----

----

| Nevada                                                         | 98-0373867                        |
|----------------------------------------------------------------|-----------------------------------|
| (State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |

|   | Large accelerated filer | o                                                                | Accelerated filer                      | o |
|--------|-------------------------|------------------------------------------------------------------|----------------------------------------|---|
|   | Non- accelerated filer  | o   (Do not check if a smaller reporting company) | Smaller reporting company    | x |

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Table of Contents

CON

| Part  I – FINANCIAL INFORMATION | 3                                                                                          |
|-------------------------------------------------|--------------------------------------------------------------------------------------------|
|                                            |                                                                                       |   |
| Item 1.                                         | Financial Statements:                                                                      | 3 |
|                                            |                                                                                       |   |
|                                            | Balance Sheets                                                                             | 4 |
|                                            |                                                                                       |   |
|                                            | Statements of Operations                                                                   | 5 |
|                                            |                                                                                       |   |
|                                            | Statements of Cash Flows                                                                   | 6 |
|                                            |                                                                                       |   |
|                                            | Notes to Financial Statements                                                              | 8 |
|                                            |                                                                                       |   |
| Item 2.                                         | Management’s Discussion and Analysis of Financial Condition and Results of Operation | 14 |
|                                            |                                                                                       |   |
| Item 3.                                         | Quantitative and Qualitative Disclosures About Market Risk                                 | 21 |
|                                            |                                                                                       |   |
| Item 4                                          | Controls and Procedures                                                                    | 21 |
|                                            |                                                                                       |   |
| Item 4T.                                        | Controls and Procedures                                                                    | 22 |
|                                            |                                                                                       |   |
| Part II – OTHER INFORMATION               | 23                                                                                         |
|                                            |                                                                                       |   |
| Item 1.                                         | Legal Proceedings                                                                          | 23 |
|                                            |                                                                                       |   |
| Item 1A.                                        | Risk Factors.                                                                              | 23 |
|                                            |                                                                                       |   |
| Item 2.                                         | Unregistered Sales of Equity Securities and Use of Proceeds                                | 23 |
|                                            |                                                                                       |   |
| Item 3.                                         | Defaults Upon Senior Securities                                                            | 23 |
|                                            |                                                                                       |   |
| Item 5.                                         | Other Information                                                                          | 23 |
|                                            |                                                                                       |   |
| Item 6.                                         | Exhibits                                                                                   | 23 |
|                                            |                                                                                       |   |
| SIGNATURES                                      | 24                                                                                         |

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Table of Contents

CIA

l S

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Table of Contents

ESO

|                                                               |   | OCTOBER 31, |       |   | JULY 31, |   |
|--------------------------------------------------------------------|--------|-------------|------------|--------|----------|--------|
|                                                               |   | 2011        |       |   | 2011     |   |
|                                                               |   | (Unaudited) |       |   |     |   |
| ASSETS                                                             |   |        |       |   |     |   |
|                                                               |   |        |       |   |     |   |
| Current                                                            |   |        |       |   |     |   |
| Cash                                                               |   | $           | 3,474      |   |     | $      | 1,221 |   |
| Available for sale investment (Note 3)                             |   |        | 151,320    |   |     |   | 330,000 |   |
| Note receivable (Note 4)                                           |   |        | 80,000     |   |     |   | - |   |
|                                                               |   |        | 234,794    |   |     |   | 331,221 |   |
|                                                               |   |        |       |   |     |   |   |   |
| Investment in EHHO (Note 8)                                        |   |        | -          |   |     |   | 200,000 |   |
| Oil and gas properties, unproven (Note 6)                          |   |        | 140,840    |   |     |   | 134,720 |   |
| Intangible asset (Note 7)                                          |   |        | 40,091     |   |     |   | 40,091 |   |
|                                                               |   |        |       |   |     |   |   |   |
|                                                               |   | $           | 415,725    |   |     | $      | 706,032 |   |
|                                                               |   |        |       |   |     |   |   |   |
| LIABILITIES                                                        |   |        |       |   |     |   |   |   |
|                                                               |   |        |       |   |     |   |   |   |
| Current                                                            |   |        |       |   |     |   |   |   |
| Accounts payable                                                   |   | $           | 103,612    |   |     | $      | 64,292 |   |
| Advances payable (Note 8)                                          |   |        | 108,346    |   |     |   | 108,346 |   |
| Due to related parties (Note 9)                                    |   |        | 42,529     |   |     |   | 46,559 |   |
| Notes payable (Note 10)                                            |   |        | 25,400     |   |     |   | 54,338 |   |
|                                                               |   |        | 279,887    |   |     |   | 273,535 |   |
|                                                               |   |        |       |   |     |   |   |   |
| FUTURE INCOME TAX LIABILITY                                        |   |        | 30,000     |   |     |   | 30,000 |   |
|                                                               |   |        | 309,887    |   |     |   | 303,535 |   |
|                                                               |   |        |       |   |     |   |   |   |
| STOCKHOLDERS’ EQUITY                                         |   |        |       |   |     |   |   |   |
|                                                               |   |        |       |   |     |   |   |   |
| Capital stock (Note 11)                                            |   |        |       |   |     |   |   |   |
| Authorized:                                                        |   |        |       |   |     |   |   |   |
| 200,000,000 common shares with a par value of $0.001 per share     |   |        |       |   |     |   |   |   |
| Issued and outstanding:                                            |   |        |       |   |     |   |   |   |
| 70,712,451 common shares (July 31, 2011: 69,344,051 common shares) |   |        | 70,712     |   |     |   | 69,343 |   |
| Additional paid-in capital                                         |   |        | 2,165,476  |   |     |   | 2,119,543 |   |
| Deficit accumulated during the exploration stage                   |   |        | (2,054,197 | )      |     |   | (1,778,022 | ) |
| Accumulated other comprehensive loss                               |   |        | (76,153    | )      |     |   | (8,367 | ) |
|                                                               |   |        | 105,838    |   |     |   | 402,497 |   |
|                                                               |   |        |       |   |     |   |   |   |
|                                                               |   | $           | 415,725    |   |     | $      | 706,032 |   |

