---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 20-F

(Mark One)

[   ] REGISTRATION STATEMENT PURSUANT TO SECTION 12(b)
OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year endedNovember 30,
2009.

OR

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

[   ] SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report
_______________________

For the transition period from ____________________ to
____________________

Commission file number 000-30972

HIP ENERGY CORPORATION(Exact name of Registrant as specified in its charter)

Not Applicable(Translation of
Registrants name into English)

British Columbia, Canada(Jurisdiction
of incorporation or organization)

Suite 404  999 World Trade CentreVancouver,
British Columbia, Canada V6E 3E2(Address of principal
executive offices)

Richard Coglon, President, 604.641.1367 richard@hipenergycorp.com Suite
404  999 World Trade CentreVancouver, British Columbia, Canada
V6E 3E2(Name, Telephone, E-mail and/or Facsimile number and Address of Company
  Contact Person)

1

---

Securities registered or to be registered pursuant to Section
12(b) of the Act.

|Title of each class | Name of each exchange on which registered
|------------------- | -----------------------------------------
|Not Applicable      | Not Applicable                           

Securities registered or to be registered pursuant to Section
12(g) of the Act.

Common Shares Without Par Value(Title
of Class)

Securities for which there is a reporting obligation pursuant to
Section 15(d) of the Act.

Not Applicable(Title of Class)

Indicate the number of outstanding shares of each of the
issuers classes of capital or common stock as of the close of the period
covered by the annual report.

There were 6,211,660, common shares, without par value,
  issued and outstanding as of November 30, 2009.

Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act. [  
] YES    [X] NO

If this report is an annual or transition report, indicate by
check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934. 
[   ]
YES    [X] NO

Note  Checking the box above will not relieve any registrant
required to file reports pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
[X] YES    [   ] NO

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any,
every
Interactive Data File required to be submitted and posted pursuant to Rule 405
of Regulation S-T (§232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post
such files) 
[   ] YES    [   ] NO

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, or a non-accelerated filer. See
definition of accelerated filer and large accelerated filer in Rule 12b-2
of the Exchange Act. (Check one):

Large accelerated filer [ 
 ]          Accelerated filer
[   ]          
Non-accelerated filer [X]

Indicate by check mark which basis of accounting the registrant
  has used to prepare the financial statements included
  in this filing:

|U.S. GAAP [   ] | International Financial
      Reporting Standards as issued | Other [X]
|--------------- | ----------------------------------------------------------- | ---------
|                | by the International Accounting
      Standards Board [   ] |          

If Other has been checked in response to the previous
question, indicate by check mark which financial statement item the
registrant has elected to follow. 
[X] Item 17   [  ]
Item 18

2

---

If this is an annual report, indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)
  
[   ] YES    [X] NO

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or 15(d) of
the Securities Exchange Act of 1934 subsequent to the distribution of securities
under a plan confirmed by a court. 
[   ] YES  
 [   ] NO

3

---

PART I

GENERAL

In this Annual Report on Form 20-F, references to:

Asset Purchase Agreement means the asset purchase agreement
among HIP, HIP Texas, EEL, and HIP Resources dated March 14, 2010;

EEL means Equi Energy LLC, a Texas corporation;

HIP Resources means HIP Energy Resource Limited, a British
Virgin Islands corporation;

HIP Nevada means HIP Energy (Nevada) Corporation, a Nevada
corporation and a wholly owned subsidiary of HIP;

HIP Tech means HIP Technology Limited, a British Virgin
Islands corporation;

HIP Texas means HIP Energy (Texas), Inc., a Texas corporation
and a wholly owned subsidiary of HIP;

HIP Downhole Process Technology means the technology relating
to the hydrogen inducement down hole oil and gas recovery process acquired by
HIP Texas pursuant to the License Agreement, which is described in more detail
under the heading Business Overview - HIP Downhole Process Technology;

Group Rich means Group Rich Development Limited, a British
Virgin Islands corporation;

License Agreement means the license agreement among HIP Tech,
Group Rich, HIP Nevada and HIP dated March 14, 2010;

We, us, our, the Company, and HIP means HIP Energy
Corporation, a British Columbia corporation; and

Well Bores means the rights acquired to various well bores by
HIP Nevada pursuant to the Asset Purchase Agreement.

Certain statements in this annual report are not historical and
are forward-looking statements. These statements relate to expectations,
beliefs, intentions, plans, objectives, assumptions or future events or
performance of HIP. In some cases, you can identify forward-looking statements
by terminology such as may, should, intend, expect, plan,
anticipate, believe, estimate, project, predict, potential, or
continue or the negative of these terms or other comparable terminology. In
particular, this annual report contains forward-looking statements pertaining to
the following:

- the quantity of potential oil and gas reserves;
- potential oil and gas production levels;
- potential production and operating activities and timing of such
  activities;
- capital expenditure programs;
- our ability to raise capital;
- projections of market prices and costs;

4

---

- discussion regarding any future joint venture agreements;
- the acquisition of future well bores;
- the viability of the HIP Downhole Process Technology; and
- treatment under governmental regulatory regimes and tax laws.

Readers should read these forward-looking statements carefully
because they discuss future expectations, contain projections of future results
of operations or of financial condition or state other forward-looking
information. Readers should be aware that these forward-looking statements
involve known and unknown risks, uncertainties and contingencies and are based
on assumptions that may not materialize or occur in the manner assumed.
Consequently, actual results may vary from the estimates or predictions stated
in the materials and these variations may be material.

These risks, uncertainties and contingencies which may affect
the assumptions underlying these forward-looking statements include, among
others:

- risks and uncertainties associated with estimating potential oil and gas
  reserves including interpreting engineering and geological data;
- risks and uncertainties associated with our ability to establish the
  economic viability of the HIP Downhole Process Technology;
- incorrect assessment that the Well Bores are suited for the HIP Downhole
  Process Technology;
- geological, technical, drilling and processing problems;
- liabilities inherent in oil and gas operations;
- inability of HIP Resources to transfer the Louisiana Well Bores;
- volatility in market prices for oil and gas and foreign currency exchange
  rates;
- possible adverse effects of governmental regulations including changes in
  environmental and other regulations that may impose restrictions in areas
  where we operate;
- competition for capital, acquisitions of reserves, undeveloped lands and
  skilled personnel;
- investors becoming unwilling or unable to complete future private
  placements;
- risks and uncertainties associated with our ability to raise additional capital;
  and
- the risks described under the heading Risk Factors.

Further, any forward-looking statement speaks only as of the
date on which such statement is made, and, except as required by applicable law,
we undertake no obligation to update any forward-looking statement to reflect
events or circumstances after the date on which such statement is made or to
reflect the occurrence of unanticipated events. New factors emerge from time to
time, and it is not possible for management to predict all of such factors and
to assess in advance the impact of such factors on our business or the extent to
which any factor, or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statement.

Unless otherwise indicated, all dollar amounts referred to
herein are in Canadian dollars.

5

---

ITEM
1             
Identity of Directors, Senior Management and Advisers

Not applicable.

ITEM
2             
Offer Statistics and Expected Timetable

Not applicable.

ITEM
3             
Key Information

*A.*            
  *Selected Financial Data*

The following financial data summarizes selected financial data
for our company prepared in accordance with Canadian generally accepted
accounting principles for the five fiscal years ended November 30, 2009.
Additional information is presented to show the differences which would result
from the application of United States generally accepted accounting principles
to our financial information. The information presented below for the five year
period ended November 30, 2009 is derived from our audited financial statements
which were examined by our independent auditor. The information set forth below
should be read in conjunction with our audited financial statements and related
notes included in this annual report and with the information appearing under
the heading Item 5 Operating and Financial Review and Prospects.

Selected Financial Data(Stated in
Canadian Dollars Calculated in accordance with Canadian GAAP)

Fiscal Year Ended November 30 (Audited)

| | CANADIAN GAAP                                                                                       | 2009       | 2008       | 2007       | 2006       | 2005      
| | --------------------------------------------------------------------------------------------------- | ---------- | ---------- | ---------- | ---------- | ----------
| |                                                                                                     |            |            |            |            |           
| | Net Sales or Operating Revenue                                                                      | $-         | $-         | $-         | $-         | $-        
| | Total Expenses                                                                                      | $66,143    | $47,508    | $61,980    | $58,145    | $71,186   
| | Other Income                                                                                        | $-         | $-         | $-         | $-         | $-        
| | Loss from Continuing Operations                                                                     | $(66,143)  | $(47,508)  | $(61,980)  | $(58,145)  | $(71,186) 
| | Net Loss and Comprehensive Loss for the
      Year                                                  | $(66,143)  | $(47,508)  | $(61,980)  | $(58,145)  | $(71,186) 
| | Net Loss and comprehensive loss per Common Share                                                    | $(0.02)    | $(0.04)    | $(0.05)    | $(0.05)    | $(0.05)   
| | Total Assets                                                                                        | $13,588    | $4,733     | $6,236     | $18,020    | $80,120   
| | Total Stockholders Equity (Deficiency)                                                             | $(98,119)  | $(95,267)  | $(52,759)  | $9,221     | $67,366   
| | Capital Stock                                                                                       | $4,337,789 | $4,279,498 | $4,279,498 | $4,279,498 | $4,279,498
| | Weighted Average Number of Common Shares
            (adjusted to reflect changes in
      capital) | 3,978,774  | 1,211,651  | 1,211,651  | 1,211,651  | 1,211,651 
| | Basic and Diluted Net Loss per Common Share                                                         | $(0.02)    | $(0.04)    | $(0.05)    | $(0.05)    | $(0.05)   
| | Long-Term Debt                                                                                      | $-         | $-         | $-         | $-         | $-        
| | Cash Dividends per Common Share                                                                     | $-         | $-         | $-         | $-         | $-        

6

---

Selected Financial Data(Stated in
Canadian Dollars - Calculated in accordance with US GAAP)

Fiscal Year Ended November 30 (Audited)

| | UNITED STATES GAAP                                                                      | 2009       | 2008       | 2007       | 2006       | 2005      
| | --------------------------------------------------------------------------------------- | ---------- | ---------- | ---------- | ---------- | ----------
| |                                                                                         |            |            |            |            |           
| | Net Sales or Operating Revenue                                                          | $-         | $-         | $-         | $-         | $-        
| | Total Expenses                                                                          | $66,143    | $47,508    | $61,980    | $58,145    | $71,186   
| | Income (Loss) From Operations                                                           | $66,143    | $47,508    | $61,980    | $58,145    | $71,186   
| | Other Income                                                                            | $-         | $-         | $-         | $-         | $-        
| | Loss from Continuing Operations                                                         | $(66,143)  | $(47,508)  | $(61,980)  | $(58,145)  | $(71,186) 
| | Net loss and comprehensive loss for the year                                            | $(66,143)  | $(47,508)  | $(61,980)  | $(58,145)  | $(71,186) 
| | Basic and Diluted Loss per Common Share                                                 | $(0.02)    | $(0.05)    | $(0.05)    | $(0.05)    | $(0.05)   
| | Total Assets                                                                            | $13,588    | $4,733     | $6,236     | $18,020    | $80,120   
| | Total Stockholders Equity (Deficiency)                                                 | $(98,119)  | $(95,267)  | $(52,759)  | $9,221     | $67,366   
| | Capital Stock                                                                           | $4,337,789 | $4,279,498 | $4,279,498 | $4,279,498 | $4,279,498
| | Weighted Average Number of Common Shares
      (adjusted to reflect changes in capital) | 3,978,774  | 1,211,651  | 1,211,651  | 1,211,651  | 1,211,651 
| | Diluted Net Income per Common Share                                                     | $(0.02)    | $(0.04)    | $(0.05)    | $(0.05)    | $(0.05)   
| | Long-term Debt                                                                          | $-         | $-         | $-         | $-         | $-        
| | Cash Dividends per Common Share                                                         | $-         | $-         | $-         | $-         | $-        

Reconciliation to United States Generally Accepted
Accounting Principles

There are no material differences between Canadian generally
accepted accounting principles and United States generally accepted accounting
principles on the balance sheets and statements of operations and comprehensive
loss and cash flows of our company.

Disclosure of Exchange Rate History

Since June 1, 1970, the government of Canada has permitted a
  floating exchange rate to determine the value of the Canadian dollar as compared
  to the United States dollar. On March 31, 2010, the exchange rate in effect
  for Canadian dollars exchanged for United States dollars, expressed in terms
  of Canadian dollars (based on the noon buying rates listed with the Bank of
  Canada) was $1.0156. For the past five fiscal years ended November 30, 2009
  and for the six monthly periods between October 2009 and March 2010, the following
  exchange rates were in effect for Canadian dollars exchanged for United States
  dollars, expressed in terms of Canadian dollars (based on the noon buying rates
  in New York City, for cable transfers in Canadian dollars, as certified for
  customs purposes by the Federal Reserve Bank of New York). As the Federal Reserve
  Bank has discontinued the publication of foreign exchange rates on December
  31, 2008 the rates listed after December 31, 2008 are based on the exchange
  rates in effect for Canadian dollars exchanged for United States dollars, expressed
  in terms of Canadian dollars (based on the intra-day high/low rates between
  08:00 (ET) and 16:00 (ET) listed with the Bank of Canada):

|Year Ended        | Average
|----------------- | -------
|                  |        
|November 30, 2005 | $1.2163
|November 30, 2006 | $1.1347
|November 30, 2007 | $0.9661
|November 30, 2008 | $1.2360
|November 30, 2009 | $1.1644

7

---

|Month Ended   | Low/High       
|------------- | ---------------
|              |                
|October 2009  | $1.0292/$1.0845
|November 2009 | $1.0460/$1.0774
|December 2009 | $1.0445/$1.0748
|January 2010  | $1.0278/$1.0695
|February 2010 | $1.0420/$1.0692
|March 2010    | $1.0113/$1.0421

*B.*             *Capitalization and Indebtedness*

Not applicable

*C.*            
  *Reasons for the Offer and Use of Proceeds*

Not applicable

*D.*            
  *Risk Factors*

Much of the information included in this annual report includes
or is based upon estimates, projections or other forward-looking statements.
Such forward-looking statements include any projections or estimates made by our
company and our management in connection with our business operations. While
these forward-looking statements, and any assumptions upon which they are based,
are made in good faith and reflect our current judgment regarding the direction
of our business, actual results will almost always vary, sometimes materially,
from any estimates, predictions, projections, assumptions or other future
performance suggested herein.

Such estimates, projections or other forward-looking statements
involve various risks and uncertainties as outlined below. We caution the reader
that important factors in some cases have affected and, in the future, could
materially affect actual results and cause actual results to differ materially
from the results expressed in any such estimates, projections or other forward-looking statements.

The common shares of our company are considered speculative.
You should carefully consider the following risks and uncertainties in addition
to other information in this annul report in evaluating our company and our
business before purchasing shares of our companys common stock. Our business,
operating and financial condition could be harmed due to any of the following
risks.

Risks Relating to our Business

We are an early-stage oil and gas development company
without revenues. Our ability to continue in business depends upon our continued
ability to obtain significant financing from external sources and the success of
the HIP Downhole Process Technology and any production resulting therefrom, none
of which can be assured.

We are an early-stage oil and gas technology development
company without any revenues, and there can be no assurance of our ability to
develop and operate our projects profitably. We have historically depended
entirely upon capital infusion from the issuance of equity securities and loans
from insiders to provide the cash needed to fund our operations, but we cannot
assure you that we will be able to continue to do so. Our ability to continue in
business depends upon our continued ability to obtain significant financing from
external sources and the success of our development efforts and any production
efforts resulting therefrom. Any reduction in our ability to raise equity
capital in the future would force us to reallocate funds from other planned uses
and could have a significant negative effect on our business plans and
operations, including our ability to continue our current development
activities.

8

---

Our auditors opinion on our November 30, 2009 financial
statements includes an explanatory paragraph in respect of there being
substantial doubt about our ability to continue as a going concern.

We have incurred a net loss of $4,445,908 for the cumulative
period from June 22, 1983 (inception) to November 30, 2009. We anticipate
generating losses for at least the next 12 months. Therefore, there is
substantial doubt about our ability to continue operations in the future as a
going concern as described by our auditors with respect to the financial
statements for the year ended November 30, 2009. Our financial statements do not
include any adjustments relating to the recoverability and classification of
recorded assets, or the amounts of and classification of liabilities that might
be necessary in the event that we cannot continue in existence. Our business
operations may fail if our actual cash requirements exceed our estimates and we
are not able to obtain further financing. If we cannot continue as a viable
entity, our shareholders may lose some or all of their investment in our
company.

We will require significant capital to complete the ongoing
development of the HIP Downhole Process Technology and any resulting application
of the HIP Downhole Process Technology on the Well Bores.

We anticipate that we will have to seek additional financing to
fund the development of the HIP Downhole Process Technology and any resulting
application of the HIP Downhole Process Technology on any of the Well Bores. We
cannot assure you that our actual cash requirements will not exceed our
estimates, and in any case we will require additional financing to bring our
interests into commercial operation, finance working capital, and pay for
operating expenses and capital requirements until we achieve a positive cash
flow. Additional capital also may be required in the event we incur any
significant unanticipated expenses.

In light of our operating history, and under the current
capital and credit market conditions, we may not be able to obtain additional
equity or debt financing on acceptable terms if and when we need it. Even if
financing is available, it may not be available on terms that are favorable to
us or in sufficient amounts to satisfy our requirements.

If we require, but are unable to obtain, additional financing
in the future, we may be unable to implement our business plan and our growth
strategies, respond to changing business or economic conditions, withstand
adverse operating results, and compete effectively. More importantly, if we are
unable to raise further financing when required, our planned development of the
Well Bores may have to be scaled down or even ceased, and our ability to
generate revenues in the future would be negatively affected.

The economic viability of the HIP Downhole Process
Technology is unproven and may not achieve commercialization, widespread market
acceptance or economic viability. If the HIP Downhole Process Technology does
not prove to be economically viable, our business will suffer and may fail in
its entirety.

Although we have performed initial testing on the viability of
  the HIP Downhole Process Technology, our assessment of the HIP Downhole Process
  Technology is primarily based upon historical data provided by the vendors relating
  to past test results. Further, the HIP Downhole Process Technology has not been
  proven in a commercial context over any significant period of time. Even if
  our HIP Downhole Process Technology is proven to be economically viable, it
  may not achieve widespread market acceptance. Our success will depend on our
  ability to prove that the HIP Downhole Process Technology is economically viable.
  We believe that the economic viability of the HIP Downhole Process Technology
  will depend on many factors, including:

- the effectiveness of the HIP Downhole Process Technology to enhance oil or
  gas recovery on any one or a series of wells or well bores;
- the safety and efficacy of the HIP Downhole Process Technology generally
  and on a well or series of well bores;
- direct cost savings resulting from the use or application of the HIP
  Downhole Process Technology has not been proven on a sustained and ongoing
  well or well bore;
- direct affect of any long term application of the HIP Downhole Process
  Technology on a well or series of well bores;

9

---

- the pricing and cost effectiveness of the HIP Downhole Process Technology;
  and
- our ability to respond to changes in regulations.

We are dependent on a single technology, and if it cannot
compete or find market acceptance, our business will suffer.

Our strategy is dependent on the success of a single
technology. Our strategy will be to focus our development on the HIP Downhole
Process Technology and the commercialization of the technology on a well or
series of well bores. Focus on this single technology leaves us vulnerable to
competing products and alternative secondary oil and gas enhancement methods. If
the HIP Downhole Process Technology is not proven to be commercially viable or
we cannot find market acceptance or cannot compete against other technologies,
our business will suffer and may fail in its entirety.

We rely on patents and proprietary rights to protect our
technology.

We rely on a combination of trade secrets, confidentiality
agreements and procedures and patents to protect our proprietary technologies.
We have been granted a patent in the U.S. covering the HIP Downhole Process
Technology. Additional patent applications will need to be made in the U.S. from
time to time. The claims contained in any patent application may not be allowed,
or any patent or our patents collectively may not provide adequate protection
for our products and technology. In the absence of patent protection, we may be
vulnerable to competitors who attempt to copy our products or gain access to our
trade secrets and know-how. In addition, the laws of foreign countries may not
protect our proprietary rights to this technology to the same extent as the laws
of the U.S.

The HIP Downhole Process Technology may infringe or be
challenged for infringement on other technology.

We have attempted to ensure that our products do not infringe
the proprietary rights of others. If a dispute arises concerning our technology,
we could become involved in litigation that might involve substantial cost. Such
litigation might also divert substantial management attention away from our
operations and into efforts to enforce our patents, protect our trade secrets or
know-how or determine the scope of the proprietary rights of others. If a
proceeding resulted in adverse findings, we could be subject to significant
liabilities to third parties. We might also be required to seek licenses from
third parties in order to manufacture or sell our products. Our ability to
manufacture and sell our products might also be adversely affected by other
unforeseen factors relating to the proceeding or its outcome.

Our lack of diversification increases the risk of an
investment in us, and our financial condition and results of operations may
deteriorate if we fail to diversify.

Our business focus is solely related to the ongoing development
and application of the HIP Downhole Process Technology on oil and gas wells or
well bores. As a result, we lack diversification, in terms of the nature of our
business. We will likely be impacted more acutely by factors affecting our
industry in which we operate than we would if our business were more
diversified. If we cannot diversify our operations, our financial condition and
results of operations could deteriorate.

The potential profitability of oil and gas operations and
ventures depends upon factors beyond the control of our company.

The potential profitability of oil and gas projects on which
the HIP Downhole Process Technology is applied and the oil and gas industry
generally is dependent upon many factors beyond our control. For instance, world
prices and markets for oil and gas are unpredictable, highly volatile,
potentially subject to governmental fixing, pegging, controls, or any
combination of these and other factors, and respond to changes in domestic,
international, political, social, and economic environments. Additionally, due
to world-wide economic uncertainty, the availability and cost of funds for
production and other expenses have become increasingly difficult, if not
impossible, to project. These changes and events may materially affect our
financial performance and the continued economic viability of our company.

10

---

Adverse weather conditions can also hinder or affect the
application or continued ability of the HIP Downhole Process Technology to
operate or remain viable. A well on which the HIP Downhole Process Technology is
applied may be productive but may become uneconomic as a result of severe or
unseasonable weather conditions.The marketability of oil and gas which
may be acquired or discovered will be affected by numerous factors beyond our
control, including the proximity and capacity of oil and gas pipelines and
processing equipment, market fluctuations of prices, taxes, royalties, land
tenure, allowable production and environmental protection. The extent of these
factors cannot be accurately predicted but the combination of these factors may
result in our company not receiving an adequate return on invested capital.

Primary and secondary drilling or enhancement of oil and gas
wells involves many risks and we may become liable for well abandonment,
plugging, pollution or other liabilities which may have an adverse effect on our
financial position.

Any enhanced recovery or drilling for oil and gas generally
involve a high degree of risk. Hazards such as unusual or unexpected geological
formations, power outages, labour disruptions, blow-outs, sour gas leakage,
fire, inability to obtain suitable or adequate machinery, equipment or labour,
and other risks are involved. We may become subject to liability for pollution
or hazards against which we cannot adequately insure or which we may elect not
to insure. Incurring any such liability may have a material adverse effect on
our financial position and operations.

Oil and gas operations are subject to comprehensive
regulation which may cause substantial delays or require capital outlays in
excess of those anticipated causing an adverse effect on our company. Further,
development and production activities are subject to certain environmental
regulations which may prevent or delay the commencement or continuance of our
operations.

Oil and gas operations in the United States and Canada are
subject to federal, state and provincial laws and regulations relating to the
protection of the environment, including, but not limited to, laws regulating
removal of natural resources from the ground and the discharge of materials into
the environment. Oil and gas operations in the United States and Canada are also
subject to federal, state and provincial laws and regulations which seek to
maintain health and safety standards by regulating the design and use of
drilling and or enhanced recovery methods and equipment. Various permits from
government bodies are required for drilling or secondary well enhancement
operations to be conducted; no assurance can be given that such permits will be
received. No assurance can be given that environmental standards imposed by
federal, state and provincial authorities will not be changed or that any such
changes would not have material adverse effects on our activities. Moreover,
compliance with such laws may cause substantial delays or require capital
outlays in excess of those anticipated, thus causing an adverse effect on us.
Additionally, we may be subject to liability for pollution or other
environmental damages which we may elect not to insure against due to
prohibitive premium costs and other reasons. Our current and anticipated
development and enhancement recovery activities are subject to the
aforementioned environment regulations. When and if we enter into production we
will become subject to additional regulations which do not currently pertain to
us or affect our current operations.

Specifically, we are subject to legislation regarding emissions
  into the environment, water discharges and storage and disposition of hazardous
  wastes. In addition, legislation has been enacted which requires well and facility
  sites to be abandoned and reclaimed to the satisfaction of federal, state and
  provincial authorities. Such laws and regulations are frequently changed and
  we are unable to predict the ultimate cost of compliance.

We may not effectively manage the growth necessary to
execute our business plan.

Any growth will place significant strain on our current
personnel, systems and resources. We expect that we will be required to hire
qualified consultants and employees to help us manage our growth effectively. We
believe that we will also be required to improve our management, technical,
information and accounting systems, controls and procedures. We may not be able
to maintain the quality of our operations, control our costs, continue complying
with all applicable regulations and expand our internal management, technical
information and accounting systems to support our desired growth. If we fail to
manage our anticipated growth effectively, our business could be adversely
affected.

11

---

Risks Relating to our Management

As a majority of our directors and officers are residents of
countries other than the United States, investors may find it difficult to
enforce, within the United States, any judgments obtained against our company,
directors and officers.

A majority of our directors and officers are nationals and/or
residents of countries other than the United States, and all or a substantial
portion of such persons assets are located outside the United States. As a
result, it may be difficult for investors to enforce within the United States
any judgments obtained against our company, officers, and directors, including
judgments predicated upon the civil liability provisions of the securities laws
of the United States or any state thereof.

Key management employees may fail to properly carry out
their duties or may leave which could negatively impact corporate operations
and/or share pricing.

Our companys financial condition and the success of the HIP
Downhole Process Technology on our oil and gas enhanced recovery operations is
dependent on our ability to hire and retain highly skilled and qualified
personnel. We face competition for qualified personnel from numerous industry
sources, and there can be no assurance that we will be able to attract and
retain qualified personnel on acceptable terms. The loss of service of any of
our key personnel could have a material adverse effect on our operations or
financial condition. We do not have key-man insurance on any of our employees.

Our Articles contain provisions indemnifying our officers
and directors against all costs, charges and expenses incurred by them.

Our Articles contain provisions with respect to the
indemnification of our officers and directors against all costs, charges and
expenses, including an amount paid to settle an action or satisfy a judgment,
actually and reasonably incurred by them in a civil, criminal or administrative
action or proceeding to which they are made a party by reason of their being or
having been a director or officer of our company.

Risks Relating to Our Stock

Our common stock is illiquid and shareholders may be unable
to sell their shares.

