---

UNITED STATESSECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2008

or

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

For the transition period from ______________ to ______________

Commission File Number 000-31503

EDEN ENERGY CORP.(Exact
name of registrant as specified in its charter)

|Nevada                                                               | N/A                              
|-------------------------------------------------------------------- | ---------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (IRS Employer Identification No.)
|                                                                     |                                  
|Suite 1680  200 Burrard Street, Vancouver, British
      Columbia   | V6C 3L6                          
|(Address of principal executive offices)                             | (Zip Code)                       

604-693-0179(Registrants telephone number,
including area code)

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

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

[ X ] YES [ ] NO

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a small
reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act

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

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act

[ ] YES [ X ] NO

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court.

[ ] YES [ ] NO

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the
issuers classes of common stock, as of the latest practicable date.
49,467,856 common shares issued and outstanding as of November13,
2008

---

PART 1  FINANCIAL INFORMATION

Item 1. Financial Statements.

Our unaudited interim consolidated financial statements for the
nine month period ended September 30, 2008 form part of this quarterly report.
They are stated in United States Dollars (US$) and are prepared in accordance
with United States generally accepted accounting principles.

---

EDEN ENERGY CORP.

(An Exploration Stage Company)

Consolidated Financial Statements (Expressed in United
States dollars)

September 30, 2008

(Unaudited)

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED STATEMENTS OF OPERATIONS

CONSOLIDATED STATEMENTS OF CASH FLOWS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

---

|Eden Energy Corp.             
|------------------------------
|(An Exploration Stage Company)
|Consolidated Balance Sheets   

|                                                                                      |   | September 30, |   |   | December 31, |  
|------------------------------------------------------------------------------------- | - | ------------- | - | - | ------------ | -
|                                                                                      |   | 2008          |   |   | 2007         |  
|                                                                                      |   | (Unaudited)   |   |   |              |  
|Assets                                                                                |   |               |   |   |              |  
|Current Assets                                                                        |   |               |   |   |              |  
|Cash and cash
      equivalents                                                       | $ | 4,883,498     |   | $ | 19,617,518   |  
|Accounts receivable                                                                   |   | 647,287       |   |   | 271,068      |  
|Prepaid expenses                                                                      |   | 91,846        |   |   | 97,654       |  
|Deferred financing costs                                                              |   | -             |   |   | 127,324      |  
|Total Current Assets                                                                  |   | 5,622,631     |   |   | 20,113,564   |  
|Oil and gas properties (Note 4)                                                       |   | 16,254,074    |   |   | 19,397,375   |  
|Restricted cash (Note 10)                                                             |   | 114,682       |   |   | 114,682      |  
|Property and
      equipment, net of depreciation                                     |   | 162,980       |   |   | 113,595      |  
|Total Assets                                                                          | $ | 22,154,367    |   | $ | 39,739,216   |  
|                                                                                      |   |               |   |   |              |  
|Liabilities and Stockholders Equity                                                  |   |               |   |   |              |  
|Current Liabilities                                                                   |   |               |   |   |              |  
|Accounts payable and accrued
      liabilities                                        | $ | 820,625       |   | $ | 2,440,031    |  
|Total Current Liabilities                                                             |   | 820,625       |   |   | 2,440,031    |  
|Asset retirement obligations (Note 5)                                                 |   | 231,506       |   |   | 113,262      |  
|Convertible notes,
      less unamortized discount of $nil (2007 - $430,776) (Note 8) |   | -             |   |   | 8,194,254    |  
|Total Liabilities                                                                     |   | 1,052,131     |   |   | 10,747,547   |  
|Contingencies and Commitments (Notes 2, 4, and 7)                                     |   |               |   |   |              |  
|Stockholders Equity                                                                  |   |               |   |   |              |  
|Preferred Stock:                                                                      |   |               |   |   |              |  
|10,000,000 preferred shares authorized, $0.001 par value                              |   |               |   |   |              |  
|None issued                                                                           |   | -             |   |   | -            |  
|Common Stock: (Note 9)                                                                |   |               |   |   |              |  
|100,000,000
      shares authorized, $0.001 par value                                 |   |               |   |   |              |  
|49,467,856 (December 31, 2007  42,763,326) shares issued and
      outstanding       |   | 49,468        |   |   | 42,763       |  
|Additional paid-in capital                                                            |   | 50,330,198    |   |   | 42,897,632   |  
|Accumulated other
      comprehensive income                                          |   | 35,113        |   |   | 35,176       |  
|Deficit accumulated prior to the
      exploration stage                              |   | (555,139      | ) |   | (555,139     | )
|Deficit accumulated during the
      exploration stage                                |   | (28,757,404   | ) |   | (13,428,763  | )
|Total
      Stockholders Equity                                                      |   | 21,102,236    |   |   | 28,991,669   |  
|Total Liabilities and Stockholders Equity                                            | $ | 22,154,367    |   | $ | 39,739,216   |  

The accompanying notes are an integral part of these
consolidated statements F-2

---

|Eden Energy Corp.                    
|-------------------------------------
|(An Exploration Stage Company)       
|Consolidated Statements of Operations
|(Unaudited)                          

|                                       |   |               |   |   |               |   |   |               |   |   |               |   |   | January 1, 2004       |  
|-------------------------------------- | - | ------------- | - | - | ------------- | - | - | ------------- | - | - | ------------- | - | - | --------------------- | -
|                                       |   |               |   |   |               |   |   |               |   |   |               |   |   | (Date of Inception of |  
|                                       |   | Three Months  |   |   | Three Months  |   |   | Nine Months   |   |   | Nine Months   |   |   | Exploration Stage)    |  
|                                       |   | Ended         |   |   | Ended         |   |   | Ended         |   |   | Ended         |   |   | To                    |  
|                                       |   | September 30, |   |   | September 30, |   |   | September 30, |   |   | September 30, |   |   | September 30,         |  
|                                       |   | 2008          |   |   | 2007          |   |   | 2008          |   |   | 2007          |   |   | 2008                  |  
|                                       |   |               |   |   |               |   |   |               |   |   |               |   |   |                       |  
|Revenue                                |   |               |   |   |               |   |   |               |   |   |               |   |   |                       |  
|Oil and gas                            | $ | 525,464       |   | $ | 1,802         |   | $ | 1,985,268     |   | $ | 42,060        |   | $ | 2,050,260             |  
|                                       |   |               |   |   |               |   |   |               |   |   |               |   |   |                       |  
|Expenses                               |   |               |   |   |               |   |   |               |   |   |               |   |   |                       |  
|                                       |   |               |   |   |               |   |   |               |   |   |               |   |   |                       |  
|Consulting                             |   |               |   |   |               |   |   |               |   |   |               |   |   |                       |  
|- cash-based                           |   | -             |   |   | -             |   |   | -             |   |   | -             |   |   | 635,030               |  
|- stock-based compensation             |   | 3,384         |   |   | 36,955        |   |   | 9,269         |   |   | 110,865       |   |   | 770,121               |  
|Debt conversion expense (Note 8)       |   | -             |   |   | -             |   |   | 3,605,000     |   |   | -             |   |   | 3,605,000             |  
|Depletion, depreciation and            |   |               |   |   |               |   |   |               |   |   |               |   |   |                       |  
|amortization                           |   | 280,636       |   |   | 46,673        |   |   | 1,008,251     |   |   | 154,993       |   |   | 1,477,996             |  
|General and administrative             |   |               |   |   |               |   |   |               |   |   |               |   |   |                       |  
|- cash-based                           |   | 225,917       |   |   | 100,095       |   |   | 647,207       |   |   | 380,244       |   |   | 2,421,997             |  
|- stock-based compensation             |   | 3,076         |   |   | 6,058         |   |   | 8,426         |   |   | 18,174        |   |   | 32,658                |  
|Impairment loss on oil and gas         |   |               |   |   |               |   |   |               |   |   |               |   |   |                       |  
|properties (Note 4)                    |   | 682,841       |   |   | -             |   |   | 9,903,643     |   |   | -             |   |   | 12,175,805            |  
|Interest expense                       |   | 112,884       |   |   | 48,895        |   |   | 771,443       |   |   | 186,482       |   |   | 6,733, 693            |  
|Management fees                        |   |               |   |   |               |   |   |               |   |   |               |   |   |                       |  
|- cash-based                           |   | 114,526       |   |   | 115,500       |   |   | 400,809       |   |   | 346,500       |   |   | 1,438,837             |  
|- stock-based
      compensation       |   | 88,467        |   |   | 170,559       |   |   | 269,860       |   |   | 484,139       |   |   | 2,337,652             |  
|Oil and gas operating expenses         |   | 114,451       |   |   | 1,970         |   |   | 646,623       |   |   | 23,563        |   |   | 690,757               |  
|Production taxes                       |   | 23,529        |   |   | -             |   |   | 87,701        |   |   | -             |   |   | 90,439                |  
|Professional
      fees                |   | 45,805        |   |   | 62,341        |   |   | 185,960       |   |   | 141,965       |   |   | 898,806               |  
|                                       |   |               |   |   |               |   |   |               |   |   |               |   |   |                       |  
|Operating expenses                     |   | 1,695,516     |   |   | 589,046       |   |   | 17,544,192    |   |   | 1,846,925     |   |   | 33,308,791            |  
|                                       |   |               |   |   |               |   |   |               |   |   |               |   |   |                       |  
|Loss before other items                |   | (1,170,052    | ) |   | (587,244      | ) |   | (15,558,924   | ) |   | (1,804,865    | ) |   | (31,258,531           | )
|                                       |   |               |   |   |               |   |   |               |   |   |               |   |   |                       |  
|Other items                            |   |               |   |   |               |   |   |               |   |   |               |   |   |                       |  
|                                       |   |               |   |   |               |   |   |               |   |   |               |   |   |                       |  
|(Loss) gain on foreign exchange        |   | 3,136         |   |   | 22,807        |   |   | (2,051        | ) |   | 105,692       |   |   | 123,235               |  
|Loss on disposal of equipment          |   | -             |   |   | (1,544        | ) |   | -             |   |   | (1,544        | ) |   | (1,544                | )
|Interest
      income                  |   | 36,157        |   |   | 301,270       |   |   | 232,334       |   |   | 800,669       |   |   | 2,379,436             |  
|                                       |   |               |   |   |               |   |   |               |   |   |               |   |   |                       |  
|Net loss                               |   | (1,130,759    | ) |   | (264,711      | ) |   | (15,328,641   | ) |   | (900,048      | ) |   | (28,757,404           | )
|                                       |   |               |   |   |               |   |   |               |   |   |               |   |   |                       |  
|Other comprehensive (loss) income      |   |               |   |   |               |   |   |               |   |   |               |   |   |                       |  
|                                       |   |               |   |   |               |   |   |               |   |   |               |   |   |                       |  
|Foreign currency translation           |   |               |   |   |               |   |   |               |   |   |               |   |   |                       |  
|adjustment                             |   | (98           | ) |   | 39,880        |   |   | (63           | ) |   | 10,932        |   |   | 35,113                |  
|                                       |   |               |   |   |               |   |   |               |   |   |               |   |   |                       |  
|Comprehensive loss                     | $ | (1,130,857    | ) | $ | (224,831      | ) | $ | (15,328,704   | ) | $ | (889,116      | ) | $ | (28,722,291           | )
|                                       |   |               |   |   |               |   |   |               |   |   |               |   |   |                       |  
|                                       |   |               |   |   |               |   |   |               |   |   |               |   |   |                       |  
|Basic and diluted
      loss per share | $ | (0.02         | ) | $ | (0.01         | ) | $ | (0.32         | ) | $ | (0.02         | ) |   |                       |  
|                                       |   |               |   |   |               |   |   |               |   |   |               |   |   |                       |  
|Weighted average number of             |   |               |   |   |               |   |   |               |   |   |               |   |   |                       |  
|common shares outstanding              |   | 48,122,000    |   |   | 42,430,000    |   |   | 48,112,000    |   |   | 42,296,000    |   |   |                       |  

The accompanying notes are an integral part of these
consolidated statements F-3

---

|Eden Energy Corp.                    
|-------------------------------------
|(An Exploration Stage Company)       
|Consolidated Statements of Cash Flows
|(Unaudited)                          

|                                                                 |   |               |   |   |               |   |   | January 1,         |  
|---------------------------------------------------------------- | - | ------------- | - | - | ------------- | - | - | ------------------ | -
|                                                                 |   |               |   |   |               |   |   | 2004               |  
|                                                                 |   |               |   |   |               |   |   | (Date of Inception |  
|                                                                 |   | Nine Months   |   |   | Nine Months   |   |   | of Exploration     |  
|                                                                 |   | Ended         |   |   | Ended         |   |   | Stage) To          |  
|                                                                 |   | September 30, |   |   | September 30, |   |   | September 30,      |  
|                                                                 |   | 2008          |   |   | 2007          |   |   | 2008               |  
|                                                                 |   |               |   |   |               |   |   |                    |  
|Cash provided by (used in):                                      |   |               |   |   |               |   |   |                    |  
|                                                                 |   |               |   |   |               |   |   |                    |  
|Operating Activities:                                            |   |               |   |   |               |   |   |                    |  
|Net loss                                                         | $ | (15,328,641   | ) | $ | (900,048      | ) | $ | (28,757,404        | )
|                                                                 |   |               |   |   |               |   |   |                    |  
|Non-cash items:                                                  |   |               |   |   |               |   |   |                    |  
|                                                                 |   |               |   |   |               |   |   |                    |  
|Impairment of oil and gas properties                             |   | 9,903,643     |   |   | -             |   |   | 12,175,805         |  
|Interest expense relating
      to accretion of convertible debt |   | 430,746       |   |   | -             |   |   | 5,227,245          |  
|Interest
      expense paid by issue of common stock             |   | 248,336       |   |   | 261,625       |   |   | 1,327,221          |  
|Depletion, depreciation
      and amortization                   |   | 1,008,251     |   |   | 154,993       |   |   | 1,477,996          |  
|Loss on
      disposal of equipment                              |   | -             |   |   | 1,544         |   |   | 1,544              |  
|Stock-based compensation                                         |   | 287,555       |   |   | 613,178       |   |   | 3,376,712          |  
|Debt
      conversion expense                                    |   | 3,605,000     |   |   | -             |   |   | 3,605,000          |  
|                                                                 |   |               |   |   |               |   |   |                    |  
|Changes in non-cash operating assets
      and liabilities:      |   |               |   |   |               |   |   |                    |  
|                                                                 |   |               |   |   |               |   |   |                    |  
|Accounts
      receivable                                        |   | (376,219      | ) |   | (10,227       | ) |   | (421,518           | )
|Prepaid expenses and
      other                                 |   | 5,808         |   |   | (89,002       | ) |   | (91,846            | )
|Accounts payable and
      accrued liabilities                   |   | (35,188       | ) |   | (230,541      | ) |   | 98,995             |  
|                                                                 |   |               |   |   |               |   |   |                    |  
|                                                                 |   | (250,709      | ) |   | (198,478      | ) |   | (1,980,250         | )
|                                                                 |   |               |   |   |               |   |   |                    |  
|Investing Activities:                                            |   |               |   |   |               |   |   |                    |  
|Net assets acquired of Frontier Explorations Ltd.                |   | -             |   |   | -             |   |   | (475               | )
|Restricted cash                                                  |   | -             |   |   | 860,656       |   |   | (114,682           | )
|Proceeds from sale of oil and gas interest                       |   | -             |   |   | 200,000       |   |   | -                  |  
|Purchase of property and equipment                               |   | (83,086       | ) |   | (14,298       | ) |   | (222,047           | )
|Oil and gas
      property acquisition and exploration, net      |   | (9,039,092    | ) |   | (872,690      | ) |   | (25,779,961        | )
|                                                                 |   |               |   |   |               |   |   |                    |  
|                                                                 |   | (9,122,178    | ) |   | 173,668       |   |   | (26,117,165        | )
|                                                                 |   |               |   |   |               |   |   |                    |  
|Financing Activities:                                            |   |               |   |   |               |   |   |                    |  
|Issuance of common stock, net
      of issuance costs            |   | 37,500        |   |   | -             |   |   | 29,842,370         |  
|Repayment of convertible notes                                   |   | (5,398,570    | ) |   | -             |   |   | (5,398,570         | )
|Proceeds from convertible notes                                  |   | -             |   |   | -             |   |   | 8,502,000          |  
|                                                                 |   |               |   |   |               |   |   |                    |  
|                                                                 |   | (5,361,070    | ) |   | -             |   |   | 32,945,800         |  
|                                                                 |   |               |   |   |               |   |   |                    |  
|Effect of exchange rate changes on cash                          |   | (63           | ) |   | 10,931        |   |   | 35,113             |  
|                                                                 |   |               |   |   |               |   |   |                    |  
|(Decrease) increase in cash and cash
      equivalents           |   | (14,734,020   | ) |   | (13,879       | ) |   | 4,883,498          |  
|                                                                 |   |               |   |   |               |   |   |                    |  
|Cash and cash equivalents, beginning                             |   | 19,617,518    |   |   | 23,438,355    |   |   | -                  |  
|                                                                 |   |               |   |   |               |   |   |                    |  
|Cash and cash equivalents, ending                                | $ | 4,883,498     |   | $ | 23,424,476    |   | $ | 4,883,498          |  
|                                                                 |   |               |   |   |               |   |   |                    |  
|Non-cash financing and investing
      activities:               |   |               |   |   |               |   |   |                    |  
|Interest capitalized to oil and gas properties                   | $ | -             |   | $ | 689,148       |   | $ | 1,257,104          |  
|Issue of common stock for interest
      expense                 | $ | 248,336       |   | $ | 261,625       |   | $ | 1,851,824          |  
|Issue of common shares for oil and gas properties                | $ | -             |   | $ | -             |   | $ | 450,000            |  
|Issue of convertible debenture, net
      of discount            | $ | -             |   | $ | -             |   | $ | 400,000            |  
|Debt assumed
      by previous management                        | $ | -             |   | $ | -             |   | $ | 19,846             |  
|                                                                 |   |               |   |   |               |   |   |                    |  
|Supplementary disclosure:                                        |   |               |   |   |               |   |   |                    |  
|Interest paid                                                    | $ | -             |   | $ | 322           |   | $ | 1,505              |  
|Income taxes
      paid                                          | $ | -             |   | $ | -             |   | $ | -                  |  

