UNITED
        STATES
 SECURITIES
        AND EXCHANGE COMMISSION
 Washington,
        D.C. 20549
 FORM
        10-KSB
 
 (Mark
        One)
 x
              ANNUAL
                  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                  OF 1934
 For
        the
        fiscal year ended June 30, 2005
 OR
 
 o
              TRANSITION
                  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                  OF 1934
 For
        the
        transition period from ____________ to ____________
 
 Commission
        file number 000-50929
 
 Ignis
                  Petroleum Group, Inc.(Name
                  of small business issuer in its charter)
 
 Nevada
              
              16-1728419(State
                  or other jurisdiction of incorporation or organization)
              
              (IRS
                  Employer Identification No.)
 
 
 100
                  Crescent Court 7thFloor Dallas, TX
              
              75201(Address
                  of principal executive offices)
              
              (Zip
                  Code)
  214-459-8188(Issuer's
                  telephone number)
 
 Securities
        registered under Section 12(b) of the Exchange Act:
 None
 
 Securities
        registered under Section 12(g) of the Exchange Act:
 Common
        Stock, $0.001 par value
 
 Check
        whether the issuer (1) filed all reports required to be filed by Section
        13 or
        15(d) of the Exchange Act during the past 12 months (or for such shorter
        period
        that the registrant was required to file such reports), and (2) has been
        subject
        to such filing requirements for the past 90 days. Yes x No  ̈ .
 
 Check
        if
        disclosure of delinquent filers in response to Item 405 of Regulation S-B
        is not
        contained in this form, and no disclosure will be contained, to the best
        of
        registrant’s knowledge, in definitive proxy or information statements
        incorporated by reference in Part III of this Form 10-KSB or any amendment
        to
        this Form 10-KSB  ̈ .
 
 State
        issuer’s revenues for its most recent fiscal year: $0.
 
 State
        the
        aggregate market value of the voting and non-voting common equity held by
        non-affiliates computed by reference to the price at which the common equity
        was
        sold, or the average bid and asked price of such common equity, as of a
        specified date within the past 60 days: 2,003,952 as of June 1,
        2005
 
 State
        the
        number of shares outstanding of each of the issuer’s classes of common equity,
        as of the latest practicable date: As of September 15, 2005 the registrant
        had
        issued and outstanding 44,700,000 shares of common stock.
 
 DOCUMENTS
        INCORPORATED BY REFERENCE
 
 None
 
 Transitional
        Small Business Disclosure Format (check one): Yes  ̈ No x
  
  FORWARD-LOOKING
        STATEMENTS
 
 We
        are
        including the following cautionary statement in this Form 10-KSB for any
        forward-looking statements made by, or on behalf of, Ignis Petroleum Group,
        Inc.
        Forward-looking statements include statements concerning plans, objectives,
        goals, strategies, expectations, future events or performance and underlying
        assumptions and other statements which are other than statements of historical
        facts. Such statements contained herein are forward-looking statements and,
        accordingly, involve risks and uncertainties which could cause actual results
        or
        outcomes to differ materially from those expressed in the forward-looking
        statements. Our expectations, beliefs and projections are expressed in good
        faith, and we believe that they have a reasonable basis, including without
        limitations, management's examination of historical operating trends, data
        contained in our records and other data available from third parties, but
        we
        cannot assure you that management's expectations, beliefs or projections
        will
        result or be achieved or accomplished.
  PART
        I
 
 Item
                  1.
              DESCRIPTION
                  OF BUSINESS
 
 BRIEF
        OVERVIEW
 
 Ignis
        Petroleum Group, Inc. is a Dallas-based development stage oil and gas company
        engaged in the exploration, acquisition and development of crude oil and
        natural
        gas properties in the United States. We intend to build an energy portfolio
        that
        combines low risk, high potential projects with higher yield, higher risk
        projects. We focus on prospects that result from new lease opportunities,
        new
        technology and new information.
 
 OUR
        HISTORY
 
 We
        were
        incorporated in Nevada as Sheer Ventures, Inc. on April 30, 2004.
 
 Prior
        to
        May 2005, we were a development stage company engaged
        in the acquisition and exploration of mineral properties with a view toward
        exploiting any mineral deposits we discovered that demonstrated economic
        feasibility. We acquired a 100% undivided interest in two mineral claims
        comprising one square kilometer located 16 kilometers from Zeballos, British
        Columbia, Canada.
 
 By
        May
        2005, it had become apparent to us that we would be unable to continue with
        our
        original business plan without
        a
        joint venture partner or business merger. We were
        unable to generate enough revenue to meet our day-to-day operating expenses,
        and
        we did not foresee our original business plan resulting in a viable operation
        in
        the long term. Our working capital was limited and we could not raise further
        financing under the market conditions that prevailed at the time.
 
 On
        May
        11, 2005, we entered into a stock exchange agreement wherein we agreed to
        issue
        1,600,000 shares of our common stock in exchange for all 1,600,000 issued
        and
        outstanding shares of common stock of Ignis Petroleum Corporation. As a result
        of this stock exchange, Ignis Petroleum Corporation became a wholly owned
        subsidiary of Sheer Ventures, Inc. The stock exchange was accounted for as
        a
        reverse acquisition in which Sheer Ventures, Inc. was acquired by Ignis
        Petroleum Corporation in accordance with Statement of Financial Accounting
        Standards No. 141 (“SFAS 141”), “Business Combinations”. Also on May 11, 2005,
        and in connection with the stock exchange, D.B. Management Ltd., a corporation
        owned and controlled by Doug Berry, who was then our President, Chief Executive
        Officer, Secretary, Treasurer and sole director, agreed to sell an aggregate
        of
        1,940,000 shares of our common stock to six individuals, including Philipp
        Buschmann, the President, Secretary, Treasurer and sole director of Ignis
        Petroleum Corporation, for $0.10 per share for a total purchase price of
        $194,000. The stock exchange and the stock purchase were both consummated
        on May
        16, 2005.
 
 On
        July
        11, 2005, we changed our name to Ignis Petroleum Group, Inc. Collectively,
        Ignis
        Petroleum Group, Inc. (f/k/a Sheer Ventures, Inc.) and Ignis Petroleum
        Corporation, are referred to in this annual report as "We", "Us", "Our" or
        the
        "Company".
  2
  BUSINESS
        DEVELOPMENT
 
 On
        June
        26, 2004, we entered into an agreement with David Heyman of Langley, British
        Columbia, wherein he agreed to stake for us a 100% undivided interest in
        a total
        of two mineral claims located approximately 16 kilometers from Zeballos,
        British
        Columbia for the sum of $6,500. Based on initial results of our exploration
        program, however, we have decided to suspend further exploration on this
        property.
 
 On
        April
        22, 2005, we entered into two agreements with Newton Properties, Inc. relating
        to the lands, leases and proposed operations covering the North Wright Field
        Prospect, located in Acadia Parish, Louisiana and the Barnett Crossroads
        Prospect, located in Escambia County, Alabama. Newton had previously acquired
        or
        owned the right to acquire an undivided seventy-five percent working interest
        in
        such prospects and to conduct operations for the drilling of one or more
        wells
        thereon. Our seventy-five percent (75%) working interest in the prospects
        is
        equal to a fifty-two and five tenths percent (52.5%) net revenue interest
        in the
        prospects. We agreed to carry 100% of the costs to drill and test each well
        drilled on the prospects. The aggregate purchase price for the acquisition
        of
        Newton’s interests was $1,500,000, evidenced by two convertible promissory
        notes. Newton later converted such notes into 3,100,000 shares of our common
        stock. Under the agreements with Newton, we were initially required to commence
        drilling operations on the prospects on or before September 30, 2005. Such
        date
        was later extended to March 31, 2006 by agreement of the parties. If we do
        not
        begin drilling operations on the prospects by March 31, 2006, our interests
        in
        the prospects will be returned to Argyle Energy, Inc., the operator of the
        prospects.
 
 Although
        the North Wright Field Prospect and the Barnett Crossroads Prospect are
        currently unproved, a prospective resource assessment prepared by Netherland,
        Sewell & Associates, Inc. has concluded that North Wright Field Prospect and
        the Barnett Crossroads Prospect may hold significant amounts of
        commercially-recoverable quantities of oil and gas. The undiscovered prospective
        resources included in the report indicate exploration opportunities and
        development potential in the event a commercial discovery is made and should
        not
        be construed as reserves. The assessment included a detailed review of
        geological and geophysical data and tested the economic viability for
        development of discovered hydrocarbons.
  The
        Barnett Crossroads Prospect is an anticlinal trap with four-way structural
        closure at the Smackover Formation level. The prospect is surrounded by several
        fields that have produced from the target interval. These fields include
        the
        Gravel Hill Church, Canaan Church, Narrow Gap Creek, and Dean Creek Fields,
        among others. The prospect area is covered with an 18-square-mile 3-D seismic
        survey. Estimated gross resources are up to 534 thousand barrels of oil
        equivalent (Mboe) with estimated mean gross resources of 355 Mboe. A well,
        drilled to a depth of 14,500 feet, is needed to test the prospect.
  The
        North
        Wright Prospect is a fault-bounded structural trap at the Margulina Texana
        (Marg
        Tex) level. The prospect is a deeper target in the same fault block and has
        the
        same structural configuration as a discovery at the shallower Camerina level.
        The Marg Tex is a lower Oligocene, Middle Frio slope sandstone. The Prospect
        is
        defined by a 50-square-mile proprietary 3-D seismic survey. Estimated gross
        resources are up to 118 billion cubic feet of gas equivalent (Bcfge) in three
        sands with estimated mean resources of 79 Bcfge. A well, drilled to a depth
        of
        16,500, is needed to test the prospect.
  On
        June
        14, 2005, we entered into a participation agreement with Kerr-McGee to test
        and
        develop the Acom A-6 Prospect, located in Chambers County, Texas. We acquired
        a
        25% working interest in the prospect in exchange for carrying 35% of the
        cost to
        drill and test the well. The prospect is a 12,604-foot maximum depth well
        into
        the Nodosaria and Tex Miss (Frio) formations. Drilling of this prospect
        commenced in August 2005 with initial production anticipated in the late
        fall of
        2005. The Acom A-6 Prospect is currently unproved.
 
