U.S. SECURITIES AND EXCHANGE COMMISSION

























WASHINGTON, D.C. 20549



















































FORM 10-KSB







































(Mark one)











































/ X /   Annual report under section 13 or 15(d) of the Securities Exchange Act of 1934























For the Year Ended April 30, 2004























or











































/   /   Transition report under section 13 or 15(d) of the Securities Exchange  Act of 1934















































SONORAN ENERGY, INC.



























(Name of Small Business Issuer in its Charter)













































WASHINGTON                                                                                             
13-4093341



























(State of incorporation)                                                                                                           (IRS Employer Identification No.)



























1 Berkely Street, London, England, W1J 8DJ

(Address of Principal Executive Offices) (Zip Code)



















11300 W. Olympic Boulevard, Ste. 800, Los Angeles, CA, 90064





















(Previous Address of Principal Executive Offices)         (Zip Code)















































44 (0) 20 7016 9452



























(Issuer's Telephone Number)

















































Securities registered under Section 12(g) of the Act:























COMMON STOCK, NO PAR VALUE PER SHARE

























(Title of Class)





Page 1

---





















































































Check whether issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange during the past 12
months (or for such shorter period that the registrant was required to file such reports), and (2)has been subject to such
filing requirements for the past 90 days.         Yes //   No /X/











































State issuer's revenues for its most recent fiscal year:
$291,797.











































The aggregate market value of the
voting and non-voting common equity held by non-affiliates computed by reference
to the price at which the common equity was sold, or the average bid and ask
price of such common equity, as of August 31, 2004 was $16,486,095.











































APPLICABLE ONLY TO CORPORATE REGISTRANTS











































The number of shares outstanding of the
issuer's Common Stock, no par value, as of August 31, 2004, was 25,335,531.











































Transitional Small Business Disclosure Format (check one):





















YES / /   NO /X/



Page 2

---





























































SONORAN ENERGY, INC.





















































2004 FORM 10-KSB ANNUAL REPORT



















































Table of Contents













































































|Part I   |  |                                                                                                       
|-------- |  | ------------------------------------------------------------------------------------------------------
|         | 
|Item 1.  |  | Description of Business                                                                               
|         | 
|Item 2.  |  | Description of Property                                                                               
|         | 
|Item 3.  |  | Legal Proceedings                                                                                     
|         | 
|Item 4.  |  | Submission of Matters to a Vote of Security
		Holders                                                 
|         | 
|Part II  |  |                                                                                                       
|         | 
|Item 5.  |  | Market for Common Equity and Related Shareholder
		Matters                                            
|         | 
|Item 6.  |  | Management's Discussion and Analysis of Financial
		Condition and Results of Operations               
|         | 
|Item 7.  |  | Financial Statements                                                                                  
|         | 
|Item 8.  |  | Changes in and Disagreements With Accountantson Accounting and Financial Disclosure                   
|         | 
|Item 8A. |  | Controls and Procedures                                                                               
|         | 
|Item 8B. |  | Other Information                                                                                     
|Part III |  |                                                                                                       
|         | 
|Item 9.  |  | Executive Officers, Promoters and
		Control Persons; Compliance with Section 16(b) of the Exchange Act
|         | 
|Item 10. |  | Executive Compensation                                                                                
|         | 
|Item 11. |  | Security Ownership of Certain Beneficial Owners
		and Managementand Related Shareholder Matters       
|         | 
|Item 12. |  | Certain Relationships and Related Transactions                                                        
|         | 
|Item 13. |  | Exhibits and Reports on Form 8-K                                                                      
|         | 
|Item 14. |  | Principal Accountant Fees and Services                                                                



Page 3

---























Cautionary Statement



Sonoran Energy, Inc is
including the following discussion to inform existing and potential security
holders generally of some of the risks and uncertainties that can affect the
Company. Statements made in this Annual Report on Form 10-KSB may be
forward-looking statements.  In addition, from time to time, the Company may
otherwise make forward-looking statements to inform existing and potential
security holders about the Company.  These statements may include projections
and estimates concerning the timing and success of specific projects and the
Company's future (1) income, (2) oil and gas production, (3) oil and gas
reserves and reserve replacement and (4) capital spending.  Forward-looking
statements are generally accompanied by words such as "estimate," "project,"
"predict," "believe," "expect," "anticipate," "plan," "goal" or other words that
convey the uncertainty of future events or outcomes.  In addition, except for
the historical information contained in this report, the matters discussed in
this report are forward-looking statements.  These statements by their nature
are subject to certain risks, uncertainties and assumptions and will be
influenced by various factors.  Should any of the assumptions underlying a
forward- looking statement prove incorrect, actual results could vary
materially.























































PART I

























































ITEM 1 - DESCRIPTION OF BUSINESS



















































GENERAL BUSINESS DESCRIPTION

































Overview



Sonoran Energy, Inc. (the "Company", "Sonoran" and sometimes "we," "us," "our" and
derivatives of such words), formerly named Showstar Online.com Inc., was incorporated on July
14, 1995 in the State of Colorado as Cerotex Holdings, Inc. The stockholders of the Company
approved a change in corporate domicile to Washington State, which became effective on
September 15, 2000. Prior to June 2002 the company had developed software and an art site on
the Internet. The project had to be discontinued due to lack of funding. On June 3, 2002 the
Company changed its name to Sonoran Energy, Inc. and began the full transition to
becoming an International independent oil and gas exploration and production company,
developing and producing crude oil and natural gas. Sonoran's portfolio during the reporting
period was comprised of assets located in Louisiana and California.  Our operational focus is on
property enhancement through developmental drilling, operating cost reduction, low-to-moderate
risk exploration, asset redeployment and acquisitions of properties in the right circumstances.



General



During the period from May 2001 to April 2002, Sonoran Energy, Inc. had been searching for a
merger partner, buyer or a combination thereof to ensure the Company's continued operations. In
April 2002, management was presented with an opportunity to acquire a minority working
interest in two California oil and gas properties. Further reviews and meetings resulted in the
Company management deciding to enter the oil and gas industry and, in May 2002,
we closed on one
of the properties.



Following the corporate name change and repositioning, Sonoran Energy began an aggressive
program to build itself into a promising junior oil and gas producer, purchasing additional oil and
gas properties in July and December 2002 and then again in April 2003.



During the fiscal year ending 2004 the Company has undergone major changes in terms of the
Board of Directors and Management Team. Sonoran has been transformed from a
small US-focused oil and gas entity into an independent oil and gas company with
both International and Domestic interests through its expansion internationally,
which includes pursuing
opportunities in the Middle East, North Africa and the Caspian.  The Company sold certain small
properties within the US and acquired 100% working interests in 6 producing fields located in
Rapides, Livingstone, Vernon and Beauregard Parishes in Louisiana. Sonoran has begun
discussions and negotiations for acquisition of both US and non -US based properties.

Sonoran operates in a highly competitive industry wherein many companies, from large
multinational organizations to small independent producers, are competing for a finite amount of
oil and gas resources.



Sonoran acquires interests in land and producing properties through acquisition or joint ventures
with other oil and gas companies. Sonoran drills and/or operates oil or gas
wells in efforts to discover and/or produce oil and gas. Crude oil and natural
gas produced from these properties are sold to various purchasers and pipeline companies. Sonoran's interests in
these properties will vary depending on the working interest and net revenue
interest availability through the acquisition or joint venture.



Page 4

---





























































DESCRIPTION OF BUSINESS - OIL AND GAS OPERATIONS



EXPLORATION AND DEVELOPMENT



Sonoran operates in a highly competitive industry wherein many companies, from large
multinational companies to small independent producers, are competing for a finite amount of oil
and gas resources. The Company seeks out properties to explore for oil and gas by drilling and
also seeks out producing oil and gas properties that can be purchased and operated. Management
will continue to review its existing properties for possible additional reserves, new well
possibilities and upgrades to production facilities.



OIL AND GAS PRODUCTION OPERATIONS



Sonoran has
various working interests in 10 producing wells covering 6 producing fields
within various counties in the State of Louisiana. All of these properties are
capable of producing oil or natural gas, although none of these properties are
considered profitable under existing economic
conditions. During fiscal 2004, the Company owned working interests in 6 leases within
California which were sold in January 2004.  Production operations, conducted by third party
operators, consist of the daily pumping of oil from a well(s) into tanks, maintaining the
production facilities both at the well and tank settings, and preparing and shipping the crude oil to
buyers. Daily operations differ from one property to another, depending on the number of wells,
the depth of the wells, the gravity of the oil produced and the location of the property. All of Sonoran's
oil production is classified as primary recovery production at this time;
although certain properties may be conducive to secondary recovery operations in
the future, depending on the prevailing price of oil. Gas production and sales
are similarly accomplished through third parties.



Primary recovery of oil and gas is by means of natural flow(s) or artificial lift of oil and gas from
a single well bore. Natural gas and petroleum fluids enter the well bore by means of reservoir
pressure or gravity; fluids and gases are moved to the surface by natural pressure or by means of
artificial lift.



Sonoran currently contracts for operational support (contract operator) with recognized operating
companies within the area of operation.  The contract operator will enter into additional contracts
for field level personnel (i.e., pumpers, rig crews, roustabouts and equipment operators) that
perform basic daily activities associated with producing oil and gas. Daily operations include
inspections of surface facilities and equipment, gauging, reporting and shipping oil, and routine
maintenance and repair activities on wells, production facilities and equipment. In the event
operations are controlled by a Joint Venture agreement, the operator nominated within the Joint
Venture agreement will contract necessary field personnel.



In an attempt to increase oil and gas production, Sonoran participates in new wells or re-drills
existing wells on properties in which Sonoran has acquired interests through acquisition or joint
ventures as described above.  Sonoran utilizes the services of outside drilling contractors for
drilling new wells and redrilling existing wells. Maintenance and repairs of existing wells to
maintain or increase oil and gas production are also carried out by contractors. Economic factors
associated with the price of oil and gas and the productive output of wells determine the
commerciality of the wells and consequently determine the number of active wells the Company
participates in.

MARKETING OF CRUDE OIL AND NATURAL GAS



The Company sold all
of its crude oil, through its operating partner, Longbow LLC, to Pacific
Marketing and Transportation LLC until January 31, 2004 when the working interests were sold.
The Company had an industry standard Joint Operating Agreement with Longbow LLC on all of
its oil properties. Longbow, as the operator, has a Crude Oil Purchase Contract that provides for
the pick-up of oil and the sale of that oil at the current average monthly price less $1.00.
Sonoran is not a signatory to the agreement with Pacific Marketing and Transportation LLC.
Gas sales were also done through short term month to month contracts with various buyers at
market prices.



Crude oil from the Louisiana properties is sold to Texon LP under the terms of a contract
between BPR Energy and Texon LP effective from February 1, 2004 through to August 31, 2004,
and month to month thereafter.   The crude oil sold is referenced as South Louisiana sweet crude
oil and the value obtained is calculated on a defined formula using Koch Supply & Trading,
L.P.'s posted price for West Texas/New Mexico Intermediate crude oil, adjusted for various
factors.  For the year ending April 30, 2004 the average value realized for oil was $37.70/bbl.



Natural gas sold from the Louisiana properties is sold under the terms of the Gas Sales contract
between BPR Energy Inc. and Duke Energy Field Services, LP. entered into in January 1, 2001
and covering a period of five (5) years.   The value obtained for any gas sold is referenced as 90%
of a defined "Index Price" less any applicable treating and compression fees. For the year ending
April 30, 2004 the average value realized for the gas was $6.81/mcf.



We will continue to sell  our current production under the terms of the above
reference contracts.  However, We will also continue to monitor and review these
contracts to ensure that the best value for our production is being achieved.



RISKS, COMPETITION AND INDUSTRY CONDITIONS



The profitability of the Company's operations depends primarily on the production of oil and gas
in commercially profitable quantities. Oil and gas properties often fail to provide a return
sufficient to repay the substantial sums of money required for their acquisition, exploration and
development. The acquisition, exploration and development of oil and gas properties is a highly
competitive business. Many entities with which the Company competes have significantly greater
financial and staff resources. Such competitive disadvantages could materially and adversely
affect the Company's ability to acquire new properties or develop existing properties.



The oil and gas industry, in general, has been adversely affected by several factors beyond the
Company's control, including unstable oil and gas prices, uncertainty regarding the effect of
pricing agreements and production quotas and allocations established by the Organization of
Petroleum Exporting Countries, political instability in the Middle East and the status of
ever-changing federal and state legislation and regulation. Given the uncertainty of international
and domestic political actions and their impact on the energy markets, it is difficult, if not
impossible, to predict the price or market situation for any oil or gas which is currently owned or
which could be developed by the Company. Depressed oil and gas prices or significant
curtailment in the Company's oil and gas production from its better properties would have a
material adverse effect on the Company's operations.



REGULATIONS



In the United States, legislation affecting the oil and gas industry has been pervasive and is
under constant review for amendment or expansion. Pursuant to such legislation, numerous
federal, state and local departments and agencies have issued extensive rules and regulations
binding on the oil and gas industry and its individual members, some of which carry substantial
penalties for failure to comply. These laws and regulations have a significant impact on oil and
gas drilling, gas processing plants and production activities, increase the cost of doing business
and, consequently, affect profitability. Inasmuch as new legislation affecting the oil and gas
industry is commonplace and existing laws and regulations are frequently amended or
reinterpreted, Sonoran is unable to predict the future cost or impact of complying with these laws
and regulations. Sonoran considers the cost of environmental protection a necessary and
manageable part of its business. Sonoran has been able to plan for and comply with new
environmental initiatives without materially altering its operating strategies.

Exploration and Production. Sonoran's operations are subject to various types of regulation at
the federal, state and local levels. These regulations include requiring permits for the drilling
wells; maintaining prevention plans; submitting notification and receiving permits relation to the
presence, sue and release of certain materials incidental to oil and gas operations; and regulating
the location of wells, the method of drilling and casing wells, the use, transportation, storage and
disposal of fluids and materials used in connection with drilling and production activities, surface
plugging and abandoning of wells and the transporting of production. Sonoran's operations are
also subject to various conservation matters, including the number of wells which may be drilled
in a unit, and the unitization or pooling of oil and gas properties. In this regard, some states allow
the forced pooling or integration of tracts to facilitate exploration while other states rely on
voluntary pooling of lands and leases, which may make it more difficult to develop oil and gas
properties. In addition state conservation laws establish maximum rates of production oil and gas
wells, generally limit the venting or flaring of gas, and impose certain requirements regarding the
ratable purchase of production. The effect of these regulations is to limit the amounts of oil and
gas Sonoran can produce from its wells and to limit the number of wells or the locations at which
Sonoran can drill.