The accompanying notes are an integral part of these
consolidated statements F-4

---

|Eden Energy Corp.                             
|----------------------------------------------
|(An Exploration Stage Company)                
|September 30, 2008                            
|Notes to the Consolidated Financial Statements
|(Unaudited)                                   

|1. | Basis of Presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The unaudited interim consolidated financial statements
      have been prepared by Eden Energy Corp. (the Company) in accordance with
      generally accepted accounting principles in the United States for interim
      financial information and conforms with instructions to Form 10-Q of
      Regulation S-K and reflects all adjustments (all of which are normal and
      recurring in nature) that, in the opinion of management, are necessary for
      fair presentation of the interim periods presented. The results of
      operations for the interim periods presented are not necessarily
      indicative of the results to be expected for any subsequent quarter or for
      the entire year ending December 31, 2008. Certain information and footnote
      disclosures normally included in financial statements prepared in
      accordance with generally accepted accounting principles in the United
      States have been condensed or omitted. These unaudited interim
      consolidated financial statements and notes included herein should be read
      in conjunction with the Companys audited consolidated financial
      statements and notes for the year ended December 31, 2007, included in the
      Companys Annual Report on Form 10-KSB. The accounting principles applied
      in the preparation of these interim consolidated financial statements are
      consistent with those applied for the year ended December 31,
  2007.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|2. | Nature and Continuance of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The Company is involved in oil and gas exploration,
      development and production activities in Alberta, Canada, and Colorado and
      Nevada, USA.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The Companys interim consolidated financial statements
      are prepared on a going concern basis in accordance with generally
      accepted accounting principles in the United States which contemplates the
      realization of assets and discharge of liabilities and commitments in the
      normal course of business. The Company has experienced negative cash flows
      from operations to date and has accumulated losses of $28,757,404 since
      inception of the exploration stage. To date the Company has funded
      operations through the issuance of capital stock and debt. Managements
      plan is to continue raising additional funds through future equity or debt
      financings as needed until it achieves profitable operations from its oil
      and gas activities. The ability of the Company to continue its operations
      as a going concern is dependent on continuing to raise sufficient new
      capital to fund its exploration and development commitments and to fund
      ongoing losses if, as and when needed, and ultimately on generating
      profitable operations.                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|3. | Recently Issued Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | In May 2008, the Financial Accounting Standards Board
      (FASB) issued SFAS No. 163, Accounting for Financial Guarantee
      Insurance Contracts  An interpretation of FASB Statement No. 60. SFAS
      163 requires that an insurance enterprise recognize a claim liability
      prior to an event of default when there is evidence that credit
      deterioration has occurred in an insured financial obligation. It also
      clarifies how Statement 60 applies to financial guarantee insurance
      contracts, including the recognition and measurement to be used to account
      for premium revenue and claim liabilities, and requires expanded
      disclosures about financial guarantee insurance contracts. It is effective
      for financial statements issued for fiscal years beginning after December
      15, 2008, except for some disclosures about the insurance enterprises
      risk-management activities. SFAS 163 requires that disclosures about the
      risk-management activities of the insurance enterprise be effective for
      the first period beginning after issuance. Except for those disclosures,
      earlier application is not permitted. The adoption of this statement is
      not expected to have a material effect on the Companys financial
      statements.                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | In May 2008, the FASB issued SFAS No. 162, The Hierarchy
      of Generally Accepted Accounting Principles. SFAS 162 identifies the
      sources of accounting principles and the framework for selecting the
      principles to be used in the preparation of financial statements of
      nongovernmental entities that are presented in conformity with generally
      accepted accounting principles in the United States. It is effective 60
      days following the SECs approval of the Public Company Accounting
      Oversight Board amendments to AU Section 411, The Meaning of Present
      Fairly in Conformity With Generally Accepted Accounting Principles. The
      adoption of this statement is not expected to have a material effect on
      the Companys financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | In March 2008, the Financial Accounting Standards Board
      (FASB) issued SFAS No. 161, Disclosures about Derivative Instruments
      and Hedging Activities  an amendment to FASB Statement No. 133. SFAS No.
      161 is intended to improve financial standards for derivative instruments
      and hedging activities by requiring enhanced disclosures to enable
      investors to better understand their effects on an entity's financial
      position, financial performance, and cash flows. Entities are required to
      provide enhanced disclosures about: (a) how and why an entity uses
      derivative instruments; (b) how derivative instruments and related hedged
      items are accounted for under Statement 133 and its related
      interpretations; and (c) how derivative instruments and related hedged
      items affect an entitys financial position, financial performance, and
      cash flows. It is effective for financial statements issued for fiscal
      years beginning after November 15, 2008, with early adoption encouraged.
      The adoption of this statement is not expected to have a material effect
      on the Companys financial statements.                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | In December 2007, the FASB issued SFAS No. 141R,
      Business Combinations. This statement replaces SFAS 141 and defines the
      acquirer in a business combination as the entity that obtains control of
      one or more businesses in a business combination and establishes the
      acquisition date as the date that the acquirer achieves control. SFAS 141R
      requires an acquirer to recognize the assets acquired, the liabilities
      assumed, and any non-controlling interest in the acquiree at the
      acquisition date, measured at their fair values as of that date. SFAS 141R
      also requires the acquirer to recognize contingent consideration at the
      acquisition date, measured at its fair value at that date. This statement
      is effective for fiscal years, and interim periods within those fiscal
      years, beginning on or after December 15, 2008. Earlier adoption is
      prohibited. The adoption of this statement is not expected to have a
      material effect on the Company's financial
statements.                                                                                                                                                                                                                                                                                                                                                                                                                       

---

|Eden Energy Corp.                             
|----------------------------------------------
|(An Exploration Stage Company)                
|September 30, 2008                            
|Notes to the Consolidated Financial Statements
|(Unaudited)                                   

|3. | Recently Issued Accounting Pronouncements
    (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | In December 2007, the FASB issued SFAS No. 160,
      Non-controlling Interests in Consolidated Financial Statements
      Liabilities  an Amendment of ARB No. 51. This statement amends ARB 51 to
      establish accounting and reporting standards for the Non-controlling
      interest in a subsidiary and for the deconsolidation of a subsidiary. This
      statement is effective for fiscal years, and interim periods within those
      fiscal years, beginning on or after December 15, 2008. Earlier adoption is
      prohibited. The adoption of this statement is not expected to have a
      material effect on the Company's future financial statements.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4. | Oil and Gas Properties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The Companys oil and gas acquisition, exploration and
      development activities are as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

| |                                    |  | September 30, 2008 |   |  | December 31, 2007 |  
| | ---------------------------------- |  | ------------------ | - |  | ----------------- | -
| |                                    |  |                    |   |  | United            |  
| |                                    |  | Canada             |   |  | States            |  
| |                                    |  | $                  |   |  | $                 |  
| | Proven Properties                  |  |                    |   |  |                   |  
| | Acquisition costs                  |  | -                  |   |  | 1,526,048         |  
| | Exploration costs                  |  | -                  |   |  | 13,512,480        |  
| | Less:                              |  |                    |   |  |                   |  
| | Accumulated depletion              |  | -                  |   |  | (841,998          | )
| | Accumulated impairment costs       |  | -                  |   |  | (3,064,213        | )
| |                                    |  | -                  |   |  | 11,132,317        |  
| |                                    |  |                    |   |  |                   |  
| | Unproven Properties                |  |                    |   |  |                   |  
| | Acquisition costs                  |  | 62,571             |   |  | 3,141,699         |  
| | Exploration costs                  |  | 2,043,587          |   |  | 8,985,492         |  
| | Less:                              |  |                    |   |  |                   |  
| | Accumulated
      impairment costs |  | (1,462,24          |   |  | (7,649,351        | )
| |                                    |  | 1                  | ) |  |                   |  
| |                                    |  | 643,917            |   |  | 4,477,840         |  
| |                                    |  |                    |   |  |                   |  
| | Net Carrying Value                 |  | 643,917            |   |  | 15,610,157        |  

All of the Companys oil and gas
properties are located in the United States and Canada.

Depletion expense  Proven
Properties

Depletion expense for the nine month
period ended September 30, 2008 of $841,998 (2007 - $nil) was recorded in the
U.S. cost center and $nil (2007 - $nil) was recorded in the Canadian cost
center. None of the Companys unproven properties are subject to depletion.

Impairment costs  Proven
Properties

| | (a) | During the nine month period ended September 30, 2008,
      the Companys proven property costs in Colorado (Ant Hill Project) were
      considered impaired resulting in a $614,353 non-cash impairment
    loss.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                     
| | (b) | During the nine month period ended September 30, 2008,
      the Companys proven property costs in Nevada (Noah Project) were
      considered impaired resulting in a $2,449,860 non-cash impairment
    loss.    

Impairment costs  Unproven
Properties

| | (c) | During the nine month period ended September 30, 2008,
      the Companys unproven property costs in Nevada (Noah Project) were
      considered impaired resulting in a $5,963,235 non-cash impairment
    loss.        
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                           
| | (d) | During the nine month period ended September 30, 2008,
      the Companys unproven property costs in Nevada (Cherry Creek Project)
      were considered impaired resulting in a $876,195 non-cash impairment
      loss.

---

|Eden Energy Corp.                             
|----------------------------------------------
|(An Exploration Stage Company)                
|September 30, 2008                            
|Notes to the Consolidated Financial Statements
|(Unaudited)                                   

|4. | Oil and Gas Properties (continued)                                                                             
|-- | ---------------------------------------------------------------------------------------------------------------
|   |                                                                                                                
|   | The Companys unproven acquisition and exploration costs
      were incurred in the following geographic
areas:

| |                                                          |  | September 30, |  |  | December 31, | 
| | -------------------------------------------------------- |  | ------------- |  |  | ------------ | 
| |                                                          |  | 2008          |  |  | 2007         | 
| |                                                          |  | $             |  |  | $            | 
| | Chinchaga Project, Alberta                               |  | 643,917       |  |  | 635,247      | 
| | Canada                                                   |  | 643,917       |  |  | 635,247      | 
| | Noah Project, Nevada                                     |  | -             |  |  | 6,239,372    | 
| | Cherry Creek Project, Nevada                             |  | -             |  |  | 852,286      | 
| | Ant Hill Unit Drilling and Development Project, Colorado |  | 4,477,840     |  |  | 11,670,470   | 
| | United
      States                                      |  | 4,477,840     |  |  | 18,762,128   | 
| | Total unproven acquisition and exploration costs         |  | 5,121,757     |  |  | 19,397,375   | 

|5. | Asset Retirement Obligations                                                                                  
|-- | --------------------------------------------------------------------------------------------------------------
|   |                                                                                                               
|   | A reconciliation between the opening and closing asset
      retirement obligations balance is provided
below:

| |                                          |  | Nine Months Ended |  |  | Year Ended   | 
| | ---------------------------------------- |  | ----------------- |  |  | ------------ | 
| |                                          |  | September 30,     |  |  | December 31, | 
| |                                          |  | 2008              |  |  | 2007         | 
| |                                          |  | $                 |  |  | $            | 
| |                                          |  |                   |  |  |              | 
| | Beginning asset retirement obligations   |  | 113,262           |  |  | -            | 
| | Liabilities incurred                     |  | 113,016           |  |  | 113,016      | 
| | Deletions related to property disposals  |  | -                 |  |  | -            | 
| | Accretion                                |  | 5,228             |  |  | 246          | 
| |                                          |  |                   |  |  |              | 
| | Total asset
      retirement obligations |  | 231,506           |  |  | 113,262      | 

|6. | Related Party Transactions
|-- | --------------------------
|   |                           
|   | (a)                       
|   |                           
|   | (b)                       
|   |                           
|   | (c)                       
|   |                           
|   | (d)                       

Related party transactions are measured
at the exchange amount which is the amount of consideration established and
agreed to by the related parties.

|7. | Commitments
|-- | -----------
|   |            
|   | (a)        

---

|Eden Energy Corp.                             
|----------------------------------------------
|(An Exploration Stage Company)                
|September 30, 2008                            
|Notes to the Consolidated Financial Statements
|(Unaudited)                                   

|7. | Commitments (continued)
|-- | -----------------------
|   |                        
|   | (b)                    

|2008 | $ | 42,972  | 
|---- | - | ------- | 
|2009 |   | 114,592 | 
|2010 |   | 171,888 | 
|2011 |   | 174,828 | 
|2012 |   | 120,472 | 
|     |   |         | 
|     | $ | 624,752 | 

|8. | Convertible Notes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | On August 25, 2005, the Company issued Convertible
      Promissory Notes (the Notes) to certain institutional investors with a
      principal amount of $9,075,000, and 907,500 Series A detachable share
      purchase warrants. The Notes bear interest at 6% per annum, mature on
      August 25, 2008, and may be converted into 1,815,000 shares of common
      stock on the basis of one share of common stock for every $5 in value of
      Notes (the Conversion Price). Each warrant is exercisable into one share
      of common stock at an exercise price of $6 per share (the Exercise
      Price) until August 25, 2008. The Company paid cash placement fees of
      $544,500, offering costs of $28,500 and issued 72,600 Broker Warrants.
      Each Broker Warrant is exercisable into one share of common stock at an
      exercise price of $6 per share until August 28, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The Conversion Price and the Exercise Price are subject
      to adjustments under certain conditions and events occurring, including
      the issue of common stock and common stock equivalents, by way of private
      placements, at a price per share less than the Conversion Price or
      Exercise Price. Accordingly, upon the completion of a financing on
      February 24, 2006, the Conversion Price was reduced from $5.00 to $4.32,
      and the Exercise Price was reduced from $6.00 to $5.04.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | In accordance with EITF 98-5 Accounting for Convertible
      Securities with Beneficial Conversion Features or Contingently Adjustable
      Conversion Ratios, the Company recognized the value of the embedded
      beneficial conversion feature of $3,854,490 as additional paid-in capital
      as the debt was issued with an intrinsic value conversion feature. In
      addition, in accordance with EITF 00-27 Application of Issue No. 98-5 to
      Certain Convertible Instruments, the Company allocated the proceeds of
      issuance between the convertible debt and the detachable warrants based on
      their relative fair values. Accordingly, the Company recognized the fair
      value of the detachable warrants of $2,039,490 as additional paid-in
      capital. The Company recorded further interest expense over the term of
      the Convertible Debentures of $2,039,490 resulting from the difference
      between the stated value and carrying value at the date of
  issuance.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | During the year ended December 31, 2005, a debenture with
      a principal amount of $450,000 was converted into 90,000 shares of common
      stock. The unamortized balance of the related embedded equity elements of
      $92,704 was charged to interest expense in 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | On January 17, 2008, and February 8, 2008 the Company
      entered into a Note and Warrant Amendment Agreement (Amendment) with
      five of the holders of the convertible debt, whereby the terms of the 6%
      convertible debt due August 25, 2008 were amended. Upon their election to
      participate and pursuant to the Amendment, the conversion price for the
      notes upon 100% conversion has been amended to $0.50 (86% of the closing
      bid of the last 5 trading days of 2007), the term of their warrants has
      been amended to expire on August 25, 2009, and the exercise price of the
      warrants has been amended to $1.00, unless the warrants are exercised
      within 30 business days of the closing date of the Amendment, in which
      case the exercise price of the warrants shall be $0.50. On February 22,
      2008, the Company issued 75,000 shares of common stock upon the exercise
      of 75,000 warrants at $0.50. The Company issued 4,438,798 shares of common
      stock, and recognized interest expense equal to the unamortized balance of
      the related embedded equity elements of $104,925 upon the conversion of
      principal of $2,198,383 and accrued interest of $21,016. Additional
      accrued interest for one of the note holders of $34,450 incurred to the
      date of conversion has been added to the principal amount. The balance of
      their Convertible Debentures and related accrued interest outstanding has
      been adjusted such that it is convertible into shares at a price of $0.65
      per share. Pursuant to FAS 84 Induced Conversions of Convertible Debt
      (FAS 84) the Company recognized a debt conversion expense of $2,403,000
      equal to the fair value of all securities and other consideration
      transferred in the transaction in excess of the fair value of securities
      issuable pursuant to the original conversion terms as aresult of the
      Amendment. The Company also paid a commission of $67,220 for brokerage
      services.