 OUR
        OPERATIONS
 
 We
        operate out of 100 Crescent Court 7 th Floor
        Dallas, Texas 75201. We currently have two full-time employees.
 
 ITEM
                  2.
              DESCRIPTION
                  OF PROPERTY
 
 We
        do not
        own any real property. We own oil, gas and mineral interest in Canada and
        the
        United States. We own a 25% working interest in an oil lease located in Chambers
        County, Texas. This interest is currently unproved. We own a 52.5% net revenue
        interest in the lands, leases and proposed operations covering the North
        Wright
        Field Prospect, located in Acadia Parish, Louisiana and the Barnett Crossroads
        Prospect Area, located in Escambia County, Alabama. These interests are
        currently unproved. We also own two mineral claims located approximately
        16
        kilometers from Zeballos, British Columbia, which we are no longer pursuing.
        All
        such properties are more fully described in Item 1 above
  3
 
 ITEM
                  3.
              LEGAL
                  PROCEEDINGS
 
 None.
 
 
 ITEM
                  4.
              SUBMISSION
                  OF MATTERS TO A VOTE OF SECURITY
                  HOLDERS
 
  On
        June
        3, 2005, holders of 52.9% of our common stock executed a written consent
        approving a proposal to amend our Articles of Incorporation to change our
        name
        to Ignis Petroleum Group, Inc. An information statement was mailed or otherwise
        furnished to our stockholders notifying them of such approval on or about
        June
        21, 2005. The name change became effective July 11, 2005.
 
 PART
        II
 
 ITEM
        5.
        MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
 
 MARKET
        INFORMATION
 
 Prior
        to
        April 18, 2005, there was no trading market for our common stock. Our common
        stock was approved for trading on the National Association of Securities
        Dealers' Over-The-Counter Bulletin Board on April 18, 2005 under the symbol
        "SHRV". Our symbol was changed to "IGPG" effective July 14, 2005 to reflect
        our
        name to Ignis Petroleum Group, Inc. The following table sets forth the quarterly
        high and low bid information for our common stock as reported by the National
        Association of Securities Dealers' Over-The-Counter Bulletin Board for the
        periods indicated below. The over-the-counter quotations reflect inter-dealer
        prices, without retail mark-up, mark-down or commission and may not represent
        actual transactions. The reported bid prices reflect the 5 for 1 stock dividend
        that occurred on
        June
        15, 2005.
  HIGH
              
              LOWYear
                  2005
              April
                  18 - June 30
              $12.00
              
              $0.98
 
 HOLDERS
 
 As
        of
        September 15, 2005 there were approximately 79 holders of record of our common
        stock.
 
 DIVIDENDS
 
 We
        have
        not paid cash dividends on our stock and we do not anticipate paying any
        cash
        dividends thereon in the foreseeable future.
 
 RECENT
        SALES OF UNREGISTERED SECURITIES
 
 Effective
        June 15, 2005, we paid a stock dividend of five (5) additional shares of
        common
        stock for each one (1) share of our common stock outstanding.
 
 On
        May
        16, 2005, we issued an aggregate of 1,600,000 shares of our common stock
        to the
        shareholders of Ignis Petroleum Corporation in exchange for 1,600,000 shares
        of
        Ignis Petroleum Corporation. The shares were issued without registration
        under
        the Securities Act in reliance on the exemption provided by Regulation S
        as an
        offer and sale that occurred outside the United States and/or Rule 506 and/or
        Section 4(2) of the Securities Act as a transaction by an issuer not involving
        a
        public offering. No underwriters were used.
 
 On
        June
        15, 2005, we issued 400,000 shares of our common stock to Petrofinanz GmbH,
        a
        Marshall Islands limited liability company, at a price of $0.50 per share
        for a
        total of $200,000. The shares were issued without registration under the
        Securities Act in reliance on the exemption provided by Regulation S as an
        offer
        and sale that occurred outside the United States and/or Rule 506 and/or Section
        4(2) of the Securities Act as a transaction by an issuer not involving a
        public
        offering. No underwriters were used.
  4
 
 EQUITY
        COMPENSATION PLANS
 
 As
        of
        June 30, 2005, we did not have any equity compensation plans, but we do refer
        you to Michael P. Piazza’s employment agreement, as amended, as described in
        Item 10 below.
 
 ITEM
        6.
        MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
 
 The
        following Management’s Discussion and Analysis or Plan of Operation is qualified
        by reference to and should be read in conjunction with, our Financial Statements
        and the Notes thereto as set forth beginning on page F-1.
 
 FORWARD-LOOKING
        STATEMENTS
 
 We
        are
        including the following cautionary statement in this Form 10-KSB for any
        forward-looking statements made by, or on behalf of, Ignis Petroleum Group,
        Inc.
        Forward-looking statements include statements concerning plans, objectives,
        goals, strategies, expectations, future events or performance and underlying
        assumptions and other statements which are other than statements of historical
        facts. Such statements contained herein are forward-looking statements and,
        accordingly, involve risks and uncertainties which could cause actual results
        or
        outcomes to differ materially from those expressed in the forward-looking
        statements. Our expectations, beliefs and projections are expressed in good
        faith, and we believe that they have a reasonable basis, including without
        limitations, management's examination of historical operating trends, data
        contained in our records and other data available from third parties, but
        we
        cannot assure you that management's expectations, beliefs or projections
        will
        result or be achieved or accomplished.
 
 INTRODUCTION
 
 For
        the
        period December 9, 2004 (Inception) to June 30, 2005, the Company's auditors
        in
        their report on the Financial Statements, have noted that there is substantial
        doubt about the Company's ability to continue as a going concern. Our existence
        is dependent upon management funding operations, and raising sufficient capital.
        At this point in time it is impossible to state an amount of additional funding
        which we believe would remove the going concern opinion.
 
 We
        do not
        have any business operations. We have neither a history of earnings nor have
        we
        ever paid any cash dividends. We are unlikely to realize earnings or pay
        cash
        dividends in the immediate or foreseeable future.
 
 Results
        Of Operations For period December 9, 2004 (Inception) to June 30,
        2005
 
 We
        did
        not earn any revenues during the period December 9, 2004 (Inception) to June
        30,
        2005.  We are a development stage company and we cannot assure you that we
        will discover oil, gas or economic mineralization on our leasehold
        properties.
 
 We
        incurred operating expenses in the amount of $253,555 for the period December
        9,
        2004 (Inception) to June 30, 2005. These operating expenses were mainly
        comprised of payroll expenditures of $100,000, professional fees of $54,122,
        other office and related expenses of $67,637, travel expenses of $18,139,
        rent
        expense of $7,055 and advertising of $6,602.
 
 We
        incurred interest expense of $22,685 on our convertible promissory notes
        payable.
  5
  PLAN
        OF
        OPERATION
 
 We
        are a
        development stage company. To date, we have not earned any revenues. Although
        we
        had a working capital deficit of ($2,525,178) as of June 30, 2005, we have
        improved our liquidity position somewhat by a private placement of an aggregate
        of $1,500,000 worth of our common stock and related units since June 30,
        2005.
        In addition, subsequent to June 30, 2005, two convertible promissory notes
        issued by Ignis Petroleum Corporation, in an aggregate principal amount of
        $1,500,000 which were outstanding on June 30, 2005 have been converted into
        3,100,000 shares of our common stock.
 
 For
        the
        next twelve months we plan to issue and sell debt or equity securities to
        cover
        our operating expenses until our oil and gas properties are able to generate
        sufficient revenues to fund our operations. We cannot assure you that our
        oil
        and gas properties will ever generate revenues or that we will be able to
        raise
        additional funds in the future.
 
 LIQUIDITY
        AND CAPITAL RESOURCES
 
 At
        June
        30, 2005, we had cash of $145,064. At June 30, 2005, the Company had a
        working capital deficit of ($2,515,178). The working capital deficit at June
        30,
        2005 is attributable to a $1,500,000 convertible promissory note which proceeds
        were used to purchase an interest in two oil and gas leases and an account
        payable of $1,124,529 to Kerr McGee for the 25% interest in the Texas oil
        lease.
        This payable was liquidated in July 2005 with the proceeds of a private
        placement.
 
 Net
        cash
        provided by (used in) operating activities was $899,053 for the period December
        9, 2004 (Inception) to June 30, 2005. The primary source of cash from operations
        was from a $1,124,529 payable to Kerr McGee for drilling a well in which
        we own
        a 25% working interest in a Texas oil lease.
 
 Net
        cash
        used in investing activities was $2,624,529 for the period December 9, 2004
        (Inception) to June 30, 2005. In April 2005 we purchased interests in three
        oil
        and gas leases for $2,624,529.
 
 Net
        cash
        provided by financing activities was $1,870,590 for the period December 9,
        2004
        (Inception) to June 30, 2005. In April 2005, we issued $1,500,000 of convertible
        notes payable. These notes were used to purchase interests in two oil and
        gas
        leases for $1,500,000.
 
 Our
        present intentions are to sell debt or equity securities to cover our operating
        expenses. There is no guarantee we can raise additional funds in the
        future.
 
 CRITICAL
        ACCOUNTING POLICIES
 
 Our
        accounting policies are fully described in Note 2 of the Notes to the Financial
        Statements. As discussed in Note 2, the preparation of financial statements
        in
        conformity with accounting principles generally accepted in the United States
        requires management to make estimates and assumptions about future events
        that
        affect the amounts reported in the financial statements and accompanying
        notes.
        Future events and their effects cannot be determined with absolute certainty.
        Therefore, the determination of estimates requires the exercise of judgment.
        Actual results inevitably will differ from those estimates, and such difference
        may be material to our financial statements. We believe that the following
        discussion addresses our Critical Accounting Policies.
 
