000.  The note is due and  payable  in full on or before  April 8, 2006 and
carries an  interest  rate of 5% per annum.  The notes are  convertible,  at the
discretion  of the  holder,  into  shares of common  stock of the  Company  at a
conversion  price of $1.00 per share.  On May 17, 2005,  the Company  executed a
Convertible  Debenture for  $150,000.  The note is due and payable in full on or
before May 17, 2006 and carries an interest rate of 5% per annum.  The notes are
convertible, at the discretion of the holder, into shares of common stock of the
Company at a conversion  price of $1.00 per share.  On December  13, 2005,  this
note was paid in full.  The Company paid a total of $319,880 for  principal  and
interest.

         On October 14, 2005,  we entered into a securities  purchase  agreement
with  H.C.  Wainwright  for  a  PIPE  Offering  which  is a  private  investment
opportunity in a public  company for an aggregate  purchase price of $3,430,000,
of  which  we  have  issued  (i) a  $3,430,000  secured  convertible  debenture,
convertible  into  shares of our  common  stock at a fixed  conversion  price of
$.315,  par value  $0.001,  and (ii) a  warrant  to  purchase  an  aggregate  of
34,408,717  additional  shares of our common stock at an exercise price of $.315
and $.63 per share and are exercisable until October 14, 2010.

         Beginning on the six (6) month  anniversary of the Closing,  and on the
first  business  day of each  month  thereafter  until  the  Notes are no longer
outstanding the Company shall pay 1/18th of the original principal amount of the
Notes and all accrued and unpaid interest.  The Company shall elect to make such
payments in shares of the Company's  common  stock.  Each share of the Company's
common stock will be valued at 92.5% of the five (5) day VWAP immediately  prior
to the payment date. The interest on the  convertible  debenture shall accrue on
the  outstanding  principal  balance  at a rate of 8% per  annum.  For the three
months  ended  March 31,  2007,  $67,660 has been  charged as  interest  expense
related to this debt.









                                       22

<PAGE>



                            SILVER STAR ENERGY, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 10 - CONVERTIBLE DEBENTURES (continued)

         The Warrants to purchase  34,408,717 of the Company's common stock will
expire on October 14, 2010.  The exercise price of the warrant is fixed at $.315
and $.63 and has an exercise period of five years.  The Company accounts for the
fair  value of these  outstanding  warrants  to  purchase  common  stock and the
conversion  feature of its  convertible  notes in  accordance  with SFAS No. 133
"Accounting For Derivative  Instruments  And Hedging  Activities" and EITF Issue
No.  00-19  "Accounting  For  Derivative  Financial  Instruments  Indexed To And
Potentially  Settled In A Company's  Own Stock;"  which  requires the Company to
bifurcate  and  separately  account for the  conversion  feature and warrants as
embedded derivatives contained in the Company's convertible notes.

         Pursuant to SFAS No. 133, the Company  bifurcated the fair value of the
conversion  feature from the convertible notes, since the conversion feature was
determined to not be clearly and closely related to the debt host, and since the
effective  registration of the securities  underlying the conversion feature and
warrants  is an event  outside of the control of the  Company,  pursuant to EITF
00-19.  The  Company  recorded  the fair  value of the  conversion  feature  and
warrants  as  long-term  liabilities  as it was  assumed  the  Company  would be
required to net-cash settle the underlying securities.

         The Company is required to carry these derivatives on its balance sheet
at fair value and  unrealized  changes in the  values of these  derivatives  are
reflected in the statement of operation as "derivative valuation gain (loss)".

         In addition  8,711,084  warrants  have been issued to H.C.  Wainwright,
John R.  Clarke,  Scott F.  Koch,  Ari  Fuchs,  Jason A. Stein and First SB Inc.
respectively,  with series A, and C each exercisable at $.315 and series B and D
each exercisable at $.63 with terms of 1 year from October 14, 2005.