---

|Eden Energy Corp.                             
|----------------------------------------------
|(An Exploration Stage Company)                
|September 30, 2008                            
|Notes to the Consolidated Financial Statements
|(Unaudited)                                   

|8. | Convertible Notes (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | On March 13, 2008, the Company entered into a Note and
      Warrant Amendment Agreement (Second Amendment) with one of the holders
      of the convertible debt, whereby the terms of the 6% convertible debt due
      August 25, 2008 were amended. Upon their election to participate and
      pursuant to the Second Amendment, the conversion price for the notes upon
      100% conversion has been amended to $0.70 (approximately 80% of the
      closing price of the last 5 trading days ending February 29, 2008), the
      term of their warrants has been amended to expire on August 25, 2009, and
      the exercise price of the warrants has been amended to $1.10, unless the
      warrants are exercised within 30 business days of the closing date of the
      Second Amendment, in which case the exercise price of the warrants shall
      be $0.70. The Company issued 726,667 shares of common stock, and
      recognized interest expense equal to the unamortized balance of the
      related embedded equity elements of $24,384 upon the conversion of
      principal of $500,000 and accrued interest of $8,667. Pursuant to FAS 84
      the Company recognized a debt conversion expense of $556,000 equal to the
      fair value of all securities and other consideration transferred in the
      transaction in excess of the fair value of securities issuable pursuant to
      the original conversion terms as a result of the Second Amendment. The
      Company also paid a commission of $15,260 for brokerage
services.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | On April 2, 2008, the Company entered into a Note and
      Warrant Amendment Agreement (Third Amendment) with two of the holders of
      the convertible debt, whereby the terms of the 6% convertible debt due
      August 25, 2008 were amended. Upon their election to participate and
      pursuant to the Third Amendment, the conversion price for the notes upon
      100% conversion has been amended to $0.70 (approximately 80% of the
      closing price of the last 5 trading days ending February 29, 2008), the
      term of their warrants has been amended to expire on August 25, 2009 and
      the exercise price of the warrants has been amended to $1.10, unless the
      warrants are exercised within 30 business days of the closing date of the
      Third Amendment, in which case the exercise price of the warrants shall be
      $0.70. The Company issued 836,786 shares of common stock, and recognized
      interest expense equal to the unamortized balance of the related embedded
      equity elements of $14,313 upon the conversion of principal of $562,500
      and accrued interest of $23,250. Pursuant to FAS 84 the Company recognized
      an expense of $646,000 equal to the fair value of all securities and other
      consideration transferred in the transaction in excess of the fair value
      of securities issuable pursuant to the original conversion terms as a
      result of the Third Amendment. The Company also paid a commission of
      $17,694 for brokerage services.                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Upon the completion of the conversions described above,
      those notes and warrants held by noteholders who chose not to participate
      in the amendments were repriced such that the conversion price of their
      notes has been reduced from $4.32 to $3.86 and the exercise price of their
      warrants has been reduced from $5.04 to $4.48. The number of potential
      shares issuable underlying the notes outstanding increased to
      approximately 5,293,644. On August 25, 2008, all of the outstanding notes
      were repaid.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | On August 25, 2008, the Company repaid the remaining
      $5,398,567 principal outstanding and issued 297,614 shares of common stock
      in lieu of cash interest payments with a value of $77,379. On June 2,
      2008, the Company issued 329,665 shares of common stock in lieu of cash
      interest payments with a value of $118,020. On June 1, 2007, the Company
      issued 242,245 shares of common stock in lieu of cash interest payments
      with a value of $261,625, and on December 1, 2007, the Company issued
      332,886 shares of common stock in lieu of cash interest payments with a
      value of $262,979. On December 1, 2006, the Company issued 149,466 shares
      of common stock in lieu of cash interest payments with a value of
      $263,060. Interest expense of $430,746 (2007 - $484,590) was accreted
      during the nine month period ended September 30, 2008. Interest expense of
      $Nil (nine months ended September 30, 2007 - $689,148) was capitalized to
      the Ant Hill Unit property during the period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|9. | Capital Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | During the nine months ended September 30, 2008, the
      Company issued the following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

| | (a) | On January 16, 2008, the Company issued 2,435,698 shares
      of common stock upon the conversion of $1,217,849 of principal and
      interest relating to the convertible debentures referred to in Note
    8.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                   
| | (b) | On February 7, 2008, the Company issued 2,003,100 shares
      of common stock upon the conversion of $1,001,550 of principal and
      interest relating to the convertible debentures referred to in Note
    8.
| |     |                                                                                                                                                                                                                   
| | (d) | On February 19, 2008, the Company issued 75,000 common
      shares upon the exercise of 75,000 warrants at $0.50 per share for
      proceeds of $37,500.                                                        
| |     |                                                                                                                                                                                                                   
| | (d) | On March 13, 2008, the Company issued 726,667 shares of
      common stock upon the conversion of $508,667 of principal and interest
      relating to the convertible debentures referred to in Note 8.          
| |     |                                                                                                                                                                                                                   
| | (e) | On April 2, 2008, the Company issued 836,786 shares of
      common stock upon the conversion of $585,750 of principal and interest
      relating to the convertible debentures referred to in Note 8.           
| |     |                                                                                                                                                                                                                   
| | (f) | On June 2, 2008, the Company issued 329,665 shares of
      common stock in settlement of accrued interest on convertible debentures
      of $118,020.                                                           
| |     |                                                                                                                                                                                                                   
| | (g) | On August 25, 2008, the Company issued 297,614 shares of
      common stock upon the conversion of $77,379 of interest relating to the
      convertible debentures referred to in Note 8.                        

---

|Eden Energy Corp.                             
|----------------------------------------------
|(An Exploration Stage Company)                
|September 30, 2008                            
|Notes to the Consolidated Financial Statements
|(Unaudited)                                   

|9. | Capital Stock (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | During the nine months ended September 30, 2007, the
      Company issued the following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | (h)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Stock Options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Effective May 1, 2005, the Company amended its stock
      option plan (the Amended 2004 Stock Option Plan) to issue up to
      3,000,000 shares of common stock. The plan allows for the granting of
      share purchase options at a price of not less than fair value of the stock
      and for a term not to exceed five years. The total number of options
      granted to any person shall not exceed 5% of the issued and outstanding
      common stock of the Company. Effective December 20, 2007 the Company
      amended its stock option plan (the Amended 2004 Stock Option Plan) to
      issue up to 4,276,332 shares of common stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | During the nine month period ended September 30, 2008,
      the Company granted stock options to directors, officers, consultants, and
      employees to acquire up to 992,000 shares of common stock exercisable at
      $0.60 per share on or before January 22, 2013 pursuant to the Amended 2004
      Stock Option Plan. One-third of the options vest on April 30, 2008,
      one-third vest on August 31, 2008 and the final one-third vest on December
      31, 2008. The closing market price of the stock on the grant date was
      $0.62 per share. The fair value for options granted was estimated at the
      date of grant to be $353,913 using the Black-Scholes option-pricing model
      with the following weighted average assumptions: expected life of 2.61
      years, risk-free rate of 2.10% and expected volatility of 96%. The
      weighted average fair value of these stock options granted was $0.36 per
      share. During the nine month period ended September 30, 2008, the Company
      recorded stock-based compensation of $269,860 as management fees, $9,269
      as consulting fees and $8,426 as payroll expense.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | A summary of the Companys stock option activity for the
      nine month period ended September 30, 2008 is as
follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

| |                                       |  |           |  |   |                |  |  | Weighted    |  |   |           | 
| | ------------------------------------- |  | --------- |  | - | -------------- |  |  | ----------- |  | - | --------- | 
| |                                       |  |           |  |   |                |  |  | Average     |  |   |           | 
| |                                       |  |           |  |   | Weighted       |  |  | Remaining   |  |   | Aggregate | 
| |                                       |  | Number of |  |   | Average        |  |  | Contractual |  |   | Intrinsic | 
| |                                       |  | Options   |  |   | Exercise Price |  |  | Life        |  |   | Value     | 
| | Outstanding, December 31, 2007        |  | 2,524,000 |  | $ | 1.95           |  |  | 3.16        |  |   |           | 
| | Granted                               |  | 992,000   |  |   | 0.60           |  |  |             |  |   |           | 
| | Outstanding, September 30, 2008       |  | 3,516,000 |  | $ | 1.57           |  |  | 3.20        |  | $ | -         | 
| | Exercisable,
      September 30, 2008 |  | 3,185,333 |  | $ | 1.67           |  |  | 2.81        |  | $ | -         | 

A summary of the status of the
Companys unvested stock options as of September 30, 2008, and changes during
the nine month period ended September 30, 2008, is presented below:

| |                                |  |           |   |   | Weighted-        | 
| | ------------------------------ |  | --------- | - | - | ---------------- | 
| |                                |  |           |   |   | Average          | 
| |                                |  | Number of |   |   | Grant-Date       | 
| | Unvested options               |  | Shares    |   |   | Fair
      Value | 
| |                                |  |           |   |   |                  | 
| | Unvested at January 1, 2008    |  | 66,667    |   | $ | 0.61             | 
| | Granted                        |  | 992,000   |   |   | 0.36             | 
| | Vested                         |  | (728,000  | ) |   | 0.38             | 
| |                                |  |           |   |   |                  | 
| | Unvested at September 30, 2008 |  | 330,667   |   | $ | 0.36             | 

As at September 30, 2008, there was
$93,895 of total unrecognized compensation cost related to unvested share-based
compensation arrangements granted under the Amended 2004 Stock Option Plan. That
cost is expected to be recognized over a weighted-average period of 0.25
years.

Share Purchase Warrants

On January 17, 2008, and February 8,
2008, the Company entered into a Note and Warrant Amendment Agreements
(Amendment) with six of the holders of the convertible debt, whereby the terms
of the convertible debt described in Note 8 were amended. Upon their election to
participate and pursuant to the Amendment, the term of 219,838 of the
noteholders warrants has been amended to expire on August 25, 2009, and the
exercise price of the warrants has been amended to $1.00, unless the warrants
are exercised within 30 business days of the closing date of the Amendment, in
which case the exercise price of the warrants shall be $0.50. On February 22,
2008, the Company issued 75,000 shares of common stock upon the exercise of
75,000 warrants at $0.50.

---

|Eden Energy Corp.                             
|----------------------------------------------
|(An Exploration Stage Company)                
|September 30, 2008                            
|Notes to the Consolidated Financial Statements
|(Unaudited)                                   

|9. | Capital Stock (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Share Purchase Warrants (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | On March 13, 2008, the Company entered into a Note and
      Warrant Amendment Agreement (Second Amendment) with one of the holders
      of the convertible debt, whereby the terms of the convertible debt
      described in Note 8 were amended. Upon their election to participate and
      pursuant to the Second Amendment, the term of 50,000 of the noteholders
      warrants has been amended to expire on August 25, 2009, and the exercise
      price of the warrants has been amended to $1.10, unless the warrants are
      exercised within 30 business days of the closing date of the Second
      Amendment, in which case the exercise price of the warrants shall be
      $0.70. No warrants were exercised at $0.70.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | On April 2, 2008, the Company entered into a Note and
      Warrant Amendment Agreement (Third Amendment) with two of the holders of
      the convertible debt, whereby the terms of the convertible debt described
      in Note 8 were amended. Upon their election to participate and pursuant to
      the Third Amendment, the term of 56,250 of the noteholders warrants has
      been amended to expire on August 25, 2009, and the exercise price of the
      warrants has been amended to $1.10, unless the warrants are exercised
      within 30 business days of the closing date of the Third Amendment, in
      which case the exercise price of the warrants shall be $0.70. No warrants
      were exercised at $0.70.    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Upon the completion of the conversions described above,
      those warrants held by noteholders who chose not to participate in the
      amendments were repriced such that the exercise price of their warrants
      has been reduced from $5.04 to $4.48. These 308,012 warrants expired on
      August 25, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The following table summarizes the continuity of the
      Companys warrants:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

| |                                   |  |            |   |   | Weighted       | 
| | --------------------------------- |  | ---------- | - | - | -------------- | 
| |                                   |  | Number of  |   |   | Average        | 
| |                                   |  | Shares     |   |   | Exercise Price | 
| |                                   |  |            |   |   |                | 
| | Balance, December 31, 2007        |  | 16,436,176 |   | $ | 4.30           | 
| | Issued                            |  | -          |   |   | -              | 
| | Expired                           |  | (308,012   | ) | $ | 4.48           | 
| | Exercised                         |  | (75,000    | ) | $ | 0.50           | 
| |                                   |  |            |   |   |                | 
| | Balance, September
      30, 2008 |  | 16,053,164 |   | $ | 4.13           | 

At September 30, 2008, the following
share purchase warrants were outstanding:

| | Number of Warrants |  |   | Exercise Price |  |  | Expiry Date       | 
| | ------------------ |  | - | -------------- |  |  | ----------------- | 
| |                    |  |   |                |  |  |                   | 
| | 490,838            |  | $ | 1.00           |  |  | August 25, 2009   | 
| | 106,250            |  | $ | 1.10           |  |  | August 25, 2009   | 
| | 7,728,038          |  | $ | 3.25           |  |  | February 16, 2009 | 
| | 7,728,038          |  | $ | 5.25           |  |  | February 16, 2009 | 

|10. | Restricted Cash                                                                                                            
|--- | ---------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                            
|    | As at September 30, 2008, restricted cash consists of
      $114,682 (CAD$112,500) for security for corporate credit cards.
|    |                                                                                                                            
|11. | Subsequent Events                                                                                                          
|    |                                                                                                                            
|    | (a)                                                                                                                        
|    |                                                                                                                            
|    | (b)                                                                                                                        

---

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

Forward-Looking Statements

This quarterly report contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance. In
some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable
terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors", that may cause our or our industry's actual results, levels of
activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected
in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to
update any of the forward-looking statements to conform these statements to actual results.

Our consolidated unaudited financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should
be read in conjunction with our consolidated financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our
actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report,
particularly in the section entitled "Risk Factors" of this quarterly report.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars. All references to "CDN$" refer to Canadian dollars and all references to "common shares" refer to the
common shares in our capital stock.

As used in this quarterly report, the terms "we", "us", "our" and "Eden" mean Eden Energy Corp. and/or our subsidiaries, unless otherwise indicated.

Overview

Until recently we have been an exploration stage oil and gas company engaged in the exploration for petroleum and natural gas in the State of Nevada and in the Province of Alberta, Canada. Effective September 2006 we
commenced with a development-drilling program in the White River Dome, Ant Hill Unit located in the Piceance Basin in Colorado. As reported on July 28, 2008 the White River Dome, Ant Hill project in Colorado has become our primary focus due to our
belief it represents the combination of good commercial returns while providing a large number of low risk development locations.

Over the past year Eden has grown its natural gas and oil production substantially and management believes it has the ability to continue growing production by drilling already identified locations on its leases in
Colorado. With our first four wells on line, net production from continuing operations for the quarter ended September 30, 2008 increased to approximately 63,300 Mcfe as compared to approximately 1,000 Mcfe for the same quarter in 2007. We have
drilled four new wells this summer drilling season, which are currently being tied in to production and which will bring our total number of producing wells in the area to eight.

Our objective is to increase stockholder value by pursuing a strategy of economically growing reserves and production through the development of our existing Colorado property. Additionally management plans to continue
to review other potential exploration projects, which may be presented to them from time to time.

Our company, Eden Energy Corp., was incorporated in the State of Nevada on January 29, 1999, under the name E-Com Technologies Corp. On June 16, 2004 we effected a 2 for 1 stock split of our common stock and our

---

preferred stock. On August 6, 2004 we changed our name to Eden
Energy Corp. and increased our authorized capital to 100,000,000 shares of
common stock having a $0.001 par value and 10,000,000 shares of preferred stock
having a $0.001 par value.

Due to the implementation of
British Columbia Instrument 51-509 on September 30, 2008 by the British Columbia
Securities Commission, we have been deemed to be a British Columbia based
reporting issuer. As such, we are required to file certain information and
documents at www.sedar.com.

Our Current Business

Eden Energy Corp. is primarily
focused and engaged in development drilling of the White River Dome, Ant Hill
Unit Project in Colorado. We expect to continue to monitor our exploration
projects pursuant to our participation agreements with our partners.

White River Dome, Ant Hill Unit Drilling and Development
Project  Colorado

The White River Dome, Ant Hill
Project is a development-drilling program located in the Piceance Basin of
western Colorado. Effective September 1, 2006, through our wholly owned
subsidiary Eden Energy Colorado LLC, we entered into a farm-in agreement with
Starlight Oil and Gas LLC and Starlight Corporation under which Eden and
Starlight would undertake development drilling on the eastern flank of the White
River Dome field located in T2N-R96&97W, Rio Blanco County, Colorado. Under
the terms of the agreement, Eden has paid Starlight a prospect fee of $900,000.
Starlight will participate for a 10% working interest and Eden will have a 75%
working interest in the prospective lands. Starlight will retain a 7.5% gross
overriding royalty on the lands.

On August 31, 2007, we entered
into an agreement with Starlight Oil & Gas LLC and Starlight Operating
Company, Inc. (Starlight) whereby Starlight shall assign to Eden all of its
rights, title, and interests in both the Ant Hill Drilling and Development
Agreement with EnCana and the related Participation Agreement with Eden.

