---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended: May 31, 2009or

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

For the transition period from  _____ to _____

Commission File Number: 000-52721

FOX PETROLEUM INC.(Exact name of registrant as specified in its charter)

|Nevada                                                               | N/A                              
|-------------------------------------------------------------------- | ---------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (IRS Employer Identification No.)

64 Knightsbridge, London, England, UK SW1X 7JF(Address of principal executive offices) (Zip code)

44-207-590-9630(Registrants telephone
number, including area code)

N/A(Former name, former address and
former fiscal year, if changed since last report)

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. Yes
[X]    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, a non-accelerated filer, or a
smaller reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act.

|Large accelerated filer [   ] |                                                     | Accelerated
      filer                  
      [   ]
|----------------------------- | --------------------------------------------------- | -----------------------------------------------------
|Non-accelerated filer   [   ] | (Do not check if a smaller
      reporting company) | Smaller reporting company [X]                        

---

ii

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

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the
issuers classes of common stock, as of the latest practicable date:
84,668,245 shares of common stock outstanding as of July 20, 2009

---

iii

TABLE OF CONTENTS

|PART
      I - FINANCIAL INFORMATION                                                                      | 1 
|--------------------------------------------------------------------------------------------------------- | --
|Item
      1. Financial Statements                                                                        | 1 
|Item
      2. Managements Discussion and Analysis of Financial Condition and Results
      of Operations | 2 
|Item
      3. Quantitative and Qualitative Disclosures about Market Risks                                 | 6 
|Item
      4T. Controls and Procedures                                                                    | 7 
|PART
      II  OTHER INFORMATION                                                                         | 8 
|Item
      1. Legal Proceedings                                                                           | 8 
|Item
      1A. Risk Factors                                                                               | 8 
|Item
      2. Unregistered Sales of Equity Securities and Use of Proceeds                                 | 18
|Item
      3. Defaults upon Senior Securities                                                             | 18
|Item
      4. Submission of Matters to a Vote of Security Holders                                         | 18
|Item
      5. Other Information                                                                           | 18
|Item
      6. Exhibits.                                                                                   | 18

---

1

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.









FOX PETROLEUM INC.

(A Development Stage Company)

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

May 31, 2009

(Stated in US Dollars)

(Unaudited)

---

FOX PETROLEUM INC.(A Development Stage Company) 
  INTERIM CONSOLIDATED BALANCE SHEETS 
  May 31, 2008 and February 28, 2009 
  (Stated in US Dollars) 
  (Unaudited)

|ASSETS                                                                   |   | May 31,     |   |   | February 28, |  
|------------------------------------------------------------------------ | - | ----------- | - | - | ------------ | -
|                                                                         |   | 2009        |   |   | 2009         |  
|Current                                                                  |   |             |   |   |              |  
|Cash  general                                                           | $ | 4,870       |   | $ | 737          |  
|
      restricted                                                       |   | -           |   |   | 5,468        |  
|VAT refund and other receivables                                         |   | 139,894     |   |   | 157,718      |  
|                                                                         |   | 144,764     |   |   | 163,923      |  
|Oil and gas interests  Note 4                                           |   | 588,270     |   |   | 608,270      |  
|                                                                         |   |             |   |   |              |  
|                                                                         | $ | 733,034     |   | $ | 772,193      |  
|                                                                         |   |             |   |   |              |  
|LIABILITIES                                                              |  
|                                                                         |   |             |   |   |              |  
|Current                                                                  |   |             |   |   |              |  
|Accounts payable and
      accrued liabilities  Notes 4 and 5 and 8(c)  | $ | 17,272,502  |   | $ | 16,585,108   |  
|Due to related parties  Note 6                                          |   | 17,500      |   |   | 34,000       |  
|Notes payable 
      Note 5                                             |   | 4,885,333   |   |   | 4,670,667    |  
|                                                                         |   | 22,175,335  |   |   | 21,289,775   |  
|Fees payable in stock and warrants  Notes
      5(e), 8(b), (d) and (e) |   | 75,672      |   |   | 67,631       |  
|                                                                         |   |             |   |   |              |  
|                                                                         |   | 22,251,007  |   |   | 21,357,406   |  
|                                                                         |   |             |   |   |              |  
|STOCKHOLDERS
      EQUITY                                               |  
|                                                                         |   |             |   |   |              |  
|Capital stock  Notes 4, 5, 6, 7, and 8                                  |   |             |   |   |              |  
|Authorized:                                                              |   |             |   |   |              |  
|90,000,000 common shares, par value $0.001 per share                     |   |             |   |   |              |  
|Issued and outstanding:                                                  |   |             |   |   |              |  
|84,818,245 common shares (February 28, 2009: 69,818,245)                 |   | 84,818      |   |   | 69,818       |  
|Additional paid-in capital                                               |   | 44,937,395  |   |   | 40,302,395   |  
|Subscriptions receivable                                                 |   | 26,000,000  |   |   | 26,000,000   |  
|Deficit accumulated during the development stage                         |   | (40,540,186 | ) |   | (34,957,426  | )
|                                                                         |   |             |   |   |              |  
|                                                                         |   | (21,517,973 | ) |   | (20,585,213  | )
|                                                                         |   |             |   |   |              |  
|                                                                         | $ | 733,034     |   | $ | 772,193      |  
|                                                                         |   |             |   |   |              |  
|Ability to Continue as a Going Concern  Note 2                          |   |             |   |   |              |  
|Commitments  Notes 4, 5, 6, 7, and 8                                    |   |             |   |   |              |  

SEE ACCOMPANYING NOTES

---

FOX PETROLEUM INC.(A Development Stage Company) 
  INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS 
  for the three months ended
  May 31, 2009 and 2008 and 
  for the period November 4, 2004 (Date of
  Inception) to May 31, 2009 
  (Stated in US Dollars) 
  (Unaudited)

|                                                           |   |                    |   |   |               |   |   | November 4,   |  
|---------------------------------------------------------- | - | ------------------ | - | - | ------------- | - | - | ------------- | -
|                                                           |   |                    |   |   |               |   |   | 2004 (Date of |  
|                                                           |   | Three months ended |   |   | Inception) to |  
|                                                           |   | May 31,            |   |   | May 31        |  
|                                                           |   | 2009               |   |   | 2008          |   |   | 2009          |  
|                                                           |   |                    |   |   |               |   |   |               |  
|Expenses:                                                  |   |                    |   |   |               |   |   |               |  
|Accounting and audit fees                                  | $ | 29,679             |   | $ | 33,244        |   | $ | 284,334       |  
|Accretion of convertible
      note discount               |   | -                  |   |   | -             |   |   | 2,575,492     |  
|Advertising and public relations                           |   | -                  |   |   | 120,091       |   |   | 2,000,759     |  
|Bank charges and interest                                  |   | 4,306              |   |   | 2,990         |   |   | 24,317        |  
|Consulting fees  Note 6                                   |   | 86,657             |   |   | 194,357       |   |   | 721,987       |  
|Filing and transfer agent                                  |   | -                  |   |   | 1,125         |   |   | 42,338        |  
|Finance fees  Notes 5(e) and 8(b)                         |   | 4,870,617          |   |   | 653,000       |   |   | 9,307,718     |  
|Foreign exchange                                           |   | 243,989            |   |   | -             |   |   | 170,916       |  
|Insurance                                                  |   | -                  |   |   | 8,822         |   |   | 72,590        |  
|Interest on notes payable                                  |   | 106,997            |   |   | 6,105         |   |   | 759,242       |  
|Impairment of oil and gas assets                           |   | -                  |   |   | -             |   |   | 9,458,413     |  
|Legal fees                                                 |   | 10,300             |   |   | 40,073        |   |   | 535,226       |  
|Loss on failure to perform obligations
      under oil and |   |                    |   |   |               |   |   |               |  
|gas commitments
       Note 8(c)                          |   | -                  |   |   | -             |   |   | 12,910,000    |  
|License fees                                               |   | 25,126             |   |   | -             |   |   | 25,126        |  
|Management fees 
      Note 6                             |   | 188,956            |   |   | 76,822        |   |   | 1,040,417     |  
|Mineral property acquisition and exploration
      costs   |   | -                  |   |   | -             |   |   | 17,000        |  
|Office and miscellaneous                                   |   | 16,133             |   |   | 46,821        |   |   | 414,415       |  
|Travel and entertainment                                   |   | -                  |   |   | 16,837        |   |   | 268,333       |  
|                                                           |   |                    |   |   |               |   |   |               |  
|Total expenses                                             |   | (5,582,760         | ) |   | (1,200,287    | ) |   | (40,628,623   | )
|                                                           |   |                    |   |   |               |   |   |               |  
|Loss for the period before other items                     |   | (5,582,760         | ) |   | (1,200,287    | ) |   | (40,628,623   | )
|                                                           |   |                    |   |   |               |   |   |               |  
|Other items:                                               |   |                    |   |   |               |   |   |               |  
|Gain on recovery of VAT
      receivable                   |   | -                  |   |   | -             |   |   | 78,451        |  
|Interest and other income                                  |   | -                  |   |   | 494           |   |   | 9,986         |  
|                                                           |   |                    |   |   |               |   |   |               |  
|Loss for the period                                        | $ | (5,582,760         | ) | $ | (1,199,793    | ) | $ | (40,540,186   | )
|                                                           |   |                    |   |   |               |   |   |               |  
|Basic and diluted loss per share                           | $ | (0.20              | ) | $ | (0.08         | ) |   |               |  
|                                                           |   |                    |   |   |               |   |   |               |  
|Weighted average number of shares outstanding              |   | 27,763,897         |   |   | 14,968,245    |   |   |               |  

SEE ACCOMPANYING NOTES

---

FOX PETROLEUM INC.(A Development Stage Company) 
  INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS 
  for the three months ended
  May 31, 2009 and 2008 and 
  for the period November 4, 2004 (Date of
  Inception) to May 31, 2009 
  (Stated in US Dollars) 
  (Unaudited)

|                                                      |   |                    |   |   |               |   |   | November 4,   |  
|----------------------------------------------------- | - | ------------------ | - | - | ------------- | - | - | ------------- | -
|                                                      |   |                    |   |   |               |   |   | 2004 (Date of |  
|                                                      |   | Three months ended |   |   | Inception) to |  
|                                                      |   | May 31,            |   |   | May 31,       |  
|                                                      |   | 2009               |   |   | 2008          |   |   | 2009          |  
|Operating Activities                                  |   |                    |   |   |               |   |   | (Cumulative)  |  
|Loss for the period                                   | $ | (5,582,760         | ) | $ | (1,199,793    | ) | $ | (40,540,186   | )
|Donated services and rent                             |   | -                  |   |   | -             |   |   | 21,000        |  
|Accretion of convertible
      debt discount          |   | -                  |   |   | -             |   |   | 2,575,492     |  
|Fees payable in stock and warrants                    |   | 2,090              |   |   | 163,650       |   |   | 46,584        |  
|Finance fees paid
      in stock and warrants         |   | 4,870,671          |   |   | 653,000       |   |   | 8,506,874     |  
|Impairment of oil & gas assets                        |   | -                  |   |   | -             |   |   | 9,458,413     |  
|Gain on recovery of VAT
      receivable written-off  |   | -                  |   |   | -             |   |   | (78,451       | )
|Change in non-cash working capital
      balances     |   |                    |   |   |               |   |   |               |  
|related to
      operations:                          |   |                    |   |   |               |   |   |               |  
|VAT refund and other receivables                      |   | 17,824             |   |   | -             |   |   | (61,443       | )
|Prepaid
      expenses                                |   | -                  |   |   | 5,540         |   |   | -             |  
|Accounts payable
      and accrued liabilities        |   | 687,394            |   |   | (557,430      | ) |   | 16,894,207    |  
|                                                      |   |                    |   |   |               |   |   |               |  
|Net cash used in operating activities                 |   | (4,835             | ) |   | (935,033      | ) |   | (3,177,510    | )
|                                                      |   |                    |   |   |               |   |   |               |  
|Investing Activities                                  |   |                    |   |   |               |   |   |               |  
|Proceeds (investment)
      in oil and gas interests  |   | 20,000             |   |   | (146,386      | ) |   | (7,702,687    | )
|Decrease (increase) in restricted
      cash          |   | 5,468              |   |   | (1,003        | ) |   | -             |  
|                                                      |   |                    |   |   |               |   |   |               |  
|Net cash provided by investing activities             |   | 25,468             |   |   | (147,389      | ) |   | (7,702,687    | )
|                                                      |   |                    |   |   |               |   |   |               |  
|Financing Activities                                  |   |                    |   |   |               |   |   |               |  
|Issuance of common
      shares                       |   | -                  |   |   | -             |   |   | 6,196,900     |  
|Advances from related parties                         |   | (16,500            | ) |   | -             |   |   | 17,500        |  
|Proceeds from notes
      payable                     |   | -                  |   |   | 900,000       |   |   | 4,670,667     |  
|                                                      |   |                    |   |   |               |   |   |               |  
|Net cash provided by financing activities             |   | (16,500            | ) |   | 900,000       |   |   | 10,885,067    |  
|                                                      |   |                    |   |   |               |   |   |               |  
|Increase (decrease) in cash and restricted
      cash |   |                    |   |   |               |   |   |               |  
|during the period                                     |   | 4,133              |   |   | (184,422      | ) |   | 4,870         |  
|                                                      |   |                    |   |   |               |   |   |               |  
|Cash, beginning of period                             |   | 737                |   |   | 271,601       |   |   | -             |  
|                                                      |   |                    |   |   |               |   |   |               |  
|Cash, end of period                                   | $ | 4,870              |   | $ | 89,179        |   | $ | 4,870         |  
|                                                      |   |                    |   |   |               |   |   |               |  
|Non-cash transactions  Note
      9                  |   |                    |   |   |               |   |   |               |  

SEE ACCOMPANYING NOTES

---

FOXPETROLEUMINC.
  (A Development Stage
  Company) 
  INTERIM CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
  (DEFICIENCY) 
  for the period November 4, 2004 (Date of Inception) to May 31,
  2009 
  (Stated in US Dollars) 
  (Unaudited )

|                                                     |                 |           |                |  |       |           |  |         |            |   |   |                 |  |   | Deficit     |   |           |            |  
|---------------------------------------------------- | --------------- | --------- | -------------- |  | ----- | --------- |  | ------- | ---------- | - | - | --------------- |  | - | ----------- | - | --------- | ---------- | -
|                                                     |                 |           |                |  |       |           |  |         |            |   |   |                 |  |   | Accumulated |   |           |            |  
|                                                     |                 |           |                |  |       |           |  |         | Additional |   |   |                 |  |   | During the  |   |           |            |  
|                                                     |                 |           | *Common Shares |  |       | Paid-in   |  |         | Share      |   |   | Pre-exploration |  |   |             |  
|                                                     |                 |           | Number         |  |       | Par Value |  |         | Capital    |   |   | Subscriptions   |  |   | Stage       |   |           | Total      |  
|                                                     |                 |           |                |  |       |           |  |         |            |   |   |                 |  |   |             |   |           |            |  
|Capital stock issued for cash                        |  at $0.0008333 |           | 5,880,000      |  | $     | 5,880     |  | $       | (980       | ) | $ | -               |  | $ | -           |   | $         | 4,900      |  
|                                                     |  at $0.0083333 |           | 3,840,000      |  |       | 3,840     |  |         | 28,160     |   |   | -               |  |   | -           |   |           | 32,000     |  
|                                                     |  at $0.0833333 |           | 120,000        |  |       | 120       |  |         | 9,880      |   |   | -               |  |   | -           |   |           | 10,000     |  
|Donated services and rent                            |                 |           | -              |  |       | -         |  |         | 3,000      |   |   | -               |  |   | -           |   |           | 3,000      |  
|Loss for the period                                  |                 |           | -              |  |       | -         |  |         | -          |   |   | -               |  |   | (18,821     | ) |           | (18,821    | )
|                                                     |                 |           |                |  |       |           |  |         |            |   |   |                 |  |   |             |   |           |            |  
|Balance, February 28, 2005                           |                 |           | 9,840,000      |  |       | 9,840     |  |         | 40,060     |   |   | -               |  |   | (18,821     | ) |           | 31,079     |  
|Donated services and rent                            |                 |           | -              |  |       | -         |  |         | 9,000      |   |   | -               |  |   | -           |   |           | 9,000      |  
|Loss for the year                                    |                 |           | -              |  |       | -         |  |         | -          |   |   | -               |  |   | (45,915     | ) |           | (45,915    | )
|                                                     |                 |           |                |  |       |           |  |         |            |   |   |                 |  |   |             |   |           |            |  
|Balance, February 28, 2006                           |                 |           | 9,840,000      |  |       | 9,840     |  |         | 49,060     |   |   | -               |  |   | (64,736     | ) |           | (5,836     | )
|Capital stock issued for cash                        |  at $5.00      |           | 20,000         |  |       | 20        |  |         | 99,980     |   |   | -               |  |   | -           |   |           | 100,000    |  
|Donated services and rent                            |                 |           | -              |  |       | -         |  |         | 9,000      |   |   | -               |  |   | -           |   |           | 9,000      |  
|Loss for the year                                    |                 |           | -              |  |       | -         |  |         | -          |   |   | -               |  |   | (54,555     | ) |           | (54,555    | )
|                                                     |                 |           |                |  |       |           |  |         |            |   |   |                 |  |   |             |   |           |            |  
|Balance, February 28, 2007                           |                 |           | 9,860,000      |  | $     | 9,860     |  | $       | 158,040    |   |   | -               |  | $ | (119,291    | ) | $         | 48,609     |  
|Capital stock issued for oil and
      gas interests |                 | 4,000,000 |                |  | 4,000 |           |  | 997,702 |            |   | - |                 |  | - |             |   | 1,001,702 |           
|Capital stock issued for cash                        |                 |           | 1,028,245      |  |       | 1,028     |  |         | 6,048,972  |   |   | -               |  |   | -           |   |           | 6,050,000  |  
|Capital stock issued for oil and
      gas           |                 |           |                |  |       |           |  |         |            |   |   |                 |  |   |             |   |           |           
|interests                                            |  at $12.05     |           | 80,000         |  |       | 80        |  |         | 963,920    |   |   | -               |  |   | -           |   |           | 964,000    |  
|Loss for the year                                    |                 |           | -              |  |       | -         |  |         | -          |   |   | -               |  |   | (2,628,203  | ) |           | (2,628,203 | )
|Balance, February 29, 2008                           |                 |           | 14,968,245     |  |       | 14,968    |  |         | 8,168,634  |   |   | -               |  |   | (2,747,494  | ) |           | 5,436,108  |  