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Table of Contents

SOU

|                                                                           |   |               |       |   | CUMULATIVE RESULTS OF OPERATIONS FROM APRIL 9, 1999 (INCEPTION) |   |
|--------------------------------------------------------------------------------|--------|--------------------|------------|--------|-----------------------------------------------------------------|--------|
|                                                                           |   | THREE MONTHS ENDED |       |   | TO                                                              |   |
|                                                                           |   | OCTOBER 31,        |       |   | OCTOBER 31,                                                     |   |
|                                                                           |   | 2011               |       |   | 2010                                                            |   |   | 2011 |   |
|                                                                           |   |               |       |   |                                                            |   |   |   |   |
| Expenses                                                                       |   |               |       |   |                                                            |   |   |   |   |
| General and administrative                                                     |   | $                  | 9,632      |   |                                                            | $      | 26,759 |   |   | $ | 248,564 |   |
| Interest and finance fees (Notes 10 and 11)                                    |   |               | 1,604      |   |                                                            |   | 642 |   |   |   | 24,608 |   |
| Investor relations                                                             |   |               | -          |   |                                                            |   | - |   |   |   | 17,989 |   |
| Management fees (Note 10)                                                      |   |               | 3,000      |   |                                                            |   | 21,233 |   |   |   | 825,410 |   |
| Professional fees                                                              |   |               | 55,648     |   |                                                            |   | 40,376 |   |   |   | 343,846 |   |
| Property examination and expenditure costs                                     |   |               | -          |   |                                                            |   | - |   |   |   | 165,489 |   |
| Consulting - stock based compensation                                          |   |               | 4,950      |   |                                                            |   | - |   |   |   | 4,950 |   |
|                                                                           |   |               |       |   |                                                            |   |   |   |   |   |   |   |
| Loss before other items                                                        |   |               | (74,834    | )      |                                                            | $      | (89,010 | ) |   |   | (1,630,856 | ) |
|                                                                           |   |               |       |   |                                                            |   |   |   |   |   |   |   |
| Other items                                                                    |   |               |       |   |                                                            |   |   |   |   |   |   |   |
| Management fee income                                                          |   |               | -          |   |                                                            |   | 15,000 |   |   |   | 15,000 |   |
| Loss on disposal of investment (Note 4)                                        |   |               | (2,532     | )      |                                                            |   | - |   |   |   | (2,532 | ) |
| Loss on settlement of note payable (Note 10)                                   |   |               | (78,809    | )      |                                                            |   | - |   |   |   | (78,809 | ) |
| Gain (loss) on sale of EHHO (Note 5)                                           |   |               | (120,000   | )      |                                                            |   | - |   |   |   | 184,689 |   |
| Dilution loss from EHHO                                                        |   |               | -          |   |                                                            |   | - |   |   |   | (196,000 | ) |
| Impairment loss on EHHO                                                        |   |               | -          |   |                                                            |   | - |   |   |   | (314,908 | ) |
| Loss from equity interest in EHHO                                              |   |               | -          |   |                                                            |   | (612 | ) |   |   | (30,781 | ) |
|                                                                           |   |               |       |   |                                                            |   |   |   |   |   |   |   |
| Net loss for the period                                                        |   |               | (276,175   | )      |                                                            |   | (74,622 | ) |   |   | (2,054,197 | ) |
|                                                                           |   |               |       |   |                                                            |   |   |   |   |   |   |   |
| Other comprehensive loss                                                       |   |               |       |   |                                                            |   |   |   |   |   |   |   |
|                                                                           |   |               |       |   |                                                            |   |   |   |   |   |   |   |
| Revaluation of available for sale investments to market value                  |   |               | (71,312    | )      |                                                            |   | - |   |   |   | (71,312 | ) |
| Realized loss on sale of investment reclassified to income                     |   |               | 2,532      |   |                                                            |   | - |   |   |   | 2,532 |   |
| Foreign currency translation adjustment                                        |   |               | 894        |   |                                                            |   | (344 | ) |   |   | (7,373 | ) |
|                                                                           |   |               |       |   |                                                            |   |   |   |   |   |   |   |
| Comprehensive loss for the period                                              |   | $                  | (344,061   | )      |                                                            | $      | (74,966 | ) |   | $ | 2,130,350 |   |
|                                                                           |   |               |       |   |                                                            |   |   |   |   |   |   |   |
| Basic and Diluted Net Loss Per Common Share                                    |   | $                  | (0.01      | )      |                                                            | $      | (0.01 | ) |   |   |   |   |
|                                                                           |   |               |       |   |                                                            |   |   |   |   |   |   |   |
| Weighted Average Number of Common Shares Outstanding – Basic and Diluted |   |               | 69,577,841 |   |                                                            |   | 39,060,650 |   |   |   |   |   |