The terms of the agreement are as
follows:

| | (i)   | Our company shall withdraw its demand for arbitration
      with prejudice;                                                                                                                                                                                                                                                                        
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                    
| | (ii)  | Our company agrees to make no claims against Starlight
      Operating Company, Inc. or Starlight Oil & Gas LLC for any obligations
      with regard to the completion of the existing wells and drilling of any
      future wells per the terms of the EnCana Drilling & Development
      Agreement and Starlight/Eden Participation Agreement;
| |       |                                                                                                                                                                                                                                                                                                                                                    
| | (iii) | Starlight Oil & Gas LLC shall assign to Eden Energy
      Colorado LLC all of its right, title and interest in and to the Drilling
      and Development Agreement with EnCana Oil & Gas (U.S.A.), Inc., dated
      May 1, 2006, as amended;                                                                                                      
| |       |                                                                                                                                                                                                                                                                                                                                                    
| | (iv)  | Starlight Oil & Gas LLC shall assign to Eden Energy
      Colorado all of its right, title and interest in and to the Participation
      Agreement with our company dated September 1, 2006;                                                                                                                                                      
| |       |                                                                                                                                                                                                                                                                                                                                                    
| | (v)   | Starlight Oil & Gas LLC will assign to Eden Energy
      Colorado all of its right, title and interest in and to its working
      interests in the Love Federal 17-21 and 17-42 wells and lands earned
      thereby;                                                                                                                             
| |       |                                                                                                                                                                                                                                                                                                                                                    
| | (vi)  | The overriding royalty interests created pursuant to the
      Participation Agreement shall be conveyed as
follows:                                                                                                                                                                                                                               

|a. | Melange International, LLC | 0.5% of 8/8ths        
|-- | -------------------------- | ----------------------
|b. | Durango Petroleum Corp.    | 0.5% of 8/8ths        
|c. | Monarch Royalty LLC        | 0.5% of 8/8ths        
|d. | Timothy E. Macke           | 0.5% of 8/8ths        
|e. | H.J. Kagie                 | 0.5% of 8/8ths        
|f. | Joseph R. Pope             | 0.5% of 8/8ths        
|g. | Brian S. Bentley           | 0.5% of 8/8ths        
|h. | Eden Energy Colorado LLC   | any remaining override

---

In the event that the Existing
Burdens on any tract are such that when taken together an 80% net revenue
interest cannot be retained by our company then the portion of the override
being delivered to Timothy E. Macke, H.J. Kagie, Joseph R. Pope and Brian S.
Bentley shall be proportionately reduced in order to deliver the 80% net revenue
lease. Our company shall continue to make such additional conveyances to the
owners of those overriding royalties as may be necessary or convenient to insure
the same are accounted for and paid in a timely manner. Royalties will continue
to be disbursed directly by EnCana or by the subsequent operator of record for
the Ant Hill Unit.

The White River Dome, Ant Hill
Unit is a 17,276 acre federal exploratory unit currently operated by EnCana Oil
and Gas (USA). Under a Drilling and Development Agreement executed between
Starlight (a private Colorado company) and EnCana on May 5, 2006, and which
Eden, effective August 31, 2007, became sole participant through Starlights
assignment as detailed above, Eden agreed to drill a minimum of four additional
wells in areas outside of the current Participating Areas (PAs), which
commenced in the fall of 2006. The wells were drilled on 160 acre drilling
blocks typically encompassing standard governmental quarter sections. By
drilling and completing these wells, the existing federal exploratory unit will
remain in effect for several more years. Eden carried EnCana for 15% of the
total well cost in each new well drilled on 40-acre drill site quarter/quarter
section. For each well drilled, Eden earned a 100% interest in a diagonal
40-acre tract, located in the same 160-acre quarter section. EnCana retains its
100% interest in the two remaining offset locations in each 160 acre drilling
block.

After the initial four locations
were drilled, Eden may elect to develop additional 160-acre drilling blocks on
any acreage outside the existing PAs under the same terms. There are 34
potential 160-acre drilling blocks outside of the existing PAs that have not
been developed, resulting in 68 potential drilling locations on what is
effectively 40-acre spacing. There is also the potential to develop the field on
20-acre spacing, which would provide for another 68 drilling locations.

The primary targets are the Cameo
Coal and Williams Fork Sandstones of the Cretaceous Mesaverde Group, found at an
average depth of 8,100 feet. Cumulative production from the field is in excess
of 65 BCF from 157 wells, with current production averaging 11 MMCF/D from 100
active wells. Typical well life in the field is in the range of 20  25 years.
Eden currently estimates ultimate reserves per well to be approximately 1.40
Bcfe per well, with an initial production rate of approximately 1,000 mcfd. Gas
from the Ant Hill unit typically contains about 25% carbon dioxide, which is
removed at a local natural gas treatment plant. Drilling and completion costs
are estimated to be in the $2,000,000 range per well throughout the field.
Operations in the White River Dome Field are largely prohibited in the winter
months.

The first well (Love Federal
17-42) under the agreement spud on September 21, 2006 and took 13 days to drill
and set production casing. The second well (Love Federal 17 -21) spud on October
8, 2006 and took 12 days to drill and set production casing. Once both wells
were cased the rig was released for the winter. Fracture stimulation commenced
on Well 1 October 28, 2006 and Well 2 November 4, 2006.

In December 2006, we announced
the tie-in of these first two wells and that they had good sand and coal
thicknesses in the order of other proven wells in the field. These first two
wells were completed using modern frac techniques designed to increase fracture
half lengths from less than 100 feet traditionally to greater than 300 feet. The
Love Federal 17-21 has experienced high water production rates, which has
naturally restricted the flow of gas. The Love Federal 17- 42 was completed in
the Cameo coal section only and despite our subsequent scaling treatment
procedure was still compromised. Both wells have subsequently been recompleted
as detailed following.

---

On October 10, 2007, we reported
spudding well AHU #18 - 23 with an expected 12 days drilling to reach
approximately 8000 feet. Upon completion the rig immediately moved to the AHU
#8-12 location. After drilling to total depth of approximately 8000 feet, the
wells were logged and the rig released. A completion rig was moved on to
fracture stimulate the wells and put them into production. AHU #18  23 went
into production on January 8, 2008 and AHU #8 - 12 went into production on
February 4, 2008.

We also reported that workover
operations on the LF 17-21 well began on October 9, 2007. The plan called for
the lowermost perforations of the well to be tested for water production and
isolated from the remainder of the Cameo and Williams Fork section, following
which the well was placed back on production and the completion rig moved to the
LF 17-42. The recompletion program for the LF 17-42 consisted of new
perforations and fracture treatments over previously bypassed zones in the
Williams Fork as well as re-perforations over zones in the Cameo, which we
believed had additional potential. Once completed it was placed back in
production. On December 31, 2007 we reported on the progress of these wells and
subsequently again on March 31, 2008 as follows:

AHU 18-23. Completion operations
on the 18-23 well were finalized in late December and the well was tied in to
sales on January 8, 2008. Peak initial production on this well was 796 MCFD on
January 10, 2008 and as of March 3, 2008 the well is producing at approximately
415 MCFD.

AHU 8-12. Completion operations
on the 8-12 well were finalized in February and the well was tied into sales on
February 4, 2008. Peak stabilized initial production was 1,785 MCFD on February
20, 2008 and as of March 3, 2008 the well is producing at approximately 1,750
MCFD.

LF 17-21. Recompletion
operations do not appear to have been successful on this well, possibly due to
damage caused during the initial completion operations. As of March 3, 2008 the
well is producing 46 MCFD.

LF 17-42. The 17-42 well was
tied in to sales on December 30, 2007 and produced at a peak daily rate of 1,772
MCFD on January 1, 2008. As of March 3, 2008 the well is producing at
approximately 496 MCFD. The 17-42 was the second of Edens wells to be
recompleted after initial completion results were deemed less than
satisfactory.

On April 28, 2008 we reported our
first four White River Dome wells to be tied-in and producing approximately 1900
mcfd net to Edens working interest. We also reported we have commissioned an
independent reserve report and they are awaiting pricing information from the
unit operator in order to finalize. On May 16, 2008 we reported receipt of the
independent reserve report from MHA Petroleum Consultants Inc., of Golden,
Colorado. The report assigned total proved reserves of 5.46 Bcfe net to Edens
interest with a PV10 value of $14.28 million, using first quarter-end actual
received gas and oil prices as mandated by the SEC. Net to Eden, the report
assigned proved developed producing (PDP) reserves of 1.99 Bcfe with a PV10
value of $8.4 million and proved undeveloped (PUD) reserves of 3.47 Bcfe with a
PV10 value of $5.88 million.

On July 28, 2008 we reported the
White River Dome project has become the Companys primary focus due to our
belief it represents the combination of good commercial returns while providing
a large number of low risk development locations. We have drilled 4 new wells in
the White River Dome field in the 2008 drilling season.

On November 5, 2008 we reported
two of the 4 new wells are tied-in to sales and are flowing through restricted
chokes. The remaining two wells are expected to be tied-in by mid to late
November. As of November 3, 2008 we are producing approximately 2400 mcfd gross
from six of eight of our White River Dome wells. We reported on the progress of
these wells as follows:

AHU 21-22. The 21-22 well was
drilled to a total depth of 7585 feet. A total gross interval of 923 feet of
gas-bearing sand and coal was fracture stimulated in four stages. The well began
producing on October 26, 2008 at an initial rate of 1310 mcfd and 380 bwpd on a
24/64s choke with a flowing tubing pressure of 950 psi and flowing casing
pressure of 1650 psi.

---

AHU 7-43. The 7-43 well was
drilled to a total depth of 7611 feet and a total gross interval of 640 feet of
gas-bearing sand and coal was fracture stimulated in two stages. The well was
put on production on October 31, 2008 at an initial rate of 1390 mcfd and 625
bwpd on a 24/64s choke with a flowing tubing pressure of 750 psi and flowing
casing pressure of 1500 psi.

AHU 28-44. The 28-44 was drilled
to a total depth of 7285 feet and a total gross interval of 977 feet of
gas-bearing sand and coal was fracture stimulated in four stages. On October 27,
2008, after flowing back 100% of its frac fluid, the well was flowing 308 mcfd
and 512 bwpd on a 24/64s choke with a flowing tubing pressure of 420 psi and
flowing casing pressure of 1550 psi. The well is currently shut in waiting on
completion of a pipeline. The Company expects to have this well on production by
the middle of November 2008.

AHU 13-43. The 13-43 well was
drilled to a total depth of 6885 feet and a total gross interval of 632 feet of
gas-bearing sand and coal was fracture stimulated in three stages. As of
November 3, 2008 the well is currently flowing back at 638 mcfd and 450 barrels
per day of frac fluid on an 18/64s choke with a flowing tubing pressure of 850
psi and flowing casing pressure of 1775 psi. The well is currently shut in
waiting on completion of a pipeline. The Company expects to have this well on
production by the end of November 2008.

Net production from continuing
operations for the quarter ended September 30, 2008 increased to approximately
63,300 Mcfe as compared to approximately 1,000 Mcfe for the same quarter in
2007. We expect to fund future drilling using reserve-based financing and plan
to update our independent reserve report at year-end after the new 2008 wells
are completed and producing. We expect to provide further updates at that
time.

Noah Project - Nevada

On August 5, 2004, by way of an
Assignment Agreement, we acquired Fort Scott Energy Corp.s (Fort Scott)
interest in a Participation Agreement dated April 26, 2004 with Cedar Strat
Corporation (Cedar Strat). The Fort Scott/Cedar Strat Participation Agreement
deals with the acquisition and development of petroleum and natural gas rights
and leases in an area of mutual interest in eastern Nevada. We named this area
of approximately 211,000 gross acres, the Noah Project.

The Assignment Agreement provides
for Fort Scott to retain a 2% over-riding royalty in the area of mutual interest
and the following considerations:

| | (i)   | the issuance to Fort Scott of 500,000 shares of
      our common stock;                                                                                                                                                                                                                                                                                                                                                     
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (ii)  | the issuance to Fort Scott of 7% interest bearing
      Promissory Note and Convertible Debenture ($0.25 conversion rate) Units in
      the principal amount of $500,000. Each Unit entitled Fort Scott to the
      issuance of one common share in our capital stock and one half of one
      warrant, with each whole warrant entitling Fort Scott to acquire one
      additional common share at $0.50 per share; and
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (iii) | for each 10 million barrels of proven reserves on the
      lands underlying the leases, we will issue to Fort Scott 1,000,000 shares
      of common stock, up to a maximum of 10,000,000 shares of common stock.                                                                                                                                                                                                          

The debenture was converted and
the associated warrants were exercised for cash in fiscal 2005. Fort Scott
retains its 2% over-riding royalty interest on the lands underlying the leases,
such that upon the fulfillment of the obligations set out in the Participation
Agreement, we will earn an 80.5% net revenue interest in the lands underlying
the leases, and Cedar Strat will be vested with a 5% over-riding royalty
interest. Cedar Strat also retains a 5% back-in working interest which may be
adjusted upwards to as much as a 12.5% back-in working interest should we elect
not to proceed with the drilling election pursuant to the terms of the
Participation Agreement.

Exploration conducted since
acquiring Fort Scotts interest includes the acquisition of proprietary and
licensed gravity and magnetic data, processing and interpreting 39 miles of
proprietary and other trade licensed seismic data, and the integration of all
sub-surface and surface geology, gravity, magnetic, and seismic data.

---

On March 1, 2007, we entered into a Letter Agreement with Cedar Strat whereby the future development plan of the Noah project was confirmed and approximately 21,000 acres of peripheral leases were transferred to Cedar
Strat.

Effective March 29, 2007, we entered into an Amendment to the Participation Agreement with Cedar Strat for this prospect. Under the terms of the Amendment, our acreage block at Noah has been divided into four Prospect
Areas with each Prospect Area encompassing approximately 50,000 acres of leases. The Prospect Areas are designated Prospect Area 1 to 4 sequentially from north to south. The Amendment calls for the Prospect Areas to be worked sequentially from North
to South by us either, 1) electing to drill an initial test well within the designated Prospect Area, 2) electing to drill a subsequent well or wells within the designated Prospect Area or 3) electing to shoot a seismic program of no less than
twenty-five (25) linear miles in the next sequential untested Prospect Area. As agreed to we will initiate our sequential work by drilling an Initial Test Well in Prospect Area 1 to a depth of approximately 7,000 to 9,000 feet by no later than
November 30, 2008.

Under the terms of the Amendment, drilling or seismic operations shall begin within each specified Prospect Area no later than 12 months following the required election date (as follows) unless extended by both parties
acting reasonably. We shall have ninety (90) days from release of either the drilling rig or completion rig, whichever is later, of the Initial Test Well in the designated Prospect Area, to elect to either drill a Subsequent Well(s) in the Prospect
Area or shoot a Seismic Program in the next untested Prospect Area. We shall have 180 days from the release of the seismic crew to elect to drill an Initial Test Well in the newly designated Prospect Area or elect to shoot a Seismic Program in the
next untested Prospect Area.

Under the terms of the Amendment if we drill an Initial Test Well or Subsequent Well(s) to the base of the sub-thrust Devonian Formation or 17,000 feet, whichever is shallower, we will retain all rights, title and
interest in all leases and lands within that particular Prospect Area. In each Prospect Area that we drill an Initial Test Well or Subsequent Well(s) to a depth shallower than the base of the sub-thrust Devonian or 17,000 feet, we shall retain all
rights, title and interest in all leases and lands within the Prospect Area, to a depth of 1,000 feet below the base of the deepest Formation penetrated. If in this case we elect not to drill a Subsequent Well then we will offer all deeper rights in
the leases within the Prospect Area to Cedar Strat and Cedar Strat shall have 90 days from receipt of such notice in which to exercise this option. Failure of Cedar Strat to exercise its option within such 90 day period shall be deemed as a waiver
of its option right.

Should we elect not to drill an Initial Test Well in Prospect Areas 2, 3, or 4 we shall, at Cedar Strats option, relinquish and assign to Cedar Strat, all right, title and interest in all leases and lands subject
to the Participation Agreement lying within the specific Prospect Area, within 90 days after receiving written notice from Cedar Strat of its intent to exercise its option. Cedar Strats right to exercise its option shall also be for a 90 day
period after receiving written notice from us of our election not to drill the Prospect Area. Failure of Cedar Strat to exercise its option within such 90 day period shall be deemed as a waiver of its option right.

Rental payments on the initial acreage and any subsequently acquired acreage will be maintained by us during this development period, except on any acreage which Cedar Strat may elect to acquire pursuant to the exercise
of its options.

Effective March 29, 2007, we entered into a Farm Out Agreement with Midland Texas based Fasken Nevada - 1, LLC and Fasken Oil and Ranch LP, privately held companies (the Partner) for the drilling of the Noah
prospect as defined in the Amendment to the Participation Agreement with Cedar Strat. The Partner will pay 2/3rds of the cost to drill, test and complete the first well in the first Prospect Block and Eden will pay 1/3rd. The Partner acts as
operator. Upon drilling and completing the first well in Prospect Area 1 the Partner will be assigned a 50% interest in Edens leases in Prospect Area 1 as provided for in the Amendment to the Participation Agreement with Cedar Strat.

Provided the Partner has met its obligations in Prospect Area 1, it shall have the option to proceed to develop Prospect Area 2. If it elects to proceed with developing Prospect Area 2, the Partner shall pay a prospect
recovery fee of $2,000,000 to Eden for costs incurred on Prospect Area 1 and shall have the right to earn a 50% interest in the Prospect Area by paying 2/3rds of any seismic programs and the drilling and completing to casing

---

point of a second well. Thereafter, the Partner shall continue to have the right to earn in subsequent Prospect Areas under the same terms but with no further prospect recovery fees.