 Property,
        Plant and Equipment - Depreciation, depletion and amortization, based on
        cost
        less estimated salvage value of the asset, are primarily determined under
        either
        the unit-of-production method or the straight-line method, which is based
        on
        estimated asset service life taking obsolescence into consideration. Maintenance
        and repairs, including planned major maintenance, are expensed as incurred.
        Major renewals and improvements are capitalized and the assets replaced are
        retired.
  We
        used
        the “successful efforts” method to account for our exploration and production
        activities. Under this method, costs are accumulated on a field-by-field
        basis
        with certain exploratory expenditures and exploratory dry holes being expensed
        as incurred. Costs of productive wells and development dry holes are capitalized
        and amortized on the unit-of-production method for each field.
  6
 
 Acquisition
        costs of proved properties are amortized using a unit-of-production method,
        computed on the basis of total proved oil and gas reserves. Significant unproved
        properties are assessed for impairment individually and valuation allowances
        against the capitalized costs are recorded based on the estimated economic
        chance of success and the length of time that the Company expects to hold
        the
        properties. The valuation allowances are reviewed at least annually. Other
        exploratory expenditures are expensed as incurred.
  Production
        costs are expensed as incurred.
 
 Proved
        oil and gas properties held and used by us are reviewed for impairment whenever
        events or changes in circumstances indicate that the carrying amounts may
        not be
        recoverable.
 
 Environmental
        Costs - Liabilities for environmental costs are recorded when it is probable
        that obligations have been incurred and the amounts can be reasonably estimated.
        These liabilities are not reduced by possible recoveries from third parties,
        and
        projected cash expenditures are not discounted.
  Accounting
        for Contingencies - We accrue for contingencies in accordance with Statement
        of
        Accounting Standards ("SFAS") No. 5, "Accounting for Contingencies," when
        it is
        probable that a liability or loss has been incurred and the amount can be
        reasonably estimated. Contingencies by their nature relate to uncertainties
        that
        require our exercise of judgment both in assessing whether or not a liability
        or
        loss has been incurred and estimating the amount of probable loss.
 
 We
        account for income taxes in accordance with SFAS No.109. Since we are in
        the
        development stage, our deferred tax assets are not expected to be utilized
        in
        the future. We have provided a full valuation allowance against the
        assets.
 
 
 ITEM
                  7.
              FINANCIAL
                  STATEMENTS
 
 The
        financial statements required in this Form 10-KSB are set forth beginning
        on
        page F-1
 
 
 ITEM
                  8.
              CHANGES
                  IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
                  DISCLOSURE
 
 
 Effective
        July 11, 2005, our independent auditors, Manning Elliott, Chartered Accountants
        (Vancouver, BC Canada), resigned as a result of our relocation of our operations
        and management from Canada to the United States. Our Board of Directors voted
        unanimously to accept the resignation of Manning Elliott, and to approve
        the
        engagement of De Meo, Young and McGrath as our new independent auditors.
        There
        were no disagreements with our former accountants on any matter of accounting
        principles or practices, financial statement disclosure, or auditing scope
        or
        procedure. Our former accountants did not advise us of a lack of internal
        controls, an unwillingness to rely on our management’s representations or
        financial statements prepared by our management, or a desire to expand the
        scope
        of their audit or to conduct a further investigation.
 
 ITEM
                  8A.
              CONTROLS
                  AND PROCEDURES
 
 We
        have
        evaluated the effectiveness of the design and operation of our disclosure
        controls and procedures as of June 30, 2005. Such evaluation was conducted
        under
        the supervision and with the participation of our Chief Executive Officer
        and
        our Chief Financial Officer. Based upon such evaluation, our Chief Executive
        Officer and our Chief Financial Officer have concluded that, as of June 30,
        2005, our disclosure controls and procedures were effective. There have been
        no
        significant changes in our internal controls over financial reporting that
        occurred during our most recent fiscal quarter that have materially affected,
        or
        are reasonably likely to materially affect, our internal controls over financial
        reporting.
 
 
 ITEM
                8B.
              OTHER
                  INFORMATION
  7
  On
        May
        23, 2005, we amended our bylaws to provide that if there is a vacancy on
        our
        board of directors, our remaining directors may fill the vacant seat, including
        any seat that has never been occupied.  Previously, our board had the power
        to appoint additional directors, but not more than half of the number of
        directors fixed at the most recent meeting of our shareholders at which
        directors were elected.  A copy of our bylaws, including the amendment
        described in this paragraph, is attached as an exhibit to this annual
        report.
 
 On
        June
        15, 2005, we issued 400,000 shares of our common stock to Petrofinanz GmbH,
        a
        Marshall Islands limited liability company, at a price of $0.50 per share
        for a
        total of $200,000.  The shares were issued without registration under the
        Securities Act in reliance on the exemption provided by Regulation S as an
        offer
        and sale that occurred outside the United States and/or Rule 506 and/or Section
        4(2) of the Securities Act as a transaction by an issuer not involving a
        public
        offering.  No underwriters were used.
 
  PART
        III
  ITEM
                  9.
                DIRECTORS,
                    EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
                    WITH SECTION
                    16(a) OF THE EXCHANGE ACT
 DIRECTORS
        AND EXECUTIVE OFFICERS
 
 The
        following table provides information concerning our directors, executive
        officers, and key employees as of June 30, 2005. All directors hold office
        until
        the next annual meeting of our stockholders, or until their death, resignation
        or removal. Any vacancies in the existing board may be filled by the remaining
        directors.
 
 NAME
              
              AGE
              
              POSITIONMichael
                  P. Piazza
              
              48
              
              President,
                  Chief Executive Officer, Treasurer and DirectorPhilipp
                  Buschmann
              
              29
              
              Chief
                  Operating Officer, Secretary and DirectorTimothy
                  Hart
              
              46
              
              Chief
                  Financial OfficerGeoffrey
                  Evett
              
              66
              
              Director
 
 Michael
        P. Piazza - (age 48) Mr. Piazza joined our board of directors effective June
        5,
        2005. Since May 25, 2005, Mr. Piazza has been our President, Chief Executive
        Officer and Treasurer. From May 25, 2005 until October 5, 2005, Mr. Piazza
        was
        also our Chief Financial Officer. From March 2005 to April 2005, Mr. Piazza
        was
        unemployed. From August 2003 to February 2005 Mr. Piazza was Senior Vice
        President and Chief Financial Officer of Ranger Enterprises, Inc., a petroleum
        corporation located in Rockford, Illinois. From May 2001 to July 2003, Mr.
        Piazza was a principal with Elan Capital, LLC, a management and financial
        consulting firm located in Houston, Texas. From February 1996 to April 2001,
        Mr.
        Piazza was a senior manager with McKinsey & Company, Inc., a management
        consulting firm located in Houston, Texas. Mr. Piazza received a Bachelor
        of
        Science degree in engineering from the Massachusetts Institute of Technology;
        a
        Master of Science degree in engineering from the University of California
        at
        Berkeley; and a Master of Business Administration degree from the Stern School
        at New York University.
 
 Philipp
        Buschmann - (age 29) Mr. Buschmann joined our board of directors effective
        June
        5, 2005. Since May 25, 2005, Mr. Buschmann has been our Chief Operating Officer
        and Secretary. Since December 2004, Mr. Buschmann has been Chief Executive
        Officer of Ignis Petroleum Corporation, an oil and gas corporation located
        in
        Dallas, Texas, which became a subsidiary of Ignis Petroleum Group, Inc. on
        May
        16, 2005. From November 2004 to April 2005, Mr. Buschmann was engaged in
        start-up activities for Ignis Petroleum Corporation. From September 2003
        to
        November 2004, Mr. Buschmann was a management consultant with Booz Allen
        Hamilton located in London, United Kingdom. From July 2003 to September 2003,
        Mr. Buschmann was unemployed. From September 2001 to July 2003 was a student
        at
        a London Business School and received a Master of Business Administration
        degree
        therefrom. From May 2002 to August 2002, Mr. Buschmann was a management
        consultant with Booz Allen Hamilton located in London, United Kingdom. From
        February 2001 to September 2001, Mr. Buschmann was unemployed. From August
        1998
        to February 2001 he was project manager for Razorfish, a corporation engaged
        in
        the business of IT consulting, located in Boston,
        Massachusetts.
  8
  Geoffrey
        Evett - (age 66) Mr. Evett joined our board of directors on August 30, 2005.
        Mr.
        Evett is a former banker with 33 years of experience. During the past five
        years, Mr. Evett has acted as a finance consultant to a major property
        development in the Czech Republic. He has also been involved with the
        development of a mixed commercial development in Prague. Mr. Evett serves
        as
        Chairman of Themis MN Fund Limited, a hedge fund listed on the Dublin Stock
        Exchange and serves as a partner in Capital Management Solution, a fund
        management company. He is also an agent for Banque SCS Alliance, a Swiss
        bank
        based in Geneva.
  Timothy
            Hart - (age 46) Mr. Hart became our Chief Financial Officer on October
            5, 2005.
            Since 1996, Mr. Hart has been in private practice with the accounting
            firm
            Ullman & Hart CPAs located in Fort Lauderdale, Florida. In his capacity with
            this firm he has performed accounting and consulting services for clients
            in a
            number of different industries, often fulfilling the internal accounting
            function. In addition, from January 2004 to May of 2005 Mr. Hart served
            as Chief
            Financial Officer of Taylor Madison Corp., a public company specializing
            in
            licensing agreements for various fragrance related products. From 2000
            to 2003
            Mr. Hart served as a director of American Group, Inc., a public company
            specializing in custom soil mixes in Homestead, Florida in addition to
            fulfilling the internal accounting function. Mr. Hart, through Ullman
& Hart
            CPAs, has provided consulting services to Ignis Petroleum Group,Inc.
            from
            February 2005 to the present. Fees totaling $11,315 have been charged
            and paid
            for the services provided.
  The
              following persons provide consulting services to us as members of our
              advisory
              board:
 
 ·
                    Joseph
                        Gittelman (age 68) is the Exploration Advisor on our advisory
                        board. Mr.
                        Gittelman is an industry professional with over 35 years
                        of international
                        experience in oil and gas exploration, development and operations.
                        Mr.
                        Gittelman enjoyed a 27-year career with Shell Oil Company,
                        serving in a
                        variety of senior technical, operational and management capacities.
                        His
                        leadership positions within the Shell organization included:
                        General
                        Manager of Geophysics, General Manager of Exploration and
                        General Manager
                        of Exploration and Production Research. Mr. Gittelman also
                        served as
                        General Manager of Shell Western Exploration & Production from 1988 to
                        1994, where he was responsible for managing Shell's domestic
                        lower 48
                        onshore and Alaska exploration programs. Since 1995, Mr.
                        Gittelman has
                        served as President of U.S.-based Danlier, Inc., a specialized
                        consulting
                        firm which provides services to exploration companies and
                        institutional
                        investors, including screening of exploration projects for
                        technical
                        quality, risk and hydrocarbon potential. Mr. Gittelman holds
                        a B.S. degree
                        in Engineering from the University of Pennsylvania, an M.S.
                        degree in
                        Engineering from New York University and a Ph.D. in Engineering
                        from the
                        University of Michigan.
 