/contd

SEE ACCOMPANYING NOTES

---

Continued

FOXPETROLEUMINC. 
  (A Development Stage
  Company) 
  INTERIM CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
  (DEFICIENCY) 
  for the period November 4, 2004 (Date of Inception) to May 31,
  2009 
  (Stated in US Dollars) 
  (Unaudited )

|                                                     |            |   |                |  |   |           |  |           |               |  |   |             |   |   | Deficit     |   |           |             |  
|---------------------------------------------------- | ---------- | - | -------------- |  | - | --------- |  | --------- | ------------- |  | - | ----------- | - | - | ----------- | - | --------- | ----------- | -
|                                                     |            |   |                |  |   |           |  |           |               |  |   |             |   |   | Accumulated |   |           |             |  
|                                                     |            |   |                |  |   |           |  |           | Additional    |  |   | Stock       |   |   | During the  |   |           |             |  
|                                                     |            |   | *Common Shares |  |   | Paid-in   |  |           | Subscriptions |  |   | Development |   |   |             |  
|                                                     |            |   | Number         |  |   | Par Value |  |           | Capital       |  |   | Receivable  |   |   | Stage       |   |           | Total       |  
|                                                     |            |   |                |  |   |           |  |           |               |  |   |             |   |   |             |   |           |             |  
|Balance, February 29, 2008                           |            |   | 14,968,245     |  |   | 14,968    |  |           | 8,168,634     |  |   | -           |   |   | (2,747,494  | ) |           | 5,436,108   |  
|Capital stock issued for finance fee                 |  at $3.43 |   | 150,000        |  |   | 150       |  |           | 514,350       |  |   | -           |   |   | -           |   |           | 514,500     |  
|Capital stock issued pursuant to
      convertible   |            |   |                |  |   |           |  |           |               |  |   |             |   |   |             |   |           |            
|debenture                                            |  at $1.63 |   | 200,000        |  |   | 200       |  |           | 326,504       |  |   | -           |   |   | -           |   |           | 326,704     |  
|                                                     |  at $0.39 |   | 2,500,000      |  |   | 2,500     |  |           | 962,598       |  |   | -           |   |   | -           |   |           | 965,098     |  
|Capital stock subscribed  Note 7 (a) (ii)           |            |   |                |  |   |           |  |           |               |  |   |             |   |   |             |   |           |            
|                                                     |  at $0.50 |   | 52,000,000     |  |   | 52,000    |  |           | 25,948,000    |  |   | (26,000,000 | ) |   |             |   |           | -           |  
|Discount of convertible debt payable - Note 5(e)     |            | - |                |  | - |           |  | 512,588   |               |  | - |             |   | - |             |   | 512,588   |            
|Beneficial conversion feature 
      Note 5(e)      |            | - |                |  | - |           |  | 1,388,320 |               |  | - |             |   | - |             |   | 1,388,320 |            
|Discount of convertible debt payable - Note 5(e)     |            | - |                |  | - |           |  | 771,101   |               |  | - |             |   | - |             |   | 771,101   |            
|Beneficial conversion feature 
      Note 5(e)      |            | - |                |  | - |           |  | 1,710,300 |               |  | - |             |   | - |             |   | 1,710,300 |            
|Loss for the period                                  |            |   | -              |  |   | -         |  |           | -             |  |   | -           |   |   | (32,209,932 | ) |           | (32,209,932 | )
|                                                     |            |   |                |  |   |           |  |           |               |  |   |             |   |   |             |   |           |             |  
|Balance, February 28, 2009                           |            |   | 69,818,245     |  |   | 69,818    |  |           | 40,302,395    |  |   | (26,000,000 | ) |   | (34,957,426 | ) |           | (20,585,213 | )
|Capital stock released from escrow
      pursuant to |            |   |                |  |   |           |  |           |               |  |   |             |   |   |             |   |           |            
|default on securities purchase agreements           |            |   |                |  |   |           |  |           |               |  |   |             |   |   |             |   |           |            
|Note 5(e)                                            | - at $0.31 |   | 15,000,000     |  |   | 15,000    |  |           | 4,635,000     |  |   | -           |   |   | -           |   |           | 4,650,000   |  
|Loss for the period                                  |            |   | -              |  |   | -         |  |           | -             |  |   | -           |   |   | (5,582,760  | ) |           | (5,582,760  | )
|                                                     |            |   |                |  |   |           |  |           |               |  |   |             |   |   |             |   |           |             |  
|Balance, May 31, 2009                                |            |   | 84,818,245     |  | $ | 84,818    |  | $         | 44,937,395    |  | $ | (26,000,000 | ) | $ | (40,540,186 | ) | $         | (21,517,973 | )

* The common stock issued has been retroactively restated to
  reflect a reverse split of 1 new share for 5 old shares, effective April 21,
  2008. The par value of common stock and additional paid-in capital has been
  retroactively restated to reflect these changes.

SEE ACCOMPANYING NOTES

---

FOX PETROLEUM INC.(A Development Stage Company) 
  NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS 
  May 31, 2009 
  (Stated in US Dollars) 
  (Unaudited)

|Note 1 | Interim Financial Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|       | While the information presented in the accompanying three
      months to May 31, 2009 interim financial statements is unaudited, it
      includes all adjustments which are, in the opinion of management,
      necessary to present fairly the financial position, results of operations
      and cash flows for the interim period presented in accordance with the
      accounting principles generally accepted in the United States of America.
      In the opinion of management, all adjustments considered necessary for a
      fair presentation of the results of operations and financial position have
      been included and all such adjustments are of a normal recurring nature.
      It is suggested that these financial statements be read in conjunction
      with the Companys February 28, 2009 financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|       | Operating results for the three months ended May 31, 2009
      are not necessarily indicative of the results that can be expected for the
      year ending February 28, 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|Note 2 | Nature of Operations and Ability to Continue as a
      Going Concern                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|       | The Company was incorporated in the State of Nevada on
      November 4, 2004 and is in the development stage. The Company has oil and
      gas interests in Alaska, North Sea and Texas and has not yet determined
      whether these properties contain reserves that are economically
      recoverable. The recoverability of amounts from the properties will be
      dependent upon the discovery of economically recoverable reserves,
      confirmation of the Companys interest in the underlying properties, the
      ability of the Company to obtain necessary financing to satisfy the
      expenditure requirements under the property agreements and to complete the
      development of the properties and upon future profitable production or
      proceeds for the sale thereof.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|       | These financial statements have been prepared in
      accordance with generally accepted accounting principles applicable to a
      going concern, which assumes that the Company will be able to meet its
      obligations and continue its operations for its next twelve months.
      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 May 31, 2009, the Company has a working capital deficiency of
      $22,030,571, has not yet achieved profitable operations, has accumulated
      losses of $40,540,186 since its inception 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 come due. Management has
      no formal plan in place to address this concern but considers that the
      Company will be able to obtain additional funds by equity financing and/or
      related party advances, however there is no assurance of additional
      funding being available or on acceptable terms, if at all.

---

Fox Petroleum Inc. 
  (A Development Stage Company) 
  Notes
  to the Consolidated Financial Statements 
  May 31, 2009 
  (Stated in US
    Dollars) 
  (Unaudited)  Page  2

|Note 3 | New Accounting Standards                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       | In December 2008, the FASB issued FSP FAS140-4 and FIN
      46(R)-8, Disclosures by Public Entities (Enterprises) about Transfers of
      Financial Assets and Interests in Variable Interest Entities. This
      disclosure-only FSP improves the transparency of transfers of financial
      assets and an enterprises involvement with variable interest entities,
      including qualifying special-purpose entities. This FSP is effective for
      the first reporting period (interim or annual) ending after December 15,
      2008, with earlier application encouraged. The adoption of this standard
      did not have a material impact on the consolidated financial statements of
      the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       | In June 2008, the FASB ratified EITF Issue No. 07-5, Determining Whether an Instrument (or an Embedded Feature) is
      Indexed to an Entitys Own Stock(EITF07-5). EITF07-5 provides that
      an entity should use a two step approach to evaluate whether an equity-
      linked financial instrument (or embedded feature) is indexed to its own
      stock, including evaluating the instruments contingent exercise and
      settlement provisions. It also clarifies on the impact of foreign currency
      denominated strike prices and market-based employee stock option valuation
      instruments on the evaluation. EITF07-5 is effective for fiscal years
      beginning after December 15, 2008. The adoption of this standard did not
      have a material impact on the consolidated financial statements of the
      Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       | In May 2008, the FASB issued SFAS No. 162, The Hierarchy
      of Generally Accepted Accounting Principles (SFAS No. 162). SFAS No. 162
      is intended to improve financial reporting by identifying a consistent
      framework, or hierarchy, for selecting accounting principles to be used in
      preparing financial statements that are presented in conformity with U.S.
      generally accepted accounting principles for nongovernmental entities.
      SFAS No. 162 is effective 60 days following the SEC's approval of the
      Public Company Accounting Oversight Board Auditing amendments to AU
      Section 411, The Meaning of Present Fairly in Conformity with Generally
      Accepted Accounting Principles. The adoption of this standard did not have
      a material impact on the consolidated financial statements of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       | In May 2008, the FASB issued FSP No. APB 14-1,
      Accounting for Convertible Debt Instruments That May Be Settled in Cash
      upon Conversion (Including Partial Cash Settlement) (FSP APB 14-1). FSP
      APB 14-1 applies to convertible debt instruments that, by their stated
      terms, may be settled in cash (or other assets) upon conversion, including
      partial cash settlement, unless the embedded conversion option is required
      to be separately accounted for as a derivative under SFAS 133. Convertible
      debt instruments within the scope of FSP APB 14-1 are not addressed by the
      existing APB 14. FSP APB 14-1 requires that the liability and equity
      components of convertible debt instruments within the scope of FSP APB
      14-1 be separately accounted for in a manner that reflects the entitys
      nonconvertible debt borrowing rate. This requires an allocation of the
      convertible debt proceeds between the liability component and the embedded
      conversion option (i.e., the equity component). The difference between the
      principal amount of the debt and the amount of the proceeds allocated to
      the liability component will be reported as a debt discount and
      subsequently amortized to earnings over the instruments expected life
      using the effective interest method. FSP APB 14-1 is effective for the
      Companys fiscal year beginning March 1, 2009 and will be applied
      retrospectively to all periods presented. The

---

Fox Petroleum Inc. 
  (A Development Stage Company) 
  Notes to the Consolidated Financial Statements 
  May 31, 2009 
  (Stated in US Dollars) 
  (Unaudited)  Page 3

|Note 3 | New Accounting Standards (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | adoption of this standard did not have a material
      impact on the consolidated financial statements of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | In April 2008, the FASB issued
      FSP 142-3, Determination of the Useful Life of Intangible Assets.
      This FSP amends the factors that should be considered in developing renewal
      or extension assumptions used to determine the useful life of a recognized
      intangible asset under FASB Statement No. 142, Goodwill and Other
      Intangible Assets. The intent of this FSP is to improve the consistency
      between the useful life of a recognized intangible asset under Statement
      142 and the period of expected cash flows used to measure the fair value
      of the asset under FASB Statement No. 141 (Revised 2007), Business
      Combinations, and other U.S. generally accepted accounting principles
      (GAAP). This FSP is effective for financial statements issued for fiscal
      years beginning after December 15, 2008, and interim periods within those
      fiscal years. Early adoption is prohibited. The adoption of this standard
      did not have a material impact on the consolidated financial statements
      of the Company.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | In March 2008, the FASB issued
      Statement of Financial Accounting Standards (SFAS) No. 161,
      Disclosures about Derivative Instruments and Hedging Activities,
      an amendment of FASB Statement No. 133, which requires additional disclosures
      about the objectives of the derivative instruments and hedging activities,
      the method of accounting for such instruments under SFAS No. 133 and its
      related interpretations, and a tabular disclosure of the effects of such
      instruments and related hedged items on our financial position, financial
      performance, and cash flows. SFAS No. 161 is effective for fiscal years
      and interim periods beginning after November 15, 2008. The adoption of
      this standard did not have a material impact on the consolidated financial
      statements of the Company.                                                                                                                                                                                                                                
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | In January 2008, Staff Accounting
      Bulletin (SAB) 110, Share-Based Payment was issued.
      Registrants may continue, under certain circumstances, to use the simplified
      method in developing estimates of the expected term of share options as
      initially allowed by SAB 107, Share-Based Payment. The adoption
      of this standard did not have a material impact on the consolidated financial
      statements of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | In December 2007, the FASB
      issued SFAS No. 141 (Revised) Business Combinations. SFAS
      141 (Revised) establishes principles and requirements for how the acquirer
      of a business recognizes and measures in its financial statements the
      identifiable assets acquired, the liabilities assumed, and any non-controlling
      interest in the acquired. The statement also provides guidance for recognizing
      and measuring the goodwill acquired in the business combination and determines
      what information to disclose to enable users of the financial statements
      to evaluate the nature and financial effects of the business combination.
      The guidance will become effective for the first fiscal year beginning
      after December 15, 2008. The adoption of this standard did not have a
      material impact on the consolidated financial statements of the Company.                                                                                                                                                                            

---

Fox Petroleum Inc. 
  (A Development Stage Company) 
  Notes
  to the Consolidated Financial Statements 
  May 31, 2009 
  (Stated in US
    Dollars) 
  (Unaudited)  Page  4

|Note 3 | New Accounting Standards (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       | In December 2007, the FASB issued SFAS No. 160
      Noncontrolling Interests in Consolidated Financial Statements-an
      amendment of ARB No. 51. SFAS 160 establishes accounting and reporting
      standards for the noncontrolling interest in a subsidiary and for the
      deconsolidation of a subsidiary. The guidance will become effective for
      the first fiscal year beginning after December 15, 2008.The adoption of
      this standard did not have a material impact on the consolidated financial
      statements of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       | In December 2007, the Emerging Issues Task Force (EITF)
      reached a consensus on EITF No. 07-01, Accounting for Collaborative
      Arrangements Related to the Development and Commercialization of
      Intellectual Property (EITF 07-01). EITF 07-01 discusses the appropriate
      income statement presentation and classification for the activities and
      payments between the participants in arrangements related to the
      development and commercialization of intellectual property. The
      sufficiency of disclosure related to these arrangements is also specified.
      EITF 07-01 is effective for fiscal years beginning after December 15,
      2008. As a result, EITF 07-01 was effective for the Company as of March 1,
      2009. The adoption of this standard did not have a material impact on the
      consolidated financial statements of the Company.                                                                                                                                                                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       | In April 2009, the FASB issued FASB Staff Position (FSP)
      FAS 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a
      Business Combination That Arise from Contingencies (FSP 141(R)-1), to
      amend and clarify the initial recognition and measurement, subsequent
      measurement and accounting, and related disclosures arising from
      contingencies in a business combination under SFAS 141(R). Under the new
      guidance, assets acquired and liabilities assumed in a business
      combination that arise from contingencies should be recognized at fair
      value on the acquisition date if fair value can be determined during the
      measurement period. If fair value can not be determined, companies should
      typically account for the acquired contingencies using existing guidance.
      We will adopt FSP 141(R)-1 along with SFAS 141(R) in the first quarter of
      fiscal 2010 and the Company does not expect the adoption will have a
      material effect on consolidated financial statements of the Company.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       | In April 2009, the FASB issued FSP SFAS No. 107-1,
      Interim Disclosures about Fair Value of Financial Instruments, which
      amends SFAS No. 107, Disclosures about Fair Value of Financial
      Instruments, and APB Opinion No. 28, Interim Financial Reporting. FSP SFAS
      No. 107-1 will require disclosures about fair value of financial
      instruments in financial statements for interim reporting periods and in
      annual financial statements of publicly-traded companies. This FSP also
      will require entities to disclose the method(s) and significant
      assumptions used to estimate the fair value of financial instruments in
      financial statements on an interim and annual basis and to highlight any
      changes from prior periods. The effective date for this FSP is interim and
      annual periods ending after June 15, 2009. The Company is currently
      assessing the impact of FSP SFAS 107-1.                                                                                                                           

---

Fox Petroleum Inc. 
  (A Development Stage Company) 
  Notes
  to the Consolidated Financial Statements 
  May 31, 2009 
  (Stated in US
    Dollars) 
  (Unaudited)  Page 5

|Note 3 | New Accounting Standards
      (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|       | In April 2009, the FASB issued FSP No. FAS 115-2 and FAS
      124-2, Recognition and Presentation of Other-Than-Temporary Impairments.
      The FSP amends the other-than-temporary impairment guidance for debt
      securities to make the guidance more operational and to improve the
      presentation and disclosure of other-than-temporary impairments on debt
      and equity securities. The FSP is effective for interim and annual periods
      ending after June 15, 2009, which is August 31, 2009 for the Company. The
      FSP is not anticipated to have a material impact on the Company's
      consolidated financial statements.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|       | In April 2009, the FASB issued FSP No. FAS 157-4,
      Determining Fair Value When the Volume and Level of Activity for the Asset
      or Liability Have Significantly Decreased and Identifying Transactions
      That Are Not Orderly" The FSP provides additional guidance for estimating
      fair value when the market activity for an asset or liability has declined
      significantly. The FSP is effective for interim and annual periods ending
      after June 15, 2009, which is August 31, 2009 for the Company. The FSP is
      not anticipated to have a material impact on the Company's consolidated
      financial statements.  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Note 4 | Oil and Gas Interests                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

| |                                         |   |            |   |   | May
      31, 2009 |   |   |            |  
| | --------------------------------------- | - | ---------- | - | - | ------------------ | - | - | ---------- | -
| |                                         |   | United     |   |   | United             |   |   |            |  
| |                                         |   | States     |   |   | Kingdom            |   |   | Total      |  
| |                                         |   |            |   |   |                    |   |   |            |  
| | Unproved properties                     |   |            |   |   |                    |   |   |            |  
| | - acquisition costs                     | $ | 3,701,871  |   | $ | 23,439             |   | $ | 3,725,310  |  
| | - exploration costs                     |   | 2,347,394  |   |   | 4,084,668          |   |   | 6,432,062  |  
| |                                         |   |            |   |   |                    |   |   |            |  
| |                                         |   | 6,049,265  |   |   | 4,108,107          |   |   | 10,157,372 |  
| | Less: Write-down of oil & gas interests |   | (5,438,576 | ) |   | (4,019,837         | ) |   | (9,458,413 | )
| | Less: Incidental revenue                |   | (110,689   | ) |   | -                  |   |   | (110,689   | )
| |                                         |   |            |   |   |                    |   |   |            |  
| |                                         | $ | 500,000    |   | $ | 88,270             |   | $ | 588,270    |  