The first well under the Agreement, the Noah Federal #1 was staked and was expected to be drilled to a total depth of between 7,000 and 9,000 feet, for an estimated cost of $4,000,000 of which we would pay 1/3rd. On
July 9, 2007, we reported the Partner received approval on the required Federal and State permits to drill the well. On July 10, 2007, the Partner advised us that they received approval from the BLM in Ely for the gravel pit(s) for commencement of
road and location construction. On October 4, 2007, we reported that on the advice of our Partner/operator due to the onset of winter conditions, the spudding of the Noah Federal No. 1 well was rescheduled to Spring 2008.

On March 4, 2008, we reported our joint venture partner in the Noah Prospect in White Pine County, Nevada, advised the Company that they had signed a drilling agreement with Badger Drilling Companys Rig No. 1
based out of Roosevelt, Utah. On March 26, 2008 we reported the spudding of the Noah Federal #1 well. On April 28, 2008 we reported the Noah Federal #1 well had been plugged and abandoned after reaching a total depth of 7,080 feet. The well
encountered its targeted formation, the sub-thrust Devonian Simonson dolomite, at a depth of 5,058 feet. Based on log analysis and the lack of oil or gas shows while drilling, the well did not warrant further testing.

On July 28, 2008 we reported our joint venture partner advised us they have elected not to pursue further exploration on additional Prospect area lands beyond the earned Prospect Area 1. We reported also that after
incorporating the results of the Noah well into our overall geological model of the area, we have decided not to pursue additional drilling leads and will not be renewing leases we hold in the project area. Accordingly, we have recognized total
impairment of $8,344,607 related to the Noah project during the nine month period ended September 30, 2008.

Pursuant to the Participation Agreement with Cedar Strat and upon their instruction, on October 27, 2008 we assigned our interest in all of the approximate 150,000 acres of leases in Prospect Areas 2 through 4 of the
Noah Prospect to Diamond Land, LLC, a Utah based Company. We expect to assign our interest in approximately 30,000 acres of Prospect Area 1 to our drilling Partner in the Block, while for the present time maintaining our interest in the remaining
approximately 10,000 acres of Prospect Area 1.

Cherry Creek Project - Nevada

On October 21, 2005, we entered into a separate Letter Agreement with Cedar Strat Corporation for the exploration and development of a new project called Cherry Creek. This agreement entitles our company or our Nevada
subsidiary, Southern Frontier Explorations Ltd., to acquire petroleum and natural gas rights and leases in an area of mutual interest (AMI) in northeastern Nevada.

Under the terms and conditions of this Letter Agreement, Cedar Strat will manage certain exploration programs within the AMI designed to bring the prospect to a drillable status. Cedar Strat has provided us with copies
of the exploration data to which Eden has paid Cedar Strat $216,000. Cedar Strats fieldwork has been completed.

Subject to election to drill, we must commence drilling within the AMI within 24 months of receipt by us of all of the exploration data from Cedar Strat, and thereafter must drill at least one development well per year
during the term of the agreement.

---

Effective January 24, 2006, we entered into a formal Joint Participation Agreement with Cedar Strat Corporation. Cedar Strat Corporation provided their acceptance to the formal Joint Participation Agreement on February
16, 2006. Pursuant to the Joint Participation Agreement we agreed to participate in Cedar Strats play included within the geographical boundaries of a confidential area, and pay Cedar Strat $750,000 as a prospect fee. We also agreed to
accept responsibility for acquiring and funding BLM leases and private fee leases, if applicable, in order to facilitate the exploration efforts. We assumed the obligation to pay the annual rental on such leases.

On March 14, 2006, we acquired at auction approximately 76,459 gross acres of oil and gas lease lands in northeastern Nevada for this project. Subsequent to March 14, 2006, adjustments reduced the number of acres to
approximately 69,982 gross acres. On September 30, 2006, we gave notice to surrender the low priority leases to Cedar Strat and retain approximately 18,500 gross acres of premium prospective leases. On December 12, 2006 we acquired approximately
2,500 additional gross acres of oil and gas leases at auction. Subsequent to December 12, 2006 we acquired additional leases from the BLM, some of which were not completed on by a buyer at a previous land sale. On March 1, 2007 we entered into a
Letter Agreement with Cedar Strat whereby approximately 2,500 acres of peripheral Cherry Creek acreage were transferred to Cedar Strat leaving us with approximately 26,000 gross acres of oil and gas leases at Cherry Creek.

Pursuant to the Joint Participation Agreement with Cedar Strat, election and subsequent commencement of a drilling program was to occur within 24 months of our assessing the viability of the prospect, unless said
assessment was delayed due to factors beyond our control, in which case the election was to be extended for such period of time as the parties may agree, acting reasonably. In recognizing that the drilling of the Noah Federal #1 well was rescheduled
for Spring 2008, and knowing that evaluation of these results was required in order to assess the viability of the prospect, we have been negotiating with Cedar Strat for an extension prior to proceeding further with exploration plans.

On July 28, 2008, subsequent to the Noah well drilling and after a careful review of the technical aspects of the project, we reported we have decided not to pursue further activities and will not be renewing leases we
hold in the project area. Accordingly, we have recognized total impairment of $876,195 related to the Cherry Creek project during the nine months ended September 30, 2008.

Pursuant to the Participation Agreement with Cedar Strat on October 7, 2008 we assigned our interest in all of the approximate 26,000 acres of leases in the Cherry Creek prospect to Cedar Strat Corporation.

Chinchaga Project  Alberta

On March 13, 2006, through our wholly owned subsidiary, Eden Energy (North) Ltd., we entered into a farm-in arrangement with Suncor Energy Inc. (Suncor) of Calgary, Alberta. The arrangement provided for Eden
to participate, with a 50% working interest and with other minor partners, in the cost to drill an exploratory well on approximately 18,000 gross acres of leases owned by Suncor while retaining options to drill a second well to earn additional
acreage. The exploration target was a dolomitized Slave Point reef at a depth of approximately 8,900 feet in Northwestern Alberta. Suncor retains a 12.5% gross overriding royalty on the lands, which are known as the Chinchaga area.

By drilling the first well, which was plugged and abandoned on January 22, 2007, Eden earned a 50% working interest in approximately 7,000 gross acres. We and our partners elected not to drill the Option Well or acquire
the Block 1  Option Lands nor purchase the additional Block 2 Option Lands that were available. The joint venture partners acquired an additional 1,279 gross acres at a February 8, 2007 land sale on which Eden holds a 55.56% working interest
due to one partner declining to participate in the land acquisition. Currently, Eden and its partners are evaluating the Farmout Lands earned from the first well and the other acquired lands in Chinchaga before making any further exploration
decisions.

On February 14, 2007, Eden entered into a separate farm-in arrangement with Suncor. Under the terms of this arrangement Eden participated with a 10% working interest, in the drilling of an exploratory well and earned a
10% working interest in approximately 9,600 gross acres. The exploration target was a dolomitized Slave Point reef at a depth of approximately 8,400 feet in northwestern Alberta, also known as Chinchaga. Suncor retains a 12.5% gross overriding
royalty on these lands. Eden acquired a 10% interest in an additional 5,120 gross acres of offsetting

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lands at an approximate gross cost of $600,000 to the joint venture partnership. These lands are subject to a 7.5% overriding royalty to Suncor. Eden also earned a first right of refusal to equalize to its proportionate share in another 5,760
gross acres held by Suncor.

The well spud on February 10, 2007 and reached final depth of 8,415 feet. On March 19, 2007, our partners and we reported the well was dry and was to be abandoned.

We have recognized total impairment of $1,462,241 related to the two dry wells. On October 4, 2007, we reported we plan to conduct additional seismic operations this winter and if warranted drill one new well at
Chinchaga the following winter drilling season.

In 2007 the Alberta government changed their oil and gas royalty assessment rates, and then subsequently announced they are reviewing some aspects of the changes. Due to the uncertainty and implications of these
changes, the Company and its partners have agreed to defer exploration decisions until such time as the matter is clarified.

On July 28, 2008 we reported we continue to monitor industry activity in the area before making further exploration or drilling decisions. At this time no further decisions on continuing exploration in the area have
been made.

Cash Requirements

For the next 12 months we plan to focus on our development-drilling program in Colorado. As reported on July 28, 2008 we expect to monitor our exploration projects as our joint venture agreements provide for. We expect
to review other potential exploration projects from time to time as they are presented to us.

In Colorado, we will hold 640 gross acres in our White River Dome development-drilling project once our current 2008 drilling program is completed. We expect to continue to hold only a minor number of leases with our
partner in Block 1 of the Noah project in Nevada, however at this time we do not expect to renew these leases in 2009. In Alberta we have interests in approximately 23,000 gross acres of leases pursuant to our joint venture exploration
agreements.

Our focus of activity is our development-drilling program in Colorado and over the next twelve-month period we have not budgeted for exploration expenditures.

We are currently budgeting for six development wells to be drilled in Colorado over the 2009 drilling season, however the number of wells to be drilled is subject to change based on managements assessment of
current and projected future economic conditions. Five of the six budgeted wells costs are included in the table of estimated expenditures for the next 12 month period. The total estimated cost of development in the Ant Hill Unit over the next 12
month period is approximately $11,400,000 including engineering reports, well permitting costs, and financing costs. We estimate based on current interpretations of typical well performance in the basin that our wells will provide cash inflow
for the period in the range of $2,000,000 to $2,500,000. As at September 30, 2008 we had received or accrued approximately $2,000,000 from gas, oil, and natural gas liquid sales from our first four wells. Future planned expenditures in
Colorado are expected to be tied to industry reserve based financing.

Our net cash used in financing activities during the nine months ended September 30, 2008 was $5,361,070 due to the repayment of convertible promissory notes. Our total net cash provided by financing since January
1, 2004, the date of inception of the exploration stage to September 30, 2008 was $32,945,800. We repaid the outstanding balance of approximately $5,398,570 on our convertible promissory notes when they matured on August 25, 2008.

We will require additional funds to implement our growth strategy in our gas development operations. These funds may be raised through equity financing, debt financing, or other sources, which may result in further
dilution in the equity ownership of our shares. There is still no assurance that we will be able to maintain operations

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at a level sufficient for an investor to obtain a return on his investment in our common stock. Further, we may continue to be unprofitable.

In order to proceed with our plans we have raised funds by way of a private placement of equity and debt securities in our company. Our initial offering consisted of 6,190,000 shares at a price of $0.50 per share
for gross proceeds of $3,095,000. We closed the private placement on November 12, 2004 and issued certificates on November 17, 2004. The net proceeds received have been used as working capital to allow us to finance our commitments under the
assignment agreement previously discussed. On November 24, 2004, we issued a further 20,000 shares at a price of $0.50 per share for gross proceeds of $10,000.

On April 5, 2005, we issued 3,840,067 shares and 1,920,035 share purchase warrants at a price of $1.50 per share for gross proceeds of $5,760,100. Each warrant entitles the holder to purchase an additional share
of common stock of our company at a price of $2.00 per share until April 4, 2006. On April 27, 2005, we issued 200,000 shares and 100,000 share purchase warrants at a price of $1.50 per share for gross proceeds of $300,000. Each warrant
entitles the holder to purchase an additional share of common stock of our company at a price of $2.00 per share until April 27, 2006. During the fiscal year ended December 31, 2005, 1,962,535 shares were issued on the exercise of 1,962,535
warrants, and on February 6, 2006 we issued the final 57,500 shares on the exercise of the final 57,500 warrants.

On August 25, 2005 we issued convertible promissory notes with a principal amount of $9,075,000, and 907,500 Series A detachable share purchase warrants. The notes bear interest at 6% per annum, mature
on August 25, 2008, and may be converted into 1,815,000 shares of common stock on the basis of one share of common stock for every $5 in value of Notes. Each warrant is exercisable into one share of common stock at an exercise price of $6
per share until August 25, 2008. The investors also have the option to make an additional investment of up to 30% of their original investment for 180 days after the closing date, on the same terms as the original investment. No further investments
were made under this option. On November 28, 2005, we issued 90,000 shares of common stock upon the conversion of a portion of our convertible promissory notes. On December 1, 2005 we issued 59,291 shares of common stock in lieu of a cash interest
payment on the convertible promissory notes. The Conversion Price and the Exercise Price are subject to adjustments under certain conditions and events occurring, including the issue of common stock and common stock equivalents at a price per share
less than the Conversion Price or Exercise Price. Upon the completion of the financing on February 24, 2006 the Conversion Price was reduced from $5.00 to $4.32, and the Exercise Price was reduced from $6.00 to $5.04. On June 1, 2006
we issued 113,258 shares of common stock in lieu of a cash interest payment on the convertible promissory notes. On December 1, 2006 we issued 149,466 shares of common stock in lieu of a cash interest payment on the convertible promissory notes. On
June 1, 2007 we issued 242,245 shares of common stock in lieu of a cash interest payment on the convertible promissory notes. On December 1, 2007 we issued 332,886 shares of common stock in lieu of a cash interest payment on the convertible
promissory notes. On June 2, 2008 we issued 329,665 shares of common stock in lieu of a cash interest payment on the convertible promissory notes.

On September 27, 2005, we issued 1,065,972 shares of common stock upon the exercise of 1,065,972 share purchase warrants at $0.50 per share for proceeds of $532,986. On November 8, 2005, we received a portion of
an initial project acquisition cost in the amount of US$667,000. On January 9, 2007 we received final payment relating to the same project divesture in the amount of US$200,000.

On February 17 and 23, 2006, we issued a combined total of 7,366,520 shares and 14,733,040 share purchase warrants at a price of $2.25 per share for gross proceeds of $16,574,670. The warrant entitles the
holders to purchase an additional 7,366,520 shares of common stock of our company at a price of $3.25 per share and an additional 7,366,520 shares of common stock at a price of $5.25 per share until February 16, 2009. On July 31, 2006 we
issued 165,774 shares of common stock pursuant to the financings registration requirements.

On January 17, 2008 and February 8, 2008 five Noteholders elected to convert Notes under a Note and Warrant Amendment Agreement (Amendment) at a conversion price of $0.50 (86% of the closing bid price of
the last 5 trading days of 2007). Pursuant to the Amendment the term of their Warrants has been amended to expire on August 25, 2009 and the exercise price of the Warrants has been amended to $1.00, unless the Warrants are exercised within 30
business days of the closing date of their Amendment dated January 17, 2008 and February 8, 2008 respectively, in which case the exercise price of the Warrants shall be $0.50. A total of $2,219,399 of principle

---

and accrued interest has been converted at a price of $0.50
whereby we issued 4,438,798 shares of our common stock. Under the terms of the
Amendment unconverted Notes held by one of the five Noteholders will be
convertible into shares at a price of $0.65 per share until Note maturity. We
also paid a commission of $67,220 for brokerage services. On February 19, 2008,
we issued 75,000 common shares upon the exercise of 75,000 warrants at $0.50 per
share for proceeds of $37,500.

On March 13, 2008, we entered
into a Note and Warrant Amendment Agreement with one of the holders of the Notes
whereby the terms of the 6% convertible debt due August 25, 2008 was amended.
Upon their election to participate and pursuant to the Amendment, the conversion
price for the notes upon 100% conversion was amended to $0.70 (approximately 80%
of the closing price of the last 5 trading days ending February 29, 2008), the
term of their warrants was amended to expire on August 25, 2009 and the exercise
price of the warrants was amended to $1.10, unless the warrants are exercised
within 30 business days of the closing date of the Amendment, in which case the
exercise price of the warrants shall be $0.70. We issued 726,667 shares of
common stock upon the conversion of principal and interest in the amount of
$508,667, and we paid a commission of $15,260 for brokerage services.

On April 2, 2008, we entered into
a Note and Warrant Amendment Agreement with two of the Note and Warrant holders
(accredited investors), whereby we amended the terms of the 6% Convertible
Promissory Notes due August 25, 2008. In regards to the Notes and Warrants held
by these investors, pursuant to the Note and Warrant Amendment Agreement, the
Conversion Price for the Notes has been amended to $0.70, the term of their
Warrants has been amended to expire on August 25, 2009 and the exercise price of
the Warrants has been amended to $1.10, unless the Warrants are exercised within
30 business days of the closing date of the Note and Warrant Amendment Agreement
dated April 2, 2008, in which case the exercise of the Warrants shall be $0.70.
Finally, the definition of Registrable Securities in the Registration Rights
Agreement has been amended to mean the shares of common stock issuable upon the
exercise of the Warrants. We issued 836,786 shares of our common stock to these
two accredited investors upon conversion of the Convertible Notes referred to
above. The aggregate amount of principal and interest converted by the investors
was $585,750. We paid a cash commission of $17,694 for brokerage services.

The Conversion Price of Notes and
the Exercise Price of Warrants held by Noteholders who elected not to
participate in the Amendment conversion are subject to adjustments under certain
conditions and events occurring, including the issue of common stock and common
stock equivalents at a price per share less than the Conversion Price or
Exercise Price. Upon the completion of the conversion of Notes pursuant to the
Amendments as described above, the Conversion Price of these Notes has been
reduced from $4.32 to $3.86 and the Exercise Price of these Warrants has been
reduced from $5.04 to $4.48. The number of potential shares issuable underlying
the Notes outstanding increases to approximately 5,293,644.