Environmental.  Our exploration, development, and production of oil and gas, including our
operation of saltwater injection and disposal wells, are subject to various federal, state and local
environmental laws and regulations. Such laws and regulations can increase the costs of
planning, designing, installing and operating oil and gas wells. Our domestic activities are
subject to a variety of environmental laws and regulations, including but not limited to, the Oil
Pollution Act of 1990 ("OPA"), the Clean Water Act ("CWA"), the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA"), the Resource
Conservation and Recovery Act ("RCRA"), the Clean Air Act ("CAA"), and the Safe Drinking
Water Act ("SDWA"), as well as state regulations promulgated under comparable state statutes.
We are also subject to regulations governing the handling, transportation, storage, and disposal of
naturally occurring radioactive materials that are found in our oil and gas operations. Civil and
criminal fines and penalties may be imposed for non-compliance with these environmental laws
and regulations. Additionally, these laws and regulations require the acquisition of permits or
other governmental authorizations before undertaking certain activities, limit or prohibit other
activities because of protected areas or species, and impose substantial liabilities for cleanup of
pollution.



Under the OPA, a release of oil into water or other areas designated by the statute could result in
the company being held responsible for the costs of remediating such a release, certain OPA
specified damages, and natural resource damages. The extent of that liability could be extensive,
as set forth in the statute, depending on the nature of the release. A release of oil in harmful
quantities or other materials into water or other specified areas could also result in the company
being held responsible under the CWA for the costs of remediation, and civil and criminal fines
and penalties.



CERCLA and comparable state statutes, also known as
"Superfund" laws, can impose joint and
several and retroactive liability, without regard to fault or the legality of the original conduct, on
certain classes of persons for the release of a "hazardous substance" into the environment. In
practice, cleanup costs are usually allocated among various responsible parties. Potentially liable
parties include site owners or operators, past owners or operators under certain conditions, and
entities that arrange for the disposal or treatment of, or transport hazardous substances found at
the site. Although CERCLA, as amended, currently exempts petroleum, including but not limited
to, crude oil, gas and natural gas liquids from the definition of hazardous substance, our
operations may involve the use or handling of other materials that may be classified as hazardous
substances under CERCLA. Furthermore, there can be no assurance that the exemption will be
preserved in future amendments of the act, if any.



RCRA and comparable state and local requirements impose standards for the management,
including treatment, storage, and disposal of both hazardous and nonhazardous solid wastes. We
generate hazardous and nonhazardous solid waste in connection with its routine operations. From
time to time, proposals have been made that would reclassify certain oil and gas wastes,
including wastes generated during drilling, production and pipeline operations, as
"hazardous
wastes" under RCRA which would make such solid wastes subject to much more stringent
handling, transportation, storage, disposal, and clean-up requirements. This development could
have a significant impact on our operating costs. While state laws vary on this issue, state
initiatives to further regulate oil and gas wastes could have a similar impact.



Because oil and gas exploration and production, and possibly other activities, have been
conducted at some of our properties by previous owners and operators, materials from these
operations remain on some of the properties and in some instances require remediation. In
addition, in certain instances we have agreed to indemnify sellers of producing properties from
which we have acquired reserves against certain liabilities for environmental claims associated
with such properties. While we do not believe that costs to be incurred by us for compliance and
remediating previously or currently owned or operated properties will be material, there can be
no guarantee that such costs will not result in material expenditures.

Additionally, in the course of our routine oil and gas operations, surface spills and leaks,
including casing leaks, of oil or other materials occur, and we incur costs for waste handling and
environmental compliance. Moreover, we are able to control directly the operations of only those
wells for which we act as the operator. Management believes that the company is in substantial
compliance with applicable environmental laws and regulations.



We do not
anticipate being required in the near future to expend amounts that are
material in relation to our total capital expenditures program by reason of environmental laws
and regulations, but inasmuch as such laws and regulations are frequently changed, we are unable
to predict the ultimate cost of compliance. There can be no assurance that more stringent laws
and regulations protecting the environment will not be adopted or that we will not otherwise
incur material expenses in connection with environmental laws and regulations in the future.



Occupational Health and Safety. Sonoran is also subject to laws and regulations concerning
occupational safety and health. Due to the continued changes in these laws and regulations, and
the judicial construction of many of them, Sonoran is unable to predict with any reasonable
degree of certainty its future costs of complying with these laws and regulations. Sonoran
considers the cost of safety and health compliance a necessary and manageable part of its
business. Sonoran has been able to plan for and comply with new initiatives without materially
altering its operating strategies.



Sonoran is subject to certain laws and regulations relating to environmental remediation
activities associated with past operations, such as the Comprehensive Environmental Response,
Compensation, and Liability Act ("CERCLA") and similar state statutes. In response to liabilities
associated with these activities, accruals have been established when reasonable estimates are
possible. Such accruals primarily include estimated costs associated with remediation. Sonoran
has used discounting to present value in determining its accrued liabilities for environmental
remediation or well closure, but no material claims for possible recovery from third party
insurers or other parties related to environmental costs have been recognized in Sonoran's
financial statements. Sonoran adjusts the accruals when new remediation responsibilities are
discovered and probable costs become estimable, or when current remediation estimates must be
adjusted to reflect new information.



Page 5

---































































TAXATION



The operations of the Company, as is the case in the petroleum industry generally, are
significantly affected by federal tax laws. Federal, as well as state, tax laws have many provisions
applicable to corporations which could affect the future tax liability of the Company.



ENVIRONMENTAL



The Company's activities are subject to existing federal and state laws and regulations governing
environmental quality and pollution control. These laws may require the acquisition of permits
relating to certain ongoing operations, for drilling, emissions, waste water disposal and other air
and water quality controls. In view of the uncertainty and unpredictability of environmental
statutes and regulations, the Company cannot ensure that such laws and regulations will not
materially and adversely affect the business of the Company. The Company does not anticipate
any material effect on its capital expenditures or earnings as the result of governmental
regulations, enacted or proposed, concerning environmental protection or the discharge of
material into the environment. The Company is actively pursuing an ongoing policy of upgrading
and restoring older properties to comply with current and proposed environmental regulations.



COMMITMENTS AND CONTINGENCIES



Sonoran is liable for future restoration and abandonment costs associated with its oil and gas
properties. These costs include future site restoration, post closure and other environmental exit
costs. The costs of future restoration and well abandonment have not been determined in detail.
State regulations require operators to post bonds that assure that well sites will be properly
plugged and abandoned.   Each state in which Sonoran operates requires a security bond varying
in value from state to state and depending on the number of wells that Sonoran operates.
Management views this as a necessary requirement for operations within each state and does not
believe that these costs will have a material adverse effect on its financial position as a result of
this requirement.



OTHER



The Company employed 3 contract people as of April 30, 2004, who were office and
administrative personnel. As of  30 April, 2004 Sonoran currently contracts for operational
support (contract operator) with recognized operating companies within the area of operation.
The contract operator will enter into additional contracts for field level personnel (i.e., pumpers,
rig crews, roustabouts and equipment operators) that perform basic daily activities associated
with producing oil and gas. Daily operations include inspections of surface facilities and
equipment, gauging, reporting and shipping oil, and routine maintenance and repair activities on
wells, production facilities and equipment. In the event operations are controlled by a Joint
Venture agreement, the operator nominated within the Joint Venture agreement will contract
necessary field personnel.



All of the Company's revenues during 2004 were derived from domestic sources.



The Company does not have any patents or trademarks, and it does not believe that its business
or operations are dependent upon owning any patents or trademarks.



Page 6

---



































































ITEM 2 - DESCRIPTION OF PROPERTY



(a) DESCRIPTION OF PROPERTY



The principal assets of the Company consist of proven and unproven oil and gas properties along
with oil and gas production related equipment acquired as part of the leases.



BVR Prospect



During January,
2004, Sonoran acquired interests in ten (10) production wells completed in the Austin chalk located in
Beauregard, Vernon, Rapides and Livingston Parishes in Louisiana from BPR Energy Inc.  In
addition to these ten (10) wells, Sonoran  also acquired interests in four (4)
associated salt water
disposal wells.    Of the ten(10) production wells, only three (3) were producing at the time of the
acquisition, with production only being undertaken to maintain and hold the lease position.

Eight (8) of the production wells have a100%
working interest ("WI") and  73% Net Revenue Interest ("NRI") with a reversionary interest of
87% WI and 63.5% NRI after recovery of any capital investment necessary to enhance the
production form the wells.  The remaining two (2) wells have a working interest of 100% WI and
an NRI 65% with a reversion of 77.5% WI and 50.4% NRI under the same conditions.

Reserves:

While three of the wells produced during the period, this was to maintain the lease position and
the analysis of these wells gave no economic Proved Developed Producing reserves and no
reserves were therefore allocated to this category.



25 Hill Prospect



During January
2004, the Company has
also contracted for the right to participate in the 25 Hill Prospect up to a 50 % W.I.
depending on Sonoran's capital contribution to development of the property and the drilling of
oil and gas wells on the property. This contract has a cancellation provision if
development is not undertaken and Sonoran exercised that right on August 5,
2004.  The Company rescinded the transaction in August 2004 as it felt
there were better opportunities available.



Page 7

---















































b) OIL AND GAS
PROPERTIES

The Company began
	acquiring properties in May of 2002, and prior to May 2002,
	the Company was not involved in the Oil and Gas Industry, therefore all
	years prior to 2003 are shown as zero.



The producing wells on
	the properties were not operating profitably at April 30, 2004.  In
	addition, it has been estimated in the engineering reserve reports that the
	Company would have to expend approximately $5 million in development costs
	to economically extract proven reserves on the properties.  Because the
	Company as at April 30, 2004 cannot fund or show committed financing for the
	required development costs, the reserves cannot be classified as proven
	reserves and are shown as zero in the following table.























|                            | Crude Oil (BBLS) | Natural Gas (MCF)
|--------------------------- | ---------------- | -----------------
|Proved Non-Producing (PDNP) | 0                | 0                
|Proved Undeveloped (PUD)    | 0                | 0                
|Total Proven                | 0                | 0                
|                            |                  |                  

The Company's estimated future net recoverable oil and gas reserves, noted above, have not been
filed with any other Federal authority or agency.



Sonoran's net share of oil and gas wells and acreage after royalty and other working interests for
the past five years ending April 30, were as follows:



|                 | 2004   | 2003 | 2002 
|---------------- | ------ | ---- | -----
|                 | Gross  | Net  | Gross
|Productive Wells |        |      |      
|Oil              | 10     | 10   | 23   
|Gas              | 0      | 0    | 27   
|                 |        |      |      
|Acreage          |        |      |      
|Oil - Developed  | 15,000 | 0    | 162  
|- Undeveloped    |        | 0    | 111  
|                 | 15,000 | 0    | 273  
|                 |        |      |      
|Gas - Developed  | 0      | 0    | 2,186
|- Undeveloped    | 0      | 0    | 1,433
|                 | 0      | 0    | 3,619
|                 |        |      |      



Sonoran did not participate in the drilling of any new wells on any property that they
had a working interest in during fiscal 2004.



Sonoran's average sales prices per barrel or per MCF of crude oil and natural gas, respectively,
and production costs per equivalent barrel (gas production is converted to equivalent barrels at
the rate of 6 MCF per barrel, representing the estimated relative energy content of gas to oil) for
the past five years ending April 30, were as follows:

























|                 | 2004     | 2003     | 2002   
|---------------- | -------- | -------- | -------
|Sales price:     |          |          |        
|Crude oil        | $ 24.93  | $ 24.87  | $ n/a  
|                 |          |          |        
|Natural gas      | $   5.16 | $   4.99 | $   n/a
|                 |          |          |        
|Production costs | $  26.75 | $  10.80 | $  n/a 
|                 |          |          |        













































The average selling price of Sonoran's crude oil at April 30, 2004, was approximately $35.70 per
barrel and the average selling price of Sonoran's gas at April 30, 2003, was approximately $6.81
per MCF.  The high production costs reflect the high maintenance costs on
the Glide property which has been sold and minimal production off the Louisiana
properties for the quarter the Company owned the property.



Page 8

---



























































































ITEM 3 - LEGAL PROCEEDINGS



The Company has been named as a defendant in a lawsuit filed against Savingsplus Internet Inc.
by a director of Savingsplus for failure to repay a $35,000 loan to the director's company (Korker
Diversified Holdings). The Company had contemplated an investment in Savingsplus Internet,
Inc. that was never consummated. The Savingsplus Director who filed suit was owed money by
Savingsplus and, Management believes, may have felt that Sonoran's possible investment would
have been the basis for his repayment. The original claim was filed in the British Columbia
Supreme Court as Registry No. S004571 on August 23, 2000. Sonoran has retained counsel and
filed a reply to the suit as of April 30, 2001. There was no contact with the other party until April
2002 when the Company was informed the other party wished to proceed and in July 2002 told
that they had increased their claim by about $190,000. Subsequent submissions by Korker have
reduced the claim and Sonoran has held an examination for discovery of Korker's officers. In
April/May 2003 Korker attempted to schedule a Summary Trial of the matter but adjourned after
receipt of Sonoran's affidavits. Counsel for Korker has made numerous requests for information
which should be apparent from the materials already prepared. Sonoran has invited Korker's
counsel to conduct an examination for discovery but to this date this has not occurred. No new
date has been set for the Summary Trial although all necessary materials have been prepared. At
this time, it appears, from the pleadings filed in this case, that the total amount claimed by the
Plaintiff is $60,400 (Canadian) with interest dating from June 30, 2000. If all interest and
principal are returned and no other parties contribute to the payment, then the total sum, after
conversion into U.S. dollars, would apparently be $58,266 as of April 30, 2004. 
The Company supplied additional information to Korker's counsel in May 2003 and
we've had no further contact since then.



