---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

Form 10-Q

(Mark One)

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

For the quarterly period ended March 31, 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.
48,840,577 common shares issued and outstanding as of May 9, 2008

2

---

PART 1  FINANCIAL INFORMATION

Item
1.           Financial
Statements.

Our unaudited interim
consolidated financial statements for the three month period ended March 31,
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.

3

---

EDEN ENERGY CORP.

(An Exploration Stage Company)

Consolidated Financial Statements (Expressed in United
States dollars)

March 31, 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   

|                                                                                      |   | March 31,   |   |   | December 31, |  
|------------------------------------------------------------------------------------- | - | ----------- | - | - | ------------ | -
|                                                                                      |   | 2008        |   |   | 2007         |  
|                                                                                      |   | (Unaudited) |   |   |              |  
|Assets                                                                                |   |             |   |   |              |  
|Current Assets                                                                        |   |             |   |   |              |  
|Cash and cash
      equivalents                                                       | $ | 14,076,841  |   | $ | 19,617,518   |  
|Accounts receivable                                                                   |   | 324,265     |   |   | 271,068      |  
|Prepaid expenses                                                                      |   | 90,951      |   |   | 97,654       |  
|Deferred financing costs                                                              |   | 79,573      |   |   | 127,324      |  
|Total Current Assets                                                                  |   | 14,571,630  |   |   | 20,113,564   |  
|Oil and gas properties (Note 4)                                                       |   | 22,120,723  |   |   | 19,397,375   |  
|Restricted cash (Note 10)                                                             |   | 114,682     |   |   | 114,682      |  
|Property and
      equipment, net of depreciation                                     |   | 168,084     |   |   | 113,595      |  
|Total Assets                                                                          | $ | 36,975,119  |   | $ | 39,739,216   |  
|                                                                                      |   |             |   |   |              |  
|Liabilities and Stockholders Equity                                                  |   |             |   |   |              |  
|Current Liabilities                                                                   |   |             |   |   |              |  
|Accounts payable and
      accrued liabilities                                        | $ | 356,201     |   | $ | 2,440,031    |  
|Convertible notes, less unamortized discount of $150,800 (Note 8)                     |   | 5,810,270   |   |   | -            |  
|Total Current Liabilities                                                             |   | 6,166,471   |   |   | 2,440,031    |  
|Asset Retirement Obligations (Note 5)                                                 |   | 115,005     |   |   | 113,262      |  
|Convertible Notes, less unamortized discount of $nil (2007
      - $430,776) (Note 8) |   | -           |   |   | 8,194,254    |  
|Total Liabilities                                                                     |   | 6,281,476   |   |   | 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                                       |   |             |   |   |              |  
|48,003,791
      (December 31, 2007  42,763,326) shares issued and outstanding       |   | 48,004      |   |   | 42,763       |  
|Additional paid-in
      capital                                                      |   | 48,656,522  |   |   | 42,897,632   |  
|Accumulated other comprehensive income                                                |   | 35,167      |   |   | 35,176       |  
|Deficit accumulated
      prior to the exploration stage                              |   | (555,139    | ) |   | (555,139     | )
|Deficit accumulated during the exploration stage                                      |   | (17,490,911 | ) |   | (13,428,763  | )
|Total Stockholders Equity                                                            |   | 30,693,643  |   |   | 28,991,669   |  
|Total Liabilities
      and Stockholders Equity                                      | $ | 36,975,119  |   | $ | 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 |  
|                                                     |   | Three Months |   |   | Three Months |   |   | of Exploration     |  
|                                                     |   | Ended        |   |   | Ended        |   |   | Stage) To          |  
|                                                     |   | March 31,    |   |   | March 31,    |   |   | March 31,          |  
|                                                     |   | 2008         |   |   | 2007         |   |   | 2008               |  
|                                                     |   |              |   |   |              |   |   |                    |  
|Revenue                                              |   |              |   |   |              |   |   |                    |  
|Oil and gas                                          | $ | 438,921      |   | $ | -            |   | $ | 501,175            |  
|                                                     |   |              |   |   |              |   |   |                    |  
|Expenses                                             |   |              |   |   |              |   |   |                    |  
|                                                     |   |              |   |   |              |   |   |                    |  
|Consulting                                           |   |              |   |   |              |   |   |                    |  
|- cash                                               |   | -            |   |   | -            |   |   | 635,030            |  
|- stock-based compensation                           |   | 2,538        |   |   | 36,955       |   |   | 763,390            |  
|Debt conversion expense                              |   | 2,912,000    |   |   | -            |   |   | 2,912,000          |  
|Depletion, depreciation and amortization             |   | 409,845      |   |   | 51,502       |   |   | 879,590            |  
|General and administrative                           |   |              |   |   |              |   |   |                    |  
|- cash                                               |   | 216,054      |   |   | 128,809      |   |   | 1,990,844          |  
|- stock-based compensation                           |   | 2,307        |   |   | 6,058        |   |   | 26,539             |  
|Impairment loss on oil and gas properties            |   | -            |   |   | -            |   |   | 2,272,162          |  
|Interest expense                                     |   | 502,203      |   |   | -            |   |   | 6,464,453          |  
|Management fees                                      |   |              |   |   |              |   |   |                    |  
|- cash                                               |   | 143,798      |   |   | 115,500      |   |   | 1,181,826          |  
|- stock-based compensation                           |   | 81,719       |   |   | 155,190      |   |   | 2,149,511          |  
|Oil and gas operating expenses                       |   | 284,670      |   |   | -            |   |   | 328,804            |  
|Professional
      fees                              |   | 114,334      |   |   | 34,167       |   |   | 827,180            |  
|                                                     |   |              |   |   |              |   |   |                    |  
|Operating expenses                                   |   | 4,669,468    |   |   | 528,181      |   |   | 20,431,329         |  
|                                                     |   |              |   |   |              |   |   |                    |  
|Loss before other items                              |   | (4,230,547   | ) |   | (528,181     | ) |   | (19,930,154        | )
|                                                     |   |              |   |   |              |   |   |                    |  
|Other items                                          |   |              |   |   |              |   |   |                    |  
|                                                     |   |              |   |   |              |   |   |                    |  
|(Loss) gain on foreign exchange                      |   | (4,197       | ) |   | -            |   |   | 121,089            |  
|Loss on disposal of equipment                        |   | -            |   |   | -            |   |   | (1,544             | )
|Interest
      income                                |   | 172,596      |   |   | 252,683      |   |   | 2,319,698          |  
|                                                     |   |              |   |   |              |   |   |                    |  
|Net loss                                             |   | (4,062,148   | ) |   | (275,498     | ) |   | (17,490,911        | )
|                                                     |   |              |   |   |              |   |   |                    |  
|Other comprehensive (loss) income                    |   |              |   |   |              |   |   |                    |  
|                                                     |   |              |   |   |              |   |   |                    |  
|Foreign currency translation adjustment              |   | (9           | ) |   | (20,505      | ) |   | 35,167             |  
|                                                     |   |              |   |   |              |   |   |                    |  
|Comprehensive loss                                   | $ | (4,062,157   | ) | $ | (296,003     | ) | $ | (17,455,744        | )
|                                                     |   |              |   |   |              |   |   |                    |  
|                                                     |   |              |   |   |              |   |   |                    |  
|Basic and diluted loss per share                     | $ | (0.09        | ) | $ | (0.01        | ) |   |                    |  
|                                                     |   |              |   |   |              |   |   |                    |  
|Weighted average number of common shares outstanding |   | 46,112,000   |   |   | 42,188,000   |   |   |                    |  