Our common stock is currently quoted on the Over-the-Counter
Bulletin Board and is thinly traded. In the past, our trading price has
fluctuated widely, depending on many factors that may have little to do with our
operations or business prospects. There is currently a limited market for our
common stock and we can provide no assurance to investors that a market will
develop. If a market for our common stock does not develop, our shareholders may
not be able to re-sell the shares of our common stock that they have purchased
and they may lose all of their investment. Public announcements regarding our
company, changes in government regulations, conditions in our market segment and
changes in earnings estimates by analysts may cause the price of our common
shares to fluctuate substantially. In addition, the Over-the-Counter Bulletin
Board is not an exchange and, because trading of securities on the
Over-the-Counter Bulletin Board is often more sporadic than the trading of
securities listed on an exchange, you may have difficulty reselling any of the
shares you purchase from our selling shareholders.

Securities class-action litigation has often been instituted
following periods of volatility in the market price of a companys securities.
Such litigation, if instituted against our company, could result in substantial
costs for our company and a diversion of managements attention and resources.

Investors interests in our company will be diluted and
investors may suffer dilution in their net book value per share if we issue
additional shares or raise funds through the sale of equity securities.

Our constating documents authorize the issuance of an unlimited
number of common shares and an unlimited number of preference shares. In the
event that we are required to issue additional shares or enter into private
placements to raise financing through the sale of equity securities, investors
interests in our company will be diluted and investors may suffer dilution in
their net book value per share depending on the price at which such securities
are sold. If we do issue additional shares, it will cause a
reduction in the proportionate ownership and voting power of all existing
shareholders.

12

---

We have never declared or paid cash dividends on our common
shares and do not anticipate doing so in the foreseeable future.

There can be no assurance that our board of directors will ever
declare cash dividends, which action is exclusively within our discretion.
Shareholders cannot expect to receive a dividend on our common shares in the
foreseeable future, if at all.

Trading of our stock may be restricted by the Securities and
Exchange Commissions Penny Stock regulations which may limit a stockholders
ability to buy and sell our stock.

The United States Securities and Exchange Commission has
adopted regulations which generally define penny stock to be any equity
security that has a market price (as defined) less than $5.00 per share or an
exercise price of less than $5.00 per share, subject to certain exceptions. Our
securities are covered by the penny stock rules, which impose additional sales
practice requirements on broker-dealers who sell to persons other than
established customers and accredited investors. The term accredited investor
refers generally to institutions with assets in excess of $5,000,000 or
individuals with a net worth in excess of $1,000,000 or annual income exceeding
$200,000 or $300,000 jointly with their spouse. The penny stock rules require a
broker-dealer, prior to a transaction in a penny stock not otherwise exempt from
the rules, to deliver a standardized risk disclosure document in a form prepared
by the Securities and Exchange Commission which provides information about penny
stocks and the nature and level of risks in the penny stock market. The
broker-dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction and monthly account statements showing the market
value of each penny stock held in the customers account. The bid and offer
quotations, and the broker-dealer and salesperson compensation information, must
be given to the customer orally or in writing prior to effecting the transaction
and must be given to the customer in writing before or with the customers
confirmation. In addition, the penny stock rules require that prior to a
transaction in a penny stock not otherwise exempt from these rules, the
broker-dealer must make a special written determination that the penny stock is
a suitable investment for the purchaser and receive the purchasers written
agreement to the transaction. These disclosure requirements may have the effect
of reducing the level of trading activity in the secondary market for the stock
that is subject to these penny stock rules. Consequently, these penny stock
rules may affect the ability of broker-dealers to trade our securities. We
believe that the penny stock rules discourage investor interest in and limit the
marketability of, our common stock.

The Financial Industry Regulatory Authority, or FINRA, has
adopted sales practice requirements which may also limit a shareholders ability
to buy and sell our stock.

In addition to the penny stock rules described above, FINRA
has adopted rules that require that in recommending an investment to a customer,
a broker-dealer must have reasonable grounds for believing that the investment
is suitable for that customer. Prior to recommending speculative low priced
securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customers financial status,
tax status, investment objectives and other information. Under interpretations
of these rules, FINRA believes that there is a high probability that speculative
low priced securities will not be suitable for at least some customers. FINRA
requirements make it more difficult for broker-dealers to recommend that their
customers buy our common stock, which may limit your ability to buy and sell our
stock and have an adverse effect on the market for our shares.

ITEM
4             
Information on HIP Energy Corporation

*A.*            
*History and Development of HIP Energy Corporation*

Name

Our legal and commercial name is HIP Energy Corporation.

13

---

Principal Office

In connection with our new business plan, we have recently
moved our principal office from Suite 1680, 200 Burrard Street, Vancouver,
British Columbia, Canada V6C 3L6 to Suite 404, 999 World Trade Centre,
Vancouver, British Columbia, V6E 3E2. Our telephone number is 604.641.1367 and
our facsimile number is 604.641.1214.

Corporate Information

Our company was incorporated pursuant to the laws of the
Province of British Columbia under the British Columbia Company Act in
June 1983 under the name Bradner Resources Ltd.. On March 29, 2004, the
British Columbia Business Corporations Act came into effect, replacing
the British Columbia Company Act. As required by the Business
Corporations Act, our company was transitioned under the Business
Corporations Act, effective March 31, 2004.

Our company is currently a reporting issuer under the
securities laws of British Columbia and Alberta.

Important Events

On December 13, 1999, our name was changed from Bradner
Resources Ltd. to Bradner Ventures Ltd.

On December 17, 2001, we entered into a share exchange
agreement (the Bestshot Agreement) with Bestshot.com Inc., Bestshot.com Corp.,
John Davis, Richard Coglon and Mark Morrill, pursuant to which, we were to
acquire 100% of the issued and outstanding shares (a total of 20,515,942 common
shares) of Bestshot.com Inc. in exchange for 24,618,590 common shares in the
capital of our company. We elected not to proceed with the completion of the
share exchange due to the fact that Bestshot.com Inc. was unable to obtain
shareholder approval with respect to its continuation from Wyoming, its current
jurisdiction of incorporation, to the province of Alberta. Our obligation to
consummate the transactions contemplated by the Bestshot Agreement was subject
to the fulfilment of a number of conditions precedent, including the
continuation of Bestshot.com Inc.

On March 31, 2004, our authorized and issued shares of common
stock and preferred stock were consolidated on the basis of one (1)
post-consolidated common share for each five (5) pre-consolidated common shares
so that our authorized capital consisted of 15,000,000 common shares and
5,000,000 preferred shares with 1,058,256 common shares issued and no preferred
shares issued. Our authorized capital was then increased to 75,000,000 common
shares and 25,000,000 preferred shares with 1,058,256 common shares issued and
no preferred shares issued. The share consolidation was effective with the OTC
Bulletin Board on April 21, 2004 and our trading symbol was changed to BNVLF.

On November 17, 2009, we changed our name from Bradner
Ventures Ltd. to HIP Energy Corporation and effected a five (5) for one (1)
reverse stock split of our issued and outstanding common stock. The name change
and reverse stock split were effected with the OTC Bulletin Board on November
19, 2009. Our trading symbol was changed from BNVLF to HIPCF. Also effective
October 20, 2009 we effected an increase in our authorized capital to an
unlimited number of common shares and an unlimited number of preferred shares.
We received approval for the increase in authorized capital, reverse split and
name change at our annual general meeting of shareholders held on July 31, 2009.

On March 30, 2010, pursuant to the Asset Purchase Agreement,
HIP Texas, a wholly-owned subsidiary of HIP, acquired from HIP Resources
ownership of the Well Bores. The Well Bores are described in detail under the
heading Business Overview - The Well Bores. The consideration for the sale and transfer
of the Well Bores was the issuance of 20 million common shares of HIP to
EEL.

On March 30, 2010, pursuant to the License Agreement, HIP
Nevada, a wholly-owned subsidiary of HIP, acquired from HIP Tech an exclusive
worldwide license for use of the HIP Downhole Process Technology. The HIP
Downhole Process Technology is described in detail under the heading Business
Overview - HIP Downhole Process Technology. The consideration for the
acquisition of the HIP Downhole Process Technology was the issuance of 30 million common shares of HIP to Group Rich and a
royalty payment, which is described in detailed under the heading Business
Overview - License Agreement.

14

---

The acquisition of the Well Bores by HIP Texas and the
exclusive worldwide right to the HIP Downhole Process Technology by HIP Nevada
caused us to cease to be a shell company, as defined in Rule 12b-2 of the
Exchange Act.

Capital Expenditures

During the period from the last three fiscal years ended November
30, 2009, we did not undertake any capital expenditures.

Our planned capital expenditures for the next twelve months are
summarized below under the heading Buiness Overview - Plan of Operation  Use of Funding. These
anticipated expenditures relate to the development of the Well Bores and the
implementation of the HIP Downhole Process Technology. Our planned capital
expenditures are primarily located in Texas and Lousiana, the location of the
Well Bores.

Takeover offers

We are not aware of any indication of any public takeover
offers by third parties in respect of our common shares during our last and
current financial years.

*B.*            
*Business Overview*

For the fiscal years ended November 30, 2009, 2008 and 2007, we
incurred net losses of $66,143, $47,508, and $61,980 respectively. We did not
generate any revenues during such periods.

Overview

Prior to the acquisition of the Well Bores and the exclusive
worldwide license to the HIP Downhole Process Technology, our company did not
have an operating business. Our sole business was to identify a suitable
business opportunity or a suitable business with which to enter into a business
combination. Our current business is to increase the recovery from oil wells
using the HIP Downhole Process Technology.

Traditional oil exploration involves acquiring exploration or
drilling rights, conducting seismic and other subsurface studies to estimate if
oil and gas is present, and then drilling of the properties in order to attempt
to discover and extract the oil and gas. The process can be extremely expensive
and time consuming. Costs for drilling a single well have escalated dramatically
and can run into the hundreds of thousands of dollars. Further, a significant
percentage of all traditional exploration wells drilled each year end-up being
dry holes. Our business is to increase the production of proven but unproductive
wells, or to increase production from damaged, uneconomical, and stripper well
bores using the HIP Downhole Process Technology.

Our initial focus will be to concentrate our operations on
applying the HIP Downhole Process Technology to existing and proven well bores
and reservoirs that have become non-commercial, uneconomic, depleted or damaged.
We intend to demonstrate the value of the HIP Downhole Process Technology by
improving the recovery of oil from well bores, after which we intend to acquire
additional well bores that we believe could have an increase in production if
the HIP Downhole Process Technology was applied to the well bores. We believe we
can generate more revenues by participating in the development of the well
bores, rather than by licensing the HIP Downhole Process Technology to third
parties. We believe the Company will benefit from increased industry recognition
of the HIP Downhole Process Technology, while generating an ongoing and
sustained cash flow from the increased recovery of hydrocarbons.

15

---

HIP Downhole Process Technology

The HIP Downhole Process Technology was developed over a period
of 28 years by Mr. Peter Noonan, who worked extensively with chemical engineers,
scientists and oil and gas reservoirs and its associated field applications in
the development of the areas in enhanced oil recovery systems. Over time,
certain oil and gas wells will experience significant production decreases, as
the remaining hydrocarbon molecules become heavier and attract unwanted
elements. The HIP Downhole Process stops and reverses the formation of these
heavier molecules and prevents the production decrease.

When material from an oil or gas well is removed too rapidly or
when too much material has been removed by production, the remaining hydrocarbon
material in the reservoir can change in such a way to become heavier and more
resistant to flow. The result is the formation of paraffinic and asphaltic
compounds that cause solidification or increase in pour-point temperatures. The
viscosity of the hydrocarbon material increases tremendously, as electrochemical
potential differences increase molecular attraction. Increased viscosity
attracts other elements and compounds, such as entrained water, salts, metallic
and foreign materials (silicates, carbonates and oxides), which further
increases resistance to flow and leads to decreased production. As the reservoir
pressure decreases over time, many wells become blocked and the remaining
hydrocarbon compounds become very large molecules that are heavier in weight. As
a result, there is a build-up of large molecular structure material which
consists of paraffinic, asphaltenes, salt residuals, calcites, sulfites and
metallic residuals, which further reduces production output. In many instances
the resultant build up of viscous material will completely shut down production
before the full availability of proven recoverable reserves is recovered.

The HIP Downhole Process utilizes a constant injection of formulized
heated gaseous fluids through a proprietary method of deliver. This process
causes a physical reaction of molecular exchange in such a way that promotes
formation of simple hydrogen molecular relationships and eliminates large
electrochemical potential differences. This inhibits formation of heavier
hydrocarbon molecules. The process works best when the pressure, volume, and
temperature of the well are maintained as constant as possible. Elemental and
salt residues of the process remain in place in a reservoir since the technology
is instrumental in producing molecular exchange to form lighter hydrocarbon
molecules similar to those that have been removed from the reservoir formation
by production.

The HIP Downhole Process is intended to increase both oil and gas
production and decrease the lifting costs of the well. The decrease in lifting
costs is intended to result in an increased revenue stream.

The Well Bores

On March 30, 2010, following the closing of the Asset Purchase
Agreement, HIP acquired all of HIP Resources rights, title and interest to 50
well bores located in West Texas and 1 well bore located in Opal Ward
(collectively, the Texas Well Bores). Figure 1  Location of Well Bores shows
the general location of the Texas Well Bores.

16

---

Figure 1- Location of Well Bores



In addition, under the terms of the Asset Purchase Agreement,
HIP Resources agreed to transfer to HIP, all of HIP Resources rights, title and
interest in 101 well bores located in East Texas and Louisiana (the Louisiana
Well Bores together with the Texas Well Bores, the Well Bores).

17

---

The following is a list of the Texas Well Bores including Oil
Lease numbers, number of wells and total depth:

|Lease Name                            | Oil Lease
      Gas ID No. | Location                    | Number of 
        Wells | Total Depth
|------------------------------------- | -------------------------- | --------------------------- | ------------------------ | -----------
|West Texas                            |                            |                             |                          |            
|Cluster 1                             |                            |                             |                          |            
|Texaco 9-1 (Texaco 9)               | 33329                      | Section 9 Block 56 Range 3  | 1                        | 3,700      
|Texaco 9-2                            | 33329                      | Section 9 Block 56 Range 3  | 1                        | 3,700      
|Texaco 9-3                            | 33329                      | Section 9 Block 56 Range 3  | 1                        | 3,700      
|Texaco 9-4                            | 33329                      | Section 9 Block 56 Range 3  | 1                        | 3,700      
|Texaco 9-5                            | 33329                      | Section 9 Block 56 Range 3  | 1                        | 3,700      
|Phillips 66 #2 (Phillips 66)          | 32571                      | Section 18 Block 56 Range 3 | 1                        | 3,700      
|Phillips 66 #3 (Phillips 66 3A)       | 33149                      | Section 18 Block 56 Range 3 | 1                        | 3,700      
|Cluster 2                             |                            |                             |                          |            
|Arco State 14-1                       | 33585                      | Section 14 Block 56 Range 3 | 1                        | 3,700      
|Arco State 14 #5                      | 33585                      | Section 14 Block 56 Range 3 | 1                        | 3,700      
|Arco State 14 #2 (Arco State 14)      | 33585                      | Section 14 Block 56 Range 3 | 1                        | 3,700      
|Arco State 14 #4                      | 33585                      | Section 14 Block 56 Range 3 | 1                        | 3,700      
|Arco State 14 - A #1 (Arco State 14A) | 34155                      | Section 14 Block 56 Range 3 | 1                        | 3,700      
|Arco State 14 - A #2 (Arco State 14A) | 34155                      | Section 14 Block 56 Range 3 | 1                        | 3,700      
|Arco State 14 - A #3 (Arco State 14A) | 34155                      | Section 14 Block 56 Range 3 | 1                        | 3,700      
|Arco State 14 - A #4 (Arco State 14A) | 34155                      | Section 14 Block 56 Range 3 | 1                        | 3,700      
|Arco State #2 Injection (dual Well)   | 25126                      | Section 14 Block 56 Range 3 | 1                        | 3,700      
|Arco State #3                         | 25126                      | Section 14 Block 56 Range 3 | 1                        | 3,700      
|Arco State #4                         | 25126                      | Section 14 Block 56 Range 3 | 1                        | 3,700      
|Arco State #5                         | 25126                      | Section 14 Block 56 Range 3 | 1                        | 3,700      
|Arco State 24 #2 (Arco State 24)      | 069586                     | Section 24 Block 57 Range 3 | 1                        | 3,400      
|Arco State 24 #3 (Arco State 24)      | 069779                     | Section 24 Block 57 Range 3 | 1                        | 3,400      
|Arco State 24 #4 (Arco State 24)      | 069912                     | Section 24 Block 57 Range 3 | 1                        | 3,400      
|Cluster 3                             |                            |                             |                          |            
|Reeves BK HD - 1 (Horizontal)         | 36100                      | Section 15 Block 56 Range 3 | 1                        | 4,900      
|Reeves BK FEE # 1                     | 32288                      | Section 15 Block 56 Range 3 | 1                        | 3,700      
|Reeves BK # 2 (Reeves-BK-FEE)         | 32288                      | Section 15 Block 56 Range 3 | 1                        | 3,700      
|Reeves BK # 3                         | 32288                      | Section 15 Block 56 Range 3 | 1                        | 3,700      
|Reeves BK FEE # 5                     | 32288                      | Section 15 Block 56 Range 3 | 1                        | 3,700      
|BK # 4 (Texaco Reeves BK)             | 33947                      | Section 15 Block 56 Range 3 | 1                        | 3,700      
|Texaco 23 #1 (Texaco 23)            | 33670                      | Section 23 Block 56 Range 3 | 1                        | 3,700      
|Texaco 23 #2                          | 33670                      | Section 23 Block 56 Range 3 | 1                        | 3,700      
|Texaco 23 #3                          | 33670                      | Section 23 Block 56 Range 3 | 1                        | 3,700      
|Texaco 13-1 HD Horizontal (Penwell)   | 12345                      | Section 13 Block 56 Range 3 | 1                        | 4,987      

18

---

|Lease Name                                | Oil Lease
      Gas ID No. | Location                    | Number of Wells | Total Depth
|----------------------------------------- | -------------------------- | --------------------------- | --------------- | -----------
|Cluster 4- Regular 57                     |                            |                             |                 |            
|Anadarko State 14 #5 (Anadarko State A)   | 34376                      | Section 14 Block 57 Range 3 | 1               | 3,200      
|Anadarko State 14 #6 (Anadarko State R)   | 34463                      | Section 14 Block 57 Range 3 | 1               | 3,200      
|Anadarko State 14 #1 (Anadarko State 14)  | 072948                     | Section 14 Block 57 Range 3 | 1               | 3,200      
|Anadarko State 14 #2 (Anadarko State 14)  | 074167                     | Section 14 Block 57 Range 3 | 1               | 3,200      
|Anadarko State 14 #3 (Anadarko State 14)  | 075491                     | Section 14 Block 57 Range 3 | 1               | 3,200      
|Anadarko State 14 #4 (Anadarko State 14)  | 075724                     | Section 14 Block 57 Range 3 | 1               | 3,200      
|Anadarko State 23 #4 (Anadarko State)     | 34313                      | Section 14 Block 57 Range 3 | 1               | 3,200      
|Stack State 1                             | 34366                      | Section 14 Block 57 Range 3 | 1               | 3,200      
|Stack State 2                             | 34366                      | Section 14 Block 57 Range 3 | 1               | 3,200      
|Cluster 5                                 |                            |                             |                 |            
|Reeves AM 25 #1 (AM Reeves)               | 34146                      | Section 25 Block 57 Range 3 | 1               | 6,200      
|Reeves AM 25 #1 (Reeves -AM- Fee)         | 036114                     | Section 25 Block 57 Range 3 | 1               | 3,200      
|Reeves AM 25 #2 (Reeves -AM- Fee)         | 036115                     | Section 25 Block 57 Range 3 | 1               | 3,200      
|State of Texas 23 # 5 (State 26)          | 34312                      | Section 23 Block 56 Range 3 | 1               | 3,100      
|State of Texas 26 # 5 (State 23)          | 34464                      | Section 26 Block 57 Range 3 | 1               | 3,100      
|State of Texas 26 # 1 (State of Texas 26) | 066070                     | Section 26 Block 57 Range 3 | 1               | 3,100      
|State of Texas 26 # 3 (State of Texas 26) | 069567                     | Section 26 Block 57 Range 3 | 1               | 3,100      
|State of Texas 26 # 4 (State of Texas 26) | 069568                     | Section 26 Block 57 Range 3 | 1               | 3,100      
|State of Texas 26 # 7 (Robinson)          | 36098                      | Section 26 Block 57 Range 3 | 1               | 3,100      
|Cluster 6                                 |                            |                             |                 |            
|Meeker 15 -1                              | 30942                      | Section 15 Block 21 Range 3 | 1               | 3,700      
|Opal Ward # 1                             | 1 Leon                     |                             | 1               | 9,475      
|Total                                     |                            |                             | 52              |            

The following is a list of the Louisiana Well Bores including
Oil Lease numbers, number of wells and total depth:

|Lease
        Name | **Oil Lease** Gas ID No. | Location | Number of Wells | Total Depth
|------------------ | ------------------------ | -------- | --------------- | -----------
|East Texas         |                          |          |                 |            
|Cluster 1          |                          |          |                 |            
|Cowherd # 1        | 129107                   |          | 2               | 6,180      
|Cowherd # 2        | 12629                    |          | 2               | 6,622      
|Cowherd # 3        |                          |          | 1               | 2,500      
|Peggy Ashley 1     | 129114                   |          | 1               | 6,174      
|Chevron # 1        |                          |          | 1               | 6,088      
|Chevron # 3        |                          |          | 1               | 6,150      
|Panola # 1         |                          |          | 1               | 2,500      
|Panola # 2         |                          |          | 1               | 2,500      
|Panola # 3         |                          |          | 1               | 2,500      

19

---

|Lease
        Name | **Oil Lease** Gas ID No. | Location         | Number of Wells | Total Depth
|------------------ | ------------------------ | ---------------- | --------------- | -----------
|Panola # 4         |                          |                  | 1               | 2,500      
|Panola # 5         |                          |                  | 1               | 2,500      
|Panola # 6         |                          |                  | 1               | 2,500      
|Elysian # 1        |                          |                  | 1               | 2,700      
|Elysian # 2        |                          |                  | 1               | 2,700      
|Elysian # 3        |                          |                  | 1               | 2,700      
|Elysian # 4        |                          |                  | 1               | 2,700      
|Elysian # 5        |                          |                  | 1               | 2,700      
|Elysian # 6        |                          |                  | 1               | 2,700      
|Elysian # 7        |                          |                  | 1               | 2,700      
|Elysian # 8        |                          |                  | 1               | 2,700      
|Elysian # 9        |                          |                  | 1               | 2,700      
|Elysian # 10       |                          |                  | 1               | 2,700      
|Elysian # 11       |                          |                  | 1               | 2,700      
|Elysian # 12       |                          |                  | 1               | 2,700      
|Elysian # 13       |                          |                  | 1               | 2,700      
|Elysian # 14       |                          |                  | 1               | 2,700      
|Elysian # 15       |                          |                  | 1               | 2,700      
|Elysian # 16       |                          |                  | 1               | 2,700      
|Elysian # 17       |                          |                  | 1               | 2,700      
|Elysian # 18       |                          |                  | 1               | 2,700      
|Elysian # 19       |                          |                  | 1               | 2,700      
|Elysian # 20       |                          |                  | 1               | 2,700      
|Elysian # 21       |                          |                  | 1               | 2,700      
|Elysian # 22       |                          |                  | 1               | 2,700      
|Laeke A-1          |                          |                  | 1               | 2,700      
|Laeke A-2          |                          |                  | 1               | 2,700      
|Laeke B-1          |                          |                  | 1               | 2,700      
|Laeke B-2          |                          |                  | 1               | 2,700      
|Laeke B-3          |                          |                  | 1               | 2,700      
|                   |                          | East Texas Total | 41              |            
|Louisiana          |                          |                  |                 |            
|Abney J. D. Lease  | 1 Harrison               |                  | 1               | 2,475      
|Abney J. D. Lease  | 2 Harrison               |                  | 1               | 2,475      
|Abney J. D. Lease  | 3 Harrison               |                  | 1               | 2,475      
|Abney J. D. Lease  | 4 Harrison               |                  | 1               | 2,475      
|Abney J. D. Lease  | 5 Harrison               |                  | 1               | 2,475      
|Abney J. D. Lease  | 6 Harrison               |                  | 1               | 2,475      
|Abney J. D. Lease  | 7 Harrison               |                  | 1               | 2,475      

20

---

|Lease Name        | **Oil Lease** Gas ID No. | Location | Number of Wells | Total Depth
|----------------- | ------------------------ | -------- | --------------- | -----------
|Abney J. D. Lease | 8 Harrison               |          | 1               | 2,475      
|Abney J. D. Lease | 9 Harrison               |          | 1               | 2,475      
|Abney J. D. Lease | 10 Harrison              |          | 1               | 2,475      
|Abney J. D. Lease | 11 Harrison              |          | 1               | 2,475      
|Abney J. D. Lease | 12 Harrison              |          | 1               | 2,475      
|Abney #1 (460)    | 103405                   |          | 1               | 2,500      
|Abney #3          | 105607                   |          | 1               | 2,500      
|Abney #4          | 105839                   |          | 1               | 2,500      
|Abney #5          | 106853                   |          | 1               | 2,500      
|Abney #6          | 107873                   |          | 1               | 2,500      
|Abney #7          | 109040                   |          | 1               | 2,500      
|Abney #8          | 110360                   |          | 1               | 2,500      
|Abney #9          | 110361                   |          | 1               | 2,500      
|Abney #10         | 113026                   |          | 1               | 2,500      
|Abney #11         | 131636                   |          | 1               | 2,500      
|Abney #12         | 129650                   |          | 1               | 2,500      
|Abney #13         | 130786                   |          | 1               | 2,500      
|Abney #14         | 133367                   |          | 1               | 2,500      
|Abney #15         | 133412                   |          | 1               | 2,500      
|Abney #16         | 131635                   |          | 1               | 2,500      
|Abney #17         | 130887                   |          | 1               | 2,500      
|Abney #18         | 127779                   |          | 1               | 2,500      
|Abney #19         | 131605                   |          | 1               | 2,500      
|Abney #20         | 128716                   |          | 1               | 2,500      
|Abney #21         | 127217                   |          | 1               | 2,500      
|Abney #22         | 127385                   |          | 1               | 2,500      
|Abney D #2 (150)  | 130119                   |          | 1               | 2,500      
|Abney D #3        | 130138                   |          | 1               | 2,500      
|Abney D #4        | 130640                   |          | 1               | 2,500      
|Abney D #5        | 130752                   |          | 1               | 2,500      
|Abney D #6        | 130923                   |          | 1               | 2,500      
|Abney D #7        | 131025                   |          | 1               | 2,500      
|Abney D #8        | 131104                   |          | 1               | 2,500      
|Abney D #9        | 133427                   |          | 1               | 2,500      
|Abney D #10       | 136179                   |          | 1               | 2,500      
|Abney D #11       | 133466                   |          | 1               | 2,500      
|Abney D #12       | 136343                   |          | 1               | 2,500      
|Abney D #14       | 136702                   |          | 1               | 2,500      

21

---

|Lease Name      | **Oil Lease** Gas ID No. | Location | Number
      of Wells | Total
      Depth
|--------------- | ------------------------ | -------- | --------------------- | -----------------
|Atkinson A #001 |                          |          | 1                     | 2,500            
|Atkinson A #002 |                          |          | 1                     | 2,500            
|Atkinson A #003 |                          |          | 1                     | 2,500            
|Atkinson B #001 |                          |          | 1                     | 2,500            
|Atkinson B #002 |                          |          | 1                     | 2,500            
|Atkinson B #003 |                          |          | 1                     | 2,500            
|Abney Kirk #001 |                          |          | 1                     | 2,500            
|Abney Kirk #002 |                          |          | 1                     | 2,500            
|Abney Kirk #003 |                          |          | 1                     | 2,500            
|Abney Kirk #004 |                          |          | 1                     | 2,500            
|Abney Kirk #005 |                          |          | 1                     | 2,500            
|Abney Kirk #006 |                          |          | 1                     | 2,500            
|Abney Kirk #007 |                          |          | 1                     | 2,500            
|Abney Kirk #008 |                          |          | 1                     | 2,500            
|Abney Kirk #009 |                          |          | 1                     | 2,500            
|Total           |                          |          | 101                   |                  

In consideration for the Well Bores, HIP issued 20,000,000 of
its common shares to EEL at a deemed price of $0.001 per share. As a condition
of the Asset Purchase Agreement, on January 12, 2010, HIP, HIP Texas, and HIP
Nevada entered into a joint operating agreement with TexLa Operating Company ("TexLa"),
whereby TexLa  agreed to develop the Well Bores using
the HIP Downhole Process Technology. In consideration for their services, TexLa
was granted a 10% working interest in any of the Well Bores that the HIP
Downhole Process Technology is applied to. This structure is intended to ensure
that TexLas interest is aligned with HIP, as TexLa will have an operating
interest in the Well Bores. Also as a condition of the Asset Purchase Agreement,
the parties agreed to enter into a Non-Competition Agreement dated March 14,
2010 pursuant to which EEL and HIP Resources agreed, among other things, not to
compete against the business of HIP for a period of four years from the
date of the agreement. In addition, as the License Agreement grants HIP a
worldwide exclusive license to the HIP Downhole Process Technology, EEL and HIP
Resources will not be able to use the HIP Downhole Process Technology on any
well or well bores, except as provided under the License Agreement.