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Table of Contents

SOU

|                                                                        |   |               |     |   | CUMULATIVE RESULTS OF OPERATIONS FROM APRIL 9, 1999 (INCEPTION) |   |
|-----------------------------------------------------------------------------|--------|--------------------|----------|--------|-----------------------------------------------------------------|--------|
|                                                                        |   | THREE MONTHS ENDED |     |   | TO                                                              |   |
|                                                                        |   | OCTOBER 31,        |     |   | OCTOBER 31,                                                     |   |
|                                                                        |   | 2011               |     |   | 2010                                                            |   |   | 2011 |   |
|                                                                        |   |               |     |   |                                                            |   |   |   |   |
| Cash Flows from Operating Activities                                        |   |               |     |   |                                                            |   |   |   |   |
| Net loss                                                                    |   | $                  | (276,175 | )      |                                                            | $      | (74,622 | ) |   | $ | (2,054,197 | ) |
|                                                                        |   |               |     |   |                                                            |   |   |   |   |   |   |   |
| Adjustments to reconcile net loss to net cash used in operating activities: |   |               |     |   |                                                            |   |   |   |   |   |   |   |
| Realized foreign exchange losses on settlement of notes payable             |   |               | (1,384   | )      |                                                            |   | 647 |   |   |   | 11,134 |   |
| Unrealized foreign exchange                                                 |   |               | 511      |   |                                                            |   | - |   |   |   | 4,456 |   |
| Stock-based compensation                                                    |   |               | 4,950    |   |                                                            |   | - |   |   |   | 754,950 |   |
| Accrued interest                                                            |   |               | 627      |   |                                                            |   | 641 |   |   |   | 23,313 |   |
| Gain on disposal of investments                                             |   |               | 2,532    |   |                                                            |   | - |   |   |   | 2,532 |   |
| Loss on settlement of note payable                                          |   |               | 78,809   |   |                                                            |   | - |   |   |   | 78,809 |   |
| Share of loss of equity investment                                          |   |               | -        |   |                                                            |   | 612 |   |   |   | 30,781 |   |
| Gain (loss) on disposal of EHHO                                             |   |               | 120,000  |   |                                                            |   | - |   |   |   | (184,689 | ) |
| Impairment of EHHO                                                          |   |               | -        |   |                                                            |   | - |   |   |   | 314,908 |   |
| Dilution loss                                                               |   |               | -        |   |                                                            |   | - |   |   |   | 196,000 |   |
| Changes in operating assets and liabilities:                                |   |               |     |   |                                                            |   |   |   |   |   |   |   |
| Amounts receivable                                                          |   |               |     |   |                                                            |   | (15,000 | ) |   |   | - |   |
| Prepaid expenses                                                            |   |               | -        |   |                                                            |   | 3,933 |   |   |   | - |   |
| Accounts payable and accrued liabilities                                    |   |               | 39,320   |   |                                                            |   | 34,809 |   |   |   | 103,612 |   |
| Net cash used in operating activities                                       |   |               | (30,810  | )      |                                                            |   | (48,980 | ) |   |   | (718,391 | ) |
|                                                                        |   |               |     |   |                                                            |   |   |   |   |   |   |   |
| Cash Flows from Financing Activities                                        |   |               |     |   |                                                            |   |   |   |   |   |   |   |
| Proceeds from issuance of common stock, net                                 |   |               | 42,352   |   |                                                            |   | - |   |   |   | 1,101,374 |   |
| Proceeds from (repayment of) notes payable                                  |   |               | -        |   |                                                            |   | - |   |   |   | 114,300 |   |
| Advances payable                                                            |   |               | -        |   |                                                            |   | - |   |   |   | 108,346 |   |
| Advances from related parties                                               |   |               | (3,169   | )      |                                                            |   | 500 |   |   |   | 38,485 |   |
| Net cash provided by financing activities                                   |   |               | 39,183   |   |                                                            |   | 500 |   |   |   | 1,362,505 |   |
|                                                                        |   |               |     |   |                                                            |   |   |   |   |   |   |   |