 ·
                    Frederick
                        Stein (age 62) is the Operations Advisor on our advisory
                        board. Mr. Stein
                        is an accomplished petroleum engineer and operations manager
                        with over 35
                        years experience in senior level management within Shell
                        Oil Company and
                        Pennzoil/Devon Energy. He developed and ran oil and gas fields
                        both
                        onshore and offshore in both domestic and international arenas.
                        Over a 25
                        year career with Shell, his responsibilities ranged from
                        production,
                        reservoir, drilling and petrophysical engineering to direct
                        management of
                        drilling and field operations. During a 10 year tenure with
                        Pennzoil/Devon
                        Energy, Mr. Stein had both technical and operations management
                        responsibilities over a variety of international projects
                        in over a dozen
                        countries with the largest being the Chirag/Azeri field in
                        Azerbaijan. Mr.
                        Stein's diverse areas of expertise include drilling and production
                        operations management, oil and gas transportation design
                        and negotiations.
                        In addition, his experience encompasses reserves evaluation,
                        reservoir
                        performance management, well planning, facility design, and
                        safety. Mr.
                        Stein graduated with honors with an engineering degree from
                        the University
                        of Wisconsin.
 
 ·
                    Alexander
                        A. Kulpecz (age 51) was the initial member of our advisory
                        board. Mr.
                        Kulpecz is highly respected in the energy sector and has
                        over 30 years
                        experience gained at the highest levels within some of the
                        world's major
                        companies. Mr. Kulpecz began his career during the drilling
                        boom of the
                        1970's with Shell Oil in their Onshore Production Division
                        where he
                        selected and drilled wells in the Texas, Louisiana, Mississippi,
                        and
                        Alabama Gulf Coast areas finding significant quantities of
                        oil and gas.
                        Mr. Kulpecz held the position of Executive VP and Director
                        of Shell
                        International Gas, Power and Coal, and he led the reorganization
                        of the
                        Company's global E&P business. As a member of the Shell International
                        Gas & Power Executive Committee, he was responsible for almost
                        half of
                        Shell's global gas and power business, actively negotiating
                        multi-billion
                        dollar projects (LNG, corporate acquisition, pipelines) at
                        the
                        Presidential, PM and Energy Ministerial levels. From 1998
                        to early 2000,
                        Mr. Kulpecz held the position of President of Azurix International
                        and
                        Executive Director of Azurix Corporation. He is currently
                        President of the
                        Omega Group, a consultancy group of senior executives providing
                        advisory
                        and managerial support to private equity, banking and energy
                        clients in
                        the oil and gas industries.
  SECTION
            16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
  Compliance
        with Section 16(a) of the Securities Exchange Act of 1934 Act, as amended,
        requires our officers and directors, and persons who own more than ten percent
        of our common stock to file reports of ownership and changes in ownership
        with
        the Securities and Exchange Commission, or SEC. Officers, directors and greater
        than ten percent stockholders are required by SEC regulations to furnish
        us with
        copies of all Section 16(a) forms they file. Based solely on a review of
        the
        copies of such forms furnished to us during, and with respect to, the fiscal
        year ending June 30, 2005, we believe that during such fiscal year all Section
        16(a) filing requirements applicable to our officers, directors and greater
        than
        ten percent beneficial owners were in compliance with Section 16(a), except
        that
        Mr. Buschmann, Mr. Piazza and Mr. Berry, who was an officer and director
        of the
        Company during our last fiscal year, each filed their Form 3 late, and Mr.
        Berry
        was late to file one Form 4 with regard to one transaction.
 
 CODE
        OF
        ETHICS
 
 We
        have
        not yet adopted a code of ethics that applies to our principal executive
        officers, principal financial officer, principal accounting officer or
        controller, or persons performing similar functions, since we have been focusing
        our efforts on obtaining financing for the company. We expect to adopt a
        code by
        December 31, 2005.
  ITEM
                    10.
                  EXECUTIVE
                      COMPENSATION
 The
        following table sets forth the compensation paid to the Company's officers
        and
        directors during fiscal 2005. This information includes the dollar value
        of base
        salaries, bonus awards and number of stock options granted, and certain other
        compensation, if any.
  9
  **Summary
        Compensation Table**
  **Long
                    Term Compensation**
 **Restricted**
                **All
                    Other****Name
                    and Principal**
                
                **Salary**
                ****
                **Stock**
                **Compensation****Position**
                **Year**
                **($)**
                ****
                **Award(s)
                    ($)**
                **($)**Michael
                    P. Piazza, President, Chief Executive Officer and Treasurer (1)
                2005
                $20,000(1)
                
                $221,333(1)
                $10,000
                    (1)Douglas
                    Berry, former President, Chief Executive Officer, Secretary and
                    Treasurer
                    (2)
                2004
                0
                
                0
                02005
                0
                
                0
                0Philipp
                    Buschmann, Chief Operating Officer and Secretary
                2005
                $70,000(3)
                0
                0
                0
  (1)           
        Ignis Petroleum Corporation entered into a written employment agreement on
        April
        21, 2005, with Mr. Piazza which provided for an annual base salary of $120,000
        per year and the issuance of up to 1,000,000 shares of common stock of Ignis
        Petroleum Corporation per year for four (4) years, for an aggregate of up
        to
        4,000,000 shares. The shares issuable to Mr. Piazza under the agreement are
        subject to vesting based upon the following schedule:
  •  150,000
        shares after three (3) months of service;
  •  350,000
        shares after six (6) months of service if Piazza meets established performance
        criteria. If the performance criteria is not met the grant of shares can
        be
        delayed by action of our board of directors until they are met or the 12
        months
        of service, whichever comes first;
  •  500,000
        shares after twelve (12) months of service; and
  •  500,000
        shares every six (6) months thereafter until the forty-eighth (48th) month
        of
        service.
  Mr.
        Piazza’s employment agreement also provided for a one time non-accountable
        moving allowance of $10,000. On September 22, 2005, Mr. Piazza’s employment
        agreement was amended to provide that he will receive up to 4,000,000 shares
        of
        common stock of Ignis Petroleum Group, Inc. rather than shares of common
        stock
        of Ignis Petroleum Corporation. The vesting schedule and all other terms
        of Mr.
        Piazza’s employment agreement remain unchanged. The amount shown as the value of
        Mr. Piazza’s restricted stock award in the table above is based upon the fair
        market value of 4,000,000 shares of Ignis Petroleum Group, Inc. stock on
        April
        21, 2005. Such 4,000,000 shares would be worth $5,400,000 if valued as of
        June
        30, 2005. If we declare any dividends on our common stock, Mr. Piazza would
        only
        be entitled to receive dividends on the vested portion of the restricted
        common
        stock described above.
  (2)  Mr.
        Berry
        resigned from each of his officer positions effective May 11, 2005.
  10
  (3)  Although
        we have no written agreement with Mr. Buschmann, we paid him an annual salary
        of
        $120,000 in his capacity of Chief Operating Officer.
  Our
        directors are not compensated for their services, with the exception of 240,000
        shares of our common stock that we granted to Mr. Berry on August 15, 2005,
        as
        compensation for his services as a director from May 22, 2005 through September
        22, 2005.
 
 ITEM
                  11.
              SECURITY
                  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
                  STOCKHOLDER MATTERS
 
 EQUITY
        COMPENSATION PLANS
 
 As
        of
        June 30, 2005, we did not have any equity compensation plans, but we do refer
        you to Michael P. Piazza’s employment agreement, as amended, as described in
        Item 10 above. Such employment agreement was not approved by our
        stockholders.
 