The Company has been named as defendant in a lawsuit filed by Longbow, LLC for
approximately $185K representing their estimate of their share of the profit on the sale of the
Company's working interests in the Keystone, Glide and Merzonian leases.  This
lawsuit was filed in the California Superior Court, Kern County (Case Number
S-1500-CV-252398, SPC).  Longbow is using a liberal interpretation of the
purchase agreements in order to claim a percentage of the proceeds of Sonoran's
sale of its working interests to Harvest Worldwide.  Sonoran has filed a
cross-complaint seeking monetary damages and a judicial interpretation of the
"sale-for-profits" clause. Contemporaneously, Harvest Worldwide, the entity to
which Sonoran sold these interests, has filed suit against Longbow for
withholding distributions and to remove them as the "operator" of the leases. 
In response, Longbow filed a cross-complaint in that action against Sonoran. 
Sonoran intends to vigorously defend itself against these claims and to pursue
its claims against Longbow.  It is management's view that Longbow will not
prevail in their action and Sonoran will prevail on its cross-complaint.



The Company has been named
	in a lawsuit filed August 25, 2004 (Case no. S-1500-CV-253638 RIA) by John
	Howe and Brad Califf concerning their short lived consulting/employment
	agreements with respect to stock options contained in the agreements.  At
	issue is 550,000 options per individual with an exercise price of $.30
	should the terminations of the agreements be without cause.  It is
	management's opinion that the case bears little merit as the options were
	dependant on time served which was scant at best.  Likely exposure is
	500,000 options at $.30 per share, plus attorney's fees.













































ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

















































No matters were submitted to a vote of security holders during the fourth quarter of 2004.



Page 9

---











































PART II





















































ITEM 5 - MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

















































(a) PRICE RANGE OF COMMON SHARES



The common stock of Sonoran is traded on the OTC Bulletin Board under the symbol "SNRN".
The following are high and low bid prices for each quarter of 2004 and 2003, and reflect
inter-dealer prices without retail markup, markdown or commission.























|QUARTER ENDING    | HIGH BID | LOW BID
|----------------- | -------- | -------
|July 31, 2002 (1) | $0.15    | $0.10  
|October 31, 2002  | $0.24    | $0.10  
|January 31, 2003  | $0.18    | $0.10  
|April 20, 2003    | $0.34    | $0.11  
|July 31,  2003    | $0.44    | $0.25  
|October 31, 2003  | $0.51    | $0.27  
|January 31, 2004  | $4.25    | $0.23  
|April 30, 2004    | $3.75    | $1.45  
|July 31, 2004     | $1.86    | $0.50  



























(1) The Company completed a 25 old for 1 new restructure of
equity on June 3, 2002.



At April 30, 2004, the Company had 500 shareholders of record, and an unknown number of
additional holders whose stock is held in "street name".



The Company has paid one dividend on its common shares in the past five years. In July 2003,
the Company announced an 8% Unit dividend and warrant (one warrant for every 10 shares held)
payable August 22, 2003 to shareholders of record on July 25, 2003.



Future dividends on the common shares, if any, will be dependent upon the Company's earnings,
financial conditions and other relevant factors as determined by the Board of Directors.

















































ITEM 6 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS



























GENERAL



The past 12 months have been one of dramatic change for Sonoran Energy, Inc. as it made the
transition to becoming an international independent oil and gas company. During the first four
months of 2004 the Company underwent a management change and added new members to the
Board of Directors. The new group have considerable experience in the oil and gas industry and
in dealing on an international scale in the industry.



The Company divested itself of its small California based properties and began searching for
larger more global operations resulting in the acquisition of properties in Louisiana of some 15,000
acres and entering into discussions with European and Mid-East companies to explore
opportunities for acquisitions or partners in developing property.  The Management also began
exploring and negotiating financial commitments to fund potential development possibilities and
begin work on the Louisiana properties.



Management intends to continue with its acquisition program and plans to develop into a major
international independent oil and gas producer.





Page 10

---







LIQUIDITY AND CAPITAL RESOURCES



The Company had
cash and cash equivalents of $43,309 at April 30, 2004 for an increase of
$10,590 when compared to April 30, 2003. Net capital spending of $5,068 used
cash in 2004. This was offset by proceeds from a loan, net of repayment, of
$100,000. The components of the changes in cash for 2004 are more fully
described in the Statements of Cash Flows included in Item 7 of this Form 10-KSB. Adequate
funds were available to carry out all cash calls the Company chose to participate in.



The Auditor has issued a going concern comment but the Company believes that it
will be able to source sufficient funds to develop its existing current assets
and planned acquisitions so that these operations will be sufficient to fund the
anticipated liquidity and capital resource needs of the Company for the fiscal
year ended April 30, 2005.  At the present time, Management feels that
there are opportunities to enhance existing wells and discussions have been held
regarding efforts to tap into possible reserves on the oil properties.



The Company is not
a party to off-balance sheet arrangements and does not engage in trading
activities involving non-exchange traded contracts. In addition, the Company has
no financial guarantees, debt or lease agreements or other arrangements that
could trigger a requirement for an early payment or that could change the value
of the Company's assets. Management continues to examine various alternatives
for increasing capital resources including, among other things, participation
with industry and/or private partners and specific rework of existing properties
to enhance production and expansion of its sales of crude oil and natural gas.



ANALYSIS OF SIGNIFICANT CHANGES IN RESULTS OF OPERATIONS



Results of Operations for
	the Fiscal Year Ended April 30, 2004 compared to the Fiscal Year Ended April
	30, 2003:











REVENUES











Revenue was $291,297 for the year April 30, 2004 and $80,507
	for the year April 30, 2003. The increase in revenue
	reflects the full production from the acquisitions made in late fiscal 2003
	up to December 31, 2003 when the assets were sold plus 3 months revenue from
	the Louisiana property versus the limited production we had in 2003











OIL AND GAS PRODUCTION COSTS











Production costs were $293,363 for the year ended April 30,
	2004 and $48,759 for the year ended April 30, 2003.  The increase in
	operating expense reflects the full operations of the acquisitions made in
	late fiscal 2003 up to November 30, 2003 at which time the working interests
	were sold, plus three months operating expenses which totaled $142,206 in
	the Louisiana property versus the limited production we had in 2003.











PROVISION FOR DEPLETION,
	DEPRECIATION AND AMORTIZATION











The provision for depletion, depreciation and amortization
	was $67,777 for the year ended April 30, 2004 compared to $40,386 for April
	30, 2003 reflecting the increase in production year over year.













STOCK BASED COMPENSATION











The Company was able to use restricted stock as payment for
	various activities as discussed in
	Notes 2 and 4 , in Item 7 of this 10KSB, for bonuses to officers, payment
	for debt and consulting services associated with property acquisitions.











GENERAL AND
	ADMINISTRATIVE EXPENSES











General and administrative expenses increased substantially
	for the year ended April 30, 2004, when compared with the same period for
	2003. The Company incurred increased legal expense as a result of the work
	needed on the acquisitions and sales of properties. General and
	Administrative expense includes the costs for Management
	services, personnel, Investor Relations, Audit, travel and office expenses. Given the
	move to a global operation with experienced oil and gas industry personal at
	higher salaries plus greatly increased travel expense was a contributor to
	the increased costs. Consultants were hired to assist the Company in
	searching for and getting introductions to potential acquisition projects as
	well as due diligence and geological reviews.



Page 11

---





















































OTHER INCOME (EXPENSE)



The loss on
disposal of Assets and bad debt expense are discussed in Notes 6 and 3 contained
in Notes to the Financial Statements in Item 7 of this 10-KSB report.  The
liability settlement gains arise from the Company being able to settle longer
term debt from expense incurred prior to its entry into the oil and gas industry
in 2003.



RECENT ACCOUNTING DEVELOPMENTS



In December 2002, the Financial Accounting Standards Board issued SFAS No. 148,
"Accounting for Stock-Based Compensation-Transition and Disclosure", which amended SFAS
No. 123 to provide alternative methods of transition for a voluntary change to the fair value
based method of accounting for stock-based employee compensation. It also amends the
disclosure provisions of SFAS No. 123 to require prominent disclosure in both annual and
interim financial statements about the method of accounting for stock-based employee
compensation and the effect of the method used on reported results. For the Company, the
provisions of SFAS No. 148 were in effect for its year ended April 30, 2003. The Company will
continue to use APB No. 25 to account for stock based compensation, while providing the
disclosures required by SFAS No. 123 as amended by SFAS No. 148.



Page 12







---











































ITEM 7- FINANCIAL STATEMENTS



SONORAN ENERGY, INC.

Index to Consolidated Financial Statements



|                                                                                                       | Page
|------------------------------------------------------------------------------------------------------ | ----
|Independent Auditors' Report                                                                           | F-2 
|                                                                                                       |     
|Consolidated Balance Sheet at April 30, 2004                                                           | F-3 
|                                                                                                       |     
|Consolidated Statements of Operations for the
    years ended April 30, 2004 and 2003                  | F-4 
|                                                                                                       |     
|Consolidated Statement of Changes in
	Shareholders' Equity for the years ended April 30, 2004 and 2003 | F-5 
|                                                                                                       |     
|Consolidated Statements of Cash Flows for the
    years ended April 30, 2004 and 2003                  | F-7 
|                                                                                                       |     
|Notes to Consolidated Financial Statements                                                             | F-9 
|                                                                                                       |     

F-1

---



To the Board of Directors and Shareholders





Sonoran Energy, Inc.









INDEPENDENT AUDITORS' REPORT









We have audited the accompanying consolidated balance sheet of Sonoran Energy, Inc. and its
subsidiaries as of April 30, 2004 and the related consolidated statements of operations, changes
in shareholders' equity, and cash flows for the years ended April 30, 2004 and 2003.  These
consolidated financial statements are the responsibility of the Company's management.  Our
responsibility is to express an opinion on these consolidated financial statements based on our
audits.

We conducted our audits in accordance with the standards of the Public Company Accounting
Oversight Board (United States).  Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of material
misstatements.  An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all
material respects, the financial position of Sonoran Energy, Inc. and its subsidiaries as of April
30, 2004 and the results of their operations and their cash flows for the years ended April 30,
2004 and 2003 in conformity with accounting principles generally accepted in the United States
of America.

The accompanying financial statements have been prepared assuming that the Company will
continue as a going concern.  As discussed in Note 1 to the financial statements, the Company
has a working capital deficit at April 30, 2004 and has incurred significant losses since inception,
which raise substantial doubt about its ability to continue as a going concern.  Management's
plans in regard to these matters are also described in Note 1.  The financial statements do not
include any adjustments that might result from the outcome of these uncertainties.

Cordovano and Honeck, P.C.

Denver, Colorado

September 29, 2004





F-2

---

SONORAN ENERGY, INC.

Consolidated Balance Sheet

April 30, 2004



|Assets                                                                |                   
|--------------------------------------------------------------------- | ------------------
|                                                                      |                   
|Current assets:                                                       |                   
|Cash                                                                  | $        
		43,309
|Note
		receivable (Note 3)                                            | -                 
|Total current assets                                                  | 43,309            
|                                                                      |                   
|Oil and gas properties (full
		cost method):                          |                   
|Unproved properties (Notes 3 and 9)                                   | 1,950,000         
|Equipment, less accumulated
		depreciation of $274                    | 4,794             
|                                                                      | $     1,998,103   
|                                                                      |                   
|Liabilities and Shareholders' Equity                                  |                   
|                                                                      |                   
|Current liabilities:                                                  |                   
|Accounts payable                                                      | $       
		401,203
|Indebtedness to related parties (Note 2)                              | 223,716           
|Accrued expenses                                                      | 72,244            
|Loan
		payable (Note 7)                                               | 100,000           
|Deferred gains on oil and gas property sales (Note 3)                 | 484,046           
|Total current liabilities                                             | 1,281,209         
|                                                                      |                   
|Contingencies (Note 8)                                                | -                 
|                                                                      |                   
|Shareholders' equity (Note 4):                                        |                   
|Series
		"A" convertible preferred stock, no par value;               |                   
|25,000,000 shares authorized, 1,000,000 shares issued and outstanding | 1,950,000         
|Common
		stock, no par value; 75,000,000 shares authorized            |                   
|24,531,620 shares issued and outstanding                              | 20,377,389        
|Outstanding common stock options - 1,375,000                          | 23,425            
|Retained deficit                                                      | (21,633,920)      
|Total shareholders' equity                                            | 716,894           
|                                                                      | $     1,998,103   
|                                                                      |                   

See accompanying notes to consolidated financial statements.



F-3

---

SONORAN ENERGY, INC.

Consolidated Statements of Operations



|                                                    | For the Years Ended April 30,
|--------------------------------------------------- | -----------------------------
|                                                    | 2004                         
|Revenue                                             |                              
|Oil and gas sales                                   | $       
	287,797            
|Other                                               | 3,500                        
|Total revenue                                       | 291,297                      
|                                                    |                              
|Operating expenses:                                 |                              
|Oil and gas production costs                        | 293,363                      
|Depletion, depreciation and amortization (Note 9)   | 67,777                       
|Impairment of oil and gas properties (Note 3)       | -                            
|Stock-based compensation (Notes 2 and 4):           |                              
|Officer compensation                                | 1,250,779                    
|Legal                                               | 32,000                       
|Debt issue costs                                    | 0                            
|Stock options                                       | 23,435                       
|Consulting                                          | 887,042                      
|Consulting, related party                           | 95,483                       
|General and administrative                          | 1,291,779                    
|Loss on disposal of assets (Note 6)                 | 361,296                      
|Bad debt expense (Note 3)                           | 666,129                      
|Gain on liability settlements                       | (82,531)                     
|Total expense                                       | (4,886,552)                  
|                                                    |                              
|Interest income                                     | 24,142                       
|Interest expense                                    | (258,137)                    
|                                                    |                              
|Loss from continuing operations before income taxes | (4,829,250)                  
|                                                    |                              
|Income tax provision
    (Note 5)                   | -                            
|                                                    |                              
|Net loss                                            | $  (4,829,250)               
|                                                    |                              
|Net loss per common
    share:                      |                              
|Basic and diluted                                   | $          
	(0.32)          
|Weighted average common
    shares outstanding:     |                              
|Basic and diluted                                   | 15,255,539                   
|                                                    |                              





See accompanying notes to consolidated
financial statements.



F-4

---

SONORAN ENERGY, INC.