| Cash Flows from Investing Activities                                        |   |               |     |   |                                                            |   |   |   |   |   |   |   |
| Acquisition of oil and gas properties                                       |   |               | (6,120   | )      |                                                            |   | (4,080 | ) |   |   | (262,840 | ) |
| Acquisition of Intellectual property                                        |   |               | -        |   |                                                            |   | - |   |   |   | (2,800 | ) |
| Investment in EHHO                                                          |   |               | -        |   |                                                            |   | - |   |   |   | (375,000 | ) |
|                                                                        |   |               | (6,120   | )      |                                                            |   | (4,080 | ) |   |   | (640,640 | ) |
|                                                                        |   |               |     |   |                                                            |   |   |   |   |   |   |   |
| Net Increase (Decrease) in Cash                                             |   |               | 2,253    |   |                                                            |   | (52,560 | ) |   |   | 3,474 |   |
|                                                                        |   |               |     |   |                                                            |   |   |   |   |   |   |   |
| Cash, Beginning                                                             |   |               | 1,221    |   |                                                            |   | 58,300 |   |   |   | - |   |
|                                                                        |   |               |     |   |                                                            |   |   |   |   |   |   |   |
| Cash, Ending                                                                |   | $                  | 3,474    |   |                                                            | $      | 5,740 |   |   | $ | 3,474 |   |

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Table of Contents

|                                                                                              |   |               |   |   | CUMULATIVE RESULTS OF OPERATIONS FROM APRIL 9, 1999 (INCEPTION) |   |
|---------------------------------------------------------------------------------------------------|--------|--------------------|--------|--------|-----------------------------------------------------------------|--------|
|                                                                                              |   | THREE MONTHS ENDED |   |   | TO                                                              |   |
|                                                                                              |   | OCTOBER 31,        |   |   | OCTOBER 31,                                                     |   |
|                                                                                              |   | 2011               |   |   | 2010                                                            |   |   | 2011 |   |
|                                                                                              |   |               |   |   |                                                            |   |   |   |   |
| Supplemental Disclosures of Cash Flow Information and Non-Cash Investing and Financing Activities |   |               |   |   |                                                            |   |   |   |   |
|                                                                                              |   |               |   |   |                                                            |   |   |   |   |
| Cash paid for:                                                                                    |   |               |   |   |                                                            |   |   |   |   |
| Interest                                                                                          |   | $                  | -      |   |                                                            | $      | - |   |   | $ | 110 |   |
| Income taxes                                                                                      |   | $                  | -      |   |                                                            | $      | - |   |   | $ | - |   |
|                                                                                              |   |               |   |   |                                                            |   |   |   |   |   |   |   |
| Common shares issued on settlement of notes payable and accrued interest                          |   | $                  | -      |   |                                                            | $      | - |   |   | $ | 102,573 |   |
|                                                                                              |   |               |   |   |                                                            |   |   |   |   |   |   |   |
| Common shares issued on acquisition of intellectual property                                      |   | $                  | -      |   |                                                            | $      | - |   |   | $ | 37,291 |   |
|                                                                                              |   |               |   |   |                                                            |   |   |   |   |   |   |   |
| Common stock of Deloro received as part proceeds on partial disposal of EHHO (Note 4)             |   | $                  | -      |   |                                                            | $      | - |   |   | $ | 330,000 |   |
|                                                                                              |   |               |   |   |                                                            |   |   |   |   |   |   |   |
| Common shares issued on acquisition of EHHO and FBHO                                              |   | $                  | -      |   |                                                            | $      | - |   |   | $ | 240,000 |   |
|                                                                                              |   |               |   |   |                                                            |   |   |   |   |   |   |   |
| Future income tax liability on property acquisition                                               |   | $                  | -      |   |                                                            | $      | - |   |   | $ | 30,000 |   |