                                                      Warrants
                                                  -----------------
H.C. Wainwright & Co. Ltd.                                2,177,768
John R. Clarke                                              947,328
Scott F. Koch                                               947,328
Ari J. Fuchs                                                217,776
Jason A. Stein                                               65,332
1st SB Partners Ltd.                                      4,355,552
                                                  -----------------
     Total                                        $       8,711,084
                                                  =================

         For  2005,  the  value  of the  conversion  feature  and  warrants  was
calculated using the  Black-Scholes  method as of December 31, 2005 based on the
following  assumptions:  an average risk free rate of 4.25; a dividend  yield of
0.00%;  and an average  volatility  factor of the  expected  market price of the
Company's  common  stock of  102.61%.  The market  value of the common  stock at
December  31, 2005 was $.22 per share.  At December  31,  2005,  the  derivative
liability was $6,458,056 and the loss on derivative valuation was $5,622,741.

                                       23

<PAGE>



                            SILVER STAR ENERGY, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 10 - CONVERTIBLE DEBENTURES (continued)

         For  2006,  the  value  of the  conversion  feature  and  warrants  was
calculated  using the Black- Scholes method as of December 31, 2006 based on the
following  assumptions:  an average risk free rate of 4.85; a dividend  yield of
0.00%;  and an average  volatility  factor of the  expected  market price of the
Company's  common  stock of  93.8%.  The  market  value of the  common  stock at
December  31, 2006 was $.047 per share.  At December 31,  2006,  the  derivative
liability was $279,074 and the gain on derivative  valuation was $6,178,983.  On
May 7, 2007, the remaining  derivative liability of $279,074 was written off and
a  derivative  valuation  gain of $279,074  was  recognized,  due to the amended
agreements relating to the convertible debt.

         On October 14, 2005,  the Company paid  $480,000 in cash for debt issue
costs related to the convertible debenture of $3,430,000. These debt issue costs
were  capitalized in the financial  statements and are being  amortized over two
years using the interest method.  On May 7, 2007, the remaining debt issue costs
of $136,835 were expensed,  due to the payoff of the convertible debt as part of
the amended  agreements  relating to the convertible  debt. At June 30, 2007 and
December 31, 2006, net debt issue costs related to these convertible  debentures
were $0 and $197,494, respectively.

         Silver  Star  Energy is in default of the October 14, 2005 terms of the
convertible  debenture.  This  Company has been unable to have the  Registration
Statement on Form SB2 declared effective within the 90 days after closing as was
required.  Liquidated  damages in the  amount of  $68,600 or 2% of the  offering
amount of $3,430,000 have been paid.  Further liquidated damages of 1% per month
of the offering amount, totaling $531,649 have been accrued. This represents the
default period from January 14, 2006 to March 31, 2007.

         Amortization payments of 1/18th of the original amount of $3,430,000 is
required to be paid on the six month anniversary of the closing and on the first
business day of each month thereafter until the notes are no longer outstanding.
The  company  may elect to make these  payments  in cash or in  payments  of the
company's stock.

         On March 8, 2007  three of our  creditors  from our  October  14,  2005
financing  filed a claim for  monies  owed under the Note and  Warrant  Purchase
Agreement in the United States  Bankruptcy Court Central District of California.
These three creditors  represent $950,000 of the $3,430,000 that was raised. The
Company and its legal  counsel have since reached a negotiated  settlement  that
all of the lenders have now accepted. The settlement resulted in the sale of the
Company's 40% interest North Franklin Gas Field to an arm's-length  third party,
the  repayment  of $2.4  million  pro-rata to the lenders and the  purchase of a
revenue  interest in the MB Gas Inc.,  a private  Alberta,  Canada,  oil and gas
exploration company. The Company sold its interest in the Franklin gas field for
a total  of  $3,100,000  and  repaid  in cash  $2,400,000  of the  approximately
$3,429,885 of principal  and $931,926 of accrued  interest that was owing to the
Lenders. This Asset Sale Agreement closed on May 7, 2007. In order to settle the
balance,  the  Company  amended  the  related  lending  documents  to allow  for
conversion of such debt into common shares at a deemed conversion price of $0.04
per share.  The remainder of the debt totaling  $1,961,811  will be converted to
49,045,225 shares of common stock. As of June 30, 2007, the common stock has not
been issued.


