---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-QSB

(Mark One)

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

For the quarter ended September 30, 2005

OR

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

For the transition period from __________to __________

Commission File Number 000-30095

WESCORP ENERGY INC.(Exact
name of registrant as specified in its charter)

|Delaware                       | 98-044716          
|------------------------------ | -------------------
|State or other jurisdiction of | (I.R.S. Employer   
|incorporation or organization  | Identification No.)

8709  50 Avenue, Edmonton AB, Canada T6E
5H4(Address of principal executive offices) (Zip Code)

(780) 482 - 4200Registrant's telephone number,
including area code

Securities registered pursuant to Section 12(b) of the Act:

|Title of each class | Name of each exchange on which registered
|------------------- | -----------------------------------------
|None                | None                                     

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.0001 per share(Title of
class)

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

Number of shares outstanding of the registrant's class of common
stock as of November 10, 2005 was 38,279,686.

Authorized share capital of the registrant as of November 10,
2005, was 250,000,000 common shares, par value of $0.0001, and 50,000,000
preferred shares, par value of $0.0001

The Company recorded revenue of $638,536 for the quarter ended
  September 30, 2005.

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

---

FORWARD-LOOKING STATEMENTS

THIS QUARTERLY REPORT ON FORM 10-QSB CONTAINS PREDICTIONS,
PROJECTIONS AND OTHER STATEMENTS ABOUT THE FUTURE THAT ARE INTENDED TO BE
"FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF SECTION 21E OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED (COLLECTIVELY, "FORWARD-LOOKING STATEMENTS").
FORWARD-LOOKING STATEMENTS INVOLVE RISKS AND UNCERTAINTIES. A NUMBER OF
IMPORTANT FACTORS COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN
THE FORWARD-LOOKING STATEMENTS. IN ASSESSING FORWARD-LOOKING STATEMENTS
CONTAINED IN THIS QUARTERLY REPORT ON FORM 10-QSB, READERS ARE URGED TO READ
CAREFULLY ALL CAUTIONARY STATEMENTS  INCLUDING THOSE CONTAINED IN OTHER
SECTIONS OF THIS QUARTERLY REPORT ON THIS FORM 10-QSB. AMONG SAID RISKS AND
UNCERTAINTIES IS THE RISK THAT THE ELLYCRACK TECHNOLOGY MAY NOT BE TECHNICALLY
EFFECTIVE OR COST EFFECTIVE IN THE MARKETS TARGETED BY MANAGEMENT; THAT THE
COMPANY WILL NOT COMPLETE ANY OTHER SUITABLE ACQUISITIONS, THAT ITS MANAGEMENT
IS ADEQUATE TO CARRY OUT ITS BUSINESS PLAN AND THAT THERE WILL BE ADEQUATE
CAPITAL; IN ADDITION, IF SAID ACQUISITIONS ARE COMPLETED THEY MAY BE
UNSUCCESSFUL FOR TECHNICAL, ECONOMIC OR OTHER REASONS.

CURRENCIES

All amounts expressed herein are in US dollars unless otherwise
indicated.

PART I - FINANCIAL INFORMATION

Item 1.     Financial Statements

Index

|Consolidated
      Balance Sheets at September 30, 2005 and December 31, 2004                                                                                   | F-1
|--------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---
|                                                                                                                                                                |    
|Consolidated
      Statements of Operations for the three and nine months ended September 30,
      2005 and the three and nine months ended September 30, 2004 | F-2
|
|                                                                                                                                                                |    
|Consolidated
      Statements of Cash Flows for the nine months ended September 30, 2005 and
      the nine months ended September 30, 2004                     | F-3
|
|                                                                                                                                                                |    
|Notes
      to the Consolidated Financial Statements                                                                                                            | F-4

2

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WESCORP ENERGY INC. 
  CONSOLIDATED BALANCE SHEETS

|                                                         |   | September 30, |   |   | December 31, |  
|-------------------------------------------------------- | - | ------------- | - | - | ------------ | -
|                                                         |   | 2005          |   |   | 2004         |  
|                                                         |   | (Unaudited)   |   |   |              |  
|ASSETS                                                   |   |               |   |   |              |  
|CURRENT ASSETS                                           |   |               |   |   |              |  
|Cash and equivalents                                     | $ | 259,708       |   | $ | 48,428       |  
|Cash trust accounts                                      |   | -             |   |   | 1,970        |  
|Accounts receivable                                      |   | 585,444       |   |   | 622,657      |  
|Inventory                                                |   | 865,809       |   |   | 510,193      |  
|Prepaid expenses                                         |   | 57,982        |   |   | 14,706       |  
|Note receivable                                          |   | 287,616       |   |   | -            |  
|TOTAL CURRENT
      ASSETS                               |   | 2,056,559     |   |   | 1,197,954    |  
|                                                         |   |               |   |   |              |  
|PROPERTY
      AND EQUIPMENT, net                        |   | 144,611       |   |   | 105,838      |  
|                                                         |   |               |   |   |              |  
|OTHER ASSETS                                             |   |               |   |   |              |  
|Investments                                              |   | 993,648       |   |   | 918,648      |  
|Technology                                               |   | 3,503,824     |   |   | 3,503,824    |  
|Goodwill                                                 |   | 414,073       |   |   | 414,073      |  
|Deposits                                                 |   | 14,132        |   |   | 39,273       |  
|TOTAL OTHER ASSETS                                       |   | 4,925,677     |   |   | 4,875,818    |  
|                                                         |   |               |   |   |              |  
|                                                         |   |               |   |   |              |  
|TOTAL ASSETS                                             | $ | 7,126,847     |   | $ | 6,179,610    |  
|                                                         |   |               |   |   |              |  
|LIABILITIES AND STOCKHOLDERS' EQUITY                     |   |               |   |   |              |  
|CURRENT LIABILITIES                                      |   |               |   |   |              |  
|Accounts payable and accrued liabilities                 | $ | 958,826       |   | $ | 914,628      |  
|Other liabilities                                        |   | 437,027       |   |   | 265,786      |  
|Due to directors                                         |   | 300,000       |   |   | -            |  
|Note payable, related party, net of unamortized discount |   | -             |   |   | 1,979,593    |  
|Due to shareholders                                      |   | -             |   |   | 44,836       |  
|Deposit equity                                           |   | 1,924,681     |   |   | -            |  
|Convertible debentures                                   |   | 1,552,319     |   |   | -            |  
|TOTAL CURRENT LIABILITIES                                |   | 5,172,853     |   |   | 3,204,843    |  
|                                                         |   |               |   |   |              |  
|LONG-TERM LIABILITIES                                    |   |               |   |   |              |  
|Other liabilities                                        |   | 487,818       |   |   | 851,572      |  
|TOTAL LONG-TERM LIABILITIES                              |   | 487,818       |   |   | 851,572      |  
|                                                         |   |               |   |   |              |  
|COMMITMENTS AND CONTINGENCIES                            |   | -             |   |   | -            |  
|                                                         |   |               |   |   |              |  
|STOCKHOLDERS' EQUITY                                     |   |               |   |   |              |  
|Preferred stock, 50,000,000 shares authorized, $0.0001   |   |               |   |   |              |  
|par value; no shares issued                              |   | -             |   |   | -            |  
|Common stock, 250,000,000 shares authorized, $0.0001     |   |               |   |   |              |  
|par value; 37,365,186 and
      35,017,615 shares        |   |               |   |   |              |  
|issued and
      outstanding, respectively               |   | 3,736         |   |   | 3,501        |  
|Additional paid-in capital                               |   | 14,597,182    |   |   | 13,081,137   |  
|Subscription receivable                                  |   | (62,272       | ) |   | -            |  
|Accumulated other comprehensive income (loss)            |   | (281,062      | ) |   | (378,641     | )
|Accumulated deficit                                      |   | (12,791,408   | ) |   | (10,582,802  | )
|TOTAL STOCKHOLDERS' EQUITY                               |   | 1,466,176     |   |   | 2,123,195    |  
|                                                         |   |               |   |   |              |  
|TOTAL LIABILITIES AND                                    |   |               |   |   |              |  
|STOCKHOLDERS'
      EQUITY                               | $ | 7,126,847     |   | $ | 6,179,610    |  

The accompanying notes are an integral part of these financials
  statements.