---

Fox Petroleum Inc. 
  (A Development Stage Company) 
  Notes
  to the Consolidated Financial Statements 
  May 31, 2009 
  (Stated in US
    Dollars) 
  (Unaudited)  Page 6

|Note 4 | Oil and Gas Interests (contd)
|------ | -------------------------------

| |                                         |   | February 28, 2009 |  
| | --------------------------------------- | - | ----------------- | -
| |                                         |   | United            |  
| |                                         |   | States            |  
| |                                         |   |                   |  
| | Unproved properties                     |   |                   |  
| | - acquisition costs                     | $ | 3,701,871         |  
| | - exploration costs                     |   | 2,347,394         |  
| |                                         |   |                   |  
| |                                         |   | 6,049,265         |  
| | Less: Write-down of oil & gas interests |   | (5,438,576        | )
| | Less: Incidental revenue                |   | (90,689           | )
| |                                         |   |                   |  
| |                                         | $ | 520,000           |  

| | a) | North Slope, Alaska                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | On May 29, 2007, the Company entered into a Lease
      Purchase and Sale Agreement with a company to acquire a combined 100%
      working interest in 12 state-issued oil and gas leases in the North Slope
      of Alaska. These leases are subject to a royalty of 16.66667% to the State
      of Alaska and a private royalty equal to 5% of net revenue. In
      consideration for the oil and gas leases, the Company issued 4,000,000
      restricted common shares of the Company valued at $1,001,702, the
      transferors historical cost. The valuation is based the SEC Staff
      Accounting Bulletin, Topic 5, G.                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | Pursuant to underlying agreements on the property, the
      Company is obligated to drill one test well to at least 10,000 feet on or
      before November 14, 2011, four test wells to at least 4,000 feet on or
      before February 20, 2012, and one test well to at least 4,000 feet on or
      before January 16, 2012. The Company is currently unable to quantify an
      estimate of the cost of these wells.                                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | By a purchase agreement dated October 10, 2007 and
      amended November 2, 2007, the Company acquired 8 additional oil and gas
      leases in the North Slope of the State of Alaska for $850,000 including
      cash of $250,000 and $600,000 paid by the issuance of 80,000 common shares
      of the Company. The fair value of the shares issued was $964,000 (based on
      the quoted market price of the Companys common shares on the transaction
      date) and consequently a further $364,000 has been recorded for this
      portion of the purchase agreement. These leases are subject to a royalty
      of 16.66667% to the State of Alaska and a private royalty equal to 5%. Two
      of the leases acquired pursuant to this agreement are part of the Cook
      Inlet project described below.

---

Fox Petroleum Inc. 
  (A Development Stage Company) 
  Notes
  to the Consolidated Financial Statements 
  May 31, 2009 
  (Stated in US
    Dollars) 
  (Unaudited)  Page 7

|Note 4 | Oil and Gas Interests  (contd)
|------ | --------------------------------

| | a) | North Slope, Alaska  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    | On January 30, 2009, the Company, entered into an
      agreement with the original lease vendors (the Payers) regarding twelve
      of the North Slope oil and gas leases (the Twelve Leases). Under the
      terms of the Agreement, the Payers agreed to use their best efforts to
      make, on the Company's behalf, annual rental payments for the Twelve
      Leases totaling up to $64,980 on or before the February 1, 2009 due
      date.                                                                                                                                                                                                    
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    | The Company agreed to repay to the Payers by March 2,
      2009 any portion of the Payments made by the Payers (the "Repayment
      Amount"). The Repayment Amount is subject to an 18% interest rate per
      annum. The Company also granted the Payers a security interest in the
      Company's right, title, and interest in the Twelve Leases. The Company
      further agreed to transfer and assign its right, title, and interest in
      the Twelve Leases to the Payers in the event of the Company's failure to
      pay the Repayment Amount in a timely manner.                                                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    | The Company failed to pay the Repayment Amount and by an
      agreement dated May 14, 2009, the Payers agreed to extend the repayment
      date until August 14, 2009 in return for the lease assignment documents
      for the Twelve Leases being executed and delivered into escrow.                                                                                                                                                                                                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    | The Company entered into an agreement dated May 16, 2009
      with the Payers in respect of five of the remaining North Slope oil and
      gas leases (the Five Leases). Pursuant to this agreement, the Payers
      made annual lease payments totaling $25,126 for the Five Leases on behalf
      of the Company. The amount paid on behalf of the Company is subject to an
      18% interest rate per annum. The Company also executed an assignment to
      the Payers of the Company's right, title, and interest in the Five Leases
      to be delivered into escrow in the event the Company fails to repay the
      payers by August 14, 2009.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    | The Company can provide no assurance that it will be able
      to obtain financing arrangements to repay the Payers by August 14, 2009
      and consequently, all costs incurred of $2,401,282 were written off on the
      statement of operations during the year ended February 28, 2009.                                                                                                                                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | b) | Anglesey, North Sea, United Kingdom                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    | Pursuant to a farm-in agreement dated June 8, 2007, the
      Company agreed to acquire a 33.33% interest in two UK petroleum production
      licenses (Licenses). The Licenses are located in the UK North Sea and
      have since been merged into one traditional license. As consideration for
      the Licenses, the Company agreed to fund 100% of the seismic costs and its
      33.33% share of the License budget costs as agreed by the parties. The
      Company also has the option to acquire an additional 26.67% interest in
      the Licenses by paying an additional 46.67% of the dry-hole costs of an
      exploration well.        

|Note 4 | Oil and Gas Interests (contd)
|------ | -------------------------------

---

Fox Petroleum Inc. 
  (A Development Stage Company) 
  Notes
  to the Consolidated Financial Statements 
  May 31, 2009 
  (Stated in US
    Dollars) 
  (Unaudited)  Page 8

|Note 4 |    | Oil and Gas Interests - (cont'd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|------ | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       | c) | Anglesey, North Sea, United Kingdom  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       |    | The option is effective from completion of the transfer
      of the assigned interest to the Company and shall continue to be valid and
      exercisable until 28 days after receipt by the Company of the processed
      seismic data and final interpretation.                                                                                                                                                                                                                                                                                                                                                                                                          
|       |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       |    | During the year ended February 28, 2009, the Company
      returned the Licenses to the UK government and consequently all costs
      incurred of $2,512,856 were written-off on the statement of operations
      during the year ended February 28, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                 
|       |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       | c) | Spears Gas Well, Texas, United States                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|       |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       |    | Pursuant to a subscription agreement dated October 9,
      2007, the Company acquired a 22.5% joint venture interest in a gas well
      called the Spears Gas Unit 2, Well #1 in the Gomez Field, Pecos County,
      Texas in consideration for US$500,000.                                                                                                                                                                                                                                                                                                                                                                                                               
|       |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       |    | As at May 31, 2009, the gas well is shut-in awaiting
      further financing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       | d) | Cook Inlet, Alaska, United States                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       |    | By a purchase agreement dated October 10, 2007, the
      Company acquired 6 oil and gas leases located in Cook Inlet of the State
      of Alaska for $750,000, payable in installments on or before March 7,
      2008. At November 30, 2008, the Company had paid $750,000. Included in
      these leases were 3 unissued leases that the vendors owned the rights
      thereto. The leases are subject to a royalty of 16.66667% to the State of
      Alaska and a private royalty equal to 5% of net revenue.                                                                                                                                                       
|       |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       |    | Subsequent to February 28, 2009, the Company entered into
      an agreement dated May 29, 2009 with the Payers in respect of three these
      oil and gas leases (the Three Leases). Pursuant to this agreement, the
      Payers made annual lease payments totaling $25,780 for the Three Leases on
      behalf of the Company. The amount paid on behalf of the Company is subject
      to an 18% interest rate per annum. The Company also executed an assignment
      to the Payers of the Company's right, title, and interest in the Five
      Leases to be delivered into escrow in the event the Company fails to repay
      the payers by August 14, 2009.
|       |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       |    | The Company can provide no assurance that it will be able
      to obtain financing arrangements to repay the Payers by August 14, 2009
      and consequently, all costs incurred of $1,061,727 were written-off on the
      statement of operations during the year ended February 28,
      2009.                                                                                                                                                                                                                                                                                                                                                                        

---

Fox Petroleum Inc. 
  (A Development Stage Company) 
  Notes
  to the Consolidated Financial Statements 
  May 31, 2009 
  (Stated in US
    Dollars) 
  (Unaudited)  Page 9

|Note 4 | Oil and Gas Interests
      (contd)
|------ | -------------------------------------

| | e) | Bourbon, North Sea, United Kingdom                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    | On November 16, 2007, the Company entered into a farm-out
      agreement dated November 8, 2007 wherein the Company would be assigned a
      total of 46% interest in a license block in the UK North Sea. In
      consideration for the assignment, the Company must pay for 89% of the cost
      of drilling and exploration well.                                                                                                                                                                                                                                                                                                                         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    | The Company is also required to pay for 46% of license
      costs. On January 24, 2008, the Company agreed to jointly participate with
      another company to identify a potential farm-in or acquisition opportunity
      and transferred a 4.6% carried interest in the license block to that
      company until a full development plan is approved by the U.K. government.
      Thereafter, that company will be responsible for its 4.6% share of the
      costs (10% of the Companys interest). Subsequent to the transfer, this
      company became related to the Company as two of its beneficial owners
      became directors of the Company.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    | During the year ended February 28, 2009, the license
      holders terminated the Farm-out agreement effective February 27, 2009.
      Consequently, all costs incurred of $1,419,627 were written off on the
      statement of operations during the year ended February 28, 2009.                                                                                                                                                                                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | f) | Geneseo-Edwards, Kansas, United States                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    | By a letter agreement dated February 27, 2008, the
      Company purchased an 80% net revenue interest in three oil leases in
      Ellsworth County, Kansas, USA by the payment of $80,000. The leases are
      subject to a landowner royalty of 12.5% and an overriding royalty of 7.5%
      retained by vendors. The Company was required to drill at least one well
      on each lease before the leases expire on November 19, 2008, November 19,
      2009 and November 30, 2009 or pay the vendor a penalty of
      $150,000.                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    | During the year ended February 28, 2009 the Company had
      drilled four wells on these leases and earned incidental revenue of
      $90,689 from two of these wells, which was credited against oil and gas
      interests on the consolidated balance sheet as a result of the wells not
      yet reaching full commercial production. Since January 2009 production has
      been suspended due to the need for implementation of water disposal
      facilities for which further funding is not currently available.                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    | During the year ended February 28, 2009, two trade
      creditors issued mechanical liens against the oil and gas leases and its
      facilities for non payment of outstanding invoices totaling
      $528,079.                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    | During the three-month period ended May 31, 2009, the
      Company assigned its interest in these oil and gas leases to a creditor in
      return for a loan rescheduling (Note 5) and entering into an agreement not
      to sue the Company for defaulting on a loan agreement. The creditor also
      received 15,000,000 common shares pledged as security from the Companys
      treasury against the notes payable.                                                                                                                                                                                                                                  

---

Fox Petroleum Inc. 
  (A Development Stage Company) 
  Notes
  to the Consolidated Financial Statements 
  May 31, 2009 
  (Stated in US
    Dollars) 
  (Unaudited)  Page 10

|Note 4 | Oil and Gas Interests
      (contd)
|------ | -------------------------------------

| | f) | Geneseo-Edwards, Kansas, United States 
      (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | Pursuant to the above, costs incurred of $1,975,567 were
      written-off on the statement of operations and deficit for the year ended
      February 28, 2009 leaving a net book value of $20,000 recovered during the
      three-month period ended May 31, 2009 for the sale of certain furniture
      and equipment held for use on the property.                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | g) | UK Onshore, United Kingdom                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | On June 3, 2008, the Company was granted a 90% interest
      in four UK petroleum production licenses, located in the south of England.
      In order to maintain the licenses, the Company must undertake seismic
      exploration estimated to cost $500,000 within the six year term of the
      license.                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | Pursuant to a letter agreement dated September 5, 2008,
      the Company will pay 100% of all costs, expenses, liabilities and
      obligations arising in respect of operations conducted in respect of each
      license block until a filed development plan is formally approved by the
      UK Secretary of State responsible for such matters, for the development of
      a discovery of petroleum in the blocks. Thereafter, the Company will each
      be responsible for 90% of all costs, expenses, liabilities and
      obligations.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | h) | 25thRound License Blocks 13/17 & 210/20e,
      United Kingdom                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | Pursuant to a letter agreement dated September 5, 2008,
      the Company was granted a 90% interest in an application made for four UK
      petroleum production licenses. In order to maintain the licenses, the
      Company must carry out geological and seismic modeling before forming up a
      drilling location and must begin drilling within the four year term of the
      license.                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | Pursuant to the letter agreement, the Company will pay
      100% of all costs, expenses, liabilities and obligations arising in
      respect of operations conducted in respect of each license block until a
      filed development plan is formally approved by the UK Secretary of State
      responsible for such matters, for the development of a discovery of
      petroleum in the blocks. Thereafter, the Company will each be responsible
      for 90% of all costs, expenses, liabilities and obligations.                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | On November 12, 2008 Fox was formally notified by the UK
      Department of Energy and Climate Change (DECC) of its success in the 25th
      Seaward Licensing Round Awards, the rights to explore and develop the
      block 13/17 concession in the North Sea by the UK government.                                                                                                                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | On May 1, 2009 Fox received notification from the UK
      Department of Energy and Climate Change that this Secretary of States
      offer of this license in the 25thround had been withdrawn due
      to fact that they consider there to have been a material change in the
      circumstances relating to Fox having adequate funding arrangements already
      in place. Consequently, all costs incurred of $87,354 were written-off on
      the statement of operations and deficit for the year ended February 28,
      2009.          

---

Fox Petroleum Inc. 
  (A Development Stage Company) 
  Notes
  to the Consolidated Financial Statements 
  May 31, 2009 
  (Stated in US
    Dollars) 
  (Unaudited)  Page 11

|Note 5 | Notes Payable
|------ | -------------

| |                                            |   |           |   |   | May 31,   |  |   | February 29, | 
| | ------------------------------------------ | - | --------- | - | - | --------- |  | - | ------------ | 
| |                                            |   |           |   |   | 2009      |  |   | 2008         | 
| |                                            |   |           |   |   |           |  |   |              | 
| | Promissory notes (a), (b), (c)             |   |           |   | $ | 450,000   |  | $ | 450,000      | 
| | Loan agreement (d)                         |   |           |   |   | 450,000   |  |   | 450,000      | 
| | Convertible notes payable (e)              | $ | 3,500,000 |   |   |           |  |   |              | 
| | Add: liquidating damages due under         |   |           |   |   |           |  |   |              | 
| | registration
      rights agreement        |   | 485,333   |   |   |           |  |   |              | 
| | Less: financing costs                      |   | (75,545   | ) |   |           |  |   |              | 
| | Add: amortization of
      financing costs |   | 75,545    |   |   | 3,985,333 |  |   | 3,770,667    | 
| |                                            |   |           |   |   |           |  |   |              | 
| |                                            |   |           |   | $ | 4,885,333 |  | $ | 4,670,667    | 

| | a) | On April 2, 2008 the Company was loaned $250,000 by the
      issuance of a promissory note, to be paid on the earlier of (i) the date
      that the Company obtains equity financing from a third party in the
      minimum amount of $1,000,000 net to the Company, or (ii) April 1, 2009.
      For the period from the date of advance of the loan up to and including
      the date that the loan is repaid, interest will accrue on the balance of
      principal outstanding at the rate of 10% per annum, compounded monthly.
      Interest will be payable in a balloon payment on the date the loan is
      repaid. The note is unsecured.         
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | As at May 31, 2009, this loan has not been repaid as the
      lender has agreed to extend the terms of the loan until the Company is
      able to obtain further financing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | b) | On May 6, 2008 the Company was loaned $150,000 by the
      issuance of a promissory note, to be paid on the earlier of (i) the date
      that the Company obtains equity financing from a third party in the
      minimum amount of $1,000,000 net to the company, or (ii) May 1, 2009. For
      the period from the date of advance of the loan up to and including the
      date that the loan is repaid, interest will accrue on the loan on the
      balance of principal outstanding at the rate of 10% per annum, compounded
      monthly. Interest will be payable in a balloon payment on the date the
      loan is repaid. The note is unsecured. 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | As at May 31, 2009, this loan has not been repaid as the
      lender has agreed to extend the terms of the loan until the Company is
      able to obtain further financing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | c) | On May 23, 2008 the Company was loaned $50,000 by the
      issuance of a promissory note, to be paid on the earlier of (i) the date
      that the Company obtains equity financing from a third party in the
      minimum amount of $1,000,000 net to the company, or (ii) May 23, 2009. For
      the period from the date of advance of the loan up to and including the
      date that the loan is repaid, interest will accrue on the loan on the
      balance of principal outstanding at the rate of 10% per annum, compounded
      monthly. Interest will be payable in a balloon payment on the date the
      loan is repaid. The note is unsecured.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | As at May 31, 2009, this loan has not been repaid as the
      lender has agreed to extend the terms of the loan until the Company is
      able to obtain further financing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

---

Fox Petroleum Inc. 
  (A Development Stage Company) 
  Notes
  to the Consolidated Financial Statements 
  May 31, 2009 
  (Stated in US
    Dollars) 
  (Unaudited)  Page 12

|Note 5 | Notes Payable (contd)
|------ | -----------------------

| | d) | On May 30, 2008 the Company was loaned $450,000 pursuant
      to a loan agreement. The principal and interest is to be paid on the
      earlier of (i) cash being available from operations, (ii) the date that
      the Company obtains equity or debt financing from a third party in the
      minimum amount of $1,000,000, or (iii) November 30, 2008. This loan bears
      interest at 12% per annum, calculated annually. The loan is secured by the
      Companys assets. As additional compensation for the loan, the Company
      issued to the lender 150,000 common shares of the Company. The fair value
      of these shares was determined to be $514,500 based on the quoted market
      price of the shares on the date of issuance and was recorded as a
      financing fee on the consolidated statement of operations.                                                                                                                                                                                                                                                                                                                   
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | As at May 31, 2009, this loan has not been repaid as the
      lender has agreed to extend the terms of the loan until the Company is
      able to obtain further financing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | e) | Pursuant to an Amendment to Securities Purchase
      Agreement, Secured Debenture, Registration Rights Agreement and Security
      Agreement dated October 31, 2008 ("Amendment Agreement"), the Company
      amended a Securities Purchase Agreement, Debentures, a Registration Rights
      Agreement, an Escrow Agreement and a Pledge and Escrow Agreement
      ("Original Agreements") all originally dated June 24, 2008. Under the
      Amendment Agreement the Company issued three secured convertible
      debentures totaling $3,500,000 consisting of two Amended Debentures and
      one New Debenture:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | (i) Amended Debentures - $2,500,000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | The Original Debenture which was a $2,500,000 senior
      secured convertible note was amended on November 11, 2008 into two
      debentures each of which are for a total principal amount of $1,250,000
      (the Amended Debentures).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | The Amended Debentures bear interest at 10% per annum,
      compounded monthly. The principal and any unpaid accrued interest owing on
      the debentures are convertible into common stock of the Company in the
      event of a default or at the option of the holder at the rate of the
      lesser of i) 100% of the volume weighted average stock price (VWAP) on
      the date of issuance and ii) at 85% of the lowest daily closing VWAP as
      quoted by Bloomberg L.P. during the 5 trading days immediately preceding
      the conversion date. The Amended Debentures also contain a redemption
      option whereby the Company can redeem the Amended Debentures provided its
      common stock is trading below 100% of the VWAP as quoted by Bloomberg L.P
      on October 31, 2008 by paying the unpaid principal and interest accrued
      and a prepayment premium of 15%. The Company must redeem the entire
      principal amount outstanding on one of the Amended Debentures on April 30,
      2009 at a 15% redemption premium; however, there is no mandatory
      redemption premium on the second Amended
      Debenture.