                                       24

<PAGE>



                            SILVER STAR ENERGY, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 10 - CONVERTIBLE DEBENTURES (continued)

         The Company also  re-priced  12,500,000  outstanding  warrants to allow
exercise at a price of $0.04. The value of the new warrants was calculated using
the Black-Scholes  method as of May 7, 2007 based on the following  assumptions:
an average  risk free rate of 4.70;  a dividend  yield of 0.00%;  and an average
volatility  factor of the expected market price of the Company's common stock of
117.8%.  The market value of the common stock at May 7, 2007 was $.04 per share.
The  warrants  were  valued  at  $375,501.  As of June  30,  2007,  the  Company
recognized $375,501 of interest expense related to the warrants.


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

GENERAL  - This  discussion  should  be read in  conjunction  with  Management's
Discussion and Analysis of Financial  Condition and Results of Operations in the
Company's annual report on Form 10-KSB for the year ended December 31, 2006.

PLAN OF OPERATIONS

         Silver Star Energy,  Inc. on May 9th, reported on a series of corporate
developments  meant to favorably  restructure the Company's debt and allow it to
continue as a going concern in the oil and gas sector.

         We had been in default  with its lenders  pursuant  to the  convertible
note and warrant purchase agreement of October 2005. Three lenders, representing
$950,000 of the $3,430,000  that was raised under the  financing,  filed a claim
for monies  owed in the United  States  Bankruptcy  Court  Central  District  of
California.  The Company and its legal  counsel have since  reached a negotiated
settlement that all of the Lenders have now accepted. The Settlement will result
in the sale of the Company's 40% interest in the North  Franklin Gas Field to an
arm's-length  third party; the repayment of $2.4 million pro-rata to the Lenders
and the purchase of a revenue interest in MB Gas Inc., a private Alberta, Canada
oil and gas exploration company, on the terms detailed below.

         We  sold  our  interest  in the  Franklin  gas  field  for a  total  of
$3,100,000  and will repay in cash  $2,400,000 of the  approximately  $3,429,885
that is  presently  owing to the  Lenders.  In order to settle the  balance,  we
amended the related  lending  documents to allow for conversion of the debt into
common  shares at a  conversion  price of $0.04 share.  We re-priced  all of the
lenders' 12,500,000  outstanding warrants to allow exercise at a price of $0.04.
No registration statement will be required or filed.

         The Company  had  commissioned  an  independent  reservoir  engineering
report  on the fair  market  value of the  Proved  Developed  Producing  ("PDP")
reserves  at  North  Franklin  from  the  four   producing  gas  wells.   Having
cumulatively  to-date  produced a total of  1,944,328  Mcf gas (1.94  Bcf),  the
remaining reserves to the 100% working interest were calculated at 2,694,781 Mcf
(2.69 Bcf) of gas. The four wells in the reservoir are declining in pressure and
additional costs are expected for pipeline  compression.  The Report valued 100%
of the interest in the North  Franklin  field at  $9,226,619  (or  $3,706,647 to
Silver Star's 40% working interest) on a PV 10 for the Proved

                                       25

<PAGE>



Developed  Producing  reserves.  The  value  of the  Company's  32% net  revenue
interest is $2,952,518 and therefore the purchase price of $3,100,000 represents
a premium to current value.

         Silver Star and MB Gas Inc., a private Alberta company,  have concluded
an  agreement  whereby  Silver Star will  acquire an  interest  in the  revenues
generated  by MB from its oil and gas  operations.  Silver  Star has  agreed  to
advance loans of $500,000  (minimum) to $1 million (maximum) to MB in return for
the  assignment of revenue from MB's oil and gas  operations.  The Loan advances
will be  repaid  from  MB's  revenues,  at 12.5% to Silver  Star  until  payout;
thereafter  5% to 10%,  pro-rated  above 5% for  amounts  loaned  in  excess  of
$500,000.