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 of |  
|                                                                 |   | Three Months |   |   | Three Months |   |   | Exploration  |  
|                                                                 |   | Ended        |   |   | Ended        |   |   | Stage) To    |  
|                                                                 |   | March 31,    |   |   | March 31,    |   |   | March 31,    |  
|                                                                 |   | 2008         |   |   | 2007         |   |   | 2008         |  
|                                                                 |   |              |   |   |              |   |   |              |  
|Cash provided by (used in):                                      |   |              |   |   |              |   |   |              |  
|                                                                 |   |              |   |   |              |   |   |              |  
|Operating Activities:                                            |   |              |   |   |              |   |   |              |  
|Net loss from operations                                         | $ | (4,062,148   | ) | $ | (275,498     | ) | $ | (17,490,911  | )
|                                                                 |   |              |   |   |              |   |   |              |  
|Non-cash items:                                                  |   |              |   |   |              |   |   |              |  
|                                                                 |   |              |   |   |              |   |   |              |  
|Impairment of oil and gas
      properties                       |   | -            |   |   | -            |   |   | 2,272,162    |  
|Interest
      expense relating to accretion of convertible debt |   | 279,948      |   |   | -            |   |   | 5,076,447    |  
|Interest expense paid by
      issue of common stock             |   | 29,686       |   |   | -            |   |   | 1,108,571    |  
|Depletion, depreciation and amortization                         |   | 409,845      |   |   | 51,502       |   |   | 879,590      |  
|Loss on disposal of
      equipment                              |   | -            |   |   | -            |   |   | 1,544        |  
|Stock-based compensation                                         |   | 86,564       |   |   | 198,203      |   |   | 3,175,721    |  
|Debt conversion expense                                          |   | 2,912,000    |   |   | -            |   |   | 2,912,000    |  
|                                                                 |   |              |   |   |              |   |   |              |  
|Changes in non-cash operating assets and liabilities:            |   |              |   |   |              |   |   |              |  
|                                                                 |   |              |   |   |              |   |   |              |  
|Accounts receivable                                              |   | (53,197      | ) |   | (126         | ) |   | (98,496      | )
|Prepaid
      expenses and other                                 |   | 6,703        |   |   | (40,810      | ) |   | (90,951      | )
|Accounts payable and accrued liabilities                         |   | 170,811      |   |   | (187,185     | ) |   | 304,994      |  
|                                                                 |   |              |   |   |              |   |   |              |  
|                                                                 |   | (219,788     | ) |   | (253,914     | ) |   | (1,949,329   | )
|                                                                 |   |              |   |   |              |   |   |              |  
|Investing Activities:                                            |   |              |   |   |              |   |   |              |  
|Net assets acquired of Frontier
      Explorations Ltd.          |   | -            |   |   | -            |   |   | (475         | )
|Restricted cash                                                  |   | -            |   |   | -            |   |   | (114,682     | )
|Proceeds from sale of oil and gas
      interest                 |   | -            |   |   | 200,000      |   |   | -            |  
|Purchase of property and equipment                               |   | (65,001      | ) |   | (7,980       | ) |   | (203,962     | )
|Oil and gas property acquisition and exploration,
      net      |   | (5,293,378   | ) |   | (212,294     | ) |   | (22,034,247  | )
|                                                                 |   |              |   |   |              |   |   |              |  
|                                                                 |   | (5,358,379   | ) |   | (20,274      | ) |   | (22,353,366  | )
|                                                                 |   |              |   |   |              |   |   |              |  
|Financing Activities:                                            |   |              |   |   |              |   |   |              |  
|Issuance of common stock, net of issuance
      costs            |   | 37,500       |   |   | -            |   |   | 29,842,370   |  
|Proceeds from convertible notes                                  |   | -            |   |   | -            |   |   | 8,502,000    |  
|                                                                 |   |              |   |   |              |   |   |              |  
|                                                                 |   | 37,500       |   |   | -            |   |   | 38,344,370   |  
|                                                                 |   |              |   |   |              |   |   |              |  
|Effect of exchange rate changes on cash                          |   | (10          | ) |   | (20,505      | ) |   | 35,166       |  
|                                                                 |   |              |   |   |              |   |   |              |  
|(Decrease) increase in cash and cash
      equivalents           |   | (5,540,677   | ) |   | (294,693     | ) |   | 14,076,841   |  
|                                                                 |   |              |   |   |              |   |   |              |  
|Cash and cash equivalents, beginning                             |   | 19,617,518   |   |   | 23,438,355   |   |   | -            |  
|                                                                 |   |              |   |   |              |   |   |              |  
|Cash and cash equivalents, ending                                | $ | 14,076,841   |   | $ | 23,143,662   |   | $ | 14,076,841   |  
|                                                                 |   |              |   |   |              |   |   |              |  
|Non-cash financing and investing
      activities:               |   |              |   |   |              |   |   |              |  
|Interest capitalized to oil and gas properties                   | $ | -            |   | $ | 289,133      |   | $ | 1,257,104    |  
|Issue of common stock for interest
      expense                 | $ | 29,686       |   | $ | -            |   | $ | 1,633,174    |  
|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                                                    | $ | -            |   | $ | 92           |   | $ | 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)                
|March 31, 2008                                
|Notes to the Consolidated Financial Statements
|(Expressed in United States Dollars)          
|(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
      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 is in the exploration stage of its
      resource business and has experienced negative cash flows from operations
      to date and has accumulated losses of $17,490,911 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 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 Company is currently evaluating the impact of SFAS No. 161 on its
      financial statements, and 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.                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

