[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 THESECURITIES EXCHANGE ACT OF 1934

For the quarterly
period ended:  March 31, 2007

# [ ] TRANSITION REPORT
UNDER SECTION 13 OR 15(d) OF THEEXCHANGE ACT

For the transition
period from_______ to _______

Commission file number
333-105008

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

|Delaware                                                       |  | 87-0700927                       
|-------------------------------------------------------------- |  | ---------------------------------
|                                                               |  |                                  
|(State or other jurisdiction of incorporation or organization) |  | (IRS Employer Identification No.)

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

(310) 300-4064Issuer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]
| | ---------------------------------------------------------------------------------------------------------------------------------

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APPLICABLE ONLY TO
ISSUERS INVOLVED IN BANKRUPTCYPROCEEDING 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:  March 31, 2007    36,565,164
| | -------------------------------------------------------------------------------------------------------------------------------------------------------

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

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# PART I

# Item 1. Financial
Statements

CALIBER ENERGY, INC.(An Exploration
State Company) BALANCE SHEETS

|                                                         | (Unaudited)
March 31,
2007 | December 31,
2006
|-------------------------------------------------------- | -------------------------- | -----------------
|ASSETS                                                   |                            |                  
|Current Assets                                           |                            |                  
|Cash and cash equivalents                                |                            |                  
|Prepaid expenses                                         |                            |                  
|                                                         |                            |                  
|Total Assets                                             |                            |                  
|                                                         |                            |                  
|LIABILITIES AND STOCKHOLDERS' EQUITY                     |                            |                  
|Current Liabilities                                      |                            |                  
|Accounts payable                                         |                            |                  
|Accrued liabilities & short term contract payable        |                            |                  
|                                                         |                            |                  
|Total Current Liabilities                                |                            |                  
|                                                         |                            |                  
|Long-Term Liabilities                                    |                            |                  
|Contract payable - the "Ritz Claim"                      |                            |                  
|                                                         |                            |                  
|Total Long-Term Liabilities                              |                            |                  
|                                                         |                            |                  
|Total Liabilities                                        |                            |                  
|                                                         |                            |                  
|Stockholders' Equity                                     |                            |                  
|Preferred stock, $.0001 par value, authorized 10,000,000 |                            |                  
|shares, -0- issued                                       |                            |                  
|Common stock, $.0001 par value, authorized 500,000,000   |                            |                  
|shares, 36,565,164 issued at March 31, 2007 and          |                            |                  
|December 31, 2006                                        |                            |                  
|Stock to be issued                                       |                            |                  
|Additional paid-in capital                               |                            |                  
|Deficit accumulated during exploration state             |                            |                  
|                                                         |                            |                  
|Total Stockholders' Equity                               |                            |                  
|                                                         |                            |                  
|Total Liabilities and Stockholders' Equity               |                            |                  
|                                                         |                            |                  

See accompanying notes.

3

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CALIBER ENERGY, INC.(An Exploration State
Company)STATEMENTS OF
OPERATIONS

|                             | (Unaudited)
For the Three Months Ended
March 31, | Accumulated
Since
November 21,
2002
Inception of
Exploration
|---------------------------- | ------------------------------------------------ | ------------------------------------------------------------
|
|Revenues                     |                                                  |                                                             
|                             |                                                  |                                                             
|Expenses                     |                                                  |                                                             
|Consulting                   |                                                  |                                                             
|Officers compensation        |                                                  |                                                             
|General and administrative   |                                                  |                                                             
|Investor relations           |                                                  |                                                             
|General exploration          |                                                  |                                                             
|                             |                                                  |                                                             
|Total Expenses               |                                                  |                                                             
|                             |                                                  |                                                             
|Other Income (Expense)       |                                                  |                                                             
|Interest Income              |                                                  |                                                             
|Interest Expense             |                                                  |                                                             
|                             |                                                  |                                                             
|Total Other Income (Expense) |                                                  |                                                             
|                             |                                                  |                                                             
|Net Income (Loss)            |                                                  |                                                             
|                             |                                                  |                                                             
|Weighted Average Shares      |                                                  |                                                             
|                             |                                                  |                                                             
|Loss per Common Share        |                                                  |                                                             
|                             |                                                  |                                                             

See accompanying notes.

4

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CALIBER ENERGY, INC. (An Exploration
State Company)CONSOLIDATED
STATEMENTS OF CASH FLOWS