         MB owns a majority  interest in a gas processing  facility and pipeline
located in the  Province of Alberta  that is linked to a  transporting  pipeline
that runs south to Encana's Hub near the U.S. - Canada  border.  MB is presently
connecting 3 Sawtooth  formation natural gas wells to the pipeline and this work
is scheduled to be completed within the next six months. Flow tests on the wells
indicate  that they should  produce a minimum of 1,300 Mcf per day when they are
connected,  on which MB will  earn up to a 67.5%  net  revenue  interest  before
payout and 45.0% after payout. MB also controls certain prospective lands in the
area targeting  mostly middle and deeper  gas-bearing  formations.  These are in
relatively close proximity to the pipeline  system,  and MB expects that the gas
from any new commercial grade  discoveries  made by MB on those lands,  together
with gas  from a number  of  previously  plugged  gas  wells in the  area,  once
tied-in,  will be carried in MB's  pipeline.  On May 10th,  we  reported  on the
completion and testing results from three Sawtooth formation gas wells at the MB
Gas Project, located in the Manyberries area of Alberta, Canada. The Company and
MB Gas Inc., based on the recently announced  participation by the Company under
the loan  agreement,  are  currently  working to tie in three  natural gas wells
owned and operated by Provident Energy Trust.

         The 11-17 gas well was flow  tested at rates of 600 Mcf per day with no
water  in well  tests  conducted  between  October  27 and  November  24,  2006.
Southridge  Petroleum Consulting Ltd. of Calgary has estimated the potential for
2.4 Bcf gas at this  location.  The 11-17 wellhead is less than 1.5 miles from a
pipeline in which MB Gas owns a majority interest.

         The second  well,  the 6-7, is  approximately  1.7 miles from the 11-17
well and was  tested  at flow  rates  that  were held back to 300 Mcf per day to
prevent  damage to the well. A remedial  cement  squeeze is planned for the well
and when tied-in to pipeline,  an additional 1.7 Bcf has been estimated for this
location.

         The last  Provident well is located 6 miles to the southeast of the 6-7
and requires re- completion  and testing.  Based on the observed pay in the well
log, it has been  estimated by  Southridge  Petroleum  to have the  potential to
produce gas at rates between 700 and 2,000 Mcf per day. The well may contain 3.0
Bcf.  Analogous wells in the area producing from Sawtooth  formation  reservoirs
commonly produce somewhere between 1,000 and 2,000 Mcf.

         The three wells are projected, when tied-in to pipeline, to produce gas
at  rates  of  between  1,300  and  3,000  Mcf per day and may  have a  combined
potential of 7.1 Bcf.

         On June 18, we reported on the  progress of pipeline  construction  and
ultimate  tie-in of gas wells at the MB Gas Project,  located in the Manyberries
area of Alberta, Canada. The Company and

                                       26

<PAGE>



MB Gas Inc., recently announced  participation  under a loan agreement,  and are
currently  working to tie-in  three  natural  gas wells  owned and  operated  by
Provident Energy Trust.

         We were informed by the operator that permitting has been processed and
the 1.5 mile  pipeline  construction  is scheduled to commence on or around July
15th.  Pipeline  tie-in of the 11-17 well is  anticipated  to take 10 days.  The
11-17  gas  well  was flow  tested  at  rates of 600 Mcf per day and  Southridge
Petroleum Consulting Ltd. of Calgary has estimated the potential for 2.4 Bcf gas
at this location.

         The 6-7 well that is  located  approximately  1.7 miles  from the 11-17
well will be the next well to be tied in and the line survey and  permitting has
commenced. An additional 1.7 Bcf has been estimated for this location.

         This program is part of the 2007  development  and  operations  plan to
tie-in and produce  natural gas from three  Provident  Energy  wells and conduct
well surveys to determine the geological potential of up to twenty (20) Sawtooth
Formation locations in the immediate vicinity of the pipeline. MB Gas Inc. plans
to tie-in five (5) currently shut-in or abandoned gas wells in the 2007 calendar
year with the aim of  producing  in the 800  BOEPD  range.  Silver  Star and its
partner,  MB Gas Inc. (a private Alberta oil and gas exploration  company),  are
focused on the  exploitation  of  targeted,  low risk  natural  gas  development
opportunities in southeastern Alberta.

         At our EVI project in Alberta Canada, we continue to look for potential
partners in the drilling of another Granite Wash test on the leases at EVI.