F-5

---

|Eden Energy Corp.                             
|----------------------------------------------
|(An Exploration Stage Company)                
|March 31, 2008                                
|Notes to the Consolidated Financial Statements
|(Expressed in United States Dollars)          
|(Unaudited                                    

|4. | Oil and Gas Properties                                                                                                                         
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                
|   | The following table summarized information regarding the
      Companys oil and gas acquisition, exploration and development
      activities:

|                      |  |            |   |  | United     |   |  | March 31,  |   |  |            |   |  | United     |   |  | December 31, |  
|--------------------- |  | ---------- | - |  | ---------- | - |  | ---------- | - |  | ---------- | - |  | ---------- | - |  | ------------ | -
|                      |  | Canada     |   |  | States     |   |  | 2008       |   |  | Canada     |   |  | States     |   |  | 2007         |  
|                      |  | $          |   |  | $          |   |  | $          |   |  | $          |   |  | $          |   |  | $            |  
|Proven Properties     |  |            |   |  |            |   |  |            |   |  |            |   |  |            |   |  |              |  
|Acquisition costs     |  | -          |   |  | 1,512,851  |   |  | 1,512,851  |   |  | -          |   |  | -          |   |  | -            |  
|Exploration costs     |  | -          |   |  | 13,576,078 |   |  | 13,576,078 |   |  | -          |   |  | -          |   |  | -            |  
|Less:                 |  |            |   |  |            |   |  |            |   |  |            |   |  |            |   |  |              |  
|Accumulated depletion |  | -          |   |  | (349,839   | ) |  | (349,839   | ) |  | -          |   |  | -          |   |  | -            |  
|                      |  | -          |   |  | 14,739,090 |   |  | 14,739,090 |   |  | -          |   |  | -          |   |  | -            |  
|Unproven Properties   |  |            |   |  |            |   |  |            |   |  |            |   |  |            |   |  |              |  
|Acquisition costs     |  | 62,571     |   |  | 3,055,616  |   |  | 3,118,187  |   |  | 62,571     |   |  | 4,544,557  |   |  | 4,607,128    |  
|Exploration costs     |  | 2,038,873  |   |  | 4,496,735  |   |  | 6,535,608  |   |  | 2,034,917  |   |  | 15,027,492 |   |  | 17,062,409   |  
|Less:                 |  |            |   |  |            |   |  |            |   |  |            |   |  |            |   |  |              |  
|Impairment costs      |  | (1,462,241 | ) |  | (809,921   | ) |  | (2,272,162 | ) |  | (1,462,241 | ) |  | (809,921   | ) |  | (2,272,162   | )
|                      |  |            |   |  |            |   |  |            |   |  |            |   |  |            |   |  |              |  
|                      |  | 639,203    |   |  | 6,742,430  |   |  | 7,381,633  |   |  | 635,247    |   |  | 18,762,12  |   |  | 19,397,375   |  
|                      |  |            |   |  |            |   |  |            |   |  |            |   |  |            |   |  |              |  
|Net Carrying Value    |  | 639,203    |   |  | 21,481,520 |   |  | 22,120,723 |   |  | 635,247    |   |  | 18,762,128 |   |  | 19,397,375   |  