On August 25, 2008 we retired the
full outstanding balance due on the Convertible Promissory Notes in the
principal amount of $5,398,570 to nine Noteholders. We issued 297,614 common
shares to these same Noteholders in lieu of a final interest payment of $77,379.
On August 25, 2008, 308,012 warrants associated with the Note financing expired,
leaving 597,088 $1.00 or $1.10 warrants exercisable until August 25, 2009.

Over the next twelve months we
intend to expend funds to continue with development drilling in Colorado as
follows:

Estimated Net Expenditures During the Next Twelve
Months

|                                                      |  | $          | 
|----------------------------------------------------- |  | ---------- | 
|General, Administrative, and Corporate
      Expenses |  | 1,600,000  | 
|Ant Hill Development Drilling Interest Expense        |  | 700,000    | 
|Ant Hill Drilling Program                             |  | 10,700,000 | 
|Working Capital                                       |  | 2,000,000  | 
|Total                                                 |  | 15,000,000 | 

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We have suffered recurring losses
from operations. The continuation of our company is dependent upon our company
attaining and maintaining profitable operations and raising additional capital
as needed. In this regard we have raised additional capital through the equity
offerings noted above.

The continuation of our business
is dependent upon obtaining further financing, a successful program of
exploration and/or development, and, finally, achieving a profitable level of
operations. The issuance of additional equity securities by us could result in a
significant dilution in the equity interests of our current stockholders.
Obtaining commercial loans, assuming those loans would be available, will
increase our liabilities and future cash commitments.

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

Our business plan is now focused
on a strategy of maximizing the development of our gas leases and opportunities
in Colorado. The execution of our business plan in past largely focused on
acquiring prospective oil and gas leases, early stage exploration, drilling, and
evaluation of resultant data. While focused on development drilling in Colorado
we do expect to continue to monitor our exploration interests pursuant to our
current participation agreements, and review other potential exploration
projects from time to time as they may be presented to us.

Purchase of Significant Equipment

We do not intend to purchase any
significant equipment (excluding oil and gas activities) over the twelve months
ending September 30, 2009 other than office computers, furnishings, and
communication equipment as required.

Corporate Offices

Our corporate headquarters are
located at 1680, 200 Burrard Street, Vancouver, British Columbia V6C 3L6,
Canada. On September 1, 2007, we entered into a five-year office lease for
approximately 4,574 square feet of rentable area at a gross cost of
approximately $25,000 per month. Within this space we are permitted to sublease
to multiple tenants and effective August 1, 2008 we have 4 sublease tenants
secured with gross rent of approximately $10,250 per month. Once completely
subleased we expect our total rentable area and associated costs to be reduced
by approximately 60%. We sublease an operations office in Denver, Colorado at an
annual cost of approximately $45,600. Our current premises are adequate for our
existing operations; however with rapid advancement of operations we may require
additional premises as we progress through into fiscal 2009. At the present
time, we do not have any real estate holdings and there are no plans to acquire
any real property interests.

Employees

Currently our only employees are
our directors, officers, corporate manager, oil and gas assistant, and an
investor relations consultant. We do not expect any material changes in the
number of employees over the next 12

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month period. We do and will continue to outsource contract employment as needed. However, with project advancement and if we are successful in our initial and any subsequent drilling programs we may retain additional employees.

Effective January 1, 2008, Larry Kellison became an employee of Eden Energy Corp. Effective January 31, 2008, Ralph Stensaker was appointed Chair of our Audit Committee.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that are material to stockholders.

Critical Accounting Policies

Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles used in the United States. Preparing financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management's application of accounting policies. We believe that understanding the basis and nature of
the estimates and assumptions involved with the following aspects of our consolidated financial statements is critical to an understanding of our financials.

Oil and Gas Properties

We utilize the full cost method to account for our investment in oil and gas properties. Accordingly, all costs associated with acquisition, exploration and development of oil and gas reserves, including such costs as
leasehold acquisition costs, capitalized interest costs relating to unproved properties, geological expenditures, and tangible and intangible development costs including direct internal costs are capitalized to the full cost pool. As of September
30, 2008, we have properties with proven reserves and production and sales from these reserves has commenced. Capitalized costs, including estimated future costs to develop the reserves and estimated abandonment costs, net of salvage, are being
depleted on the units-of-production method using estimates of the proved reserves. Investments in unproved properties and major development projects including capitalized interest, if any, are not depleted until proved reserves associated with the
projects can be determined. If the future exploration of unproved properties are determined uneconomical the amount of such properties are added to the capitalized cost to be depleted. As of September 30, 2008, our Alberta oil and gas properties
were unproved and were excluded from depletion. At September 30, 2008, management believes none of our unproved oil and gas properties were considered impaired other than as previously reported. On July 28, 2008 we reported on the status of our
exploration leases in Nevada and have impaired these leases accordingly.

The capitalized costs included in the full cost pool are subject to a "ceiling test", which limits such costs to the aggregate of the estimated present value, using a ten percent discount rate, of the future net
revenues from proved reserves, based on current economic and operating conditions plus the lower of cost and estimated net realizable value of unproven properties.

Sales of proved and unproved properties 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, in which case the gain or loss is recognized in the statement of operations.

Long-Lived Assets

In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets", the carrying value of intangible assets and other long-lived assets is reviewed on a regular basis for the
existence of facts

---

or circumstances that may suggest impairment. We recognize impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess of the carrying
amount of the asset over its estimated fair value.

Revenue Recognition

Oil and natural gas revenues are recorded using the sales method whereby our company recognizes oil and natural gas revenue based on the amount of oil and gas sold to purchasers when title passes, the amount is
determinable and collection is reasonably assured. Actual sales of gas are based on sales, net of the associated volume charges for processing fees and for costs associated with delivery, transportation, marketing, and royalties in accordance with
industry standards. Operating costs and taxes are recognized in the same period of which revenue is earned.

Going Concern

We have suffered recurring losses from operations. The continuation of our company as a going concern is dependent upon our company attaining and maintaining profitable operations and/or raising additional capital. The
financial statements do not include any adjustment relating to the recovery and classification of recorded asset amounts or the amount and classification of liabilities that might be necessary should our company discontinue operations.

The continuation of our business is dependent upon us raising additional financial support and/or attaining and maintaining profitable levels of internally generated revenue. The issuance of additional equity securities
by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

Recently Issued Accounting Standards

In May 2008, the Financial Accounting Standards Board (FASB) issued SFAS No. 163, Accounting for Financial Guarantee Insurance Contracts  An interpretation of FASB Statement No. 60. SFAS
163 requires that an insurance enterprise recognize a claim liability prior to an event of default when there is evidence that credit deterioration has occurred in an insured financial obligation. It also clarifies how Statement 60 applies to
financial guarantee insurance contracts, including the recognition and measurement to be used to account for premium revenue and claim liabilities, and requires expanded disclosures about financial guarantee insurance contracts. It is effective for
financial statements issued for fiscal years beginning after December 15, 2008, except for some disclosures about the insurance enterprises risk-management activities. SFAS 163 requires that disclosures about the risk-management activities of
the insurance enterprise be effective for the first period beginning after issuance. Except for those disclosures, earlier application is not permitted. The adoption of this statement is not expected to have a material effect on the Companys
financial statements.

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles. SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles
to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. It is effective 60 days following the SECs approval of the
Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. The adoption of this statement is not expected to have a material effect
on the Companys financial statements.

In March 2008, the Financial Accounting Standards Board (FASB) issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities  an amendment to FASB Statement No. 133.
SFAS No. 161 is intended to improve financial standards for derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position, financial
performance, and cash flows. Entities are required to provide enhanced disclosures about: (a) how and why an entity uses derivative instruments; (b) how derivative instruments and related hedged items are accounted for under

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Statement 133 and its related interpretations; and (c) how
derivative instruments and related hedged items affect an entitys financial
position, financial performance, and cash flows. It is effective for financial
statements issued for fiscal years beginning after November 15, 2008, with early
adoption encouraged. The adoption of this statement is not expected to have a
material effect on the Companys financial statements.

In December 2007, the Financial
Accounting Standards Board (FASB) issued SFAS No. 141R, Business Combinations.
This statement replaces SFAS 141 and defines the acquirer in a business
combination as the entity that obtains control of one or more businesses in a
business combination and establishes the acquisition date as the date that the
acquirer achieves control. SFAS 141R requires an acquirer to recognize the
assets acquired, the liabilities assumed, and any non-controlling interest in
the acquiree at the acquisition date, measured at their fair values as of that
date. SFAS 141R also requires the acquirer to recognize contingent consideration
at the acquisition date, measured at its fair value at that date. This statement
is effective for fiscal years, and interim periods within those fiscal years,
beginning on or after December 15, 2008. Earlier adoption is prohibited. The
adoption of this statement is not expected to have a material effect on the
Company's financial statements.

In December 2007, the FASB issued
SFAS No. 160, Non-controlling Interests in Consolidated Financial Statements
Liabilities  an Amendment of ARB No. 51. This statement amends ARB 51 to
establish accounting and reporting standards for the Non-controlling interest in
a subsidiary and for the deconsolidation of a subsidiary. This statement is
effective for fiscal years, and interim periods within those fiscal years,
beginning on or after December 15, 2008. Earlier adoption is prohibited. The
adoption of this statement is not expected to have a material effect on the
Company's future reported financial position or results of operations.

Results of Operations  Three Months Ended September 30,
2008 and 2007

The following summary of our results of operations should be
read in conjunction with our financial statements for the quarter ended
September 30, 2008, which are included herein.

Our operating results for the three months ended September 30,
2008, for the three months ended September 30, 2007 and the changes between
those periods for the respective items are summarized as follows:

|                                                |   | Three Months Ended
      September 30, 2008 |   | Three Months Ended
      September 30, 2007 |   | Change Between Three Month
      Period Ended September 30, 2008 and
      September 30, 2007
|----------------------------------------------- | - | ------------------------------------------- | - | ------------------------------------------- | - | ---------------------------------------------------------------------------------------------
|Revenue                                         | $ | 525,464                                     | $ | 1,802                                       | $ | 523,662                                                                                      
|Debt conversion expense                         |   | Nil                                         |   | Nil                                         |   | Nil                                                                                          
|General and administrative                      |   | 228,993                                     |   | 106,153                                     |   | 122,840                                                                                      
|Interest expense                                |   | 112,884                                     |   | 48,895                                      |   | 63,989                                                                                       
|Impairment loss on oil and gas
      properties |   | 682,841                                     |   | Nil                                         |   | 682,841                                                                                      
|Management fees                                 |   | 202,993                                     |   | 286,059                                     |   | (83,066)                                                                                     
|Oil and gas operating expenses                  |   | 114,451                                     |   | 1,970                                       |   | 112,481                                                                                      
|Professional Fees                               |   | 45,805                                      |   | 62,341                                      |   | (16,536)                                                                                     
|Net loss                                        |   | (1,130,759)                                 |   | (264,711)                                   |   | (866,048)                                                                                    

Our accumulated losses increased
to $28,757,404 as of September 30, 2008. Our financial statements report a net
loss of $1,130,759 for the three month period ended September 30, 2008 compared
to a net loss of $264,711 for the three month period ended September 30, 2007.
Our losses have increased primarily as a result of an increase in impairment of
oil and gas properties of $682,841 for the three months ended September 30, 2008
as compared to

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$nil for the three months ended September 30, 2007. The Company
also recognized depletion of its capitalized oil and gas expenditures of
$235,330 during the three months ended September 30, 2008, compared to $nil for
the three months ended September 30, 2007. The depletion rate for Colorado
production for the three months ended September 30, 2008 was $3.72/mcfe.

Results of Operations  Nine Months Ended September 30, 2008
and 2007

The following summary of our results of operations should be
read in conjunction with our financial statements for the quarter ended
September 30, 2008, which are included herein.

Our operating results for the nine months ended September 30,
2008, for the nine months ended September 30, 2007 and the changes between those
periods for the respective items are summarized as follows:

|                                                |   | Nine Months
      Ended September 30, 2008 |   | Nine Months
      Ended September 30, 2007 |   | Change Between Nine Month Period Ended September 30,
      2008 and September 30, 2007
|----------------------------------------------- | - | ------------------------------------------ | - | ------------------------------------------ | - | --------------------------------------------------------------------------------------
|Revenue                                         | $ | 1,985,268                                  | $ | 42,060                                     | $ | 1,943,208                                                                             
|Debt conversion expense                         |   | 3,605,000                                  |   | Nil                                        |   | 3,605,000                                                                             
|General and administrative                      |   | 655,633                                    |   | 398,418                                    |   | 257,215                                                                               
|Interest expense                                |   | 771,443                                    |   | 186,482                                    |   | 584,961                                                                               
|Impairment loss on oil and gas
      properties |   | 9,903,643                                  |   | Nil                                        |   | 9,903,643                                                                             
|Management fees                                 |   | 670,669                                    |   | 830,639                                    |   | (159,970)                                                                             
|Oil and gas operating expenses                  |   | 646,623                                    |   | 23,563                                     |   | 623,060                                                                               
|Professional Fees                               |   | 185,960                                    |   | 141,965                                    |   | 43,995                                                                                
|Net loss                                        |   | (15,328,641)                               |   | (900,048)                                  |   | (14,428,593)                                                                          

As at September 30, 2008, we had
$820,625 in current liabilities. Our net cash used in operating activities for
the nine months ended September 30, 2008 was $250,709 compared to $198,478 used
in the nine months ended September 30, 2007. Our accumulated losses increased to
$28,757,404 as of September 30, 2008. Our financial statements report a net loss
of $15,328,641 for the nine month period ended September 30, 2008 compared to a
net loss of $900,048 for the nine month period ended September 30, 2007. Our
losses have increased primarily as a result of an increase in the non-cash debt
conversion expense relating to the conversions of the Companys convertible debt
of $3,605,000 for the nine months ended September 30, 2008 as compared to $nil
for the nine months ended September 30, 2007, and as a result of an increase in
impairment of oil and gas properties of $9,903,643 for the nine months ended
September 30, 2008 as compared to $nil for the nine months ended September 30,
2007. The Company also recognized depletion of its capitalized oil and gas
expenditures of $841,998 during the nine months ended September 30, 2008,
compared to $nil for the nine months ended September 30, 2007. The depletion
rate for Colorado production for the nine months ended September 30, 2008 was
$2.89/mcfe.

Our total liabilities as of
September 30, 2008 were $1,052,131 as compared to total liabilities of
$8,269,212 as of September 30, 2007. The decrease was due to the increase in
accounts payable and accrued liabilities (from $236,488 as at September 30, 2007
to $820,625 as at September 30, 2008) offset by a decrease in our outstanding
Convertible Notes from $8,032,724 as at September30, 2007 to $nil as at
September 30, 2008.

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During the nine month period
ended September 30, 2008 we spent $7,602,340 on exploration, development and
acquisition of our oil and gas properties as compared to $1,561,838 spent during
the nine month period ended September 30, 2007. Of this amount $123,190 was
attributable to acquisition costs (2007 - $112,137), and $7,479,150 (2007 -
$1,449,701) was attributable to exploration and development costs.

Liquidity and Financial Condition

Working Capital

|                    |   | At        |  |   | At         | 
|------------------- | - | --------- |  | - | ---------- | 
|                    |   | September |  |   | December   | 
|                    |   | 30,       |  |   | 31,        | 
|                    |   | 2008      |  |   | 2007       | 
|Current assets      | $ | 5,622,631 |  | $ | 20,113,564 | 
|Current liabilities |   | 820,625   |  |   | 2,440,031  | 
|Working capital     | $ | 4,802,006 |  | $ | 17,673,533 | 

Cash Flows

|                                                    |   | Nine Months Ended |  
|--------------------------------------------------- | - | ----------------- | -
|                                                    |   | September         |  
|                                                    |   | 30,
      2008    |  
|Cash flows used in operating activities             | $ | (250,709          | )
|Cash flows used in investing activities             |   | (9,122,178        | )
|Cash flows provided by financing activities         |   | (5,361,070        | )
|Effect of exchange rate changes on cash             |   | (63               | )
|Net increase (decrease) in cash during
      period | $ | (14,734,020       | )

We repaid the outstanding balance of approximately $5,398,570
on our convertible promissory notes as they matured on August 25, 2008.

Operating Activities

Net cash used in operating activities was $250,709 in the nine
months ended September 30, 2008 compared with net cash used in operating
activities of $198,478 in the same period in 2007.

Investing Activities

Net cash used in investing activities was $9,122,178 in the
nine months ended September 30, 2008 compared to net cash provided by investing
activities of $173,668 in the same period in 2007. The increase in use of cash
of $9,295,846 in investing activities is mainly attributable to the increase in
oil and gas property exploration and development costs.

Financing Activities

Net cash provided by financing activities was $5,361,070 in the
nine months ended September 30, 2008 compared to $nil in the same period in
2007. This is attributable to the repayment of convertible promissory notes
matured on August 25, 2008.

Oil and gas sales volume comparisons for the Quarter
ended September 30, 2008 compared to the quarter ended September 30,
2007

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For the quarter ended September 30, 2008 total net production
increased to approximately 63,300 Mcfe as compared to approximately 1,000 Mcfe
for the quarter ended September 30, 2007. We recognized oil and gas sales of
$525,464 during the quarter ended September 30, 2008 as compared to $1,802
during the same prior year quarter. The increase in oil and gas production
volumes in the White River Dome, Ant Hill Project is due to the impact of work
over completions on two wells in the unit and production coming from four (4)
operating wells in the quarter ended September 30, 2008 as compared to two (2)
operating wells in the quarter ended September 30, 2007. The drilling program in
the White River Dome, Ant Hill Project of four (4) additional wells, which began
in July 2008 has further increased production in the fourth quarter of 2008.