F-1

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WESCORP ENERGY INC.CONSOLIDATED STATEMENTS OF OPERATIONS

|                                                   |   | Three Months Ended September 30, |   |   | Nine Months Ended September 30, |  
|-------------------------------------------------- | - | -------------------------------- | - | - | ------------------------------- | -
|                                                   |   | 2005                             |   |   | 2004                            |  
|                                                   |   | (Unaudited)                      |   |   | (Unaudited)                     |  
|                                                   |   |                                  |   |   |                                 |  
|REVENUES                                           | $ | 638,536                          |   | $ | 579,337                         |  
|                                                   |   |                                  |   |   |                                 |  
|COST OF SALES                                      |   | 396,556                          |   |   | 407,090                         |  
|                                                   |   |                                  |   |   |                                 |  
|GROSS PROFIT                                       |   | 241,980                          |   |   | 172,247                         |  
|                                                   |   |                                  |   |   |                                 |  
|EXPENSES                                           |   |                                  |   |   |                                 |  
|Consulting                                         |   | 137,498                          |   |   | 174,402                         |  
|Advertising
      and investor relations           |   | 29,574                           |   |   | 130,971                         |  
|Legal and accounting                               |   | 23,743                           |   |   | 202,082                         |  
|Wages and
      benefits                           |   | 260,927                          |   |   | -                               |  
|Office                                             |   | 54,355                           |   |   | 68,491                          |  
|Insurance                                          |   | 35,361                           |   |   | -                               |  
|Travel                                             |   | 46,948                           |   |   | 3,535                           |  
|Engineering
      expenses                         |   | 168,044                          |   |   | -                               |  
|Depreciation                                       |   | 14,544                           |   |   | 24,516                          |  
|Research
      and development                     |   | 4,392                            |   |   | -                               |  
|Amortization of loan discount                      |   | -                                |   |   | 35,273                          |  
|TOTAL OPERATING EXPENSES                           |   | 775,386                          |   |   | 639,270                         |  
|                                                   |   |                                  |   |   |                                 |  
|LOSS FROM OPERATIONS                               |   | (533,406                         | ) |   | (467,023                        | )
|                                                   |   |                                  |   |   |                                 |  
|OTHER INCOME (EXPENSES)                            |   |                                  |   |   |                                 |  
|Interest and bank charges                          |   | (1,720                           | ) |   | (3,420                          | )
|Interest
      to shareholders and related parties |   | -                                |   |   | (71,513                         | )
|Interest on debentures                             |   | (58,660                          | ) |   | -                               |  
|Financing
      costs                              |   | -                                |   |   | -                               |  
|Beneficial conversion interest                     |   | -                                |   |   | -                               |  
|Penalty for
      late delivery of shares          |   | (233,280                         | ) |   | -                               |  
|Interest income                                    |   | -                                |   |   | 4,042                           |  
|Foreign currency
      transaction gain/(loss)     |   | -                                |   |   | (25,313                         | )
|Gain/(loss) on sale of assets                      |   | -                                |   |   | (5,398                          | )
|TOTAL OTHER INCOME (EXPENSES)                      |   | (293,660                         | ) |   | (101,602                        | )
|                                                   |   |                                  |   |   |                                 |  
|LOSS BEFORE INCOME TAXES                           |   | (827,066                         | ) |   | (568,625                        | )
|                                                   |   |                                  |   |   |                                 |  
|INCOME TAXES                                       |   | -                                |   |   | -                               |  
|                                                   |   |                                  |   |   |                                 |  
|NET LOSS                                           |   | (827,066                         | ) |   | (568,625                        | )
|                                                   |   |                                  |   |   |                                 |  
|OTHER COMPREHENSIVE INCOME (LOSS)                  |   |                                  |   |   |                                 |  
|Foreign currency translation
      gain (loss)     |   | 29,560                           |   |   | 192,861                         |  
|                                                   |   |                                  |   |   |                                 |  
|COMPREHENSIVE LOSS                                 | $ | (797,506                         | ) | $ | (375,764                        | )
|                                                   |   |                                  |   |   |                                 |  
|BASIC AND DILUTED NET LOSS
      PER SHARE         | $ | (0.02                            | ) | $ | (0.01                           | )
|                                                   |   |                                  |   |   |                                 |  
|WEIGHTED AVERAGE NUMBER                            |   |                                  |   |   |                                 |  
|COMMON SHARES
      OUTSTANDING                    |   |                                  |   |   |                                 |  
|BASIC AND DILUTED                                  |   | 36,613,882                       |   |   | 35,706,227                      |  

The accompanying notes are an integral part of these financial
  statements.

F-2

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WESCORP ENERGY INC.CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                      |   | Nine Months Ended September 30, |  
|--------------------------------------------------------------------- | - | ------------------------------- | -
|                                                                      |   | 2005                            |  
|                                                                      |   | (Unaudited)                     |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                 |   |                                 |  
|Net loss                                                              | $ | (2,208,606                      | )
|Adjustments to reconcile net loss                                     |   |                                 |  
|to net cash used by operating
      activities:                       |   |                                 |  
|Depreciation                                                          |   | 38,553                          |  
|Shares issued
      for services                                      |   | 25,392                          |  
|Shares
      issued for penalty on late delivery of shares            |   | 233,280                         |  
|Beneficial
      conversion interest                                  |   | 380,000                         |  
|Amortization
      on discount of note payable                        |   | -                               |  
|Decrease (increase)
      in accounts receivable                      |   | 37,213                          |  
|Decrease
      (increase) in inventory                                |   | (355,616                        | )
|Decrease (increase)
      in prepaid expenses                         |   | (43,276                         | )
|Increase
      (decrease) in bank indebtedness                        |   | -                               |  
|Increase (decrease)
      in accounts payable and accrued liabilities |   | 344,198                         |  
|Increase
      (decrease) in accounts payable, related parties        |   | -                               |  
|Net cash used
      by operating activities                           |   | (1,548,862                      | )
|CASH FLOWS FROM INVESTING ACTIVITIES:                                 |   |                                 |  
|Purchase of
      equipment                                           |   | (77,326                         | )
|Cash
      provided by acquisition                                    |   | -                               |  
|Deposits                                                              |   | 25,141                          |  
|Note
      receivable                                                 |   | (287,616                        | )
|Purchase of
      trademarks                                          |   | -                               |  
|Investments                                                           |   | (75,000                         | )
|Net cash used
      in investing activities                           |   | (414,801                        | )
|CASH FLOWS FROM FINANCING ACTIVITIES:                                 |   |                                 |  
|Repayments
      on borrowing                                         |   | (7,970                          | )
|Payments
      on notes payable                                       |   | -                               |  
|Repament of
      shareholder loan                                    |   | (44,836                         | )
|Proceeds
      on notes payable                                       |   | -                               |  
|Proceeds on
      finance contracts                                   |   | 55,458                          |  
|Proceeds
      on converitble debentures                              |   | 1,552,319                       |  
|Sale of stock                                                         |   | 575,336                         |  
|Net
      cash provided by financing activities                       |   | 2,130,307                       |  
|Effect of exchange rates                                              |   | 42,666                          |  
|Net increase in cash                                                  |   | 209,310                         |  
|Cash, beginning of period                                             |   | 50,398                          |  
|Cash, end of period                                                   | $ | 259,708                         |  
|SUPPLEMENTAL CASH FLOW DISCLOSURES:                                   |   |                                 |  
|Cash paid for interest and income
      taxes:                        |   |                                 |  
|Interest expense                                                      | $ | 146,163                         |  
|Income
      taxes                                                    | $ | -                               |  
|                                                                      |   |                                 |  
|NON-CASH INVESTING AND FINANCING ACTIVITIES:                          |   |                                 |  
|                                                                      |   |                                 |  
|Shares issued for services                                            | $ | 25,392                          |  
|Shares issued for subscriptions receivable                            | $ | 62,272                          |  
|Assets net of liabilities acquired
      in acquisition               | $ | -                               |  
|Shares traded for shares in Ellycrack                                 | $ | -                               |  
|Shares issued to settle obligation
      to Vasjar shareholders       | $ | 240,000                         |  
|Shares issued for penalty on late delivery of
      shares            | $ | 233,280                         |  

The accompanying notes are an integral part of these financial
  statements.

F-3

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|                                              
|----------------------------------------------
|WESCORP ENERGY INC.                           
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|(Unaudited)                                   
|September 30, 2005                            
|                                              

NOTE 1  BASIS OF PRESENTATION

The foregoing unaudited interim financial statements have been
  prepared in accordance with generally accepted accounting principles for interim
  financial information and with the instructions to Form 10-QSB and Regulation
  S-B as promulgated by the Securities and Exchange Commission ("SEC"). Accordingly,
  these financial statements do not include all of the disclosures required by
  generally accepted accounting principles for complete financial statements.
  These unaudited interim financial statements should be read in conjunction with
  the audited financial statements for the period ended December 31, 2004. In
  the opinion of management, the unaudited interim financial statements furnished
  herein include all adjustments, all of which are of a normal recurring nature,
  necessary for a fair statement of the results for the interim period presented.

The preparation of financial statements in accordance with generally
  accepted accounting principles requires the use of estimates and assumptions
  that affect the reported amounts of assets and liabilities, disclosure of contingent
  assets and liabilities known to exist as of the date the financial statements
  are published, and the reported amounts of revenues and expenses during the
  reporting period. Uncertainties with respect to such estimates and assumptions
  are inherent in the preparation of the Company's financial statements; accordingly,
  it is possible that the actual results could differ from these estimates and
  assumptions that could have a material effect on the reported amounts of the
  Company's financial position and results of operations.

Operating results for the nine month period ended September 30,
  2005 are not necessarily indicative of the results that may be expected for
  the year ending December 31, 2005.

NOTE 2  ORGANIZATION AND DESCRIPTION OF BUSINESS

Wescorp Energy Inc. (the Company) was incorporated
  in Delaware on August 11, 1998. Wescorp changed its business focus in early
  fiscal 2004, and as a result is no longer considered to be a development stage
  enterprise. The Company provides expertise to emerging companies by offering
  timely product solutions and/or strategic investment opportunities in the petroleum
  production and service industries. Wescorp intends to carry out this mandate
  through investments in companies or products where early stage product development
  has been completed.