|                                                 | (Unaudited)
For the Three Months Ended
March 31, | Deficit
Accumulated
Since
November 6,
2002
Inception of
Development
|------------------------------------------------ | ------------------------------------------------ | -------------------------------------------------------------------
|
|CASH FLOWS FROM OPERATING                        |                                                  |                                                                    
|ACTIVITIES:                                      |                                                  |                                                                    
|Net Loss                                         |                                                  |                                                                    
|Adjustments used to reconcile net loss to net    |                                                  |                                                                    
|cash provided by (used in) operating activities: |                                                  |                                                                    
|Depreciation and Amortization                    |                                                  |                                                                    
|Common stock issued for liabilities              |                                                  |                                                                    
|Stock compensation                               |                                                  |                                                                    
|Interest expense from beneficial conversion      |                                                  |                                                                    
|Common stock to be issued for mineral rights     |                                                  |                                                                    
|Mineral rights expensed                          |                                                  |                                                                    
|(Increase) decrease in prepaid expenses          |                                                  |                                                                    
|(Increase) decrease in receivables               |                                                  |                                                                    
|(Increase) decrease in interest receivable       |                                                  |                                                                    
|Increase (decrease) in accrued interest          |                                                  |                                                                    
|Increase (decrease) in accounts payable          |                                                  |                                                                    
|Increase (decrease) in accrued liabilities       |                                                  |                                                                    
|Increase (decrease) in contracts payable         |                                                  |                                                                    
|                                                 |                                                  |                                                                    
|Net cash used in operating activities            |                                                  |                                                                    
|                                                 |                                                  |                                                                    
|CASH FLOWS FROM INVESTING                        |                                                  |                                                                    
|ACTIVITIES:                                      |                                                  |                                                                    
|Cash paid for website design                     |                                                  |                                                                    
|Cash paid for mineral rights                     |                                                  |                                                                    
|                                                 |                                                  |                                                                    
|Net cash used by investing activities            |                                                  |                                                                    
|                                                 |                                                  |                                                                    
|CASH FLOWS FROM FINANCING                        |                                                  |                                                                    
|ACTIVITIES:                                      |                                                  |                                                                    
|Proceeds from convertible debentures             |                                                  |                                                                    
|Proceeds from loans                              |                                                  |                                                                    
|Proceeds from shareholder loan                   |                                                  |                                                                    
|Loans to related parties                         |                                                  |                                                                    
|Proceeds from loans to related parties           |                                                  |                                                                    
|Proceeds on sale of common stock                 |                                                  |                                                                    
|                                                 |                                                  |                                                                    
|Net Cash Provided by Financing  Activities       |                                                  |                                                                    
|                                                 |                                                  |                                                                    

5

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CALIBER ENERGY, INC.(An Exploration
State Company)CONSOLIDATED
STATEMENTS OF CASH FLOWS(continued)

|                                | (Unaudited)
For the Three Months Ended
March 31, | Deficit
Accumulated
Since
November 6,
2002
Inception of
Development
|------------------------------- | ------------------------------------------------ | -------------------------------------------------------------------
|
|Net Increase (Decrease) in      |                                                  |                                                                    
|Cash  and Cash Equivalents      |                                                  |                                                                    
|Cash and Cash Equivalents at    |                                                  |                                                                    
|Beginning of the Period         |                                                  |                                                                    
|                                |                                                  |                                                                    
|Cash and Cash Equivalents at    |                                                  |                                                                    
|End of the Period               |                                                  |                                                                    
|                                |                                                  |                                                                    
|SUPPLEMENTAL DISCLOSURE OF CASH |                                                  |                                                                    
|FLOW INFORMATION:               |                                                  |                                                                    
|Interest                        |                                                  |                                                                    
|Income Taxes                    |                                                  |                                                                    

SUPPLEMENTAL DISCLOSURE
OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

During
the quarter ended June 30, 2006, convertible debt of $463,453, accrued interest of
$29,915, accounts payable of $158,217 and accrued expenses of $69,800 were converted into
24,046,164 shares of common stock.

See accompanying notes.

6

---

CALIBER ENERGY, INC.

(An Exploration
State Company)

NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1  NATURE OF
OPERATIONS AND GOING CONCERN

This
summary of accounting policies for Caliber Energy is presented to assist in understanding
the Companys consolidated financial statements. The accounting policies conform to
generally accepted accounting principles and have been consistently applied in the
preparation of the financial statements.

The
unaudited financial statements as of March 31, 2007, and the three 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 months. Operating results for interim periods are not necessarily
indicative of the results which can be expected for full years.

The
accompanying consolidated 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.

Several
conditions and events cast doubt about the Companys ability to continue as a
going concern. The Company is an exploration state company, and has incurred
net losses of $26,483 for the three months ended March 31, 2007, losses of $142,533 for
the year ended December 31, 2006, and losses of $1,425,320 since inception. The Company
has not realized economic production from its mineral properties as of March 31, 2007.
These factors raise substantial doubt about the Companys ability to continue as a
going concern. Management continues to actively seek additional sources of capital to fund
current and future operations. There is no assurance that the Company will be successful
in continuing to raise additional capital, establishing probable or proven reserves, or
determining if the mineral properties can be mined economically. These financial
statements do not include any adjustments that might result from the outcome of these
uncertainties.

Organization and Basis of
Presentation

Caliber
Energy, Inc. (the Company), an exploration state company, was incorporated on November 6,
2002 in the State of Delaware as Twin Ventures, Ltd. On June 18, 2004, the Company changed
the name to Rincon Resources, Inc. On March 14, 2005, the Company changed its name to
Caliber Energy, Inc.