 SECURITY
        OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
 The
        following table provides certain information as of September 15, 2005 concerning
        the beneficial ownership of our common stock held by each of our
        directors,  our
        Chief
        Executive Officer and our other most highly compensated executive officer;
        each
        person known by us to be the beneficial owner of at least 5% of our outstanding
        common stock; and all of our executive officers and directors as a group.
  NAME
                  OF BENEFICIAL OWNER
              
              NUMBER
                  OF COMMON SHARES
              
              PERCENTAGE
                  OF OWNERSHIP (1)**Directors:**Philipp
                  Buschmann
              
              
              4,584,000
              
              
              10.3
              %Michael
                  P. Piazza (2)
              
              
              500,000
              
              
              1.1
              %Geoffrey
                  Lowndes Evett (3)
              
              
              0
              
              
              0
              %**Executive
                  Officers not named above:**Douglas
                  Berry (4)
              
              
              600,000
              
              
              1.3
              %**Directors
                  and executive officers as a group (4 persons)**
              
              
              5,684,000
              
              
              12.7
              %**5%
                  holders not named above:**Petrofinanz
                  GmbH (5)
              
              
              6,400,000
              
              
              13.4
              %Newton
                  Properties, Inc. (6)
              
              
              3,100,000
              
              
              6.5
              %
 
 (1)
              This
                  table is based on 44,700,000 shares of Common Stock outstanding
                  as of
                  September 15, 2005. If a person listed on this table has the right
                  to
                  obtain additional shares of Common Stock within sixty (60) days
                  from
                  September 15, 2005, the additional shares are deemed to be outstanding
                  for
                  the purpose of computing the percentage of class owned by such
                  person, but
                  are not deemed to be outstanding for the purpose of computing the
                  percentage of any other person.
  (2)
              Includes
                  350,000 shares which may become issuable to Mr. Piazza under his
                  employment agreement on November 9, 2005 if Mr. Piazza meets the
                  established performance criteria.
  (3)
              Mr.
                  Evett joined our board of directors on August 30,
                  2005.
  (4)
              Includes
                  600,000 shares beneficially owned indirectly by Mr. Berry through
                  his
                  control of D.B. Management Ltd. Mr. Berry resigned from the board
                  effective September 22, 2005. Mr. Berry’s address is 14188 Marine Dr.
                  White Rock BC, Canada V4B1A8.
  (5)
              Includes
                  3,000,000 shares issuable upon exercise of a warrant. Petrofinanz’s
                  address is Trust Company Complex, Ajeltake Road, Ajeltake Island,
                  Majuro,
                  Marshall Islands MH96960.
  (6)
              Includes
                  3,100,000 issuable to Newton Properties, Inc. upon conversion of
                  two
                  convertible promissory notes. Such notes were converted into 3,100,000
                  shares of our common stock on September 22, 2005. Newton Properties,
                  Inc.’s address is Trust Company Complex, Ajeltake Road, Ajeltake Island,
                  Majuro, Marshall Islands MH96960
  11
  ITEM
                12.
              CERTAIN
                  RELATIONSHIPS AND RELATED
                  TRANSACTIONS.
 
 Except
        as
        described below, none of the following parties has, since our date of
        incorporation, had any material interest, direct or indirect, in any transaction
        with us or in any presently proposed transaction in an amount over
        $60,000:
 
 *
              Any
                  of our directors or executive
                  officers;
 *
              Any
                  person proposed as a nominee for election as a
                  director;
 *
              Any
                  person who beneficially owns, directly or indirectly, shares carrying
                  more
                  than 5% of the voting rights attached to our outstanding shares
                  of common
                  stock; or
 *
              Any
                  member of the immediate family of any of the foregoing
                  persons.
   During
        the year ended June 30, 2005, our chief financial officer, Mr. Timothy Hart,
        through Ullman & Hart CPAs, provided consulting services to us. Fees
        totaling $11,315 have been charged and paid for the services provided. It
        is
        anticipated that Mr. Hart will continue to provide consulting services to
        us
        through Ullman & Hart CPAs at a rate of $150 per hour.
  ITEM
                13.
              EXHIBITS
 
 (a)
              EXHIBITS
  The
          following are exhibits to this report:
 Number
              Description*3.1
              Articles
                  of Incorporation.*3.2
              Bylaws**10.1
              Stock
                  exchange agreement, dated May 11, 2005, by and among Sheer Ventures,
                  Inc.
                  and shareholders of Ignis Petroleum Corporation (filed as Exhibit
                  10.1 to
                  our form 8-K/A filed June 20, 2005 and incorporated by reference
                  herein**10.2
              Letter
                  Agreement, dated March 31, 2005, by and among Argyle Energy, Inc.,
                  Newton
                  Properties, Inc. and Blue Ridge Energy, Inc. regarding Barnett
                  Crossroads
                  Prospect Area, Escambia County, Alabama**10.3
              Letter
                  Agreement, dated March 31, 2005, by and among Argyle Energy, Inc.,
                  Newton
                  Properties, Inc. and Blue Ridge Energy, Inc. regarding North Wright
                  Prospect Area, Acadia Parish, Louisiana**10.4
              Letter
                  Agreement, dated April 22, 2005, by and between Newton Properties,
                  Inc.
                  and Ignis Petroleum Corporation regarding Barnett Crossroads Prospect
                  Area, Escambia County, Alabama**10.5
              Letter
                  Agreement, dated April 22, 2005, by and between Newton Properties,
                  Inc.
                  and Ignis Petroleum Corporation regarding North Wright Prospect
                  Area,
                  Acadia Parish, Louisiana**10.6
              Letter
                  Agreement, dated September 29, 2005, by and among Argyle Energy,
                  Inc.,
                  Ignis Petroleum Corporation and Bayou City Exploration, Inc. (f/k/a
                  Blue
                  Ridge Energy, Inc.) regarding Barnett Crossroads Prospect Area,
                  Escambia
                  County, Alabama**10.7
              Letter
                  Agreement, dated September 1, 2005, by and among Argyle Energy,
                  Inc.,
                  Ignis Petroleum Corporation and Bayou City Exploration, Inc. (f/k/a
                  Blue
                  Ridge Energy, Inc.) regarding North Wright Prospect Area, Acadia
                  Parish,
                  Louisiana**10.8
              Letter
                  Agreement, dated September 22, 2005, by and among Ignis Petroleum
                  Group,
                  Inc., Newton Properties, Inc. and Ignis Petroleum Corporation regarding
                  $375,000 convertible note**10.9
              Letter
                  Agreement, dated September 22, 2005, by and among Ignis Petroleum
                  Group,
                  Inc., Newton Properties, Inc. and Ignis Petroleum Corporation regarding
                  $1,125,000 convertible note**10.10
              Letter
                  Agreement, dated September 30, 2005, by and among Ignis Petroleum
                  Group,
                  Inc., Newton Properties, Inc. and Ignis Petroleum Corporation regarding
                  Barnett Crossroads Prospect, Escambia County, Alabama**10.11
              Letter
                  Agreement, dated September 30, 2005, by and among Ignis Petroleum
                  Group,
                  Inc., Newton Properties, Inc. and Ignis Petroleum Corporation regarding
                  North Wright Prospect, Acadia Parish, Louisiana**10.12+
              Letter
                  Agreement, dated April 21, 2005, by and between Ignis Petroleum
                  Corporation and Michael P. Piazza**10.13+
              Letter
                  Agreement, dated September 22, 2005, by and among Ignis Petroleum
                  Group,
                  Inc., Ignis Petroleum Corporation and Michael P. Piazza**10.14+
              Letter
                  Agreement, dated August 8, 2005, by and between Ignis Petroleum
                  Group,
                  Inc. and Alexander A. Kulpecz**10.15+
              Letter
                  Agreement, dated August 17, 2005, by and between Ignis Petroleum
                  Group,
                  Inc. and Frederick C. Stein**10.16+
              Letter
                  Agreement, dated August 17, 2005, by and between Ignis Petroleum
                  Group,
                  Inc. and Joseph Gittelman**10.17
              Participation
                  agreement, dated June 14, 2005, by and between Ignis Petroleum
                  Corporation
                  and Kerr-McGee Oil & Gas Onshore LP. d/b/a KMOG Onshore LP.*10.18
              Stock
                  Purchase Agreement, dated June 15, 2005, by and among Sheer Ventures,
                  Inc.
                  and Petrofinanz GmbH.***16
              Letter
                  on change in certifying accountant, from the former auditor.*21
              Subsidiaries
                  of the small business issuer.*31.1
              Rule
                  13a-14(a) Certification of Chief Executive Officer*31.2
              Rule
                  13a-14(a) Certification of Chief Financial Officer*32.1
              Section
                  1350 Certification of Chief Executive Officer*32.2
              Section
                  1350 Certification of Chief Financial
                  Officer
 ______________
 * 
        Filed herewith
 ** (filed
        as
        an Exhibit to our Form 8-K filed October 11, 2005 and incorporated herein
        by
        reference)
 *** (filed
        as
        an Exhibit to our Form 8-K filed July 14, 2005 and incorporated herein by
        reference)
 
 +
              Identifies
                  management contracts and compensatory plans or arrangements.
  12
 
 (b)
              We
                  filed the following reports on Form 8-K during the year ended June
                  30,
                  2005:
 
 On
        May
        19, 2005 we announced that on March 16, 2005, we consummated a stock exchange
        with shareholders of Ignis Petroleum Corporation and that on the same day
        D.B. Management Ltd., a company owned and controlled by Doug Berry, who was
        then
        our sole officer and sole director, sold 1,940,000 shares of our common stock.
        In the same report we announced a change in control of Ignis Petroleum Group,
        Inc. on March 16, 2005.
 
 On
        June
        20, 2005, we amended the Form 8-K described above to include copies of the
        stock
        exchange agreement and the stock purchase agreements referenced in the report
        as
        exhibits.
 
 ITEM
                  14.
              PRINCIPAL
                  ACCOUNTANT FEES AND SERVICES
 
 AUDIT
        FEES
 
 For
        the
        year ended June 30, 2005, our principal accountant billed $9,000 for the
        audit
        of our annual financial statements. For the year ended June 30, 2005, our
        former
        principal accountant billed $1,800 for the review of financial statements
        included in our Form 10-QSB filings.
  AUDIT-RELATED
        FEES
 
 There
        were no fees billed for services related to the performance of the audit
        or
        review of our financial statements outside of those fees disclosed above
        under
“Audit Fees” for the year ended June 30, 2005, and the period ended June 30,
        2004.
 
 TAX
        FEES
 
 For
        the
        fiscal year ended June 30, 2005, our principal accountant did not render
        any
        services for tax compliance, tax advice, and tax planning work.
 
 ALL
        OTHER
        FEES
 
 There
        were no other fees billed by our principal accountants other than those
        disclosed above for the year ended June 30, 2005.
 
 PRE-APPROVAL
        POLICIES AND PROCEDURES
 
 Prior
        to
        engaging our accountants to perform a particular service, our board of directors
        obtains an estimate for the service to be performed. All of the services
        described above were approved by the board of directors in accordance with
        its
        procedures.
 13
  SIGNATURES
 
 In
        accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
        this report to be signed on its behalf by the undersigned, thereunto duly
        authorized.
 