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Table of Contents

| 1. | NATURE OF CONTINUED OPERATIONS AND BASIS OF PRESENTATION |
|----|----------------------------------------------------------|

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Table of Contents

| 2. | RECENT ACCOUNTING PRONOUNCEMENTS |
|----|----------------------------------|

| 3. | INVESTMENT |
|----|------------|

|                                                                                                   | OCTOBER 31 |   | JULY 31 |   |
|--------------------------------------------------------------------------------------------------------|------------|--------|---------|--------|
|                                                                                                   | 2011       |   | 2011    |   |
|                                                                                                   |       |   |    |   |   |   |
| Deloro – 2,000,000 common shares at market value (July 31, 2011 – 3,000,000 common shares) |       | $      | 151,320 |   |   | $ | 330,000 |   |

| 4. | NOTE RECEIVABLE |
|----|-----------------|

|                       | OCTOBER 31 |   | JULY 31 |   |
|----------------------------|------------|--------|---------|--------|
|                       | 2011       |   | 2011    |   |
|                       |       |   |    |   |   |   |
| Promissory note receivable |       | $      | 80,000  |   |   | $ | - |   |

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Table of Contents

| 5. | INVESTMENT IN EHHO |
|----|--------------------|

|   | i) | On or before May 11, 2011, Deloro will issue 3,000,000 common shares each to the Company (received) and to EHPC.  As consideration both the Company and EHPC will transfer 15,000 units of capital of EHHO to Deloro immediately and an aggregate of 30,000 ownership units of EHHO (15,000 from the Company and 15,000 from EHPC) will be placed into escrow until the completion of Deloro’s obligations described below. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ii) | On or before May 13, 2011, Deloro shall make a capital contribution of Cdn$150,000 to EHHO (received). |
|--------|-----|--------------------------------------------------------------------------------------------------------|

|   | iii) | On or before September 30, 2011, Deloro will make further capital contributions aggregating Cdn$450,000 to EHHO in either cash or approved exploration expenditures (not received). |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Sale proceeds received                                      |   |   |    |
|-------------------------------------------------------------|--------|--------|---------|
| 3,000,000 common shares of Deloro                           |   | $      | 330,000 |   |
| Carrying value of 15,000 capital units sold to Deloro       |   |   | (89,924 | ) |
| Gain on disposal of 15,000 capital units  of EHHO |   |   | 240,076 |   |
|                                                        |   |   |    |   |
| Share of capital contribution to EHHO by Deloro             |   |   | 64,613  |   |
|                                                        |   |   |    |   |
| Total gain on disposal of 15,000 capital units of EHHO      |   | $      | 304,689 |   |

| Initial recognition on promissory note                 |   | $      | 80,000   |   |
|--------------------------------------------------------|--------|--------|----------|--------|
| Carrying value of 75,000 capital units                 |   |   | (200,000 | )      |
|                                                   |   |   |     |   |
| Total loss on disposal of 75,000 capital units of EHHO |   | $      | (120,000 | )      |