7

---

CALIBER ENERGY, INC.

(An Exploration
State Company)

NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

(continued)

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

Nature of Operations

The
Company is an exploration state oil and gas company. The Company also has interests in
mining and mineral properties. On November 21, 2002 the Company became actively engaged in
acquiring mineral properties, raising capital, and preparing properties for production.

The
Company did not have any significant mining operations or activities from inception;
accordingly, the Company is deemed to be in the exploration state. For purposes of
recording the Companys mineral claims in Canada, the Company acquired New Heights
Capital Corporation (a Canadian corporation) and transferred the claims listed in the
following paragraph into the subsidiary in exchange for 100% of the subsidiarys
outstanding stock.

On
November 21, 2002, the Company acquired mineral claims (the Ritz Claims)
located in the Lillooet Lake Region of Southwest British Columbia, Canada. The property
consists of twenty unpatented two post mineral claims and one unpatented four post mineral
claim representing forty units that have been staked and recorded in the Lillooet mining
division. The Company has not commenced economic production and is therefore still
considered to be in the exploration stage.

On
July 26, 2004, the Company executed an agreement and made the 1st statutory
payment of $55,000 to acquire a 75% interest in the Tudor Gold Property. The Tudor Gold
Property is located in eastern Ontario, Canada approximately 100 miles northeast of
Toronto. The property lies within Tudor and Grimsthorpe Townships. The property consists
of twenty-two contiguous unpatented mining claims containing sixty units covering
approximately 2,965 acres of land. The Company intends to launch a comprehensive, property
wide, surface exploration program immediately. The Company intends to follow-up with drill
testing of the mineralized zones of the property. The data derived from the drill testing
of the various zones should enable the Company to identify and assess gold bearing
structures to ultimately establish the size and grade of the gold resource.

NOTE 2  SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES

Principles of
Consolidation

The
consolidated financial statements for the three months ended March 31, 2007 and 2006
include the accounts of Caliber Energy, Inc. and its subsidiary New Heights Capital
Corporation. New Heights Capital Corporation was acquired by the Company on April 22,
2003.

8

---

CALIBER ENERGY, INC.

(An Exploration
State Company)

NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

(continued)

NOTE 2  SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (continued)

The
results of subsidiaries acquired or sold during the year are consolidated from their
effective dates of acquisition through their effective dates of disposition.

All
significant intercompany balances and transactions have been eliminated.

Revenue and Cost
Recognition

The
Company uses the accrual basis of accounting for financial statement reporting. Revenues
and expenses are recognized in accordance with Generally Accepted Accounting Principles
for the industry. Certain period expenses are recorded when obligations are incurred.

Use of Estimates

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

Accounts Receivable,
Deposits, Accounts Payable and Accrued Expenses

Accounts
receivable have historically been immaterial and therefore no allowance for doubtful
accounts has been established. Normal operating refundable Company deposits are listed as
Other Assets. Accounts payable and accrued expenses consist of trade payables created from
the normal course of business.

Mineral Properties and
Mining Equipment

Mineral
properties and mining equipment include land and mining equipment carried at cost. Mining
equipment including mill facilities is depreciated using the straight-line method over
estimated useful lives of 5 to 15 years, or the units-of-production method based on
estimated tons of ore reserves if the equipment is located at a producing property with a
shorter economic life. Mining equipment not in service is not depreciated.

During
1997, the Securities and Exchange Commission (SEC) staff reconsidered existing accounting
practices for mineral expenditures by United States junior mining companies. They now

9

---

CALIBER ENERGY, INC.

(An Exploration
State Company)

NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

(continued)

NOTE 2  SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (continued)

interpret generally accepted
accounting policy for junior mining companies to permit capitalization of acquisition and
exploration costs only after persuasive engineering evidence is obtained to support
recoverability of these costs (ideally upon determination of proven and/or probable
reserves based upon dense drilling samples and feasibility studies by a recognized
independent engineer). Although the Company has obtained samples, and an independent
engineer has deemed the properties may contain platinum group metals, management has
chosen to follow the more conservative method of accounting by expensing all mineral
costs, for which there is no feasibility study.

Land Options

As
noted above, since the Company interprets generally accepted accounting policies to permit
capitalization of acquisition costs including leases and land options only after
persuasive engineering evidence has been obtained to support recoverability of these
costs, these costs will be expensed.

Reclamation and
Environmental Costs

Reclamation
costs and related accruals are based on the Companys interpretation of environmental
and regulatory requirements. Minimum standards for mine reclamation have been established
by various governmental agencies. Reclamation, site restoration, and closure costs for
each producing mine are accrued over the life of the mine using the units-of-production
method. Ongoing reclamation activities are expensed in the period incurred.

Oil and Gas Properties

The
Company follows the full cost method of accounting for its oil and gas operations whereby
all costs related to the acquisition of petroleum and natural gas interests 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 nonproductive wells, and direct exploration salaries and related
benefits. Proceeds from the disposal of oil and gas properties are recorded as a reduction
of the related capitalized costs without recognition of a gain or loss unless the disposal
would result in a change of 20 percent or more in the depletion rate. The Company operates
in one cost center, being Canada. To date the Company has not established any proven
recoverable reserves on its properties.