Consolidated Statement of Changes in Shareholders' Equity



|                                                                             | Series "A" Convertible Preferred Stock |  | Common Stock |  | Outstanding Common Stock Options/Warrants |  | Retained Deficit |  | Cumulative Translation Adjustment
		Other
		Comprehensive (Loss) |  | Total        
|---------------------------------------------------------------------------- | -------------------------------------- |  | ------------ |  | ----------------------------------------- |  | ---------------- |  | ---------------------------------------------------------------- |  | -------------
|                                                                             | Shares                                 |  | Amount       |  | Shares                                    |  | Amount           |  |                                                                  |  |              
|                                                                             |                                        |  |              |  |                                           |  |                  |  |                                                                  |  |              
|Balance at April
		30, 2002                                                  | -                                      |  | -            |  | 2,212,756                                 |  | $13,672,429      |  | $                
		-                                            |  | $(15,734,079)
|                                                                             |                                        |  |              |  |                                           |  |                  |  |                                                                  |  |              
|Common stock
		dividend (Note 4)                                             | -                                      |  | -            |  | 222,207                                   |  | -                |  | -                                                                |  | -            
|Common stock sales
		(Note 4)                                                | -                                      |  | -            |  | 615,546                                   |  | 142,487          |  | -                                                                |  | -            
|Common stock issued
		to an officer as payment for salaries (Note 2)         | -                                      |  | -            |  | 216,000                                   |  | 30,000           |  | -                                                                |  | -            
|Common stock issued
		in exchange for consulting services (Note 4)           | -                                      |  | -            |  | 2,201,580                                 |  | 299,525          |  | -                                                                |  | -            
|Common stock issued
		in exchange for interest expense (Note 4)              | -                                      |  | -            |  | 540,000                                   |  | 85,000           |  | -                                                                |  | -            
|Common stock issued
		to officers as payment for liabilities (Note 2)        | -                                      |  | -            |  | 1,278,936                                 |  | 296,055          |  | -                                                                |  | -            
|Common stock issued
		in exchange for debt payments (Note 4)                 | -                                      |  | -            |  | 430,961                                   |  | 94,167           |  | -                                                                |  | -            
|Common stock issued
		in exchange for oil and gas properties (Note 4)        | -                                      |  | -            |  | 1,890,000                                 |  | 350,000          |  | -                                                                |  | -            
|Common stock
		warrants issued to non-employees (Note 4)                     | -                                      |  | -            |  | -                                         |  | -                |  | 7,200                                                            |  | -            
|Comprehensive loss:                                                          |                                        |  |              |  |                                           |  |                  |  |                                                                  |  |              
|Net loss, year ended April 30, 2003                                          | -                                      |  | -            |  | -                                         |  | -                |  | -                                                                |  | (1,070,591)  
|Cumulative translation adjustment                                            | -                                      |  | -            |  | -                                         |  | -                |  | -                                                                |  | -            
|Comprehensive loss                                                           | -                                      |  | -            |  | -                                         |  | -                |  | -                                                                |  | -            
|                                                                             |                                        |  |              |  |                                           |  |                  |  |                                                                  |  |              
|Balance at April
		30, 2003                                                  | -                                      |  | -            |  | 9,607,986                                 |  | 14,969,663       |  | 7,200                                                            |  | (16,804,670) 
|                                                                             |                                        |  |              |  |                                           |  |                  |  |                                                                  |  |              
|Common stock sales
		(Note 4)                                                | -                                      |  | -            |  | 287,500                                   |  | 57,500           |  | -                                                                |  | -            
|Common stock
		dividend (Note 4)                                             | -                                      |  | -            |  | 753,542                                   |  | -                |  | -                                                                |  | -            
|Exercised common
		stock options (Note 4)                                    | -                                      |  | -            |  | 4,526,586                                 |  | 1,291,882        |  | (7,200)                                                          |  | -            
|Exercised common
		stock warrants (Note 4)                                   | -                                      |  | -            |  | 6,412                                     |  | 6,412            |  | -                                                                |  | -            
|Common stock
		cancellations (Note 4)                                        | -                                      |  | -            |  | (18,800)                                  |  | (13,000)         |  | -                                                                |  | -            
|Common stock issued
		in exchange for assumption of liabilities (Note 4)     | -                                      |  | -            |  | 1,050,053                                 |  | 840,043          |  | -                                                                |  | -            
|Common stock issued
		to an officer for compensation (Note 2)                | -                                      |  | -            |  | 3,000,000                                 |  | 600,000          |  | -                                                                |  | -            
|Common stock issued
		in exchange for consulting services (Note 4)           | -                                      |  | -            |  | 1,804,461                                 |  | 364,858          |  | -                                                                |  | -            
|Common stock issued
		in exchange for interest expense (Note 4)              | -                                      |  | -            |  | 98,223                                    |  | 22,222           |  | -                                                                |  | -            
|Common stock issued
		in exchange for legal services (Note 4)                | -                                      |  | -            |  | 160,000                                   |  | 32,000           |  | -                                                                |  | -            
|Common stock issued
		to related parties as payment for liabilities (Note 2) | -                                      |  | -            |  | 179,844                                   |  | 44,961           |  | -                                                                |  | -            
|Common stock issued
		in exchange for debt payments (Note 4)                 | -                                      |  | -            |  | 2,151,424                                 |  | 1,526,128        |  | -                                                                |  | -            
|Common stock issued
		to an officer in exchange for debt payments (Note 4)   | -                                      |  | -            |  | 1,000,000                                 |  | 200,000          |  | -                                                                |  | -            
|Common stock issued
		in exchange for oil and gas properties (Note 4)        | -                                      |  | -            |  | 175,000                                   |  | 32,375           |  | -                                                                |  | -            
|Preferred stock
		issued in exchange for oil and gas properties (Note 3)     | 1,000,000                              |  | 1,950,0000   |  | -                                         |  | -                |  | -                                                                |  | -            
|Common stock issued
		in exchange for payment of expenses (Note 4)           | -                                      |  | -            |  | 502,931                                   |  | 402,345          |  | -                                                                |  | -            
|Common stock
		options issued to non-employees (Note 4)                      | -                                      |  | -            |  | -                                         |  | -                |  | 23,425                                                           |  | -            
|Comprehensive loss:                                                          |                                        |  |              |  |                                           |  |                  |  |                                                                  |  |              
|Net loss, year ended April 30, 2004                                          | -                                      |  | -            |  | -                                         |  | -                |  | -                                                                |  | (4,829,250)  
|Cumulative translation adjustment                                            | -                                      |  | -            |  | -                                         |  | -                |  | -                                                                |  | -            
|Comprehensive loss                                                           | -                                      |  | -            |  | -                                         |  | -                |  | -                                                                |  | -            
|                                                                             |                                        |  |              |  |                                           |  |                  |  |                                                                  |  |              
|Balance at April
		30, 2004                                                  | 1,000,000                              |  | $1,950,000   |  | 24,531,620                                |  | $20,377,389      |  | $    23,425                                                      |  | $(21,633,920)
|                                                                             |                                        |  |              |  |                                           |  |                  |  |                                                                  |  |              

See accompanying notes to consolidated financial statements.



F-6

---

SONORAN ENERGY, INC.

Consolidated Statements of Cash Flows



|                                                                                       | For the Years Ended April 30,
|-------------------------------------------------------------------------------------- | -----------------------------
|                                                                                       | 2004                         
|Cash flows from
    operating activities:                                              |                              
|Net loss                                                                               | $ 
	(4,829,250)              
|Adjustments to reconcile net loss to net cash used in operating activities:            |                              
|Depletion, depreciation and amortization                                               | 67,777                       
|Bad debt expense                                                                       | 666,129                      
|Liability settlement gains                                                             | (82,531)                     
|Stock issued for payment of expenses                                                   | 402,345                      
|Stock compensation expense                                                             | 2,288,739                    
|Stock issued for interest expense                                                      | 22,222                       
|Common stock options granted                                                           | 16,225                       
|Impairment of oil and gas properties                                                   | -                            
|Loss on disposal of assets                                                             | 361,296                      
|Changes in operating assets and liabilities:                                           |                              
|Receivables and prepaid expenses                                                       | 175,247                      
|Accounts payable, accrued expenses and deferred gains                                  | 748,734                      
|                                                                                       |                              
|Net cash used in operating activities                                                  | (163,067)                    
|                                                                                       |                              
|Cash flows from
    investing activities:                                              |                              
|Equipment purchases                                                                    | (5,068)                      
|Issuance of note receivable                                                            | -                            
|Payment of Idle well bond                                                              | -                            
|Purchases of oil and gas properties                                                    | -                            
|                                                                                       |                              
|Net cash used in investing activities                                                  | (5,068)                      
|                                                                                       |                              
|Cash flows from
    financing activities:                                              |                              
|Proceeds from notes payable                                                            | 157,000                      
|Repayment of notes payable                                                             | (57,000)                     
|Proceeds from exercised options and warrants                                           | 43,912                       
|Proceeds from the sale of common stock                                                 | 57,500                       
|                                                                                       |                              
|Net cash provided by financing activities                                              | 201,412                      
|                                                                                       |                              
|Effect of cumulative translation
    adjustment on cash                                | (22,687)                     
|                                                                                       |                              
|Net change in cash                                                                     | 10,590                       
|                                                                                       |                              
|Cash, beginning of year                                                                | 32,719                       
|                                                                                       |                              
|Cash, end of year                                                                      | $        43,309              
|                                                                                       |                              
|Supplemental disclosure
    of cash flow information:                                  |                              
|Cash paid for income taxes                                                             | $                 
	-        
|Cash paid for interest                                                                 | $                 
	-        
|                                                                                       |                              
|Non-cash investing and
    financing activities:                                       |                              
|Common stock issued for payment of debt and current liabilities                        | $    2,611,132               
|Common stock issued for acquisition of oil and gas properties                          | $                 
	0        
|Series A convertible preferred stock issued for acquisition of oil and gas
	properties | $    1,950,000               
|Oil and gas property acquired in exchange for a promissory note and common
	stock      | $       642,375              
|oil and gas property sold in exchange for a promissory note                            | $    1,035,000               
|                                                                                       |                              

See accompanying notes to consolidated financial statements.



F-8

---

SONORAN ENERGY, INC.

Notes to Consolidated Financial
Statements



Note 1:   
Nature of Organization and Summary of Significant Accounting Policies



Nature of Organization

Sonoran Energy, Inc. (the
"Company") was incorporated under the laws of Colorado as Cerotex
Holdings, Inc. on July 14, 1995.  The Company's shareholders approved a change of corporate
domicile to Washington State, which became effective on September 15, 2000.  Prior to June
2002, the Company developed software and an art site on the Internet.  The Internet project was
terminated in April 2002, due to lack of funding, after generating approximately $1.8 million in
liabilities.  On June 3, 2002, the Company changed its name to Sonoran Energy, Inc. and entered
the oil and gas industry.  The Company's primary objective is to identify, acquire and develop
oil and gas projects.

The Company acquires interests in producing properties through leases on which it drills and/or
operates oil or gas wells in efforts to discover and/or to produce oil and gas.  The majority of all
oil and gas properties that the Company owns and operates are in joint venture with others in the
industry.  The Company's interests in the properties vary depending on the availability of the
interests and their locations.

At April 30,
2004, the Company owned a working interest in an oil and gas property located
within the State of Louisiana.

Basis of Presentation

The accompanying consolidated financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and liabilities in the normal course of
business.  As shown in the accompanying consolidated financial statements, the Company has
incurred significant losses since inception.  The Company lacks liquidity and has a working
capital deficit at April 30, 2004.  These factors, among others, indicate that the Company may be
unable to continue as a going concern.

The consolidated financial statements do not include any adjustments relating to the
recoverability and classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.  The Company's continuation as a going concern is
dependent upon its ability to secure profitable interests in oil and gas projects.  Further, the
Company is dependent upon management's ability to produce sufficient cash flow that is
required to meet obligations as they come due.  Lastly, the Company is dependent upon
successful completion of additional financing and, ultimately, to attain profitability.  Historically,
the Company has been successful in meeting ongoing cash requirements sufficient to remain in
operations; however there can be no assurances that the Company will continue to be successful
in obtaining the funds necessary to meet the anticipated cash requirements.  The Company plans
to continue to finance its operations and satisfy cash requirements with a combination of debt
financing, stock sales and in the longer term, revenues from operations.

Basis of Consolidation

The consolidated financial statements include the accounts of Sonoran Energy, Inc. and its
wholly owned subsidiaries Showstar Entertainment Corporation, a Nevada company that has
done business as Showstar Productions, Inc.; Showstar Online Canada, Inc., a Canadian
registered company; and ALS Sportswear.  All significant intercompany balances and
transactions have been eliminated in consolidation.  The Company's subsidiaries have been
dormant since the Company entered the oil and gas industry.



F-9

---

















SONORAN ENERGY, INC.

Notes to Consolidated Financial
Statements

Use of Estimates

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

Cash Equivalents

For the purposes of the statement of cash flows, the Company considers all highly liquid debt
instruments purchased with an original maturity of three months or less to be cash equivalents.
The Company had no cash equivalents at April 30, 2004.

Equipment and
	Depreciation



Equipment is recorded at
	cost, less accumulated depreciation.  Major items and betterments are
	capitalized; minor items and repairs are expensed as incurred.  Depreciation
	is computed under the straight-line method over the estimated useful lives
	of the assets.  The Company's equipment is depreciated over an estimated
	useful live of 3 years.  Depreciation on equipment totaled $274 and $-0-for
	the years ended April 30, 2004 and 2003, respectively.

Oil and Gas Producing Activity

The Company follows the full cost method of accounting for its oil and gas activities.
Accordingly, all costs associated with the acquisition, exploration and development of oil and gas
properties are capitalized within the appropriate cost center.  Any internal costs that are
capitalized are limited to those costs that can be directly identified with acquisition, exploration,
and development activities undertaken by the Company for its own account, and do not include
any costs related to production, general corporate overhead, or similar activities.

All capitalized costs within a cost center are depleted on the units-of-production method based on
estimated proved reserves attributable to the oil and gas properties owned by the Company.