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 three month
period ended March 31, 2008 of $349,839 (2007 - $nil) was recorded in the U.S.
cost center and $nil (2007 - $nil) was recorded in the Canadian cost center. All
of the Companys unproven properties are not subject to depletion.

Impairment costs  Unproven
Properties

| | (a) | During 2006, the Companys unproven property costs in
      Alberta (Chinchaga Project) were considered impaired resulting in a
      $1,462,241 non-cash impairment loss.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                           
| | (b) | During 2006, the Companys unproven property costs in
      Nevada (Big Sand Project) were considered impaired resulting in a $809,921
      non-cash impairment loss.    

The Companys unproven acquisition and
exploration costs were distributed in the following geographic areas:

| |                                                          |  | March 31, |  |  | December 31, | 
| | -------------------------------------------------------- |  | --------- |  |  | ------------ | 
| |                                                          |  | 2008      |  |  | 2007         | 
| |                                                          |  | $         |  |  | $            | 
| | Chinchaga Project, Alberta                               |  | 639,203   |  |  | 635,247      | 
| | Canada                                                   |  | 639,203   |  |  | 635,247      | 
| | Noah Project, Nevada                                     |  | 5,866,235 |  |  | 6,239,372    | 
| | Cherry Creek Project, Nevada                             |  | 876,195   |  |  | 852,286      | 
| | Ant Hill Unit Drilling and Development Project, Colorado |  | -         |  |  | 11,670,470   | 
| | United
      States                                      |  | 6,742,430 |  |  | 18,762,128   | 
| | Total unproven acquisition and exploration costs         |  | 7,381,633 |  |  | 19,397,375   | 

F-6

---

|Eden Energy Corp.                             
|----------------------------------------------
|(An Exploration Stage Company)                
|March 31, 2008                                
|Notes to the Consolidated Financial Statements
|(Expressed in United States Dollars)          
|(Unaudited                                    

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

| |                                          |  | Three Months Ended |  |  | Year Ended   | 
| | ---------------------------------------- |  | ------------------ |  |  | ------------ | 
| |                                          |  | March 31,          |  |  | December 31, | 
| |                                          |  | 2008               |  |  | 2007         | 
| |                                          |  | $                  |  |  | $            | 
| |                                          |  |                    |  |  |              | 
| | Beginning asset retirement obligations   |  | 113,262            |  |  | -            | 
| | Liabilities incurred                     |  | -                  |  |  | 113,016      | 
| | Deletions related to property disposals  |  | -                  |  |  | -            | 
| | Accretion                                |  | 1,743              |  |  | 246          | 
| |                                          |  |                    |  |  |              | 
| | Total asset
      retirement obligations |  | 115,005            |  |  | 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)        
|   |            
|   | (b)        
|   |            
|   | (c)        

2008
    
    179,8312009
    
    182,8922010
    
    189,0532011
    
    189,0532012
    
    126,024$
      866,853


F-7

---

|Eden Energy Corp.                             
|----------------------------------------------
|(An Exploration Stage Company)                
|March 31, 2008                                
|Notes to the Consolidated Financial Statements
|(Expressed in United States Dollars)          
|(Unaudited                                    

|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 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | 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 has 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 will record 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. The
      carrying value of the Convertible Debentures is being accreted to the face
      value of $8,625,000 at maturity. 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. At March
      31, 2008, accrued interest of $118,176 (December 31, 2007 - $42,534) is
      included in accrued liabilities. Interest expense of $150,639 (2007 -
      $59,372) has been accreted during the three month period ended March 31,
      2008 increasing the carrying value of the Convertible Debentures to
      $5,810,270 (December 31, 2007 - $8,194,254). Interest expense of $Nil
      (2007 - $289,133) was capitalized to the Ant Hill Unit property during the
      three month period ended March 31, 2008.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | 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
      $2,356,000 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 Amendment. The Company also paid a commission of $67,220 for
      brokerage services.                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

F-8

---

|Eden Energy Corp.                             
|----------------------------------------------
|(An Exploration Stage Company)                
|March 31, 2008                                
|Notes to the Consolidated Financial Statements
|(Expressed in United States Dollars)          
|(Unaudited                                    

|   | 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 has also accrued a commission of $15,260 for brokerage
      services.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|8. | Convertible Notes (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Upon the completion of the conversions described above
      and in Note 11, 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 increases to
      approximately 5,293,644.                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|9. | Capital Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | During the three months ended March 31, 2008, the Company
      issued the following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | (d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | During the three months ended March 31, 2007, the Company
      issued the following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | (e)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | (f)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | (g)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | (h)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

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.