Current Operations

According to data provided to us by HIP Tech under the License
Agreement, the HIP Downhole Process Technology has dissipated the barrier of 23
impediments that restricted or shut in the reservoirs located in the West Texas
field, where the Texas Well Bores are located. According to data provided to us
by HIP Tech, the HIP Process was applied on several of the Well Bores during the
period from 1998 through 2004. These Well Bores experienced an increase in
production after the HIP Downhole Process Technology was applied.

More recently, during 2008 to the present, the HIP Downhole
Process has been applied on a single Well Bore, namely the Opal Ward 1 well,
(the Opal Well) located in Opal Ward, Texas. The Opal Well was chosen
specifically for its use as a central process unit, which, when fully
operational, would serve as the central control and processing facility for an
offset of up to 15 or more oil and gas wells located within the same reservoir.
As at February 2010, the Opal Well was being operated for its increased
production on a continuous flow basis using the HIP Downhole Process. The HIP
Downhole Process has increased the down hole pressure to 3361 psi compared to
down hole pressures of 431 psi in March 1993 when the Opal Well was shut in. If
we are successful in replication these pressure and expected production
increases as we expand out to offsetting wells, then we will be in a position
to aggressively pursue the acquisition or leasing of additional
well bores on which to apply the HIP Downhole Process Technology. Our ability to
prove the commercial viability of the HIP Downhole Process Technology is the key
to our business.

22

---

Plan of Operation

Financing

We plan to focus on those areas that will result in the
production of oil and gas in the shortest time frame. In pursuing this
objective, we plan to raise funds as required with the intent of minimizing
dilution and maximizing return on funds deployed. Until such time as the HIP
Downhole Process Technology is further developed and results in revenues from
production of oil and gas from applied wells, we plan to primarily rely on
traditional equity markets and if available, debt instruments to raise our
required funding.

Use of Funding

Any funds received will, at the discretion of management, be
allocated in part to establishing 5 to 8 test wells, which may include the
expansion from the central unit at the Opal Well into 5 additional offset well
locations within the same reservoir or development of any of the Well Bores. If
oil and gas production is attained from these low production or problematic
wells using the HIP Downhole Process, we will then continue to expand our
commercialization of the HIP Downhole Process Technology.

We plan on deploying monies in those prospect areas where we
have the greatest understanding of the existing well bores and reservoirs. To
this end, we plan to focus our initial efforts on using the HIP Process in well
bores and basins in such regions as the Woodbine and Austin Chalk region of the
U.S. These regions are low-risk and long-term energy producers. We will
participate in such regions with landowners or companies that have access to
leases located in geological trends that have demonstrated substantial
historical production and have potential remaining reserves that can be
exploited in a low-risk, systematic fashion.

Based on our  initial project plan and budget, we anticipate that we will require  an
investment of approximately $1.45 million to fund a capital project and
operating costs and are expected to be deployed as set out in the following
table:

Project 1 - Budget for First
FinancingSummarized Statement of Changes in Cash

|                             |           |               | Year
      1  |               |           
|---------------------------- | --------- | ------------- | ------------- | ------------- | ----------
|                             | 1st QTR   | 2nd
      QTR | 3rd
      OTR | 4th
      OTR | Total YR 1
|Gross Revenue                | 95,580    | 511,560       | 950,040       | 1,096,200     | 2,653,380 
|Royality Fees                | 17,520    | 93,769        | 174,142       | 200,933       | 486,365   
|Net Revenue                  | 78,060    | 417,791       | 775,898       | 895,267       | 2,167,015 
|                             |           |               |               |               |           
|Operating Costs:             |           |               |               |               |           
|- License to HIP(T)          | 19,515    | 104,448       | 193,974       | 223,817       | 541,754   
|- Field opertating costs     | 50,700    | 28,350        | 26,850        | 35,250        | 141,150   
|- Field Labor Costs          | 3,600     | 3,600         | 3,600         | 36,000        | 46,800    
|- Admin Operatings Costs     | 231,601   | 246,302       | 235,302       | 103,100       | 816,305   
|- Admin CDN Costs            | 129,900   | 192,800       | 192,800       | 192,800       | 708,300   
|Total costs                  | 435,316   | 575,500       | 652,526       | 590,967       | 2,254,309 
|                             |           |               |               |               |           
|Cash Flow from Operations    | (357,256) | (157,709)     | 123,371       | 304,300       | (87,293)  
|                             |           |               |               |               |           
|- Bonus = 10% of EBITDA      | -         | -             | 12,337        | 30,430        | 42,767    
|- Deferred Bouns and Payment |           | -             | (12,337)      | (30,430)      | (42,767)  
|                             |           |               |               |               |           
|Capital Assets               |           |               |               |               |           
|- Project Capital Costs      | (575,500) | (250,000)     |               |               | (825,500) 
|                             |           |               |               |               | -         
|                             |           |               |               |               |           
|Investment Capital           | 1,452,793 |               | -             |               | 1,452,793 
|                             |           |               |               |               |           
|Change in Cash               | 520,037   | (407,709)     | 123,371       | (235,700)     | (0)       
|                             |           |               |               |               |           
|Beginning Cash               | -         | 520,037       | 112,328       | 235,700       | -         
|Ending Cash                  | 520,037   | 112,328       | 235,700       | (0)           | (0)       

23

---

Our sole tangible assets consist of the Well Bores and the
exclusive worldwide license to the HIP Downhole Process Technology. It is
however a requirement of the application of the HIP Downhole Process Technology
that certain equipment and other fixed or other tangible assets be acquired or
leased in order that any potential commercialization of the HIP Tech on any of
the well bores can be realized. The equipment required as part of the HIP
Downhole Process in part forms the basis of the application patent relating to
the HIP Downhole Process Technology and in other cases is readily available
oilfield equipment. The availability of any specific equipment may affect our
ability to carry out its operations in a timely and cost effective manner. As
stated earlier, our short-term plan is to apply and test the HIP Downhole
Process Technology on a number of wells and wellbores acquired from HIP
Resources. The results of these tests and the ongoing development and
application of the HIP Downhole Process Technology will directly affect the
companys ability to generate revenue and raise additional capital to further
expand its programs and acquire any ongoing plant and equipment. As with any new
technology applications there is inherent risk that the technology itself may
not prove commercially viable or result in any economic production.

China Joint Venture

We have been in preliminary discussions with China Jianghan
Oilfield Company (JOC) to form a joint venture (a China Joint Venture). Our
discussion to-date have focussed on the development of an initial pilot program
to prove the economic viability of the HIP Downhole Process Technology on an
agreed number of beta test well bores within the Jianghan Oilfield in China.
After the economic viability of the HIP Downhole Process Technology has been
proven, the HIP Downhole Process Technology applied on a large scale. As of the
date of this report, we have not signed any definitive agreements with JOC and
they may cease discussions at any time. Further, although we are at an advanced
stage of negotiations and agreement as to the financial terms, number of wells
and contribution of the respective parties, we have not signed any letters of
intent or memorandums of understanding regarding same at this time.

License Agreement

Under the License Agreement, HIP Nevada was granted a worldwide
exclusive license to the HIP Downhole Process Technology for the purpose of
developing, producing, using, selling or otherwise commercially exploiting all
subject matter encompassed within the scope of the HIP Downhole Process
Technology. The consideration for the acquisition of the HIP Downhole Process
Technology was the issuance of 30 million common shares of HIP to Group Rich and
the grant of an agreed royalty structure on certain non-China ventures by HIP.

The royalty payment varies depending on the project. HIP Tech
and HIP, collectively, will split any proceeds from a non-China Joint Venture as
follows:

(i)      On
all Non-China joint venture related projects or operations on which the HIP
Downhole Process Technology are being applied, HIP agrees subject to (ii) below,
pay to Group Rich and HIP Tech (together the Licensor) a royalty fee equal to
25% of the gross revenue received by HIP from oil and gas wells where cumulative
gross production per well exceeds more than 20 barrels of oil equivalences per
day (Bblsoepd) for each monthly period. In the event cumulative production per
well is equal to or less than 20 Bblsoepd for each monthly period, then the
royalty will be reduced to 20% of the gross revenue received by HIP for all such
wells.

Gross Average Production Per Well Per Day, calculated
      commencing from the day immediately after Well bore Commercialization
    Percentage Payable to LicensorUp to 20 barrels per well per day
    20% Gross RevenueGreater than 20 barrels per well per day
    25% Gross Revenue


24

---

(ii)    Immediately
upon HIP completing an equity or debt financing of US$1,000,000 or more, the
gross royalty set out in (i) will be reduced to a flat 25% of all net revenue
derived by HIP from projects on which the HIP Downhole Process Technology is
being applied.

C.          
Organizational Structure

Our organizational structure is as follows:



HIP Energy (Texas) Corp. (HIP Texas) is a wholly owned
subsidiary that is governed by the laws of the state of Texas. HIP Texas was
incorporated for the purposes of holding title to the Well Bores.

HIP Energy (Nevada) Corp. (HIP Nevada) is a wholly owned
subsidiary that is governed by the laws of the state of Nevada. HIP Nevada was
incorporated for the purposes of holding our license to the HIP Downhole Process
Technology.

D.          
Property, Plant and Equipment

We currently have an office located at Suite 404  999 World
Trade Centre, Vancouver, British Columbia, Canada V6E 3E26. We believe that our
current office arrangements provide adequate space for our foreseeable future
needs.

We also have an interest in the Well Bores, as described in
more detail under the heading Business Overview - The Well Bores.

ITEM
4A           Unresolved
Staff Comments

Not applicable.

ITEM
5             
Operating and Financial Review and Prospects

The information in this section is presented in accordance with
Canadian generally accepted accounting principles and has not been reconciled to
United States generally accepted accounting principles.

A.          
Operating Results

Our company did not generate any revenues during fiscal 2009 or
2008 as, during this period, our companys business was to seek out a suitable
business opportunity or business combination.

Quarterly Financial Information

The following table provides selected quarterly financial
information for 2009 for our company:

25

---

| |                                  |   |             |   |   | 2009        |   |   |              |  
| | -------------------------------- | - | ----------- | - | - | ----------- | - | - | ------------ | -
| |                                  |   |             |   |   |             |   |   |              |  
| |                                  |   | November 30 |   |   | August 31   |   |   | May
      31 |  
| |                                  |   |             |   |   | (Unaudited) |   |   |              |  
| |                                  |   |             |   |   |             |   |   |              |  
| | Revenues                         | $ | Nil         |   | $ | Nil         |   | $ | Nil          |  
| |                                  |   |             |   |   |             |   |   |              |  
| | Net loss                         |   | (33,861     | ) |   | (10,174     | ) |   | (13,280      | )
| |                                  |   |             |   |   |             |   |   |              |  
| | Basic and Diluted loss per share |   | (0.01       | ) |   | (0.00       | ) |   | (0.00        | )

The following table provides selected quarterly financial
information for 2008 for our company:

| |                                  |   |             |   |   | 2008        |   |   |              |  
| | -------------------------------- | - | ----------- | - | - | ----------- | - | - | ------------ | -
| |                                  |   |             |   |   |             |   |   |              |  
| |                                  |   | November 30 |   |   | August 31   |   |   | May
      31 |  
| |                                  |   |             |   |   | (Unaudited) |   |   |              |  
| |                                  |   |             |   |   |             |   |   |              |  
| | Revenues                         | $ | Nil         |   | $ | Nil         |   | $ | Nil          |  
| |                                  |   |             |   |   |             |   |   |              |  
| | Net loss                         |   | (17,315     | ) |   | (10,356     | ) |   | (12,135      | )
| |                                  |   |             |   |   |             |   |   |              |  
| | Basic and Diluted loss per share |   | (0.01       | ) |   | (0.01       | ) |   | (0.01        | )

Yearly Financial Information

The following table provides selected yearly financial
information for the last three years of our company:

| |                                              |   | 2009    |   |   | 2008    |   |   | 2007    |  
| | -------------------------------------------- | - | ------- | - | - | ------- | - | - | ------- | -
| |                                              |   |         |   |   |         |   |   |         |  
| | Revenues                                     | $ | Nil     |   | $ | Nil     |   | $ | Nil     |  
| |                                              |   |         |   |   |         |   |   |         |  
| | Net loss                                     |   | (66,143 | ) |   | (47,508 | ) |   | (61,980 | )
| |                                              |   |         |   |   |         |   |   |         |  
| | Basic and Diluted loss per
      share       |   | (0.02   | ) |   | (0.04   | ) |   | (0.05   | )
| |                                              |   |         |   |   |         |   |   |         |  
| | Expenses                                     |   | (66,143 | ) |   | (47,508 | ) |   | (61,980 | )
| |                                              |   |         |   |   |         |   |   |         |  
| | Net Cash Inflow (Outflow) for
      the year |   | 7,606   |   |   | 3,721   |   |   | (15,993 | )

The increase in the net loss of fiscal 2009 as compared to
fiscal 2008 was due to an increase in professional fees and office and
miscellaneous due to increased expenses associated with our public reporting
obligations in Canada and the U.S.

Expenses incurred in the fiscal year ended November 30, 2009
and in the fiscal year ended November 30, 2008 were primarily those required to
maintain our continuous disclosure requirements as a public company while we
sought to identify a suitable business opportunity or business combination during the year.

The increase in cash inflow of our 2009 fiscal year end as
compared to our 2008 fiscal year end was due primarily to $58,291 of private
placement proceeds we received from a director during 2009.

26

---

B.          
Liquidity and Capital Resources

We had cash of $12,229 as at November 30, 2009, compared to
$4,623 as at November 30, 2008. During the year ended November 30, 2009, we
spent $25,685 on operating activities, repaid $25,000 of advance payable, and
received $58,291 from a private placement with the President of the Company,
thereby increasing our cash position from $4,623 at November 30, 2008 to $12,229
at November 30, 2009. Our companys operating expenses of $66,143 for the fiscal
year ended November 30, 2009 included professional fees (accounting,
administration and legal) of $50,575, transfer agent and regulatory fees of
$5,191, office and miscellaneous fees of $7,172 and other expenses of $3,205.

We had cash of $4,623 as at November 30, 2008, compared to $902
as at November 30, 2007. During the year ended November 30, 2008, we spent
$47,508 on operating activities, received $25,000 from a director and $15,000
from a shareholder as advances and received a refund of $5,000 that was used as
a deposit in connection with the general acquisition of an exploration permit,
thereby increasing our cash position from $902 at November 30, 2007 to $4,623 at
November 30, 2008. Our companys operating expenses of $47,508 for the fiscal
year ended November 30, 2008 included professional fees (accounting,
administration and legal) of $34,665, transfer agent and regulatory fees of
$6,576, office and miscellaneous fees of $5,015 and other expenses of $1,252.

We presently believe that subject to obtaining additional
financing of $1.45 million, we will have sufficient capital resources to fund our
initial plan of operations for the next twelve months, as described in detail under the heading "Business Overview - Plan of Operation". However, if we are not successful in generating revenues from
any associated or increased oil and gas production on the tested well bores
during the initial period or we do not receive all the funds from equity
financings we complete, then we will require additional funds to continue
advanced development of the Well Bores and to undertake any additional
operations.

Cash on hand is currently our only source of liquidity. We do
  not have any lending arrangements in place with banking or financial institutions
  and we do not anticipate that we will be able to secure these funding arrangements
  in the near future.

Operating Activities

Operating activities used cash of $25,685 for the year ended
November 30, 2009 compared to $41,279 for the year ended November 30, 2008. This
decrease was due to slower payment of the accounts payable and accrued
liabilities balances.

Investing Activities

Investing activities provided cash of $nil for the year ended
November 30, 2009, compared to providing cash $5,000 for the year ended November
30, 2008. This decrease was due to therefund of deposit in mineral
properties that the Company received in 2008.There was no equivalent
amount in fiscal 2009.

Financing Activities

Financing activities provided net cash of $33,291 for the year
ended November 30, 2009, compared to $40,000 for the year ended November 30,
2008. This decrease in net cash was due to repayment of the advance payable in
the year. We used part of the $58,291 proceeds from issuance of our common
shares to repay $25,000 of advanced payable.

Capital Resources

We anticipate that we will incur approximately $2,254,309 for
operating expenses over the next twelve months. These expenses include
professional legal and accounting expenses associated with our company being a
reporting issuer in the United States under the Securities Exchange Act of
1934 and a reporting issuer in British Columbia.

27

---

Application of Critical Accounting Policies

The preparation of financial statements in conformity with
Canadian generally accepted accounting principles requires our 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 periods. Significant areas requiring the use of management
estimates relate to the impairment of mineral property interests and the
determination of reclamation obligations. Actual results could differ from those
estimates. By their nature, such estimates are subject to measurement
uncertainty and the effect on the financial statements of changes in such
estimates in future periods could be significant.

The financial statements have, in managements opinion, been
properly prepared within the framework of the significant accounting policies
summarized below.

Foreign Currency Translation

Monetary items denominated in foreign currencies are translated
into Canadian dollars at exchange rates prevailing at the balance sheet date and
non-monetary items are translated at exchange rates prevailing when the assets
were acquired or obligations incurred. Foreign currency denominated revenue and
expense items are translated at exchange rates prevailing at the transaction
date. Gains or losses arising from the translations are included in
operations.

Stock-Based Compensation

Stock-based compensation is accounted for at fair value as
determined by the Black-Scholes option pricing model using amounts that are
believed to approximate the volatility of the trading price of our companys
stock, the expected lives of awards of stock-based compensation, the fair value
of our companys stock and the risk-free interest rate. The estimated fair value
of awards of stock-based compensation is charged to expense as awards vest, with
offsetting amounts recognized as contributed surplus.

Accounting Changes

The Company adopted CICA Handbook Section 1506 Accounting
Changes which revises the standards on changes in accounting policy, estimates
or errors to require a change in accounting policy to be applied retrospectively
(unless doing so is impracticable or is specified otherwise by a new accounting
standard), changes in estimates to be recorded prospectively, and prior period
errors to be corrected retrospectively. Voluntary changes in accounting policy
are allowed only when they result in financial statements that provide reliable
and more relevant information. In addition, these revised standards call for
enhanced disclosures about the effects of changes in accounting policies,
estimates and errors on the financial statements. The impact of this new
standard cannot be determined until such time as the Company makes a change in
accounting policy, other than the changes resulting from the implementation of
the new CICA Handbook standards discussed in this note.

Cash Distributions

The Company follows the CICA Handbook Section 1540, Cash Flow
Statements, which has been amended to require additional disclosures where cash
distributions are made in accordance with a contractual obligation for cash
distributions. The adoption of this section has not resulted in any changes on
the disclosure within the financial statements.

Capital Disclosures

Effective December 1, 2007, the Company adopted the new CICA
guidelines of Section 1535, Capital Disclosures, which requires companies to
disclose their objectives, policies and processes for managing capital,
quantitative data about what the entity regards as capital, and whether
companies have complied with externally imposed capital requirements and, if not
in compliance, the consequences of such non-compliance.

28

---

In the management of capital, the Company includes cash in the
definition of capital. The Company manages its capital structure and makes
adjustments to it, based on the funds available to the Company, in order to seek
and identify suitable business opportunities or business combinations in Canada.
The board of directors does not establish quantitative return on capital
criteria for management, but rather relies on the expertise of the Companys
management to sustain future development of the business.

The Company places its cash with institutions of high credit
worthiness. At November 30, 2009, the Company had cash of $12,229 compared to
$4,623 as at November 30, 2008.

The Company has historically relied on the equity markets and
advances from related parties to fund its activities. In order to carry out
identifying business opportunities and pay for administrative costs, the Company
will spend its existing working capital and raise additional funds as
needed.

Management reviews its capital management approach on an
ongoing basis and believes that this approach, given the relative size of the
Company, is reasonable. There have been no changes made to the capital
management policy during the year.

Recently Adopted Accounting Pronouncements

The Canadian Accounting Standards Board (AcSB) issued CICA
Handbook Section 3064 which replaces Section 3062, Goodwill and Other Intangible
Assets, and Section 3450, Research and Development Costs. This new section
establishes standards for the recognition, measurement, presentation and
disclosure of goodwill subsequent to its initial recognition and of intangible
assets. Standards concerning goodwill remain unchanged from the standards
included in the previous Section 3062. The section applies to interim and annual
financial statements relating to fiscal years beginning on or after October 1,
2008. Effective December 1, 2008, the Company has applied this standard and the
adoption of this did not have material impact on the financial statements.

The amended Section 1400 provides guidance related to
managements assessment of the Companys ability to continue as a going concern.
The additional requirement requires management to make an assessment of the
Companys ability to continue as a going concern and to disclose any material
uncertainties related to events or conditions that may cast significant doubt
upon the entitys ability to continue as a going concern. Note 1 addresses the
additional disclosure as required.

The CICA handbook Section 1000 has been amended to focus on the
  capitalization of costs that meet the definition of an asset and de-emphasizes
  the matching principle. The revised requirements are effective for annual and
  interim financial statements relating to fiscal years beginning on or after
  October 1, 2008. The amendment has not resulted in any changes on the financial
  position or results of the Company.

Recent Accounting Pronouncements

In 2006, the AcSB published a new strategic plan that will
significantly affect financial reporting requirements for Canadian companies.
The AcSB strategic plan outlines the convergence of Canadian GAAP with IFRS over
an expected five year transitional period. In February 2008, the AcSB announced
that 2011 is the changeover date for publicly-listed companies to use IFRS,
replacing Canadas own GAAP. The date is for interim and annual financial
statements relating to fiscal years beginning on or after January 1, 2011. The
transition date of January 1, 2011 will require the restatement for comparative
purposes of amounts reported by the Company for the year ended November 30,
2011. While the Company has begun assessing the adoption of IFRS for 2011, the
financial reporting impact of the transition to IFRS cannot be reasonably
estimated at this time. The Company is currently assessing the impact of the
above new accounting standards on the Companys financial positions and results
of operations.

The CICA handbook Section 1601, Consolidated Financial
Statements, and Section 1602, Non-controlling Interests, replaces Section
1600. Section 1601 establishes standards for the preparation of consolidated
financial statements. Section 1602 establishes standards for accounting, for a
non-controlling interest in a subsidiary in consolidated financial statements,
subsequent to a business combination. Section 1602 is equivalent to the
corresponding provisions of International Financial Reporting Standard IAS 27,
Consolidated and Separate Financial Statements. These standards are effective for the
Company for interim and annual financial statements beginning on January 1,
2011. Early adoption is permitted. The Company has not yet determined the impact
of the adoption of these changes on its financial statements.

29

---

The CICA handbook Section 1582, Business Combinations,
  which replaces Section 1581, Business Combinations, establishes
  standards for the accounting for a business combination. It is the Canadian
  GAAP equivalent to International Financial Reporting Standard IFRS 3, Business
  Combinations. This standard is effective for interim and annual financial
  statements beginning on January 1, 2011. Early adoption is permitted. The Company
  has not yet determined the impact of the adoption of these changes on its financial
  statements.

Recent New Accounting Standards under United States Generally
  Accepted Accounting Principles

In June 2009, FASB issued The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles  a
replacement of FASB Statement No. 162. The FASB Accounting Standards
Codification (Codification) will become the source of authoritative U.S.
generally accepted accounting principles (GAAP) recognized by FASB to be
applied by nongovernmental entities. Rules and interpretive releases of the
Securities and Exchange Commission SEC under authority of federal securities
laws are also sources of authoritative GAAP for SEC registrants. On the
effective date of this statement, the Codification will supersede all
then-existing non-SEC accounting and reporting standards. All other
non-grandfathered non-SEC accounting literature not included in the Codification
will become non-authoritative. This statement is effective for financial
statements issued for interim and annual periods ending after September 30,
2009. Effective December 1, 2008, references made to FASB guidance throughout
these financial statements have been updated for the Codification.

Effective December 1, 2008, the Company adopted a new
accounting standard included in ASC 805, Business Combinations. The new standard
applies to all transactions or other events in which an entity obtains control
of one or more businesses. Additionally, the new standard requires the acquiring
entity in a business combination to recognize all (and only) the assets acquired
and liabilities assumed in the transaction; establishes the acquisition-date
fair value as the measurement date for all assets acquired and liabilities
assumed; and requires the acquirer to disclose additional information needed to
evaluate and understand the nature and financial effect of the business
combination. The Companys adoption of the new accounting standard did not have
a material effect on the Companys financial statements.

In January 2010, FASB issued an Accounting Standard Update, ASU
No. 2010-06, on codification, Fair value Measurements and Disclosures (Topic
820-10), improving disclosures about fair value measurements. This update
provides amendments to Topic 820 that will provide more robust disclosures about
(1) the different classes of assets and liabilities measured at fair value, (2)
the valuation techniques and inputs used, (3) the activity in Level 3 fair value
measurements, and (4) the transfers between Levels 1, 2, and 3. The standard
adds new disclosure and clarifies existing disclosure requirements. The new
standard requires disclosures of the fair value of financial instruments for
interim reporting periods of publicly traded companies in addition to the annual
disclosure required at year-end. The provisions of the new standard are
effective for the interim periods ending after June 15, 2009. The adoption of
the new standard did not have a material on the Companys financial statements.