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Table of Contents

| 6. | OIL AND GAS PROPERTIES |
|----|------------------------|

|                |   | OCTOBER 31 |    |   | JULY 31 |   |
|---------------------|--------|------------|---------|--------|---------|--------|
|                |   | 2011       |    |   | 2011    |   |
| Unproved properties |   |       |    |   |    |   |
| Acquisition costs   |   | $          | 128,000 |   |    | $      | 128,000 |   |
| Annual lease costs  |   |       | 12,840  |   |    |   | 6,720 |   |
|                |   |       |    |   |    |   |   |   |
|                |   | $          | 140,840 |   |    | $      | 134,720 |   |

| 7. | INTANGIBLE ASSET |
|----|------------------|

| Related party transfer cost                |   | $      | 37,291 |   |
|--------------------------------------------|--------|--------|--------|--------|
| Other costs                                |   |   | 2,800  |   |
|                                       |   |   |   |   |
| Balance July 31, 2011 and October 31, 2011 |   | $      | 40,091 |   |

| 8. | ADVANCES PAYABLE |
|----|------------------|

| 9. | RELATED PARTY TRANSACTIONS |
|----|----------------------------|

|                                                                                                                                                                                                                       |   | OCTOBER 31 |   |   | JULY 31 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------|--------|--------|---------|--------|
|                                                                                                                                                                                                                       |   | 2011       |   |   | 2011    |   |
| Balance Sheet items                                                                                                                                                                                                        |   |       |   |   |    |   |
|                                                                                                                                                                                                                       |   |       |   |   |    |   |
| i)   Due to Directors                                                                                                                                                                                            |   |       |   |   |    |   |
| Amounts payable for reimbursement of corporate expenses                                                                                                                                                                    |   | $          | 4,569  |   |    | $      | 1,463 |   |
| Amounts payable for management fees                                                                                                                                                                                        |   |       | -      |   |    |   | 6,277 |   |
|                                                                                                                                                                                                                       |   |       |   |   |    |   |   |   |
| ii)  Other                                                                                                                                                                                                            |   |       |   |   |    |   |   |   |
| Note payable (Cdn$35,000) including accrued interest to Director, unsecured bearing interest at 6% per annum. The loan was due on July 25, 2011.  There are no default charges and interest continues to accrue. |   |       | 37,960 |   |    |   | 38,819 |   |
|                                                                                                                                                                                                                       |   | $          | 42,529 |   |    | $      | 46,559 |   |

----

Table of Contents

| 9. | RELATED PARTY TRANSACTIONS (Continued) |
|----|----------------------------------------|

|                                                                  |   | THREE MONTHS ENDED |   |
|-----------------------------------------------------------------------|--------|--------------------|--------|
|                                                                  |   | OCTOBER 31,        |   |
|                                                                  |   | 2011               |   |   | 2010 |   |
| Income Statement Items                                                |   |               |   |   |   |   |
|                                                                  |   |               |   |   |   |   |
| iii)  Interest paid or accrued                                   |   |               |   |   |   |   |
| Interest accrued on promissory note owing to Director                 |   | $                  | 523    |   |   | $ | 542 |   |
|                                                                  |   |               |   |   |   |   |   |   |
| iv)  Management fees                                             |   |               |   |   |   |   |   |   |
| Charged to EHHO                                                       |   | $                  | -      |   |   | $ | 15,000 |   |
|                                                                  |   |               |   |   |   |   |   |   |
| Fees paid to two (2010 – three) Directors for services rendered |   | $                  | 3,000  |   |   | $ | 21,233 |   |

| 10. | NOTES PAYABLE |
|-----|---------------|

| 11. | CAPITAL STOCK |
|-----|---------------|

|   | a) | Authorized |
|--------|----|------------|

|   | b) | Issued |
|--------|----|--------|

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| 11. | CAPITAL STOCK (Continued) |
|-----|---------------------------|

|   | c) | Stock Options |
|--------|----|---------------|

|                             |   | THREE MONTHS ENDED |    |     | YEAR ENDED    |   |
|----------------------------------|--------|--------------------|---------|----------|---------------|--------|
|                             |   | OCTOBER 31, 2011   |    |     | JULY 31, 2011 |   |
|                             |   |               |    | Weighted |          |   |   |   | Weighted |
|                             |   | Number             |    | Average  |          |   | Number |   | Average |
|                             |   | of                 |    | Exercise |          |   | of |   | Exercise |
|                             |   | Shares             |    | Price    |          |   | Shares |   | Price |
|                             |   |               |    |     |          |   |   |   |   |   |   |   |
| Outstanding, beginning of period |   |               | -       |     |          | $      | - |   |   |   | - |   |   | $ | - |   |
|                             |   |               |    |     |          |   |   |   |   |   |   |   |   |   |   |   |
| Granted                          |   |               | 100,000 |     |          |   | 0.10 |   |   |   | - |   |   |   | - |   |
|                             |   |               |    |     |          |   |   |   |   |   |   |   |   |   |   |   |
| Outstanding, end of period       |   |               | 100,000 |     |          | $      | 0.10 |   |   |   | - |   |   | $ | - |   |