F-9

---

|Eden Energy Corp.                             
|----------------------------------------------
|(An Exploration Stage Company)                
|March 31, 2008                                
|Notes to the Consolidated Financial Statements
|(Expressed in United States Dollars)          
|(Unaudited                                    

During the three month period ended
March 31, 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 three month period ended
March 31, 2008, the Company recorded stock-based compensation of $81,719 as
management fees, $2,538 as consulting fees and $2,307 as general and
administrative expense.

F-10

---

|Eden Energy Corp.                             
|----------------------------------------------
|(An Exploration Stage Company)                
|March 31, 2008                                
|Notes to the Consolidated Financial Statements
|(Expressed in United States Dollars)          
|(Unaudited                                    

|9. | Capital Stock (continued)                                                                                            
|-- | ---------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                      
|   | Stock Option Plan (continued)                                                                                        
|   |                                                                                                                      
|   | A summary of the Companys stock option activity for the
      three month period ended March 31, 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, March 31, 2008       |  | 3,516,000 |  | $ 2.18         |  |  | 4.87        |  | $ | 397,600   | 
|Exercisable, March
      31, 2008 |  | 2,490,667 |  | $ 1.98         |  |  | 2.89        |  | $ | 100,000   | 

A summary of the status of the
Companys unvested stock options as of March 31, 2008, and changes during the
three month period ended March 31, 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                      |  | (33,333   | ) | 0.61             | 
|                            |  |           |   |                  | 
|Unvested at March 31, 2008  |  | 1,025,334 |   | $ 0.37           | 

As at March 31, 2008, there was
$294,877 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 0.74
years.

Share Purchase Warrants

On January 17, 2008, and February 8,
2008, the Company entered into 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.

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.

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.

F-11

---

|Eden Energy Corp.                             
|----------------------------------------------
|(An Exploration Stage Company)                
|March 31, 2008                                
|Notes to the Consolidated Financial Statements
|(Expressed in United States Dollars)          
|(Unaudited                                    

|9. | Capital Stock (continued)                                                     
|-- | ------------------------------------------------------------------------------
|   |                                                                               
|   | Share Purchase Warrants (continued)                                           
|   |                                                                               
|   | 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                     |  | -          |   | -              | 
|Exercised                  |  | (75,000    | ) | $ 0.50         | 
|                           |  |            |   |                | 
|Balance, March 31, 2008    |  | 16,361,176 |   | $ 4.22         | 

At March 31, 2008, the following share
purchase warrants were outstanding:

| | Number
      of Warrants |  | Exercise Price |  | Expiry Date       | 
| | ------------------------ |  | -------------- |  | ----------------- | 
| |                          |  |                |  |                   | 
| | 364,262                  |  | $ 4.48         |  | August 25, 2008   | 
| | 490,838                  |  | $ 1.00         |  | August 25, 2009   | 
| | 50,000                   |  | $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 March 31, 2008, restricted cash consists of
      $114,682 (CAD$112,500) for security for corporate credit cards.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|11. | Subsequent Events                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | On April 2, 2008, the Company entered into a Note and
      Warrant Amendment Agreements (Second 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 Second Amendment, the conversion price for the notes upon
      100% conversion 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 Second Amendment, in
      which case the exercise price of the warrants shall be $0.70. The Company
      issued 836,786 shares of common stock, and will recognize 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 will recognize a debt
      conversion expense of $663,000 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 $17,572 for brokerage services.

F-12

---

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

We are 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. We also are engaged in a
development drilling program for natural gas in the State of Colorado.
Management of our company has and continues to review other potential petroleum
and natural gas projects which may meet our exploration criteria.

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.

Our Current Business

Eden Energy Corp. is engaged in
various stages of exploration and development on multiple projects in the USA
and Canada. Currently, these include the Noah and Cherry Creek Projects in
Nevada, the Chinchaga Project in Alberta, and the Ant Hill Unit Drilling and
Development Project in Colorado.

4

---

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

5

---

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.

6

---

In total, there are approximately
190,000 acres in the Noah project with numerous structural leads to potentially
explore. We are incorporating the results of this first well into our overall
geological model of the area before making a decision on how to proceed
further.

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 the
drilling of the Noah Federal #1 well was rescheduled for Spring 2008 and
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.

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.

7

---

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. Our partners and we 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 of
which Eden holds a 55.56% working interest in 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 recently
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 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.

Ant Hill Unit Drilling and Development Project 
Colorado

The 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 will 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.

The Ant Hill Unit is a 20,000
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 became a party to,
Eden and Starlight have agreed to drill a minimum of four additional wells in
areas outside of the current Participating Areas (PAs) commencing in the fall
of 2006. The wells will be 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 and Starlight will carry 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 and Starlight will also earn 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
are drilled, Eden and Starlight 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.

8

---

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 17 years. Eden estimates
ultimate reserves per well to be approximately 1.07 BCF per well, with an
initial production rate of approximately 710mcfd. 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
restricted the flow of gas naturally. The Love Federal 17- 42 was completed in
the Cameo coal section only and despite our subsequent scaling treatment
procedure is currently not producing. Both wells have subsequently been
recompleted as detailed following.