 
 October11, 2005
              Ignis
                  Petroleum Group, Inc.By: /s/
                  Michael PiazzaMichael
                  Piazza,President,
                  Chief Executive Officer and Treasurer
  In
        accordance with the Exchange Act, this report has been signed below by the
        following persons on behalf of the registrant and in the capacities and on
        the
        dates indicated.
 
 Name
              
              Position
              
              Date/s/
                  Michael P. Piazza
              
              President,
                    Chief Executive Officer, Treasurer and Director
              
              October
                  11, 2005Michael
                  P. Piazza
              
              (Principal
                  Executive Officer)/s/
                  Philipp Buschmann
              
              Chief
                    Operating Officer, Secretary and Director
              
              October
                  11, 2005Philipp
                  BuschmannDirectorGeoffrey
                  Lowndes Evett/s/
                  Timothy Hart
              
              Chief
                  Financial Officer
              
              October
                  11, 2005Timothy
                  Hart
              
              (Principal
                  Financial Officer and Principal Accounting Officer)




14




**REPORT
        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
  
 
 To
        the
        Board of Directors of
 Ignis
        Petroleum Group, Inc.
 
 We
        have
        audited the accompanying consolidated balance sheet of Ignis Petroleum Group,
        Inc. and subsidiaries (the “Company”) as of June 30, 2005, and the related
        consolidated statements of operations, changes in shareholders’ equity and
        cash flows for the period
        December 9, 2004 (Inception) to June 30, 2005 .
        These
        consolidated financial statements are the responsibility of the Company’s
        management. Our responsibility is to express an opinion on these financial
        statements based on our audit.
 
 We
        conducted our audits in accordance with the standards of the Public Company
        Accounting Oversight Board (United States). Those standards require that
        we plan
        and perform the audit to obtain reasonable assurance about whether the financial
        statements are free of material misstatement. We were not engaged to perform
        an
        audit of the Company’s internal control over financial reporting. Our audit
        includes consideration of internal control over financial reporting as a
        basis
        for designing audit procedures that are appropriate in the circumstances,
        but
        not for the purpose of expressing an opinion on the effectiveness of the
        Company’s internal control over financial reporting. Accordingly, we express no
        such opinion. An audit also includes examining, on a test basis, evidence
        supporting the amounts and disclosures in the financial statements, assessing
        the accounting principles used and significant estimates made by management,
        and
        evaluating the overall financial statement presentation. We believe that
        our
        audits provide a reasonable basis for our opinion.
 
 In
        our
        opinion, the financial statements referred to above present fairly, in all
        material respects, the financial position of the Company as of June 30, 2005
        and
        the results of their operations and their cash flows for the period December
        9,
        2004 (Inception) to June 30, 2005, in conformity with US generally accepted
        accounting principles.
  The
        accompanying financial statements have been prepared assuming that the Company
        will continue as a going concern. As discussed in Note 1 to the consolidated
        financial statements, the Company’s dependence on outside financing, lack of
        sufficient working capital, and recurring losses from operations raise
        substantial doubt about the Company’s ability to continue as a going concern.
        The financial statements do not include any adjustments that might result
        from
        the outcome of these uncertainties.
 
 
 
 /s/De
        Meo, Young McGrath
  Fort
        Lauderdale, Florida
 October
        11, 2005
  F-1




Ignis
            Petroleum Group, Inc. and Subsidiary
 A
            Development Stage Company
 Consolidated
            Balance Sheet
 June
            30,
            2005
  ASSETSCurrent
                      assets:Cash
                      and cash equivalents
                  
                  $
                  145,064Prepaid
                      expenses and other current assets
                  
                  
                  20,066Total
                      current assets
                  
                  
                  165,130Property
                      and equipment:Oil
                      and gas properties, successful efforts method, unproved
                  
                  
                  2,624,529Other
                      assets
                  
                  
                  3,3603,360Total
                      assets
                  
                  $
                  2,793,019LIABILITIES
                      AND STOCKHOLDERS' EQUITYCurrent
                      liabilities:Accounts
                      payable and accrued expenses
                  
                  $
                  1,169,718Convertible
                      notes
                  
                  
                  1,500,000Due
                      to related party
                  
                  
                  20,590Total
                      current liabilities
                  
                  
                  2,690,308Commitments
                      and contingencies
                  
                  
                  -Stockholders'
                      equity:Common
                        shares, $0.001 par value, 75,000,000 shares authorized41,200,000
                        issued and outstanding
                  
                  
                  41,200Additional
                      paid-in capital
                  
                  
                  353,500Accumulated
                      deficit in the development stage
                  
                  
                  (291,989
                  )Total
                      stockholders' equity
                  
                  
                  102,711Total
                      liabilities and stockholders' equity
                  
                  $
                  2,793,019
   The
            accompanying notes are an integral part of these consolidated financial
            statements
  F-2
 
 Ignis
            Petroleum Group, Inc. and Subsidiary
 A
            Development Stage Company
 Consolidated
            Statement of Operations
  For
                      the Period
                      December
                        9, 2004 (Inception)
                      to
                        June 30, 2005Total
                      revenues
                  
                  $
                  -Operating
                      expenses:General
                      and administrative expenses
                  
                  
                  253,555Total
                      operating expenses
                  
                  
                  253,555Other
                      income (expense)Interest
                      expense
                  
                  
                  (22,685
                  )Net
                      loss
                  
                  $
                  (276,240
                  )Basic
                      and diluted loss per common share
                  
                  $
                  (0.01
                  )Weighted
                      average number of common shares outstanding and proforma
                  
                  
                  40,829,557
   The
            accompanying notes are an integral part of these consolidated financial
            statements
  F-3
 
 Ignis
            Petroleum Group, Inc. and Subsidiary
 A
            Development Stage Company
 Consolidated
            Statement of Stockholders' Equity
 For
            the
            Period December 9, 2004 (Inception) to June 30, 2005
 
 DeficitAccumulatedAdditional
                    
                    During
                        theCommon
                        Stock
                    
                    Paid-in
                    
                    DevelopmentShares
                    
                    Par
                        value
                    
                    Capital
                    
                    Stage
                    
                    TotalBalance
                        December 9, 2004 (reverse merger)(1)
                    
                    
                    31,200,000
                    
                    $
                    31,200
                    
                    $
                    -
                    
                    $
                    (15,749
                    )
                    $
                    15,451Issuance
                        of common stock
                    
                    
                    10,000,000
                    
                    
                    10,000
                    
                    
                    340,000
                    
                    
                    -
                    
                    
                    350,000Donated
                        services for rent
                    
                    
                    -
                    
                    
                    -
                    
                    
                    13,500
                    
                    
                    -
                    
                    
                    13,500Net
                        loss
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (276,240
                    )
                    
                    (276,240
                    )Balance
                        June 30, 2005
                    
                    
                    41,200,000
                    
                    $
                    41,200
                    
                    $
                    353,500
                    
                    $
                    (291,989
                    )
                    $
                    102,711
   (1)
                        Shares and per share amounts have been adjusted to reflect
                        five for one
                        stock dividend
 
 
 The
            accompanying notes are an integral part of these consolidated financial
            statements
  F-4
 
 Ignis
            Petroleum Group, Inc. and Subsidiary
 A
            Development Stage Company
 Consolidated
            Statement of Cash Flows
  For
                      the Period
                    December
                      9, 2004 (Inception)
                    to
                      June 30, 2005Net
                      loss
                  
                  $
                  (276,240
                  )Adjustments
                      to net loss not affecting cash:Donated
                      capital
                  
                  
                  13,500Reverse
                      merger adjustments
                  
                  
                  15,451Changes
                      in assets and liabilitiesPrepaid
                      expenses and other current assets
                  
                  
                  (20,066
                  )Other
                      assets
                  
                  
                  (3,360
                  )Accounts
                      payable and accrued expenses
                  
                  
                  1,169,718Cash
                      provided by (used in) operating activities
                  
                  
                  899,003Investing
                      activitiesPurchase
                      of oil and gas properties
                  
                  
                  (2,624,529
                  )Cash
                      used for investing activities
                  
                  
                  (2,624,529
                  )Financing
                      activitiesIssuance
                      of common stock
                  
                  
                  350,000Advance
                      from related party
                  
                  
                  20,590Issuance
                      of convertible notes
                  
                  
                  1,500,0001,870,590Net
                      increase in cash
                  
                  
                  145,064Cash
                      at beginning of period
                  
                  
                  -Cash
                      at end of period
                  
                  $
                  145,064Supplemental
                      disclosure of cash flow information:Cash
                      paid during the period for:Interest
                  
                  $
                  -Income
                      taxes
                  
                  $
                  -
 
 The
            accompanying notes are an integral part of these consolidated financial
            statements
  F-5


Ignis
        Petroleum Group, Inc. and Subsidiary
 A
        Development Stage Company
 Notes
        to
        the Financial Statements
 June
        30,
        2005
  Note
        1
 Nature
        of
        Operations
 
 Ignis 
        Petroleum Group, Inc., formerly Sheer Ventures, Inc., was incorporated in
        the State of Nevada on April 30, 2004. Ignis Petroleum Corporation was
        incorporated in the State of Nevada on December 9, 2004. Ignis Petroleum
        Group,
        Inc. and Ignis Petroleum Corporation entered into a transaction accounted
        for as
        a reverse merger on May 16, 2005 as more fully described in Note 3 below.
        We are
        a development stage company as defined by Statement of Financial Accounting
        Standard (“SFAS”) No. 7. We acquired a 75% working interest which is equal to a
        fifty-two and five tenths percent (52.5%) net revenue interest in two oil,
        gas
        and mineral leases in Louisiana and Alabama, respectively as well entering
        into
        a participation agreement with an industry partner for a 25% working interest
        in
        a prospect located in Chambers County, Texas.
 