In September 2009, FASB issued an Accounting Standards Update,
ASU No. 2009-06, Income Taxes (Topic 740)  Implementation Guidance on
Accounting for Uncertainty in Income Taxes and Disclosure Amendments for
Nonpublic Entities. This update is to address the need for additional
implementation guidance on accounting for uncertainty in income taxes. The
implementation guidance will apply to financial statements of nongovernmental
entities that are presented in conformity with U.S. GAAP. The effective date is
for entities that are currently applying the standards for accounting for
uncertainty in income taxes, the guidance and disclosure amendments are
effective for financial statements issued for interim and annual periods ending
after September 15, 2009. For those entities that have deferred the application
of accounting for uncertainty in income taxes in accordance with paragraph
740-10-65-1(e), the guidance and disclosure amendments are effective upon
adoption of those standards. The adoption of the new standard did not have a
material on the Companys financial statements.

In May 2009, FASB issued ASC 855, Subsequent Events, which
establishes general standards of for the evaluation, recognition and disclosure
of events and transactions that occur after the balance sheet date. Although
there is new terminology, the standard is based on the same principles as those
that currently exist in the auditing standards. The standard, which includes a new required
disclosure of the date through which an entity has evaluated subsequent events,
is effective for interim or annual periods ending after June 15, 2009. The
adoption of ASC 855 did not have a material effect on the Companys financial
statements.

30

---

In August 2009, FASB issued an Accounting Standards Update, ASU
No. 2009-5 Fair Value of Measurements and Disclosure (Topic 820)  Measuring
Liabilities at Fair Value. The new guidance, which is now part of ASC 820,
provides clarification that in certain circumstances in which a quoted price in
an active market for the identical liability is not available, a company is
required to measure fair value using one or more of the following valuation
techniques: the quoted price of the identical liability when traded as an asset,
the quoted prices for similar liabilities or similar liabilities when traded as
assets, or another valuation technique that is consistent with the principles of
fair value measurements. The new guidance clarifies that a company is not
required to include an adjustment for restrictions that prevent the transfer of
the liability and if an adjustment is applied to the quoted price used in a
valuation technique, the result is a Level 2 or 3 fair value measurement. The
new guidance is effective for interim and annual periods beginning after August
27, 2009. The adoption of this standard did not have a material effect on the
Companys financial statements.

Accounting Standards Not Yet Effective

FASB issued a new accounting standard included in ASC 820, The
new standard requires disclosures of the fair value of financial instruments for
interim reporting periods of publicly traded companies in addition to the annual
disclosure required at year-end. The provisions of the new standard were
effective for the interim periods ending after December 15, 2009. The adoption
of this standard is not expected to have a material effect on the Companys
financial statements.

In September 2009, FASB issued an Accounting Standards Update,
ASU No. 2009-12, Fair Value Measurement and Disclosures, Topic (820). This
amendment to Subtopic 820-10, Fair Value Measurements and DisclosuresOverall,
for the fair value measurement of investments in certain entities that calculate
net asset value per share (or its equivalent). The amendments in this Update
also require disclosures by major category of investment about the attributes of
investments within the scope of the amendments in this Update. The amendments in
this Update are effective for interim and annual periods ending after December
15, 2009. Early application is permitted in financial statements for earlier
interim and annual periods that have not been issued. If an entity elects to
early adopt the measurement amendments in this Update, the entity is permitted
to defer the adoption of the disclosure provisions of paragraph 820-10-50-6A
until periods ending after December 15, 2009. The Company is evaluating the
impact it would have to the Companys financial statements.

C.          
Research and Development, Patents and Licenses etc.

We do not currently, and did not previously, have research and
development policies in place. Over the past three fiscal years, no funds were
expended by our company on research and development activities.

D.          
Trend Information

As we have just implemented a new business plan, we do not
currently know of any trends that would be material to our operations other than the risks and uncertainties set out above  under the heading “Risk Factors”.

E.          
Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or
are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that are
material to investors.

F.          
Contractual Obligations

We do not have any contractual obligations.

31

---

ITEM
6             
Directors, Senior Management and Employees

A.          
Directors and Senior Management

The following table sets forth the names and business
experience of each of our directors and officers, as of the date hereof:

|                        |                                                                    | Date of                             
|----------------------- | ------------------------------------------------------------------ | ------------------------------------
|                        |                                                                    | Commencement of                     
|                        |                                                                    | Office with our                     
|Name and
      Age      | Present Position with our Company                                  | Company                             
|                        |                                                                    |                                     
|Richard Coglon(1)(49)   | Director, President, and
      Chief Executive Officer             | November 26, 2001 May 26,
      2004
|                        |                                                                    |                                     
|Peter Noonan(1)(68)     | Director (Chairman)                                                | March 30, 2010                      
|                        |                                                                    |                                     
|James Chui(1)(46)       | Director, and Executive
      Vice President, Business Development | November 19, 2009                   
|                        |                                                                    |                                     
|Carlos Contreras(1)(61) | Director, and Executive
      VP Operations                        | March 30, 2010                      

(1)Member of our audit committee.

Richard Coglon

Mr. Coglon graduated from the University of Alberta in 1982
with a Bachelor of Commerce degree. In 1983, he attended the University of
Victoria and received his Bachelor of Laws degree in 1986. Mr. Coglon was called
to the Bar in British Columbia, Canada in 1987 and practiced in the areas of
corporate finance and securities law until January 1, 2003 when Mr. Coglon
ceased the active practice of law to concentrate on his other business ventures.

From 2003 to present, Mr. Coglon carries on business under a
  privately owned venture capital firm which is involved in initiating and funding
  early stage growth companies in energy, mining, technology and real estate sector.
  Over the past 10 years, Mr. Coglon has raised or assisted in raising in excess
  of $100 million for private and public early stage companies. During 1995 to
  2006, Mr. Coglon served as a director and officer of various reporting issuers
  including TransGlobe Energy Corp. where he was responsible for initiating TransGlobes
  transition in 1995 to 1997 from a junior mining company to an international
  oil exploration and production company. In 1999, Mr. Coglon co-founded and served
  as president and chief executive officer of Heartland Oil and Gas Corp. From
  September 18, 2002 to January 1, 2006, Mr. Coglon serves as president and a
  director of Heartland. During this period, Heartland turned its Kansas CBM projects
  into commercial production. In 1995, Mr. Coglon co-founded Velvet Exploration
  Ltd., a start-up oil exploration and production company. Velvet was listed on
  the Toronto Stock Exchange and sold for US$430 million in August of 2001 in
  a friendly takeover transaction with El Paso Energy.

Peter Noonan

Mr. Noonan went through private schools and graduated from one
of the finest college preparatory schools in the United States. He continued his
education in pre-mechanical engineering by attending South Texas College. He
attended the US Naval Academy and presently holds a position of inactive service
as an Officer in the US Navy due to an injury that was suffered in the line of
duty. He is a life-time alumnus with USNAA and the Disable American Veterans. He
continued his education at the University of Houston, University of Texas of
Austin and Nichols State University. Mr. Noonan has achieve numerous
certificates from University of South Carolina in Management Seminars and
Executive Management SeminarsMr. Noonan has been working in the oil and gas sector for over
40 years on the ongoing development of various industry inventions with
particular focus on the Hydrogen Inducement (HIP) Process, which was originally
referred to as the NooPar Process.

32

---

Mr. Noonan has been successful in developing technologies, such
as a systems controller program for the merchandising inventory purchase
control system for light manufacturing; the development and completion of an
offshore logistics supply system for world-wide operation on 26 rigs; a vapor
recovery system for oil and gas recovery; a high intensity heating and control
unit for wells, a innovated new gas lift injection system and/or pipelines
operations; a desalinization unit, waste treatment units, and surface process in
the primary cleanse of crude oil to very extreme high quality value, and a
technical application program for spill prevention used by the EPA for oil field
use. Mr. Noonan has acted as a director and officer of various private companies
in the oil and gas sector and has been a consultant in this sector for some 35
years in the areas of building and construction of roads, bridges, well site
locations, workover, coil tubing units, land and off- shore drilling units which
includes the drilling of numerous wells and there operations thereof.

Mr. Noonan holds the US Methods Patent to the HIP Processes and
in addition to his vast oilfield experience, Mr. Noonan has been a presenter and
speaker before the US Department of Energy Technology Centre, and the US
Congress on hearings relating to various issues in the Oil and Gas sector as
well a lecturer to market group at the University of Texas.

James Chui

Mr. Chui graduated from the Shanghai University of Science and
Technology in 1985 with a bachelors degree in Applied Technology. In addition,
he attended courses during 2004 to 2006 towards an Executive MBA from Beijing
University and continues to attend numerous ongoing courses in Continuing
Education from the University of British Columbia in the areas of law and
business.

Mr. Chui currently serves as the co-founder and chief executive
  officer of HIP Energy Resource Limited and HIP Technology Limited. He is also
  currently the president and chief executive officer of HRJC Enterprises Inc.
  Mr Chui also served as the president and chief executive officer of various
  successful internationally based companies in the high-tech manufacturing and
  software design and application sectors. From 1988 to 1996, Mr. Chui was the
  president and chief executive officer of James-Contact Limited with
  offices in Hong Kong, Germany and Japan. From 1996 to 2006, he served as president
  of World Trade Development Limited (HK) and World Trade Electronics
  Limited with offices in Hong Kong and Japan. From 2006 to 2008, Mr. Chui
  served as the chief financial officer of Global Microgene Holdings Group
  Limited (HK) and as vice president of Digital Video Systems Inc.
  (USA).

Carlos Contreras

Mr. Contreras graduated from the University of Tulsa in 1970with a Bachelor of Science Degree in Chemical Engineering. Mr. Contreras
also holds an associate degree in Engineering (Honors) from Middle George
College. Mr. Contreras has done graduate work in Macromolecular Science at Case
Western Reserve University. Mr. Contreras specialized field of study was the
Masters Program in Polymer Science. He has completed the Executive Program in
Management at the University of California. In addition, Mr. Contreras has
successfully completed numerous formal courses including Performance Management,
Executive Decision-Making, Professional Presentations and he is certified for
Offshore Survival.

Mr. Contreras has been in the oil and gas industry for over 35
  years. Since June 2009, Mr. Contreras has been our chief operating officer.
  Mr. Contreras has acted as the director and chief operating officer of World
  GTL Trinidad Limited from February 2007 to August 2008 and he served as a Minister
  of Energy and Hydrocarbons in La Paz (Bolivia) from 1999-2001. During the mid
  1970s until 1999, Mr. Contreras was employed with Occidental Petroleum
  in which he served in many executive roles such as president, vice-president
  and general manager at Occidentals companies in various locations such
  as the Philippines, Columbia and California.

33

---

Relationships

There are no family relationships between any of the directors
or executive officers of our company.

There are no arrangements or understandings between any of the
directors and/or executive officers and any other person pursuant to which that
director and/or executive officer was selected.

B.          
Compensation

None of our directors or executive officers was paid or earned
compensation for performing their respective duties during the fiscal year ended
November 30, 2009.

No cash compensation was paid to any of our directors for
services as a director during the fiscal year ended November 30, 2009. We have
no plan for compensating our directors for their service in their capacity as
directors, although such directors are expected in the future to receive stock
options to purchase common shares as awarded by our board or a compensation
committee which may be established. Directors are entitled to reimbursement for
reasonable travel and other out-of-pocket expenses incurred in connection with
attendance at meetings of our board. Our board may award special remuneration to
any director undertaking any special services on our behalf other than services
ordinarily required of a director. No director received and/or accrued any
compensation for their services as a director, including committee participation
and/or special assignments for the fiscal year ended November 30, 2009.

As at the fiscal year ended November 30, 2009, we have no
options outstanding. We do not have a formal stock option plan or any informal
plan to pay compensation to directors, officers or employees by way of options.
Despite having no formal stock option plan, we have historically issued stock
options to our officers and directors in lieu of cash compensation and as an
incentive to continue to achieve the objectives of our shareholders.

As of the date of this annual report, we have no compensatory
plan or arrangement with respect to any officer that results or will result in
the payment of compensation in any form from the resignation, retirement or any
other termination of employment of such officers employment with our company,
from a change in control of our company or a change in such officers
responsibilities following a change in control.

C.          
Board Practices

Our directors are re-elected and our officers are re-appointed
at the annual general meeting of our shareholders. The last annual general
meeting was held on July 31, 2009 and each of our current directors and officers
will continue to hold his respective office until his successor is elected or
appointed, unless his office is earlier vacated under any of the relevant
provisions of our Articles or of the British Columbia Business Corporations
Act.

There are no service contracts between our company and any of
our officers, directors or employees providing for benefits upon termination of
employment.

As of the date of this annual report, our entire board
functions as our audit committee. The audit committee reviews and approves the
scope of the audit procedures employed by our independent auditors, reviews the
results of the auditors examination, the scope of audits. The audit committee
also recommends the selection of independent auditors.

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

34

---

D.          
Employees

During the fiscal years ended November 30, 2009, 2008 and 2007,
we did not have any employees other than our officers. We do not currently have
any paid employees and we have not experienced a significant change in the
number of people we employ.

E.          
Share Ownership

As of March 31, 2010, and after giving effect to the issuance
of the 50,000,000 common shares under each of the Asset Purchase Agreement and
the License Agreement there are 56,211,660 common shares of our company issued
and outstanding. Upon the closing of the HIP Asset Agreement and the HIP License
Agreement, and the resulting issuance of the shares required thereunder, as the
case may be, our directors and officers owned, directly or indirectly, the
following common shares:

|Name and Office Held                                                        | Number of Common Shares | Percentage(1)
|--------------------------------------------------------------------------- | ----------------------- | -------------
|                                                                            | Beneficially Owned      |              
|                                                                            |                         |              
|Richard Coglon President, Chief
      Executive Officer                     | 5,484,511               | 9.8%         
|                                                                            |                         |              
|Peter Noonan Director (Chairman)                                            | 50,000,000(2)           | 88.9%(2)     
|                                                                            |                         |              
|James Chui Executive Vice-President
      Business Development and Director | 50,000,000(2)           | 88.9%(2)     
|                                                                            |                         |              
|Carlos Contreras Executive
      Vice-President and Director                | 40,000                  | *            

Notes

|*   | Less than 1%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Based on 56,211,660 shares of common stock issued and
      outstanding as of March 31, 2010. Beneficial ownership is determined in
      accordance with the rules of the SEC and generally includes voting or
      investment power with respect to securities. Except as otherwise
      indicated, we believe that the beneficial owners of the common stock
      listed above, based on information furnished by such owners, have sole
      investment and voting power with respect to such shares, subject to
      community property laws where applicable.                                                                                                                                                                                                                                                                                     
|(2) | In connection with the Asset Purchase Agreement, EEL received   20,000,000 shares of HIP and under the License Agreement Group Rich   received 30,000,000 shares of HIP. EEL is owned 100% by HIP Energy   Resources Limited (HIP Resources) and Group Rich is owned 100% by HIP Technology   Limited (HIP Tech). Peter Noonan beneficially owns 40% of the voting securities   of each of HIP Tech and HIP Resources. Speedy Growth Holding Limited owns 40% of   the voting securities of each HIP Tech and HIP Resources. Mr. Chui has sole   investment and voting power of with respect to the securities of Speedy Growth   Holding Limited. Mr. Chui has 35% voting and investment power over the shares of   HIP owned by EEL and Group Rich and Mr. Noonan has 45% voting and   investment power over the shares of HIP owned by EEL and Group Rich.

ITEM
7 **Major Shareholders and Related Party Transactions

As of March 31, 2010, there were 56,211,660 common shares of
our company issued and outstanding, after giving effect to the Asset Purchase
Agreement and the License Agreement. The following table sets forth persons
known to us to be the beneficial owner of more than five (5%) of our common
shares as of March 31, 2010:

|                | Number of Common Shares |              
|--------------- | ----------------------- | -------------
|Name            | Beneficially Owned      | Percentage(1)
|Richard Coglon  | 5,484,511               | 9.8%         
|Equi Energy LLC | 20,000,000(2)           | 35.6%(2)     

35

---

|                               | Number of Common Shares |              
|------------------------------ | ----------------------- | -------------
|Name                           | Beneficially Owned      | Percentage(1)
|Group Rich Development Limited | 30,000,000(2)           | 53.4%(2)     

Notes

|(1) | Based on 56,211,660 shares of common stock issued and
      outstanding as of March 31, 2010. Beneficial ownership is determined in
      accordance with the rules of the SEC and generally includes voting or
      investment power with respect to securities. Except as otherwise
      indicated, we believe that the beneficial owners of the common stock
      listed above, based on information furnished by such owners, have sole
      investment and voting power with respect to such shares, subject to
      community property laws where applicable.                                                                                                                                                                                                                                                                                                                                   
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | In connection with the Asset Purchase Agreement, EEL
      received 20,000,000 shares of HIP and under the License Agreement
      Group Rich received 30,000,000 shares of HIP. EEL is owned 100% by
      HIP Energy Resources Limited (HIP Resources) and Group Rich is owned 100%
      by HIP Technology Limited (HIP Tech). Peter Noonan beneficially owns 40%
      of the voting securities of each of HIP Tech and HIP Resources. Speedy
      Growth Holding Limited owns 40% of the voting securities of each HIP Tech
      and HIP Resources. Mr. Chui has sole investment and voting power of with
      respect to the securities of Speedy Growth Holding Limited. Mr. Chui has
      35% voting and investment power over the shares of HIP owned by
      EEL and Group Rich and Mr. Noonan has 45% voting and investment power over
      the shares of HIP owned by EEL and Group
Rich.

The voting rights of our major shareholder do not differ from
the voting rights of holders of our companys shares who are not major
shareholders.

As of March 31, 2010, Computershare Trust Company, our
registrar and transfer agent, reported that our companys 56,211,660 common
shares are held as follows:

|                       |                  |                      | Number of Registered  
|---------------------- | ---------------- | -------------------- | ----------------------
|Location               | Number of Shares | Percentage of Shares | Shareholders of Record
|Canada                 | 6,197,651        | 11%                  | 23                    
|United States          | 20,013,951       | 35.6%                | 14                    
|British Virgin Islands | 30,000,000       | 53.4%                | 1                     
|Other                  | 58               | *                    | 1                     
|Total                  | 56,211,660       | 100%                 | 39                    

* Less than 1%.

We are directly controlled by Group Rich and EEL, as they are
affiliated and collectively own 89% of our issued and outstanding common
shares.

There are no arrangements known to us, the operation of which
may at a subsequent date result in a change in the control of our company.

B.          
Related Party Transactions

Other than as disclosed herein, to the best of our knowledge,
there have been no material transactions or loans from November 30, 2007 up to
the date of this annual report between our company and: (a) enterprises that
directly or indirectly through one or more intermediaries, control or are
controlled by, or are under common control with, our company; (b) associates;
(c) individuals owning, directly or indirectly, an interest in the voting power
of our company that gives them significant influence over our company, and close
members of any such individuals family; (d) key management personnel of our
company, including directors and senior management of our company and close
members of such individuals families; and (e) enterprises in which a
substantial interest in the voting power is owned, directly or indirectly, by
any person described in (c) or (d) or over which such a person is able to
exercise significant influence.

36

---

| | 1. | During the year ended November 30, 2009, we
      incurred $2,000 (2008 - $2,000; 2007 - $nil) for management fees to a
      company with a common director.                                    
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                  
| | 2. | During the year ended November 30, 2009, we
      incurred $3,000 (2008 - $3,000; 2007 - $nil) for bookkeeping fees to a
  company with a common director.                                       
| |    |                                                                                                                                                                                                  
| | 3. | As at November 30, 2009, we owe $50,000 (2008 -
      $50,000) to a director for advances, which is unsecured, non-interest
  bearing and payable on demand.                                     
| |    |                                                                                                                                                                                                  
| | 4. | As at November 30, 2009, we owe $15,000 (2008 -
      $15,000) to a company owned by a shareholder for advances, which is
      unsecured, non-interest bearing and payable on demand.           
| |    |                                                                                                                                                                                                  
| | 5. | As at November 30, 2009, we owe $nil (2008 -
      $25,000) to a company owned by our President  for advances,
      which are unsecured, non-interest bearing and no fixed term of
  repayments.
| |    |                                                                                                                                                                                                  
| | 6. | We incurred $nil (2008 - $nil; 2007 - $5,245)
      for office rent to a company with a common director, which is included in
      office and miscellaneous expenses.                           

These transactions were in the normal course of operations.

ITEM
8             
Financial Information

A.          
Financial Statements and Other Financial Information

Our financial statements are stated in Canadian dollars and are
prepared in accordance with Canadian generally accepted accounting principles.
In this annual report, unless otherwise specified, all dollar amounts are
expressed in Canadian dollars.

Financial Statements filed as part of this Annual Report

| | 1. | Independent Auditors Report of BDO Canada LLP dated
      March 30, 2010 on the Financial Statements as at November 30, 2009,
      together with Comments by Auditor for US Readers in Canada  US Reporting
      Conflict;
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                               
| | 2. | Balance Sheets at November 30, 2009 and 2008;                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                               
| | 3. | Statements of Operations and Comprehensive Loss for the
      years ended November 30, 2009, 2008 and 2007 and for the period June 22,
      1983 (Date of Inception) to November 30, 2009;                                   
| |    |                                                                                                                                                                                                                               
| | 4. | Statements of Cash Flows for the years ended November 30,
      2009, 2008 and 2007 and for the period June 22, 1983 (Date of Inception)
      to November 30, 2009;                                                          
| |    |                                                                                                                                                                                                                               
| | 5. | Statement of Shareholders Equity (Deficiency) from June
      22, 1983 (Date of Inception) to November 30, 2009; and                                                                                                         
| |    |                                                                                                                                                                                                                               
| | 6. | Notes to the Financial
Statements.                                                                                                                                                                                            

The audited financial statements for the years ended November
30, 2009, 2008 and 2007 can be found under Item 17 Financial Statements.

37

---

Legal Proceedings

There are no pending legal proceedings to which we are a party
or of which any of our property is the subject. There are no legal proceedings
to which any director, officer or affiliate of our company or any associate of
any such director, officer or affiliate of our company is a party or has a
material interest adverse to us.

Dividend Distributions

Holders of our common shares are entitled to receive such
dividends as may be declared from time to time by our board, in its discretion,
out of funds legally available for that purpose. We intend to retain future
earnings, if any, for use in the operation and expansion of our business and do
not intend to pay any cash dividends in the foreseeable future.

B.          
Significant Changes

Since the date of the financial statements included with this
Form 20-F, we acquired the Well Bores and the exclusive worldwide license for
use of the HIP Downhole Process Technology, which is discussed in detail under
the heading Item 4. Information on HIP Energy Corporation.

The audited financial statements for the years ended November
30, 2009, 2008 and 2007 can be found under Item 17 Financial Statements.

ITEM 9        
     The Offer and Listing

A.          
Offer and Listing Details

Our common shares were traded on the TSX Venture Exchange until
they were voluntarily delisted on June 20, 2001. Since April 19, 2001, our
common shares have been quoted exclusively on the Over-the-Counter Bulletin
Board, under the symbol BNVLF. On November 19, 2009, our symbol changed from
BNVLF to HIPCF.

Our authorized capital consists of unlimited common shares
without par value and unlimited preference shares without par value. Our
preference shares may be issued in one or more series and our directors may fix
the number of shares which is to comprise each series and the designation,
rights, privileges, restrictions and conditions attaching to each series.

Holders of our common shares are entitled to vote at all
meetings of shareholders, except meetings at which only holders of a specified
class of shares are entitled to vote, receive any dividend declared by our
companys board of directors and, subject to the rights, privileges,
restrictions and conditions attaching to any other class of shares, receive the
remaining property of our company upon dissolution.

The annual high and low market prices for our common shares for
the five most recent full fiscal years were as follows:

|                   | OTC Bulletin Board |           
|------------------ | ------------------ | ----------
|                   |                    |           
|Year Ended         | High               | Low       
|November 30, 2005  | US $5.00           | US $1.25  
|November 30, 2006  | US $0.75           | US $0.25  
|November 30, 2007  | US $2.50           | US $0.15  
|November 30, 2008  | US $0.075          | US $0.005 
|November 30, 2009* | US $0.05           | US $0.0005

* After giving effect to the five (5) for one (1) reverse stock
split of our issued and outstanding common stock on November 19, 2009

38

---

The high and low market prices for our common shares for each
full financial quarter for the two most recent full fiscal years on the
Over-the-Counter Bulletin Board were as follows:

|                  | OTC Bulletin Board
|----------------- | ------------------
|                  |                   
|Quarter Ended     | High              
|February 28, 2008 | US $0.075         
|May 31, 2008      | US $0.075         
|August 31, 2008   | US $0.060         
|November 30, 2008 | US $0.060         
|February 29, 2009 | US $0.0025        
|May 31, 2009      | No trades         
|August 31, 2009   | US $0.0005        
|November 30, 2009 | US $0.0102        

The high and low market prices of our common shares for each of
the most recent six months, from October, 2009 through March, 2010, on the
Over-the-Counter Bulletin Board were as follows:

|               | OTC Bulletin Board
|-------------- | ------------------
|               |                   
|Month          | High              
|October, 2009  | US $0.01          
|November, 2009 | US $0.0102        
|December, 2009 | No trades         
|January, 2010  | US $0.02          
|February, 2010 | No trades         
|March, 2010    | No trades         

B.          
Plan of Distribution

Not applicable.

C.          
Markets

Since April 19, 2001, our common shares have been quoted
exclusively on the Over-the-Counter Bulletin Board.

D.          
Selling Shareholders

Not applicable.

E.          
Dilution

Not applicable.

F.          
Expenses of the Issue

Not applicable.

ITEM
10           Additional
Information

A.          
Share Capital

Not applicable.

B.          
Memorandum and Articles of Association

39

---

We are incorporated under the laws of the Province of British
Columbia, Canada and have been assigned incorporation number 265693.

On March 29, 2004, the Business Corporations Act came
into force in British Columbia. The new act impacted British Columbia companies
by modernizing and streamlining company law in British Columbia. In order to
take advantage of the provisions under the Business Corporations Act, our
company sought and obtained shareholder approval at our shareholders meeting on
April 21, 2005 for the removal of our pre-existing company provisions in our
former Articles and the adoption of new Articles under the Business
Corporations Act.

Our Articles do not contain a description of our objects and
purposes.

Our Articles do not restrict a directors power to (a) vote on
a proposal, arrangement or contract in which the director is materially
interested, (b) to vote compensation to themselves or any other members of their
body in the absence of an independent quorum, or (c) exercise borrowing powers.
Under our Articles, there is no mandatory retirement age for our directors and
our directors are not required to own securities of our company in order to
serve as directors.