Item 4. Controls and Procedures

We maintain disclosure controls and procedures that are
designed to ensure that information required to be disclosed in our reports
filed under the Securities Exchange Act of 1934, as amended, is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms, and that such information
is accumulated and communicated to our management, including our president (also
our principal executive officer) and our secretary, treasurer and chief
financial officer (also our principal financial and accounting officer) to allow
for timely decisions regarding required disclosure.

As of September 30, 2008, the end of our third quarter covered
by this report, we carried out an evaluation, under the supervision and with the
participation of our president (also our principal executive officer) and our
secretary, treasurer and chief financial officer (also our principal financial
and accounting officer), of the effectiveness of the design and operation of our
disclosure controls and procedures. Based on the foregoing, our president (also
our principal executive officer) and our secretary, treasurer and chief
financial officer (also our principal financial and accounting officer)
concluded that our disclosure controls and procedures were effective in
providing reasonable assurance in the reliability of our financial reports as of
the end of the period covered by this quarterly report.

Inherent limitations on effectiveness of
controls

Internal control over financial reporting has inherent
limitations which include but is not limited to the use of independent
professionals for advice and guidance, interpretation of existing and/or
changing rules and principles, segregation of management duties, scale of
organization, and personnel factors. Internal control over financial reporting
is a process which involves human diligence and compliance and is subject to
lapses in judgement and breakdowns resulting from human failures. Internal
control over financial reporting also can be circumvented by collusion or
improper management override. Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements on a
timely basis, however these inherent limitations are known features of the
financial reporting process and it is possible to design into the process
safeguards to reduce, though not eliminate, this risk. Therefore, even those
systems determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation. Projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.

Changes in Internal Control over Financial
Reporting

There have been no significant changes in our internal controls
over financial reporting that occurred during the quarter ended September 30,
2008 that have materially or are reasonably likely to materially affect, our
internal controls over financial reporting.

PART II

OTHER INFORMATION

Item 1. Legal Proceedings

We know of no material, existing
or pending legal proceedings against our company, nor are we involved as a
plaintiff in any material proceeding or pending litigation. There are no
proceedings in which any of our

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directors, executive officers or affiliates, or any registered
or beneficial stockholder, is an adverse party or has a material interest
adverse to our interest.

Item 1A. Risk Factors

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

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

Prospective investors should consider carefully the risk
factors set out below.

We have had negative cash flows from operations.

To date we have had negative cash flows from operations and we
have been dependent on sales of our equity securities and debt financing to meet
our cash requirements and have incurred losses totaling approximately
$15,328,641 for the nine month period ending September 30, 2008, and cumulative
losses of $29,312,543 to September 30, 2008. As of September 30, 2008 we had
working capital of $4,802,006 as a result of past financing activities. We do
expect positive cash flow from operations in the near term; however there is no
assurance that actual cash requirements will not exceed our estimates, or that
our sales projections will be realized as estimated. In particular, additional
capital may be required in the event that:

- drilling and completion costs for
further wells increase beyond our expectations; or

- commodity prices for our production
decline beyond our expectations; or

- production levels do not meet our
expectations; or

- we encounter greater costs associated
with general and administrative expenses or offering costs.

The occurrence of any of the aforementioned events could
adversely affect our ability to meet our business plans.

We will depend almost exclusively on outside capital to pay for
the continued exploration and development of our properties. Such outside
capital may include the sale of additional stock and/or commercial borrowing.
Capital may not continue to be available if necessary to meet these continuing
development costs or, if the capital is available, that it will be on terms
acceptable to us. The issuance of additional equity securities by us would
result in a significant dilution in the equity interests of our current
stockholders. Obtaining commercial loans, assuming those loans would be
available, will increase our liabilities and future cash commitments.

If we are unable to obtain financing in the amounts and on
terms deemed acceptable to us, we may be unable to continue our business and as
a result may be required to scale back or cease operations for our business, the
result of which would be that our stockholders would lose some or all of their
investment.

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

A prolonged decline in the price of our common stock could
result in a reduction in the liquidity of our common stock and a reduction in
our ability to raise capital. Because our operations have been primarily
financed through the

---

sale of equity securities, a decline in the price of our common stock could be especially detrimental to our liquidity and our continued operations. Any reduction in our ability to raise equity capital in the future would force us to reallocate
funds from other planned uses and would have a significant negative effect on our business plans and operations, including our ability to develop new products and continue our current operations. If our stock price declines, we may not be able to
raise additional capital or generate funds from operations sufficient to meet our obligations.

We have a history of losses and fluctuating operating results.

From inception through to September 30, 2008, we have incurred aggregate losses of approximately $29,312,543. Our loss from operations for the nine-month period ended September 30, 2008 was $15,328,641. There is no assurance that we will
operate profitably or will generate positive cash flow in the future. In addition, our operating results in the future may be subject to significant fluctuations due to many factors not within our control, such as the unpredictability of when
customers will purchase our production and/or services, the size of customers purchases, the demand for our production and/or services, and the level of competition and general economic conditions. If we cannot generate positive cash flows in
the future, or raise sufficient financing to continue our normal operations, then we may be forced to scale down or even close our operations. Until such time as we generate significant revenues, we expect an increase in development costs and
operating costs. Consequently, we expect to continue to incur operating losses and negative cash flow until we receive significant commercial production from our properties.

We have a limited operating history and if we are not successful in continuing to grow our business, then we may have to scale back or even cease our ongoing business operations.

We have limited history of revenues from operations and have limited significant tangible assets. We have yet to generate positive earnings and there can be no assurance that we will ever operate profitably. Our company has a limited operating
history and must be considered in the development stage. The success of our company is significantly dependent on a successful acquisition, drilling, completion and production program. Our companys operations will be subject to all the risks
inherent in the establishment of a developing enterprise and the uncertainties arising from the absence of a significant operating history. We may be unable to locate recoverable reserves, extract the reserves economically, and/or operate on a
profitable basis. We are in the development stage and potential investors should be aware of the difficulties normally encountered by enterprises in the development stage. If our business plan is not successful, and we are not able to operate
profitably, investors may lose some or all of their investment in our company.

Trading of our stock may be restricted by the SEC's "Penny Stock" regulations, which may limit a stockholder's ability to buy and sell our stock.

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

---

penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of, our common stock.

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

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

Trading in our common shares on the OTC Bulletin Board is limited and sporadic making it difficult for our shareholders to sell their shares or liquidate their investments.

Our common shares are currently listed for public trading on the OTC Bulletin Board. The trading price of our common shares has been subject to wide fluctuations. Trading prices of our common shares may fluctuate in response to a number of factors,
many of which will be beyond our control. The stock market has generally experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies with no current business
operation. There can be no assurance that trading prices and price earnings ratios previously experienced by our common shares will be matched or maintained. These broad market and industry factors may adversely affect the market price of our common
shares, regardless of our operating performance.

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

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

Our securities must be considered highly speculative, generally because of the nature of our business and the early stage of its development. We have largely been engaged in the business of exploring and until only recently attempting to develop
commercial reserves of oil and gas. Our Alberta property is in the exploration stage and without known reserves of oil and gas. Only our Colorado properties have commenced production. Accordingly, we have not generated significant revenues nor have
we realized a profit from our operations to date and there is little likelihood that we will generate significant revenues or realize any profits in the short term. Any profitability in the future from our business will be dependent upon attaining
adequate levels of internally generated revenues through locating and developing economic reserves of oil and gas, which itself is subject to numerous risk factors as set forth herein. Since we have not generated significant revenues, we will have
to raise additional monies through either securing industry reserve based debt financing, or the sale of our equity securities or debt, or combinations of the above in order to continue our business operations.

As our properties are in the exploration and early development stage there can be no assurance that we will establish commercial discoveries and/or profitable production programs on these properties.

Exploration for economic reserves of oil and gas is subject to a number of risk factors. Few properties that are explored are ultimately developed into producing oil and/or gas wells. Our Nevada properties have been impaired and our Alberta
properties are in the exploration stage only and are without proven reserves of oil and gas. We may not establish commercial discoveries on these properties. Our Colorado property is in early stage development drilling and may prove uneconomic to
develop.

---

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

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

Adverse weather conditions can also hinder drilling operations. A productive well may become uneconomic in the event water or other deleterious substances are encountered which impair or prevent the production of oil and/or gas from the well. In
addition, production from any well may be unmarketable if it is impregnated with water or other deleterious substances. The marketability of oil and gas, which may be acquired or discovered, will be affected by numerous factors beyond our control.
These factors include the proximity and capacity of oil and gas pipelines and processing equipment, market fluctuations of prices, taxes, royalties, land tenure, allowable production and environmental protection. These factors cannot be accurately
predicted and the combination of these factors may result in our company not receiving an adequate return on invested capital.

Competition in the oil and gas industry is highly competitive and there is no assurance that we will be successful in acquiring the leases.

The oil and gas industry is intensely competitive. We compete with numerous individuals and companies, including many major oil and gas companies, which have substantially greater technical, financial and operational resources and staff.
Accordingly, there is a high degree of competition for desirable oil and gas leases, suitable properties for drilling operations and necessary drilling equipment, as well as for access to funds. We cannot predict if the necessary funds can be raised
or that any projected work will be completed. Our budget does not anticipate the potential acquisition of additional acreage in Nevada and/or Alberta although this may change at any time without notice. This acreage may not become available or if it
is available for leasing, that we may not be successful in acquiring the leases. There are other competitors that have operations in these areas and the presence of these competitors could adversely affect our ability to acquire additional
leases.

The marketability of natural resources will be affected by numerous factors beyond our control, which may result in us not receiving an adequate return on invested capital to be profitable or viable.

The marketability of natural resources, which may be acquired or discovered by us, will be affected by numerous factors beyond our control. These factors include market fluctuations in oil and gas pricing and demand, the proximity and capacity of
natural resource markets and processing equipment, governmental regulations, land tenure, land use, regulation concerning the importing and exporting of oil and gas and environmental protection regulations. The exact effect of these factors cannot
be accurately predicted, but the combination of these factors may result in us not receiving an adequate return on invested capital to be profitable or viable.

Oil and gas operations are subject to comprehensive regulation, which may cause substantial delays or require capital outlays in excess of those anticipated causing an adverse effect on our company.

Oil and gas operations are subject to federal, state, and local laws relating to the protection of the environment, including laws regulating removal of natural resources from the ground and the discharge of materials into the environment. Oil and
gas operations are also subject to federal, state, and local laws and regulations, which seek to maintain health and safety standards by regulating the design and use of drilling methods and equipment. Various permits from government bodies are
required for drilling operations to be conducted; no assurance can be given that such permits will be received. Environmental standards imposed by federal, provincial, or local authorities may be changed and any such changes may have material
adverse effects on our activities. Moreover, compliance with such laws may cause substantial delays or require capital outlays in excess of those anticipated, thus causing an adverse effect on us. Additionally, we may be subject to liability for
pollution or other environmental damages, which it may elect not to insure against due to prohibitive premium costs and other reasons. To date we have not been required to spend any material amount on compliance with environmental regulations.
However, we may be required to do so in future and this may affect our ability to expand or maintain our operations.

---

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

In general, our exploration and production activities are subject to certain federal, state and local laws and regulations relating to environmental quality and pollution control. Such laws and regulations increase the costs of these activities and
may prevent or delay the commencement or continuance of a given operation. Compliance with these laws and regulations has not had a material effect on our operations or financial condition to date. Specifically, we are subject to legislation
regarding emissions into the environment, water discharges and storage and disposition of hazardous wastes. In addition, legislation has been enacted which requires well and facility sites to be abandoned and reclaimed to the satisfaction of state
authorities. However, such laws and regulations are frequently changed and we are unable to predict the ultimate cost of compliance. Generally, environmental requirements do not appear to affect us any differently or to any greater or lesser extent
than other companies in the industry.

We believe that our operations comply, in all material respects, with all applicable environmental regulations.

Our operating partners maintain insurance coverage customary to the industry; however, we are not fully insured against all possible environmental risks.

Exploratory and development drilling involves many risks and we may become liable for pollution or other liabilities, which may have an adverse effect on our financial position.

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

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

The laws, regulations, policies or current administrative practices of any government body, organization or regulatory agency in the United States, Canada, or any other jurisdiction, may be changed, applied or interpreted in a manner which will
fundamentally alter the ability of our company to carry on our business.

The actions, policies or regulations, or changes thereto, of any government body or regulatory agency, or other special interest groups, may have a detrimental effect on us. Any or all of these situations may have a negative impact on our ability to
operate and/or our profitably.

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

Our By-laws contain provisions with respect to the indemnification of our officers and directors against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, actually and reasonably incurred by him,
including an amount paid to settle an action or satisfy a judgment in a civil, criminal or administrative action or proceeding to which he is made a party by reason of his being or having been one of our directors or officers.

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

Our constating documents authorize the issuance of 100,000,000 shares of common stock with a par value of $0.001 and 10,000,000 shares of preferred stock with a par value of $0.001. In the event that we are required to issue any additional
shares or enter into private placements to raise financing through the sale of equity securities, investors' interests in our company will be diluted and investors may suffer dilution in their net book value per share depending on the price at which
such securities are sold. If we issue any such additional shares, such issuances also

---

will cause a reduction in the proportionate ownership and
voting power of all other shareholders. Further, any such issuance may result in
a change in our control.

Our By-laws do not contain anti-takeover provisions, which
could result in a change of our management and directors if there is a take-over
of our company.

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

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

Other than our operations office in Denver, Colorado, we do not
currently maintain a permanent place of business within the United States. In
addition, a majority of our directors and officers are nationals and/or
residents of countries other than the United States, and all or a substantial
portion of such persons' assets are located outside the United States. As a
result, it may be difficult for investors to enforce within the United States
any judgments obtained against our company or our officers or directors,
including judgments predicated upon the civil liability provisions of the
securities laws of the United States or any state thereof.

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

None.

Item 3. Defaults Upon Senior Securities

None.

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

None.

Item 5. Other Information

Due to the implementation of British Columbia Instrument 51-509
on September 30, 2008 by the British Columbia Securities Commission, we have
been deemed to be a British Columbia based reporting issuer. As such, we are
required to file certain information and documents at www.sedar.com.

Item 6. Exhibits

|Exhibit | Description                                                                                                                                                                                              
|------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  |                                                                                                                                                                                                          
|        |                                                                                                                                                                                                          
|(3)     | (i) Articles of
      Incorporation; and (ii) Bylaws                                                                                                                                                     
|        |                                                                                                                                                                                                          
|3.1     | Articles of Incorporation
      (incorporated by reference from our Registration Statement on Form 10-SB,
      filed on September 11, 2000).                                                            
|        |                                                                                                                                                                                                          
|3.2     | Bylaws (incorporated by
      reference from our Registration Statement on Form 10-SB, filed on
      September 11, 2000).                                                                               
|        |                                                                                                                                                                                                          
|3.3     | Certificate of Amendment filed
      with the Secretary of State of Nevada on June 16, 2004 (incorporated by
      reference from our Quarterly Report on Form 10-QSB filed on November 22,
      2004). 
|        |                                                                                                                                                                                                          
|3.4     | Certificate of Amendment filed
      with the Secretary of State of Nevada on August 6, 2004 (incorporated by
      reference from our Quarterly Report on Form 10-QSB filed on November 22,
      2004).