 These
        financial statements have been prepared on a going concern basis. We have
        incurred losses since inception resulting in an accumulated deficit of $291,989
        since inception and further losses are anticipated in the development of
        its
        business raising substantial doubt about our ability to continue as a going
        concern. Our ability to continue as a going concern is dependent upon our
        ability to generate profitable operations in the future and/or to obtain
        the
        necessary financing to meet our obligations and repay our liabilities arising
        from normal business operations when they come due. (See Note 11).
   Note
        2
 Summary
        of Significant Accounting Policies
 
 Stock
        Dividend
 Effective
        June 1, 2005 our then Sole Director voted to declare a five for one stock
        dividend to holders of record of our common stock at the close business on
        June
        15, 2005. The capital accounts and all per share information have been adjusted
        retroactively to reflect the stock dividend
 
 Basis
        of
        Presentation
 Our
        financial statements have been prepared in accordance with generally accepted
        accounting principles in the United States of America and are expressed in
        US
        dollars. Our fiscal year end is June 30.
  F-6
  Ignis
        Petroleum Group, Inc. and Subsidiary
 A
        Development Stage Company
 Notes
        to
        the Financial Statements
 June
        30,
        2005
  Principles
        of Consolidation
 The
        consolidated financial statements include the accounts of the Company and
        its
        wholly owned subsidiary, Ignis Petroleum Corporation. All significant
        intercompany balances and transactions have been eliminated in consolidation.
 
 Use
        of
        Estimates and Assumptions
 The
        preparation of financial statements in conformity with US generally accepted accounting
        principles requires management to make estimates and assumptions that affect
        the reported amounts of assets and liabilities and disclosure of contingent
        assets and liabilities at the date of the financial statements and the
        reported amounts of revenues and expenses during the reporting period.
 Actual
        results could differ from those estimates.
 
 Income
        Taxes
 We
        have
        adopted SFAS No. 109 as of our inception. Pursuant to SFAS No. 109 we are
        required to compute tax asset benefits for net operating losses carried forward.
        Potential benefits of income tax losses are not recognized in the accounts
        until
        realization is more likely than not. The potential benefit of net operating
        losses has not been recognized in these financial statements because we cannot
        be assured it is more likely than not we will utilize the net operating losses
        carried forward in future years.
 
 Cash
        and
        Cash Equivalents
 We
        consider all highly liquid instruments with maturity of three months or less
        at
        the time of issuance to be cash equivalents.
 
 Concentration
        of Credit Risk
 Financial
        instruments that potentially subject us to credit risk consist principally
        of
        cash. Cash was deposited with a high quality credit
        institution.
  F-7
  Ignis
        Petroleum Group, Inc. and Subsidiary
 A
        Development Stage Company
 Notes
        to
        the Financial Statements
 June
        30,
        2005
  Property,
        and Equipment. - Oil and Gas Properties
 We
        use
        the “successful efforts” method to account for our oil and gas activities. Under
        this method, costs are accumulated on a field-by-field basis with certain
        exploratory expenditures and exploratory dry holes being expensed as incurred.
        Costs of productive wells and development dry holes are capitalized and
        amortized on the unit-of-production method for each field. Other exploration
        costs, including geological and geophysical costs are charged to expense
        when
        incurred.
 
 Acquisition
        costs of proved properties are amortized using a unit-of-production method,
        computed on the basis of total proved oil and gas reserves. Significant unproved
        properties are assessed for impairment individually and valuation allowances
        against the capitalized costs are recorded based on the estimated economic
        chance of success and the length of time that we expect to hold the properties.
        The valuation allowances are reviewed at least annually.
 
 Production
        costs are expensed as incurred.
 
 Proved
        oil and gas properties held and used by us are reviewed for impairment whenever
        events or changes in circumstances indicate that the carrying amounts may
        not be
        recoverable.
 
 The
        following table describes the changes in capitalized exploratory drilling
        costs
        that are pending the determination of proven reserves:
 
 2005#
                  Wells
              
              CostAdditions
                  pending determination of proven reserves
              
              
              3
              
              $
              2,624,529Reclassifications
                  to wells, equipment and facilities based on proven
                  reserves
              
              
              -
              
              
              -Charged
                  to expense
              
              
              -
              
              
              -Balance
                  at June 30, 2005
              
              
              3
              
              $
              2,624,529
 
 The
        operating agreements covering the leases associated with these wells will
        remain
        in effect so long as any of the underlying leases remain in force by production,
        extension, renewal or otherwise.
  F-8
  Ignis
        Petroleum Group, Inc. and Subsidiary
 A
        Development Stage Company
 Notes
        to
        the Financial Statements
 June
        30,
        2005
 
 Environmental
        Costs.
 Liabilities
        for environmental costs are recorded when it is probable that obligations
        have
        been incurred and the amounts can be reasonably estimated. These liabilities
        are
        not reduced by possible recoveries from third parties, and projected cash
        expenditures are not discounted. There is no contingent liability.
 
 Comprehensive
        Loss
 SFAS
        No.
        130, “Reporting Comprehensive Income,” establishes standards for the reporting
        and display of comprehensive loss and its components in the financial statements.
        As of June 30, 2005, we have no items that represent a comprehensive
        loss and, therefore, has not included a schedule of comprehensive loss
        in
        the financial statements.
 
 Basic
        and
        Diluted Net Loss per Share
 We
        compute net income (loss) per share in accordance with SFAS No. 128, "Earnings
        per Share". SFAS No. 128 requires presentation of both basic and diluted
        earnings per share (EPS) on the face of the income statement. Basic EPS is
        computed by dividing net income (loss) available to common shareholders
        (numerator) by the weighted average number of shares outstanding (denominator)
        during the period. Diluted EPS gives effect to all dilutive potential common
        shares outstanding during the period using the treasury stock method and
        convertible notes using the if-converted method. In computing Diluted EPS,
        the
        average stock price for the period is used in determining the number of shares
        assumed to be purchased from the exercise of stock options or warrants. Diluted
        EPS excludes all dilutive potential shares if their effect is anti
        dilutive.
 
 Stock-based
        Compensation
 In
        December 2002, the Financial Accounting Standards Board issued Financial Accounting
        Standard No. 148, “Accounting for Stock-Based Compensation - Transition
        and Disclosure” (“SFAS No. 148”), an amendment of Financial Accounting
        Standard No. 123 “Accounting for Stock-Based Compensation” (“SFAS No. 123”). The
        purpose of SFAS No. 148 is to: (1) provide alternative methods of transition
        for
        an entity that voluntarily changes to the fair value based method of accounting
        for stock-based employee compensation, (2) amend the disclosure provisions
        to
        require prominent disclosure about the effects on reported net income of
        an
        entity’s accounting policy decisions with respect to stock-based employee
        compensation, and (3) to require disclosure of those effects in interim
        financial information.
  F-9
  Ignis
        Petroleum Group, Inc. and Subsidiary
 A
        Development Stage Company
 Notes
        to
        the Financial Statements
 June
        30,
        2005
 
 We
        have
        elected to account for stock-based employee compensation arrangements in
        accordance with the provisions of Accounting Principles Board Opinion No.
        25,
“Accounting for Stock Issued to Employees”, (“APB No. 25”) and comply with the
        disclosure provisions of SFAS No. 123 as amended by SFAS No. 148 as described
        above. Under APB No. 25, compensation expense for employees is recognized
        based
        on the difference, if any, on the date of grant between the estimated fair
        value
        of the our stock and the amount an employee must pay to acquire the stock.
 
 Compensation
        expense is recognized immediately for past services and pro-rata for future
        services over the option-vesting period. As of June 30, 2005, we have not
        granted any stock options.
 
 We
        account for equity instruments issued in exchange for the receipt of goods
        or
        services from other than employees in accordance with SFAS No. 123 and the
        conclusions reached by the Emerging Issues Task Force in Issue No. 96-18.
        Costs
        are measured at the estimated fair market value of the consideration received
        or
        the estimated fair value of the equity instruments issued, whichever is more
        reliably measurable. The value of equity instruments issued for consideration
        other than employee services is determined on the earliest of a performance
        commitment or completion of performance by the provider of goods or services
        as
        defined by EITF 96-18.
 
 We
        have
        also adopted the provisions of the Financial Accounting Standards Board
        Interpretation No.44, Accounting for Certain Transactions Involving Stock
        Compensation - An Interpretation of APB Opinion No. 25 (“FIN 44”), which
        provides guidance as to certain applications of APB 25. FIN 44 is generally
        effective July 1, 2000 with the exception of certain events occurring after
        December 15, 1998.
  F-10
  Ignis
        Petroleum Group, Inc. and Subsidiary
 A
        Development Stage Company
 Notes
        to
        the Financial Statements
 June
        30,
        2005
 
 Note
        3
 Acquisition
 
 On
        May
        16, 2005, pursuant
        to a Stock
        Exchange Agreement dated May 11, 2005, Ignis Petroleum Group, Inc., formerly
        Sheer Ventures, Inc. (a development stage company), (“Sheer”) agreed to exchange
        9,600,000 newly issued, restricted shares of its common stock in exchange
        for
        1,600,000 shares of common stock of Ignis Petroleum Corporation (a development
        stage company) (“Ignis”). The 1,600,000 shares of Ignis constituted all of the
        issued and outstanding shares of Ignis. As a result of this transaction Ignis
        became a wholly owned subsidiary of Sheer. The completed stock exchange was
        accounted for as a reverse acquisition in accordance with Statement of Financial
        Accounting Standards No. 141 (“SFAS 141”), “Business Combinations” in which
        Sheer was acquired by Ignis (a
        reverse acquisition in which Ignis is considered the acquirer for accounting
        purposes) .
        Also,
        on May 16, 2005, pursuant to a Stock Purchase Agreement dated May 11, 2005,
        D.B.
        Management Ltd., a corporation (the "Seller") owned and controlled by Doug
        Berry, then the president of Sheer entered into a contract with Caroline
        Emma
        Thomson, Daniel Stephen Gaunt, Christopher Ian Harvey, Benjamin Vernon Weller,
        Julian David Mark Lane, and Philipp Buschmann (collectively referred to herein
        as the "Purchasers") wherein the Purchasers acquired 1,940,000 shares of
        Sheer’s
        common stock from the Seller. At the time of closing the purchasers paid
        $.10
        per share for a total purchase price of $194,000.
 