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 8/8thsb.
    Durango Petroleum Corp.
    0.5%
      of 8/8thsc.
    Monarch Royalty LLC
    0.5%
      of 8/8thsd.
    Timothy E. Macke
    0.5% of 8/8ths


9

---

e.
    H.J. Kagie
    0.5%
      of 8/8thsf.
    Joseph R. Pope
    0.5%
      of 8/8thsg.
    Brian S. Bentley
    0.5%
      of 8/8thsh.
    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.

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 are tied-in and producing approximately 1.9
MMcfd 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. We anticipate being able to provide the
report within the next 30 days.

Cash Requirements

For the next 12 months we expect
to continue to evaluate our lease positions in eastern Nevada. We expect to
continue to participate in our Alberta projects as our 50% and 10% joint venture
exploration agreements provide

10

---

for. We plan to continue with our development-drilling program
in Colorado. Additionally, we expect to continue to review other potential
projects, which may meet our exploration criteria.

Currently in Nevada we hold
approximately 190,000 gross acres pursuant to lease agreements on the Noah
Project and approximately 26,000 gross acres pursuant to lease agreements on the
Cherry Creek Project. The expiration dates for the leases are in 2014, 2015, and
2016 respectively. The leases may be extended upon production from the leases.
In Colorado, we hold 320 gross acres in our White River Dome
development-drilling project. In Alberta we hold approximately 5,120 gross acres
in our 50% working interest joint exploration agreement and an additional 1,280
gross acres with a 55.56% interest due to one partner not participating in a
February 2007 lease sale. We hold an approximate 14,080 gross acres and the
right of first refusal on another 5,760 gross acres in our 10% working interest
joint venture exploration agreement.

Our portfolio of exploration
projects includes the Noah and Cherry Creek projects in the USA, and the
Chinchaga project in Alberta. On April 28, 2008 we reported plugging and
abandoning our first well on the Noah Project, and in conjunction with our
Partner, are evaluating these results prior to budgeting further exploration
funds in Nevada. In light of the uncertainty surrounding the new Alberta
Government Royalty program, our Alberta projects are temporarily suspended. We
are reviewing other potential projects and have budgeted approximately
$4,000,000 in exploration funding should we decide to proceed in this
manner.

Due to seasonal access
limitations and other considerations in the Ant Hill Unit we are revising the
development well drilling schedule over the next 12 month period to align with
proposed changes to the commitment obligations in the area for 2008. We are
budgeting for three additional wells over the drilling season of May 1, 2008 to
December 1, 2008 of which the cost of these three wells is 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 $6,150,000 including engineering reports and well permitting
costs. We estimate based on current interpretations of well projections that
these three new wells combined with production from our four existing wells will
provide approximately $4,000,000 in net cash for the period and approximately
4.5 Bcf of residual gross reserves, exclusive of earned proved undeveloped
locations. As at March 31, 2008, we had received or accrued approximately
$501,175 gross from gas and liquid sales from the first four wells.

Combined, we have budgeted
approximately $10,200,000 over the next 12 month period for exploration and
drilling programs. As it relates to our Colorado development-drilling program,
our planned expenditures are expected to be linked to securing industry reserve
based financing.

Our net cash provided by
financing activities during the three months ended March 31, 2008 was $37,500.
Our total net cash provided by financing since January 1, 2004, the date of
inception of the exploration stage to March 31, 2008 was $38,344,370.

We will require additional funds
to implement our growth strategy in our oil and gas exploration and 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 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

11

---

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 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. 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 3% of the gross proceeds for
brokerage services in the transaction.

12

---

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 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.

Over the next twelve months we
intend to use our available funds to expand on the exploration and development
of projects and continue with development drilling in Colorado as follows:

Estimated Net Expenditures During the Next Twelve
Months

$General, Administrative and Corporate
      Expenses
    
    1,550,000Projects Land Rental Expense  Nevada, Colorado, Alberta
    
    332,000Exploration/Drilling Programs  Ant Hill
      and Other
    
    10,200,000Working Capital
    
    4,000,000Total
    
    16,082,000


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, 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.

13

---

Our business plan is focused on a
strategy for maximizing the long-term exploration and development of our oil and
gas leases in the USA and Canada and other jurisdictions that may be entered.
The execution of our business plan has largely focused on acquiring prospective
oil and gas leases and with early stage exploration, drilling, and evaluation of
acquired data. We continue to evaluate these results and plan for further
exploration, while simultaneously reviewing other potential projects, which meet
our exploration criteria. Effective September 1, 2006 we are engaged in natural
gas development drilling in Colorado.

Purchase of Significant Equipment

We do not intend to purchase any
significant equipment (excluding oil and gas activities) over the twelve months
ending March 31, 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 $24,000 per month. Within this space we are permitted to sublease
to multiple tenants and currently have 5 sublease tenants secured with gross
rent of approximately $12,000 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 $48,000. Our current premises are adequate for our existing
operations; however with the rapid advancement of operations we may require
additional premises as we progress through fiscal 2008. 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, and an investor relations
consultant. We do not expect any material changes in the number of employees
over the next 12 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 June 11, 2007, Ralph
Stensaker, CGA, MBA was appointed to our Board of Directors and Audit Committee.
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.