Our authorized capital consists of an unlimited number of
common shares without par value and an unlimited number of preference shares
without par value. Our preference shares may be issued in one or more series and
our directors may fix the number of shares which is to comprise each series and
the designation, rights, privileges, restrictions and conditions attaching to
each series.

Holders of our common shares are entitled to vote at all
meetings of shareholders, except meetings at which only holders of a specified
class of shares are entitled to vote, receive any dividend declared by our
companys board of directors and, subject to the rights, privileges,
restrictions and conditions attaching to any other class of shares, receive the
remaining property of our company upon dissolution.

Our Articles state that the rights attaching to our common
shares and preference shares may be altered, amended, repealed, suspended or
changed by the affirmative vote of the holders of not less than two-thirds of
our common and preference shares.

At each annual general meeting of our company, all of our
directors retire and the shareholders elect a new board of directors. Each
director holds office until our next annual general meeting, or until his office
is earlier vacated in accordance with our Articles or with the provisions of the
British Columbia Business Corporations Act. A director appointed or
elected to fill a vacancy on our board also holds office until our next annual
general meeting.

Our Articles provide that our annual meetings of shareholders
must be held at such time in each calendar year and not more than 15 months
after the last annual general meeting and at such place as our board of
directors may from time to time determine.

Under our Articles, the holders of not less than five percent
of our issued shares that carry the right to vote at a meeting may requisition
our directors to call a meeting of shareholders for the purposes stated in the
requisition.

Under our Articles, and subject to the special rights and
restrictions attached to the shares of any class or series of shares, the quorum
for the transaction of business at a meeting of our shareholders is two persons
who are, or who represent by proxy, shareholders who, in the aggregate, hold at
least 5% of the issued shares entitled to be voted at the meeting.

Our Articles state that our directors, the President, the
Secretary, and any lawyer or auditor of our company are entitled to attend any
meeting of our shareholders.

Except as provided in the Investment Canada Act, there
are no limitations specific to the rights of non-Canadians to hold or vote our
common shares under the laws of Canada or British Columbia, or in our charter
documents.

40

---

There are no provisions in our Articles that would have the
effect of delaying, deferring or preventing a change in control of our company,
and that would operate only with respect to a merger, acquisition or corporate
restructuring involving our company.

Our Articles do not contain any provisions governing the
ownership threshold above which shareholder ownership must be disclosed.
Securities legislation in Canada, however, requires that we disclose in our
annual general meeting proxy statement, holders who beneficially own more than
10% of our issued and outstanding shares, and United States Federal securities
laws require the disclosure in our annual report on Form 20-F of holders who own
more than 5% of our issued and outstanding shares.

C.          
Material Contracts

The material contracts to which we are a party which were
entered into during the last two years are as follows:

| | 1. | The Asset Purchase Agreement dated March 14, 2010 among
      HIP, HIP Texas, HIP Resources, and EEL, whereby HIP Texas, a wholly-owned
      subsidiary of HIP, acquired the Well Bores in consideration for the
      issuance of 20 million of our common shares. The Well Bores are described
      in detail under the heading The Well Bores.                                                                                                                           
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | 2. | The License Agreement dated March 14, 2010 among HIP, HIP
      Nevada, HIP Tech, and Great Rich, whereby HIP Nevada, a wholly-owned
      subsidiary of HIP, acquired the exclusive worldwide license for the HIP
      Downhole Process Technology in consideration for the issuance of 30
      million of our common shares. The HIP Downhole Process Technology is
      described in detail under the heading Business Overview - HIP Downhole
      Process Technology.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | 3. | Joint operating agreement dated January 12, 2010 among
      TexLa Operating Company, HIP, HIP Texas, and HIP Nevada, whereby TexLa
      will provide services relating to the application of the HIP Downhole
      Process Technology to the Well Bores and HIPs oil and gas leases in
      consideration for a 10% operating working interest in the Well Bores and
      oil and gas leases.                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | 4. | Non-Competition Agreement between HIP Resources, EEL, HIP
      and HIP Texas dated March 14, 2010 pursuant to which EEL and HIP Resources
      agreed, among other things, not to compete against the business of the
      Company for a period of four years from the date of the
  agreement.                                                                                                                                                                              

D.          
Exchange Controls

There are no government laws, decrees or regulations in Canada
which restrict the export or import of capital or which affect the remittance of
dividends, interest or other payments to non-resident holders of our common
shares. Any remittances of dividends to United States residents and to other
non-residents are, however, subject to withholding tax. See Taxation below.

E.          
Taxation

We consider that the following general summary fairly describes
the principal Canadian federal income tax consequences applicable to a holder of
our common shares who is a resident of the United States, who is not, will not
be and will not be deemed to be a resident of Canada for purposes of the
Income Tax Act (Canada) and any applicable tax treaty and who does not
use or hold, and is not deemed to use or hold, his common shares in the capital
of our company in connection with carrying on a business in Canada (a
non-resident holder).

This summary is based upon the current provisions of the
Income Tax Act (Canada), the regulations thereunder (the Regulations),
the current publicly announced administrative and assessing policies of the
Canada Customs and Revenue Agency and the Canada-United States Tax Convention as
amended by the Protocols thereto (the Treaty). This summary also takes into
account the amendments to the Income Tax Act (Canada) and the Regulations
publicly announced by the Minister of Finance (Canada) prior to the date hereof
(the Tax Proposals) and assumes that all such Tax Proposals will be enacted in
their present form. However, no assurances can be given that the Tax Proposals will be enacted in the form proposed, or at all. This
summary is not exhaustive of all possible Canadian federal income tax
consequences applicable to a holder of our common shares and, except for the
foregoing, this summary does not take into account or anticipate any changes in
law, whether by legislative, administrative or judicial decision or action, nor
does it take into account provincial, territorial or foreign income tax
legislation or considerations, which may differ from the Canadian federal income
tax consequences described herein.

41

---

This summary is of a general nature only and is not intended
to be, and should not be construed to be, legal, business or tax advice to any
particular holder or prospective holder of our common shares, and no opinion or
representation with respect to the tax consequences to any holder or prospective
holder of our common shares is made. Accordingly, holders and prospective
holders of our common shares should consult their own tax advisors with respect
to the income tax consequences of purchasing, owning and disposing of our common
shares in their particular circumstances.

Dividends

Dividends paid on our common shares to a non-resident holder
will be subject under theIncome Tax Act (Canada) to withholding tax at a
rate of 25% subject to a reduction under the provisions of an applicable tax
treaty, which tax is deducted at source by our company. The Treaty provides that
the Income Tax Act (Canada) standard 25% withholding tax rate is reduced
to 15% on dividends paid on shares of a corporation resident in Canada (such as
our company) to residents of the United States, and also provides for a further
reduction of this rate to 5% where the beneficial owner of the dividends is a
corporation resident in the United States that owns at least 10% of the voting
shares of the corporation paying the dividend.

Capital Gains

A non-resident holder is not subject to tax under the Income
Tax Act (Canada) in respect of a capital gain realized upon the disposition
of a common share of our company unless such share represents taxable Canadian
property, as defined in the Income Tax Act (Canada), to the holder
thereof. Our common shares generally will be considered taxable Canadian
property to a non-resident holder if:

-      the non-resident holder;

-      persons with whom the
non-resident holder did not deal at arms length; or

-      the non-resident holder and
persons with whom such non-resident holder did not deal at arms length,

owned, or had an interest in an option in respect of, not less
than 25% of the issued shares of any class of our capital stock at any time
during the 60 month period immediately preceding the disposition of such shares.
In the case of a non-resident holder to whom shares of our company represent
taxable Canadian property and who is resident in the United States, no Canadian
taxes will generally be payable on a capital gain realized on such shares by
reason of the Treaty unless the value of such shares is derived principally from
real property situated in Canada.

Certain United States Federal Income Tax Consequences

The following is a general discussion of certain possible
United States federal foreign income tax matters under current law, generally
applicable to a U.S. Holder (as defined below) of our common shares who holds
such shares as capital assets. This discussion does not address all aspects of
United States federal income tax matters and does not address consequences
peculiar to persons subject to special provisions of federal income tax law,
such as those described below as excluded from the definition of a U.S. Holder.
In addition, this discussion does not cover any state, local or foreign tax
consequences. See Certain Canadian Federal Income Tax Consequences above.

The following discussion is based upon the Internal Revenue
Code of 1986, as amended (the Code), Treasury Regulations, published Internal
Revenue Service (IRS) rulings, published administrative positions of the IRS
and court decisions that are currently applicable, any or all of which could be
materially and adversely changed, possibly on a retroactive basis, at any time.
In addition, this discussion does not consider the potential effects, both
adverse and beneficial, of any recently proposed legislation which, if
enacted, could be applied, possibly on a retroactive basis, at any time. No
assurance can be given that the IRS will agree with such statements and
conclusions, or will not take, or a court will not adopt, a position contrary to
any position taken herein.

42

---

The following discussion is for general information only and
is not intended to be, nor should it be construed to be, legal, business or tax
advice to any holder or prospective holder of our common shares, and no opinion
or representation with respect to the United States federal income tax
consequences to any such holder or prospective holder is made. Accordingly,
holders and prospective holders of common shares should consult their own tax
advisors with respect to federal, state, local, and foreign tax consequences of
purchasing, owning and disposing of our common shares.

U.S. Holders

As used herein, a U.S. Holder includes a holder of less than
10% of our common shares who is a citizen or resident of the United States, a
corporation created or organized in or under the laws of the United States or of
any political subdivision thereof, any entity which is taxable as a corporation
for U.S. tax purposes and any other person or entity whose ownership of our
common shares is effectively connected with the conduct of a trade or business
in the United States. A U.S. Holder does not include persons subject to special
provisions of federal income tax law, such as tax-exempt organizations,
qualified retirement plans, financial institutions, insurance companies, real
estate investment trusts, regulated investment companies, broker-dealers,
non-resident alien individuals or foreign corporations whose ownership of our
common shares is not effectively connected with the conduct of a trade or
business in the United States and shareholders who acquired their shares through
the exercise of employee stock options or otherwise as compensation.

Distributions

The gross amount of a distribution paid to a U.S. Holder will
generally be taxable as dividend income to the U.S. Holder for U.S. federal
income tax purposes to the extent paid out of our current or accumulated
earnings and profits, as determined under U.S. federal income tax principles.
Distributions which are taxable dividends and which meet certain requirements
will be unqualified dividend income and taxed to U.S. Holders at a maximum
U.S. federal rate of 15%. Distributions in excess of our current and accumulated
earnings and profits will be treated first as a tax-free return of capital to
the extent of the U.S. Holders tax basis in the common shares and, to the
extent in excess of such tax basis, will be treated as a gain from a sale or
exchange of such shares.

Capital Gains

In general, upon a sale, exchange or other disposition of
common shares, a U.S. Holder will generally recognize a capital gain or loss for
U.S. federal income tax purposes in an amount equal to the difference between
the amount realized on the sale or other distribution and the U.S. Holders
adjusted tax basis in such shares. Such gain or loss will be U.S. source gain or
loss and will be treated as a long-term capital gain or loss if the U.S.
Holders holding period of the shares exceeds one year. If the U.S. Holder is an
individual, any capital gain will generally be subject to U.S. federal income
tax at preferential rates if specified minimum holding periods are met. The
deductibility of capital losses is subject to significant limitations.

Foreign Tax Credit

A U.S. Holder who pays (or has had withheld from distributions)
Canadian income tax with respect to the ownership of our common shares may be
entitled, at the option of the U.S. Holder, to either a deduction or a tax
credit for such foreign tax paid or withheld. Generally, it will be more
advantageous to claim a credit because a credit reduces United States federal
income taxes on a dollar-for-dollar basis, while a deduction merely reduces the
taxpayers income subject to tax. This election is made on a year-by-year basis
and generally applies to all foreign income taxes paid by (or withheld from) the
U.S. Holder during that year. There are significant and complex limitations
which apply to the tax credit, among which are an ownership period requirement
and the general limitation that the credit cannot exceed the proportionate share
of the U.S. Holders United States income tax liability that the U.S. Holders
foreign source income bears to his or its worldwide taxable income. In
determining the application of this limitation, the various items of income and deduction must be
classified into foreign and domestic sources. Complex rules govern this
classification process. There are further limitations on the foreign tax credit
for certain types of income such as passive income, high withholding tax
interest, financial services income, shipping income, and certain other
classifications of income. The availability of the foreign tax credit and the
application of these complex limitations on the tax credit are fact specific and
holders and prospective holders of our common shares should consult their own
tax advisors regarding their individual circumstances.

43

---

F.          
Dividends and Paying Agents

Not applicable.

G.          
Statements by Experts

Not applicable.

H.          
Documents on Display

Documents concerning our company referred to in this annual
report may be viewed by appointment during normal business hours at our
registered and records office at Suite 800 - 885 West Georgia Street, Vancouver,
British Columbia, Canada, V6C 3H1.

I.          
Subsidiary Information

Our organizational structure is as follows:



HIP Energy (Texas) Corp. (HIP Texas) is a wholly owned
subsidiary that is governed by the laws of the state of Texas. HIP Texas was
incorporated for the purposes of holding title to the Well Bores.

HIP Energy (Nevada) Corp. (HIP Nevada) is a wholly owned
subsidiary that is governed by the laws of the state of Nevada. HIP Nevada was
incorporated for the purposes of holding our license to the HIP Downhole Process
Technology.

ITEM
11           Quantitative and
Qualitative Disclosures About Market Risk

Not applicable.

ITEM
12           Description of
Securities Other Than Equity Securities

None.

PART II

ITEM
13           Defaults,
Dividend Arrearages and Delinquencies

Not applicable.

ITEM
14           Material
Modifications to the Rights of Security Holders and Use of Proceeds

44

---

Not applicable.

ITEM
15           Controls and
Procedures

Not applicable.

ITEM 15T.        CONTROLS
AND PROCEDURES

Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other
procedures that are designed to ensure that information required to be disclosed
in our companys reports filed or submitted under the Securities Exchange Act of
1934 is recorded, processed, summarized and reported, within the time periods
specified in the Securities and Exchange Commissions rules and forms.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed in our
companys reports filed under the Securities Exchange Act of 1934 is accumulated
and communicated to management, including our companys Chief Executive Officer
(CEO) and Chief Financial Officer (CFO) as appropriate, to allow timely
decisions regarding required disclosure.

As required by Rule 13a-15 under the Securities Exchange Act of
1934, we have carried out an evaluation of the effectiveness of the design and
operation of our companys disclosure controls and procedures as of the end of
the period covered by this annual report, being December 31, 2009. This
evaluation was carried out by our CEO (being our principal executive officer)
and CFO (being our principal financial officer).

Based upon that evaluation, our CEO and CFO concluded that our
disclosure controls and procedures are ineffective to ensure that (i)
information we are required to disclose in reports that we file or submit under
the Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the Commission rules and forms and (ii) that such
information is accumulated and communicated to our management, including our CEO
and CFO in order to allow timely decisions regarding required disclosure.

Managements Annual Report on Internal Control Over
Financial Reporting

Our Board has overall responsibility for reviewing our
disclosure to ensure we provide full and plain disclosure to shareholders and
other stakeholders. Our Board discharges its responsibilities through its
committees, specifically with respect to financial disclosure. The Audit
Committee is responsible for reviewing our financial reporting procedures and
internal controls to ensure full and accurate disclosure of our financial
position.

Our CEO and CFO are responsible for designing internal controls
over financial reporting or causing them to be designed under their supervision
in order to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in
accordance with Canadian GAAP. Our CEO and CFO have evaluated the effectiveness
of our disclosure controls and procedures (as such term is defined in Rules
13a-15 and 15d-15 under the Exchange Act as of the end of the period covered by
this Annual Report (the Evaluation Date) are ineffective.

Based on such evaluation, they have concluded that as of the
Evaluation Date, certain material weaknesses exist in our internal controls and
procedures, however, our CEO and CFO believe that these material weaknesses
would not prevent them from becoming aware, on a timely basis, of material
information relating to us required to be included in our reports filed or
submitted under the Exchange Actdue to their involvement in all of our
operations. Such weaknesses are:

| | (i)  | Due to our limited number of staff, it is not feasible to
      achieve complete segregation of incompatible duties.                                                                                                                    
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                         
| | (ii) | Due to our limited number of staff, we do not have a
      sufficient number of finance personnel with all the technical accounting
      knowledge to address all complex and non-routine accounting transactions
      that may arise.

45

---

| | (iii) | We did not have a Whistle Blower Policy in place during
      the period.
| | ----- | -------------------------------------------------------------------------

These weaknesses in our internal controls over financial
reporting greatly increase the likelihood that a material misstatement would not
be prevented or detected. Management and our Board work to mitigate the risk of
a material misstatement in financial reporting; however, there can be no
assurance that this risk can be reduced to less than a remote likelihood of a
material misstatement.

Attestation Report of Registered Public Accounting Firm

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

Changes in Internal Control Over Financial Reporting

There were no significant changes in our internal controls or
in other factors that could significantly affect these controls subsequent to
the date of their evaluation, including any significant deficiencies or material
weaknesses of internal controls that would require corrective action.

ITEM
16           [Reserved]

ITEM
16A        Audit Committee Financial
Expert

Our board has determined that we do not have a member of our
audit committee that qualifies as an audit committee financial expert as
defined in Item 16A(b) of Form 20-F. We believe that the members of our audit
committee, are collectively capable of analyzing and evaluating our financial
statements and understanding internal controls and procedures for financial
reporting.

Our board of directors has determined that Peter Noonan
qualifies as an independent member of our audit committee as that term is
defined in Rule 4350(d) of the Marketplace Rules of the FINRA. Richard Coglon,
James Chui and Carlos Contreras are not independent as defined in Rule
4200(a)(15)of the Marketplace Rules of the FINRA. We believe that having
an audit committee financial expert and an audit committee that consists
entirely of independent directors would be overly costly and burdensome and is
not warranted in our circumstances given the early stages of our development and
the fact that we have not generated revenues to date.

ITEM 16B        Code of
Ethics

Effective May 27, 2004, our companys board adopted a Code of
Business Conduct and Ethics that applies to, among other persons, our companys
president, being our principal executive officer, and our companys chief
financial officer, as well as persons performing similar functions. As adopted,
our Code of Business Conduct and Ethics sets forth written standards that are
designed to deter wrongdoing and to promote:

|1. | honest and ethical conduct, including the ethical
      handling of actual or apparent conflicts of interest between personal and
      professional relationships;                                                          
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                              
|2. | full, fair, accurate, timely, and understandable
      disclosure in reports and documents that we file with, or submit to, the
      Securities and Exchange Commission and in other public communications made
      by us;
|   |                                                                                                                                                                                                                              
|3. | compliance with applicable governmental laws, rules and
      regulations;                                                                                                                                                   
|   |                                                                                                                                                                                                                              
|4. | the prompt internal reporting of violations of the Code
      of Business Conduct and Ethics to an appropriate person or persons
      identified in the Code of Business Conduct and Ethics; and                            
|   |                                                                                                                                                                                                                              
|5. | accountability for adherence to the Code of Business
      Conduct and Ethics.                                                                                                                                               

46

---

Our Code of Business Conduct and Ethics requires, among other
things, that all of our companys personnel shall be accorded full access to our
president and chief financial officer with respect to any matter which may arise
relating to the Code of Business Conduct and Ethics. Further, all of our
companys personnel are to be accorded full access to our companys board if any
such matter involves an alleged breach of the Code of Business Conduct and
Ethics by our president or chief financial officer.

In addition, our Code of Business Conduct and Ethics emphasizes
that all employees, and particularly managers and/or supervisors, have a
responsibility for maintaining financial integrity within our company,
consistent with generally accepted accounting principles, and federal,
provincial and state securities laws. Any employee who becomes aware of any
incidents involving financial or accounting manipulation or other
irregularities, whether by witnessing the incident or being told of it, must
report it to his or her immediate supervisor or to our companys president or
chief financial officer. If the incident involves an alleged breach of the Code
of Business Conduct and Ethics by the president or secretary, the incident must
be reported to any member of our board. Any failure to report such inappropriate
or irregular conduct of others is to be treated as a severe disciplinary matter.
It is against our company policy to retaliate against any individual who reports
in good faith the violation or potential violation of our companys Code of
Business Conduct and Ethics by another.

We will provide a copy of the Code of Business Conduct and
Ethics to any person without charge, upon request. Requests can be sent to the
companys offices at Suite 404  999 World Trade Centre, Vancouver, British
Columbia, Canada V6C 3H1.

ITEM 16C        Principal
Accountant Fees and Services

Audit Fees

Our board appointed BDO Canada LLP, Chartered Accountants, as
independent auditors to audit our financial statements for the fiscal years
ended November 30, 2008 and November 30, 2009. The aggregate of fees billed by
BDO Canada LLP, Chartered Accountants, for professional services rendered for
the audit of our annual financial statements included in this annual report for
the fiscal years ended 2008 and 2009 were $12,192 and $16,900, respectively.

Audit Related Fees

For the fiscal years ended November 30, 2008 and November 30,
2009, the aggregate fees billed for assurance and related services by BDO Canada
LLP, Chartered Accountants, relating to our quarterly financial statements which
are not reported under the caption Audit Fees above, were $Nil for both
years.

Tax Fees

For the fiscal years ended November 30, 2008 and November 30,
2009, the aggregate fees billed for tax compliance, tax advice and tax planning
by BDO Canada LLP, Chartered Accountants, was $Nil for both years.

All Other Fees

For the fiscal years ended November 30, 2008 and November 30,
2009, the aggregate fees billed by BDO Canada LLP, Chartered Accountants, for
other non-audit professional services, other than those services listed above,
totalled $Nil and $Nil, respectively.

Pre-Approval Policies and Procedures

Effective May 6, 2003, the Securities and Exchange Commission
adopted rules that require that before BDO Canada LLP, Chartered Accountants, is
engaged by us to render any auditing or permitted non-audit related service, the
engagement be:

|- | approved by our audit committee;
      or
|- | -----------------------------------------

47

---

|- | entered into pursuant to pre-approval policies and
      procedures established by the audit committee, provided the policies and
      procedures are detailed as to the particular service, the audit committee
      is informed of each service, and such policies and procedures do not
      include delegation of the audit committees responsibilities to
      management.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The audit committee pre-approves all services provided by our
independent auditors. The pre-approval process has been implemented in response
to the new rules. Therefore, the audit committee does not have records of what
percentage of the above fees were pre-approved. However, all of the above
services and fees were reviewed and approved by the audit committee either
before or after the respective services were rendered.

The audit committee has considered the nature and amount of the
fees billed by BDO Canada LLP, Chartered Accountants, and believes that the
provision of the services for activities unrelated to the audit is compatible
with maintaining the independence of BDO Canada LLP, Chartered Accountants.

ITEM 16D.      Exemption from the
Listing Standards for Audit Committees

Not Applicable.

ITEM 16E        Purchases
of Equity Securities the Company and Affiliated Purchasers

Not Applicable.

ITEM 16F        Change in
Registrants Certifying Account

None.

ITEM 16G        Corporate
Governance

Not Applicable.

PART III

ITEM
17           Financial
Statements

Financial Statements Filed as Part of this Annual
Report:

|- | Independent Auditors Report of BDO Canada LLP dated
      March 30, 2010 on the Financial Statements as at November 30, 2009 and
      2008; together with Comments by Auditor for US Readers on Canada  US
      Reporting Conflict;
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                        
|- | Balance Sheets at November 30, 2009 and 2008;                                                                                                                                                                                          
|  |                                                                                                                                                                                                                                        
|- | Statements of Operations and Comprehensive Loss for the
      years ended November 30, 2009, 2008 and 2007 and for the period June 22,
      1983 (Date of Inception) to November 30, 2009;                                            
|  |                                                                                                                                                                                                                                        
|- | Statements of Cash Flows for the years ended November 30,
      2009, 2008 and 2007 and for the period June 22, 1983 (Date of Inception)
      to November 30, 2009;                                                                   
|  |                                                                                                                                                                                                                                        
|- | Statement of Shareholders Equity (Deficiency) from June
      22, 1983 (Date of Inception) to November 30, 2009; and                                                                                                                  
|  |                                                                                                                                                                                                                                        
|- | Notes to Financial Statements.                                                                                                                                                                                                         

---



HIP ENERGY CORPORATION
  (Formerly Bradner Ventures Ltd.) 
  (A Development Stage Company)

Audited Financial Statements 
  (Expressed in Canadian dollars)

November 30, 2009, 2008, 2007

---

|bdo                      | Tel: 604 688
      5421     | BDO Canada LLP
|------------------------ | --------------------------- | --------------
|Fax: 604  688
      5132 | 600 Cathedral Place        
|www.bdo.ca               | 925 West Georgia Street    
|                         | Vancouver BC V6C 3L2 Canada

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders of
  HIP Energy Corporation
  (Formerly Bradner Ventures Ltd.)
  (A Development Stage Company)

We have audited the balance sheets of HIP Energy Corporation
  as at November 30, 2009 and 2008 and the statements of operations and comprehensive
  loss, cash flows and stockholders equity (deficiency) for the years ended
  November 30, 2009, 2008 and 2007 and for the cumulative period from June 22,
  1983 (Date of Inception) to November 30, 2009. These financial statements are
  the responsibility of the Companys management. Our responsibility is to
  express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with Canadian generally
  accepted auditing standards and the standards of the Public Company Accounting
  Oversight Board (United States of America). Those standards require that we
  plan and perform an audit to obtain reasonable assurance whether the financial
  statements are free of material misstatement. The Company is not required to
  have, nor were we engaged to perform, an audit of its internal control over
  financial reporting. Our audits included 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, as well as evaluating the overall financial statement presentation.
  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, these financial statements present fairly, in
  all material respects, the financial position of the Company as at November
  30, 2009 and 2008 and the results of its operations and its cash flows for the
  years ended November 30, 2009, 2008 and 2007 and for the cumulative period from
  June 22, 1983 (Date of Inception) to November 30, 2009 in accordance with Canadian
  generally accepted accounting principles.

(signed) BDO Canada LLP

Chartered Accountants

Vancouver, Canada 
  March 30, 2010

COMMENTS BY AUDITOR FOR US READERS ON CANADA - US REPORTING CONFLICT

In the United States of America, reporting standards for auditors
  require the addition of an explanatory paragraph (following the opinion paragraph)
  when there is substantial doubt about a companys ability to continue as
  a going concern. The accompanying financial statements have been prepared on
  the basis of accounting principles applicable to a going concern which assumes
  the realization of assets and discharge of liabilities in the normal course
  of business. As discussed in Note 1 to the accompanying financial statements,
  the Company is in the development stage, has yet to identify suitable business
  opportunities and has a working capital deficiency, which raises substantial
  doubt about the Companys ability to continue as a going concern. The accompanying
  financial statements do not include any adjustments that might result from the
  outcome of these uncertainties.

Our report to the shareholders dated March 30, 2010 is expressed
  in accordance with Canadian reporting standards which do not permit a reference
  to such uncertainty in the auditors report when the uncertainty is adequately
  disclosed in the financial statements.