Depletion
and depreciation of the capitalized costs are computed using the unit-of-production method
based on the estimated proven reserves of oil and gas determined by independent
consultants.

10

---

CALIBER ENERGY, INC.

(An Exploration
State Company)

NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

(continued)

NOTE 2  SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (continued)

Estimated
future removal and site restoration costs are provided over the life of proven reserves on
a unit-of-production basis. Costs, which include the cost of production equipment removal
and environmental clean-up, are estimated each period by management based on current
regulations, costs, technology and industry standards. The charge is included in the
provision for depletion and depreciation and the actual restoration expenditures are
charged to the accumulated provision amounts as incurred.

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.

Income Taxes

The
Company accounts for income taxes using the liability method which requires recognition of
deferred tax liabilities and assets for the expected future tax consequences of events
that have been included in the financial statements or tax returns. Deferred tax assets
and liabilities are determined based on the difference between the financial statements
and tax basis of assets and liabilities using enacted tax rates in effect for the year in
which the differences are expected to reverse.

The
Companys management determines if a valuation allowance is necessary to reduce any
tax benefits when the available benefits are more likely than not to expire before they
can be used.

Cash and Cash
Equivalents, and Credit Risk

For
purposes of reporting cash flows, the Company considers all cash accounts with maturities
of 90 days or less and which are not subject to withdrawal restrictions or penalties, as
cash and cash equivalents in the accompanying balance sheet.

The
portion of deposits in a financial institution that insures its deposits with the FDIC up
to $100,000 per depositor in excess of such insured amounts are not subject to insurance
and represent a credit risk to the Company.

11

---

CALIBER ENERGY, INC.

(An Exploration
State Company)

NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

(continued)

NOTE 2  SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (continued)

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 years ended December 30, 2006 or 2005 and accordingly, no
compensation expense was recognized under APB No. 25 for the years 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.

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.

Foreign Currency
Translation and Transactions

The
Companys functional currency is the US dollar. No material translations or
transactions have occurred. Upon the occurrence of such material transactions or the need
for translation adjustments, the Company will adopt Financial Accounting Standard No. 52
and other methods in conformity with Generally Accepted Accounting Principles.

12

---

CALIBER ENERGY, INC.

(An Exploration
State Company)

NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

(continued)

NOTE 2  SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (continued)

Earnings Per Share

Basic
earnings per common share were computed by dividing net loss by the weighted average
number of shares of common stock outstanding during the year. There are no dilutive
outstanding common stock equivalents at March 31 ,2007 and 2006.

Fair Value of Financial
Instruments

The
carrying value of the Companys financial instruments, including accounts payable and
accrued liabilities at March 31, 2007 and December 31, 2006 approximates their fair values
due to the short-term nature of these financial instruments.

NOTE 3  EXPLORATION
STATE COMPANY/ GOING CONCERN

The
Company has not begun principal operations and as is common with a company in the
exploration state, the Company has had recurring losses. Continuation of the Company as a
going concern is dependent upon obtaining the additional working capital necessary to be
successful in its planned activity, and the management of the Company has developed a
strategy, which it believes will accomplish this objective through additional equity
funding and long term financing, which will enable the Company to operate for the coming
year.

NOTE 4  AFFILIATES
AND RELATED PARTIES

Significant
relationships with (1) companies affiliated through common ownership and/or management,
and (2) other related parties are as follows:

On
July 26th, 2004, the Company executed an agreement with Louvicourt Gold Mines Inc. and
made a first payment of $55,000.00 (US) to acquire a 75% interest and the rights to
explore a series of gold occurrences situated on the Tudor Gold Property. The President of
Louvicourt Gold Mines Inc. is Fenton Scott, a related party and father of Graeme F. Scott,
the President and CEO of the Company. Additionally, Graeme F. Scott was a past director of
Louvicourt Gold Mines, Inc. See Note 8 for a description of this Project.

During
October 2004, the Company received a loan from a related party for $19,590 for exploration
costs associated with the Tudor Gold Property. The loan is due on demand with interest
accrued at 5% annually. In March 2005, this loan was converted to convertible debentures
(see Note 11).

13

---

CALIBER ENERGY, INC.

(An Exploration
State Company)

NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

(continued)

NOTE 4  AFFILIATES
AND RELATED PARTIES (continued)

During
December 2004, the Company received a loan from a shareholder of $3,245 for payment of
accounts payable. The loan is due on demand with interest accrued at 5% annually. In March
2005, this loan was converted to convertible debentures (see Note 11).

During
the year ended December 31, 2005, the Company made two short-term loans totaling $40,512
to two affiliated companies. The loans carry an interest rate of 6% per annum. In February
2006, both of these loans were repaid.

NOTE 5  NOTES
PAYABLE

In
July 2004, the Company received a loan of $58,000 from a third-party. The loan is due July
14, 2005 with interest at 5% annually. In March 2005, this loan was converted to
convertible debentures (see Note 11).