RESULTS OF OPERATIONS

REVENUE

         Revenue  decreased to $79,253 for the quarter ended June 30, 2007, down
from $518,328 in the same period in 2006.  This decrease is a result of the sale
of the North Franklin property on May 7, 2007.

COST OF REVENUE

         The Company  recorded cost of revenue and depletion of $979,845  during
the quarter ended June 30, 2007 up from  $103,020  during the quarter ended June
30, 2006. This increase was mainly due to the capitalized costs of $627,375 from
the Winters Pinchout  property being expensed as well as expenses related to the
sale of the North Franklin property.

GENERAL AND ADMINISTRATIVE EXPENSES

         General and  administrative  expenses consist  primarily of accounting,
legal,  depreciation  and  selling  and  marketing  expenses.  The  general  and
administrative expenses for the quarter ended June 30, 2007 are $99,808. This is
a decrease  from 2006 of  $29,608.  Professional  fees which  include  legal and
accounting  were $71,160 for the quarter ended June 30, 2007 compared to $59,927
for the quarter  ended June 30, 2006 and this  increase is due to an increase in
legal fees for the quarter.


                                       27

<PAGE>



         Consulting and Management fees were $123,002 for the quarter ended June
30, 2007 and decreased over the same period in 2006 by $3,145,972. This decrease
was due to the issuance of stock for consulting  expense in 2006 for $2,750,000.
We expect to continue to incur  general and  administrative  expenses to support
the business.

INTEREST EXPENSE

         Interest  expense  increased  for the quarter  ended June 30, 2007 with
$478,251  compared to $133,339 for the quarter ended June 30, 2006. The increase
was mainly due to the debt  issue  costs of  $136,835  being  expensed,  and the
valuation on the stock warrants of $375,500 being recognized.

NET LOSS

         The Company  ended the second  quarter of June 30, 2007 with a net loss
of ($245,229) compared to ($3,138,111) for the same period in 2006.

LIQUIDITY AND CAPITAL RESOURCES

         Cash and cash  equivalents  from  inception have been  insufficient  to
provide the operating  capital  necessary to operate the Company.  The necessary
capital to operate the  Company was  initially  provided by the  principals  and
founders of the Company in the form of both debt and capital stock  issuances as
set forth in the financial  statements  incorporated herein. The working capital
necessary to operate the Company and provide for  acquisition  capital came from
the  proceeds  of loans,  a credit  line and  production  revenue as  previously
disclosed.

         The  Company  had cash and cash  equivalents  of  $50,908  and  working
capital of $217,744 at June 30, 2007. This compares to cash and cash equivalents
of $31,533 and working capita deficit of $3,603,925 at December 31, 2006.

         During the six months  ended June 30,  2007,  the Company  used cash of
$180,623 in operating  activities  compared to being provided cash of $1,092,464
in the prior year. At June 30, 2007 the company had an outstanding receivable of
$7,972.

         Net cash provided by investing  activities was  $2,600,0000 for the six
months ended June 30, 2007,  which  compares to cash used of $1,568,207  for the
same period in 2006. Net cash provided by investing activities is primarily from
the sale of North Franklin gas property.  Net cash used in investing  activities
is primarily from acquisition of oil and gas property interests.

         Net cash provided by (used by) financing  activities  was  ($2,400,000)
for the six months ended June 30, 2007,  which  compares to  ($560,000)  for the
same period in 2006.  Net cash used by financing  activities was due to payments
on convertible debt.

ITEM 3.  CONTROLS AND PROCEDURES

         The Company's Chief Executive  Officer and Chief Financial  Officer are
responsible for establishing and maintaining  disclosure controls and procedures
for the Company.


                                       28

<PAGE>



         (a) Evaluation of Disclosure Controls and Procedures

         As of the end of the period covered by this report, the Company carried
out an  evaluation,  under the  supervision  and with the  participation  of the
Company's management, including the Company's President, of the effectiveness of
the design and operation of the  Company's  disclosure  controls and  procedures
pursuant to Rule 13a-15 under the  Securities  Exchange Act of 1934,  as amended
(the  "Exchange  Act").  Based  upon the  evaluation,  the  Company's  President
concluded that, as of the end of the period, the Company's  disclosure  controls
and  procedures  were effective in timely  alerting him to material  information
relating to the Company  required to be included in the reports that the Company
files and submits pursuant to the Exchange Act.