(signed) BDO Canada LLP

Chartered Accountants

Vancouver, Canada 
  March 30, 2010



BDO Canada LLP, a Canadian limited
  liability partnership, is a member of BDO International Limited, a UK company
  limited by guarantee, and forms part of theinternational BDO network of independent member firms.

---

HIP Energy Corporation 
  (Formerly Bradner Ventures Ltd.) 
  (A Development Stage Company) 
  Balance Sheets 
  November 30, 2009 and 2008 
  (Expressed in Canadian dollars)

|                                                                                                                 |  | November 30, |   |  | November 30, |  
|---------------------------------------------------------------------------------------------------------------- |  | ------------ | - |  | ------------ | -
|                                                                                                                 |  | 2009         |   |  | 2008         |  
|                                                                                                                 |  | $            |   |  | $            |  
|                                                                                                                 |  |              |   |  |              |  
|                                                                                                                 |  |              |   |  |              |  
|ASSETS                                                                                                           |  |              |   |  |              |  
|                                                                                                                 |  |              |   |  |              |  
|Current Assets                                                                                                   |  |              |   |  |              |  
|                                                                                                                 |  |              |   |  |              |  
|Cash                                                                                                             |  | 12,229       |   |  | 4,623        |  
|GST recoverable                                                                                                  |  | 1,359        |   |  | 110          |  
|                                                                                                                 |  |              |   |  |              |  
|Total Assets                                                                                                     |  | 13,588       |   |  | 4,733        |  
|                                                                                                                 |  |              |   |  |              |  
|LIABILITIES AND STOCKHOLDERS DEFICIENCY                                                                         |  |              |   |  |              |  
|                                                                                                                 |  |              |   |  |              |  
|Current Liabilities                                                                                              |  |              |   |  |              |  
|                                                                                                                 |  |              |   |  |              |  
|Accounts payable and accrued liabilities                                                                         |  | 46,707       |   |  | 10,000       |  
|Advance payable (Note 5)                                                                                         |  | 65,000       |   |  | 90,000       |  
|                                                                                                                 |  |              |   |  |              |  
|Total Liabilities                                                                                                |  | 111,707      |   |  | 100,000      |  
|                                                                                                                 |  |              |   |  |              |  
|Stockholders Deficiency                                                                                         |  |              |   |  |              |  
|                                                                                                                 |  |              |   |  |              |  
|Capital Stock (Note 6)                                                                                           |  |              |   |  |              |  
|Authorized: unlimited common shares, without par value 
           unlimited preferred shares, without par value |  |              |   |  |              |  
|Issued: 6,211,660 common shares
      (2008: 1,211,660)                                                          |  | 4,337,789    |   |  | 4,279,498    |  
|                                                                                                                 |  |              |   |  |              |  
|Contributed Surplus (Note 8)                                                                                     |  | 10,000       |   |  | 5,000        |  
|                                                                                                                 |  |              |   |  |              |  
|Deficit Accumulated During the Development Stage                                                                 |  | (4,445,908   | ) |  | (4,379,765   | )
|                                                                                                                 |  |              |   |  |              |  
|Total Stockholders Deficiency                                                                                   |  | (98,119      | ) |  | (95,267      | )
|                                                                                                                 |  |              |   |  |              |  
|Total Liabilities and Stockholders Deficiency                                                                   |  | 13,588       |   |  | 4,733        |  
|                                                                                                                 |  |              |   |  |              |  
|Nature of operations and ability to continue
      as a going concern (Note 1)                                   |  |              |   |  |              |  
|Subsequent events (Note 12)                                                                                      |  |              |   |  |              |  

Approved on behalf of the Board:



|*Richard Coglon* |  | *James
      Chui*
|------------------ |  | --------------------
|Director           |  | Director            

The accompanying notes are an integral part of these financial
  statements

---

HIP Energy Corporation 
  (Formerly Bradner Ventures Ltd.) 
  (A Development Stage Company) 
  Statements of Operations and Comprehensive Loss 
  For the years ended November 30, 2009, 2008 and 2007 
  And for the period June 22, 1983 (Date of Inception) to November 30, 2009 
  (Expressed in Canadian dollars)

|                                                     |  | Accumulated from    |   |  |                          |   |  |           |   |  |           |  
|---------------------------------------------------- |  | ------------------- | - |  | ------------------------ | - |  | --------- | - |  | --------- | -
|                                                     |  | June 22, 1983       |   |  |                          |   |  |           |   |  |           |  
|                                                     |  | (Date of Inception) |   |  | Years ended November 30, |  
|                                                     |  | to November 30,     |   |  |                          |   |  |           |   |  |           |  
|                                                     |  | 2009                |   |  | 2009                     |   |  | 2008      |   |  | 2007      |  
|                                                     |  | $                   |   |  | $                        |   |  | $         |   |  | $         |  
|                                                     |  |                     |   |  |                          |   |  |           |   |  |           |  
|EXPENSES                                             |  |                     |   |  |                          |   |  |           |   |  |           |  
|Amortization                                         |  | 2,095               |   |  |                         |   |  |          |   |  |          |  
|Bad debts                                            |  | 248                 |   |  |                         |   |  |          |   |  |          |  
|Bank charges and interest                            |  | 64,557              |   |  | 467                      |   |  | 290       |   |  | 292       |  
|Consulting and secretarial                           |  | 205,016             |   |  |                         |   |  |          |   |  |          |  
|Finders fees                                        |  | 180,727             |   |  |                         |   |  |          |   |  |          |  
|Foreign exchange (gain) loss                         |  | (1,631              | ) |  | 21                       |   |  | 15        |   |  | 6         |  
|Management fees (Note 5(a))                          |  | 346,781             |   |  | 2,000                    |   |  | 2,000     |   |  |          |  
|Mineral property expenses                            |  | 54,541              |   |  |                         |   |  |          |   |  | 3,921     |  
|Office and miscellaneous (Note 5(f))                 |  | 161,811             |   |  | 7,172                    |   |  | 5,015     |   |  | 9,757     |  
|Professional fees (Note 5(b))                        |  | 919,206             |   |  | 50,575                   |   |  | 32,665    |   |  | 39,996    |  
|Shareholder information                              |  | 92,944              |   |  | 717                      |   |  | 947       |   |  | 1,138     |  
|Transfer agent and regulatory fees                   |  | 181,049             |   |  | 5,191                    |   |  | 6,576     |   |  | 5,790     |  
|Travel and promotion                                 |  | 78,032              |   |  |                         |   |  |          |   |  | 1,080     |  
|Write-down of mineral property                       |  | 1,456,807           |   |  |                         |   |  |          |   |  |          |  
|                                                     |  |                     |   |  |                          |   |  |           |   |  |           |  
|                                                     |  | 3,742,183           |   |  | 66,143                   |   |  | 47,508    |   |  | 61,980    |  
|                                                     |  |                     |   |  |                          |   |  |           |   |  |           |  
|OTHER ITEMS                                          |  |                     |   |  |                          |   |  |           |   |  |           |  
|Interest income                                      |  | (25,440             | ) |  |                         |   |  |          |   |  |          |  
|Gain on settlement of debt                           |  | (1,303              | ) |  |                         |   |  |          |   |  |          |  
|Gain on option                                       |  | (1,187,500          | ) |  |                         |   |  |          |   |  |          |  
|Loss on sale of computer equipment                   |  | 344                 |   |  |                         |   |  |          |   |  |          |  
|Loss on sale of long-term investment                 |  | 630,397             |   |  |                         |   |  |          |   |  |          |  
|Write-down of advances to affiliate                  |  | 637,768             |   |  |                         |   |  |          |   |  |          |  
|Write-down of
      long-tem investment              |  | 649,459             |   |  |                         |   |  |          |   |  |          |  
|                                                     |  |                     |   |  |                          |   |  |           |   |  |           |  
|                                                     |  | 703,725             |   |  |                         |   |  |          |   |  |          |  
|                                                     |  |                     |   |  |                          |   |  |           |   |  |           |  
|Net Loss and
      Comprehensive Loss for the Period |  | (4,445,908          | ) |  | (66,143                  | ) |  | (47,508   | ) |  | (61,980   | )
|                                                     |  |                     |   |  |                          |   |  |           |   |  |           |  
|                                                     |  |                     |   |  |                          |   |  |           |   |  |           |  
|Net Loss Per Share  Basic and Diluted               |  |                     |   |  | (0.02                    | ) |  | (0.04     | ) |  | (0.05     | )
|                                                     |  |                     |   |  |                          |   |  |           |   |  |           |  
|Weighted Average Number of Shares Outstanding        |  |                     |   |  | 3,978,774                |   |  | 1,211,651 |   |  | 1,211,651 |  

The accompanying notes are an integral part of these financial
  statements

---

HIP Energy Corporation 
  (Formerly Bradner Ventures Ltd.) 
  (A Development Stage Company) 
  Statements of Cash Flows 
  For the years ended November 30, 2009, 2008 and 2007 
  And for the period June 22, 1983 (Date of Inception) to November 30, 2009 
  (Expressed in Canadian dollars)

|                                                                                              |  | Accumulated from    |   |   |                          |   |   |         |   |   |         |  
|--------------------------------------------------------------------------------------------- |  | ------------------- | - | - | ------------------------ | - | - | ------- | - | - | ------- | -
|                                                                                              |  | June 22, 1983       |   |   |                          |   |   |         |   |   |         |  
|                                                                                              |  | (Date of Inception) |   |   | Years ended November 30, |  
|                                                                                              |  | to November 30,     |   |   |                          |   |   |         |   |   |         |  
|                                                                                              |  | 2009                |   |   | 2009                     |   |   | 2008    |   |   | 2007    |  
|                                                                                              |  | $                   |   |   | $                        |   |   | $       |   |   | $       |  
|NET INFLOW (OUTFLOW) OF CASH RELATED TO 
      THE FOLLOWING ACTIVITIES:                      |  |                     |   |   |                          |   |   |         |   |   |         |  
|                                                                                              |  |                     |   |   |                          |   |   |         |   |   |         |  
|OPERATING                                                                                     |  |                     |   |   |                          |   |   |         |   |   |         |  
|Net loss for the period                                                                       |  | (4,445,908          | ) |   | (66,143                  | ) |   | (47,508 | ) |   | (61,980 | )
|Adjustments to reconcile net loss to
      net cash used in 
           operating activities: |  |                     |   |   |                          |   |   |         |   |   |         |  
|Amortization                                                                                  |  | 2,095               |   |   |                         |   |   |        |   |   |        |  
|Bad debts                                                                                     |  | 248                 |   |   |                         |   |   |        |   |   |        |  
|Donated rent and services                                                                     |  | 10,000              |   |   | 5,000                    |   |   | 5,000   |   |   |        |  
|Finders fees                                                                                 |  | 114,932             |   |   |                         |   |   |        |   |   |        |  
|Gain on debt settlement                                                                       |  | (1,303              | ) |   |                         |   |   |        |   |   |        |  
|Gain on option                                                                                |  | (1,187,500          | ) |   |                         |   |   |        |   |   |        |  
|Loss on sale of computer equipment                                                            |  | 344                 |   |   |                         |   |   |        |   |   |        |  
|Loss on sale of investments                                                                   |  | 630,397             |   |   |                         |   |   |        |   |   |        |  
|Write-down of advances to affiliate                                                           |  | 637,768             |   |   |                         |   |   |        |   |   |        |  
|Write-down of mineral property                                                                |  | 1,468,807           |   |   |                         |   |   |        |   |   |        |  
|Write-down of long-term investment                                                            |  | 649,459             |   |   |                         |   |   |        |   |   |        |  
|Changes in non-cash working capital items
      related 
            to operations            |  |                     |   |   |                          |   |   |         |   |   |         |  
|Decrease (increase) in GST recoverable                                                        |  | (1,607              | ) |   | (1,249                   | ) |   | 224     |   |   | 791     |  
|Increase in accounts payable and accrued liabilities                                          |  | 468,554             |   |   | 36,707                   |   |   | 1,005   |   |   | 196     |  
|                                                                                              |  |                     |   |   |                          |   |   |         |   |   |         |  
|Net cash used in operating activities                                                         |  | (1,653,714          | ) |   | (25,685                  | ) |   | (41,279 | ) |   | (60,993 | )
|                                                                                              |  |                     |   |   |                          |   |   |         |   |   |         |  
|INVESTING                                                                                     |  |                     |   |   |                          |   |   |         |   |   |         |  
|Purchase of office equipment                                                                  |  | (3,038              | ) |   |                         |   |   |        |   |   |        |  
|Expenditures on mineral properties                                                            |  | (1,121,172          | ) |   |                         |   |   |        |   |   |        |  
|Proceeds from disposal of office equipment                                                    |  | 600                 |   |   |                         |   |   |        |   |   |        |  
|Purchase of investments                                                                       |  | (310,025            | ) |   |                         |   |   |        |   |   |        |  
|Mineral property deposit                                                                      |  |                    |   |   |                         |   |   | 5,000   |   |   | (5,000  | )
|Advances to affiliate                                                                         |  | (808,346            | ) |   |                         |   |   |        |   |   |        |  
|Proceeds on
      disposal of investments                                                     |  | 365,111             |   |   |                         |   |   |        |   |   |        |  
|                                                                                              |  |                     |   |   |                          |   |   |         |   |   |         |  
|Net cash flows provided
      by (used in) investing activities                               |  | (1,876,870          | ) |   |                         |   |   | 5,000   |   |   | (5,000  | )
|                                                                                              |  |                     |   |   |                          |   |   |         |   |   |         |  
|FINANCING                                                                                     |  |                     |   |   |                          |   |   |         |   |   |         |  
|Advance payable                                                                               |  | 65,000              |   |   | (25,000                  | ) |   | 40,000  |   |   | 50,000  |  
|Capital stock
      issued for cash                                                           |  | 3,477,813           |   |   | 58,291                   |   |   |        |   |   |        |  
|                                                                                              |  |                     |   |   |                          |   |   |         |   |   |         |  
|Net cash flows provided
      by financing activities                                         |  | 3,542,813           |   |   | 33,291                   |   |   | 40,000  |   |   | 50,000  |  
|                                                                                              |  |                     |   |   |                          |   |   |         |   |   |         |  
|NET CASH INFLOWS (OUTFLOWS)                                                                   |  | 12,229              |   |   | 7,606                    |   |   | 3,721   |   |   | (15,993 | )
|                                                                                              |  |                     |   |   |                          |   |   |         |   |   |         |  
|CASH, BEGINNING OF
      PERIOD                                                               |  |                    |   |   | 4,623                    |   |   | 902     |   |   | 16,895  |  
|                                                                                              |  |                     |   |   |                          |   |   |         |   |   |         |  
|CASH, ENDING OF PERIOD                                                                        |  | 12,229              |   |   | 12,229                   |   |   | 4,623   |   |   | 902     |  
|                                                                                              |  |                     |   |   |                          |   |   |         |   |   |         |  
|Cash paid for income
      taxes during the year                                              |  |                     |   | $ | Nil                      |   | $ | Nil     |   | $ | Nil     |  
|Cash paid for interest during the year                                                        |  |                     |   | $ | Nil                      |   | $ | Nil     |   | $ | Nil     |  

Non-cash transactions  Note 10

The accompanying notes are an integral part of these financial
  statements

---

HIP Energy Corporation 
  (Formerly Bradner Ventures Ltd.) 
  (A Development Stage Company) 
  Statement of Stockholders Equity (Deficiency) 
  From June 22, 1983 (Date of Inception) to November 30, 2009 
  (Expressed in Canadian dollars)

|                                                                                   |  |        |   |  |         |   |  |             |  |  | Deficit     |   |  |          |  
|---------------------------------------------------------------------------------- |  | ------ | - |  | ------- | - |  | ----------- |  |  | ----------- | - |  | -------- | -
|                                                                                   |  |        |   |  |         |   |  |             |  |  | Accumulated |   |  |          |  
|                                                                                   |  |        |   |  |         |   |  |             |  |  | During the  |   |  |          |  
|                                                                                   |  |        |   |  |         |   |  | Contributed |  |  | Development |   |  |          |  
|                                                                                   |  | Shares |   |  | Amount  |   |  | Surplus     |  |  | Stage       |   |  | Total    |  
|                                                                                   |  | #      |   |  | $       |   |  | $           |  |  | $           |   |  | $        |  
|Balance  June 22, 1983 (Date of Inception)                                        |  |       |   |  |        |   |  |            |  |  |            |   |  |         |  
|Net loss for the
      period                                                      |  |       |   |  |        |   |  |            |  |  |            |   |  |         |  
|Balance  November 30, 1983                                                        |  |       |   |  |        |   |  |            |  |  |            |   |  |         |  
|Shares issued for cash:                                                            |  |        |   |  |         |   |  |             |  |  |             |   |  |          |  
|- at $1.75 per
      share                                                         |  | 4,289  |   |  | 7,500   |   |  |            |  |  |            |   |  | 7,500    |  
|- at $26.25 per share                                                              |  | 1,257  |   |  | 33,000  |   |  |            |  |  |            |   |  | 33,000   |  
|Net loss for the year                                                              |  |       |   |  |        |   |  |            |  |  |            |   |  |         |  
|Balance  November 30, 1984                                                        |  | 5,546  |   |  | 40,500  |   |  |            |  |  |            |   |  | 40,500   |  
|Shares issued for cash at $70.90 per share                                         |  | 2,856  |   |  | 202,500 |   |  |            |  |  |            |   |  | 202,500  |  
|Shares allotted for cash at $52.52 per share                                       |  | 1,428  |   |  | 75,000  |   |  |            |  |  |            |   |  | 75,000   |  
|Shares issued for acquisition of mineral
      property 
      at $26.41 per share |  | 142    |   |  | 3,750   |   |  |            |  |  |            |   |  | 3,750    |  
|Net loss for the
      year                                                        |  |       |   |  |        |   |  |            |  |  |            |   |  | (60,415  | )
|Balance  November 30, 1985                                                        |  | 9,972  |   |  | 321,750 |   |  |            |  |  | (60,415     | ) |  | 261,335  |  
|Share subscriptions refunded at $52.51 per share                                   |  | (554   | ) |  | (29,090 | ) |  |            |  |  |            |   |  | (29,090  | )
|Net loss for the year                                                              |  |       |   |  |        |   |  |            |  |  |            |   |  |         |  
|Balance  November 30, 1986                                                        |  | 9,418  |   |  | 292,660 |   |  |            |  |  | (60,415     | ) |  | 232,245  |  
|Shares issued for cash at $15.75 per share                                         |  | 2,429  |   |  | 38,250  |   |  |            |  |  |            |   |  | 38,250   |  
|Net loss for the
      year                                                        |  |       |   |  |        |   |  |             |  |  | (146,697    | ) |  | (146,697 | )
|Balance  November 30, 1987                                                        |  | 9,903  |   |  | 330,910 |   |  |            |  |  | (207,112    | ) |  | 123,798  |  
|Net loss for the
      year                                                        |  |       |   |  |        |   |  |            |  |  | (140,613    | ) |  | (140,613 | )
|Balance  November 30, 1988                                                        |  | 9,903  |   |  | 330,910 |   |  |            |  |  | (347,725    | ) |  | (16,815  | )
|Shares issued for settlement of debt at $94.55 per share                           |  | 257    |   |  | 24,300  |   |  |            |  |  |            |   |  | 24,300   |  
|Private placement at $52.45 per share                                              |  | 858    |   |  | 45,000  |   |  |            |  |  |            |   |  | 45,000   |  
|Exercise of options at $78.26 per share                                            |  | 69     |   |  | 5,400   |   |  |            |  |  |            |   |  | 5,400    |  
|Net loss for the year                                                              |  |       |   |  |        |   |  |            |  |  | (17,337     | ) |  | (17,337  | )
|Balance  November 30, 1989                                                        |  | 11,087 |   |  | 405,610 |   |  |            |  |  | (365,062    | ) |  | 40,548   |  

The accompanying notes are an integral part of these financial
  statements

---

HIP Energy Corp. 
  (Formerly Bradner Ventures Ltd.) 
  (A Development Stage Company) 
  Statement of Stockholders Equity (Deficiency) 
  From June 22, 1983 (Date of Inception) to November 30, 2009 
  (Expressed in Canadian dollars)

|                                                                                    |  |        |  |  |           |  |  |             |  |  | Deficit     |   |  |           |  
|----------------------------------------------------------------------------------- |  | ------ |  |  | --------- |  |  | ----------- |  |  | ----------- | - |  | --------- | -
|                                                                                    |  |        |  |  |           |  |  |             |  |  | Accumulated |   |  |           |  
|                                                                                    |  |        |  |  |           |  |  |             |  |  | During the  |   |  |           |  
|                                                                                    |  |        |  |  |           |  |  | Contributed |  |  | Development |   |  |           |  
|                                                                                    |  | Shares |  |  | Amount    |  |  | Surplus     |  |  | Stage       |   |  | Total     |  
|                                                                                    |  | #      |  |  | $         |  |  | $           |  |  | $           |   |  | $         |  
|                                                                                    |  |        |  |  |           |  |  |             |  |  |             |   |  |           |  
|Balance  November 30, 1989                                                         |  | 11,087 |  |  | 405,610   |  |  |            |  |  | (365,062    | ) |  | 40,548    |  
|                                                                                    |  |        |  |  |           |  |  |             |  |  |             |   |  |           |  
|Shares issued for acquisition of mineral
      property 
      at $349.65 per share |  | 143    |  |  | 50,000    |  |  |            |  |  |            |   |  | 50,000    |  
|                                                                                    |  |        |  |  |           |  |  |             |  |  |             |   |  |           |  
|Shares issued for finders fee:                                                     |  |        |  |  |           |  |  |             |  |  |             |   |  |           |  
|- at $87.41 per share                                                               |  | 286    |  |  | 25,000    |  |  |            |  |  |            |   |  | 25,000    |  
|- at $347.83 per share                                                              |  | 115    |  |  | 40,000    |  |  |            |  |  |            |   |  | 40,000    |  
|                                                                                    |  |        |  |  |           |  |  |             |  |  |             |   |  |           |  
|Shares issued for exercise of options:                                              |  |        |  |  |           |  |  |             |  |  |             |   |  |           |  
|- at $61.19 per share                                                               |  | 572    |  |  | 35,000    |  |  |            |  |  |            |   |  | 35,000    |  
|- at $87.21 per
      share                                                         |  | 29     |  |  | 2,500     |  |  |            |  |  |            |   |  | 2,500     |  
|- at $122.38 per
      share                                                        |  | 286    |  |  | 35,000    |  |  |            |  |  |            |   |  | 35,000    |  
|- at $131.28 per share                                                              |  | 537    |  |  | 70,500    |  |  |            |  |  |            |   |  | 70,500    |  
|- at $194.74 per
      share                                                        |  | 57     |  |  | 11,100    |  |  |            |  |  |            |   |  | 11,100    |  
|                                                                                    |  |        |  |  |           |  |  |             |  |  |             |   |  |           |  
|Net loss for the
      year                                                         |  |       |  |  |          |  |  |            |  |  | (118,112    | ) |  | (118,112  | )
|                                                                                    |  |        |  |  |           |  |  |             |  |  |             |   |  |           |  
|Balance  November 30, 1990                                                         |  | 13,112 |  |  | 674,710   |  |  |            |  |  | (483,174    | ) |  | 191,536   |  
|                                                                                    |  |        |  |  |           |  |  |             |  |  |             |   |  |           |  
|Shares issued for acquisition of mineral property:                                  |  |        |  |  |           |  |  |             |  |  |             |   |  |           |  
|- at $314.69 per share                                                              |  | 572    |  |  | 180,000   |  |  |            |  |  |            |   |  | 180,000   |  
|- at $485.03 per
      share                                                        |  | 176    |  |  | 85,366    |  |  |            |  |  |            |   |  | 85,366    |  
|                                                                                    |  |        |  |  |           |  |  |             |  |  |             |   |  |           |  
|Private placement at $273.00                                                        |  | 131    |  |  | 35,880    |  |  |            |  |  |            |   |  | 35,880    |  
|                                                                                    |  |        |  |  |           |  |  |             |  |  |             |   |  |           |  
|Exercise of warrants at $70.00 per share                                            |  | 286    |  |  | 20,000    |  |  |            |  |  |            |   |  | 20,000    |  
|                                                                                    |  |        |  |  |           |  |  |             |  |  |             |   |  |           |  
|Shares issued for exercise of options:                                              |  |        |  |  |           |  |  |             |  |  |             |   |  |           |  
|- at $122.81 per share                                                              |  | 114    |  |  | 14,000    |  |  |            |  |  |            |   |  | 14,000    |  
|- at $130.81 per
      share                                                        |  | 172    |  |  | 22,500    |  |  |            |  |  |            |   |  | 22,500    |  
|- at $271.48 per share                                                              |  | 338    |  |  | 91,760    |  |  |            |  |  |            |   |  | 91,760    |  
|- at $334.66 per
      share                                                        |  | 234    |  |  | 78,310    |  |  |            |  |  |            |   |  | 78,310    |  
|                                                                                    |  |        |  |  |           |  |  |             |  |  |             |   |  |           |  
|Shares issued for finders fee:                                                     |  |        |  |  |           |  |  |             |  |  |             |   |  |           |  
|- at $262.24 per share                                                              |  | 143    |  |  | 37,500    |  |  |            |  |  |            |   |  | 37,500    |  
|- at $291.22 per
      share                                                        |  | 55     |  |  | 16,017    |  |  |            |  |  |            |   |  | 16,017    |  
|- at $480.23 per share                                                              |  | 22     |  |  | 10,565    |  |  |            |  |  |            |   |  | 10,565    |  
|                                                                                    |  |        |  |  |           |  |  |             |  |  |             |   |  |           |  
|Net income for the year                                                             |  |       |  |  |          |  |  |            |  |  | 445,784     |   |  | 445,784   |  
|                                                                                    |  |        |  |  |           |  |  |             |  |  |             |   |  |           |  
|Balance  November 30, 1991                                                         |  | 15,355 |  |  | 1,266,608 |  |  |            |  |  | (37,390     | ) |  | 1,229,218 |  
|                                                                                    |  |        |  |  |           |  |  |             |  |  |             |   |  |           |  
|Shares issued for exercise of options:                                              |  |        |  |  |           |  |  |             |  |  |             |   |  |           |  
|- at $270.92 per
      share                                                        |  | 119    |  |  | 32,240    |  |  |            |  |  |            |   |  | 32,240    |  
|- at $332.48 per share                                                              |  | 27     |  |  | 8,977     |  |  |            |  |  |            |   |  | 8,977     |  
|                                                                                    |  |        |  |  |           |  |  |             |  |  |             |   |  |           |  
|Shares issued for finders fees at
      $262.50 per share                          |  | 143    |  |  | 37,500    |  |  |            |  |  |            |   |  | 37,500    |  
|                                                                                    |  |        |  |  |           |  |  |             |  |  |             |   |  |           |  
|Net loss for the year                                                               |  |       |  |  |          |  |  |            |  |  | (788,460    | ) |  | (788,460  | )
|                                                                                    |  |        |  |  |           |  |  |             |  |  |             |   |  |           |  
|Balance  November 30, 1992                                                         |  | 15,644 |  |  | 1,345,325 |  |  |            |  |  | (825,850    | ) |  | 519,475   |  