For each cost center, capitalized costs less accumulated depletion and related deferred income
taxes, may not exceed the cost center ceiling.  The cost center ceiling is equal to the sum of (a)
the present value of estimated future net revenues from proved oil and gas reserves, less
estimated future expenditures to be incurred in developing the proved reserves computed using a
10 percent discount factor; (b) the cost of properties not being amortized; (c) the lower of cost or
fair market value of unproven properties included in the costs being amortized; and (d) income
tax effects related to the differences between the book and tax basis of the properties.  Any
excess is charged to expense during the period in which the excess occurs.

Sales of oil and gas properties, whether or not being amortized currently, are accounted for as
adjustments of capitalized costs, with no gain or loss recognized, unless such adjustments would
significantly alter the relationship between capitalized costs and proved reserves of oil and gas
attributable to a cost center.  Abandonments of oil and gas properties are accounted for as
adjustments of capitalized costs, and are amortized and subject to the cost center ceiling
limitation.



F-10

---









SONORAN ENERGY, INC.

Notes to Consolidated Financial
Statements

Net loss per share

Net loss per basic share excludes dilution and is determined by dividing loss available to
common shareholders by the weighted average number of common shares outstanding during the
period.  Net loss per diluted share reflects the potential dilution that could occur if securities and
other contracts to issue common stock were exercised or converted into common stock.  Due to
the Company's losses, any inclusion of other securities to issue common stock would have an
anti-dilutive effect on loss per diluted share.  Therefore, basic and diluted loss per share amounts
are equal.

Income Taxes

Income taxes are provided for the tax effects of transactions reported in the financial statements
and consist of taxes currently due plus deferred taxes related primarily to differences between the
recorded book basis and tax basis of assets and liabilities for financial and income tax reporting.
The deferred tax assets and liabilities represent the future tax return consequences of those
differences, which will either be taxable or deductible when the assets and liabilities are
recovered or settled.  Deferred taxes are also recognized for operating losses that are available to
offset future taxable income and tax credits that are available to offset future income taxes.

Stock-Based Compensation

The Company accounts for stock-based employee compensation arrangements in accordance
with Accounting Principles Board ("APB") Opinion 25 and complies with the disclosure
provisions of SFAS No. 123, as amended by SFAF No. 148.  Under APB No. 25, compensation expense is based on the
difference, if any, on the date of grant, between the fair value of the Company's stock and the
exercise price.  The Company accounts for stock issued to non-employees in accordance with the
provisions of SFAS No. 123.  SFAS 123 requires the fair value based method of accounting for
stock issued to non-employees in exchange for services.

Companies that elect to use the method provided in APB 25 are required to disclose pro forma
net income and pro forma earnings per share information that would have resulted from the use
of the fair value based method.  The Company has elected to continue to determine the value of
stock-based compensation arrangements under the provisions of APB 25.



F-11

---





SONORAN ENERGY, INC.

Notes to Consolidated Financial
Statements

Fair Value of Financial Instruments

The Company's financial instruments, including cash, receivables, current liabilities, and
short-term debt, are carried at cost, which approximates their fair value because of the short-term
maturity of these instruments.

Foreign Currency Translation

Assets and liabilities of non-U.S. subsidiaries are translated to U.S. dollars at end-of-period
exchange rates.  The effects of this translation for non-U.S. subsidiaries are reported in other
comprehensive income (loss).  Remeasurement of assets and liabilities of non-U.S. subsidiaries
that use a currency other than the U.S. dollar as their functional currency are included in income
as transaction gains and losses.  Income statement elements of all non-U.S. subsidiaries are
translated to U.S. dollars at average-period exchange rates and are recognized as part of revenues,
costs and expenses.  The functional currency of the Company's foreign subsidiary is the local
currency, the Canadian dollar.

Reclassifications

Certain prior year amounts may have been reclassified to conform to the current year
presentation. Such reclassifications had no effect on the prior year net income.

Note 2:    Related Party Transactions



During the year ended April 30, 2004, the Company incurred operational and administrative
expenses to a company managed by its then president and CEO, totaling $113,332.  The amount
was unpaid as of April 30, 2004 and is included in the accompanying consolidated financial
statements as "indebtedness to related party".

During the last quarter of the year ended April 30, 2004, the Company incurred $110,384 in joint
interest billings to BPR Energy, Inc. as a result of operations of the leases in Louisiana (see Note
3).  The fees remained unpaid as of April 30, 2004 and are included in the accompanying
consolidated financial statements as "indebtedness to related party".

On December 17, 2003, prior to becoming a Company officer, a former CEO signed a
subscription agreement to purchase 3 million shares of the Company's common stock at $.15
per share, or $450,000.  On December 18, 2003, the Company's Board of Directors resolved to
reduce the price from $.15 to $.10 per share due to the restricted nature of the stock.  Finally,
again on December 18, 2003, the Board resolved to approve a $300,000 signing bonus to the
former CEO to be applied as payment for the subscription agreement and related 3 million shares
of common stock.  Stock-based compensation related to the transaction totaled $600,000.
Because the transaction occurred between related parties, the stock was valued based on
contemporaneous sales to unrelated third parties, or $.20 per share.

During the year ended April 30, 2004, the Company performed a cashless exercise of 2,550,000
stock options held by its then president and CEO.  The exercises resulted in the issuance of
2,389,577 shares of the Company's common stock.  Stock-based compensation related to the
transaction totaled $650,779 based on the exercise price of the related options.



F-12

---













SONORAN ENERGY, INC.

Notes to Consolidated Financial
Statements



During the year ended April 30, 2004, the Company performed a cashless exercise of 350,000
stock options held by a relative of the Company's then president and CEO.  The exercise
resulted in the issuance of 318,278 shares of the Company's common stock.  Stock-based
compensation related to the transaction totaled $95,483 based on the exercise price of the related
options.

During the year ended April 30, 2004, the Company issued 179,844 shares of its common stock
to officers and employees as payment for accrued liabilities totaling $44,961.  
Because the transaction occurred between related parties, the stock was valued
based on contemporaneous sales to unrelated third parties.



During the year ended April 30, 2004, the Company issued 1,000,000 shares of its common stock
to its former president as payment for a $200,000 promissory note.  Because the
transaction occurred between related parties, the stock was valued based on
contemporaneous sales to unrelated third parties.

During the year ended April 30, 2003, the Company issued 426,200 shares of its common stock
to an officer as payment for $106,550 of accrued compensation.  The market price of the
common stock was $.25 on the date of issuance.

During the year ended April 30, 2003, the Company issued 200,000 shares of its common stock
to an officer as payment for $30,000 of salaries.  The market price of the common stock was $.15
on the date of issuance.

Note 3:   
Oil and Gas Properties



Acquisitions

BVR
Prospect



On February 11, 2004, the Company acquired working interests in oil and gas properties from
BPR Energy, Inc. ("BPR") in exchange for 1,000,000 shares of the Company's Series A
convertible preferred stock with a stated value of $15.00 per share.  The Series A preferred stock
is convertible to 1,000,000 restricted shares of the Company's common stock 180 days after the
date of closing (August 9, 2004) at the option of the preferred stockholder.  If, at the time of conversion, the
market price of the Company's common stock is not at $15.00 or above, the preferred
stockholder will receive 100,000 additional restricted common shares or fraction thereof, for
each dollar or fraction thereof the Company's common stock is below $12.00 per share.  The
additional common shares issued may not exceed 1,000,000 shares.  The Company acquired an
average 87% working interest in properties located in the Beauregard,
Livingston, Rapides and Vernon Parishes in Louisiana.

The producing wells on the properties were not operating profitably at April 30, 2004.  In
addition, it has been estimated in the engineering reserve reports that the Company would have to
expend approximately $5 million in development costs to economically extract proven reserves
on the properties.  Because the Company does not have the existing funding or
financing for the required development costs,
the reserves cannot be classified as proven reserves.  Consequently, the BVR
prospect is reflected in the accompanying consolidated financial statements as
unproved properties.

The acquisition has been recorded based on the conversion of the preferred shares into 2 million
shares of the Company's common stock, which had a traded market value of $1.95
per share on February 11, 2004. Based on the traded market value of the common
stock, the gross valuation of the transaction would be $3.9 million. However,
due to the Rule 144 restriction on the common stock and the fact that 2 million shares far exceeds the daily trading volume
for the Company's stock, a discount (haircut) of 50 percent has been estimated by the Company.
Consequently, the net value of the mineral rights is reduced to $1.95 million.



The following
unaudited pro forma consolidated results of operations gives effect to the
Company's acquisition of working interests in oil and gas properties from BPR
Energy, Inc. ("BPR"), as if the acquisition occurred at the beginning of the
periods presented.  The unaudited pro forma consolidated results of
operations have been prepared for informational purposes only and do not purport
to be indicative of the results of operations that actually would have occurred
if the acquisition had been consummated at the beginning of the periods
presented, nor of results to be expected in the future.



|                                                 | April 30,           
|------------------------------------------------ | --------------------
|                                                 | 2004                
|                                                 |                     
|Revenue                                          | $        304,012    
|                                                 |                     
|Net income (loss)                                | $  (5,142,444)      
|                                                 |                     
|Net income (loss) per share,
		basic and diluted | $          
		(0.34)
|                                                 |                     





F-13

---

















SONORAN ENERGY, INC.

Notes to Consolidated Financial
Statements



25 Hill



On January 31, 2004, the Company purchased working interests in oil and gas properties from
Summit Oil and Gas, Inc. ("Summit") for 1,687,500 shares of common stock valued at
$1,350,000, based on $.80 per share. The Company also issued 294,016 shares of
common stock as payment for fees and commissions related to the transaction. The
agreement provided Sonoran with an opportunity to
acquire up to a 50% working interest depending on commitment of drilling funds which
was
budgeted at $10 million.

The Company subsequently rescinded the transaction in July 2004 due to non-performance on the
part of Summit.  The Company has cancelled, but not reacquired, the shares
issued in the transaction as of the date of this report.  The transaction
is not reflected in the accompanying consolidated financial
statements.

South Little Knife Prospect



During November 2003, the Company acquired a working interest in the South Little Knife
Prospect from Harvest Worldwide LLC ("Harvest") for $642,375 paid for by the issuance of a
$400,000 convertible promissory note, 175,000 shares of common stock valued at $32,375
(based on the traded market price of the stock, less a 50 percent discount), and $210,000
reimbursed to the Company's former CEO through the issuance of 700,000 shares of common
stock.  (The former CEO issued personal free-trading common stock to Harvest to complete the
transaction and the Company reimbursed the former CEO in restricted common stock). 
The $400,000 promissory note was converted to 1,000,000 shares of restricted
common stock during January 2004.

The Company sold the property to Zenith Finance Ltd. ("Zenith") during January 2004 in
exchange for a $1,035,000 note receivable.  The Company recorded a deferred gain on the sale of
$392,625.  The note receivable carries an eight percent interest rate and matures on January 16,
2005.  The note was in default and, consequently, collectibility of the
amount due was questioned.  As of April 30, 2004, the Company recorded an allowance against the promissory note
($1,035,000) and related accrued interest ($23,754) and removed the deferred gain ($392,625).
As a result, the Company recorded a charge to bad debt expense totaling $666,129.

North West Lost Hills



During October 2003, the Company
entered into an agreement to acquire a 5 percent working interest in the North West Lost
Hills NE 12 Prospect for $22,500. The purchase agreement provided for a 20%
back-in, equal to1%
of the working interest at it's discretion after the completion of the initial test well.  The
Company subsequently sold this property to Harvest along with its other initial holdings as
described below.

Bond (BPZ) Energy Corp



On January 31, 2004, the Company
entered into an agreement to acquire working interests in oil and gas properties from
Bond Energy Corporation in exchange for 1,666,667 shares of the Company's Series B
Convertible Preferred stock with a stated value of $15.00 per share.  The Series B
Convertible Preferred stock
was to be convertible to 1,666,667 shares of the Company's common stock 180 days after the date of
closing at the option of the preferred stockholder.  Prior to transferring title
to the properties in exchange for the Series B Convertible Preferred Stock, the
parties rescinded the acquisition during March 2004.  Consequently, the
transaction was not reflected in the accompanying consolidated financial
statements.



F-14

---









SONORAN ENERGY, INC.

Notes to Consolidated Financial
Statements



Dispositions

During January 2004, the Company sold its Glide, Keystone and Merzonian leases on the Deer
Creek Oil Company property; the Malton-Black Butte, Denverton Creek, Maine Prairie and the
Lambie Ranch Gas Fields; as well as the North West Lost Hills property to Harvest
in exchange for their assumption of debt related to the properties, which
totaled $1.2 million.  The Company recorded a deferred gain on the sale of
$484,046, which is included in the accompanying consolidated financial
statements as "Deferred gains on oil and gas property sales." However, should
Harvest not perform on the debts assumed in the transaction, the properties
could revert back to the Company.

Impairment

For the fiscal year ended
	April 30, 2003, the Company determined that the net carrying value of its
	oil and gas reserve balances exceeded the cost center ceiling.
	Consequently, the reduction to reserve quantities and discounted cash flows
	resulted in an impairment of oil and gas properties of $573,427.



Note 4:   
Shareholders' Equity



Preferred Stock

The Company is authorized to issue 25 million shares of no par value preferred stock, which may
be issued in series with such designations, preferences, stated values, rights, qualifications or
limitations as determined by the Board of Directors.  As of April 30, 2004, the Company had
1,000,000 shares of Series "A" convertible preferred stock issued and outstanding (see Note 3).

Common Stock

During the year ended April 30, 2004, the Company issued 1,050,053 and 502,931
(1,552,984 total) shares of its common stock
to Camden Holdings, Inc. ("Camden") pursuant to a Stock Purchase Agreement, whereby
Camden assumed liabilities and paid expenses on behalf of the Company totaling $840,043 and
$402,345 ($1,242,388 total), respectively (see Note 8).

During the year ended April 30, 2004, the Company issued 98,223 shares of its common stock as
payment for interest expense related to certain debts.  The transactions totaled $22,222 and were
valued based on the traded market value of the common stock.

During the year ended April 30, 2004, the Company issued 2,151,424 shares of its common stock
as payment for debts and related accrued interest totaling $1,526,128.



F-15

---

SONORAN ENERGY, INC.