| 12. | PROPOSED ACQUISITION |
|-----|----------------------|

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|   | 1. | Stranded oil – After production, a large amount of the oil remains in the formation.  In North America as much as 60% of the oil will be left after conventional production. ZeroGap may be used here in mobilizing and in-situ upgrading this oil. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2. | Transition zone oil – A lot of oil is left behind at the oil-water interface.  Due to the higher mobility of water, recovery is difficult.  ZeroGap may be useful here to apply the appropriate gas chemistry to increase the mobility of the oil phase and decrease the mobility of the water phase”. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                                                                                                                                                                                       |   | OCTOBER 31 |   |   | JULY 31 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------|--------|--------|---------|--------|
|                                                                                                                                                                                                                       |   | 2011       |   |   | 2011    |   |
| Balance Sheet items                                                                                                                                                                                                        |   |       |   |   |    |   |
|                                                                                                                                                                                                                       |   |       |   |   |    |   |
| i)   Due to Directors                                                                                                                                                                                            |   |       |   |   |    |   |
| Amounts payable for reimbursement of corporate expenses                                                                                                                                                                    |   | $          | 4,569  |   |    | $      | 1,463 |   |
| Amounts payable for management fees                                                                                                                                                                                        |   |       | -      |   |    |   | 6,277 |   |
|                                                                                                                                                                                                                       |   |       |   |   |    |   |   |   |
| ii)  Other                                                                                                                                                                                                            |   |       |   |   |    |   |   |   |
| Note payable (Cdn$35,000) including accrued interest to Director, unsecured bearing interest at 6% per annum. The loan was due on July 25, 2011.  There are no default charges and interest continues to accrue. |   |       | 37,960 |   |    |   | 38,819 |   |
|                                                                                                                                                                                                                       |   | $          | 42,529 |   |    | $      | 46,559 |   |

|                                                                  |   | THREE MONTHS ENDED |   |
|-----------------------------------------------------------------------|--------|--------------------|--------|
|                                                                  |   | OCTOBER 31,        |   |
|                                                                  |   | 2011               |   |   | 2010 |   |
| Income Statement Items                                                |   |               |   |   |   |   |
|                                                                  |   |               |   |   |   |   |
| iii)  Interest paid or accrued                              |   |               |   |   |   |   |
| Interest accrued on promissory note owing to Director                 |   | $                  | 523    |   |   | $ | 542 |   |
|                                                                  |   |               |   |   |   |   |   |   |
| iv)  Management fees                                        |   |               |   |   |   |   |   |   |
| Charged to EHHO                                                       |   | $                  | -      |   |   | $ | 15,000 |   |
|                                                                  |   |               |   |   |   |   |   |   |
| Fees paid to two (2010 – three) Directors for services rendered |   | $                  | 3,000  |   |   | $ | 21,233 |   |

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|   | 31.1 | Certification of Ray Jefferd, Chief Executive Officer of Stellar Resources Ltd. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.   |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------|
|   | 31.2 | Certification of Luigi Rispoli, Chief Financial Officer of Stellar Resources Ltd. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|   | 32.1 | Certification of Ray Jefferd, Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                             |
|   | 32.2 | Certification of Luigi Rispoli, Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                           |

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ATU

|   | By:                                   | /s/ Ray Jefferd |   |
|--------|---------------------------------------|----------------------|--------|
|   | Ray Jefferd                           |                 |
|   | President and Chief Executive Officer |                 |
|   |                                  |                 |
|   |                                  |                 |   |
|   | By:                                   | /s/ Luigi Rispoli    |   |
|   | Luigi Rispoli                         |                 |
|   | Director and Chief Financial Officer  |                 |
|   |                                  |                 |   |
|   |                                  |                 |   |
|   | By:                                   | /s/ Michael Rezac    |   |
|   | Michael Rezac                         |                 |
|   | Director                              |                 |

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