The Companys year end is December 31. The Company is headquartered
  in Edmonton, Alberta, Canada.

NOTE 3  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies is presented
  to assist in understanding the financial statements. The financial statements
  and notes are representations of the Companys management, which is responsible
  for their integrity and objectivity. These accounting policies conform to accounting
  principles generally accepted in the United States of America and have been
  consistently applied in the preparation of the financial statements.

Accounting Method 
  The Companys financial statements are prepared using the accrual basis
  of accounting in accordance with accounting principles generally accepted in
  the United States of America.

Revenue Recognition 
  The Company recognizes revenue when the customer has accepted delivery of the
  product and has agreed it meets their requirements.

Accounts Receivable 
  The Company carries its accounts receivable at net realizable value. On a periodic
  basis, the Company evaluates its accounts receivable and considers the need
  for an allowance for doubtful accounts, based on Company past and expected collections,
  and current credit conditions. At September 30, 2005, a valuation allowance
  of $20,515 (December 31, 2004  nil) is deemed necessary. The Company's
  policy is to accrue interest on trade receivables at the discretion of management.

F-4

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Product Warranties 
  The Company sold the majority of its products with one-year unconditional repair
  or replacement warranties. Warranty expense is included in cost of sales.

Inventories 
  Inventories are stated at the lower of cost or market on a weighted average
  basis.

Intangible Assets 
  In September 2001, the Financial Accounting Standards Board issued Statement
  of Financial Accounting Standards No. 141, "Business Combinations" (hereinafter
  SFAS No. 141) and Statement of Financial Accounting Standard No.
  142, "Goodwill and Other Intangible Assets" (hereinafter SFAS No. 142).
  SFAS No. 141 provides for the elimination of the pooling-of-interest method
  of accounting for business combinations with an acquisition date of July 1,
  2001 or later. SFAS No. 142 prohibits the amortization of goodwill and other
  intangible assets with indefinite lives and requires periodic reassessment of
  the underlying value of such assets for impairment. SFAS No. 142 is effective
  for fiscal years beginning after December 15, 2001. During 2002, the Company
  fully impaired its intangible assets which were charged to discontinued operations
  expense and subsequently disposed of during 2003. Application of the non-amortization
  provision of SFAS No. 142 is expected to result in no change to the Companys
  results of operations, even though the Company acquired new non-amortizable
  intangible assets in the year ended December 31, 2004.

Goodwill represents the excess of the purchase price and related
  direct costs over the fair value of net assets acquired as of the date of the
  acquisition of Flowstar Technologies Inc. (Flowstar). The Company periodically
  reviews its goodwill to assess recoverability based on projected undiscounted
  cash flows from operations. Impairments are recognized in operating results
  when a permanent diminution in value occurs. At December 31, 2004, an impairment
  of $533,181 on the Companys goodwill was deemed necessary.

The Company acquired DCR technology rights from Vasjar which
  are included in intangible assets. These items represent the acquisition cost
  of the assets purchased from Vasjar in 2004 (see Note 9). The Companys
  intangible assets are summarized as follows:

September 30,
      
      
      December 312005
      
      
      2004DCR Technology
      $
      3,503,824
      
      $
      3,503,824Goodwill
      
      414,073
      
      
      414,073Net Intangibles Assets
      $
      3,917,897
      
      $
      3,917,897


Accounting Pronouncements  Recent 
  In December 2004, the Financial Accounting Standards Board issued Statement
  of Financial Accounting Standards No. 153. This statement addresses the measurement
  of exchanges of non-monetary assets. The guidance in APB Opinion No. 29, Accounting
  for Non-monetary Transactions, is based on the principle that exchanges
  of non-monetary assets should be measured based on the fair value of the assets
  exchanged. The guidance in that opinion, however, included certain exceptions
  to that principle. This statement amends Opinion 29 to eliminate the exception
  for non-monetary exchanges of similar productive assets and replaces it with
  a general exception for exchanges of non-monetary assets that do not have commercial
  substance. A non-monetary exchange has commercial substance if the future cash
  flows of the entity are expected to change significantly as a result of the
  exchange. This statement is effective for financial statements for fiscal years
  beginning after June 15, 2005. Earlier application is permitted for non-monetary
  asset exchanges incurred during fiscal years beginning after the date of this
  statement is issued. Management believes the adoption of this statement will
  have no impact on the financial statements of the Company.

In December 2004, the Financial Accounting Standards Board issued
  a revision to Statement of Financial Accounting Standards No. 123R, Accounting
  for Stock Based Compensation. This statement supersedes APB Opinion No.
  25, Accounting for Stock Issued to Employees, and its related implementation
  guidance. This statement establishes standards for the accounting for transactions
  in which an entity exchanges its equity instruments for goods or services. It
  also addresses transactions in which an entity incurs liabilities in exchange
  for goods or services that are based on the fair value of the entitys
  equity instruments or that may be settled by the issuance of those equity instruments.
  This statement focuses primarily on accounting for transactions in which an
  entity obtains employee services in share-based payment transactions. This statement
  does not change the accounting guidance for share based payment transactions
  with parties other than employees provided in Statement of Financial Accounting
  Standards No. 123. This statement does not address the accounting for employee
  share ownership plans, which are subject to AICPA Statement of Position 93-6,
  Employers Accounting for Employee Stock Ownership Plans. The
  Company has not yet determined the impact to its financial statements from the
  adoption of this statement.

F-5

---

In November 2004, the Financial Accounting Standards Board (FASB)
  issued Statement of Financial Accounting Standards No. 151, Inventory
  Costs an amendment of ARB No. 43, Chapter 4. This statement amends
  the guidance in ARB No. 43, Chapter 4, Inventory Pricing, to clarify
  the accounting for abnormal amounts of idle facility expense, freight, handling
  costs, and wasted material (spoilage). This statement requires that those items
  be recognized as current-period charges regardless of whether they meet the
  criterion of abnormal. In addition, this statement requires that
  allocation of fixed production overhead to the costs of conversion be based
  on the normal capacity of the production facilities. This statement is effective
  for inventory costs incurred during fiscal years beginning after June 15, 2005.
  Management does not believe the adoption of this statement will have any immediate
  material impact on the Company.

In May 2003, the Financial Accounting Standards Board issued
  Statement of Financial Accounting Standards No. 150, Accounting for Certain
  Financial Instruments with Characteristics of Both Liabilities and Equity
  (hereinafter SFAS No. 150). SFAS No. 150 establishes standards for
  classifying and measuring certain financial instruments with characteristics
  of both liabilities and equity and requires that those instruments be classified
  as liabilities in statements of financial position. Previously, many of those
  instruments were classified as equity. SFAS No. 150 is effective for financial
  instruments entered into or modified after May 31, 2003 and otherwise is effective
  at the beginning of the first interim period beginning after June 15, 2003.
  The adoption of this statement has had no impact on the Companys financial
  condition or results of operations.

Stock-Based Compensation 
  In December 2002, the Financial Accounting Standards Board issued Statement
  of Financial Accounting Standards No. 148, Accounting for Stock-Based
  Compensation  Transition and Disclosure (hereinafter SFAS
  No. 148). SFAS No. 148 amends SFAS No. 123, Accounting for Stock-Based
  Compensation, to provide alternative methods of transition for a voluntary
  change to the fair value based method of accounting for stock-based employee
  compensation. In addition, the statement amends the disclosure requirements
  of SFAS No. 123 to require prominent disclosure in both annual and interim financial
  statements about the method of accounting for stock-based employee compensation
  and the effect of the method used on reported results. The provisions of the
  statement are effective for financial statements for fiscal years ending after
  December 15, 2002. As the Company accounts for stock-based compensation using
  the intrinsic value method prescribed in APB No. 25, Accounting for Stock
  Issued to Employees, the adoption of SFAS 148 has had no impact on the
  Companys financial condition or results of operations.

Exit and Disposal Activities 
  In June 2002, the Financial Accounting Standards Board issued Statement of Financial
  Accounting Standards No. 146, Accounting for Costs Associated with Exit
  or Disposal Activities (hereinafter SFAS No. 146). SFAS No.
  146 addresses significant issues regarding the recognition, measurement, and
  reporting of costs associated with exit and disposal activities, including restructuring
  activities. SFAS No. 146 also addresses recognition of certain costs related
  to terminating a contract that is not a capital lease, costs to consolidate
  facilities or relocate employees, and termination benefits provided to employees
  that are involuntarily terminated under the terms of a one-time benefit arrangement
  that is not an ongoing benefit arrangement or an individual deferred-compensation
  contract. SFAS No. 146, which was issued in June 2002 and is effective for activities
  after December 31, 2002, has not materially impacted the Companys financial
  statements for the periods presented.