---

Fox Petroleum Inc. 
  (A Development Stage Company) 
  Notes
  to the Consolidated Financial Statements 
  May 31, 2009 
  (Stated in US
    Dollars) 
  (Unaudited)  Page 13

|Note 5 | Notes Payable (contd)
|------ | -----------------------

| | e) |  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | In consideration for the holder's agreement to extend the
      maturity date of the original convertible debt from October 24, 2008 to
      April 30, 2009, the Company cancelled the original 500,000 warrants issued
      in connection with the Original Debenture and replaced them with 2,000,000
      warrants with a term of 5 years and a decreased exercise price of
      $0.001.                                                                                                                                                                                                                                                                                                                                                                    
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | The exercise price is subject to an adjustment if, during
      the term of the warrants, the Company issues shares, options or
      convertible securities for consideration less than the exercise price,
      then the exercise price will be adjusted to 85% of such consideration.
      Additional warrants will be issued if the Company becomes in default under
      the transaction agreements.                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | The Company determined the allocation of the net proceeds
      of the Original convertible debenture based on the relative fair value of
      the convertible debenture, the 500,000 share purchase warrants and the
      200,000 common shares. The fair value of the warrants of $910,000 and the
      common shares of $580,000 were determined using the Black-Scholes
      valuation model and the quoted market price of the shares on the date of
      issuance, respectively.                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | The resulting discount of $839,292 was being accreted
      over the term of the debenture. The assumptions used in the Black-Scholes
      calculation are as follows: expected life  5 years; volatility  78.26%;
      Dividend rate  0%; and risk free interest rate is 0.95%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | The Company recorded a beneficial conversion feature of
      $1,388,320 with respect to the Original Debentures pursuant to EITF 98-5 Accounting for Convertible Securities with Beneficial Conversion
        Features or Contingently Adjustable Conversion Ratios. The conversion
      feature was contingently exercisable in an event of default of the
      debenture; which occurred on October 24, 2008 when the debenture came due
      but was not repaid by the Company. Therefore the amount was recorded as a
      financing fee during the year ended February 28, 2009.                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | The Company determined the allocation of the net proceeds
      of the Amended Debentures based on the relative fair value of the
      convertible debenture, the share purchase warrants and the common shares.
      The fair value of the warrants of $1,578,000 and the common shares of
      $1,975,000 were determined using the Black- Scholes valuation model and
      the quoted market price of the shares on the date of issuance,
      respectively. The resulting discount of $1,736,200 was being accreted over
      the term of the debentures. The assumptions used in the Black-Scholes
      calculation are as follows: expected life  5 years; volatility  78.26%;
      Dividend rate  0%; and risk free interest rate is
      3.52%.

---

Fox Petroleum Inc. 
  (A Development Stage Company) 
  Notes
  to the Consolidated Financial Statements 
  May 31, 2009 
  (Stated in US
    Dollars) 
  (Unaudited)  Page 14

|Note 5 | Notes Payable (contd)
|------ | -----------------------

| | e) |  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    | The Company was required to pay to the investor at
      closing of the Original Agreements: $17,500 in legal costs, a $10,000 due
      diligence fee, a 7% commitment fee and a 2% facility fee, 500,000 share
      purchase warrants and 200,000 shares of common stock. Finders fees of
      $150,000 and 52,265 share purchase warrants were paid to Partners
      Consulting in connection with the Original Agreements pursuant to a finder
      agreement dated February 15, 2008. This amount is included in fees payable
      in stock and warrants at February 28, 2009. The warrants expire three
      years from the date of issuance.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    | At the closing of the Amended Debentures, the Company
      also issued 2,500,000 shares of common stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    | In no event shall the Holder be entitled to convert this
      Debenture for a number of shares of Common Stock in excess of that number
      of shares of Common Stock which, upon giving effect to such conversion,
      would cause the aggregate number of shares of Common Stock beneficially
      owned by the Holder and its affiliates to exceed 9.99% of the outstanding
      shares of the Common Stock following such conversion without the approval
      of the Company.                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    | Upon the occurrence of an Event of Default by the
      Company, the Holder has the option to elect that the interest due and
      payable be paid in cash or in stock at the rate of 85% of the lower of:
      (i) the VWAP on the date the interest payment is due; or (ii) if the
      interest payment is not made when due, the VWAP on the date the interest
      payment is made.                                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    | The Debentures are secured by all of the assets and
      property of the Company and its subsidiaries pursuant to a Security
      Agreement. The debentures were further secured by a Pledge and Escrow
      Agreement pursuant to which 15,000,000 common shares of the Company to be
      held in escrow on behalf of the investor.                                                                                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    | Further, the debenture is subject to a currency
      adjustment clause whereby the exchange rate between the US Dollar and the
      Euro will be fixed at the date of closing and if the exchange rate moves
      unfavorably for the holder of the debenture, the Company will be required
      to adjust conversion and redemption rates to compensate the holder for any
      such loss.                                                                                                                                                                                                                                                          
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    | The debenture also contains certain restrictions on the
      Company for new share or debt issuances as long as any principal or
      interest amount remains outstanding on the
      debenture.                                                                                                                                                                                                                                                                                                                                                                                                                                                       

---

Fox Petroleum Inc. 
  (A Development Stage Company) 
  Notes
  to the Consolidated Financial Statements 
  May 31, 2009 
  (Stated in US
    Dollars) 
  (Unaudited)  Page 15

|Note 5 | Notes Payable (contd)
|------ | -----------------------

| | e) |  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | The New Debenture and has a principal amount of
      $1,000,000 and matures on October 31, 2010 (the New Debenture). The New
      Debenture bears interest at a rate of 10% per annum compounded monthly.
      The principal and any unpaid accrued interest owing on the debentures are
      convertible into common stock of the Company in the event of a default or
      at the option of the holder at the rate of the lesser of i) 100% of the
      volume weighted average stock price on the date of issuance and ii) at 85%
      of the lowest daily closing VWAP as quoted by Bloomberg L.P. during the 5
      trading days immediately preceding the conversion date.                                                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | The Company may redeem any or all of the New Debenture at
      any time, provided that the Common Stock is trading below the Fixed Price
      at the time the Company gives the Holder the redemption notice, by paying
      the unpaid principal and interest accrued and a prepayment premium of 15%
      redemption premium on the amount redeemed. In any case, the Company must
      redeem the $1,000,000 debenture maturing October 31, 2010 in equal monthly
      installments commencing January 31, 2009 until maturity at a 15%
      redemption premium.                                                                                                                                                                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | At the closing of the New Debentures the Company
      incurred: $7,500 in legal costs, a $45,000 commitment fee, a $1,000 due
      diligence fee                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | The Company recorded a beneficial conversion feature of
      $1,710,300 with respect to the Original Debentures. The amount was being
      amortized over the term of the debentures, however after an event of
      default (see below), the entire amount was immediately recognized into
      income as a financing fee during the year ended February 28,
      2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | Pursuant to the securities purchase agreement, the
      Company entered into a freestanding investor registration rights agreement
      dated June 24, 2008 and amended October 31, 2008. Under the terms of this
      agreement, the Company must have registered at least three (3) times the
      number of shares which are anticipated to be issued upon conversion of the
      Debentures issued and shares of common stock issuable to the purchaser
      upon exercise of the warrants. The Company has the obligation to use their
      best efforts to keep the registration of these securities effective by the
      SEC until all of the securities had been sold by the purchaser. Failure to
      meet this obligation would result in the Company incurring liquidated
      damages in the amount of 2% of the liquidated value of the debentures for
      each 30 day period registration of the securities is not
      effective.

---

Fox Petroleum Inc. 
  (A Development Stage Company) 
  Notes
  to the Consolidated Financial Statements 
  May 31, 2009 
  (Stated in US
    Dollars) 
  (Unaudited)  Page 16

|Note 5 | Notes Payable (contd)
|------ | -----------------------

| | e) |  (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    | Under the provisions of FSP EITF 00-19-2 Accounting for
      Registration Payment Arrangements (EITF 00-19-2), the Company is
      required to separately recognize and measure a contingent obligation in
      respect of the liquidating damages in accordance with FASB No.5
      Accounting for Contingencies and FSB Interpretation No.14 Reasonable
      Estimation of the Amount of a Loss. At May 31, 2009, an amount of
      $485,333 (February 28, 2009 - $270,667) has been recognized as the Company
      has determined that a loss is probable because the Company has failed to
      maintain effectiveness of its registration statement.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    | Included in accounts payable and accrued liabilities at
      May 31, 2009 is $509,460 (February 28, 2009 - $429,167) for accrued
      interest and redemption premiums on these notes payable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    | During the three-month period ended May 31, 2009 and the
      year ended February 28, 2009, the Company failed to make any of the
      required redemption payments on the New Debenture. This triggered a
      default, which resulted in all of the debentures immediately becoming due
      and payable and the remaining discounts on the debentures were immediately
      recognized in income.                                                                                                                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    | As at May 31, 2009, the Company had not repaid the
      $1,250,000 debenture that matured on April 30, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    | As consideration for entering into negotiations to effect
      a loan rescheduling and the holder entering into an agreement not to sue,
      the Company assigned its interest in certain oil and gas leases to the
      holder (Note 4(f)). The holder also received the 15,000,000 common shares
      pledged as security against for debentures valued at $4,650,000, based on
      the quoted market price of the Companys common shares on the date they
      were released from escrow.                                                                                                                                                                   

---

Fox Petroleum Inc. 
  (A Development Stage Company) 
  Notes
  to the Consolidated Financial Statements 
  May 31, 2009 
  (Stated in US
    Dollars) 
  (Unaudited)  Page  17

|Note 5 | Notes Payable (contd)
|------ | -----------------------

| | e) |  (contd)
| | -- | ----------

| |                                     |   | Face       |   |   |            |   |   | Deferred        |   |   | Carrying   |  
| | ----------------------------------- | - | ---------- | - | - | ---------- | - | - | --------------- | - | - | ---------- | -
| |                                     |   | Amount     |   |   | Discount   |   |   | Financing Costs |   |   | Value      |  
| | Balance, March 1, 2008              | $ | -          |   | $ | -          |   | $ | -               |   | $ |            |  
| |                                     |   |            |   |   |            |   |   |                 |   |   | -          |  
| | Issuance of Original                |   |            |   |   |            |   |   |                 |   |   |            |  
| | Debenture, June 24, 2008            |   | 2,500,000  |   |   | (839,292   | ) |   | (252,500        | ) |   | 1,408,208  |  
| |                                     |   |            |   |   |            |   |   |                 |   |   |            |  
| | Commissions paid  cash             |   | -          |   |   | -          |   |   | (150,000        | ) |   | (150,000   | )
| | Finders fees  warrants            |   | -          |   |   | -          |   |   | (7,592          | ) |   | (7,592     | )
| | Event of default, October 24,       |   | -          |   |   |            |   |   |                 |   |   |            |  
| | 2008                                |   |            |   |   |            |   |   |                 |   |   |            |  
| | Beneficial conversion feature       |   | -          |   |   | -          |   |   | (1,388,320      | ) |   | (1,388,320 | )
| | Accretion of debt discount          |   | -          |   |   | 839,292    |   |   | 1,798,412       |   |   | 2,637,704  |  
| | Extinguishment of Original          |   |            |   |   |            |   |   |                 |   |   |            |  
| | debenture, October 31,
      2008   |   | (2,500,000 | ) |   | -          |   |   | -               |   |   | (2,500,000 | )
| | Issuance of Amended                 |   | 3,500,000  |   |   | (1,736,200 | ) |   | (53,500         | ) |   | 1,710,300  |  
| | Debentures                          |   |            |   |   |            |   |   |                 |   |   |            |  
| | Beneficial conversion feature       |   | -          |   |   | -          |   |   | (1,710,300      | ) |   | (1,710,300 | )
| | Commissions paid  cash             |   | -          |   |   | -          |   |   | (60,000         | ) |   | (60,000    | )
| | Finders fee  warrants             |   | -          |   |   | -          |   |   | (15,545         | ) |   | (15,545    | )
| | Event of default, January
      31, |   |            |   |   |            |   |   |                 |   |   |            |  
| | 2009                                |   |            |   |   |            |   |   |                 |   |   |            |  
| | Accretion of debt discount          |   | -          |   |   | 1,736,200  |   |   | 1,839,345       |   |   | 3,575,545  |  
| | Liquidating damages                 |   | 270,667    |   |   | -          |   |   | -               |   |   | 270,667    |  
| | Balance, February 28, 2009          |   | 3,770,667  |   |   | -          |   |   | -               |   |   | 3,770,667  |  
| | Liquidating damages                 |   | 214,666    |   |   |            |   |   |                 |   |   | 214,666    |  
| | Balance, May 31, 2009               | $ | 3,985,333  |   | $ | -          |   | $ | -               |   | $ | 3,985,333  |  

Note 6
      Related Party Transactions Note 8The officers of the Company provide consulting and
        management services to the Company as follows:


| |                          |   |                    |  |   |               |  |   | November 4,   | 
| | ------------------------ | - | ------------------ |  | - | ------------- |  | - | ------------- | 
| |                          |   |                    |  |   |               |  |   | 2004 (Date of | 
| |                          |   | Three months ended |  |   | Inception) to | 
| |                          |   | May 31,            |  |   | May 31,       | 
| |                          |   | 2009               |  |   | 2008          |  |   | 2009          | 
| |                          |   |                    |  |   |               |  |   |               | 
| | Consulting fees          | $ | -                  |  | $ | 27,925        |  | $ | 394,859       | 
| | Management fees          |   | 144,856            |  |   | 76,822        |  |   | 996,316       | 
| | Office and miscellaneous |   | -                  |  |   | -             |  |   | 7,000         | 
| |                          |   |                    |  |   |               |  |   |               | 
| |                          | $ | 144,856            |  | $ | 104,747       |  | $ | 1,398,175     | 

---

Fox Petroleum Inc. 
  (A Development Stage Company) 
  Notes
  to the Consolidated Financial Statements 
  May 31, 2009 
  (Stated in US
    Dollars) 
  (Unaudited)  Page  18

|Note 6 | Related Party Transactions Note 8  (contd)                                                                                                                                                                                                                  
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                
|       | Included in accounts payable and accrued liabilities at
      May 31, 2009 is $765,988 (February 28, 2009: $504,293) owed to directors
      of the Company for expenses incurred on behalf of the Company and for
      unpaid management and consulting fees.
|       |                                                                                                                                                                                                                                                                
|       | The amounts due to related parties are unsecured,
      non-interest bearing and have no specific terms for repayment. These
      amounts were due to the director of the Company and a company controlled
      by a director of the Company.                
|       |                                                                                                                                                                                                                                                                
|       | Effective May 6, 2008, the Company adopted a compensation
      policy for its directors pursuant to which the Company will compensate
      each director, as follows:                                                                                        

| | i)   | a fee of $1,000 per month;                                                 
| | ---- | ---------------------------------------------------------------------------
| | ii)  | 1,000 restricted shares of the common stock of the
      Company per month;
| | iii) | a fee of $1,000 per each quarterly board meeting
      attended.           

|Note 7 | Capital Stock Notes 4, 5, 6, 8 and 10                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       | Effective January 11, 2007 the Company completed a
      forward stock split of the authorized, issued and outstanding shares of
      common stock on a six new for one old basis. Authorized capital increased
      from 75,000,000 common shares to 450,000,000 common shares. Effective
      April 21, 2008 the Company completed a reverse stock split of authorized,
      issued and outstanding shares of common stock on a one new for five old
      basis. Authorized capital decreased from 450,000,000 to 90,000,000. In
      January 2009, the Company obtained shareholder approval to amend its
      authorized share capital from 90,000,000 common shares, par value $0.001
      to 500,000,000 common shares, par value $0.001. These financial statements
      have been retroactively restated to reflect reverse stock split, however
      the increase in authorized share capital will not become effective until
      not less than 20 days after the information statement regarding the
      increase is first mailed to stockholders and until the appropriate filing
      is made with the Nevada Secretary of State. Subsequent to May 31, 2009,
      these required filings had not been made but it is managements intention
      to do so.