In
December 2004, the Company received a loan of $20,695 from a third-party. The loan is due
on demand with interest at 5% annually. In March 2005, this loan was converted to
convertible debentures (see Note 11).

NOTE 6  INCOME TAXES

As
of December 31, 2006, the Company had a net operating loss carry forward for income tax
reporting purposes of approximately $957,324 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 |      |     
|Valuation Allowance  |      |     
|                     |      |     
|                     |      |     
|                     |      |     

14

---

CALIBER ENERGY, INC.

(An Exploration
State Company)

NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

(continued)

NOTE 6  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   |      |     
|Increase (Decrease) in Valuation Allowance |      |     
|                                           |      |     
|                                           |      |     
|                                           |      |     

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 7  LONG-TERM
DEBT

On
November 21, 2002, the Company entered into an agreement with Mr. Garth Barton for the
purchase of mining property, the Ritz Claim, located in the Lillooet Lake
Region of Southwest British Columbia, Canada. The Ritz Claim is title to forty
(40) mineral claim units that are unpatented. The total purchase price of the claim is
$33,500 due per terms of the contract with advance royalties of $25,000 to be paid
annually commencing 36 months from the date of signature of the agreement. The property is
subject to a royalty agreement.

The
contract payment schedule calls for $13,500 to be paid upon delivery of a summary
geological report and transfer of property title. The $13,500 was paid per the contract.
On February 28, 2003 a payment of $2,500 was made per contract schedule. Twelve months
from the date of title registration, $2,500 becomes due with another $2,500 due twenty
four months from such date. No later than thirty six months from the date of signature on
the contract, the balance of payment is due for a total purchase price of $33,500. At
March 31, 2007 and December 31, 2006, the amount due on this contract was $15,000 and
$15,000, respectively.

NOTE 8 
SHAREHOLDERS EQUITY

Preferred Stock

The
Company has authorized ten million (10,000,000) shares of preferred stock with a par value
of $.0001, none of which have been issued.

15

---

CALIBER ENERGY, INC.

(An Exploration
State Company)

NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

(continued)

NOTE 8 
SHAREHOLDERS EQUITY (continued)

Common Stock

The
Company has authorized five hundred million (500,000,000) shares of common stock with a
par value of $.0001.

On
April 8, 2004, 36,000,000 shares were returned to the treasury and canceled.

On April
6, 2005, 5,995,000 shares of common stock were returned to the treasury and canceled.

During
the quarter ended June 30, 2006, convertible debt of $463,453, accrued interest of
$29,915, accounts payable of $158,217 and accrued expenses of $69,800 were converted into
24,046,164 shares of common stock.

On
July 23, 2004, the Company did a 10 to 1 forward stock split of its issued and outstanding
shares of common stock from 9,257,000 shares to 92,570,000 shares. On June 26, 2006, the
Company did a 5 to 1 reverse stock split of its issued and outstanding shares of common
stock from 182,825,805 shares to 36,565,164 shares. All references to common stock have
been adjusted to reflect the stock splits.

Common Stock Subscribed
and Issued for Cash

During
December, 2002, the Company undertook an offering exempt from registration pursuant to
Section 4(2) of the Securities Act of 1933 to raise $16,000 in the issuance of 6,400,000
shares of common stock for the purpose of the acquisition and exploration of mining
properties. The Companys management considers this offering to be exempt under the
Securities Act of 1933.

During
March 2003, the Company undertook a Regulation D Rule 506 private placement offering to
raise $14,250 for the issuance of 114,000 shares of common stock for the purpose of
mineral exploration. The Companys management considers this offering to be exempt
under the Securities Act of 1933.

Common Stock to be Issued

On
July 26, 2004, the Company entered into a property option agreement with Louvicourt Gold
Mines, Inc. As part of this agreement, the Company was to issue 20,000 shares of common
stock upon the execution of the agreement. As of December 31, 2005, the Company had
expensed $19,000 in exploration costs related to the 20,000 shares of common stock due
upon execution of the agreement. The shares were valued at $.19 per share and as of March
31, 2007, had not been issued.

16

---

CALIBER ENERGY, INC.

(An Exploration
State Company)

NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

(continued)

NOTE 9  MINERAL
RIGHTS

On
November 21, 2002, the Company entered into an agreement with Mr. Garth Barton for the
purchase of mining property, the Ritz Claim, located in the Lillooet Lake
Region of Southwest British Columbia, Canada. The Ritz Claim is title to forty
(40) mineral claim units that are unpatented. The total purchase price of the claim is
$33,500 due per terms of the contract with advance royalties of $25,000 to be paid
annually commencing 36 months from the date of signature of the agreement. Failure to pay
the advance royalties will cause a reversion of the property within 10 days of such
failure. The property is subject to a 2 1/2% Net Smelter Royalty (NSR) and a 7 1/2% Gross
Rock Royalty (GRR). 1 1/2% of the NSR can be acquired for $1.0 million within 12 months
from the commencement of commercial production. Mr. Barton is required to keep the claims
in good standing for at least 18 months from the date of the agreement. In addition, Mr.
Barton will provide geological consulting services for the claims and will maintain the
claims in good standing for a period of 36 months with fees advanced by the Company prior
to the anniversary dates from signature of the agreement. Said fees are to be deducted
from the total cost. All costs related to this claim have been expensed in accordance with
Generally Accepted Accounting Principals for the industry.