Impairment or Disposal of Long-Lived Assets 
  In August 2001, the Financial Accounting Standards Board issued Statement of
  Financial Accounting Standards No. 144, Accounting for the Impairment
  or Disposal of Long-Lived Assets (hereinafter SFAS No. 144).
  SFAS No. 144 replaces SFAS No. 121, Accounting for the Impairment of Long-Lived
  Assets and for Long-Lived Assets to Be Disposed Of. This standard establishes
  a single accounting model for long-lived assets to be disposed of by sale, including
  discontinued operations. SFAS No. 144 requires that these long-lived assets
  be measured at the lower of carrying amount or fair value less cost to sell,
  whether reported in continuing operations or discontinued operations. This statement
  is effective beginning for fiscal years after December 15, 2001, with earlier
  application encouraged. The Company adopted SFAS No. 144 which did not have
  a material impact on the financial statements of the Company for the years presented.
  All of the Companys long-lived assets were disposed of during 2002 and
  2003. New assets were acquired in 2004 as a result of the acquisition of 100%
  of the outstanding shares of Flowstar and Vasjar (see Note 9).

F-6

---

Inventory 
  Inventories are stated at the lower of average cost or market. The cost of finished
  goods includes the cost of raw material, direct and indirect labor, and other
  indirect manufacturing costs.

The components of inventory at September 30, 2005 and December
  31, 2004 are as follows:

September 30,
      
      
      December 31,2005
      
      
      2004Finished goods
      $
      822,468
      
      $
      471,222Raw materials
      
      43,341
      
      
      38,971Total inventory
      $
      865,809
      
      $
      510,193


Advertising Expenses 
  Advertising expenses consist primarily of costs incurred in the design, development,
  and printing of Company literature and marketing materials. The Company expenses
  all advertising expenditures as incurred. The Company's advertising expenses
  were $139,023 and $253,379 for the nine months ended September 30, 2005 and
  the nine months ended September 30, 2004 respectively.

Cash and Cash Equivalents 
  For purposes of the statements of cash flows, the Company considers all highly
  liquid investments (or short-term debt) with original maturities of three months
  or less to be cash equivalents. Cash trust accounts are funds received from
  stock sales and administered by the Companys corporate counsel. These
  funds are not restricted.

Concentration of Credit Risk 
  The Company maintains its cash in a commercial account at a major Canadian financial
  institution.

Derivative Instruments 
  The Financial Accounting Standards Board issued Statement of Financial Accounting
  Standards No. 133, Accounting for Derivative Instruments and Hedging Activities
  (hereinafter SFAS No. 133), as amended by SFAS No. 137, Accounting
  for Derivative Instruments and Hedging Activities  Deferral of the Effective
  Date of FASB No. 133, and SFAS No. 138, Accounting for Certain Derivative
  Instruments and Certain Hedging Activities. In April 2003, the Financial
  Accounting Standards Board issued Statement of Financial Accounting Standards
  No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging
  Activities (hereinafter SFAS No. 149). SFAS No. 149 amends
  and clarifies the accounting for derivative instruments, including certain derivative
  instruments embedded in other contracts and for hedging activities under SFAS
  No. 133. This statement is effective for contracts entered into or modified
  after June 30, 2003 and for hedging relationships designated after June 30,
  2003. The adoption of SFAS No. 149 is not expected to have a material impact
  on the financial position or results of operations of the Company.

If certain conditions are met, a derivative may be specifically
  designated as a hedge, the objective of which is to match the timing of gain
  or loss recognition on the hedging derivative with the recognition of (i) the
  changes in the fair value of the hedged asset or liability that are attributable
  to the hedged risk or (ii) the earnings effect of the hedged forecasted transaction.
  For a derivative not designated as a hedging instrument, the gain or loss is
  recognized in income in the period of change.

Historically, the Company has not entered into derivatives contracts
  to hedge existing risks or for speculative purposes.

Earnings Per Share 
  On January 1, 1998, the Company adopted Statement of Financial Accounting Standard
  No. 128, which provides for calculation of "basic" and "diluted" earnings per
  share.

Basic earnings per share includes no dilution and is computed
  by dividing net income available to common shareholders by the weighted average
  common shares outstanding for the period. Diluted earnings per share reflect
  the potential dilution of securities that could share in the earnings of an
  entity similar to fully diluted earnings per share. Although there were common
  stock equivalents outstanding at September 30, 2005 and at December 31, 2004,
  they were not included in the calculation of earnings per share because they
  would have been considered anti-dilutive.

Fair Value of Financial Instruments 
  The Company's financial instruments as defined by Statement of Financial Accounting
  Standard No. 107, "Disclosures about Fair Value of Financial Instruments," include
  cash, investments, a note receivable, accounts payable, accrued expenses and
  notes payable. All instruments are accounted for on a historical cost basis,
  which, due to the short maturity of these financial instruments, approximates
  fair value at September 30, 2005 and at December 31, 2004.

F-7

---

Foreign Currency Translation Gains/Losses 
  The Companys functional currency is the Canadian dollar. The Company has
  adopted Financial Accounting Standard No. 52. Monetary assets and liabilities
  denominated in foreign currencies are translated into United States dollars
  at rates of exchange in effect at the balance sheet date. Gains or losses are
  included in income for the year, except gains or losses relating to long-term
  debt which are deferred and amortized over the remaining term of the debt. Non-monetary
  assets, liabilities and items recorded in income arising from transactions denominated
  in foreign currencies are translated at rates of exchange in effect at the date
  of the transaction.

Going ConcernThese consolidated financial statements have been prepared with the assumption
  being that the Company will continue on a going concern basis and that it will
  be able to realize assets and discharge liabilities in the normal course of
  business. As shown in the accompanying financial statements, the Company has
  incurred an accumulated deficit of approximately $12,791,408 through September
  30, 2005. The Company has changed its focus to provide expertise to emerging
  companies, offering timely product solutions and/or strategic investment opportunities
  in the oil and gas industries which will, if successful, mitigate these factors
  which raise substantial doubt about the Companys ability to continue as
  a going concern. The financial statements do not include any adjustments relating
  to the recoverability and classification of recorded assets, or the amounts
  and classification of liabilities that might be necessary in the event the Company
  cannot continue in existence. The Company has successfully raised $1,552,319
  on a convertible debenture. Management feels that this will be sufficient to
  fund normal operations through 2005 (see Note 11).

Investments 
  The Companys investments consist of non-marketable equity securities.
  These investments, for which the Company does not have the ability to exercise
  significant influence in the underlying company, are accounted for under the
  cost method of accounting. Dividends and other distributions of earnings, if
  any, are included in income when declared. The Company periodically evaluates
  the carrying value of its investments, which are recorded at the lower of cost
  or estimated net realizable value.

Principles of Consolidation 
  The consolidated financial statements include the accounts of the Company and
  its wholly owned subsidiaries, after elimination of the inter-company accounts
  and transactions. Wholly owned subsidiaries of the Company are listed in Note
  9.

Provision for Taxes 
  Income taxes are provided based upon the liability method of accounting pursuant
  to Statement of Financial Accounting Standards No. 109, Accounting for
  Income Taxes (hereinafter SFAS No. 109). Under this approach,
  deferred income taxes are recorded to reflect the tax consequences in future
  years of differences between the tax basis of assets and liabilities and their
  financial reporting amounts at each year-end. A valuation allowance is recorded
  against deferred tax assets if management does not believe the Company has met
  the more likely than not standard imposed by SFAS No. 109 to allow
  recognition of such an asset.

Restatement and Reclassification 
  Certain amounts from prior periods have been reclassified to conform to the
  current period presentation. The reclassifications and restatements principally
  consist of revised reporting of operating results of the discontinued operations
  of the Companys subsidiaries in the prior fiscal period. This reclassification
  has resulted in no changes to the Companys accumulated deficit or net
  losses presented.

Use of Estimates 
  The process of preparing financial statements in conformity with accounting
  principles generally accepted in the United States of America requires the use
  of estimates and assumptions regarding certain types of assets, liabilities,
  revenues, expenses and common stock equivalents. Such estimates primarily relate
  to unsettled transactions and events as of the date of the financial statements.
  Accordingly, upon settlement, actual results may differ from estimated amounts.

NOTE 4  NOTE RECEIVABLE

During the period the Company entered into an agreement to advance
  funds to an unrelated party in the form of a promissory note. This note carries
  interest at a rate of 7.25%, was due on September 30, 2005 and is secured by
  a general security agreement. On October 18, 2005 the note holder repaid CAD
  $200,000 and has made arrangements with the Company to repay the balance of
  the note.