| | a) | Share Issuance Agreements:
| | -- | --------------------------
| |    |                           
| |    | i)                        

---

Fox Petroleum Inc. 
  (A Development Stage Company) 
  Notes
  to the Consolidated Financial Statements 
  May 31, 2009 
  (Stated in US
    Dollars) 
  (Unaudited)  Page  19

|Note 7 | Capital Stock Notes 4,
      5, 6, and 8
|------ | -----------------------------------------

| | a) | Share Issuance Agreements: -
      (contd)
| | -- | -------------------------------------------

Shares issued under the agreement were
  as follows:

| |                    |  | Number of |  |  | Issue  |  |   | Total     | 
| | ------------------ |  | --------- |  |  | ------ |  | - | --------- | 
| | Issue Date         |  | Units     |  |  | Price  |  |   | Proceeds  | 
| |                    |  |           |  |  |        |  |   |           | 
| | May 17, 2007       |  | 377,358   |  |  | $5.30  |  | $ | 2,000,000 | 
| | August 1, 2007     |  | 31,056    |  |  | $8.05  |  |   | 250,000   | 
| | September 18, 2007 |  | 44,199    |  |  | $9.05  |  |   | 400,000   | 
| | September 18, 2007 |  | 52,133    |  |  | $10.55 |  |   | 550,000   | 
| | September 27, 2007 |  | 28,708    |  |  | $10.45 |  |   | 300,000   | 
| | October 26, 2007   |  | 16,381    |  |  | $12.21 |  |   | 200,000   | 
| | October 26, 2007   |  | 21,097    |  |  | $11.85 |  |   | 250,000   | 
| | October 26, 2007   |  | 35,897    |  |  | $9.75  |  |   | 350,000   | 
| | November 28, 2007  |  | 47,337    |  |  | $8.45  |  |   | 400,000   | 
| | January 16, 2008   |  | 43,478    |  |  | $3.45  |  |   | 150,000   | 
| | January 24, 2008   |  | 96,154    |  |  | $5.20  |  |   | 500,000   | 
| | January 30, 2008   |  | 48,387    |  |  | $3.10  |  |   | 150,000   | 
| | February 11, 2008  |  | 89,286    |  |  | $2.80  |  |   | 250,000   | 
| | February 26, 2008  |  | 96,774    |  |  | $3.10  |  |   | 300,000   | 
| |                    |  |           |  |  |        |  |   |           | 
| |                    |  | 1,028,245 |  |  |        |  | $ | 6,050,000 | 

---

Fox Petroleum Inc. 
  (A Development Stage Company) 
  Notes
  to the Consolidated Financial Statements 
  May 31, 2009 
  (Stated in US
    Dollars) 
  (Unaudited)  Page  20

|Note 7 | Capital Stock Notes 4,
      5, 6, and 8
|------ | -----------------------------------------

| | a) | Share Issuance Agreement: 
      (contd)
| | -- | ------------------------------------------

| | i) |  contd                                                                                                                                                                                            
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                     
| |    | As at May 31, 2009, there are 3,048,246 share purchase
      warrants outstanding entitling the holders thereof the right to purchase
      one common share for each warrant held as
      follows:

Number of
      ExerciseWarrants
      Price
      Expiry Date20,000
      $6.25
      February 23, 2010377,358
      $6.65
      May 17, 201031,056
      $10.05
      August 1, 201044,199
      $11.30
      September 10, 201052,133
      $13.20
      September 10, 201028,708
      $13.05
      October 1, 201016,381
      $15.25
      October 26, 201021,097
      $14.80
      October 26, 201035,897
      $12.20
      October 26, 201047,337
      $10.55
      November 28, 201043,478
      $4.30
      January 16, 201196,154
      $6.50
      January 24, 201148,387
      $3.90
      January 30, 201189,286
      $3.50
      February 11, 201196,775
      $3.90
      February 26, 20112,000,000
      $0.001
      October 31, 20133,048,246


| | ii) | On November 5, 2008, the Company entered into a
      subscription agreement with Carbon Energy Investments Limited (Carbon
      Energy) for the sale of 80,000,000 shares of common stock at a price of
      $0.50 per share for the aggregate price of $40,000,000. Carbon Energy
      agreed to pay for the shares as follows:
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | $15,000,000 on or before November 30, 2008 (later amended
      to December 12, 2008);
| | - | --------------------------------------------------------------------------------------
| | - | $15,000,000 on or before January
      31, 2009; and                                  
| | - | $10,000,000 on or before March
      31, 2009.                                        

---

Fox Petroleum Inc. 
  (A Development Stage Company) 
  Notes
  to the Consolidated Financial Statements 
  May 31, 2009 
  (Stated in US
    Dollars) 
  (Unaudited)  Page  21

|Note 7 | Capital Stock Notes 4,
      5, 6, and 8  (contd)
|------ | ----------------------------------------------------

| | a) | Share Issuance Agreement:  (contd)
| | -- | ------------------------------------
| |    |                                     
| |    | ii)                                 
| |    |                                     
| |    |                                     
| |    |                                     
| |    |                                     
| |    |                                     
| |    |                                     
| |    |                                     
| |    |                                     
| |    |                                     
| |    |                                     
| |    |                                     
| |    |                                     

---

Fox Petroleum Inc. 
  (A Development Stage Company) 
  Notes
  to the Consolidated Financial Statements 
  May 31, 2009 
  (Stated in US
    Dollars) 
  (Unaudited)  Page  22

|Note 7 | Capital Stock Notes 4,
      5, 6, and 8  (contd)
|------ | ----------------------------------------------------

| | b) | Share Purchase Warrants                                                                                                                                     
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                             
| |    | The summary of the changes in the Companys share
      purchase warrants for the periods ended May 31, 2009 and February 28, 2009
      is presented below:

| |                           |  | May
      31, 2009 |  |   | February 28, 2009 | 
| | ------------------------- |  | ------------------ |  | - | ----------------- | 
| |                           |  |                    |  |   | Weighted          | 
| |                           |  |                    |  |   | Average           | 
| |                           |  | Number of          |  |   | Exercise          | 
| |                           |  | Warrants           |  |   | Price             | 
| |                           |  |                    |  |   |                   | 
| | Balance, beginning of the |  |                    |  |   |                   | 
| | period                    |  | 1,048,246          |  | $ | 7.34              | 
| | Issued                    |  | 2,000,000          |  | $ | 0.001             | 
| |                           |  |                    |  |   |                   | 
| | Balance, end of period    |  | 3,048,246          |  | $ | 2.53              | 

The remaining average life of the
  warrants at May 31, 2009 is 2.53 years (February 28, 2009: 3.61 years).

A finder's fee of $60,000 and 52,265
  share purchase warrants exercisable at $2.87 for a period of three years from
  the date of issuance (6% of proceeds) were paid to Partners Consulting in
  connection with the Original Debenture (Note 5(e)) pursuant to a finder
  agreement dated February 15, 2008. The fair value of the warrants was determined
  using the Black-Scholes valuation model. The assumptions used in the
  Black-Scholes calculation are as follows: expected life  3 years; volatility 
  192%; Dividend rate  0%; and risk free interest rate is 1.0% . At May 31, 2009
  these warrants had not yet been issued and are included in fees payable in stock
  and warrants.

A finder's fee of $60,000 and 76,923
  share purchase warrants exercisable at $0.78 for a period of three years from
  the date of issuance (6% of additional proceeds) were paid to Partners
  Consulting in connection with the Amended Debentures (Note 5(e) pursuant to a
  finder agreement dated February 15, 2008. The fair value of the warrants was
  determined using the Black-Scholes valuation model. The assumptions used in the
  Black-Scholes calculation are as follows: expected life  3 years; volatility 
  192.6%; Dividend rate  0%; and risk free interest rate is 1.0% . At May 31,
  2009 these warrants had not yet been issued and are included in fees payable in
  stock and warrants.

---

Fox Petroleum Inc. 
  (A Development Stage Company) 
  Notes
  to the Consolidated Financial Statements 
  May 31, 2009 
  (Stated in US
    Dollars) 
  (Unaudited)  Page  23

|Note 8 | Commitments Notes 4, 5,
      7 and 10
|------ | ---------------------------------------

| | a) | By agreements dated June 8, 2007, the Company agreed to
      pay three directors of the Company a total amount of $20,000 per month for
      an indefinite period for consulting and management services to the
      Company. The agreements may be terminated at any time with cause and with
      three months notice without cause. On October 19, 2007 two of these
      agreements where amended from $12,000 to £9,000 ($17,900) per month and
      from $5,000 per month to £7,000 ($13,900). All other terms remained the
      same.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | b) | On May 8, 2008 the Company entered into a consulting
      agreement with Partners Consulting Inc. (PCI), a Florida Corporation, to
      introduce the Company to potential new investors. The consideration
      payable to PCI is warrants to purchase 50,000 shares of common stock due
      upon signing the agreement. In addition, PCI will receive 6% of the gross
      proceeds from any potential financing, payable in cash and share purchase
      warrants equal to 6% of the gross proceeds. In the event a financing is
      facilitated through an investment banker introduced by PCI, PCI will
      instead receive 3% of the gross proceeds, payable in cash and share
      purchase warrants equal to 3% of the gross proceeds. All warrants will
      have a cashless exercise and will be priced at market value as of the date
      of the financing and with a minimum expiry period of three years. The
      consulting agreement is for a period of one year.                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    | At May 31, 2009 the Company had not yet issued the
      warrants for 50,000 common shares due upon signing of the agreement but
      the fair value of these warrants was determined to be $10,434, which was
      included in fees payable in stock and warrants at May 31, 2009. The fair
      value of these warrants was determined to be $7,344 at February 28, 2009
      and, consequently an amount of $3,090 has been charged to consulting fees
      for the three months ended May 31, 2009. These warrants are exercisable at
      $2.77 and will expire three years from the date of issuance. The fair
      value of these warrants was determined using the Black Scholes valuation
      model. The assumptions used in the Black-Scholes calculation are as
      follows: expected life  3 years; volatility  192%; Dividend rate  0%;
      and risk free interest rate is 1.0%.                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | c) | On May 21, 2008, the Company signed a letter of
      commitment whereby the Company agreed to commit to the use of a drilling
      rig commencing no earlier than October 1, 2008 for a total cost of
      $8,910,000 which has been accrued in accounts payable and accrued
      liabilities as at February 28, 2009. The Company also committed to enter
      into a well project management and integrated services contract for the
      management of a well program on the rig. The Company is also obligated to
      pay a fee of 1.75% of the operating rig rate in acknowledgement of the
      value provided with the rig opportunity, if the Company uses the rig, but
      not the integrated project management services. The Company also incurred
      and accrued penalties of $2,000,000 as compensation for lost revenues of
      the rig owners for its failure to fulfill its obligations under the rig
      provision contract and may be liable to pay up to an additional $2,000,000
      for its share of additional costs incurred by the rig owners during the
      Companys allotted rig slot.

---

Fox Petroleum Inc. 
  (A Development Stage Company) 
  Notes
  to the Consolidated Financial Statements 
  May 31, 2009 
  (Stated in US
    Dollars) 
  (Unaudited)  Page 24

|Note 8 | Commitments Notes 4, 5,
      7 and 10  (contd)
|------ | --------------------------------------------------

| | c) | - (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    | This additional $2,000,000 amount is subject to a
      commercial discussion between the parties involved and has been accrued at
      May 31, 2009 as it is likely that will be incurred. A total of $12,910,000
      was recorded as a loss on failure to perform obligations under oil &
      gas commitments and has been charged to the statement of operations during
      the year ended February 28, 2009.                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | d) | By a bonus agreement dated May 22, 2008, the Company
      agreed to issue 5,000 common shares and £5,000 ($10,000) (paid during the
      year ended February 29, 2008) to an officer and director of the Company as
      a performance bonus. At November 30, 2008, the Company had not yet issued
      the shares due. The fair value of the shares was determined to be $22,150,
      which was included in fees payable in stock and warrants at May 31,
      2009.                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | e) | During the three months ended May 31, 2009, the Company
      recorded a recovery of $1,000 (2008: $Nil) for the change in fair value of
      50,000 common shares issuable pursuant to Board of Advisors (BOA)
      agreements dated November 17, 2007 as compensation to the members of the
      BOA. An amount of $14,000 is included in fees payable in stock and
      warrants at May 31, 2009 for these shares.                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | f) | By an investor relations consulting service agreement
      dated September 1, 2008 and later verbally amended, the Company agreed to
      pay $6,000 per month for services relating to investor relations and
      corporate communications, identification of projects of interest and basic
      project management for an initial period of nine months beginning on
      September 1, 2008. Following the initial period of nine months, the
      contract will continually and automatically be renewed for additional nine
      month periods until it is terminated by either
      party.

|Note 9 | Non-cash Transactions                                                                                                                                
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                      
|       | Investing and financing activities that do not have a
      direct impact on current cash flows are excluded from the statements of
      cash flows.
|       |                                                                                                                                                      
|       | During the three-month periods ended May 31, 2009 and
      2008 no amounts were paid for income taxes.                                              
|       |                                                                                                                                                      
|       | During the three-month periods ended May 31, 2009 and
      2008 no amounts were paid for interest on notes payable.                                 

---

2

Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations.

Cautionary Note Regarding Forward Looking Statements

This quarterly report contains forward looking statements.
These statements relate to future events or our future financial performance. 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. These statements speak only as of
the date of this quarterly report. Examples of forward looking statements made
in this quarterly report include statements about:

- our future exploration programs and results;
- our future capital expenditures;
- our future financing; and
- our future investments in and acquisitions of oil and gas properties.

These statements are only predictions and involve known and
unknown risks, uncertainties and other factors, including the risks, such as

- our ability to establish or find reserves;
- volatility in market prices for natural gas and crude oil;
- liabilities inherent in natural gas and crude oil operations;
- uncertainties associated with estimating natural gas reserves and crude
  oil;
- competition for, among other things, capital, acquisitions of reserves,
  undeveloped lands and skilled personnel;
- political instability or changes of laws in the countries in which we
  operate and risks of terrorist attacks;
- incorrect assessments of the value of acquisitions;
- geological, technical, drilling and processing problems;
- the uncertainty inherent in the litigation process, including the
  possibility of newly discovered evidence or the acceptance of novel legal
  theories, and the difficulties in predicting the decisions of judges and
  juries; and
- other factors discussed under Item 1A. Risk Factors commencing on
  page 8 of this quarterly report.

These risks may cause our companys or our industrys actual
results, levels of activity or performance to be materially different from any
future results, levels of activity or performance expressed or implied by these
forward looking statements.

Although we believe that the expectations reflected in the
forward looking statements are reasonable, we cannot guarantee future results,
levels of activity or performance. Except as required by applicable law,
including the securities laws of the United States, we do not intend to update
any of the forward looking statements to conform these statements to actual
results.

---

3

In this report, the terms we, us and our refer to Fox
Petroleum Inc. and/or its wholly owned subsidiaries, Fox Petroleum (Alaska)
Inc., Fox Petroleum, Inc. (a Kansas corporation) and Fox Energy Exploration
Limited, as the case may be.

Our Business

We are a development stage company engaged in the
identification, acquisition, exploration, and, if warranted, development of
prospective oil and gas properties. We have oil and gas leases in Alaska,
interests in a UK onshore license, and joint venture interests in a gas well in
Texas.

Anticipated Cash Requirements

We estimate our minimum operating expenses and working capital
  requirements for the next 12 month period to be as follows:

Estimated Operating Expenses For the Next 12
      Month PeriodExploration Costs
    $
    250,000Employee and Consultant Compensation
    
    324,000Professional Fees
    
    150,000General and Administrative Expenses
    
    300,000Current Liabilities due in the next 12
      months
    
    22,175,335Total
    $
    23,199,335


Exploration Costs

We estimate that our Alaska lease rental fees for the next 12
months to be $250,000. In addition, we could incur additional exploration costs
depending on the level of the financing that we obtain.

Employee and Consultant Compensation

We estimate that our employee and consultant compensation
expenses for the next 12 month period ending May 31, 2010 will be approximately
$324,000.

Professional Fees

We estimate our legal and accounting expenses for the next 12
month period to be approximately $150,000.

General and Administrative Expenses

We anticipate spending approximately $300,000 on general and
administrative costs in the next 12 month period. These costs primarily consist
of expenses such as lease payments, office supplies and office equipment, and
travel expenses.

Current Liabilities

As of May 31, 2009, we had the current liabilities of
$22,175,335 which are due in the next 12 months.

---

4

Results of Operation

Revenues

From our inception on November 4, 2004 to May 31, 2009, we had
no operating revenues.

Expenses

The major components of our expenses for the three month
periods ended May 31, 2009 and 2008 are outlined in the table below:

|                                 |   | Three Month  |  |   | Three Month  | 
|-------------------------------- | - | ------------ |  | - | ------------ | 
|                                 |   | Period Ended |  |   | Period Ended | 
|                                 |   | May 31,      |  |   | May 31,      | 
|Expenses:                        |   | 2009         |  |   | 2008         | 
|Accounting and audit fees        | $ | 29,679       |  | $ | 33,244       | 
|Advertising and public relations |   | -            |  |   | 120,091      | 
|Bank charges                     |   | 4,306        |  |   | 2,990        | 
|Consulting fees                  |   | 86,657       |  |   | 194,357      | 
|Filing and transfer agent        |   | -            |  |   | 1,125        | 
|Finance fees                     |   | 4,870,617    |  |   | 653,000      | 
|Foreign exchange                 |   | 243,989      |  |   | -            | 
|Insurance                        |   | -            |  |   | 8,822        | 
|Interest on notes payable        |   | 106,997      |  |   | 6,105        | 
|Legal fees                       |   | 10,300       |  |   | 40,073       | 
|License fees                     |   | 25,126       |  |   | -            | 
|Management fees                  |   | 188,956      |  |   | 76,822       | 
|Office and miscellaneous         |   | 16,133       |  |   | 46,821       | 
|Travel and entertainment         |   | -            |  |   | 16,837       | 

Advertising and public relations
expenses

The decrease in advertising and public relations expenses for
the three-month period ended May 31, 2009 as compared to the three-month period
ended May 31, 2008 was primarily due to less printing and distribution of our
brochures and newsletter.