On
April 22, 2003, the Company acquired the outstanding common share (one common share) of
New Heights Capital Corporation, an inactive Canadian corporation, for the purpose of
recording the Companys Canadian Ritz Claim in a Canadian corporation as
required. The Ritz Claim was transferred to the subsidiary in exchange for the
subsidiarys outstanding common share of stock. New Heights Capital Corporation is a
wholly owned Canadian subsidiary of the Company.

On
July 26, 2004, the Company executed a Property Option Agreements with Louvicourt Gold
Mines, Inc. (Louvicourt) (see Note 3) to acquire a 75% interest in the Tudor
Gold Property. The Company agreed to make the following cash and share option payments to
Louvicourt:

|1. | $55,000 upon the full execution of the Agreement.
|-- | -------------------------------------------------

|2. | $55,000 on or before one year from the date of full execution of this
                    Agreement. 3. 20,000 shares of common stock upon full execution of this
                    Agreement, and 4. 40,000 shares of common stock on or before one year from the
                    date of full execution
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

of
this Agreement.

17

---

CALIBER ENERGY, INC.

(An Exploration
State Company)

NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

(continued)

NOTE 9  MINERAL
RIGHTS (continued)

The
Company also agreed to fund work programs on the mineral claims by advancing exploration
funds to Louvicourt on the following basis:

| | 1. | by no later than July 31, 2004, the Company will advance Exploration Funds of
               $150,000
| | -- | -----------------------------------------------------------------------------------------------------

| | 2. | by no later than one year from the signing of this Agreement, the Company will
               advance additional Exploration Funds of $350,000;
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------

| | 3. | by no later than two years from the signing of this Agreement, the Company will
               advance additional Exploration Funds of $250,000; and
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------

| | 4. | by no later than 4 years from the signing of this Agreement, the Company will
               advance additional Exploration Funds of $1,250,000.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------

Provided
the Company has made the option payments and advanced the exploration funds required for
work programs costing a total of $750,000, the Company shall have earned an immediately
vested 50% interest in the mineral claims. Provided the Company has made the option
payments and advanced the exploration funds required for work programs costing a total of
$1,250,000, the Company shall have earned an immediately vested additional 25% interest in
the mineral claims, bringing the Companys total interest in the mineral claims to
75%.

As
of December 31, 2004 the Company had paid Louvicourt a cash payment of $55,000 as part of
this agreement. The $55,000 was expensed in 2004 as part of exploration costs. The Company
has accrued $150,000 in accounts payable for the exploration funds due on July 31, 2004.
This $150,000 was expensed in 2004 as part of exploration costs. The Company also expensed
$19,000 in exploration costs in 2004 related to the 20,000 shares of common stock due upon
execution of the agreement. The shares were valued at $.19 per share and as of March 31,
2007, had not been issued.

The
Tudor Gold Property is located in Tudor and Grimsthorpe Townships in the Madoc-Bancroft
region of the Providence of Ontario and is located approximately 100 miles northeast of
Toronto, Canada. The property consists of twenty-two contiguous unpatented mining claims
containing sixty units covering approximately 2,965 acres of land. The Company intends to
launch a comprehensive, property wide, surface exploration program immediately. Once
further funding is acquired and the agreement can be fully executed, the Company intends
to follow-up with drill testing of the mineralized zones of the property. The data derived
from the drill testing of the various zones should enable the Company to identify and
assess gold bearing structures to ultimately establish the size and grade of the gold
resource.

18

---

CALIBER ENERGY, INC.

(An Exploration
State Company)

NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

(continued)

NOTE 10 
COMMITMENTS AND CONTINGENCIES

As
of March 31, 2007, all activities of the Company have been conducted by corporate officers
from either their homes or business offices. Currently, there are no outstanding debts
owed by the company for the use of these facilities and there are no commitments for
future use of the facilities.

The
Companys Ritz Claims will revert back to the seller within no less than
a 10 day period if the Company fails to make the $25,000 annual advance royalty payments
per the sales contract commencing 36 months from the date of the contract.

On
June 1, 2004, the Company entered into a consulting agreement with Mr. Robert McIntosh.
Mr. McIntosh will provide geological and administrative services to the Company for $3,000
per month. This agreement was canceled as of March 31, 2006.

Pursuant
to consulting agreements dated June 1, 2004, the Company agreed to pay $2,500 per month to
the CFO and director of the Company and $5,000 per month to the President and director of
the Company. Pursuant to a consulting agreement dated April 23, 2004, the Company agreed
to pay $400 per month to a director.