 Note
        4
 Property
        and equipment
 
 Property
        and equipment consisted of the following at June 30, 2005:
 
 Oil
                  and gas properties- unproved
              
              $
              2,624,529
 
 These
        interests are currently unproven and are not subject to depreciation, depletion
        or amortization.
 
 Note
        5
 Income
        Taxes
 
 Potential
        benefits of income tax losses are not recognized in the accounts until
        realization is more likely than not. We have incurred net operating losses
        of
        approximately $300,000. Pursuant to SFAS No. 109 we are required to compute
        tax
        asset benefits for net operating losses carried forward. Potential benefit
        of
        net operating losses have not been recognized in these financial statements
        because we cannot be assured it is more likely than not we will utilize the
        net
        operating losses carried forward in future years.
  F-11
  Ignis
        Petroleum Group, Inc. and Subsidiary
 A
        Development Stage Company
 Notes
        to
        the Financial Statements
 June
        30,
        2005
 
 The
        components of the net deferred tax asset at June 30, 2005, and the statutory tax
        rate,
        the effective tax rate and the elected amount of the valuation allowance
        are indicated below:
 
 Net
                  Operating Loss
              
              $
              300,000Statutory
                  Tax Rate
              
              
              34
              %Deferred
                  tax asset
              
              $
              100,000Valuation
                  allowance
              
              $
              (100,000
              )Net
                  Deferred Tax Asset
              
              $
              -
 
 Note
        6
 Convertible
        Promissory Notes
 
 One
        April
        22, 2005 we acquired a working interest in two oil, gas and mineral leases
        in
        Louisiana and Alabama, respectively, for $1,500,000. We financed the transaction
        with one year 8% convertible promissory notes. These notes were convertible
        into
        our common stock at a price of $.50 per share. The notes could have been
        converted into the our common stock in whole or part anytime after August
        15,
        2005. All principal and accrued interest on such notes were converted into
        3,100,000 shares of our common stock on September 22, 2005. In the event
        we did
        not commence actual drilling operations on or before September 30, 2005 we
        were
        to deliver assignments of the acquired interest back to the seller with no
        further force or effect on either party. This agreement was extended until
        March
        31, 2006 in exchange for 400,000 shares of our common stock.
  Note
        7
 Leases
 
 In
        January 2005 we entered into a one year operating lease for our office space.
        The lease requires monthly payments of $1,680 plus the cost of office services
        provided by the landlord. The additional services average $500 per month.
        A
        total of $7,055 was charged to rent expense for the year ended June 30,
        2005.
  Note
        8
 Stockholders’
        Equity
 
 Effective
        June 15, 2005 our Board of Directors unanimously voted to declare a five
        for one
        stock dividend to holders of record at the close of business on June 15,
        2005.
        The capital accounts and all per share information have been adjusted
        retroactively to reflect the stock dividend
  F-12
  Ignis
        Petroleum Group, Inc. and Subsidiary
 A
        Development Stage Company
 Notes
        to
        the Financial Statements
 June
        30,
        2005
 
  On
        May
        16, 2005, pursuant to a Stock Exchange Agreement dated May 11, 2005, Ignis
        Petroleum Group, Inc., formerly Sheer Ventures, Inc. (a development stage
        company), (“Sheer”) agreed to exchange 9,600,000 newly issued, restricted shares
        of its common stock in exchange for 1,600,000 shares of common stock of Ignis
        Petroleum Corporation (a development stage company) (“Ignis”). The 1,600,000
        shares of Ignis constituted all of the issued and outstanding shares of Ignis.
        As a result of this transaction Ignis became a wholly owned subsidiary of
        Sheer.
        The completed stock exchange was accounted for as a reverse acquisition in
        accordance with Statement of Financial Accounting Standards No. 141 (“SFAS
        141”), “Business Combinations” in which Sheer was acquired by Ignis (a
        reverse acquisition in which Ignis is considered the acquirer for accounting
        purposes) .
        Also,
        on May 16, 2005, pursuant to a Stock Purchase Agreement dated May 11, 2005,
        D.B.
        Management Ltd., a corporation (the "Seller") owned and controlled by Doug
        Berry, then the president of Sheer entered into a contract with Caroline
        Emma
        Thomson, Daniel Stephen Gaunt, Christopher Ian Harvey, Benjamin Vernon Weller,
        Julian David Mark Lane, and Philipp Buschmann (collectively referred to herein
        as the "Purchasers") wherein the Purchasers acquired 1,940,000 shares of
        Sheer’s
        common stock from the Seller. At the time of closing the purchasers paid
        $.10
        per share for a total purchase price of $194,000.
 
 One
        April
        22, 2005 we acquired a working interest in two oil, gas and mineral leases
        in
        Louisiana and Alabama, respectively, for $1,500,000. we financed the transaction
        with one year 8% convertible promissory notes. These notes were convertible
        into
        our common stock at a price of $.50 per share. The notes could have been
        converted into our common stock in whole or part anytime after August 15,
        2005.
        All principal and accrued interest on such notes were converted into $3,100,000
        shares of our common stock on September 22, 2005. In the event we did not
        commence actual drilling operations on or before September 30, 2005 we were
        to
        deliver assignments of the acquired interest back to the seller with no further
        force or effect on either party. This agreement was extended until March
        31,
        2006 in exchange for 400,000 shares of our common stock.
 
 On
        June
        15, 2005 we issued 400,000 shares of our common stock to Petrofinanz GMBH,
        a
        private investment group in the Marshall Islands (“Petrofinanz”), for $0.50 per
        share.
  F-13
  Ignis
        Petroleum Group, Inc. and Subsidiary
 A
        Development Stage Company
 Notes
        to
        the Financial Statements
 June
        30,
        2005
  Note
        9
 Related
        Party Transactions
 
 At
        June
        30, 2005, our chief operating officer, Mr. Philipp Buschmann, was due $5,000
        in
        the form of unpaid expense account reimbursement. This amount is unsecured,
        non-interest bearing and was paid in July 2005.
 
 At
        June
        30, 2005, our chief executive officer, Mr. Michael Piazza, was due $14,590
        in
        the form of unpaid salary and expense account reimbursement. This amount
        is
        unsecured, non-interest bearing and was paid in July 2005.
 
 Note
        10
 Participation
        Agreement
 
 On
        June
        14, 2005 we entered into a participation agreement with an industry partner
        to
        participate in the drilling of a test well in Chambers County, Texas. In
        exchange for providing 35% of the costs and expenses incurred in drilling
        the
        test well, 25% of the costs of completing the test well, 35% of the costs
        for
        drilling and title examination and 25% of subsequent title cost we will be
        entitled to an undivided 25% interest in the industry partners leasehold
        interest. The initial cash call for the drilling was $1,124,529 which was
        financed by a July 26, 2005 private placement (See Note 11).
 
 Note
        11
 Subsequent
        Events
 
 As
        a
        result of hurricane Rita, the oil and gas interest in Chambers County, Texas
        is
        now located in a designated federal disaster area. While the property did
        not
        sustain any damage from the hurricane, the lease will be subject to special
        permitting requirements until the designation is lifted. We do not expect
        to
        incur any material expense from this event. The Louisiana property was
        unaffected by hurricane Katrina.
 
 On
        July
        26, 2005, the we sold 3,000,000 units consisting of one share of our common
        stock and one warrant to purchase our common stock at $1.50 to Petrofinanz
        GMBH,
        a private investment group in the Marshall Islands (“Petrofinanz”), for $0.50
        per unit and a total cash consideration of $1,500,000 in a private sale of
        securities exempt from registration under Regulation S of the Securities
        Act of
        1933, as amended (the “Securities Act”). A total of $1,200,000 of the purchase
        price was received and was directly used to fund the participation agreement
        (see Note 10), with the remaining $300,000 to be used for working capital.
        Each
        unit consisted of one share of common stock and one warrant to purchase common
        stock at $1.50 per share until July 2006.
  F-14
  Ignis
        Petroleum Group, Inc. and Subsidiary
 A
        Development Stage Company
 Notes
        to
        the Financial Statements
 June
        30,
        2005
 
 On
        September 1, 2005, we entered into a letter agreement with Argyle Energy,
        Inc.
        and Bayou City Exploration, Inc. (f/k/a Blue Ridge Energy, Inc.) wherein
        it was
        agreed that the deadline for Ignis Petroleum Corporation to spud the initial
        well on the North Wright Prospect Area would be extended from September 30,
        2005
        until March 31, 2006. On September 29, 2005, Ignis Petroleum Corporation
        entered
        into a letter agreement with Argyle and Bayou City Exploration wherein it
        was
        agreed that the deadline for Ignis Petroleum Corporation to spud the initial
        well on the Barnett Crossroads Prospect Area would be extended from September
        30, 2005 until March 31, 2006. We agreed to pay $10,000 per month per well
        through March 31, 2006 for the extension.
 
 On
        September 22, 2005, we entered into two letter agreements, each with Newton
        Properties, Inc., pursuant to which we agreed to issue an aggregate of 3,100,000
        shares of our common stock, par value $0.001 per share, to Newton in exchange
        for Newton’s conversion of the two convertible promissory notes and the accrued
        interest thereon issued by Ignis Petroleum Corporation described above. The
        principal amounts and accrued but unpaid interest on the notes were converted
        into our common stock at a rate of $0.50 per share. The conversion price
        of the
        convertible notes was not adjusted based upon our June 2005 stock dividend.
  On
        September 30, 2005, we entered into two letter agreements with Newton
        Properties, Inc. pursuant to which it was agreed that the deadlines set forth
        in
        the April 22, 2005 letter agreements between Ignis Petroleum Corporation
        and
        Newton for Ignis Petroleum Corporation to spud the initial wells on the North
        Wright Prospect Area and Barnett Crossroads Prospect Area would be extended
        from
        September 30, 2005 until March 31, 2006. In exchange for such extension,
        we
        agreed to issue an aggregate of 400,000 shares of our common stock to Newton,
        at
        an agreed value of $1.00 per share.
  F-15