Consulting fees

The decrease in the consulting fees for the three-month period
ended May 31, 2009 as compared to the three-month period ended May 31, 2008 was
primarily due to an accrual in the period ended May 31, 2008 pursuant to board
of advisors termination agreements whereby we agreed to issue stock for services
rendered.

Finance Fees

The increase in financing fees for the three-month period ended
May 31, 2009 as compared to the three-month period ended May 31, 2008 was
primarily due to the 15,000,000 shares of our common stock issued as
consideration by our company for entering into negotiations to effect a loan
rescheduling and the holder entering into an agreement not to sue. The
15,000,000 shares of our common stock received by the holder were pledged as
security against for the debentures and were valued at $4,650,000, based on the
quoted market price of the shares of our common stock on the date they were
released from escrow.

---

5

Interest on Notes Payable

The increase in interest on notes payable for the three-month
period ended May 31, 2009 as compared to the three-month period ended May 31,
2008 was primarily due to the issuance of convertible debentures in June 2008
and October 2008.

Management fees

The increase in the management fees for the three-month period
ended May 31, 2009 as compared to the three-month period ended May 31, 2008 was
primarily due to greater staffing level during the three-month period ended May
31, 2009.

Liquidity and Capital Resources

|Working Capital           |   |             |   |   |                 |  
|------------------------- | - | ----------- | - | - | --------------- | -
|                          |   | At May 31,  |   |   | At February 28, |  
|                          |   | 2009        |   |   | 2009            |  
|Current Assets            | $ | 144,764     |   | $ | 163,923         |  
|Current Liabilities       | $ | 22,175,335  |   | $ | 21,289,775      |  
|Working Capital (Deficit) | $ | (22,030,571 | ) | $ | (21,125,852     | )

As of May 31, 2009, we held a cash balance of $4,870 and a
working capital deficit of $22,030,571, compared to a cash balance of $6,205 and
a working capital deficit of $21,125,852 as of February 28, 2009. We have
suffered recurring losses from inception.

Financing from Trafalgar Capital Specialized Investment
Fund, Luxembourg

We failed to make most payments due to Trafalgar Capital
Specialized Investment Fund, Luxembourg under the various loan arrangements
(approximately $196,000 in scheduled principal, premium and interest repayments
at February 28, 2009). We later were not in a position to repay the $1,250,000
principal due at the end of April 2009 under a loan agreement with Trafalgar
(which would have left $2,250,000 principal outstanding).

We have also incurred trade creditor and direct salary related
debt of over $1,000,000 to date for our operations in Kansas. Several of these
key trade creditors have issued mechanical liens against our facilities in
Kansas.

Subsequently, Trafalgar and we have commenced negotiations to
amend the various loan arrangements to avoid default notices and legal action
having to be taken. In principle, we have been asked by Trafalgar to assign our
leases in Kansas to Trafalgar in return for a loan rescheduling, Trafalgars
realizing the 15,000,000 shares of our common stock pledged under an earlier
loan document with Trafalgar and a covenant not to sue by Trafalgar.

As a
  result, in April 30, 2009, we and Trafalgar entered into amendment to the
  securities purchase agreement, secured debenture, registration rights agreement
  and security agreement, whereby Trafalgar agreed to extend the maturity date of
  a secured debenture in the principal amount of $1,250,000 until October 31, 2009
  from April 30, 2009. In consideration for Trafalgars agreeing to extend the
  maturity date of that secured debenture, we released 15,000,000 shares of our
  common stock from escrow to Trafalgar as payment of an extension fee. These
  shares were originally intended to serve as additional pledged property under
  the security agreement that we entered into with Trafalgar in connection with
  the sale of the debentures to Trafalgar and in fact were described by Trafalgar
  as being made available for a CEF type arrangement to repay creditors. This was
  later not consented to by Trafalgar.

Annual Rental Payments for Leases in Alaska

On January 30, 2009, we entered into an agreement with Daniel
Donkel and Samuel Cade regarding twelve oil and gas leases in the State of
Alaska, which were sold by Messrs. Donkel and Cade to us.

Under the terms of the agreement, Messrs. Donkel and Cade
agreed to use their best efforts to make, on our behalf, annual rental payments
for the twelve leases totaling up to $64,980 on or before the due date of each
payment. The

---

6

payments were due on February 1, 2009 and were paid by Messrs.
Donkel and Cade on February 1, 2009.

We agreed to repay to them by March 2, 2009 any portion of the
payments made by them. The repayment amount is subject to an 18% interest rate
per annum. We also granted them a security interest in our right, title, and
interest in the twelve leases. We further agreed to transfer and assign 25% of
our right, title, and interest in the twelve leases to Mr. Donkel and 75% of our
right, title, and interest in the twelve leases to Mr. Cade in the event of our
failure to pay the repayment amount in a timely manner.

To date we have not been in a position to reimburse Messrs.
Donkel and Cade. Before the end of May 2009, we entered into a letter agreement
with Messrs. Cade and Donkel extending repayment deadline to August 14, 2009
within which we have to repay the annual rental payments made by them on
February 1, 2009 together with interest. In order to obtain the extension, we
executed the lease assignments for all of the above twelve oil and gas leases
and delivered them into escrow with the attorney of Messrs. Cade and Donkel.

We also had lease payments unpaid totalling $25,126 for five
leases which were due by March 1, 2009. We also had to pay further $25,790 for
Alaska lease payments for three leases by June 1, 2009.

As of May 16, 2009 and May 29, 2009, we entered into agreements
with Messrs. Donkel and Cade whereby they paid lease rental fees of $25,126 for
five leases which were due by March 1, 2009 and lease rental fees of $25,790 for
three leases which were due by June 1, 2009, respectively, on behalf of our
company. Under the agreements we have until August 14, 2009 to repay them in
full including any accrued interest. The amount paid on our behalf is subject to
an 18% interest rate per annum. If we fail to pay them the leases will
automatically be assigned to them under the lease assignment agreements signed
by us and held in escrow by Messrs. Donkel and Cade.

Future Financing

We have no access to capital to repay our debt or fund our
current or ongoing operations. Unless we can secure additional capital and
renegotiate the terms of our outstanding debts, we may be required to
discontinue our operations at any time.

There are no assurances that we will be able to obtain funds
required for our continued operations. There can be no assurance that additional
financing will be available to us when needed or, if available, that it can be
obtained on commercially reasonable terms. If we are not able to obtain
additional financing on a timely basis, we will be unable to conduct our
operations as planned, and we will not be able to meet our other obligations as
they become due. In such event, we will be forced to scale down or perhaps even
cease our operations.

Going Concern

Because we are in the development stage, have not yet achieved
profitable operations and are dependent on our ability to raise capital from
stockholders or other sources to meet our obligations and repay our liabilities
arising from normal business operations when they become due, in their report on
our audited financial statements for the years ended February 28, 2009 and
February 29, 2008, our independent auditors included an explanatory paragraph
regarding substantial doubt about our ability to continue as a going concern.
Our financial statements contain additional note disclosure describing the
circumstances that lead to this disclosure by our independent auditors.

Off-Balance Sheet Arrangements

We have no 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 is material to
investors.

Item 3. Quantitative and Qualitative Disclosures about
Market Risks.

Not Applicable.

---

7

Item 4T. Controls and Procedures.

Disclosure Controls and Procedures

As required by Rule 13a-15 under the Securities Exchange Act of
1934, we have carried out an evaluation of the effectiveness of our disclosure
controls and procedures as of the end of the period covered by this quarterly
report, being May 31, 2009. This evaluation was carried out under the
supervision and with the participation of our management, including our
President and Chief Executive Officer.

Disclosure controls and procedures are controls and other
procedures that are designed to ensure that information required to be disclosed
in our 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 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 President and Chief Executive Officer, to allow timely decisions
regarding required disclosure.

Our management does not expect that our disclosure controls or
our internal controls over financial reporting will prevent all error and fraud.
A control system, no matter how well conceived and operated, can provide only
reasonable, but no absolute, assurance that the objectives of a control system
are met. Further, any control system reflects limitations on resources, and the
benefits of a control system must be considered relative to its costs. These
limitations also include the realities that judgments in decision-making can be
faulty and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some
persons, by collusion of two or more people or by management override of a
control. A design of a control system is also based upon certain assumptions
about potential future conditions; over time, controls may become inadequate
because of changes in conditions, or the degree of compliance with the policies
or procedures may deteriorate. Because of the inherent limitations in a
cost-effective control system, misstatements due to error or fraud may occur and
may not be detected.

Based upon that evaluation, our President and Chief Executive
Officer concluded that our disclosure controls and procedures were ineffective
as of the end of the period covered by this quarterly report.

Our management identified the following material weaknesses in
our internal control over financial reporting, which are indicative of many
small companies with small staff: (i) inadequate segregation of duties and
effective risk assessment; and (ii) insufficient written policies and procedures
for accounting and financial reporting with respect to the requirements and
application of both US GAAP and SEC guidelines.

We plan to take steps to enhance and improve the design of our
internal control over financial reporting. During the period covered by this
quarterly report on Form 10-Q, we have not been able to remediate the material
weaknesses identified above. To remediate such weaknesses, we plan to implement
the following changes during our fiscal year ending February 28, 2010: (i)
appoint additional qualified personnel to address inadequate segregation of
duties and ineffective risk management; and (ii) adopt sufficient written
policies and procedures for accounting and financial reporting. The remediation
efforts set out in (i) is largely dependent upon our securing additional
financing to cover the costs of implementing the changes required. If we are
unsuccessful in securing such funds, remediation efforts may be adversely
affected in a material manner.

---

8

Changes in Internal Controls over Financial
Reporting

There were no changes in our internal control over financial
reporting that occurred during our fiscal quarter ended May 31, 2009 that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.

PART II  OTHER INFORMATION

Item 1. Legal Proceedings.

Except for claims, if any, arising out of our letter of
commitment with Senergy Limited (as disclosed in our annual report on Form 10-K
filed on July 15, 2009) and trade creditor related debt for our operations in
Kansas (as disclosed in our annual report on Form 10-K filed on July 15, 2009),
we know of no material, existing or pending legal proceedings to which we are a
party or of which any of our property is the subject.

There are no material proceedings in which any of our
directors, officers or affiliates, or any registered or beneficial stockholder,
or any associate of such director, officer, affiliate, or stockholder, is a
party adverse to us or has a material interest adverse to us.

Item 1A. Risk Factors.

In addition to other information in this quarterly report, the
following risk factors should be carefully considered in evaluating our business
because such factors may have a significant impact on our business, operating
results, liquidity and financial condition. As a result of the risk factors set
forth below, actual results could differ materially from those projected in any
forward looking statements. Additional risks and uncertainties not presently
known to us, or that we currently consider to be immaterial, may also impact our
business, operating results, liquidity and financial condition. If any such
risks occur, our business, operating results, liquidity and financial condition
could be materially affected in an adverse manner. Under such circumstances, the
trading price of our securities could decline, and you may lose all or part of
your investment.

Risks Relating To Our Business and the Oil and Gas
Industry

Our financial condition is precarious and we have no
access to capital to repay our debt or fund our current or ongoing operations.
Unless we can secure additional capital and renegotiate the terms of our
outstanding debts, we may be required to discontinue our operations at any
time.

As of May 31, 2009, we had cash of $4,870 and had a working
capital deficit of $22,030,571. We do not have any credit available to us nor
have we identified other sources of capital and it is unlikely, given our
current financial condition and the ongoing global financial crisis, that we
will secure any additional credit or capital. Unless we can secure additional
capital and renegotiate the terms of our outstanding debts, we may be required
to discontinue our operations at any time. If we discontinue our operations, our
stockholders will lose the entire amount of their investments in our company.

Our independent auditors have expressed substantial doubt
about our ability to continue as a going concern, which may hinder our ability
to obtain future financing.

We incurred net losses of $5,582,760 and $1,1,199,793 for the
three month period ended May 31, 2009 and the three month period ended May 31,
2008, respectively. At May 31, 2009, we had accumulated a deficit of $40,540,186
and had a working capital deficit of $22,030,571.

Because we are in the development stage, have not yet achieved
profitable operations and are dependent on our ability to raise capital from
stockholders or other sources to meet our obligations and repay our liabilities
arising from normal business operations when they come due, in their report on
our audited financial statements for the years ended February 28, 2009 and
February 29, 2008, our independent auditors included an explanatory paragraph
regarding concerns about our ability to continue as a going concern. Our
financial statements contain additional note

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9

disclosure describing the circumstances that led to this
disclosure by our independent auditors.

If we are required for any reason to repay our
outstanding secured convertible debentures or any other indebtedness, we would
be required to deplete our working capital, if available, or raise additional
funds. Our failure to repay the convertible debentures or any other
indebtedness, if required, could require the sale of substantial assets of our
company in addition to legal action against our company.

If we are required to repay the secured convertible debentures
or any other indebtedness for any reason, we would be required to use our
limited working capital and raise additional funds. If we are unable to repay
the secured convertible debentures or any other indebtedness when required, we
may be required to sell substantial assets of our company. In addition, the
lenders could commence legal action against our company and foreclose on all of
our assets to recover the amounts due. Any such sale or legal action would
require our company to curtail or possibly cease our operations.

We have had a history of losses and no revenue to date,
which trend may continue and may negatively impact our ability to achieve our
business objectives.

We have experienced net losses since inception, and expect to
continue to incur substantial losses for the foreseeable future. To date, we
have not generated any significant revenues from our operations. We will not be
able to generate significant revenues in the immediate future. As a result, our
management expects the business to continue to experience negative cash flow for
the foreseeable future and cannot predict when, if ever, our business might
become profitable. We need to raise additional funds, and such funds may not be
available on commercially acceptable terms, if at all. If we are unable to raise
funds on acceptable terms, we may not be able to execute our business plan, take
advantage of future opportunities, or respond to competitive pressures or
unanticipated requirements. This may seriously harm our business, financial
condition and results of operations.

We are a development stage company with a limited
operating history, which may hinder our ability to successfully meet our
objectives.

We are a development stage company with only a limited
operating history upon which to base an evaluation of our current business and
future prospects. We have only begun engaging in the oil and gas exploration and
development business since February 2007 and our company does not have an
established history of locating and developing properties that have oil and gas
reserves. As a result, the revenue and income potential of our business is
unproven. In addition, because of our limited operating history, we have limited
insight into trends that may emerge and affect our business. Errors may be made
in predicting and reacting to relevant business trends and we will be subject to
the risks, uncertainties and difficulties frequently encountered by early-stage
companies in evolving markets. We may not be able to successfully address any or
all of these risks and uncertainties. Failure to adequately do so could cause
our business, results of operations and financial condition to suffer.

Market conditions or operation impediments may hinder our
access to oil and gas markets or delay our potential production.

The marketability of potential production from our properties
depends in part upon the availability, proximity and capacity of pipelines,
natural gas gathering systems and processing facilities. This dependence is
heightened where this infrastructure is less developed. Therefore, even if
drilling results are positive in certain areas of our oil and gas properties, a
new gathering system may need to be built to handle the potential volume of oil
and gas produced. We might be required to shut in wells, at least temporarily,
for lack of a market or because of the inadequacy or unavailability of
transportation facilities. If that were to occur, we would be unable to realize
revenue from those wells until arrangements were made to deliver production to
market.

Even if we are able to establish any oil or gas reserves on our
properties, our ability to produce and market oil and gas is affected and also
may be harmed by:

- inadequate pipeline transmission facilities or carrying capacity;
- government regulation of natural gas and oil production;

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10

- government transportation, tax and energy policies;
- changes in supply and demand; and
- general economic conditions.

Our future performance is dependent upon our ability to
identify, acquire and develop oil and gas properties, the failure of which could
result in under use of capital and losses.

Our future performance depends upon our ability to identify,
acquire and develop oil and gas reserves that are economically recoverable. Our
success will depend upon our ability to acquire working and revenue interests in
properties upon which oil and gas reserves are ultimately discovered in
commercial quantities, and our ability to develop prospects that contain proven
oil and gas reserves to the point of production. Without successful acquisition
and exploration activities, we will not be able to develop oil and gas reserves
or generate revenues. We cannot provide you with any assurance that we will be
able to identify and acquire oil and gas reserves on acceptable terms, or that
oil and gas deposits will be discovered in sufficient quantities to enable us to
recover our exploration and development costs or sustain our business.

The successful acquisition and development of oil and gas
properties requires an assessment of recoverable reserves, future oil and gas
prices and operating costs, potential environmental and other liabilities, and
other factors. Such assessments are necessarily inexact and their accuracy
inherently uncertain. In addition, no assurance can be given that our
exploration and development activities will result in the discovery of any
reserves.

We have a very small management team and the loss of any
member of our team may prevent us from implementing our business plan in a
timely manner.

We currently have two executive officers and a limited number
of full time employees and consultants upon whom our success largely depends. We
do not maintain key person life insurance policies on our executive officers or
consultants, the loss of which could seriously harm our business, financial
condition and results of operations. In such an event, we may not be able to
recruit personnel to replace our executive officers or consultants in a timely
manner, or at all, on acceptable terms.

If we are unable to successfully recruit qualified
managerial and field personnel having experience in oil and gas exploration, we
may not be able to continue our operations.

In order to successfully implement and manage our business
plan, we will depend upon, among other things, successfully recruiting qualified
managerial and field personnel having experience in the oil and gas exploration
business. Competition for qualified individuals is intense. We may not be able
to find, attract and retain qualified personnel on acceptable terms. If we are
unable to find, attract and retain qualified personnel with technical expertise,
our business operations could suffer.

We will have substantial capital requirements that, if
not met, may hinder our growth and operations.

Our future growth depends on our ability to make large capital
expenditures for the exploration and development of our natural gas and oil
properties. Future cash flows and the availability of financing will be subject
to a number of variables, such as:

- the success of our planned projects on North Slope and Cook Inlet in
  Alaska, in Texas and Kansas, in the UK;
- success in locating and producing reserves; and
- prices of natural gas and oil.

Financing might not be available in the future, or we might not
be able to obtain necessary financing on acceptable terms, if at all. If
sufficient capital resources are not available, we might be forced to curtail
our drilling and other

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11

activities or be forced to sell some assets on an untimely or
unfavorable basis, which would have an adverse affect on our business, financial
condition and results of operations.

If we obtain additional financing, our existing
stockholders may suffer substantial dilution or we may not have sufficient funds
to pay the interest on our current or future debt.