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 March 31, 2008, we have properties with
proven reserves and production and sales from these reserves has

14

---

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 March 31, 2008, our
Alberta and Nevada (less Block 1 Noah) oil and gas properties were unproved and
were excluded from depletion. At March 31, 2008, management believes none of our
unproved oil and gas properties were considered impaired other than as
previously reported.

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 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. 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.

15

---

Results of Operations  Three Months Ended March 31, 2008
and 2007

The following summary of our results of operations should be
read in conjunction with our financial statements for the quarter ended March
31, 2008 which are included herein.

Our operating results for the three months ended March 31,
2008, for the three months ended March 31, 2007 and the changes between those
periods for the respective items are summarized as follows:

Three Months
      Ended March 31, 2008
    
    Three Months Ended
      March 31, 2007
    
    Change Between
      Three Month Period Ended March 31, 2008
      and March 31, 2007Revenue
    $
    438,921
    $
    Nil
    $
    438,921Debt conversion expense
      
      2,912,000
      
      Nil
      
      2,912,000General and administrative
    
    218,361
    
    134,867
    
    83,494Interest expense
    
    502,203
    
    Nil
    
    502,203Management fees
    
    225,517
    
    270,690
    
    (45,173)Oil and gas operating expenses
    
    284,670
    
    Nil
    
    284,670Professional Fees
    
    114,334
    
    34,167
    
    80,167Net loss
    
    4,062,148
    
    275,498
    
    3,786,650


As at March 31, 2008, we had
$6,166,471 in current liabilities. Our net cash used in operating activities for
the three months ended March 31, 2008 was $219,788 compared to $253,914 used in
the three months ended March 31, 2007. Our accumulated losses increased to
$17,490,911 as of March 31, 2008. Our financial statements report a net loss of
$4,062,148 for the three month period ended March 31, 2008 compared to a net
loss of $275,498 for the three month period ended March 31, 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 $2,912,000 for the three months ended March 31, 2008 as compared to $nil for
the three months ended March 31, 2007. The Company also recognized depletion of
its capitalized oil and gas expenditures of $349,839 during the three months
ended March 31, 2008, compared to $nil for the three months ended March 31,
2007. The depletion rate for the three months ended March 31, 2008 was
$2.41/MCFe.

Our total liabilities as of March
31, 2008 were $6,281,476 as compared to total liabilities of $7,943,391 as of
March 31, 2007. The decrease was due to the increase in accounts payable and
accrued liabilities (from $233,727 as at March 31, 2007 to $356,201 as at March
31, 2008) offset by a decrease in our outstanding Convertible Notes from
$7,709,664 as at March 31, 2007 to $5,810,270 as at March 31, 2008.

During the three month period
ended March 31, 2008 we spent $5,293,378 on exploration and acquisition of our
oil and gas properties as compared to $212,294 spent during the three month
period ended March 31, 2007. Of this amount $23,910 was attributable to
acquisition costs (2007 - $212,294), and $5,269,468 (2007 - $nil) was
attributable to exploration costs.

16

---

Liquidity and Financial Condition

|Working Capital     |   |            |  |   |              | 
|------------------- | - | ---------- |  | - | ------------ | 
|                    |   | At         |  |   | At           | 
|                    |   | March 31,  |  |   | December 31, | 
|                    |   | 2008       |  |   | 2007         | 
|Current assets      | $ | 14,571,630 |  | $ | 20,113,564   | 
|Current liabilities |   | 6,166,471  |  |   | 2,440,031    | 
|Working capital     | $ | 8,405,159  |  | $ | 17,673,533   | 

|Cash Flows                                    |   |                    |   |   |           |  
|--------------------------------------------- | - | ------------------ | - | - | --------- | -
|                                              |   | Three Months Ended |  
|                                              |   | March 31,          |   |   | March 31, |  
|                                              |   | 2008               |   |   | 2007      |  
|Cash flows used in operating activities       | $ | 219,788            |   | $ | 253,914   |  
|Cash flows used in investing activities       |   | 5,358,379          |   |   | 20,274    |  
|Cash flows provided by financing activities   |   | 37,500             |   |   | Nil       |  
|Net increase (decrease) in cash during period | $ | (5,540,677         | ) | $ | (294,693  | )

Operating Activities

Net cash used in operating activities was $219,788 in the three
months ended March 31, 2008 compared with net cash used in operating activities
of $253,914 in the same period in 2007.

Investing Activities

Net cash used in investing activities was $5,358,379 in the
three months ended March 31, 2008 compared to net cash provided by investing
activities of $20,274 in the same period in 2007. The increase of $5,338,105 in
investing activities is mainly attributable to oil and gas property acquisition
and exploration.

Financing Activities

Net cash provided by financing activities was $37,500 in the
three months ended March 31, 2008 compared to $Nil in the same period in 2007,
an increase of $37,500. This is attributable to sales of our common stock.