F-8

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NOTE 5  PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation is provided
  using the straight-line method over three to seven years. The Company evaluates
  the recoverability of property and equipment when events and circumstances indicate
  that such assets might be impaired. The Company determines impairment by comparing
  the undiscounted future cash flows estimated to be generated by these assets
  to their respective carrying amounts. Maintenance and repairs are expensed as
  incurred. Replacements and betterments are capitalized. The cost and related
  reserves of assets sold or retired are removed from the accounts, and any resulting
  gain or loss is reflected in results of operations.

|                                    |   | September 30, 2005 |  |   | December 31, 2004 | 
|----------------------------------- | - | ------------------ |  | - | ----------------- | 
|                                    |   |                    |  |   | Accumulated       | 
|                                    |   | Cost               |  |   | Depreciation      | 
|Tools and Equipment                 | $ | 9,363              |  | $ | 887               | 
|Furniture & Fixtures                |   | 12,489             |  |   | 5,134             | 
|Office Equipment                    |   | 33,094             |  |   | 14,651            | 
|Automotive Equipment                |   | 129,329            |  |   | 45,164            | 
|Computer Hardware                   |   | 34,728             |  |   | 13,044            | 
|Computer Software                   |   | 11,666             |  |   | 7,178             | 
|Leasehold Improvements              |   | 748                |  |   | 748               | 
|                                    |   |                    |  |   |                   | 
|Total                               |   | 231,417            |  | $ | 86,806            | 
|                                    |   |                    |  |   |                   | 
|Less: accumulated depreciation      |   | 86,806             |  |   |                   | 
|                                    |   |                    |  |   |                   | 
|Total property, plant and equipment | $ | 144,611            |  |   |                   | 

NOTE 6  INVESTMENTS

The components of investments at September 30, 2005 and December
  31, 2004 are as follows:

September 30,
      
      
      December 31,2005
      
      
      2004Synenco Energy Inc.
      $
      530,462
      
      $
      530,462Ellycrack AS
      
      463,186
      
      
      388,186Total investments
      $
      993,648
      
      $
      918,648


Agreement with Vasjar Trading Ltd.In January of 2004, the Company entered into an agreement to acquire 100%
  of the common stock of Vasjar Trading Ltd. ("Vasjar"), a British Virgin Islands
  corporation.

Vasjar has five Barbados corporate subsidiaries, one of which
  holds intellectual property rights, including technology rights to the DCR system
  originally owned by Flowray.

On April 29, 2004, the Company tendered to Vasjar's two shareholders
  2,400,000 shares of its common stock as a proposed settlement of the initial
  share delivery provisions for the Vasjar acquisition. Resolution of both of
  the shareholders situations has occurred.

As part of the agreement the Company also consented to issue
  an aggregate of up to 2,600,000 shares additional stock over the years 2005-2007
  based on the achievement of Vasjar's minimum annual sales volumes during the
  years 2004-2006. In the event that earned shares are not timely delivered, the
  agreement provides for "penalty" shares to be issued and also provides Vasjar's
  two shareholders with the right to rescind the agreement and receive back their
  original shares. Wescorp was not able to deliver free-trading shares on April
  1, 2005, and as a result the Company was obligated to pay the Vasjar shareholders
  an additional 48,000 Wescorp shares for each of the months April through September
  2005. As of September 30, 2005 the Company delivered all of the required shares
  which were accepted by the Vasjar shareholders.

Agreement with Ellycrack AS 
  Wescorp has purchased as an aggregate 655,000 shares of common stock of Ellycrack
  AS, a privately held company in Norway. Wescorp acquired 255,000 shares in consideration
  of $119,000 that was paid in three installments, $50,000 each on December 29,
  2003 and February 2, 2004, and $19,000 in May 2004. On September 15, 2004, the
  Company issued 300,000 of its shares to Ellycrack AS in exchange for 400,000
  shares of Ellycrack AS. The value ascribed to the Ellycrack shares of $150,000
  was calculated based on

F-9

---

the median trading price of Wescorp shares on that day (being
  $0.50) . In the first quarter of 2005, Wescorp paid $75,000 for 97,000 additional
  shares of Ellycrack at five Kroners per share.

Pursuant to a share purchase option agreement dated February
  10, 2004, the Company has been granted an option to purchase additional shares
  to increase the Company's ownership up to 20% of the outstanding common voting
  shares of Ellycrack on a fully diluted basis as at June 30, 2004. The option
  is exercisable until the later of June 30, 2004 or the date that is four months
  after the completion date of the Company's testing of Ellycrack's technology.
  This testing has not been completed as of the writing of these financial statements.
  The purchase price for these Ellycrack shares will be equal to 11.85% of the
  total market value of $5,000,000 in respect of all the outstanding shares of
  Ellycrack as at June 30, 2004 as mutually agreed by the parties or approximately
  $592,500.

NOTE 7  COMMON STOCK AND WARRANTS

Common Stock 
  The Company is authorized to issue 250,000,000 shares of $0.0001 par value common
  stock and 50,000,000 shares of $0.0001 par value preferred stock. All common
  stock shares have equal voting rights, are non-assessable and have one vote
  per share. Voting rights are not cumulative and, therefore, the holders of more
  than 50% of the common stock could, if they choose to do so, elect all of the
  directors of the Company. The preferred shares may be issued in series, with
  the powers, rights and limitations of the preferred shares to be determined
  by the Companys board of directors.

2005 Stock Transactions 
  In the first nine months of 2005, the Company issued 1,579,571 shares for total
  proceeds of $663,000. These shares were issued on the exercise of various warrants
  at exercise prices of $0.25 to $1.00 per share.

Common Stock Warrants 
  As of November 10, 2005, the Company has the following common stock purchase
  warrants outstanding:

Number of shares
      
      Exercise
      
      Expirationunder warrants
      
      price
      
      date3,178,923
      
      $0.35
      
      December 20051,500,000
      
      $0.15
      
      March
        2006300,000
      
      $0.25
      
      December 20061,000,000
      
      $0.15
      
      June
        20085,978,923


Common Stock OptionsDuring the quarter ended September 30, 2005, the Company approved the issuance
  of stock options to the President and C.E.O. of the Company to purchase a total
  of 2,277,777 shares of the Companys stock at $0.54 per share pursuant
  to the terms of an employment contract. These options vest November 30, 2005
  and have a term of four years from the date of vesting.

Following is a summary of the status of the options during the
  periods ended September 30, 2005:

|                                                  |                  |  | Weighted Average      | 
|------------------------------------------------- | ---------------- |  | --------------------- | 
|                                                  | Number of Shares |  | Exercise Price        | 
|Outstanding at January 1, 2005                    | -                |  | $           
       - | 
|Granted                                           | 2,277,777        |  | 0.54                  | 
|Exercised                                         | -                |  | -                     | 
|Forfeited                                         | -                |  | -                     | 
|Outstanding at September 30, 2005                 | 2,277,777        |  | 0.54                  | 
|Weighted average fair value of options granted in |                  |  |                       | 
|2005                                              |                  |  | $        0.54         | 

F-10

---

NOTE 8  COMMITMENTS

Agreement with Ellycrack AS 
  In March of 2004, Ellycrack AS (Ellycrack) of Norway granted the
  Company an option exercisable until June 1, 2005 to acquire exclusive rights
  to use Ellycracks high intensive catalytic cracking technology and intellectual
  property. This would also include the exclusive rights to manufacture, and sell
  products or systems derived from or utilizing Ellycracks technology in
  North America.

Later in 2004, the Company entered into a joint venture (JV)
  agreement with Ellycrack (superseding prior agreements) that gives Wescorp a
  50% interest in the rights to use and benefit from Ellycracks high intensive
  catalytic cracking technology and intellectual property worldwide. In exchange,
  the Company must pay for the construction and design modifications of a full
  scale prototype in Canada to the point that such a prototype is commercially
  saleable. After this point, all future costs will be shared equally between
  the Company and Ellycrack.

NOTE 9 ACQUISITIONS AND DISPOSITIONS OF SUBSIDIARIES

Acquisition of Flowstar and Vasjar 
  On March 31, 2004, Wescorp completed the purchase of 100% of the outstanding
  shares of Flowstar Technologies Inc. (Flowstar) in exchange for
  $414,073 pursuant to the share purchase and subscription agreement dated June
  9, 2003 as amended January 14, 2004. On August 19, 2004, the Company concluded
  the acquisition of 100% of the outstanding shares of Vasjar Trading Ltd. (Vasjar),
  a British Virgin Islands company. Its wholly owned subsidiary (Quadra Products
  International Inc. or Quadra) owns the rights to the technology
  related to the DCR 900 system. The purchase called for the payment of 2,400,000
  common stock shares of Wescorp initially, with an additional minimum 2,080,000
  common stock shares issued over three years (480,000 before April 01, 2005,
  800,000 before April 01, 2006 and 800,000 before April 01, 2007). An additional
  520,000 shares are payable over this three year period if certain sales targets
  are achieved. If Wescorp fails to deliver any of the shares due before April
  01, 2006, then the Company will be subject to a penalty of 10% additional shares
  for each month of delay, with a cumulative provision. If any of the Wescorp
  shares to be issued have not been delivered for a period of 182 days after the
  applicable due date, then the Vasjar shareholders may at their option terminate
  the share purchase agreements without notice or opportunity to cure. Wescorp
  has pledged to the Vasjar shareholders all of the Vasjar shares it holds as
  security to guarantee Wescorps performance under the share purchase agreements.

The assets and liabilities acquired were as follows as of March
  31, 2004:

FlowstarTechnologies
      
      
      FlowrayInc.
      