Additional financing sources will be required in the future to
fund developmental and exploratory drilling. Issuing equity securities to
satisfy our financing requirements could cause substantial dilution to our
existing stockholders.

Additional debt financing could lead to:

- a substantial portion of operating cash flow being dedicated to the payment
  of principal and interest;
- being more vulnerable to competitive pressures and economic downturns; and
- restrictions on our operations.

If we incur indebtedness, our ability to meet our debt
obligations and reduce our level of indebtedness depends on future performance.
General economic conditions, oil and gas prices and financial, business and
other factors affect our operations and future performance. Many of these
factors are beyond our control. We cannot assure you that we will be able to
generate sufficient cash flow to pay the interest on our current or future debt
or that future working capital, borrowings or equity financing will be available
to pay or refinance such debt. Factors that will affect our ability to raise
cash through an offering of our capital stock or a refinancing of our debt
include financial market conditions, the value of our assets and performance at
the time we need capital. We cannot assure you that we will have sufficient
funds to make such payments. If we do not have sufficient funds and are
otherwise unable to negotiate renewals of our borrowings or arrange additional
financing, we might have to sell significant assets. Any such sale could have a
material adverse effect on our business and financial results.

We may not be able to determine reserve potential or
identify liabilities associated with our properties in Alaska, Texas, the UK
and/or other future properties. We may also not be able to obtain protection
from vendors against possible liabilities, which could cause us to incur
losses.

Although we have reviewed and evaluated our properties in
Alaska, Texas, and the UK, such review and evaluation might not necessarily
reveal all existing or potential problems. This is also true for any future
acquisitions made by us. Inspections may not always be performed on every well,
and environmental problems, such as groundwater contamination, are not
necessarily observable even when an inspection is undertaken. Even when problems
are identified, a vendor may be unwilling or unable to provide effective
contractual protection against all or part of those problems, and we may assume
environmental and other risks and liabilities in connection with the acquired
properties.

If we or our operators fail to maintain adequate
insurance, our business could be materially and adversely affected.

Our operations are subject to risks inherent in the oil and gas
industry, such as blowouts, cratering, explosions, uncontrollable flows of oil,
gas or well fluids, fires, pollution, earthquakes and other environmental risks.
These risks could result in substantial losses due to injury and loss of life,
severe damage to and destruction of property and equipment, pollution and other
environmental damage, and suspension of operations. We could be liable for
environmental damages caused by previous property owners. As a result,
substantial liabilities to third parties or governmental entities may be
incurred, the payment of which could have a material adverse effect on our
financial condition and results of operations.

Any prospective drilling contractor or operator which we hire
will be required to maintain insurance of various types to cover our operations
with policy limits and retention liability customary in the industry. Therefore,
we do not plan to acquire our own insurance coverage for such prospects. The
occurrence of a significant adverse event on such prospects that is not fully
covered by insurance could result in the loss of all or part of our investment
in a particular prospect which could have a material adverse effect on our
financial condition and results of operations.

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The oil and gas industry is highly competitive, and we
may not have sufficient resources to compete effectively.

The oil and gas industry is highly competitive. We compete with
oil and natural gas companies and other individual producers and operators, many
of which have longer operating histories and substantially greater financial and
other resources than we do, as well as companies in other industries supplying
energy, fuel and other needs to consumers. Our larger competitors, by reason of
their size and relative financial strength, can more easily access capital
markets than we can and may enjoy a competitive advantage in the recruitment of
qualified personnel. They may be able to absorb the burden of any changes in
laws and regulation in the jurisdictions in which we do business and handle
longer periods of reduced prices for oil and gas more easily than we can. Our
competitors may be able to pay more for oil and gas leases and properties and
may be able to define, evaluate, bid for and purchase a greater number of leases
and properties than we can. Further, these companies may enjoy technological
advantages and may be able to implement new technologies more rapidly than we
can. Our ability to acquire additional properties in the future will depend upon
our ability to conduct efficient operations, evaluate and select suitable
properties, implement advanced technologies and consummate transactions in a
highly competitive environment.

Exploration and production activities are subject to
certain environmental regulations which may prevent or delay the commencement or
continuance of our operations.

In general, our exploration and production activities are
subject to certain federal, state, local, and foreign laws and regulations
relating to environmental quality and pollution control. Such laws and
regulations increase the costs of these activities and may prevent or delay the
commencement or continuance of a given operation. 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 state authorities. However, such laws and regulations are
frequently changed and any such changes may have material adverse effects on our
activities. We are unable to predict the ultimate cost of compliance with such
laws and regulations. Generally, environmental requirements do not appear to
affect us any differently or to any greater or lesser extent than other
companies in the industry. To date we have not been required to spend any
material amount on compliance with environmental regulations. However, we may be
required to do so in future and this may affect our ability to expand or
maintain our operations.

Any change to government regulation/administrative
practices may have a negative impact on our ability to operate and our
profitability.

The business of oil and gas exploration and development is
subject to substantial regulation under federal, state, local and foreign laws
relating to the exploration for, and the development, upgrading, marketing,
pricing, taxation, and transportation of oil and gas and related products and
other matters. Amendments to current laws and regulations governing operations
and activities of oil and gas exploration and development operations could have
a material adverse impact on our business. In addition, there can be no
assurance that income tax laws, royalty regulations and government incentive
programs related to our oil and gas properties and the oil and gas industry
generally, will not be changed in a manner which may adversely affect our
progress and cause delays, inability to explore and develop or abandonment of
these interests.

Permits, leases, licenses, and approvals are required from a
variety of regulatory authorities at various stages of exploration and
development. There can be no assurance that the various government permits,
leases, licenses and approvals sought will be granted in respect of our
activities or, if granted, will not be cancelled or will be renewed upon expiry.
There is no assurance that such permits, leases, licenses, and approvals will
not contain terms and provisions which may adversely affect our exploration and
development activities.

Shortages of rigs, equipment, supplies and personnel
could delay or otherwise adversely affect our cost of operations or our ability
to operate according to our business plans.

If drilling activity increases worldwide, a shortage of drilling
  and completion rigs, field equipment and qualified personnel could develop.
  These costs have recently increased sharply and could continue to do so. The
  demand for and wage rates of qualified drilling rig crews generally rise in
  response to the increasing number of active rigs in service and could increase
  sharply in the event of a shortage. Shortages of drilling and completion rigs,
  field equipment or qualified personnel could delay, restrict or curtail our
  exploration and development operations, which could in turn harm our operating
  results.

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The geographic concentration of all of our properties in
Alaska, Texas, and the UK subjects us to an increased risk of loss of revenue or
curtailment of production from factors affecting those areas.

The geographic concentration of all of our leasehold interests
in Alaska, our joint venture interests in Texas, our UK onshore license means
that our properties could be affected by the same event should the regions
experience:

- severe weather;
- delays or decreases in production, the availability of equipment,
  facilities or services;
- delays or decreases in the availability of capacity to transport, gather or
  process production; or
- changes in the regulatory environment.

The oil and gas exploration and production industry is
historically a cyclical industry and market fluctuations in the prices of oil
and gas could adversely affect our business.

Prices for oil and gas tend to fluctuate significantly in
response to factors beyond our control. These factors include:

- weather conditions in the United States and wherever our property interests
  are located;
- economic conditions, including demand for petroleum-based products, in the
  United States and the rest of the world;
- actions by OPEC, the Organization of Petroleum Exporting Countries;
- political instability in the Middle East and other major oil and gas
  producing regions;
- governmental regulations, both domestic and foreign;
- domestic and foreign tax policy;
- the pace adopted by foreign governments for the exploration, development,
  and production of their national reserves;
- the price of foreign imports of oil and gas;
- the cost of exploring for, producing and delivering oil and gas;
- the discovery rate of new oil and gas reserves;
- the rate of decline of existing and new oil and gas reserves;
- available pipeline and other oil and gas transportation capacity;
- the ability of oil and gas companies to raise capital;
- the overall supply and demand for oil and gas; and
- the availability of alternate fuel sources.

Changes in commodity prices may significantly affect our
capital resources, liquidity and expected operating results. Price changes will
directly affect revenues and can indirectly impact expected production by
changing the amount of funds available to reinvest in exploration and
development activities. Reductions in oil and gas prices not only reduce
revenues and profits, but could also reduce the quantities of reserves that are
commercially recoverable. Significant declines in prices could result in
non-cash charges to earnings due to impairment.

Changes in commodity prices may also significantly affect our
ability to estimate the value of producing properties

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14

for acquisition and divestiture and often cause disruption in
the market for oil and gas producing properties, as buyers and sellers have
difficulty agreeing on the value of the properties. Price volatility also makes
it difficult to budget for and project the return on acquisitions and the
development and exploitation of projects. We expect that commodity prices will
continue to fluctuate significantly in the future.

Exploratory drilling involves many risks that are outside
our control which may result in a material adverse effect on our business,
financial condition or results of operations.

The business of exploring for and producing oil and gas
involves a substantial risk of investment loss. Drilling oil and gas wells
involves the risk that the wells may be unproductive or that, although
productive, the wells may not produce oil or gas in economic quantities. Other
hazards, such as unusual or unexpected geological formations, pressures, fires,
blowouts, power outages, sour gas leakage, loss of circulation of drilling
fluids or other conditions may substantially delay or prevent completion of any
well. Adverse weather conditions can also hinder drilling operations. A
productive well may become uneconomic if water or other deleterious substances
are encountered that impair or prevent the production of oil or gas from the
well. In addition, production from any well may be unmarketable if it is
impregnated with water or other deleterious substances. There can be no
assurance that oil and gas will be produced from the properties in which we have
interests.

We are dependent upon the efforts of various third
parties that we do not control and, as a result, we may not be able to control
the timing of development efforts, associated costs, or the rate of production
of reserves (if any).

The success of our business depends upon the efforts of various
third parties that we do not control. At present, we act as the operator for
several of our projects, but we may also need to contract many service providers
such as rig and drilling contractors. As a result, we may have limited ability
to exercise influence over the operations of the properties or their associated
costs. Our dependence on the operator and, where applicable, other working
interest owners for these projects and our limited ability to influence
operations and associated costs could prevent the realization of our targeted
returns on capital in drilling or acquisition activities. The success and timing
of development and exploitation activities on properties operated by others
depend upon a number of factors that will be largely outside of our control,
including:

- the timing and amount of capital expenditures;
- the operators expertise and financial resources;
- approval of other participants in drilling wells;
- selection of technology;
- the rate of production of the reserves; and
- the availability of suitable drilling rigs, drilling equipment, production
  and transportation infrastructure, and qualified operating personnel.

We will rely upon various companies to provide us with
technical assistance and services. We will also rely upon the services of
geologists, geophysicists, chemists, engineers and other scientists to explore
and analyze oil and gas prospects to determine a method in which the oil and gas
prospects may be developed in a cost-effective manner. Although our management
has relationships with a number of third-party service providers, we cannot
assure you that we will be able to continue to rely on such persons. If any of
these relationships with third-party service providers are terminated or are
unavailable on commercially acceptable terms, we may not be able to execute our
business plan.

We may be unable to retain our leases or licenses and
working interests in our leases or licenses, which would result in significant
financial losses to our company.

In general, our properties are held under oil and gas leases or
licenses. If we fail to meet the specific requirements of each lease or license,
such lease or license may terminate or expire. We cannot assure you that any of
the obligations required to maintain each lease or license will be met. The
termination or expiration of our leases or licenses will

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15

harm our business. Our property interests will terminate unless
we fulfill certain obligations under the terms of our leases or licenses and
other agreements related to such properties. If we are unable to satisfy these
conditions on a timely basis, we may lose our rights in these properties. The
termination of our interests in these properties will harm our business. In
addition, we will need significant funds to meet capital requirements for the
exploration activities that we intend to conduct on our properties.

Title deficiencies could render our leases worthless
which could have adverse effects on our financial condition or results of
operations.

The existence of a material title deficiency can render a lease
worthless and can result in a large expense to our business. It is our practice
in acquiring oil and gas leases or undivided interests in oil and gas leases to
forgo the expense of retaining lawyers to examine the title to the oil or gas
interest to be placed under lease or already placed under lease. Instead, we
rely upon the judgment of oil and gas landmen who perform the field work in
examining records in the appropriate governmental office before attempting to
place under lease a specific oil or gas interest. We do not anticipate that we,
or the person or company acting as operator of the wells located on the
properties that we lease or may lease in the future, will obtain counsel to
examine title to the lease until the well is about to be drilled. As a result,
we may be unaware of deficiencies in the marketability of the title to the
lease. Such deficiencies may render the lease worthless.

Risks Relating to Our Common Stock

If we fail to file our required filings with the
Securities and Exchange Commission in an accurate and timely manner, our common
stock may be no longer quoted on the OTC Bulletin Board. If this happens, our
stockholders would have difficulty in reselling any of their shares.

If we fail to file our required filings with the Securities and
Exchange Commission in an accurate and timely manner, the Financial Industry
Regulatory Authority may determine that our common stock is no longer eligible
for quotation on the OTC Bulletin Board and remove our common stock from the OTC
Bulletin Board quotations. If this happens, then market makers would no longer
be able to enter quotations for our common stock through the OTC Bulletin Board
and our stockholders would have difficulty in reselling any of their shares.

A prolonged decline in the price of our common stock
could affect our ability to raise further working capital and adversely impact
our ability to continue operations.

A prolonged decline in the price of our common stock could
reduce liquidity of our common stock and reduce our ability to raise capital.
Because a significant portion of our operations have been and will be financed
through the sale of equity securities, a decline in the price of our common
stock could be especially detrimental to our liquidity and our operations. Such
reductions may force us to reallocate funds from other planned uses and may have
a significant negative effect on our business plan and operations, including our
ability to continue our current operations. If our stock price declines, we can
offer no assurance that we will be able to raise additional capital or generate
funds from operations sufficient to meet our obligations. If we are unable to
raise sufficient capital in the future, we may not be able to have the resources
to continue our normal operations.

The market price for our common stock may also be affected by
our ability to meet or exceed expectations of analysts or investors. Any failure
to meet these expectations, even if minor, may have a material adverse effect on
the market price of our common stock.

If we issue additional shares in the future, it will
result in the dilution of our existing shareholders.

Our articles of incorporation authorize the issuance of up to
90,000,000 shares of common stock with a par value of $0.001 per share and we
plan to increase our authorized capital from 90,000,000 shares of common stock
with a par value of $0.001 to 500,000,000 shares of common stock with a par
value of $0.001. Our board of directors may choose to issue some or all of such
shares to acquire one or more businesses or to provide additional financing in
the future. The issuance of any such shares will reduce the book value and
market price of the outstanding shares of our common stock. If we issue any such
additional shares, such issuance will reduce the proportionate ownership and
voting power of all current shareholders. Further, such issuance may result in a
change of control of our corporation.

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16

Trading of our stock may be restricted by the Securities
Exchange Commissions penny stock regulations, which may limit a stockholders
ability to buy and sell our common stock.

The 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 FINRA sales practice requirements may also limit a
stockholders ability to buy and sell our stock.

In addition to the penny stock rules described above,
Financial Industry Regulatory Authority or 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. The 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.

Our common stock is illiquid and the price of our common
stock may be negatively impacted by factors which are unrelated to our
operations.

Our common stock currently trades on a limited basis on the OTC
Bulletin Board. Trading of our stock through the OTC Bulletin Board is
frequently thin and highly volatile. There is no assurance that a sufficient
market will develop in our stock, in which case it could be difficult for
stockholders to sell their stock. The market price of our common stock could
fluctuate substantially due to a variety of factors, including market perception
of our ability to achieve our planned growth, quarterly operating results of our
competitors, trading volume in our common stock, changes in general conditions
in the economy and the financial markets or other developments affecting our
competitors or us. In addition, the stock market is subject to extreme price and
volume fluctuations. This volatility has had a significant effect on the market
price of securities issued by many companies for reasons unrelated to their
operating performance and could have the same effect on our common stock.

Because of the early stage of development and the nature
of our business, our securities are considered highly speculative.

Our securities must be considered highly speculative, generally
because of the nature of our business and the early stage of our development. We
are engaged in the business of identifying, acquiring, exploring and, if
warranted, developing commercial reserves of oil and gas. Our properties are in
the exploration stage only and are without known reserves of oil and gas.
Accordingly, we have not generated any revenues nor have we realized a profit
from

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17

our operations to date and there is little likelihood that we
will generate any revenues or realize any profits in the short term. Any
profitability in the future from our business will be dependent upon locating
and developing economic reserves of oil and gas, which itself is subject to
numerous risk factors as set forth herein. Since we have not generated any
revenues, we will have to raise additional monies through the sale of our equity
securities or debt in order to continue our business operations.

We do not intend to pay dividends on any investment in
the shares of stock of our company.

We have never paid any cash dividends and currently do not
intend to pay any dividends for the foreseeable future. To the extent that we
require additional funding currently not provided for in our financing plan, our
funding sources may prohibit the payment of a dividend. Because we do not intend
to declare dividends, any gain on an investment in our company will need to come
through an increase in the stocks price. This may never happen and investors
may lose all of their investment in our company.

Carbon Energy and/or Trafalgars control may prevent our
other stockholders from causing a change in the course of our operations and may
affect the price of our common stock.

As long as Carbon Energy and/or Trafalgar controls more than
50% of our common stock, they will be able to elect our entire board of
directors, control all matters that require a shareholder vote (such as mergers,
acquisitions and other business combinations, and the future issuance of our
shares) and exercise a significant amount of influence over our management and
operations. Therefore, the ability of our other stockholders to cause a change
in the course of our operation is eliminated. As such, the value attributable to
the right to vote is limited.

Risks Related to Our Company

Our disclosure controls and procedures and internal
control over financial reporting are not effective, which problem may cause our
financial reporting to be unreliable and lead to misinformation being
disseminated to the public.

Our management evaluated our disclosure controls and procedures
as of May 31, 2009 and concluded that as of that date, our disclosure controls
and procedures were not effective. In addition, our management concluded that as
of February 28, 2009, our internal control over financial reporting was not
effective. If such ineffective controls are not promptly corrected in the
future, our ability to report quarterly and annual financial results or other
information required to be disclosed on a timely and accurate basis may be
adversely affected. Also such ineffective controls could cause our financial
reporting to be unreliable and lead to misinformation being disseminated to the
public. Investors relying upon this misinformation may make an uninformed
investment decision.