         (b) Changes in Internal Controls

         Based on his evaluation as of June 30, 2007,  there were no significant
changes in the Company's  internal  controls over financial  reporting or in any
other areas that could  significantly  affect the  Company's  internal  controls
subsequent to the date of his most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         There are no legal proceedings pending or threatened against us.

ITEM 2.  CHANGES IN SECURITIES

    None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

     None.

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

     None.

ITEM 5.  OTHER INFORMATION

     None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

Exhibit
Number          Title of Document

4.15     Escrow Agreement between the Company and Greenberg  Taurig,  LLP, dated
         May 7, 2007, filed on June 8, 2007 on Form 8-K.

4.16     Amended and Restated Senior Secured Convertible  Promissory Note, filed
         on June 8, 2007 on Form 8-K.

                                       29

<PAGE>

4.17     Form of  Warrant  to  Purchase  Shares of Common  Stock of Silver  Star
         Energy, Inc., filed on June 8, 2007 on Form 8-K.

4.18     Form of Series A Warrant to Purchase  Shares of Common  Stock of Silver
         Star Energy, Inc., filed on June 8, 2007 on Form 8-K.

10.1     Robert McIntosh's  Consulting  Agreement dated November 15, 2003, filed
         on April 21, 2004 on Form 10KSB/A.

10.15    Amendment  Agreement between the Company and Various  Creditors,  dated
         May 7, 2007, filed June 8, 2007 on Form 8-K.

10.16    Asset Sale Agreement between the Company and Archer Exploration,  Inc.,
         dated April 1, 2007, filed on June 8, 2007 on Form 8-K.

10.2     David Naylor's  Consulting  Agreement dated November 15, 2003, filed on
         April 21, 2004 on Form 10KSB/A.

10.3     Robert  McIntosh's  Loan Agreement  dated  December 31, 2003,  filed on
         April 21, 2004 on Form 10KSB/A.

10.4     Agreement  dated  October 21, 2003  between the Company and Adil Dinani
         disposing  of 657333 BC Ltd.  (Netcash),  filed on November 13, 2003 on
         Form 8-K.

10.5     Agreement  dated  October  29,  2003  between  the  Company and 1048136
         Alberta,  Ltd.  respecting  the  acquisition  of the  Evi  oil  and gas
         prospect, filed on November 13, 2003 on Form 8-K.

10.6     Agreement  dated  October  29,  2003  between  the  Company and 1048136
         Alberta,  Ltd.  respecting the acquisition of the Verdigris oil and gas
         prospect,  filed on November 13, 2003 on Form 8-K. 10.7 Agreement dated
         December  5, 2003  between the  Company  and Archer  Exploration,  Inc.
         respecting the North  Franklin oil and gas prospect,  filed on December
         23, 2003 on Form 8-K.

10.8     Agreement  dated  December  5, 2003  between  the  Company  and  Archer
         Exploration,  Inc.  respecting the Winter Pinchout oil and gas project,
         filed on December 23, 2003 on Form 8-K.

31.1     Certification  Pursuant  to Section  302 of the  Sarbanes-Oxley  Act of
         2002.
31.2     Certification  Pursuant  to Section  302 of the  Sarbanes-Oxley  Act of
         2002.
32.1     Certification  Pursuant  to Section  906 of the  Sarbanes-Oxley  Act of
         2002.
32.2     Certification  Pursuant  to Section  906 of the  Sarbanes-Oxley  Act of
         2002.

(b)      On June 8, 2007, the Company filed a report on Form 8-K. SIGNATURES

                                       30

<PAGE>




         In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                            Silver Star Energy, Inc.
                            ------------------------
                                  (Registrant)

DATE:       August 20, 2007


By:  /s/ Robert McIntosh
------------------------
Robert McIntosh
President, CEO & Director
(Principal Executive Officer)


By:  /s/ David Naylor
---------------------
David Naylor
Treasurer, Director
(Principal Financial Officer)




























                                       31