      
      Inc.Cash equivalents
      $
      131,704
      
      $
      6,587Receivables
      
      305,986
      
      
      -Inventory
      
      290,906
      
      
      -Due from affiliate
      
      -
      
      
      103,054Other current assets
      
      23,856
      
      
      -Property and equipment
      
      108,286
      
      
      -Note receivable
      
      -
      
      
      444,972Deferred tax asset
      
      64,777
      
      
      -Total Assets
      $
      925,515
      
      $
      554,613Accounts payable
      $
      222,949
      
      $
      23,416Deferred tax liability
      
      -
      
      
      9,938Due to Wescorp
      
      1,104,150
      
      
      485,826Long-term liability
      
      25,385
      
      
      -Total Liabilities
      $
      1,352,484
      
      $
      519,180


In connection with the acquisition of Flowstar, Wescorp acquired
  100% of the outstanding shares of Vasjar Trading Ltd. (Vasjar),
  a British Virgin Islands corporation. Vasjar in turn owns 100% of the outstanding
  shares of Quadra International Inc. (Quadra) and Flowstar International,
  Inc. (formerly Penta Energy Products Inc.) (Flowstar International),
  both of which are Barbados corporations. In consideration of the purchase of
  all the outstanding shares of Vasjar from two shareholder entities, Wescorp
  issued shares to the shareholders of Vasjar each as to 50% as follows:

(a) an aggregate 2,400,000 shares of common stock of the Company
  effective April 30, 2004; and

(b) up to an aggregate 2,600,000 additional shares of common
  stock of the Company to be issued in stages as follows:

F-11

---

Stage One. On or before April 1, 2005, Wescorp will issue
  from 480,000 to 600,000 additional shares based on sales achieved in the 2004
  calendar year; the lower figure being if sales are less than $3,000,000, and
  the upper figure being if sales are more than $3,750,000. Shares are required
  to be registered at delivery.

Stage Two. On or before April 1, 2006, Wescorp will issue
  from 800,000 to 1,000,000 additional shares based on sales achieved in the 2005
  calendar year; the lower figure being if sales are less than $4,500,000 and
  the upper figure being if sales are more than $7,500,000. Shares are required
  to be registered at delivery.

Stage Three. On or before April 1, 2007, Wescorp will
  issue from 800,000 to 1,000,000 additional shares based on sales achieved in
  the 2006 calendar year; the lower figure being if sales are less than $6,000,000
  and the upper figure being if sales are more than $11,250,000. Shares are required
  to be registered at delivery.

As part of the agreement the Company agreed to also issue up
  to an aggregate additional 2,600,000 shares of stock over the years 2005-2007
  for the achievement of Vasjar's minimum annual sales volumes during the years
  2004-2006. In the event that earned shares are not timely delivered, the agreement
  provides for "penalty" shares to be issued and also provides Vasjar's two shareholders
  with the right to rescind the agreement and receive back their original shares.
  Wescorp was not able to deliver free-trading shares on April 1, 2005, and so
  the Company was required to pay the Vasjar shareholders an additional 48,000
  Wescorp shares for each month that the shares were not delivered covering the
  months April through September 2005. These shares were delivered and accepted
  by the Vasjar shareholder on September 28, 2005.

Any Wescorp shares not earned in a particular calendar year because
  the sales did not achieve the upper sales target will be carried over and added
  to the shares to be issued in the next calendar year, subject to achievement
  of the next years escalating sales volumes.

The balance of the fair market value of the shares due to the
  Vasjar shareholders has been recorded as other short-term and long-term
  liabilities totaling $800,000.

On April 29, 2004, the Company issued and delivered to each of
  the shareholders of Vasjar 1,200,000 restricted shares of common stock, for
  a total of 2,400,000 shares, as a proposed settlement of the initial share delivery
  provisions for the Vasjar acquisition.

NOTE 10  OTHER LIABILITIES

Vehicle Loans 
  During the year ended December 31, 2004, the Company purchased trucks for $65,504.
  The underlying notes are secured by the vehicles and are for thirty-five months.
  The monthly payments are $1,207.

The following comprise the Companys notes payable at September
  30, 2005 and at December 31, 2004:

|                                                                                               |   | September 30, |  |   | December 31, | 
|---------------------------------------------------------------------------------------------- | - | ------------- |  | - | ------------ | 
|                                                                                               |   | 2005          |  |   | 2004         | 
|Note payable  Interest at 0.0%, and secured by automotive
      assets of Flowstar            | $ | 19,421        |  | $ | 23,692       | 
|Note payable 
      Interest at 7.75%, compounded monthly and secured by automotive assets of |   |               |  |   |              | 
|Flowstar                                                                                       |   | 27,977        |  |   | 31,191       | 
|Note payable 
      Interest at 9.45%, compounded monthly and secured by automotive assets of |   |               |  |   |              | 
|Flowstar                                                                                       |   | 18,018        |  |   | -            | 
|Note payable 
      Interest at 0.90%, compounded monthly and secured by automotive assets of |   |               |  |   |              | 
|Flowstar                                                                                       |   | 36,954        |  |   | -            | 
|Notes payable 
      Interest at 0.0%, unsecured                                              |   | 822,475       |  |   | 1,062,475    | 
|Total notes payable                                                                            | $ | 924,845       |  | $ | 1,117,358    | 
|Portion due within one year                                                                    |   | 437,027       |  |   | 265,786      | 
|Long-term                                                                                      | $ | 487,818       |  | $ | 851,572      | 

Future principal payments are as follows:

AnnualMaturityYear
      
      Amount2006
      $
      437,0272007
      
      423,9152008
      
      24,7942009
      
      19,3702010
      
      19,739$
      924,845






---

For additional disclosures on notes payable to related parties,
  see Note 14.

NOTE 11  CONVERTIBLE DEBENTURES

During the period the Company issued debentures which bear interest
  at the rate of 14% per annum, payable quarterly which mature on December 31,
  2005. The debentures are secured by way of a security interest over the inventory
  and receivables of Flowstar Technologies Inc., a wholly owned subsidiary of
  the Company.

The debentures may, at the option of the holder, be converted
  into units of the Company a price of US$0.90 per unit at any time prior to the
  maturity date. Each unit shall be comprised of one common share of the Company
  and one common share purchase warrant each of which may be exercised at any
  time up to December 31, 2006 as follows:

a) if exercised on or before December
  31, 2005 the holder of a warrant shall be entitled to purchase one common share
  for each warrant held for US$1.00 per common share; and

b) thereafter until the maturity date
  the holder of each warrant shall be entitled to purchase one (1) common share
  for each warrant held for US $2.00 per share common share.

The Company shall be entitled to prepay the debenture in whole
  or in part, at any time prior to the maturity date subject to the following:

| | a) | the Company provides the holder with at least one months
        prior written notice (the "Notice Period") of the Companys intention
        to repay the debenture; and                                                            
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                       
| | b) | at the date the notice is issued the weighted average
        trading price of the Company's common shares as traded on the NASD OTC
        Bulletin Board for the ten previous trading days was at least US $1.35
        per share.

The convertible debentures contained a beneficial conversion
  feature computed at its intrinsic value, which was the difference between the
  conversion price and the fair value on the debenture issuance date of the units
  into which the debt was convertible, multiplied by the number of shares into
  which the debt was convertible at the commitment date. Since the beneficial
  conversion feature was to be settled by issuing equity, the amount attributed
  to the beneficial conversion feature, or $380,000, was recorded as an interest
  expense and a component of equity on the issuance date. It is managements
  opinion that the fair market value of the units noted above would be worth 80%
  of the market price of free trading stock as the shares in these units are restricted
  in trading and represent a large block of shares that current market conditions
  could not absorb.

The fair value of the warrants attached to each unit was calculated
  using the Black-Scholes Option Pricing Model incorporating the following weighted
  average assumptions:

Risk free interest rate
      3.0%Expected dividend yield
      NilExpected stock price volatility
      117%Expected warrant life
      0.75 yearWeighted average grant date fair value per
        warrant
      0.30


Measurement uncertainty 
  The Black-Scholes Option Pricing Model was developed for use in estimating the
  fair value of traded options that have no vesting restrictions and are fully
  transferable. The warrants attached to the units issued by the Company are non-transferable.
  Option pricing models require the input of subjective assumptions including
  expected share price volatility. The fair value estimate can vary materially
  as a result of changes in the assumptions.

NOTE 12  COMMITMENTS AND CONTINGENCIES

The Company had three consulting agreements. The agreements were
  effective from April 1, 2003 through March 31, 2005. The consultants were to
  be paid in cash or common stock, with a deemed price of $0.20 per share. The
  monthly fee for two consultants was $5,000 each and the other consultant was
  to receive $2,500 per month. Consultant expense for the quarter ended March
  31, 2005 under these agreements was $37,500 (2004 - $37,500). To September 30,
  2005, the Company has not yet paid these amounts nor issued any stock.

On September 3, 2003, the Company signed an agreement to settle
  its indebtedness to a former officer of the Company. At the date of the agreement,
  the individual received $15,000 and is to receive $7,500 per month and 3% of
  the gross proceeds of any equity financing

F-13

---

completed by the Company after the date of the agreement subject
  to a maximum payment of $37,500 in respect to each financing. The total payment
  in aggregate will not exceed $150,000. This obligation was paid in full effective
  June 22, 2005.