Our by-laws contain provisions indemnifying our officers
and directors.

Our by-laws provide the indemnification of our directors and
officers to the fullest extent legally permissible under the Nevada corporate
law against all expenses, liability and loss reasonably incurred or suffered by
him in connection with any action, suit or proceeding. Furthermore, our by-laws
provide that our board of directors may cause our company to purchase and
maintain insurance for our directors and officers, and we have implemented
director and officer insurance coverage.

Our by-laws do not contain anti-takeover provisions and
thus our management and directors may change if there is a take-over of our
company.

We do not currently have a shareholder rights plan or any
anti-takeover provisions in our by-laws. Without any anti-takeover provisions,
there is no deterrent for a take-over of our company. If there is a take-over of
our company, our management and directors may change.

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

Most 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

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investors to enforce within the United States any judgments
obtained against our officers or directors, including judgments predicated upon
the civil liability provisions of the securities laws of the United States or
any state thereof.

Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds.

Please see Item 2. Managements Discussion and Analysis of
Financial Condition and Results of Operations  Liquidity and Capital Resources
- Financing from Trafalgar Capital Specialized Investment Fund,
Luxembourg.

Item 3. Defaults upon Senior Securities.

Please see Item 2. Managements Discussion and Analysis of
Financial Condition and Results of Operations  Liquidity and Capital
Resources.

Item 4. Submission of Matters to a Vote of Security Holders.

Effective April 21, 2009, the holders of a majority of the
outstanding shares of our common stock appointed Jeffrey Sternberg to our board
of directors.

Item 5. Other Information.

None.

Item 6. Exhibits.

Exhibit No.
    Description(3)
    (i) Articles of Incorporation and (ii) By-laws3.1
    Articles of Incorporation
      (attached asan exhibit to our registration statement on Form SB-2 filed on
      August 19, 2005)3.2
    Certificate of change filed with
      the Secretary of State of Nevada on January 2, 2007 and which is effective
      on January 11, 2007 (incorporated by reference to an exhibit to our
      current report on Form 8- K filed on January 12, 2007)3.3
    Article of Merger filed with the
      Secretary of State of Nevada on January 11, 2007 (incorporated by
      reference to an exhibit to our current report on Form 8-K filed on
      February 7, 2007)3.4
    Certificate of Change filed with
      the Secretary of State of Nevada on April 4, 2008 (incorporated by
      reference to an exhibit to our current report on Form 8-K filed on April
      21, 2008)3.5
    Amended and Restated Bylaws
      (incorporated by reference to an exhibit to our current report on Form 8-
      K filed on April 30, 2008)(10)
    Material Contracts10.1
    Private Placement Subscription
      Agreement dated February 23, 2007 (incorporated by reference to an exhibit
      to our current report on Form 8-K filed on June 1, 2007)10.2
    Lease Purchase and Sale Agreement
      dated May 29, 2007 (incorporated by reference to an exhibit to our current
      report on Form 8-K filed on May 31, 2007)10.3
    Share Issuance Agreement dated
      May 17, 2007 (incorporated by reference to an exhibit to our current
      report on Form 8-K filed on June 1, 2007)


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Exhibit No.
    Description10.4
    Farm-In Agreement dated June 8, 2007 (incorporated by
      reference to an exhibit to our annual report on Form 10-KSB filed on June
      13, 2007)10.5
    Employment Agreement dated June 11, 2007 (incorporated by
      reference to an exhibit to our annual report on Form 10-KSB filed on June
      13, 2007)10.6
    Escrow Agreement dated June 8, 2007 (incorporated by
      reference to an exhibit to our annual report on Form 10-KSB filed on June
      13, 2007)10.7
    Consulting Agreement dated June 12, 2007 (incorporated by
      reference to an exhibit to our annual report on Form 10- KSB filed on June
      13, 2007)10.8
    Consulting Agreement dated June 12, 2007 (incorporated by
      reference to an exhibit to our annual report on Form 10- KSB filed on June
      13, 2007)10.9
    Subscription Agreement between Trius Energy, LLC and our
      company (incorporated by reference to an exhibit to our current report on
      Form 8-K filed on October 19, 2007)10.10
    Amendment to Employment Agreement dated October 19, 2007
      (incorporated by reference to an exhibit to our quarterly report on Form
      10-QSB filed on October 22, 2007)10.11
    Amendment to Consulting Agreement dated October 19, 2007
      (incorporated by reference to an exhibit to our quarterly report on Form
      10-QSB filed on October 22, 2007)10.12
    Farm-Out Agreement dated November 8, 2007 between Valiant
      North Sea Limited, Petrofac Energy Developments Limited and Fox Energy
      Exploration Limited (incorporated by reference to an exhibit to our
      current report on Form 8-K filed on November 23, 2007)10.13
    Purchase Agreement (North Slope Leases) dated October 10,
      2007 (incorporated by reference to an exhibit to our current report on
      Form 8-K filed on November 28, 2007)10.14
    Amendment Agreement No. 1 to Purchase Agreement (North
      Slope Leases) dated November 2, 2007 (incorporated by reference to an
      exhibit to our current report on Form 8-K filed on November 28, 2007)10.15
    Purchase Agreement (Cook Inlet) dated October 10, 2007
      (incorporated by reference to an exhibit to our current report on Form 8-K
      filed on November 28, 2007)10.16
    Finder Agreement with Partners Consulting, Inc. dated
      February 15, 2008 (incorporated by reference to an exhibit to our current
      report on Form 8-K filed on March 21, 2008)10.17
    Promissory Note dated April 1, 2008 to EuroEnergy Growth
      Capital S.A. (incorporated by reference to an exhibit to our current
      report on Form 8-K filed on May 9, 2008)10.18
    Letter of Commitment with Senergy Limited (incorporated
      by reference to an exhibit to our current report on Form 8-K filed on May
      9, 2008)10.19
    Promissory Note dated May 1, 2008 to EuroEnergy Growth
      Capital S.A. (incorporated by reference to an exhibit to our current
      report on Form 8-K filed on May 21, 2008)10.20
    Bonus Agreement dated May 22, 2008 between Richard Moore
      and our company (incorporated by reference to an exhibit to our current
      report on Form 8-K filed on May 28, 2008)


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Exhibit No.
    Description10.21
    Agreement of Intention to Sell/Purchase the
      Geneseo-Edwards Program between Hodgden & Associates and our company
      (incorporated by reference to an exhibit to our current report on Form 8-K
      filed on May 29, 2008)10.22
    Promissory Note dated May 23, 2008 to EuroEnergy Growth
      Capital S.A. (incorporated by reference to an exhibit to our current
      report on Form 8-K filed on June 6, 2008)10.23
    Board of Advisors Agreement dated July 19, 2007 with
      Aimwell Energy Limited (incorporated by reference to an exhibit to our
      annual report on Form 10-KSB filed on June 13, 2008)10.24
    Board of Advisors Agreement dated July 19, 2007 with
      Black Gold Consulting Inc. (incorporated by reference to an exhibit to our
      annual report on Form 10-KSB filed on June 13, 2008)10.25
    Board of Advisors Agreement dated August 2007 with John
      Spence (incorporated by reference to an exhibit to our annual report on
      Form 10-KSB filed on June 13, 2008)10.26
    Board of Advisors Agreement dated August 2007 with
      Jonathan Wood (incorporated by reference to an exhibit to our annual
      report on Form 10-KSB filed on June 13, 2008)10.27
    Board of Advisors Termination Agreement dated June 10,
      2008 with Aimwell Energy Limited (incorporated by reference to an exhibit
      to our annual report on Form 10-KSB filed on June 13, 2008)10.28
    Board of Advisors Termination Agreement dated June 10,
      2008 with Black Gold Consulting Inc.(incorporated by reference to an
      exhibit to our annual report on Form 10-KSB filed on June 13, 2008)10.29
    Board of Advisors Termination Agreement dated June 10,
      2008 with John Spence (incorporated by reference to an exhibit to our
      annual report on Form 10-KSB filed on June 13, 2008)10.30
    Board of Advisors Termination Agreement dated June 10,
      2008 with Jonathan Wood (incorporated by reference to an exhibit to our
      annual report on Form 10-KSB filed on June 13, 2008)10.31
    Agreement dated January 24, 2008 with Aimwell Energy
      limited (incorporated by reference to an exhibit to our annual report on
      Form 10-KSB filed on June 13, 2008)10.32
    Loan Agreement with EuroEnergy Growth Capital S.A.
      (incorporated by reference to an exhibit to our annual report on Form
      10-KSB filed on June 13, 2008)10.33
    Senior Secured Convertible Redeemable Debenture dated
      June 24, 2008 issued by our company to Trafalgar Capital Specialized
      Investment Fund, Luxembourg (incorporated by reference to an exhibit to
      our quarterly report on Form 10-Q filed on July 21, 2008)10.34
    Warrant dated June 24, 2008 issued by our company to
      Trafalgar Capital Specialized Investment Fund, Luxembourg (incorporated by
      reference to an exhibit to our quarterly report on Form 10-Q filed on July
      21, 2008)10.35
    Securities Purchase Agreement dated June 24, 2008 between
      Trafalgar Capital Specialized Investment Fund, Luxembourg and our company
      (incorporated by reference to an exhibit to our quarterly report on Form
      10-Q filed on July 21, 2008)10.36
    Registration Rights Agreement dated June 24, 2008 between
      Trafalgar Capital Specialized Investment Fund, Luxembourg and our company
      (incorporated by reference to an exhibit to our quarterly report on Form
      10-Q filed on July 21, 2008)


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Exhibit No.
    Description10.37
    Escrow Agreement dated June 24, 2008 between Trafalgar
      Capital Specialized Investment Fund, Luxembourg, The Law Office of James
      G. Dodrill II, P.A. and our company (incorporated by reference to an
      exhibit to our quarterly report on Form 10-Q filed on July 21, 2008)10.38
    Security Agreement dated June 24, 2008 between Trafalgar
      Capital Specialized Investment Fund, Luxembourg and our company
      (incorporated by reference to an exhibit to our quarterly report on Form
      10-Q filed on July 21, 2008)10.39
    Irrevocable Transfer Agent Instructions dated June 18,
      2008 between Empire Stock Transfer Inc. and our company (incorporated by
      reference to an exhibit to our quarterly report on Form 10-Q filed on July
      21, 2008)10.40
    General Assignment of Contracts and Leases dated June 18,
      2008 between Trafalgar Capital Specialized Investment Fund, FIS and our
      company (incorporated by reference to an exhibit to our quarterly report
      on Form 10-Q filed on July 21, 2008)10.41
    Consulting Agreement with Partners Consulting, Inc. dated
      May 8, 2008 (incorporated by reference to an exhibit to our quarterly
      report on Form 10-Q filed on July 21, 2008)10.42
    Letter of Commitment with Senergy Limited (incorporated
      by reference to an exhibit to our quarterly report on Form 10-Q filed on
      July 21, 2008)10.43
    Investor Relations Consulting Service Agreement dated
      September 1, 2008 between our company and Benaterra Communications Inc.
      (incorporated by reference to an exhibit to our current report on Form 8-
      K filed on September 12, 2008)10.44
    Investor Relations Consulting Service Agreement dated
      June 1, 2007 between our company and Senergy Communications Inc.
      (incorporated by reference to an exhibit to our current report on Form 8-K
      filed on September 12, 2008)10.45
    Transaction Proposal and Exclusivity Agreement dated
      September 26, 2008 between Ballyliffin Capital Corp., Fox Energy
      Exploration Limited, and Fox Petroleum Inc. (incorporated by reference to
      an exhibit to our current report on Form 8-K filed on October 1, 2008)10.46
    Letter Agreement dated September 25, 2008 between Fox
      Energy Exploration Limited and Pollard Financial Ltd. (incorporated by
      reference to an exhibit to our current report on Form 8-K filed on October
      1, 2008)10.47
    Amendment to June 24, 2008 Financing Documents between
      Fox Petroleum Inc. and Trafalgar Capital Specialized Investment Fund,
      Luxembourg (incorporated by reference to an exhibit to our current report
      on Form 8-K filed on November 21, 2008)10.48
    Amended Debenture No. 1 - $1.25 million principal amount
      (incorporated by reference to an exhibit to our current report on Form 8-K
      filed on November 21, 2008)10.49
    Amended Debenture No. 2 - $1.25 million principal amount
      (incorporated by reference to an exhibit to our current report on Form 8-K
      filed on November 21, 2008)10.50
    New Debenture - $1 million principal amount (incorporated
      by reference to an exhibit to our current report on Form 8-K filed on
      November 21, 2008)10.51
    Replacement Warrant (incorporated by reference to an
      exhibit to our current report on Form 8-K filed on November 21, 2008)


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Exhibit No.
    Description10.52
    Amended Security Agreement (incorporated by reference to
      an exhibit to our current report on Form 8-K filed on November 21, 2008)10.53
    Pledge and Escrow Agreement (incorporated by reference to
      an exhibit to our current report on Form 8- K filed on November 21, 2008)10.54
    Side Letter Agreement (incorporated by reference to an
      exhibit to our current report on Form 8-K filed on November 21, 2008)10.55
    Irrevocable Transfer Agent Instructions (incorporated by
      reference to an exhibit to our current report on Form 8-K filed on
      November 21, 2008)10.56
    Subscription Agreement with Carbon Energy Investments
      Limited dated November 5, 2008 (incorporated by reference to an exhibit to
      our current report on Form 8-K filed on January 7, 2009)10.57
    Agreement for the Purchase of Shares in Alaska Oil &
      Gas Resources Limited dated November 5, 2008 (incorporated by reference to
      an exhibit to our current report on Form 8-K filed on January 7, 2009)10.58
    Amendment Agreement for the Purchase of Shares of Alaska
      Oil & Gas Resources Limited dated November 2008 (incorporated by
      reference to an exhibit to our current report on Form 8-K filed on January
      7, 2009)10.59
    Letter Agreement with Carbon Energy Investments Limited
      dated December 10, 2008 (incorporated by reference to an exhibit to our
      current report on Form 8-K filed on January 7, 2009)10.60
    Letter agreement between Fox Energy Exploration Limited
      and Aimwell Energy Limited dated September 5, 2008 (incorporated by
      reference to an exhibit to our quarterly report on Form 10-Q filed on
      January 21, 2009)10.61
    Letter agreement between Fox Energy Exploration Limited
      and Aimwell Energy Limited dated September 5, 2008 (incorporated by
      reference to an exhibit to our quarterly report on Form 10-Q filed on
      January 21, 2009)10.62
    Oil and Gas Lease Agreement dated October 14, 2008
      (incorporated by reference to an exhibit to our quarterly report on Form
      10-Q filed on January 21, 2009)10.63
    Oil and Gas Lease Agreement dated October 14, 2008
      (incorporated by reference to an exhibit to our quarterly report on Form
      10-Q filed on January 21, 2009)10.64
    Amendment to Securities Purchase Agreement, Secured
      Debenture, Registration Rights Agreement and Security Agreement dated
      April 2009 between our company and Trafalgar Capital SpecializedInvestment Fund, Luxembourg (incorporated by reference to
      an exhibit to our annual report on Form 10- K filed on July 15, 2009)10.65
    Bill of Sale and Assignment in Lieu of Foreclosure
      between our company and TCF Oil and Gas Corp. (incorporated by reference
      to an exhibit to our annual report on Form 10-K filed on July 15, 2009)10.66
    Certificate of Seller by our company (incorporated by
      reference to an exhibit to our annual report on Form 10-K filed on July
      15, 2009)10.67
    Covenant Not To Sue dated April 6, 2009 between our
      company and Trafalgar Capital Specialized Investment Fund, FIS
      (incorporated by reference to an exhibit to our annual report on Form 10-K
      filed on July 15, 2009)


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Exhibit No.
      Description10.68
      Agreement relating to Alaska
          Oil and Gas Leases dated May 14, 2009 (incorporated by reference to
          an exhibit to our annual report on Form 10-K filed on July 15, 2009)10.69
      Agreement relating to Alaska
          Oil and Gas Leases dated May 16, 2009 (incorporated by reference to
          an exhibit to our annual report on Form 10-K filed on July 15, 2009)10.70
      Agreement relating to Alaska
          Oil and Gas Leases dated May 29, 2009 (incorporated by reference to
          an exhibit to our annual report on Form 10-K filed on July 15, 2009)10.71
      Agreement between our company
          and Trafalgar Capital Advisory Partners LLP relating to the appointment
          of Trafalgar Capital Advisory Partners LLP as Introducer/Advisor (incorporated
          by reference to an exhibit to our annual report on Form 10-K filed on
          July 15, 2009)14.1
      Code of Conduct and Ethics
          (incorporated by reference to an exhibit to our current report on Form
          8-K filed on May 9, 2008)(21)
      Subsidiaries21.1
      Fox Petroleum (Alaska) Inc., incorporated in Alaska21.2
      Fox Energy Exploration Limited, incorporated in England
          and Wales21.3
      Fox Petroleum, Inc., incorporated in Kansas(31)
      Section 302 Certification31.1*
      Section 302 Certification of
          Richard Moore(32)
      Section 906 Certification32.1*
      Section 906 Certification of
          Richard Moore(99)
      Additional Exhibits99.1
      Audit Committee Charter (incorporated
          by reference to an exhibit to our current report on Form 8-K filed on
          May 9, 2008)99.2
      Compensation Committee Charter
          (incorporated by reference to an exhibit to our current report on Form
          8-K filed on May 9, 2008)99.3
      Nominating Committee Charter
          (incorporated by reference to an exhibit to our current report on Form
          8- K filed on May 9, 2008)99.4
      Letter from Blackhawk Investments
          Limited dated November 19, 2008 (incorporated by reference to an exhibit
          to our quarterly report on Form 10-Q filed on January 21, 2009)99.5
      Letter to Minmet Plc regarding
          Proposed Offer for the Shares of Minmet Plc. dated December 4, 2008
          (incorporated by reference to an exhibit to our quarterly report on
          Form 10-Q filed on January 21, 2009)


* Filed herewith.

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24

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.

FOX PETROLEUM INC.

By:

/s/ Richard
MooreRichard
MoorePresident, Chief Executive Officer, Chairman, and Director
(Principal Executive Officer, Principal Financial Officer, and Principal
Accounting Officer)

Date: July 20, 2009

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