---

|Exhibit | Description                                                                                                                                                                                                    
|------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  |                                                                                                                                                                                                                
|        |                                                                                                                                                                                                                
|(4)     | Instruments defining rights
      of security holders, including indentures                                                                                                                                    
|        |                                                                                                                                                                                                                
|4.1     | 2004 Stock Option Plan (incorporated by reference from
      our Form S-8, filed on October 8, 2004).                                                                                                          
|        |                                                                                                                                                                                                                
|4.2     | Amended 2004 Stock Option Plan (incorporated by reference
      from our Current Report filed on Form 8- K filed on January 23, 2008)                                                                          
|        |                                                                                                                                                                                                                
|(10)    | Material Contracts                                                                                                                                                                                             
|        |                                                                                                                                                                                                                
|10.1    | Form of Stock Option Agreement entered into with the
      following individuals (incorporated by reference from our Quarterly Report
      on Form 10-QSB filed on August 12, 2005):                          
|        |                                                                                                                                                                                                                
|        | Donald Sharpe                                                                                                                                                                                                  
|        | John Martin                                                                                                                                                                                                    
|        | Neil Maedel                                                                                                                                                                                                    
|        | Drew Bonnell                                                                                                                                                                                                   
|        |                                                                                                                                                                                                                
|10.2    | Form of Note and Warrant Purchase Agreement dated August
      18, 2005 entered into with the following persons (incorporated by
      reference from our Current Report on Form 8-K filed on August 31, 2005):
|        |                                                                                                                                                                                                                
|        | RAB Special Situations (Master) Fund Ltd.                                                                                                                                                                      
|        | Cranshire Capital LP                                                                                                                                                                                           
|        | Douglas Campbell Jr.                                                                                                                                                                                           
|        | SDS Capital Group SPC, Ltd.                                                                                                                                                                                    
|        | Nite Capital LP                                                                                                                                                                                                
|        | Omicron Master Trust                                                                                                                                                                                           
|        | Capital Ventures International                                                                                                                                                                                 
|        | Crestview Capital Master, LLC                                                                                                                                                                                  
|        | Double U Master Fund LP                                                                                                                                                                                        
|        | Iroquois Master Fund Ltd.                                                                                                                                                                                      
|        | JGB Capital LP                                                                                                                                                                                                 
|        | Enable Growth Partners LP                                                                                                                                                                                      
|        | Enable Opportunity Partners LP                                                                                                                                                                                 
|        |                                                                                                                                                                                                                
|10.3    | Form of Registration Rights Agreement dated August 18,
      2005 entered into with the following persons (incorporated by reference
      from our Current Report on Form 8-K filed on August 31, 2005):      
|        |                                                                                                                                                                                                                
|        | RAB Special Situations (Master) Fund Ltd.                                                                                                                                                                      
|        | Cranshire Capital LP                                                                                                                                                                                           
|        | Douglas Campbell Jr.                                                                                                                                                                                           
|        | SDS Capital Group SPC, Ltd.                                                                                                                                                                                    
|        | Nite Capital LP                                                                                                                                                                                                
|        | Omicron Master Trust                                                                                                                                                                                           
|        | Capital Ventures International                                                                                                                                                                                 
|        | Crestview Capital Master, LLC                                                                                                                                                                                  
|        | Double U Master Fund LP                                                                                                                                                                                        
|        | Iroquois Master Fund Ltd.                                                                                                                                                                                      
|        | JGB Capital LP                                                                                                                                                                                                 
|        | Enable Growth Partners LP                                                                                                                                                                                      
|        | Enable Opportunity Partners LP                                                                                                                                                                                 

---

|Exhibit | Description                                                                                                                                                                                                                                               
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  |                                                                                                                                                                                                                                                           
|        |                                                                                                                                                                                                                                                           
|10.4    | Form of Convertible Promissory Note entered into with the
      following persons (incorporated by reference from our Current Report on
      Form 8-K filed on August 31, 2005):                                                                         
|        |                                                                                                                                                                                                                                                           
|        | Cranshire Capital LP                                                                                                                                                                                                                                      
|        | Douglas Campbell Jr.                                                                                                                                                                                                                                      
|        | SDS Capital Group SPC, Ltd.                                                                                                                                                                                                                               
|        | Nite Capital LP                                                                                                                                                                                                                                           
|        | Omicron Master Trust                                                                                                                                                                                                                                      
|        | Capital Ventures International                                                                                                                                                                                                                            
|        | Crestview Capital Master, LLC                                                                                                                                                                                                                             
|        | Double U Master Fund LP                                                                                                                                                                                                                                   
|        | Iroquois Master Fund Ltd.                                                                                                                                                                                                                                 
|        | JGB Capital LP                                                                                                                                                                                                                                            
|        | Enable Growth Partners LP                                                                                                                                                                                                                                 
|        | Enable Opportunity Partners LP                                                                                                                                                                                                                            
|        |                                                                                                                                                                                                                                                           
|10.5    | Form of Series A Share Purchase Warrant entered into with
      the following persons (incorporated by reference form our Current Report
      on Form 8-K filed on August 31, 2005):                                                                     
|        |                                                                                                                                                                                                                                                           
|        | Cranshire Capital LP                                                                                                                                                                                                                                      
|        | Douglas Campbell Jr.                                                                                                                                                                                                                                      
|        | SDS Capital Group SPC, Ltd.                                                                                                                                                                                                                               
|        | Nite Capital LP                                                                                                                                                                                                                                           
|        | Omicron Master Trust                                                                                                                                                                                                                                      
|        | Capital Ventures International                                                                                                                                                                                                                            
|        | Crestview Capital Master, LLC                                                                                                                                                                                                                             
|        | Double U Master Fund LP                                                                                                                                                                                                                                   
|        | Iroquois Master Fund Ltd.                                                                                                                                                                                                                                 
|        | JGB Capital L.P.                                                                                                                                                                                                                                          
|        | Enable Growth Partners LP                                                                                                                                                                                                                                 
|        | Enable Opportunity Partners LP                                                                                                                                                                                                                            
|        |                                                                                                                                                                                                                                                           
|10.6    | Form of Convertible Promissory Note entered into with RAB
      Special Situations (Master) Fund Ltd. (incorporated by reference from our
      Registration Statement on Form SB-2 filed on September 28, 2005).                                         
|        |                                                                                                                                                                                                                                                           
|10.7    | Form of Series A Share Purchase Warrant entered into with
      RAB Special Situations (Master) Fund Ltd. (incorporated by reference from
      our Registration Statement on Form SB-2 filed on September 28, 2005).                                     
|        |                                                                                                                                                                                                                                                           
|10.8    | Form of Broker Warrant entered into with the following
      (incorporated by reference from our Registration Statement on Form SB-2
      filed on September 28, 2005):                                                                                  
|        |                                                                                                                                                                                                                                                           
|        | H.C. Wainwright & Co., Inc.                                                                                                                                                                                                                               
|        | John R. Clarke                                                                                                                                                                                                                                            
|        | Scott F. Koch                                                                                                                                                                                                                                             
|        | Energy Equities, Inc.                                                                                                                                                                                                                                     
|        | Ocean Equities Ltd.                                                                                                                                                                                                                                       
|        |                                                                                                                                                                                                                                                           
|10.9    | Participation Agreement with Merganser Limited
      (incorporated by reference from our Current Report on Form 8-K filed on
      November 10, 2005).                                                                                                    
|        |                                                                                                                                                                                                                                                           
|10.10   | Joint Participating Agreement with Chamberlain
      Exploration Development and Research Stratigraphic Corporation dba Cedar
      Strat Corporation (incorporated by reference from our Current Report on
      Form 8- K filed on February 21, 2006).**
|        |                                                                                                                                                                                                                                                           
|10.11   | Form of Subscription Agreement entered into with the
      following individuals (incorporated by reference from our Current Report
      on Form 8-K filed on February 24, 2006):                                                                        

---

|Exhibit | Description                                                                                                                                                                                                                                     |                                        |                               
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------- | ------------------------------
|Number  |                                                                                                                                                                                                                                                 |                                        |                               
|        |                                                                                                                                                                                                                                                 |                                        |                               
|        | Keith Reid                                                                                                                                                                                                                                      | Keats Investments Ltd.                 | Nite Capital LP               
|        | John Pevedoros                                                                                                                                                                                                                                  | Absolute East West Fund                | George S. Palfi               
|        | Stephen Hanson                                                                                                                                                                                                                                  | Alpine Atlantic Asset Mgt.,
      Ltd. | Parker Communication Corp.    
|        | Paul King                                                                                                                                                                                                                                       | La Roche & Co. Banquiers               | Carolyn Townshend             
|        | Jason McCarroll                                                                                                                                                                                                                                 | Norene Brown                           | 862002 Alberta Ltd.           
|        | Arbutus Gardens Apartments                                                                                                                                                                                                                      | Credit Suisse Securities (USA)         | Olivier Turrettini            
|        | Corp.                                                                                                                                                                                                                                           | LLC                                    | Veronique Rochette            
|        | Epsilon Management Ltd.                                                                                                                                                                                                                         | Stanley Case                           | RMB International (Dublin)    
|        | Conrad Weiss                                                                                                                                                                                                                                    | Chartwell Investment Services          | Ltd.                          
|        | Yingchun Ye                                                                                                                                                                                                                                     | S.A.                                   | SDS Capital Group SPC, Ltd.   
|        | Maria Pedrosa                                                                                                                                                                                                                                   | Donna Chudnow                          | Shalimar Business             
|        | Sara Relling                                                                                                                                                                                                                                    | Clearwaters Management Ltd.            | Synergy Resource Fund UBS     
|        | Bantry Bay Properties Inc.                                                                                                                                                                                                                      | Cranshire Capital, LP                  | Zurich                        
|        | Barb Turner                                                                                                                                                                                                                                     | Swell Capital Limited                  | UBS AG                        
|        | C-Quest Holdings Ltd.                                                                                                                                                                                                                           | Crescent International Ltd.            | Rupert Edward Williams        
|        | Avtar Dhillon                                                                                                                                                                                                                                   | Double U Master Fund Ltd.              | Christian Weyer               
|        | Hao Tang                                                                                                                                                                                                                                        | Andrea Egger                           | Winsome Capital Inc.          
|        | Neil Maedel                                                                                                                                                                                                                                     | Epson Investment Services NV           | Banque Vontobel Geneve, SA    
|        | Donald Rippon                                                                                                                                                                                                                                   | Evergreen Investment                   | Iroquois Master Fund Ltd.     
|        | Peter Ross                                                                                                                                                                                                                                      | Corporation                            | Wilma E. Bonnell              
|        | John Martin                                                                                                                                                                                                                                     | GLG European Opportunity Fund          | Pierce Diversified Strategy   
|        | Gregg Layton                                                                                                                                                                                                                                    | General Research GmbH                  | Master Fund LLC               
|        | Dolwar Invest & Trade Corp.                                                                                                                                                                                                                     | Ralph Hogg                             | Enable Opportunity Partners LP
|        | Barry Maedel                                                                                                                                                                                                                                    | HSBC Guyerzeller Bank AG               | Enable Growth Partners LP     
|        | John Tognetti                                                                                                                                                                                                                                   | Kaupthing Bank Luxembourg              | Kimberly Lloyd                
|        | Clarion Finanz AG                                                                                                                                                                                                                               | Lombard Odier Darier Hentsch           | Paul Mitchell                 
|        |                                                                                                                                                                                                                                                 | Moen Holdings Inc.                     |                               
|        |                                                                                                                                                                                                                                                 | Luce Lapointe                          |                               
|        |                                                                                                                                                                                                                                                 |                                        |                               
|        |                                                                                                                                                                                                                                                 |                                        |                               
|10.12   | Amended Management Consulting Agreement dated February
      28, 2006 and made effective February 1, 2006 with Drew Bonnell
      (incorporated by reference from our Current Report on Form 8-K filed on
      March 10, 2006).               
|        |                                                                                                                                                                                                                                                
|10.13   | Amended Management Consulting Agreement dated February
      28, 2006 and made effective February 1, 2006 with Donald Sharpe
      (incorporated by reference from our Current Report on Form 8-K filed on
      March 10, 2006).              
|        |                                                                                                                                                                                                                                                
|10.14   | Farmout and Option Agreement with Suncor dated March 7,
      2006 (incorporated by reference from our Current Report on Form 8-K filed
      on March 17, 2006).**                                                                            
|        |                                                                                                                                                                                                                                                
|10.15   | Management Agreement with Freestone Energy LLC dated May
      1, 2006 (incorporated by reference from our Current Report on Form 8-K
      filed on May 2, 2006).                                                                             
|        |                                                                                                                                                                                                                                                
|10.16   | Stock Option Agreement with Larry Kellison dated May 1,
      2006 (incorporated by reference from our Current Report on Form 8-K filed
      on May 2, 2006).                                                                                 
|        |                                                                                                                                                                                                                                                
|10.17   | Amended Management Consulting Agreement dated December
      21, 2006 and made effective January 1, 2007 with Drew Bonnell
      (incorporated by reference from our Current Report on Form 8-K filed on
      December 22, 2006).             
|        |                                                                                                                                                                                                                                                
|10.18   | Amended Management Consulting Agreement dated December
      21, 2006 and made effective January 1, 2007 with D. Sharpe Management Inc.
      (incorporated by reference from our Current Report on Form 8-K filed on
      December 22, 2006).
|        |                                                                                                                                                                                                                                                
|10.19   | Form of Stock Option Agreement with Donald Sharpe, Drew
      Bonnell, John Martin and Larry Kellison (incorporated by reference from
      our Current Report on Form 8-K filed on December 22, 2006).                                        

---

|Exhibit | Description                                                                                                                                                                                                                                                                          
|------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  |                                                                                                                                                                                                                                                                                      
|        |                                                                                                                                                                                                                                                                                      
|10.20   | Form of Stock
        Option Agreement with Paul Mitchell, Kim Lloyd and Olga Bespalaja (incorporated
        by reference from our Current Report on Form 8-K filed on December 22,
        2006).                                                                                  
|        |                                                                                                                                                                                                                                                                                      
|10.21   | Participation
        Agreement dated February 14, 2007 with Suncor Energy Inc., Grand Banks
        Energy Corporation and Dejour Energy (Alberta) Ltd. (incorporated by reference
        from our Current Report on Form 8-K filed on February 23, 2007).                         
|        |                                                                                                                                                                                                                                                                                      
|10.22   | Amended Management
        Consulting Agreement dated December 21, 2006 and made effective January
        1, 2007 with Freestone Energy LLC (incorporated by reference from our
        Current Report on Form 8-K filed on February 23, 2007).                                     
|        |                                                                                                                                                                                                                                                                                      
|10.23   | Form of Stock
        Option Agreement with Ralph Stensaker (incorporated by reference from
        our Current Report on Form 8-K filed on December 22, 2006).                                                                                                                      
|        |                                                                                                                                                                                                                                                                                      
|10.24   | Agreement Starlight
        Oil & Gas LLC and Starlight Operating Company, Inc. effective August
        31, 2007 (incorporated by reference from our Current Report on Form 8-K
        filed on September 11, 2007).                                                               
|        |                                                                                                                                                                                                                                                                                      
|10.25   | Amended Management
        Consulting Agreement dated December 21, 2007 and made effective January
        1, 2008 with D. Sharpe Management Inc. (incorporated by reference from
        our Current Report on Form 8-K filed on December 28, 2007).                                
|        |                                                                                                                                                                                                                                                                                      
|10.26   | Amended Management
        Consulting Agreement dated December 21, 2007 and made effective January
        1, 2008 with Drew Bonnell (incorporated by reference from our Current
        Report on Form 8-K filed on December 28, 2007).                                             
|        |                                                                                                                                                                                                                                                                                      
|10.27   | Amended Management
        Consulting Agreement dated December 21, 2007 and made effective January
        1, 2008 with Larry Kellison. (incorporated by reference from our Current
        Report on Form 8-K filed on December 28, 2007).                                          
|        |                                                                                                                                                                                                                                                                                      
|10.28   | Form of Note
        and Warrant Amendment Agreement dated January 17, 2008 (incorporated by
        reference from our Current Report on Form 8-K filed on January 23, 2008).                                                                                                       
|        |                                                                                                                                                                                                                                                                                      
|10.29   | Form of Stock
        Option Agreement with Donald Sharpe, Drew Bonnell, John Martin, Ralph
        Stensaker, Larry Kellison, Kim Lloyd, Olga Bespalaja and Paul Mitchell
        (incorporated by reference from our Current Report on Form 8-K filed on
        January 23, 2008).
|        |                                                                                                                                                                                                                                                                                      
|10.30   | Note and Warrant
        Amendment Agreement dated February 8, 2008 with RAB Special Situations
        (Master) Fund Limited (incorporated by reference from our Current Report
        on Form 8-K filed on February 14, 2008).                                                    
|        |                                                                                                                                                                                                                                                                                      
|10.31   | Form of Note
        and Warrant Amendment Agreement dated April 2, 2008 (incorporated by reference
        from our Current Report on Form 8-K filed on April 4, 2008).                                                                                                             
|        |                                                                                                                                                                                                                                                                                      
|10.32   | Executive Employment
        Agreement between the company and Larry Kellison, executed July 18, 2008
        and dated effective January 1, 2008 (incorporated by reference from our
        Current Report on Form 8-K filed on July 22, 2008).                                    
|        |                                                                                                                                                                                                                                                                                      
|(14)    | Code of Ethics                                                                                                                                                                                                                                                                       
|        |                                                                                                                                                                                                                                                                                      
|14.1    | Code of Business
        Conduct and Ethics (incorporated by reference from our Annual Report on
        Form 10- KSB filed on April 14, 2004).                                                                                                                                      
|        |                                                                                                                                                                                                                                                                                      
|(31)    | Rule 13a-14(a)/15d-14(a) Certifications                                                                                                                                                                                                                                              
|        |                                                                                                                                                                                                                                                                                      
|31.1*   | Section
      302 Certification under Sarbanes-Oxley Act of 2002 of Donald Sharpe                                                                                                                                                                                                    
|        |                                                                                                                                                                                                                                                                                      
|31.2*   | Section
      302 Certification under Sarbanes-Oxley Act of 2002 of Drew Bonnell                                                                                                                                                                                                     
|        |                                                                                                                                                                                                                                                                                      
|(32)    | Section 1350 Certifications                                                                                                                                                                                                                                                          
|        |                                                                                                                                                                                                                                                                                      
|32.1*   | Section
      906 Certification under Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                     
|        |                                                                                                                                                                                                                                                                                      
|32.2*   | Section 906 Certification
      under Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                     

* Filed herewith.

**Certain parts of this document have not been disclosed and have been filed separately with the Secretary, Securities and Exchange Commission, and is subject to a confidential treatment request pursuant to Rule 24b-2 of the Securities Exchange Act
of 1934.

---

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

EDEN ENERGY CORP.

By: /s/ Donald Sharpe Donald Sharpe, President
(Principal Executive Officer) November 13, 2008

By: /s/ Drew BonnellDrew Bonnell, Secretary,
Treasurer and CFO(Principal Financial Officer and Principal Accounting
Officer) November 13, 2008

---