Notes to Consolidated Financial
Statements



During the year ended April 30, 2003, the Company issued 1,750,000 shares of its common stock
in exchange for working interests in oil and gas properties valued at $350,000.  The value of the
stock issued was recorded at the quoted market price on the date of issuance.  The working
interests were acquired in the developments known as the Franklin Prospect ($225,000) and the
San Antonio Anvil Bar ($125,000).

During the year ended April 30, 2003, the Company issued 399,038 shares of its common stock
as payment for liabilities valued at $94,167.  The value of the stock issued was recorded at the
quoted market price on the date of issuance.

During the year ended April 30, 2003, the Company issued 500,000 shares of its common stock
as payment for debt issue costs. The value of the stock issued was recorded at the quoted market
price on the date of issuance and totaled $85,000.  The costs are included in the accompanying
financial statements under "interest expense".



On May 29, 2002,
the Company's Board of Directors approved a 1 for 25 reverse stock split. 
Following the reverse stock split, the Company had 2,212,756 common shares
issued and outstanding.   Shares issued prior to May 29, 2002 have
been retroactively restated to reflect the impact of the reverse stock split.

Stock-Based Compensation

During the year ended April 30, 2004, the Company issued 1,964,461 shares of its common stock
to outside service providers, in exchange for legal, financial consulting, investor relations and
other consulting services. The value of the stock issued was recorded at the quoted market price
on the date of issuance, less a 50 percent discount for the restricted nature of the shares, and
totaled $282,203.  The services are included in the accompanying financial statements as
"stock-based compensation".

During the year ended April 30, 2004, the Company performed a cashless exercise of 2,000,000
stock options held by a consultant.  The exercises resulted in the issuance of 1,818,731 shares of
the Company's common stock.  Stock-based compensation related to the transaction totaled
$545,619, based on the $.30 exercise price on the options.  The services are included in the
accompanying financial statements as "stock-based compensation".

During the year ended April 30, 2003, the Company issued 2,038,500 shares of its common stock
to outside service providers, in exchange for legal, financial consulting, investor relations and
other consulting services. The value of the stock issued was recorded at the quoted market price
on the date of issuance and totaled $299,525.  The services are included in the accompanying
financial statements as "stock-based compensation", net of $82,500 prepaid for the fiscal year
ended April 30, 2004.



F-16

---

SONORAN ENERGY, INC.

Notes to Consolidated Financial
Statements



Common Stock Options

A summary of the status of the Company's stock option awards as of April 30, 2004, and the
changes during the period from May 1, 2002 through April 30, 2004 are presented below:







|                                |                             | Options Issued to Non-Employees | Weighted Average Exercise Price | Weighted Average Fair Value | Exercisable | Weighted Average Exercise Price - Exercisable
|------------------------------- | --------------------------- | ------------------------------- | ------------------------------- | --------------------------- | ----------- | ---------------------------------------------
|                                | Options Issued to Employees
|Outstanding, April 30,
    2002 | -                           | -                               | $         
	-                   | $        
	-                | -           | $        
	-                                 
|                                |                             |                                 |                                 |                             |             |                                              
|Options granted                 | -                           | 150,000                         | 0.25                            | 0.05                        | 150,000     | 0.25                                         
|Options exercised               | -                           | -                               | -                               | -                           | -           | -                                            
|Options cancelled               | -                           | -                               | -                               | -                           | -           | -                                            
|Outstanding, April 30,
    2003 | -                           | 150,000                         | 0.25                            | 0.05                        | 150,000     | 0.25                                         
|                                |                             |                                 |                                 |                             |             |                                              
|Options granted                 | 2,200,000                   | 2,525,000                       | 0.38                            | 0.13                        | 4,725,000   | 0.38                                         
|Options exercised               | (1,000,000)                 | (2,500,000)                     | 0.30                            | 0.14                        | (3,500,000) | 0.30                                         
|Options cancelled               | -                           | -                               | -                               | -                           | -           | -                                            
|Outstanding, April 30,
    2004 | 1,200,000                   | 175,000                         | $     0.57                      | $   0.11                    | 1,375,000   | $   0.57                                     
|                                |                             |                                 |                                 |                             |             |                                              







The fair value for the options granted during the year ended April 30, 2004 was estimated at the
date of grant using the Black-Scholes option-pricing model with the following assumptions:



Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.. . . . . . . . . . . . . . . . .     2.00%









Dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.. . . . . . . . . . . . . . . . . .     0.00%

Volatility factor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.. . . . . . . . . . . . . . . . . . .  147.19%

Weighted average expected life . . . . . . . . . . . . . . . . . . . . . . . . .
.. . . . . . . . . . .   1 year











The fair value for the options granted during the year ended April 30, 2003 was estimated at the
date of grant using the Black-Scholes option-pricing model with the following assumptions:



Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.. . . . . . . . . . . . . . . . .     2.00%









Dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.. . . . . . . . . . . . . . . . . .     0.00%

Volatility factor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
.. . . . . . . . . . . . . . . . . . .  100.00%

Weighted average expected life . . . . . . . . . . . . . . . . . . . . . . . . .
.. . . . . . . . . . .   2 years



The Black-Scholes options valuation model was developed for use in estimating the fair value of
traded options, which have no vesting restrictions and are fully transferable.  In addition, option
valuation models require the input of highly subjective assumptions including the expected stock
price volatility.  Because the Company's stock options have characteristics significantly
different from those of traded options, and because changes in the subjective input assumptions
can materially affect the fair value estimate, in management's opinion, the existing models do
not necessarily provide a reliable single measure of the fair value of its stock options. However,
the Company has presented the pro forma net loss and pro forma basic and diluted loss per
common share using the assumptions noted above.



F-17

---

SONORAN ENERGY, INC.

Notes to Consolidated Financial
Statements

|                                                           | For the Years Ended April 30,
|---------------------------------------------------------- | -----------------------------
|                                                           | 2004                         
|                                                           |                              
|Net loss, as reported                                      | $    (4,829,250)             
|                                                           |                              
|Pro forma net loss                                         | $    (4,953,800)             
|                                                           |                              
|Basic and diluted net loss per
		common share, as reported | $            
		(0.32)       
|                                                           |                              
|Pro Forma basic and diluted net
		loss per common share    | $            
		(0.32)       
|                                                           |                              



Common Stock Dividend and Warrants

The Company declared an eight percent dividend payable to shareholders of record at the close of
business on July 22, 2003.  The unit stock dividend, paid on August 22, 2003, consisted of one
common share plus a warrant allowing shareholders to purchase one share for each ten shares of
the Company's stock held on the record date at a $1.00 strike price.  The number of shares
issued on August 22, 2003 totaled 753,542 and 941,642 related warrants were granted. 
Shares issued prior to July 22, 2003 have been retroactively restated to reflect
the impact at May 1, 2002.







Note 5:    Income Taxes









A reconciliation of the U.S. statutory federal income tax rate to the effective tax rate is as follows:









































|                                                                     | Years Ended April 30,
|-------------------------------------------------------------------- | ---------------------
|                                                                     | 2004                 
|U.S. Federal statutory
		graduated rate                              | 34.00%               
|State income tax rate, net of
		federal benefit                      | 5.83%                
|Net operating loss for which no
		tax benefit is currently available | -39.83%              
|                                                                     | 0.00%                
|                                                                     |                      













The valuation allowance offsets the net deferred tax asset for which there is no assurance of
recovery.  The change in the valuation allowance for the years ended April 30, 2004 and 2003
totaled $1,923,703 and $426,464, respectively.  The current tax benefit also changed by
$1,923,703 and $426,464 for the years ended April 30, 2004 and 2003, respectively.  The net
operating loss carryforward expires through the year 2024.

The valuation allowance will be evaluated at the end of each year, considering positive and
negative evidence about whether the deferred tax asset will be realized.  At that time, the
allowance will either be increased or reduced; reduction could result in the complete elimination
of the allowance if positive evidence indicates that the value of the deferred tax assets is no
longer impaired and the allowance is no longer required.

Should the Company undergo an ownership change as defined in Section 382 of the Internal
Revenue Code, the Company's tax net operating loss carryforwards generated prior to the
ownership change will be subject to an annual limitation, which could reduce or defer the
utilization of these losses.



F-18

---





SONORAN ENERGY, INC.

Notes to Consolidated Financial
Statements

















Note 6:   
Settlement with Former Merger Candidate



The Company received loans from First Nevisian ("FN"), the parent of a potential merger
candidate, totaling $25,000 and $818,000 during the years ended April 30, 2002 and 2001,
respectively.  The Company also moved its operations into the FN offices during the year ended
April 30, 2001.  The loans were due on demand in the event that the proposed merger was not
consummated.

Effective July 31, 2001, the proposed merger agreement was terminated.  Following the
termination, the Company moved its operations from the FN offices, but left all of its property
and equipment.  As of April 30, 2003, the Company owed FN the $843,000 in loans and
$212,394 in related accrued interest.  In addition, FN held property and equipment owned by the
Company with a book value of approximately $309,743.

During January 2004, the Company negotiated a debt conversion agreement with FN.  The
Company agreed to issue 704,786 shares of its common stock as full payment for debt and
related accrued interest totaling $1,055,394.  In addition, the Company included a waiver against
any claims for the Company's property and equipment that was held by FN.  The Company
wrote-off the property and equipment held by FN resulting in a loss of $309,743,
and other property and equipment disposed of during the year totaling $51,553,
resulting in a total loss of $361,296.  This is included in the
accompanying consolidated financial statements as "Loss on disposal of assets."

The Company also wrote-off property and equipment disposed during the fiscal year totaling
$51,553.

The losses, totaling $361,296, are included in the accompanying condensed, consolidated
Statements of Operations as "Loss on disposal of assets".

Note 7:   
Loan Payable



During February 2004, Camden Holdings, Inc. ("Camden"),
who is also a shareholder via the Stock Purchase Agreement (see Note 8), advanced the Company
$100,000 for working capital.  The loan does not carry an interest rate and is payable on demand.



F-19

---





SONORAN ENERGY, INC.

Notes to Consolidated Financial
Statements



Note 8:   
Concentrations and Contingencies



Concentrations

From May 2003 through January 2004, the Company sold all of its crude oil, through its
operating partner, Longbow LLC, to Pacific Marketing and Transportation LLC.

From February 2004 through April 2004, crude oil from the BPR properties was sold to Texon
LP under the terms of a contract between BPR and Texon LP.

During the year ended April 30, 2003, the Company sold all of its crude oil to Pacific Marketing
and Transportation LLC.

While the Company has utilized only two customers over the past two years, it is management's
belief that the oil and gas the Company produces could be sold to other crude oil purchasers,
refineries or pipeline companies.  The Company sells its oil pursuant to short-term contracts at
market prices.  Market demand for the Company's production is subject to various influences
that can never be assured.  The base values for the Company's crude oil sales is set by major oil
companies in response to area and market strengths and international influences.

Contingencies

The Company has been named as a defendant in a lawsuit filed by a director of Savingsplus
Internet, Inc. for claiming that the Company failed to repay a $35,000 loan to the director's company ("Korker"). Sonoran
retained counsel and filed a reply to the suit as of April 30, 2001. In July 2002, the Company was
informed that Korker had increased their claim by approximately $190,000. Subsequent
submissions by Korker have reduced the claim to $59,000 and Sonoran has held an examination
for discovery of Korker's officers. In April and May 2003 Korker attempted to schedule a
Summary Trial of the matter but adjourned after receipt of Sonoran's affidavits.  The Company
is optimistic that the lawsuit will be successfully defended and is considering a countersuit.

The Company has been named as defendant in a lawsuit filed by Longbow, LLC for
approximately $185,000 representing their estimate of their share of the profit on the sale of the
Company's working interests in the Keystone, Glide and Merzonian leases. This lawsuit was filed
in the California Superior Court, Kern County (Case Number S-1500-CV-252398, SPC).
Longbow is using a liberal interpretation of the purchase agreements in order to claim a
percentage of the proceeds of Sonoran's sale of its working interests to Harvest Worldwide.
Sonoran has filed a cross-complaint seeking monetary damages and a judicial interpretation of
the "sale-for-profits" clause. Contemporaneously, Harvest Worldwide, the entity to which
Sonoran sold these interests, has filed suit against Longbow for withholding distributions and to
remove them as the "operator" of the leases. In response, Longbow filed a cross-complaint in
that action against Sonoran. Sonoran intends to vigorously defend itself against these claims and
to pursue its claims against Longbow. It is management's view that Longbow will not prevail in
their action and Sonoran will prevail on its cross-complaint.



The Company has been named in a lawsuit filed August 25, 2004 (Case no. S-1500-CV-253638
RIA) by John Howe and Brad Califf concerning their short lived
consulting/employment agreements with respect to stock options contained in the
agreements. At issue is 550,000 options per individual with an exercise price of
$.30 should the terminations of the agreements be determined to have occurred
without cause.



F-20

---

SONORAN ENERGY, INC.

Notes to Consolidated Financial
Statements



During November 2003, the Company entered into a Stock Purchase Agreement with Camden,
whereby Camden agreed to purchase $3 million in common stock at a price equal to a 20 percent
discount from the average 10-day "bid" price starting on or before November 26, 2003
(determined as a price of $.80 per share).  In January 2004, under the terms of the Stock Purchase
Agreement, Camden agreed to assume $840,043 of the Company's liabilities in exchange for
1,050,053 shares of common stock.  However, if Camden fails to extinguish the liabilities
assumed in the transaction, the creditors may look to the Company for payment
and the Company would seek the reacquisition or cancellation of the stock issued.

During January 2004, the Company sold its Glide, Keystone and Merzonian leases on the Deer
Creek Oil Company property; the Malton-Black Butte, Denverton Creek, Maine Prairie and the
Lambie Ranch Gas Fields; as well as the North West Lost Hills property to Harvest Worldwide,
LLC ("Harvest") subject to the debt related to the properties, which totaled
$1.2 million. However, if Harvest fails to perform on the debts collateralized
by the above properties, the creditor may seek repayment of the debt from the
Company.