Management
is not aware of any contingent matters that could have a material adverse effect on the
Companys financial condition, results of operations, or liquidity.

NOTE 11 
CONVERTIBLE DEBENTURES

On
March 9, 2005, the Company executed three Convertible Debentures for up to $870,000. The
notes are due and payable in full on or before March 9, 2006 and carry 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 $.10 per share.

On
March 9, 2005, the Company sold $383,610 of convertible debentures. On that date the fair
market value of the stock was $.20. Since the fair market value of the stock was greater
than the conversion price of $.10, the Company has recognized interest expense of
$383,610.

On
June 1, 2005, the Company sold $50,000 of convertible debentures. On that date the fair
market value of the stock was $.18. Since the fair market value of the stock was greater
than the conversion price of $.10, the Company has recognized interest expense of $40,000.

On
June 10, 2005, the Company sold $29,842 of convertible debentures. On that date the fair
value of the stock was $.16. Since the fair market value of the stock was greater than the
conversion price of $.10, the Company has recognized interest expense of $17,905.

19

---

CALIBER ENERGY, INC.

(An Exploration
State Company)

NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

(continued)

NOTE 11 
CONVERTIBLE DEBENTURES (continued)

The
Company had received approximately $463,453 from the convertible debentures. In June 2006,
the convertible debentures of $463,453 and accrued interest of $29,915 was converted
common stock.

NOTE 12  OIL AND
GAS PROPERTIES

On
March 28, 2005, the Company entered into an agreement with Salida Capital, Inc. (Salida)
whereby the Company will be entitled to 49% of the benefits and interests earned by
Salida, pursuant to an agreement between Salida and Vega Resources, Ltd. (Vega), on
certain lands known as the Bolloque Prospect, located in the Province of Alberta. To earn
the interest in the Bolloque Prospect, the Company shall be required to assume the
obligations of Salida pursuant to Salidas agreement with Vega, including the
drilling of a test well, and the drilling of two additional option wells. If all three
wells are not drilled and completed, or capped and abandoned, as the case may be, the
Company will earn no interest in the Bolloque Prospect. During the year ended December 31,
2005, the Company paid $40,998 towards the drilling of wells. These costs had been
capitalized. However, the Company was unable to advance the full funds for the Test-Well,
and was in default pursuant to the original agreement. On August 26, 2005, the Company and
Salida agreed that Salida would reimburse the Company the full amount of its investment in
the Test-Well. In consideration for the advancement of funds paid, Salida will grant the
Company a 10% carried interest in the section of lands earned by Salida under the Vega
Participation Agreement by virtue of the completion of the Test-Well. At December 31,
2005, the capitalized cost of the investment in oil and gas properties of $40,998 has been
reclassified as a receivable. On March 3, 2006, the Company received this payment from
Salida.

20

---

The
following discussion and analysis should be read in conjunction with our financial
statements, included herewith. This discussion should not be construed to imply that the
results discussed herein will necessarily continue into the future, or that any conclusion
reached herein will necessarily be indicative of actual operating results in the future.
Such discussion represents only the best present assessment of our management.

# Plan of Operations

On
March 16th, 2006 the Company began negotiations with a private Company to
participate in oil and gas exploration in Kansas. The oil and gas boom returned to Kansas
in 2005. Its impact on the state economy depends on how long it lasts. Kansas oil and gas
production was worth $4.7 billion in 2005, according to estimates by the Kansas Geological
Survey at the University of Kansas.

The
total value of oil produced in the state in 2005 was estimated at about $1.8 billion, up
from about $500 million in 2004. The total value of natural gas production was more than
$2.8 billion in 2005, up from $2.2 billion the previous year. Natural gas production in
2005 is estimated at 380 billion cubic feet, down about 20 billion cubic feet from the
previous year. The statewide peak was 990 billion cubic feet in 1970.

Caliber
will join other partners that have acquired participation rights in a large data base that
includes a geophysical survey covering approximately one million acres, located in central
Kansas, covering parts of Ellsworth, Salina, McPherson, Reno, Harvey, Kingman, and
Sedgwick counties. Total cumulative oil production through 1999 from these counties is
more than 978 million barrels of oil. The geophysical survey utilized RAM technology,
owned by Paramount Energy Corp., which is a geophysical methodology used to highlight oil
and gas deposits. Unlike 2-D and 3-D seismic methods, which gather information based upon
artificially induced sonic responses recorded at the surface, RAM technology identifies
unique bright spots using its proprietary software to process certain aspects
of the earths magnetic field data.