The accompanying notes are an integral part of these financial
  statements

---

HIP Energy Corp. 
  (Formerly Bradner Ventures Ltd.) 
  (A Development Stage Company) 
  Statement of Stockholders Equity (Deficiency) 
  From June 22, 1983 (Date of Inception) to November 30, 2009 
  (Expressed in Canadian dollars)

|                                                                            |  |        |  |  |           |  |  |             |  |  | Deficit     |   |  |          |  
|--------------------------------------------------------------------------- |  | ------ |  |  | --------- |  |  | ----------- |  |  | ----------- | - |  | -------- | -
|                                                                            |  |        |  |  |           |  |  |             |  |  | Accumulated |   |  |          |  
|                                                                            |  |        |  |  |           |  |  |             |  |  | During the  |   |  |          |  
|                                                                            |  |        |  |  |           |  |  | Contributed |  |  | Development |   |  |          |  
|                                                                            |  | Shares |  |  | Amount    |  |  | Surplus     |  |  | Stage       |   |  | Total    |  
|                                                                            |  | #      |  |  | $         |  |  | $           |  |  | $           |   |  | $        |  
|                                                                            |  |        |  |  |           |  |  |             |  |  |             |   |  |          |  
|Balance  November 30, 1992                                                 |  | 15,644 |  |  | 1,345,325 |  |  |            |  |  | (825,850    | ) |  | 519,475  |  
|                                                                            |  |        |  |  |           |  |  |             |  |  |             |   |  |          |  
|Shares issued for acquisition of mineral
      property:                    |  |        |  |  |           |  |  |             |  |  |             |   |  |          |  
|- at $69.93 per share                                                       |  | 143    |  |  | 10,000    |  |  |            |  |  |            |   |  | 10,000   |  
|- at $87.41 per
      share                                                 |  | 286    |  |  | 25,000    |  |  |            |  |  |            |   |  | 25,000   |  
|- at $104.90 per share                                                      |  | 143    |  |  | 15,000    |  |  |            |  |  |            |   |  | 15,000   |  
|                                                                            |  |        |  |  |           |  |  |             |  |  |             |   |  |          |  
|Shares issued for finders fee at $52.56 per share                          |  | 254    |  |  | 13,350    |  |  |            |  |  |            |   |  | 13,350   |  
|                                                                            |  |        |  |  |           |  |  |             |  |  |             |   |  |          |  
|Private placement at $52.50 per share                                       |  | 2,857  |  |  | 150,000   |  |  |            |  |  |            |   |  | 150,000  |  
|                                                                            |  |        |  |  |           |  |  |             |  |  |             |   |  |          |  
|Shares issued for settlement of debt at $54.22 
      per share             |  | 1,460  |  |  | 79,166    |  |  |            |  |  |            |   |  | 79,166   |  
|                                                                            |  |        |  |  |           |  |  |             |  |  |             |   |  |          |  
|Shares issued for exercise of options:                                      |  |        |  |  |           |  |  |             |  |  |             |   |  |          |  
|- at $56.00 per
      share                                                 |  | 1,419  |  |  | 79,470    |  |  |            |  |  |            |   |  | 79,470   |  
|- at $108.49 per share                                                      |  | 884    |  |  | 95,901    |  |  |            |  |  |            |   |  | 95,901   |  
|                                                                            |  |        |  |  |           |  |  |             |  |  |             |   |  |          |  
|Net loss for the
      year                                                 |  |       |  |  |          |  |  |            |  |  | (754,698    | ) |  | (754,698 | )
|                                                                            |  |        |  |  |           |  |  |             |  |  |             |   |  |          |  
|Balance  November 30, 1993                                                 |  | 23,090 |  |  | 1,813,212 |  |  |            |  |  | (1,580,548  | ) |  | 232,664  |  
|                                                                            |  |        |  |  |           |  |  |             |  |  |             |   |  |          |  
|Shares issued for settlement of debt at $45.49 
      per share             |  | 2,474  |  |  | 112,553   |  |  |            |  |  |            |   |  | 112,553  |  
|                                                                            |  |        |  |  |           |  |  |             |  |  |             |   |  |          |  
|Exercise of options at $50.43 per share                                     |  | 115    |  |  | 5,800     |  |  |            |  |  |            |   |  | 5,800    |  
|                                                                            |  |        |  |  |           |  |  |             |  |  |             |   |  |          |  
|Exercise of warrants at $52.73 per share                                    |  | 165    |  |  | 8,700     |  |  |            |  |  |            |   |  | 8,700    |  
|                                                                            |  |        |  |  |           |  |  |             |  |  |             |   |  |          |  
|Net loss for the
      year                                                 |  |       |  |  |          |  |  |            |  |  | (201,255    | ) |  | (201,255 | )
|                                                                            |  |        |  |  |           |  |  |             |  |  |             |   |  |          |  
|Balance  November 30, 1994                                                 |  | 25,844 |  |  | 1,940,265 |  |  |            |  |  | (1,781,803  | ) |  | 158,462  |  
|                                                                            |  |        |  |  |           |  |  |             |  |  |             |   |  |          |  
|Shares issued for exercise of options:                                      |  |        |  |  |           |  |  |             |  |  |             |   |  |          |  
|- at $42.00 per
      share                                                 |  | 1,727  |  |  | 72,536    |  |  |            |  |  |            |   |  | 72,536   |  
|- at $50.75 per share                                                       |  | 650    |  |  | 32,986    |  |  |            |  |  |            |   |  | 32,986   |  
|- at $54.25 per
      share                                                 |  | 188    |  |  | 10,199    |  |  |            |  |  |            |   |  | 10,199   |  
|- at $57.62 per share                                                       |  | 315    |  |  | 18,150    |  |  |            |  |  |            |   |  | 18,150   |  
|- at $73.52 per
      share                                                 |  | 1,252  |  |  | 92,046    |  |  |            |  |  |            |   |  | 92,046   |  
|- at $87.44 per share                                                       |  | 589    |  |  | 51,500    |  |  |            |  |  |            |   |  | 51,500   |  
|                                                                            |  |        |  |  |           |  |  |             |  |  |             |   |  |          |  
|Shares issued for exercise of warrants:                                     |  |        |  |  |           |  |  |             |  |  |             |   |  |          |  
|- at $49.00 per
      share                                                 |  | 1,714  |  |  | 84,000    |  |  |            |  |  |            |   |  | 84,000   |  
|- at $61.25 per share                                                       |  | 2,946  |  |  | 180,425   |  |  |            |  |  |            |   |  | 180,425  |  
|                                                                            |  |        |  |  |           |  |  |             |  |  |             |   |  |          |  
|Shares issued for private placements:                                       |  |        |  |  |           |  |  |             |  |  |             |   |  |          |  
|- at $49.01 per
      share                                                 |  | 1,714  |  |  | 84,000    |  |  |            |  |  |            |   |  | 84,000   |  
|- at $78.81 per share                                                       |  | 571    |  |  | 45,000    |  |  |            |  |  |            |   |  | 45,000   |  
|                                                                            |  |        |  |  |           |  |  |             |  |  |             |   |  |          |  
|Shares issued for acquisition of mineral property 
      at 78.67 per share |  | 286    |  |  | 22,500    |  |  |            |  |  |            |   |  | 22,500   |  
|                                                                            |  |        |  |  |           |  |  |             |  |  |             |   |  |          |  
|Net loss for the
      year                                                 |  |       |  |  |          |  |  |            |  |  | (304,564    | ) |  | (304,564 | )
|                                                                            |  |        |  |  |           |  |  |             |  |  |             |   |  |          |  
|Balance  November 30, 1995                                                 |  | 37,796 |  |  | 2,633,607 |  |  |            |  |  | (2,086,367  | ) |  | 547,240  |  

The accompanying notes are an integral part of these financial
  statements

---

HIP Energy Corp. 
  (Formerly Bradner Ventures Ltd.) 
  (A Development Stage Company) 
  Statement of Stockholders Equity (Deficiency) 
  From June 22, 1983 (Date of Inception) to November 30, 2009 
  (Expressed in Canadian dollars)

|                                                                                   |  |         |  |  |           |   |  |             |  |  | Deficit     |   |  |          |  
|---------------------------------------------------------------------------------- |  | ------- |  |  | --------- | - |  | ----------- |  |  | ----------- | - |  | -------- | -
|                                                                                   |  |         |  |  |           |   |  |             |  |  | Accumulated |   |  |          |  
|                                                                                   |  |         |  |  |           |   |  |             |  |  | During the  |   |  |          |  
|                                                                                   |  |         |  |  |           |   |  | Contributed |  |  | Development |   |  |          |  
|                                                                                   |  | Shares  |  |  | Amount    |   |  | Surplus     |  |  | Stage       |   |  | Total    |  
|                                                                                   |  | #       |  |  | $         |   |  | $           |  |  | $           |   |  | $        |  
|Balance  November 30, 1995                                                        |  | 37,796  |  |  | 2,633,607 |   |  |            |  |  | (2,086,367  | ) |  | 547,240  |  
|Shares issued for acquisition of mineral property 
      at $105.26 per share      |  | 114     |  |  | 12,000    |   |  |            |  |  |            |   |  | 12,000   |  
|Exercise of warrants at $78.81 per share                                           |  | 571     |  |  | 45,000    |   |  |            |  |  |            |   |  | 45,000   |  
|Private placement at $61.26 per share                                              |  | 857     |  |  | 52,500    |   |  |            |  |  |            |   |  | 52,500   |  
|Shares issued for exercise of options:                                             |  |         |  |  |           |   |  |             |  |  |             |   |  |          |  
|- at $87.55 per share                                                              |  | 948     |  |  | 82,998    |   |  |            |  |  |            |   |  | 82,998   |  
|- at $92.66 per
      share                                                        |  | 143     |  |  | 13,250    |   |  |            |  |  |            |   |  | 13,250   |  
|- at $103.15 per share                                                             |  | 572     |  |  | 59,000    |   |  |            |  |  |            |   |  | 59,000   |  
|Net loss for the year                                                              |  |        |  |  |          |   |  |            |  |  | (102,055    | ) |  | (102,055 | )
|Balance  November 30, 1996                                                        |  | 41,001  |  |  | 2,898,355 |   |  |            |  |  | (2,188,422  | ) |  | 709,933  |  
|Shares issued for acquisition of mineral
      property 
      at $43.75 per share |  | 143     |  |  | 6,250     |   |  |            |  |  |            |   |  | 6,250    |  
|Shares issued for exercise of options:                                             |  |         |  |  |           |   |  |             |  |  |             |   |  |          |  
|- at $45.71 per
      share                                                        |  | 1,514   |  |  | 68,900    |   |  |            |  |  |            |   |  | 68,900   |  
|- at $52.45 per share                                                              |  | 286     |  |  | 15,000    |   |  |            |  |  |            |   |  | 15,000   |  
|- at $54.26 per
      share                                                        |  | 857     |  |  | 46,500    |   |  |            |  |  |            |   |  | 46,500   |  
|Net loss for the
      year                                                        |  |        |  |  |          |   |  |            |  |  | (150,318    | ) |  | (150,318 | )
|Balance  November 30, 1997                                                        |  | 43,801  |  |  | 3,035,005 |   |  |            |  |  | (2,338,740  | ) |  | 696,265  |  
|Shares issued for cash at $26.23 per share                                         |  | 629     |  |  | 16,500    |   |  |            |  |  |            |   |  | 16,500   |  
|Shares issued for settlement of debt at
      $26.24 
      per share              |  | 2,025   |  |  | 53,144    |   |  |            |  |  |            |   |  | 53,144   |  
|Share issuance costs                                                               |  |        |  |  | (2,452    | ) |  |            |  |  |            |   |  | (2,452   | )
|Net loss for the year                                                              |  |        |  |  |          |   |  |            |  |  | (512,408    | ) |  | (512,408 | )
|Balance  November 30, 1998                                                        |  | 46,455  |  |  | 3,102,197 |   |  |            |  |  | (2,851,148  | ) |  | 251,049  |  
|Shares issued for settlement of debt at
      $26.25 
      per share              |  | 2,333   |  |  | 61,252    |   |  |            |  |  |            |   |  | 61,252   |  
|Net loss for the
      year                                                        |  |        |  |  |          |   |  |            |  |  | (369,731    | ) |  | (369,731 | )
|Balance  November 30, 1999                                                        |  | 48,788  |  |  | 3,163,449 |   |  |            |  |  | (3,220,879  | ) |  | (57,430  | )
|Shares issued for settlement of debt at $3.75 per 
      share                     |  | 24,689  |  |  | 92,581    |   |  |            |  |  |            |   |  | 92,581   |  
|Private placement at $4.75 per share                                               |  | 68,000  |  |  | 323,000   |   |  |            |  |  |            |   |  | 323,000  |  
|Share issuance costs                                                               |  |        |  |  | (1,498    | ) |  |            |  |  |            |   |  | (1,498   | )
|Net loss for the year                                                              |  |        |  |  |          |   |  |            |  |  | (91,248     | ) |  | (91,248  | )
|Balance  November 30, 2000                                                        |  | 141,477 |  |  | 3,577,532 |   |  |            |  |  | (3,312,127  | ) |  | 265,405  |  

The accompanying notes are an integral part of these financial
  statements

---

HIP Energy Corp. 
  (Formerly Bradner Ventures Ltd.) 
  (A Development Stage Company) 
  Statement of Stockholders Equity (Deficiency) 
  From June 22, 1983 (Date of Inception) to November 30, 2009 
  (Expressed in Canadian dollars)

|                                          |  |           |  |  |           |  |  |             |  |  | Deficit     |   |  |          |  
|----------------------------------------- |  | --------- |  |  | --------- |  |  | ----------- |  |  | ----------- | - |  | -------- | -
|                                          |  |           |  |  |           |  |  |             |  |  | Accumulated |   |  |          |  
|                                          |  |           |  |  |           |  |  |             |  |  | During the  |   |  |          |  
|                                          |  |           |  |  |           |  |  | Contributed |  |  | Development |   |  |          |  
|                                          |  | Shares    |  |  | Amount    |  |  | Surplus     |  |  | Stage       |   |  | Total    |  
|                                          |  | #         |  |  | $         |  |  | $           |  |  | $           |   |  | $        |  
|Balance  November 30, 2000               |  | 141,477   |  |  | 3,577,532 |  |  |            |  |  | (3,312,127  | ) |  | 265,405  |  
|Shares issued for cash at $8.00 per share |  | 5,000     |  |  | 40,000    |  |  |            |  |  |            |   |  | 40,000   |  
|Exercise of warrants at $6.25 per share   |  | 31,193    |  |  | 194,947   |  |  |            |  |  |            |   |  | 194,947  |  
|Net loss for the
      year               |  |          |  |  |          |  |  |            |  |  | (489,432    | ) |  | (489,432 | )
|Balance  November 30, 2001               |  | 177,670   |  |  | 3,812,479 |  |  |            |  |  | (3,801,559  | ) |  | 10,920   |  
|Shares issued for cash at $7.89 per share |  | 5,000     |  |  | 39,435    |  |  |            |  |  |            |   |  | 39,435   |  
|Exercise of options at $5.25 per share    |  | 3,600     |  |  | 18,900    |  |  |            |  |  |            |   |  | 18,900   |  
|Exercise of warrants at $6.25 per share   |  | 25,390    |  |  | 158,684   |  |  |            |  |  |            |   |  | 158,684  |  
|Net loss for the year                     |  |          |  |  |          |  |  |            |  |  | (261,950    | ) |  | (261,950 | )
|Balance  November 30, 2002               |  | 211,660   |  |  | 4,029,498 |  |  |            |  |  | (4,063,509  | ) |  | (34,011  | )
|Net loss for the year                     |  |          |  |  |          |  |  |            |  |  | (27,840     | ) |  | (27,840  | )
|Balance  November 30, 2003               |  | 211,660   |  |  | 4,029,498 |  |  |            |  |  | (4,091,349  | ) |  | (61,851  | )
|Units issued for cash at $0.25 per unit   |  | 1,000,000 |  |  | 250,000   |  |  |            |  |  |            |   |  | 250,000  |  
|Net loss for the
      year               |  |          |  |  |          |  |  |            |  |  | (49,597     | ) |  | (49,597  | )
|Balance  November 30, 2004               |  | 1,211,660 |  |  | 4,279,498 |  |  |            |  |  | (4,140,946  | ) |  | 138,552  |  
|Net loss for the
      year               |  |          |  |  |          |  |  |            |  |  | (71,186     | ) |  | (71,186  | )
|Balance  November 30, 2005               |  | 1,211,660 |  |  | 4,279,498 |  |  |            |  |  | (4,212,132  | ) |  | 67,366   |  
|Net loss for the
      year               |  |          |  |  |          |  |  |            |  |  | (58,145     | ) |  | (58,145  | )
|Balance  November 30, 2006               |  | 1,211,660 |  |  | 4,279,498 |  |  |            |  |  | (4,270,277  | ) |  | 9,221    |  
|Net loss for the
      year               |  |          |  |  |          |  |  |            |  |  | (61,980     | ) |  | (61,980  | )
|Balance  November 30, 2007               |  | 1,211,660 |  |  | 4,279,498 |  |  |            |  |  | (4,332,257  | ) |  | (52,759  | )
|Net loss for the year                     |  |          |  |  |          |  |  |            |  |  | (47,508     | ) |  | (47,508  | )
|Donated services                          |  |          |  |  |          |  |  | 5,000       |  |  |            |   |  | 5,000    |  
|Balance  November 30, 2008               |  | 1,211,660 |  |  | 4,279,498 |  |  | 5,000       |  |  | (4,379,765  | ) |  | (95,267  | )
|Private placement at $0.01 per share      |  | 5,000,000 |  |  | 58,291    |  |  |            |  |  |            |   |  | 58,291   |  
|Donated services (Note 8)                 |  |          |  |  |          |  |  | 5,000       |  |  |            |   |  | 5,000    |  
|Net loss for the year                     |  |          |  |  |          |  |  |            |  |  | (66,143     | ) |  | (66,143  | )
|Balance  November 30, 2009               |  | 6,211,660 |  |  | 4,337,789 |  |  | 10,000      |  |  | (4,445,908  | ) |  | (98,119  | )

The accompanying notes are an integral part of these financial
  statements

---

HIP Energy Corporation 
  (Formerly Bradner Ventures Ltd.) 
  (A Development Stage Company) 
  Notes to the Financial Statements 
  November 30, 2009, 2008 and 2007 
  (Expressed in Canadian dollars)

|1. | NATURE OF OPERATIONS AND ABILITY TO CONTINUE AS
      A GOING CONCERN                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | The Company was incorporated on June 22, 1983, and
      is currently in the business of seeking and identifying suitable business
      opportunities or business combinations in Canada. On November 17, 2009,
      the Company changed its name from Bradner Ventures Ltd. to HIP Energy
      Corporation. The Company's common shares are listed on the OTC Bulletin
      Board under the trading symbol "HIPCF". The Company is a development stage
      company and accordingly, the statements of operations and comprehensive
      loss, and cash flows include a total of all expenditures and other income
      and expenses since inception, June 22, 1983 to November 30, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | These financial statements have been prepared in accordance
      with generally accepted accounting principles in Canada applicable to
      a going concern, which assumes that the Company will be able to meet its
      obligations and continue its operations for its next fiscal year. Realization
      values may be substantially different from carrying values as shown and
      these financial statements do not give effect to adjustments that would
      be necessary to the carrying values and classification of assets and liabilities
      should the Company be unable to continue as a going concern. At November
      30, 2009, the Company had not yet identified a suitable business, has
      accumulated losses of $4,445,908 since its inception, had a working
      capital deficiency of $98,119 and expects to incur further losses
      in the development of its business, all of which casts substantial doubt
      about the Company's ability to continue as a going concern. The Companys
      ability to continue as a going concern is dependent upon its ability to
      generate future profitable operations and/or to obtain the necessary financing
      to meet its obligations and repay its liabilities arising from normal
      business operations when they become due.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | The operations of the Company have primarily been
      funded by the issuance of capital stock. Continued operations of the Company
      are dependent on the Company's ability to raise funds through debt financing,
      complete equity financings or generate profitable operations in the future.
      Management's plan in this regard is to secure additional funds through
      future equity financings. Such financings may not be available or may
      not be available on reasonable terms. The financial statements contain
      no adjustments which reflect the outcome of this uncertainty.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|2. | SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | The preparation of financial statements in conformity
      with Canadian 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 period. Actual results could differ from those
      estimates. By their nature, these estimates are subject to measurement
      uncertainty and the effect on the financial statements of changes in such
      estimates in future periods could be significant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | The financial statements have, in managements
      opinion, been properly prepared within the framework of the significant
      accounting policies summarized below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Foreign Currency Translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Monetary items denominated in foreign currencies are
      translated into Canadian dollars at exchange rates prevailing at the balance
      sheet date and non-monetary items are translated at exchange rates prevailing
      when the assets were acquired or obligations incurred. Foreign currency
      denominated revenue and expense items are translated at exchange rates
      prevailing at the transaction date. Gains and losses arising from the
      translations are included in operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

---

HIP Energy Corporation 
  (Formerly Bradner Ventures Ltd.) 
  (A Development Stage Company) 
  Notes to the Financial Statements 
  November 30, 2009, 2008 and 2007 
  (Expressed in Canadian dollars)

|2. | SIGNIFICANT ACCOUNTING POLICIES (Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | The Company follows the asset and liability method
      for determining income taxes. Under this method, future income tax assets
      and liabilities are recognized for temporary differences between the carrying
      amounts for financial statement purposes and the tax basis for certain
      assets and liabilities. Future income tax assets and liabilities are measured
      using enacted tax rates expected to apply to taxable income in the years
      in which these temporary differences are expected to be settled. The tax
      effects of changes in these temporary differences are recognized in income
      in the period in which they occur.                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Stock  Based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | The value of stock options granted is estimated on
      the date of grant using the Black-Scholes option-pricing model. The Black-Scholes
      option-pricing model requires the input of subjective assumptions, including
      the expected term of the option and stock price volatility. The expected
      term of options granted is determined based on historical data on the
      average hold period before exercise, expiry or cancellation. Expected
      volatility is based on the historical volatility of the share price of
      the Company. These estimates involve inherent uncertainties and the application
      of management judgment. In addition, the Company is required to estimate
      the expected forfeiture rate and only recognizes expense for those options
      expected to vest. As a result, if other assumptions had been used, the
      recorded stock-based compensation expense could have been different from
      that reported.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Basic and Diluted Loss Per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Basic loss per share is calculated by dividing the
      net loss available to common shareholders by the weighted average number
      of shares outstanding during the year. Diluted earnings per share reflect
      the potential dilution of securities that could share in earnings of an
      entity. In a loss year, potentially dilutive common shares are excluded
      from the loss per share calculation, as the effect would be anti-dilutive.
      Basic and diluted loss per share are the same for the years presented.                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | For the years ended November 30, 2009, 2008 and 2007,
      there were no potentially dilutive common shares relating to stock options
      and warrants outstanding at the year-end.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Mineral Properties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Mineral properties consist of exploration and mining
      concessions, options and contracts. Acquisition and leasehold costs are
      capitalized and deferred until such time as the property is put into production
      or the properties are disposed of either through sale or abandonment.
      If mineral properties are put into production, the costs of acquisition
      will be amortized over the life of the property based on estimated economic
      reserves. Proceeds received from the sale of any interest in a property
      will first be credited against the carrying value of the property, with
      any excess included in operations for the period. If a property is abandoned,
      the property costs that are not recoverable will be written-off to operations.                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Mineral properties exploration costs are expensed
      when incurred. Recorded costs of mineral properties are not intended to
      reflect present or future values of mineral properties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Comprehensive Income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | The Company follows CICA Handbook Section 1530 Comprehensive
      Income which establishes standards for reporting and presenting
      comprehensive income, which is defined as the change in equity from transactions
      and other events from non-owner sources. Other comprehensive income refers
      to items recognized in comprehensive income that are excluded from net
      income calculated in accordance with Canadian generally accepted accounting
      principles. At November 30, 2009, the Company does not have transactions
      and events which require the recognition of comprehensive income.                                                                                                                                                                                                                                                                                                                                                      

---

HIP Energy Corporation 
  (Formerly Bradner Ventures Ltd.) 
  (A Development Stage Company) 
  Notes to the Financial Statements 
  November 30, 2009, 2008 and 2007 
  (Expressed in Canadian dollars)

|2. | SIGNIFICANT ACCOUNTING POLICIES (Continued)                                                                                                                                                                                                                                                                                                                                                                        
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Financial Instruments  Recognition and Measurement                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | This standard requires all financial instruments within
      its scope, including derivatives, to be included on the balance sheet
      and measured either at fair value or, in certain circumstances when fair
      value may not be considered most relevant, at cost or amortized cost.
      Changes in fair value are to be recognized in either the Statements of
      Operations or Comprehensive Loss.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | In accordance with this standard, the Company has classified
      its financial instruments as follows:                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The Company classifies and measures its financial instruments
      as follows:                                                                                                                                                                                                                                                                                                                                    

| | • | Cash is classified as held-for-trading
      which is measured at fair value initially and in subsequent periods;                                                                                                                                                   
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                       
| | • | Accounts payable, accrued liabilities
      and advances payable are classified as other financial liabilities and
      are measured at fair value at inception. Subsequent valuations are recorded
      at amortized cost using the effective interest rate method.

Financial Instruments  Presentation
  and Disclosures

Handbook Section 3862, Financial Instruments
   Disclosures, was amended in June 2009. It establishes revised standards
  for the disclosure of financial instruments. The standard establishes a three-tier
  hierarchy as a framework for disclosing fair value of financial instruments
  based on inputs used to value the Companys investments. The amended standard
  has no impact on the Companys financial statements.

See additional disclosures on financial
  instruments on Note 11.

Accounting Changes

The Company adopted CICA Handbook Section
  1506 Accounting Changes which revises the standards on changes in
  accounting policy, estimates or errors to require a change in accounting policy
  to be applied retrospectively (unless doing so is impracticable or is specified
  otherwise by a new accounting standard), changes in estimates to be recorded
  prospectively, and prior period errors to be corrected retrospectively. Voluntary
  changes in accounting policy are allowed only when they result in financial
  statements that provide reliable and more relevant information. In addition,
  these revised standards call for enhanced disclosures about the effects of changes
  in accounting policies, estimates and errors on the financial statements. The
  impact of this new standard cannot be determined until such time as the Company
  makes a change in accounting policy, other than the changes resulting from the
  implementation of the new CICA Handbook standards discussed in this note.

Cash Distributions

The Company follows the CICA Handbook
  Section 1540, Cash Flow Statements, which has been amended to require
  additional disclosures where cash distributions are made in accordance with
  a contractual obligation for cash distributions. The adoption of this section
  has not resulted in any changes on the disclosure within the financial statements.