Note 9:   
Oil and Gas Reserves and Related Financial Information



Costs Incurred in Oil and Gas Property Acquisition, Exploration and Development Activities

Costs incurred in oil and gas property acquisition, exploration and development activities are
summarized as follows:

|                  | Year Ended
    April 30, 2004
|----------------- | -----------------------------
|                  |                              
|Acquisitions:     |                              
|Proved            | $                         
	-
|Unproved          | 2,592,375                    
|Development costs | -                            
|Exploration costs | -                            
|                  |                              
|Total             | $          
	2,592,375       
|                  |                              

As of April 30,
2004, the Company has excluded $1,950,000 of unproved assets from the
capitalized costs being amortized.  The capitalized costs represent the
entire carrying value ascribed to the BVR Prospect (see Note 3).  There
have not been any other excluded costs during the three most recent fiscal
years.  The Company is seeking to finance the estimated $5 million of costs
necessary to achieve economically commercial production from existing wells. 
Excluded costs will be included in the capitalized costs being amortized as the
project is evaluated, at the earlier determination of proved reserves or
impairment.



Depletion,
depreciation and amortization per unit of production (Bbls) for the cost center
was as follows:



|               |       
|-------------- | ------
|April 30, 2004 | $7.72 
|April 30, 2003 | $13.20
|               |       



Proved Oil and Gas Reserve Quantities (Unaudited)

At April 30, 2004 and 2003, the estimated oil and gas reserves presented herein were derived
from reports prepared by an independent engineering firm and by an in-house engineer.  The
Company cautions that there are many inherent uncertainties in estimating proved reserve
quantities and in projecting future production rates and the timing of development expenditures.
Accordingly, these estimates are likely to change as future information becomes available, and
these changes could be material.



F-21

---

SONORAN ENERGY, INC.

Notes to Consolidated Financial
Statements



Estimated quantities of proved reserves (all of which are classified as proved developed and are
located within the United States), as well as the changes in proved reserves during the year ended
April 30, 2004, are presented in the following tables:



|                                            | Crude Oil (Bls) |  | Natural Gas (Mcf)
|------------------------------------------- | --------------- |  | -----------------
|Proved developed reserves at April 30, 2003 | 80,810          |  | 70,279           
|Sale of reserves                            | (73,287)        |  | (62,759)         
|Purchase of reserves                        | -               |  | -                
|Production                                  | (7,523)         |  | (7,520)          
|Proved developed reserves at April 30, 2004 | -               |  | -                
|                                            |                 |  |                  



Proved reserves are estimated quantities of crude oil, natural gas and natural gas liquids which
geological and engineering data indicate with reasonable certainty to be recoverable in future
years from known reservoirs under existing economic and operating conditions.  Proved
developed reserves are proved reserves that can be expected to be recovered through existing
wells with existing equipment and operating methods.

Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Gas
Reserve Quantities (Unaudited)

The table below sets forth a standardized measure of the estimated discounted future net cash
flows attributable to the Company's proved oil and gas reserves. Estimated future cash inflows
were computed by applying year-end prices of oil and gas (with consideration of price changes
only to the extent provided by contractual arrangements) to the estimated future production of
proved oil and gas reserves at April 30, 2004 discounted at 10 percent. The future production and
development costs represent the estimated future expenditures to be incurred in developing and
producing the proved reserves, assuming continuation of existing economic conditions.

|                                                                      | Year Ended
    April 30, 2004
|--------------------------------------------------------------------- | -----------------------------
|                                                                      |                              
|Future cash inflows                                                   | $          -                 
|Future cash outflows:                                                 |                              
|Production costs                                                      | -                            
|Development costs                                                     | -                            
|Future net cash flows before income taxes                             | -                            
|                                                                      |                              
|Future income taxes                                                   | -                            
|Future net cash flows                                                 | -                            
|Adjustment to discount future annual net cash
    flows at 10 percent | -                            
|                                                                      |                              
|Standardized measure of discounted future net
    cash flows          | $          -                 
|                                                                      |                              



The following table summarizes the principal factors comprising the changes in the standardized
measure of estimated discounted net cash flows:

|                                              | Year Ended
    April 30, 2004
|--------------------------------------------- | -----------------------------
|                                              |                              
|Standardized measure, beginning of period     | $          
	648,304         
|Sales of oil and gas, net of production costs | -                            
|Purchase of reserves                          | -                            
|Sale of reserves                              | (648,304)                    
|                                              |                              
|Standardized measure, end of period           | $                     
	-    
|                                              |                              



F-22

---



SONORAN ENERGY, INC.

Notes to Consolidated Financial
Statements



Note 10: Subsequent Events





Baron Oil



On May 7, 2004,
		the Company signed a Merger Agreement to acquire Baron Oil AS ("Baron"),
		a Norwegian oil and gas company. Baron has a presence across the Middle
East and with an office in Amman, Jordan, is positioned to attract oil and gas
contracts in the region.   Baron specializes in the utilization of the
latest proven technology and operational processes in the development, drilling
and operating of onshore oil and gas fields.  Under the terms of the agreement, the
		Company would acquire all of the issued and outstanding shares of Baron
		in exchange for approximately 18,625,000 shares of the Company's common
		stock and the assumption of all Baron's outstanding stock options.  The
		Company has further agreed to provide an additional commitment of $20
		million for the purposes of developing Baron
		projects.





The agreement had
		not closed as of the date of this report.

Scottsdale
		Oil Field Services



On August 18, 2004, the Company signed a Stock Purchase Agreement to acquire
Scottsdale Oil Field Services, Limited ("SOFS"), an Arizona
		corporation.  SOFS' management and team of oil and gas operational
staff and consultants have many years of experience in North America, the UK,
Africa, South America, Pakistan, Australia, and Asia.  SOFS specializes in
providing engineering, reservoir, drilling (including deep water) financial,
commercial, materials management, systems and procedures, environmental and
operational services to the oil and gas industry through the placement of the
company's highly qualified personnel.

Under the terms of the agreement, the Company acquired all
		of the issued and outstanding shares of SOFS in exchange for 1,000,000
		shares of the Company's restricted common stock.  The Company further
		agreed to enter into employment contracts with the two existing officers
		and one direct employee covering an initial period of two years.



F-23

---









































































ITEM 8 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS  ON ACCOUNTING AND
FINANCIAL DISCLOSURE

























































None



ITEM 8A - CONTROLS AND PROCEDURES





(a) Disclosure Controls and Procedures.
Disclosure controls and procedures are controls and other procedures that are
designed to ensure that the information required to be disclosed by a company in
the reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the
SEC's rules and forms. Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed in the reports that a company files or submits under the
Exchange Act is accumulated and communicated to the Company's management,
including its Principal Executive Officer and Principal Financial Officer, as
appropriate to allow timely decisions regarding required disclosure.



We maintain disclosure controls and
procedures designed to ensure that material information related to our company
is recorded, processed, summarized and reported within the time periods
specified in the SEC rules and forms.



Under the supervision of our Chief
Executive Officer and our interim Chief Financial Officer, we re-evaluated the
effectiveness of the design and operation of our disclosure controls and
procedures as of the end of the period covered by this report. Based upon that
evaluation, our Chief Executive Officer and interim Chief Financial Officer
concluded that as of April 30, 2004, the design and operation of such
disclosure controls and procedures were effective.





ITEM
8B - OTHER INFORMATION



None.

---















































































PART III

























































































ITEM 9 - DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT































Section 16(a) of the Exchange Act ("Section 16(a)") requires the Company's Officers and
Directors, and persons who own more than ten percent of a registered class of the Company's
equity securities, to file reports of ownership on Form 3 and changes in ownership on Form 4 or
Form 5 with the Securities and Exchange Commission (the "SEC"). Such Officers, Directors and
ten percent shareholders are also required by SEC rules to furnish the Company with copies of all
such forms that they file. The Company's initial registration statement on Form 10-SB became
effective on or about April 5, 2000. Management is confident that all filings required are current
as of the proxy date.







|Name               | Age | Current Position/Office | Position Held Since
|------------------ | --- | ----------------------- | -------------------
|Peter
	Rosenthal   | 42  | Director/President/CEO  | 2004               
|Rasheed
	Rafidi    | 37  | Director/CFO            | 2004               
|Russ
	Costin       | 60  | Director/Controller     | 2000               
|Christopher Pitman | 45  | Director                | 2003               
|Mehdi
	Varzi       | 58  | Director                | 2003               
|Charles
	Waterman  | 65  | Director                | 2003               













































































Note: All the
		directors must stand for election at this years Annual General Meeting.











PETER ROSENTHAL,
		CHAIRMAN, CEO, PRESIDENT, DIRECTOR











Prior to joining
		Sonoran Energy, Inc Peter held the position of General Manager -
		Aberdeen Operations with Amerada Hess Corporation Prior to joining
		Amerada Hess Ostenfeld-Rosenthal worked for
		Elf Petroleum Norge, as a Specialist
		Engineer, Project Manager and Implementation Superintendent from 1993 to
		1997. Previous to that he was a consulting engineer assisting with the
		development of new concepts for floating Oil & Gas facilities,
		developing technical and commercial proposals for clients such as
		Chevron, Mobil and Shell, and project management of various projects,
		mainly within structural reliability and risk analysis (both technical
		and financial).













RASHEED RAFIDI,
		DIRECTOR, CFO











Mr. Rafidi. Rasheed
		has previously served as Managing Director of "Precise Business
		Consulting" in Amman, Jordan (2002 to 2004). PBC is a certified
		consulting firm providing conglomerate and professional financial and
		management advisory services specializing in mergers and acquisitions,
		company valuations, private equity placements, financial analysis and
		reporting, strategic planning and internal auditing. Rafidi has some 14
		years' of professional experience as a consultant and CFO for national
		and international corporations including serving as CFO for an oil and
		gas procurement company (1997 to 2001) as well as a tobacco
		manufacturing company (2001 to 2002). Rasheed has obtained his
		bachelor's degree in Business Administration from the University of
		Toledo in the USA. In addition, Rasheed holds the following financial
		certifications: Certified Public Accountant (CPA), Certified Valuation
		Analyst (CVA), Certified Management Accountant (CMA), Certified in
		Financial Management (CFM), Certified Internal Auditor (CIA), and
		Certified Investment and Derivatives Auditor (CIDA).











RUSS COSTIN,
		DIRECTOR, CONTROLLER











Russ is a Certified
		General Accountant in the Province of British Columbia and has served in
		a variety of accounting and management positions in the forest industry.
		In mid 1989, he chose to join a Tax Preparation firm to further his
		knowledge of business and personal taxes as well as working with
		start-up businesses. In June 1994, Mr. Costin started up his own public
		practice to provide tax, accounting and consulting services to
		businesses and private citizens. On June 1, 1999, he joined Showstar as
		Controller and provided a variety of administrative functions such as
		CFO (July 11, 2000 to Present) and Corporate Secretary (from October 2,
		2000) and now continues to provide the same support to the CEO through
		the transition into the oil and gas sector. Other than the previous
		years with Sonoran, Mr. Costin has had no prior experience in the
		petroleum industry.











CHRISTOPHER PITMAN,
		DIRECTOR











Mr. Pitman has
		extensive international oil and gas energy sector experience gained
		through working with oil companies, private equity investors,
		governments, investment banks and funding agencies. A permanent advisor
		to the World Bank, Mr. Pitman has also been retained as non-executive
		director and as a senior advisor at the board level to both private and
		public energy and investment companies actively involved in
		international mergers and acquisitions (1988 to Present). From 2003 to
		the present, he has been president of the largest worldwide seismic
		company PGS Equity Investments and is responsible for
		PGS's equity interests in several oil and
		gas companies and arranging financial structures with outside investors.













MEHDI VARZI, DIRECTOR











Mr. Varzi established
		Varzi Energy as an independent oil and gas consultancy in June 2001
		after a 33-year career spanning oil, diplomacy and international
		finance. From 1982 - 2001, Mr. Varzi worked in the City of London, first
		as an oil consultant, specializing in OPEC and international oil market
		developments from 1982-1986 with stockbrokers
		Grieveson Grant; then as a Director of Energy Research with
		Kleinwort Benson (1986-1995), and then in the same position with
		Dresdner Kleinwort Wasserstein (1995-2001), retiring as Managing
		Director of Energy Research in 2001. From 1972-1981, Mr. Varzi served in
		the Iranian Ministry of Foreign Affairs, and was posted to the Iranian
		Embassy in Ankara from 1977-1981. From 1968-1972, Mr. Varzi served as a
		Senior Analyst in the International Affairs Section of the National
		Iranian Oil Company. Mr. Varzi regularly conducts briefings on world oil
		issues for private and state oil and gas companies and is currently
		involved in a number of oil and gas projects in the Middle East.













CHARLES WATERMAN,
		DIRECTOR











Mr. Waterman is the
		Chief Executive Officer and founding member of Jefferson Waterman
		International, a Washington, DC-based consultancy that advises clients
		on political, economic and military trends worldwide. Waterman has held
		several leading positions within the U.S. Central Intelligence Agency
		and as National Intelligence Officer in the Middle East (1963 to 1985),
		Mr. Waterman coordinated the intelligence input to policy deliberations
		in the Near East and South Asia. As a member of the Foreign Service, he
		spent many years living and working overseas in Kuwait, Cairo, Beirut,
		Amman and Jiddah. A recognized expert in the
		Middle East and the former Soviet Union, Mr. Waterman has extensive
		knowledge of the defense and petroleum industries, and has published
		extensively in foreign affairs journals.





Section 16(a) Beneficial Ownership
Reporting Compliance





Section 16(a) of the Securities Exchange
Act of 1934 requires the Company's executive officers, directors and persons
beneficially owning more than 10% of the Company's common stock to file reports
of ownership and changes in ownership with the Securities and Exchange
Commission. The Company has undertaken an extensive review of the Section 16(a)
reports filed on behalf of each person subject to Section 16(a) prior to
December 31, 2003, to determine whether all of their reportable transactions in
the Company's common stock were timely reported and to ensure proper reporting
of all of their beneficial holdings. The review revealed that there were a
number of holdings and transactions that were not timely reported and the
Company has undertaken to assist the subject persons to file the necessary
forms. The Company has also developed new procedures to ensure improved
compliance with Section 16(a) on an on-going basis.



Based solely on copies of such forms
furnished as provided above, to the Company's knowledge all reports required
under Section 16(a) during the most recent fiscal year or prior years, except
that none of the newly appointed/elected members of the Board of Directors has
filed a Form 3.  These reports are intended to be filed as soon as
possible.