Data
is collected by a low flying aircraft equipped with specialized equipment and then
analyzed by RAM software. These unique bright spot anomalies can be correlated
to near-surface alterations caused by the slow geochemical processes that occur over both
oil and gas deposits. The RAM technology is an indirect hydrocarbon indicator independent
of structure so it a good tool in areas where seismic is not. Since RAM data is collected
from an aircraft, large acreage surveys can be acquired many times faster and many times
less costly than traditional seismic. That makes RAM an ideal first reconnaissance tool.
Several identified RAM anomalies interpreted within the survey area are believed to have
hydrocarbon potential over multi-sections of lands that have never been tested with a
drill bit. Most nearby production within this region of the Central Kansas Platform
produces from Mississippian age and older limestone rocks above the Arbuckle dolomite
formation. Some of the accumulations of hydrocarbons are stratagraphically trapped and
unrelated to structure and therefore not easily identifiable by traditional seismic. The
magnetic survey and interpretation of the region is of excellent quality. Oil wells will
be drilled to test the most promising prospects

21

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to the deepest known petroleum
formation, the Arbuckle, generally less than 4000 in depth in the Central Kansas
Platform. Drilling costs have been estimated to be in the order of $200,000 for a cased
and completed well.

The
Central Kansas Platform covered by the survey and interpretation contains some of the most
prolific production from shallow depths in that part of the country. There are many
established oil fields within the boundaries of the survey area. The survey indicates
bright spots that could be hydrocarbon accumulations not yet discovered by
traditional seismic or other older exploration technologies. Multiple prospects are
expected to be generated after more extensive field tests. When formalized, Caliber will
join partners who are proceeding to further evaluate the most prospective oil and gas
targets for drilling utilizing complimentary geochemical and geophysical methodologies in
their field testing. The operator will then recommend leases for acquisition and the
exploration program will commence.

Caliber
will join other Companies which are Silver Star, with a 20% working interest, Fidelis
Energy, Inc. which has a 25% working interest, and Cascade Energy, Inc. which also has a
25% working interest. The private company will be carried through the drilling and
completion of the first two (2) exploratory wells. The 70% working interest partners will
pay 100% of the costs of drilling and completing the initial two wells. Subsequent to
those first two wells, all participants in the play will contribute on a straight up
working interest basis.

On
June 16, 2006 the Data Sharing Agreement between Caliber, Silver Star, Fidelis, Cascade
and the private company was cancelled. Caliber will no longer have any interest to
participate in the oil exploration in Kansas.

# Reverse Stock Split

On
June 15, 2006, the Board of Directors voted in favor of the reverse stock split and
directed that the reverse stock split be completed.  The Board of Directors also
placed the ratification of the reverse stock split on the agenda for consideration by
stockholders at the special meeting to be held on December 15, 2006.  The Board of
Directors believes that the per share price of our common stock justified the 1:5 reverse
stock split and that it would not negatively impact the marketability of the existing
shares or our potential ability to raise capital.  The Board of Directors further
believed that the increase in the number of shares of common stock outstanding as a
consequence of the reverse stock split would ultimately encourage greater interest in our
common stock by the financial community and investing public. Accordingly, we believe that
our company and our stockholders will realize benefits over time and suffer no long-term
negative consequences as a result of the reverse split.

As
a result of the reverse stock split, the number of issued and outstanding shares of our
common stock decreased from 182,825,805 shares to 36,565,164 shares, based upon the total
number of issued and outstanding shares of common stock as of the record date on October
27, 2006 and decreased our total number of authorized shares of common stock from
500,000,000 to

22

---

100,000,000.    
           Please note that the reverse stock split did not change a
          stockholders proportionate equity interest in our company.

As
an additional result of the reverse stock split, our stated capital decreased from $18,283
to $3,657 on the effective date of the reverse stock split.  Our stated capital
consists of the aggregate number of our shares of common stock outstanding from
time-to-time, multiplied by the par value of $0.0001 of the common stock.

# Liquidity and Capital
Resources

The
Company requires working capital principally to fund its current operations. There are no
commitments from banks or other lending sources for lines of credit or similar short-term
borrowing. From time to time in the past, required short-term borrowing have been obtained
from a principal shareholder or other related entities.

The
Companys business plan requires substantial funding from a public or private
offering of its common stock in connection with a business acquisition, for which the
Company has no commitments. The Company intends to actively pursue other financing or
funding opportunities.

# 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.

(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 March 31, 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.

23

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# PART II  OTHER
INFORMATION

# Item 1. Legal Proceedings

None.

# Item 2. Changes in
Securities

None.

# Item 3. Defaults Upon
Senior Securities

None.

None.

# Item 5. Other Information

None.

# Item 6. Exhibits and
Reports on Form 8-K

|Exhibit
Number      |  | Title of Document                                                                                                                                                                                                                                                                                  
|------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                    |  |                                                                                                                                                                                                                                                                                                    
|31.1
31.2
32.1
32.2 |  | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(b)    
          Reports on Form 8-K filed.

None.

24

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# SIGNATURES

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.

| |                                                                       
| | ----------------------------------------------------------------------
| |                                                                       
| | Caliber Energy, Inc.
(Registrant)                                     
| |                                                                       
| | DATE: May 7, 2007                                                     
| |                                                                       
| | /S/ Graeme Scott                                                      
| | Graeme Scott
President, CEO and Director
(Principal Executive Officer)
| |                                                                       
| | /S/ David Naylor                                                      
| | David Naylor
Treasurer, CFO and Director
(Principal Financial Officer)

25

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