At September 2003, the Company approved a transaction with a
  legal service provider in recognition of a previous credit accommodation. The
  transaction provided for a direct grant of 100,000 common stock and an additional
  100,000 common stock warrants exercisable at $0.50 for five years and with a
  cashless exercise feature. As part of the transaction, the party agreed to cap
  legal service costs at an agreed maximum from September 2003 to December 2004,
  amounting to a reduction of $100 per hour. To September 30, 2005, the Company
  had not issued this stock or warrants.

NOTE 13  LEASES

Operating Leases 
  The Company leases office space and manufacturing space in Edmonton, Alberta,
  Canada for $5,695 per month under a month to month operating lease agreement.
  The Company leases office space in Calgary, Alberta, Canada for $3,500 per month
  under an operating lease agreement, which expires June 2006. In addition the
  Company has entered into a lease agreement with respect to a vehicle which has
  minimum lease payments of $873 per month until June 2007.

NOTE 14 - RELATED PARTY TRANSACTIONS

Related Party Transactions 
  Summary of related party transactions as follows for the nine months ended September
  30, 2005 and the year ended December 31, 2004:

|                                                            |   | September 30, |  |   | December 31, | 
|----------------------------------------------------------- | - | ------------- |  | - | ------------ | 
|                                                            |   | 2005          |  |   | 2004         | 
|Consulting fees paid or accrued to directors of the Company | $ | 37,500        |  | $ | 150,000      | 
|Interest paid or accrued
      to shareholders              | $ | NIL           |  | $ | 247,351      | 

Related Party Notes Payable 
  On January 28, 2003, the Company entered into an agreement with AHC Holdings,
  Inc. (AHC), under which AHC would lend Wescorp up to $1,750,000.
  AHC is a private company beneficially owned and controlled by a director of
  the Company. The loan was structured as a borrowing facility, was unsecured
  and all advances bore interest at the rate of 15% per annum. All advances, regardless
  of the date advanced, were due on December 31, 2005. As of December 31, 2004,
  the Company had borrowed approximately $1,979,593 including accrued and unpaid
  interest.

On March 15, 2005, AHC agreed to convert this debt plus accrued
  and unpaid interest to units (units) of the Company at a price of
  $0.87 per unit. Each unit consists of one common stock share and one common
  stock share purchase warrant (the "warrant(s)") each of which may be exercised
  at any time up to December 31, 2006 as follows:

(a) if exercised on or before December 31, 2005 the holder of
  each warrant shall be entitled to purchase one common share for each warrant
  held for $1.00 per common share; and

(b) thereafter until December 31, 2006 the holder of each warrant
  shall be entitled to purchase one common share for each warrant held for $2.00
  per common share.

The original note was denominated in Canadian dollars. Upon signing
  the above agreement the parties agreed to a value of the note in the amount
  of $1,924,681 as at March 15, 2005. Based on this valuation 2,212,277 shares
  will be issued as a result of this transaction. To September 30, 2005, these
  shares had not yet been issued.

Further, on January 28, 2003 the Company granted warrants to
  AHC which would allow them to purchase 1,000,000 shares of common stock at a
  price of $0.15 per share in connection with the above stated loan. The warrants
  expire on March 6, 2006. If these warrants were exercised the shares would have
  a market value of $950,000 at September 30, 2005.

F-14

---

The terms of the amounts due to related parties at September
  30, 2005 and at December 31, 2004 are as follows:

|                                                                                                 |   | September 30, |  |   | December 31, | 
|------------------------------------------------------------------------------------------------ | - | ------------- |  | - | ------------ | 
|                                                                                                 |   | 2005          |  |   | 2004         | 
|Note payable Interest
      at 15%, compounded semi-annually, paid annually with a maturity     |   |               |  |   |              | 
|date of December 31,
      2005, unsecured, due to a shareholder.                                | $ | -             |  | $ | 1,979,593    | 
|                                                                                                 |   |               |  |   |              | 
|Commitment to issue
      shares on the conversion of the above note payable  shares to be      |   | 1,924,681     |  |   | -            | 
|issued subsequent
      to the quarter end                                                       |   |               |  |   |              | 
|                                                                                                 |   |               |  |   |              | 
|Due to directors during
      the period ended September 30, 2005  non-interest bearing, due on |   |               |  |   |              | 
|demand                                                                                           |   | 300,000       |  |   | -            | 
|                                                                                                 |   |               |  |   |              | 
|Advances from shareholders,
      non-interest bearing with no set terms of repayment.           |   | -             |  |   | 44,836       | 
|                                                                                                 |   |               |  |   |              | 
|Total amounts due
      to related parties                                                       | $ | 2,224,681     |  | $ | 2,024,429    | 

NOTE 15  SUBSEQUENT EVENTS

Conditional Purchase AgreementAs a condition on the acquisition of Vasjar the Company was required to
  issue on or before April 1, 2005 between 480,000 and 600,000 additional shares
  based on sales achieved in the 2004 calendar year. The lower figure was based
  on sales of less than $3,000,000, and the upper figure was based on sales in
  excess of $3,750,000. The shares were required to be registered at delivery.

Wescorp was not able to deliver free-trading shares on April
  1, 2005, and so the Company was obligated to pay the former Vasjar shareholders
  an additional 48,000 Wescorp shares for each of the months April through September
  2005. The Company did deliver all of the required shares which were accepted
  by the Vasjar shareholders. Wescorp has pledged to the former owners of Vasjar
  all the Vasjar shares as security to guarantee Wescorps performance under
  the share purchase agreements.

F-15

---

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

The following discussion and analysis of our financial
condition and results of operations should be read in conjunction with our
Consolidated Financial Statements and related notes appearing elsewhere in this
Form 10-QSB.

Overview

During the nine months ended September 30, 2005, we
successfully raised $1,552,319 on the issuance of a convertible debenture and
$600,728 on the exercise of outstanding warrants. An additional $110,000 was
raised through the convertible debenture but the debenture agreement for these
funds has not yet been signed. Furthermore, the loan from AHC Holdings Ltd. in
the amount of Cdn $2,382,755 was converted to shares of the company at $0.87 per
share valued at US $1,924,681, resulting in the complete elimination of this
loan. We are currently in the process of completing a Cdn. $500,000 private
placement which will provide additional financing for the Company.

Revenue from operations for the third quarter of 2005 totaled
$638,536 versus $579,337 in 2004 representing a 10.2% increase in year-over-year
third quarter revenue. That revenue also represented a 48.0% increase over
second quarter 2005 revenue of $431,428. Year-to-date nine-month revenue totaled
$1,690,558 in 2005 representing a 116.9% increase over 2004 revenue of $779,446
for the same period.

Gross margins for the third quarter were 37.9% of revenue
compared to 29.7% for the same period in 2004. That margin was lower than the
50.5% of sales reported for the second quarter of 2005, due primarily to a one
time inventory adjustment attributed to reconciling accounting records with a
physical count taken at the end of the quarter. Gross margins for the nine-month
period are therefore 45.7% of sales compared to 34.9% for the same period in
2004 representing a significant improvement in operating efficiencies attributed
primarily to tighter internal controls.

We did not have any revenue from operations for the first
quarter of 2004, as Flowray Inc. ("Flowray") and Flowstar Technologies Inc.
("Flowstar") (see "Acquisition of Flowstar and Flowray", below) became wholly
owned subsidiaries after the end of the first quarter on March 31, 2004.
Flowstar and Flowray were operating prior to their acquisition, and the
operating results of this can be reviewed in the Proforma Financial Statements
that are included in the 10Q report for the first quarter of 2004. The
acquisition of Vasjar Trading Ltd. was completed after the end of the second
quarter in 2004 and accordingly, assets, liabilities and operations of Vasjar
and its subsidiaries, as well as any consolidating entries associated therewith,
were reflected in the third quarter of 2004.

To date our quarterly operations have experienced consistently
negative cash flows. Management had anticipated that the Flowstar operations
would generate increased sales and result in positive quarterly operating cash
flows commencing by the end of fiscal 2004. While Flowstar sales to date have
been encouraging and are gaining momentum due to greater market acceptance of
the Flowstar product line and the addition of two full-time sales
representatives, the flow meter business has not yet reached the break even
level to support operations without continued financial support from Wescorp.