Contractual Obligations

The following table sets forth our contractual obligations and
commercial commitments as of March 31, 2008:

|                               |   | Payment Due by Period | 
|------------------------------ | - | --------------------- | 
|                               |   |                       | 
|                               |   | Total                 | 
|                               |   |                       | 
|Contractual Obligations:       |   | -                     | 
|♦ LongTerm Debt                |   | -                     | 
|♦ CapitalLease Obligations     |   | -                     | 
|♦ OperatingLeases              | $ | 866,853               | 
|♦ PurchaseObligations          |   | -                     | 
|Total Contractual Obligations: | $ | 866,853               | 

17

---

[♦ Provide any
  footnote disclosure for the above table to better explain any of the obligations
  if necessary.]

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.

Recently Issued Accounting Standards

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 Company is currently evaluating the impact of SFAS No. 161 on
its financial statements, and 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.

In February 2007, the FASB issued
SFAS No. 159, The Fair Value Option for Financial Assets and Financial
Liabilities  Including an Amendment of FASB Statement No. 115. This statement
permits entities to choose to measure many financial instruments and certain
other items at fair value. Most of the provisions of SFAS No. 159 apply only to
entities that elect the fair value option. However, the amendment to SFAS No.
115, Accounting for Certain Investments in Debt and Equity Securities, applies
to all entities with available-for-sale and trading securities. SFAS No. 159 is
effective as of the beginning of an entitys first fiscal year that begins after
November 15, 2007. The adoption of this statement did not have a material effect
on the Company's financial statements.

18

---

Item 4.  Controls and Procedures

Managements Report on Disclosure 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, principal financial officer and principal
accounting officer) to allow for timely decisions regarding required disclosure.

As of March 31, 2008, the end of our first 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.

Managements Report on Internal Control over Financial
Reporting

Our management is responsible for establishing and maintaining
adequate internal control over financial reporting (as defined in Rule 13a-15(f)
under the Securities Exchange Act, as amended). In fulfilling this
responsibility, estimates and judgments by management are required to assess the
expected benefits and related costs of control procedures. The objectives of
internal control include providing management with reasonable, but not absolute,
assurance that assets are safeguarded against loss from unauthorized use or
disposition, and that transactions are executed in accordance with managements
authorization and recorded properly to permit the preparation of consolidated
financial statements in conformity with accounting principles generally accepted
in the United States. Our management assessed the effectiveness of our internal
control over financial reporting as of March 31, 2008. In making this
assessment, our management used the criteria set forth by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) in Internal
Control-Integrated Framework. Our management has concluded that, as of March
31, 2008, our internal control over financial reporting is effective in
providing reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with US generally accepted accounting principles. Our management reviewed the
results of their assessment with the Audit Committee of our Board of
Directors.

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 March 31, 2008
that have materially or are reasonably likely to materially affect, our internal
controls over financial reporting.

19

---

Audit Committee Financial Expert

Our board of directors has determined that it does have a
member of its audit committee who qualifies as an audit committee financial
expert as defined in Item 401(e) of Regulation S-B, and is independent as the
term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities Exchange
Act of 1934, as amended.

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 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 totalling approximately
$4,062,148 for the three month period ending March 31, 2008, and cumulative
losses of $17,490,911 to March 31, 2008. As of March 31, 2008 we had working
capital of $8,405,159 as a result of recent financing activities. We do not
expect positive cash flow from operations in the near term. There is no
assurance that actual cash requirements will not exceed our estimates. In
particular, additional capital may be required in the event that:

- drilling and completion costs for further wells increase beyond 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.

20

---

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 March 31, 2008, we have incurred
aggregate losses of approximately $17,490,911. Our loss from operations for the
three-month period ended March 31, 2008 was $4,062,148. 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 services, the size of
customers purchases, the demand for our 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 no
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 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

21

---

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
are largely engaged in the business of exploring and, if warranted, developing
commercial reserves of oil and gas. Our Nevada and Alberta properties are in the
exploration stage only and are 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 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 the sale of our equity securities or debt in
order to continue our business operations.

As our Nevada and Alberta properties are in the exploration
and development stage there can be no assurance that we will establish
commercial discoveries on these properties.

22

---

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 and 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.

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 anticipates the potential acquisition of additional
acreage in Nevada, Colorado and/or Alberta. 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

23

---

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 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.

24

---

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 satellite 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
|------- | -----------------
|        |                  
|        | None             
|        |                  
|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).                   

25

---

|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).            
|     |                                                                                                                                                                                                                
|(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                                                                                                                                                                                 

26

---

|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):                                                                        

27

---

| | 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).                                        
|      |                                                                                                                                                                                                                                                
|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).                                                        

28

---

|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).                                                                                                             
|      |                                                                                                                                                                                                                                                                                      
|(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).                                                                                                                                      
|      |                                                                                                                                                                                                                                                                                      
|(21)  | Subsidiaries                                                                                                                                                                                                                                                                         
|      |                                                                                                                                                                                                                                                                                      
|21.1  | List of Subsidiaries                                                                                                                                                                                                                                                                 
|      |                                                                                                                                                                                                                                                                                      
|(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 of Donald Sharpe                                                                                                                                                                                                  
|      |                                                                                                                                                                                                                                                                                      
|32.2* | Section
        906 Certification under Sarbanes-Oxley Act of 2002 of Drew Bonnell                                                                                                                                                                                                   

* 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.

29

---

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

30

---