Capital Disclosures

CICA Handbook Section 1535 Capital
  Disclosures: The new standard is effective for annual and interim periods
  beginning on or after October 1, 2007 and requires disclosure of the Companys
  objectives, policies, and processes for managing capital; quantitative data
  about what the Company regards as capital; whether the Company has complied
  with any capital requirements; and, if the Company has not complied, the consequences
  of such noncompliance. The new accounting standard covers disclosure only and
  had no effect on the financial position or results of the Company.

---

HIP Energy Corporation 
  (Formerly Bradner Ventures Ltd.) 
  (A Development Stage Company) 
  Notes to the Financial Statements 
  November 30, 2009, 2008 and 2007 
  (Expressed in Canadian dollars)

|2. | SIGNIFICANT ACCOUNTING POLICIES (Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Recently Adopted Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The Canadian Accounting Stardards Board (AcSB)
      issued CICA Handbook Section 3064 which replaces Section 3062, Goodwill
      and Other Intangible Assets, and Section 3450, Research and Development
      Costs. This new section establishes standards for the recognition, measurement,
      presentation and disclosure of goodwill subsequent to its initial recognition
      and of intangible assets. Standards concerning goodwill remain unchanged
      from the standards included in the previous Section 3062. The section
      applies to interim and annual financial statements relating to fiscal
      years beginning on or after October 1, 2008. Effective December 1, 2008,
      the Company has applied this standard and the adoption of this did not
      have material impact on the financial statements.                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The amended Section 1400 provides guidance related
      to managements assessment of the Companys ability to continue
      as a going concern. The additional requirement requires management to
      make an assessment of the Companys ability to continue as a going
      concern and to disclose any material uncertainties related to events or
      conditions that may cast significant doubt upon the entitys ability
      to continue as a going concern. Note 1 addresses the additional disclosure
      as required.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The CICA handbook Section 1000 has been amended to
      focus on the capitalization of costs that meet the definition of an asset
      and de-emphasizes the matching principle. The revised requirements are
      effective for annual and interim financial statements relating to fiscal
      years beginning on or after October 1, 2008. The amendment has not resulted
      in any changes on the financial position or results of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Recent Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | In 2006, the AcSB published a new strategic plan that
      will significantly affect financial reporting requirements for Canadian
      companies. The AcSB strategic plan outlines the convergence of Canadian
      GAAP with IFRS over an expected five year transitional period. In February
      2008, the AcSB announced that 2011 is the changeover date for publicly-listed
      companies to use IFRS, replacing Canadas own GAAP. The date is for
      interim and annual financial statements relating to fiscal years beginning
      on or after January 1, 2011. The transition date of January 1, 2011 will
      require the restatement for comparative purposes of amounts reported by
      the Company for the year ended November 30, 2011. While the Company has
      begun assessing the adoption of IFRS for 2011, the financial reporting
      impact of the transition to IFRS cannot be reasonably estimated at this
      time. The Company is currently assessing the impact of the above new accounting
      standards on the Companys financial positions and results of operations.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The CICA handbook Section 1601, Consolidated
      Financial Statements, and Section 1602, Non-controlling Interests,
      replaces Section 1600. Section 1601 establishes standards for the preparation
      of consolidated financial statements. Section 1602 establishes standards
      for accounting, for a non-controlling interest in a subsidiary in consolidated
      financial statements, subsequent to a business combination. Section 1602
      is equivalent to the corresponding provisions of International Financial
      Reporting Standard IAS 27, Consolidated and Separate Financial Statements.
      These standards are effective for the Company for interim and annual financial
      statements beginning on January 1, 2011. Early adoption is permitted.
      The Company has not yet determined the impact of the adoption of these
      changes on its financial statements.                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The CICA handbook Section 1582, Business Combinations,
      which replaces Section 1581, Business Combinations, establishes
      standards for the accounting for a business combination. It is the Canadian
      GAAP equivalent to International Financial Reporting Standard IFRS 3,
      Business Combinations. This standard is effective for interim
      and annual financial statements beginning on January 1, 2011. Early adoption
      is permitted. The Company has not yet determined the impact of the adoption
      of these changes on its financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

---

HIP Energy Corporation 
  (Formerly Bradner Ventures Ltd.) 
  (A Development Stage Company) 
  Notes to the Financial Statements 
  November 30, 2009, 2008 and 2007 
  (Expressed in Canadian dollars)

|3. | CAPITAL DISCLOSURES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Effective December 1, 2007, the Company adopted
      the new CICA guidelines of Section 1535, Capital Disclosures,
      which requires companies to disclose their objectives, policies and processes
      for managing capital, quantitative data about what the entity regards
      as capital, and whether companies have complied with externally imposed
      capital requirements and, if not in compliance, the consequences of such
      non- compliance.                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | In the management of capital, the Company
      includes cash in the definition of capital.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | The Company manages its capital structure
      and makes adjustments to it, based on the funds available to the Company,
      in order to seek and identify suitable business opportunities or business
      combinations in Canada. The board of directors does not establish quantitative
      return on capital criteria for management, but rather relies on the expertise
      of the Companys management to sustain future development of the
      business.                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | The Company places its cash with institutions
      of high credit worthiness. At November 30, 2009, the Company had cash
      of $12,229 (2008: $4,623).                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | The Company currently has not identified business
      opportunities; as such the Company has historically relied on the equity
      markets and advances from related parties to fund its activities. In order
      to carry out identifying business opportunities and pay for administrative
      costs, the Company will spend its existing working capital and raise additional
      funds as needed. The Company will continue to assess new opportunities
      and seek to acquire business if it feels there are sufficient benefits
      to the Company and if it has adequate financial resources to do so.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Management reviews its capital management
      approach on an ongoing basis and believes that this approach, given the
      relative size of the Company, is reasonable. There have been no changes
      made to the capital management policy during the year.                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|4. | MINERAL PROPERTY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | During the year ended November 30, 2007, the
      Company was in the process of acquiring an exploration permit to a mineral
      claim located in British Columbia, Canada for a term which expired on
      November 30, 2008. The Company paid a $5,000 security deposit and incurred
      $3,921 in exploration costs on the mineral claim.                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | During the year ended November 30, 2008, the
      Company abandoned the mineral claim and received a refund for the security
      deposit of $5,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|5. | RELATED PARTY TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | The Company entered into the following transactions
      with related parties, which are measured at the exchange amount.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | f)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

---

HIP Energy Corporation 
  (Formerly Bradner Ventures Ltd.) 
  (A Development Stage Company) 
  Notes to the Financial Statements 
  November 30, 2009, 2008 and 2007 
  (Expressed in Canadian dollars)

|6. | CAPITAL STOCK                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Common Shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The common shares of the Company are all of the same
      class, are voting and entitle stockholders to receive dividends. Upon
      liquidation or wind-up, stockholders are entitled to participate equally
      with respect to any distribution of net assets or any dividends which
      may be declared.                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | On May 12, 2009, the Company completed a private placement
      with a director of the Company for the purchase of 5,000,000 common shares
      for proceeds of $58,291 (US$50,000).                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | On November 19, 2009, the Company effected a 5:1 reverse
      stock split of the authorized, issued and outstanding common and preferred
      stock. The
      issued and outstanding common stock decreased from 31,058,255 shares to
      6,211,660 shares. All share amounts have been retroactively adjusted for
      all periods presented.                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Preferred Shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The preferred shares of the Company may be issued in
      one or more series and may be designated as voting or non-voting and cumulative
      or non-cumulative. Upon liquidation or wind-up, stockholders are entitled
      to participate equally with respect to any distribution of net assets
      before any distribution is made to the holders of the common shares. The
      Company had no preferred shares outstanding at November 30, 2009, 2008
      and 2007.                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Stock Options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The Company, from time to time, allows officers, key
      employees and non-employee directors to be granted options to purchase
      shares of the Companys authorized but un-issued common stock. Options
      currently expire no later than 10 years from the grant date and generally
      vest on the date of grant. These options are granted with an exercise
      price equal to the market price of the Companys common stock on
      the date of the grant. The Company had no options outstanding as at November
      30, 2009, 2008 and 2007.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Warrants                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The following is a summary of the activity of the warrants
      issued for the fiscal years ended 2009, 2008, and 2007:                                                                                                                                                                                                                                                                                                                                                                                                                                           

| |                            |  | November 30, 2009 |  |  | November
      30, 2008 |  |  | November
      30, 2007 | 
| | -------------------------- |  | ----------------- |  |  | ----------------------- |  |  | ----------------------- | 
| |                            |  | Exercise          |  |  |                         |  |  |                         | 
| |                            |  | Number            |  |  | Price                   |  |  | Number                  | 
| |                            |  |                   |  |  |                         |  |  |                         | 
| | Balance, beginning of year |  |                  |  |  |                        |  |  |                        | 
| | Expired                    |  |                  |  |  |                        |  |  |                        | 
| |                            |  |                   |  |  |                         |  |  |                         | 
| | Balance, end of year       |  |                  |  |  |                        |  |  |                        | 

---

HIP Energy Corporation 
  (Formerly Bradner Ventures Ltd.) 
  (A Development Stage Company) 
  Notes to the Financial Statements 
  November 30, 2009, 2008 and 2007 
  (Expressed in Canadian dollars)

|7. | INCOME TAXES                                                                                                         
|-- | ---------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                      
|   | A reconciliation of income tax recovery at statutory
      rates with the reported income tax recovery is as follows:

| |                                                                   |   | 2009    |   |   | 2008    |   |   | 2007     |  
| | ----------------------------------------------------------------- | - | ------- | - | - | ------- | - | - | -------- | -
| |                                                                   |   |         |   |   |         |   |   |          |  
| | Basic statutory and provincial income tax rate                    |   | 30.04%  |   |   | 31.30%  |   |   | 34.12%   |  
| |                                                                   |   |         |   |   |         |   |   |          |  
| | Net loss                                                          | $ | (66,143 | ) | $ | (47,508 | ) | $ | (61,980  | )
| |                                                                   |   |         |   |   |         |   |   |          |  
| | Expected income tax recovery on net loss,
      before income tax | $ | 20,000  |   | $ | 15,000  |   | $ | 21,000   |  
| | Differences due to recognition of items for tax purposes:         |   |         |   |   |         |   |   |          |  
| | Effects of reduction in statutory rate                            |   | (21,000 | ) |   | (2,000  | ) |   | (118,000 | )
| | Permanent differences                                             |   | (2,000  | ) |   | (2,000  | ) |   | -        |  
| | Expiry of non-capital loss carry forward                          |   | (42,000 | ) |   | (19,000 | ) |   | -        |  
| | Change in valuation allowance                                     |   | 45,000  |   |   | 8,000   |   |   | 97,000   |  
| |                                                                   |   |         |   |   |         |   |   |          |  
| | Total income tax recovery                                         | $ | -       |   | $ | -       |   | $ | -        |  

The significant components of the Companys
  future income tax assets and liabilities are as follows:

|                                       |   | 2009     |   |   | 2008     |  
|-------------------------------------- | - | -------- | - | - | -------- | -
|                                       |   |          |   |   |          |  
|Future estimated income tax assets:    |   |          |   |   |          |  
|Non-capital losses carried forward     | $ | 93,000   |   | $ | 126,000  |  
|Exploration expenses                   |   | 229,000  |   |   | 238,000  |  
|Capital
      loss carry-forwards      |   | 92,000   |   |   | 95,000   |  
|                                       |   | 414,000  |   |   | 459,000  |  
|Valuation allowance                    |   | (414,000 | ) |   | (459,000 | )
|Net future estimated income tax assets | $ | -        |   | $ | -        |  

As at November 30, 2009, the Company
  has accumulated Canadian and foreign exploration costs totaling $916,000 and
  non-capital losses totaling $373,000. The Company also has $734,000 of capital
  losses which may be applied to future capital gains, which may be carried forward
  to apply against future years income for Canadian income tax purposes.
  Potential benefits of these losses and exploration costs have not been recognized
  in these financial statements because the Company cannot be assured it is more
  likely than not they will be utilized in future years. The non-capital losses
  expire as follows:

|2011 |   | 28,000  | 
|---- | - | ------- | 
|2014 |   | 50,000  | 
|2015 |   | 71,000  | 
|2026 |   | 58,000  | 
|2027 |   | 62,000  | 
|2028 |   | 43,000  | 
|2029 |   | 61,000  | 
|     | $ | 373,000 | 

For income tax purposes, the Company
  reports certain transactions in different periods than reported for financial
  statement purposes. The Company has incurred operating losses since its inception
  and, therefore, no tax liabilities have been incurred for the years presented.

---

HIP Energy Corporation 
  (Formerly Bradner Ventures Ltd.) 
  (A Development Stage Company) 
  Notes to the Financial Statements 
  November 30, 2009, 2008 and 2007 
  (Expressed in Canadian dollars)

|8. | CONTRIBUTED SURPLUS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | During the year ended November 30, 2009, a Company
      with a common director provides bookkeeping services and management services
      at no cost. The fair value of the bookkeeping services of $3,000 (2008:
      $3,000) and the fair value of the management services of $2,000
      (2008: $2,000) have been recorded in the statement of operations and
      in contributed surplus.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|9. | UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | These financial statements have been prepared in accordance
      with generally accepted accounting principles (GAAP) in Canada.
      There are no material differences between Canadian GAAP and United States
      GAAP on the balance sheets and statements of operations and comprehensive
      loss, cash flows and stockholders equity (deficiency) for 2009,
      2008 and 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Recent Accounting Pronouncement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | In June 2009, FASB issued The FASB Accounting
      Standards Codification and the Hierarchy of Generally Accepted Accounting
      Principles  a replacement of FASB Statement No. 162. The FASB
      Accounting Standards Codification (Codification) will become
      the source of authoritative U.S. generally accepted accounting principles
      (GAAP) recognized by FASB to be applied by nongovernmental
      entities. Rules and interpretive releases of the Securities and Exchange
      Commission SEC under authority of federal securities laws
      are also sources of authoritative GAAP for SEC registrants. On the effective
      date of this statement, the Codification will supersede all then-existing
      non-SEC accounting and reporting standards. All other non- grandfathered
      non-SEC accounting literature not included in the Codification will become
      non-authoritative. This statement is effective for financial statements
      issued for interim and annual periods ending after September 30, 2009.
      Effective December 1, 2008, references made to FASB guidance throughout
      this financial statements have been updated for the Codification.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Effective December 1, 2008, the Company adopted a
      new accounting standard included in ASC 805, Business Combinations. The
      new standard applies to all transactions or other events in which an entity
      obtains control of one or more businesses. Additionally, the new standard
      requires the acquiring entity in a business combination to recognize all
      (and only) the assets acquired and liabilities assumed in the transaction;
      establishes the acquisition-date fair value as the measurement date for
      all assets acquired and liabilities assumed; and requires the acquirer
      to disclose additional information needed to evaluate and understand the
      nature and financial effect of the business combination. The Companys
      adoption of the new accounting standard did not have a material effect
      on the Companys financial statements.                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | In January 2010, FASB issued an Accounting Standard
      Update, ASU No. 2010-06, on codification, Fair value Measurements and
      Disclosures (Topic 820-10), improving disclosures about fair value measurements.
      This update provides amendments to Topic 820 that will provide more robust
      disclosures about (1) the different classes of assets and liabilities
      measured at fair value, (2) the valuation techniques and inputs used,
      (3) the activity in Level 3 fair value measurements, and (4) the transfers
      between Levels 1, 2, and 3. The standard adds new disclosure and clarifies
      existing disclosure requirements. The new standard requires disclosures
      of the fair value of financial instruments for interim reporting periods
      of publicly traded companies in addition to the annual disclosure required
      at year-end. The provisions of the new standard are effective for the
      interim periods ending after June 15, 2009. The adoption of the new standard
      did not have a material on the Companys financial statements.                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | In September 2009, FASB issued an Accounting Standards
      Update, ASU No. 2009-06, Income Taxes (Topic 740)  Implementation
      Guidance on Accounting for Uncertainty in Income Taxes and Disclosure
      Amendments for Nonpublic Entities. This update is to address the need
      for additional implementation guidance on accounting for uncertainty in
      income taxes. The implementation guidance will apply to financial statements
      of nongovernmental entities that are presented in conformity with U.S.
      GAAP. The effective date is for entities that are currently applying the
      standards for accounting for uncertainty in income taxes, the guidance
      and disclosure amendments are effective for financial statements issued
      for interim and annual periods ending after September 15, 2009. For those
      entities that have deferred the application of accounting for uncertainty
      in income taxes in accordance with paragraph 740-10-65-1(e), the guidance
      and disclosure amendments are effective upon adoption of those standards.
      The adoption of the new standard did not have a material on the Companys
      financial statements.     

---

HIP Energy Corporation 
  (Formerly Bradner Ventures Ltd.) 
  (A Development Stage Company) 
  Notes to the Financial Statements 
  November 30, 2009, 2008 and 2007 
  (Expressed in Canadian dollars)

|9. | UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
      (Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Recent Accounting Pronouncement (Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | In May 2009, FASB issued ASC 855, Subsequent
      Events, which establishes general standards of for the evaluation,
      recognition and disclosure of events and transactions that occur after
      the balance sheet date. Although there is new terminology, the standard
      is based on the same principles as those that currently exist in the auditing
      standards. The standard, which includes a new required disclosure of the
      date through which an entity has evaluated subsequent events, is effective
      for interim or annual periods ending after June 15, 2009. The adoption
      of ASC 855 did not have a material effect on the Companys financial
      statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | In August 2009, FASB issued an Accounting Standards
      Update, ASU No. 2009-5 Fair Value of Measurements and Disclosure
      (Topic 820)  Measuring Liabilities at Fair Value. The new
      guidance, which is now part of ASC 820, provides clarification that in
      certain circumstances in which a quoted price in an active market for
      the identical liability is not available, a company is required to measure
      fair value using one or more of the following valuation techniques: the
      quoted price of the identical liability when traded as an asset, the quoted
      prices for similar liabilities or similar liabilities when traded as assets,
      or another valuation technique that is consistent with the principles
      of fair value measurements. The new guidance clarifies that a company
      is not required to include an adjustment for restrictions that prevent
      the transfer of the liability and if an adjustment is applied to the quoted
      price used in a valuation technique, the result is a Level 2 or 3 fair
      value measurement. The new guidance is effective for interim and annual
      periods beginning after August 27, 2009. The adoption of this standard
      did not have a material effect on the Companys financial statements.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Accounting Standards Not Yet Effective                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | FASB issued a new accounting standard included in
      ASC 820, The new standard requires disclosures of the fair value of financial
      instruments for interim reporting periods of publicly traded companies
      in addition to the annual disclosure required at year-end. The provisions
      of the new standard were effective for the interim periods ending after
      December 15, 2009. The adoption of this standard is not expected to have
      a material effect on the Companys financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | In September 2009, FASB issued an Accounting Standards
      Update, ASU No. 2009-12, Fair Value Measurement and Disclosures,
      Topic (820). This amendments to Subtopic 820-10, Fair Value Measurements
      and DisclosuresOverall, for the fair value measurement of investments
      in certain entities that calculate net asset value per share (or its equivalent).
      The amendments in this Update also require disclosures by major category
      of investment about the attributes of investments within the scope of
      the amendments in this Update. The amendments in this Update are effective
      for interim and annual periods ending after December 15, 2009. Early application
      is permitted in financial statements for earlier interim and annual periods
      that have not been issued. If an entity elects to early adopt the measurement
      amendments in this Update, the entity is permitted to defer the adoption
      of the disclosure provisions of paragraph 820-10-50- 6A until periods
      ending after December 15, 2009. The Company is evaluating the impact it
      would have to the Companys financial statements.                                                                                                                                        

---

HIP Energy Corporation 
  (Formerly Bradner Ventures Ltd.) 
  (A Development Stage Company) 
  Notes to the Financial Statements 
  November 30, 2009, 2008 and 2007 
  (Expressed in Canadian dollars)

|10. | NON-CASH TRANSACTIONS
|--- | ---------------------

| |                                                   |  | Accumulated from    |  |  |                          |  |  |       |  |  |      | 
| | ------------------------------------------------- |  | ------------------- |  |  | ------------------------ |  |  | ----- |  |  | ---- | 
| |                                                   |  | June 22, 1983       |  |  |                          |  |  |       |  |  |      | 
| |                                                   |  | (Date of Inception) |  |  | Years ended November 30, | 
| |                                                   |  | to November 30,     |  |  |                          |  |  |       |  |  |      | 
| |                                                   |  | 2009                |  |  | 2009                     |  |  | 2008  |  |  | 2007 | 
| |                                                   |  | $                   |  |  | $                        |  |  | $     |  |  | $    | 
| |                                                   |  |                     |  |  |                          |  |  |       |  |  |      | 
| | Shares issued for settlement of debt              |  | 422,996             |  |  |                         |  |  |      |  |  |     | 
| | Shares issued for finders fee                    |  | 179,932             |  |  |                         |  |  |      |  |  |     | 
| | Shares issued for acquisition of mineral property |  | 409,866             |  |  |                         |  |  |      |  |  |     | 
| | Donated services
      (note 8)                   |  | 10,000              |  |  | 5,000                    |  |  | 5,000 |  |  |     | 

|11. | FINANCIAL INSTRUMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Financial Instrument Risk Exposure and Risk Management                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | The Companys risk management policies are established
      to identify and analyze the risks faced by the Company, to set appropriate
      risk limits and controls, and to monitor risks and adherence to market
      conditions and the Companys activities. The Company has exposure
      to credit risk, liquidity risk and market risk as a result of its use
      of financial instruments. This note presents information about the Companys
      exposure to each of the above risks and the Companys objectives,
      policies and processes for measuring and managing these risks.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Financial instruments issued by the Company are treated
      as equity only to the extent that they do not meet the definition of a
      financial liability. The Companys common shares are classified as
      equity instruments.                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | The Board of Directors has overall responsibility for
      the establishment and oversight of the Companys risk management
      framework. The Board has implemented and monitors compliance with risk
      management policies as set out herein:                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Credit Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | The Company is primarily exposed to credit risk on its
      bank accounts. Credit risk exposure is limited through maintaining its
      cash with high-credit quality financial institutions.                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Liquidity Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | The Company ensures that there is sufficient capital
      in order to meet short term business requirements, after taking into account
      the Companys holdings of cash. The Company believes that these sources
      will be sufficient to cover the expected short and long term cash requirements.                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Interest Rate Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Interest rate risk is the risk that future cash flows
      will fluctuate as a result of changes in market interest rates. The Company
      is not exposed to significant interest rate risk on its cash.                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Foreign Currency Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Foreign currency exchange rate risk is the risk that
      the fair value or future cash flows will fluctuate as a result of changes
      in foreign exchange rates. As significant transactions of the Company
      are denominated in Canadian dollars, the Company is not significantly
      exposed to foreign currency exchange risk at this time.                                                                                                                                                                                                                                              

---

|HIP Energy Corporation           
|---------------------------------
|(Formerly Bradner Ventures Ltd.) 
|(A Development Stage Company)    
|Notes to the Financial Statements
|November 30, 2009, 2008 and 2007 
|(Expressed in Canadian dollars)  

|12. | SUBSEQUENT EVENTS                                                                                      
|--- | -------------------------------------------------------------------------------------------------------
|    |                                                                                                        
|    | •                                                                                                      
|    |                                                                                                        
|    |                                                                                                        
|    |                                                                                                        
|    |                                                                                                        
|    |                                                                                                        
|    | •                                                                                                      
|    |                                                                                                        
|    | •                                                                                                      
|    |                                                                                                        
|    | •                                                                                                      
|    |                                                                                                        
|13. | COMPARATIVE FIGURES                                                                                    
|    |                                                                                                        
|    | Certain comparative figures have been reclassified
      to conform to the current years presentation.

---



ITEM
18           Financial
Statements

Refer to Item 17 - Financial Statements.

ITEM
19           Exhibits

The following exhibits are being filed as part of this annual
report, or are incorporated by reference where indicated:

|1.1  | Articles of Incorporation, effective
        June 22, 1983 (incorporated by reference from our Registration Statement
        on Form 20-F/A, filed on January 22, 2001).                                                                                                                      
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                
|1.2  | Altered Memorandum, dated December
        13, 1999 (incorporated by reference from our Registration Statement on
        Form 20-F/A, filed on January 22, 2001).                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                
|1.3  | Certificate of Change of Name, dated
        December 13, 1999 (incorporated by reference from our Registration Statement
        on Form 20-F/A, filed on January 22, 2001).                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                
|1.4  | Notice of Alteration of Articles, effective
        March 31, 2004 (incorporated by reference from our Registration Statement
        on Form 20-F, filed on June 1, 2004).                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                
|1.5  | Notice of Alteration of Articles, effective
        March 31, 2004 (incorporated by reference from our Registration Statement
        on Form 20-F, filed on June 1, 2004).                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                
|1.6  | Notice of Articles, effective October
        20, 2009 (incorporated by reference from our Registration Statement on
        Form 20-F, filed on April 5, 2010).                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                
|4.   | Material Agreements                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                
|4.1  | Asset Purchase Agreement dated March
        14, 2010 among HIP Energy Corporation, HIP Energy (Texas), Inc., HIP Energy
        Resource Limited, and Equi Energy LLC (incorporated by reference from
        our Registration Statement on Form 20-F, filed on April 5, 2010).               
|     |                                                                                                                                                                                                                                                                                                
|4.2  | License Agreement dated March 14, 2010
        among HIP Energy Corporation, HIP Energy (Nevada) Corporation, HIP Technology
        Limited, and Group Rich Development Limited (incorporated by reference
        from our Registration Statement on Form 20-F, filed on April 5, 2010).     
|     |                                                                                                                                                                                                                                                                                                
|4.3. | Joint operating agreement dated January
        12, 2010 among TexLa Operating Company, HIP Energy Corporation, HIP Energy
        (Texas), Inc., and HIP Energy (Nevada) Corporation (incorporated by reference
        from our Registration Statement on Form 20-F, filed on April 5, 2010).
|     |                                                                                                                                                                                                                                                                                                
|4.4  | Non-Competition Agreement dated March
        14, 2010 among HIP Energy Corporation, HIP Energy (Texas), Inc., HIP Energy
        Resource Limited and Equi Energy LLC (incorporated by reference from our
        Registration Statement on Form 20-F, filed on April 5, 2010).               
|     |                                                                                                                                                                                                                                                                                                
|11.  | Code of Ethics                                                                                                                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                
|11.1 | Code of Ethics (incorporated by reference
        from our Registration Statement on Form 20-F, filed on June 1, 2004).                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                
|31.  | 302 Certification                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                
|31.1 | Section 302
        Certification under Sarbanes-Oxley Act of 2002 for Richard Coglon.                                                                                                                                                                                                         

---

2

|32.  | 906 Certification                                                                     
|---- | --------------------------------------------------------------------------------------
|     |                                                                                       
|32.1 | Section 906
        Certification under Sarbanes-Oxley Act of 2002 for Richard Coglon.

---

SIGNATURES

The registrant hereby certifies that it meets all of the
requirements for filing on Form 20-F and that it has duly caused and authorized
the undersigned to sign this annual report on its behalf.

HIP ENERGY CORPORATION

/s/ Richard
L. CoglonRichard
L. Coglon Chief Executive Officer and Chief Financial Officer (Principal
Executive Officerand Principal Financial Officer)

Date: April 22, 2010

---