Audit Committee Financial Expert



The entire Board of Directors of Sonoran
Energy, Inc. serves as the Company's Audit Committee.  As of April 30,
2004, our Board of Directors has  designated two audit committee financial
experts as that term is defined in Item 401(e)(2) of Regulation S-B.  Russ
Costin and Rasheed Rafidi serve as the audit committee financial experts for the
Company.  Neither Costin nor Rafidi are independent directors.



Code of Ethics



We have adopted a "Code of Ethics for
Directors, Officers and Employees", a code of ethics that applies to all
employees, including our executive officers. A copy of our Code of Ethics for
Directors, Officers and Employees is filed with the Securities and Exchange
Commission as Exhibit 14.1 to this annual report. In the event that we make any
amendments to, or grant any waivers of, a provision of the Code of Ethics for
Directors, Officers and Employees that applies to the principal executive
officer, principal financial officer, or principal accounting officer that
requires disclosure under applicable SEC rules, we intend to disclose such
amendment or waiver and the reasons therefore on a Form 8-K or on our next
periodic report.





























Page 13

---









ITEM 10 - EXECUTIVE COMPENSATION

























































SUMMARY COMPENSATION TABLE











The following table sets forth the aggregate annual remuneration of Sonoran's Chief Executive
Officer and the other executive officers whose annual salary and bonus exceeded $100,000 in the
fiscal year ended April 30, 2004 (collectively, the "named executive officers"), and for the fiscal
years ended April 30, 2004 and April 30, 2003, the Company's most recent and only meaningful
fiscal years. All amounts are in U.S. dollars unless otherwise noted.



|                            |      | Annual Compensation | Long Term Compensation
|--------------------------- | ---- | ------------------- | ----------------------
|Name and Principal Position | Year | Salary              | Bonus                 
|                            |      |                     |                       
|Peter Rosenthal             | 2004 | $48,346(1)          | 0                     
|Director/CEO/President      | 2003 | n/a                 | n/a                   
|                            | 2002 | n/a                 | n/a                   
|                            |      |                     |                       
|Paul Pristol                | 2004 | $46,849(1)          | $600,000              
|Former CEO                  | 2003 | n/a                 | n/a                   
|                            | 2002 | n/a                 | n/a                   
|                            |      |                     |                       
|John Punzo                  | 2004 | $ 100,000(1)        | 0                     
|Former CEO                  | 2003 | $120,000(1)         | 0                     
|                            | 2002 | $82,488(1)          | 0                     





(1) Payment was made in Cash and debt

(2) Severance pay of 18 months





















































ITEM 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

























































BENEFICIAL SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL
OWNERS











The following table sets forth the beneficial ownership of Common Stock of the Company as of
the Record Date for the following: (i) each person or entity who is known to the Company to
beneficially own more than 5% of the outstanding shares of the Company's Common Stock; (ii)
each of the Company's Directors (and nominees for election as Directors); (iii) the Company's
Chief Executive Officer and each of the officers ("Named Officers") named in the Summary
Compensation Table herein; and (iv) all Directors and executive officers of the Company as a
group.



The number and percentage of shares beneficially owned is determined under rules of the
Securities and Exchange Commission ("SEC"), and the information is not necessarily indicative
of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes
any shares as to which the individual has sole or shared voting power or dispositive power and
also any shares that the individual has the right to acquire within sixty days of the Record Date
through the exercise of any stock option or other right. Unless otherwise indicated in the
footnotes, each person has sole voting and dispositive power (or shares such power) with respect
to the shares shown as beneficially owned.







|TITLE OF CLASS | NAME AND ADDRESS OF BENEFICIAL OWNER  | AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP | PERCENT OF CLASS
|-------------- | ------------------------------------- | ----------------------------------------- | ----------------
|Common Stock   | Paul Bristol                          | 3,000,000                                 | 11.32%          
|Common Stock   | Directors and Officers as a Group (1) | 3,138,849                                 | 11.54%          



Note 1 - Effective June 1, 2003, the directors can exercise their options of 150,000 shares granted
June 2002 at a strike price of $.20 per share.





























ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS































During the year
			ended April 30, 2004, the Company incurred operational and
			administrative expenses to a company managed by its then president
			and CEO, totaling $113,332.  The amount was unpaid as of April 30,
			2004 and is included in the accompanying consolidated financial
			statements as "indebtedness to related party".



During the
			last quarter of the year ended April 30, 2004, the Company incurred
			$110,384 in joint interest billings to BPR Energy, Inc. as a result
			of operations of the leases in Louisiana (see Note 3).  The fees
			remained unpaid as of April 30, 2004 and are included in the
			accompanying consolidated financial statements as "indebtedness to
			related party".



On December
			17, 2003, prior to becoming a Company officer, a former CEO signed a
			subscription agreement to purchase 3 million shares of the Company's
			common stock at $.15 per share, or $450,000.  On December 18, 2003,
			the Company's Board of Directors resolved to reduce the price from
			$.15 to $.10 per share due to the restricted nature of the stock. 
			Finally, again on December 18, 2003, the Board resolved to approve a
			$300,000 signing bonus to the former CEO to be applied as payment
			for the subscription agreement and related 3 million shares of
			common stock.  Stock-based compensation related to the transaction
			totaled $600,000.  Because the transaction occurred between related
			parties, the stock was valued based on contemporaneous sales to
			unrelated third parties, or $.20 per share.



During the
			year ended April 30, 2004, the Company performed a cashless exercise
			of 2,550,000 stock options held by its then president and CEO.  The
			exercises resulted in the issuance of 2,389,577 shares of the
			Company's common stock.  Stock-based compensation related to the
			transaction totaled $650,779 based on the exercise price of the
			related options and the Company also performed a cashless exercise
			of 350,000 stock options held by a relative of the Company's then
			president and CEO.  The exercise resulted in the issuance of 318,278
			shares of the Company's common stock.  Stock-based compensation
			related to the transaction totaled $95,483 based on the exercise
			price of the related options.



During the
			year ended April 30, 2004, the Company issued 179,844 shares of its
			common stock to officers and employees as payment for accrued
			liabilities totaling $44,961 and also issued
			1,000,000 shares of its common stock to its former president as
			payment for a $200,000 promissory note.





Page 14

---



















































PART IV



























































ITEM 13 - EXHIBITS

























































































(a)  1.  FINANCIAL STATEMENTS



























































These documents are listed and included in Part II, Item 7 of this

























report:



















































Report of Independent Public Accountants

























Balance Sheets at April 30, 2003

























Statements of Operations for the periods ended April 30, 2003 and 2002.

























Statements of Shareholders' Equity for the periods ended April 30, 2003 and 2002.

























Statements of Cash Flows for the periods ended April 30, 2003 and 2002.

























Notes to Financial Statements.















































































(a)  3.  EXHIBITS



3.1 - Articles of Incorporation - Cerotex Holdings, Inc.*

3.2 - Articles of Incorporation - Name change from Cerotex Holding, Inc. to
Showstar Entertainment Corporation*

3.3 - Amendment to the Articles of Incorporation - Name change from Showstar
Entertainment Corporation to Showstar Online.com, Inc.*

3.4 - Bylaws of Showstar - Name change from Certoex Holdings, Inc. to Showstar
Entertainment Corporation to Showstar Online.com, Inc.*

3.5 - Amended Articles of Incorporation (filed with Definitive Proxy Statement
on August 17, 2000)

3.6 - Amended Bylaws (filed with the Definitive Proxy Statement on August 17,
2000)

4.1 - Convertible Note

4.2 - Convertible Note

10.1 - Content Licensing Agreement with National Register Publishing, a division
of Reed Elsevier, Inc.*

10.2 - Supplier Agreement - Leiberman's Gallery, LLP*

10.3 - Agreement dated October 29, 2000 regarding Proposed China Joint Venture*

10.4 - John Punzo Employment Contract dated May 27, 1999*

10.5 - Oil and Gas Purchase Agreement between Sonoran Energy, Inc. and Longbow,
LLC for Emjayco Glide #33 Lease (dated October 5, 2002)(1)

10.6 - Oil and Gas Purchase Agreement between Sonoran Energy, Inc. and Longbow,
LLC for Keystone/Deer Creek Property (dated October 5, 2002)(21)

10.7 - Deer Creek Property Purchase Agreement (dated February 7, 2003)*

10.8 - Denverton Creek/Malton Black Butte/Maine Prairie/Lambie Ranch Field
Property Purchase Agreement (dated March 1, 2003)(1)

10.9 - Services Agreement between Sonoran and Paradigm (Punzo)(1)

14.1 - Code of Ethics

31.1 - Rule 13a-14a/15d-14(a) Certification by Chief
Executive Officer

31.2 - Rule
13a-14a/15d-14(a) Certification by Chief Financial Officer

32.1 - Section 1350 Certification by Chief Executive Officer

32.2 - Section 1350 Certification by Chief Financial Officer























































* Incorporated by reference (filed with Company's Form 10-SB on
January 14, 2000).

(1) Incorporated by reference (filed with Form 10KSB for the year
ended April 30, 2003)





















































(b) REPORTS ON FORM 8-K

























































The Company filed the following two Form 8-K during the 4th quarter:

























8-K filed on March
16, 2004 announcing that Sonoran Energy, Inc. (the "Company") has elected to cancel its proposed acquisition of
mineral rights in Peru and has declined to purchase BPZ Energy. The Company has
determined, after a review of information made available during the investigatory phase of the
contract, that the contemplated purchase would not be in its best interest.



ITEM 14. 
PRINCIPAL ACCOUNTANT FEES AND SERVICES

























































The following table sets forth the
aggregate fees billed from May 1, 2003 to April 30, 2004 by Cordovano & Harvey,
PC:



|                   |  |   |          
|------------------ |  | - | ---------
|Audit Fees         |  | $ | 7,750.00 
|Audit Related Fees |  | $ | 6,736.25 
|Tax Fees           |  | $ | 0        
|All Other Fees     |  | $ | 0        
|Total              |  | $ | 14,486.25



















































SIGNATURES



















































In accordance with Section 13 or 15(d) of the Exchange Act,the Registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.





















































SONORAN ENERGY, INC.

(Registrant)



















































October 4, 2004



By:    Peter Rosenthal































Peter Rosenthal























Director/President/CEO



KNOW ALL PERSONS BY THESE PRESENTS, that
each person whose signature appears below hereby severally constitutes and
appoints Peter Rosenthal and Rashid Rafidi, and each of them, his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution for him and in his name, place and stead, in any and all
capacities to sign any and all amendments to this Report, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite or necessary fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that each said attorneys-in-fact
and agents or any of them or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.



In accordance with the Exchange
Act, this Report has been signed below by the following persons on
behalf of registrant in the capacities and on the dates indicated.



|Signature                                     | Title                  | Date           
|--------------------------------------------- | ---------------------- | ---------------
|/s/
		Peter Rosenthal
		Peter
		Rosenthal     | President/CEO/Director | October 4, 2004
|/s/
		Christopher Pitman
		Christopher Pitman | Director               | October 4, 2004
|/s/
		Mehdi Varzi
		Mehdi
		Varzi             | Director               | October 4, 2004
|/s/
		Charles Waterman
		Charles
		Waterman   | Director               | October 4, 2004
|/s/
		Rasheed Rafidi
		Rasheed Rafidi         | Director/CFO           | October 4, 2004
|/s/
		Russ Costin
		Russ
		Costin             | Director/Controller    | October 4, 2004



Page 15

---

























Exhibit 31.1





|Pursuant to the
    requirements of Rule 13a-14 of the Securities Exchange Act of 1934, as
    amended,  provides the following certification.
         I,  Peter Rosenthal, President of Sonoran Energy, Inc. ("Company"), certify that:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.                                                                                                                                                                                                                                       
|2.                                                                                                                                                                                                                                       
|3.                                                                                                                                                                                                                                       
|4.                                                                                                                                                                                                                                       
|5.                                                                                                                                                                                                                                       

|a. | All significant
    deficiencies and material weaknesses  in the design or operation of internal control
    over financial reporting which are reasonably likely to adversely affect the
    Company's ability to record, process, summarize and report financial data;
    and
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|b. | Any fraud, whether or
    not material, that involves management or other employees who have a
    significant role in the Company's internal control over financial reporting; and                                                                                             
|  
|   |                                                                                                                                                                                                                                                                                 

|Date:
	October 4, 2004 | /s/ Peter Rosenthal        
|---------------------- | ---------------------------
|                       | Peter Rosenthal,  President
|                       |                            

---

Exhibit 31.2





|Pursuant to the
    requirements of Rule 13a-14 of the Securities Exchange Act of 1934, as
    amended,  provides the following certification.
         I, Rasheed Rafidi, Chief Financial Officer of Sonoran
    Energy, Inc. ("Company"), certify that:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.                                                                                                                                                                                                                                                       
|2.                                                                                                                                                                                                                                                       
|3.                                                                                                                                                                                                                                                       
|4.                                                                                                                                                                                                                                                       
|5.                                                                                                                                                                                                                                                       

|a. | All significant
    deficiencies and material weaknesses  in the design or operation of internal control
    over financial reporting which are reasonably likely to adversely affect the
    Company's ability to record, process, summarize and report financial data;
    and
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|b. | Any fraud, whether or
    not material, that involves management or other employees who have a
    significant role in the Company's internal control over financial reporting; and                                                                                             
|  
|   |                                                                                                                                                                                                                                                                                 

|Date:
	October 4, 2004 | /s/ Rasheed Rafidi  
|---------------------- | --------------------
|                       | Rasheed Rafidi,  CFO

---

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. Section 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of
Sonoran Energy, Inc. on Form 10-KSB for the year ending April 30, 2004, as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I,
Peter Rosenthal, President of the Company, certify, pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief: (1)
the Report fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and (2) the information contained in the Report
fairly presents, in all material respects, the financial condition and result of
operations of the Company.

/s/ Peter Rosenthal

Peter Rosenthal

President

October 4, 2004

---

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. Section 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of
Sonoran Energy, Inc. on Form 10-KSB for the year ending April 30, 2004, as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I,
Rasheed Rafidi, CFO of the Company, certify, pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief: (1)
the Report fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and (2) the information contained in the Report
fairly presents, in all material respects, the financial condition and result of
operations of the Company.

/s/ Rasheed Rafidi

Rasheed Rafidi

Chief Financial
Officer

October 4, 2004