The rapid growth an organization experiences often places
considerable operational, managerial and financial strain on a company. To
ensure the success of our new business plan, we must proactively adhere to the
following:

| | 1. | Continue to improve, upgrade and expand our business
      infrastructure - In the third quarter of 2004 additional supply sources
      for our Flowstar products were identified and developed. A service network
      for Flowstar was completed with the successful launch of the first school
      to certify independent Certified Flowstar Service Technicians. We expanded
      our sales force by adding two new sales personnel in the third quarter of
      2005 to promote the sale of Flowstar DCR technologies, and one new field
      technician to oversee on-site installation, servicing and training for
      those technologies. We received certification by the Kansas State Oil and
      Gas Conservation Commission in the third quarter of 2005 to allow us to
      sell DCR-based technologies within its jurisdiction representing our
      initial entry into the US market with Flowstar. As a result of these
      efforts and developments we are preparing a new strategic plan to promote
      Flowstar DCR-based technology sales. We are also negotiating with several
      parties who have expressed an interest in becoming distributors of
      Flowstar DCR-based technology within the United States and other energy
      producing nations.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | 2. | Continue to hire, train and retain key management for our
      company and ensure any target company does the same - A corporate
      controller was hired late in March of 2005 and we hired an investor
      relations executive in June 2005. We recently also hired an engineer to
      become project manager for the Ellycrack venture.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | 3. | Continue to advance the commercialization development
      programs for target companies so they become cash flow positive as soon as
      is practically possible  In the third quarter of 2004 the requirement for
      the construction of a pilot plant in Canada to take the Ellycrack project
      commercial was identified. This resulted in the signing of a Memorandum of
      Understanding to build such a plant in return for expanding the Company's
      interests from licenses in North America to a 50% ownership in a Joint
      Venture covering the entire world. We have since made various improvements
      to core technology of the Ellycrack process in the third quarter of 2005
      in order to optimize it for the pilot plant and subsequent commercial
      applications. As a                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

3

---

| |    | result of those improvements we have scheduled tests for
      several major energy producers who have requested a demonstration of the
      Ellycrack process for possible consideration within their field operations
      as a commercial application. To date, the company has hired a major
      engineering firm to prepare the design for a 50 to 200 barrel a day pilot
      plant utilizing the Ellycrack technology. The complete engineering and
      costing of the plant is in process, with the estimated completion to be in
      mid 2006.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | 4. | Maintain adequate financial resources  As noted above in
      the nine months ended September 30, 2005 we undertook to raise over one
      million dollars through the issuance of a convertible debenture. This was
      successful, and the issuance was closed on April 28, 2005, resulting in
      the Company raising $1,552,319. We are currently in the process of
      completing a Cdn. $500,000 private placement which will provide additional
      financing for the Company.                                                                

Our future opportunities for success greatly depend on the
continued employment of and performance of senior management, including the
successful hiring of any key personnel employed by potential target companies.
We would be materially adversely affected if one or more of the senior
management team does not continue to perform in their present positions, or if
we or potential targets are unable to hire and train a sufficient number of
qualified management, professional, technical and regulatory personnel. As such,
in July 2005 we granted our CEO Doug Biles options to purchase 2 million common
shares of Wescorp as part of his employment agreement and as an incentive for
his continued service. (See Exhibit 2.1.19 below) We also executed an employment
agreement with our CFO Terry Mereniuk who ceased to be a consultant to the
Company in the third quarter 2005 period. (See Exhibit 2.1.20 below)

A.1 Acquisition of Flowstar and Flowray

On March 31, 2004, we completed the acquisition of 100% of the
outstanding shares of Flowstar and Flowray in consideration of cash payments to
the selling shareholders totaling approximately $414,000 (CDN$550,000).

Flowstar has the non-exclusive worldwide license to use
Flowray's technology relating to certain flow meters and to manufacture, market
and sell products derived from the technology, including three major product
lines used in measuring and recording natural gas flow. Flowray has developed a
system known as the Digital Chart Recorder or "DCR" for measuring the flow of
gas at the wellhead. Flowstar also markets liquid based totalizers, and
Windows©-based gas flow calculation software, and a line of liquid
turbines for which there is no intellectual property, as the patents expired
long ago.

Flowstar successfully field-tested the DCR-900 product in 2003.
Units were commercially sold in the 2003 year, and were installed in various
customer applications. Flowstar continues to develop and improve the DCR product
line, including PDA/telephone software and a satellite communication system. The
introduction of the DCR-1000 and testing of the differential pressure cell
enhances Flowstars position as an industry leader providing advanced
technological solutions for gas flow measurement equipment.

In 2005 management of Flowstar participated in the ISA Calgary
2005 Show and Conference on April 13 and 14, and the Canadian School of
Hydrocarbon Measurement Exhibit in Calgary Alberta on March 22 and 23. Staff
also attended the Coal Bed Methane Conference held on March 2 and 3.

In the third quarter of 2004, additional professional sales
staff were identified and hired, and a sales office was opened in Calgary,
giving the company an important presence in the most influential oil and gas
industry cities in Canada. Two additional professional sales staff were hired in
the third quarter of 2005 to further expand our sales capabilities within the
Calgary and Edmonton based markets of Canada Management is optimistic about the
future prospects for Flowstar. We feel that sales of Flowstar technology will
continue to increase over the remaining three months of 2005 and through 2006.
In an effort to boost DCR-related revenue beyond Canada we are negotiating with
several parties expressing an interest in becoming distributors of Flowstar
DCR-based technology within the United States and other energy producing
nations.

A.2 Acquisition of Vasjar

In acquiring Flowstar and Flowray, we also entered into share
purchase agreements dated effective January 14, 2004 pursuant to which Wescorp
acquired 100% of the outstanding shares of Vasjar Trading Ltd. (Vasjar), a
British Virgin Islands corporation, Vasjar in turn owns 100% of the outstanding
shares of Quadra Products International Inc. (Quadra) and Flowstar
International, Inc. (formerly Penta Energy Products Inc.) (Flowstar
International), both of which are Barbados corporations. (Pursuant to an
agreement dated as effective August 30, 2003, Flowray had transferred to Quadra
all of its intellectual property rights, including rights to the technology
related to the DCR 900 system described below, in consideration of a promissory
note in the principal amount of CDN$600,000 without interest. The promissory
note is now an asset of Flowstar.

The acquisition of Vasjar was concluded on August 19th,
  2004. In consideration of the purchase of all the outstanding shares of Vasjar
  from two shareholder entities, we issued shares to the shareholders of Vasjar
  50% each of the following:

4

---

|(a) | an aggregate 2,400,000 shares of common stock of the
      Company on April 28, 2004; and                                                                                                                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                              
|(b) | up to an aggregate 2,600,000 additional shares of common
      stock of the Company to be issued in stages as follows:                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                              
|    | Stage One.On or before April 1, 2005, Wescorp
      will issue from 480,000 to 600,000 additional shares based on sales
      achieved in the 2004 calendar year; the lower figure being if sales are
      less than $3,000,000, and the upper figure being if sales are more than
      $3,750,000. Shares are required to be registered at delivery.      
|    |                                                                                                                                                                                                                                                                                                                                                              
|    | Stage Two. On or before April 1, 2006, Wescorp
      will issue from 800,000 to 1,000,000 additional shares based on sales
      achieved in the 2005 calendar year; the lower figure being if sales are
      less than $4,500,000 and the upper figure being if sales are more than
      $7,500,000. Shares are required to be registered at delivery; and
|    |                                                                                                                                                                                                                                                                                                                                                              
|    | Stage Three. On or before April 1, 2007, Wescorp
      will issue from 800,000 to 1,000,000 additional shares based on sales
      achieved in the 2006 calendar year; the lower figure being if sales are
      less than $6,000,000 and the upper figure being if sales are more than
      $11,250,000. Shares are required to be registered at delivery. 
|    |                                                                                                                                                                                                                                                                                                                                                              
|    | Any Wescorp shares not earned in a particular calendar
      year because the sales did not achieve the upper sales target will be
      carried over and added to the shares to be issued in the next calendar
      year, subject to achievement of the next years escalating sales volumes.                                                              

Wescorp was not able to deliver free-trading shares on April 1,
2005, and so we were required to pay the Vasjar shareholders an additional
48,000 Wescorp shares for each month that the shares were not delivered,
covering the months April through September 2005. These shares were delivered
and accepted by the Vasjar shareholder on September 28, 2005.

If we fail to deliver any of the Stage 2 or 3 shares, Wescorp
will be subject to a penalty of 10% additional shares to be issued to the Vasjar
shareholders for each month of delay, with a cumulative provision. If any of the
Wescorp shares to be issued to the Vasjar shareholders have not been delivered
for a period of 182 days after the applicable due date, the Vasjar shareholders
may at their option terminate the share purchase agreements, without notice or
prior opportunity to cure. Wescorp has pledged to the Vasjar shareholders all
the Vasjar shares as security to guarantee Wescorps performance under the share
purchase agreements.

With the completion of the acquisition of Vasjar, the Company
now owns all the proprietary technology originally owned by Flowray related to
the DCR 900 system and other products. Quadra is planning to grant Flowstar
International a license to use the technology and to manufacture, market and
sell products derived from the technology, including the DCR 900 system, in all
jurisdictions worldwide except Canada. Wescorp has become the parent company of
Flowstar USA, which will hold the rights to manufacture, market and sell the DCR
system in the United States. Flowstar's current worldwide license will be
amended so that Flowstar will retain the rights to manufacture, market and sell
the DCR system only in Canada.

B. Memorandum of Understanding to Form a Joint Venture with
and Shares of Ellycrack AS

Pursuant to a letter of intent dated February 10, 2004
Ellycrack AS (Ellycrack), of Florø, Norway, had granted Wescorp, or its
subsidiary, options to acquire three separate exclusive territorial licenses in
Canada, the United States and Mexico to make, use, copy, develop and exploit
Ellycracks technology and intellectual property and to design, manufacture,
market and sell products or systems derived from or utilizing Ellycracks
technology or sublicense others to do the same in each territory.

However, on September 28th, 2004, Ellycrack and the
Company signed a Memorandum of Understanding (MOU) to form a 50% / 50% Joint
Venture to make, use, copy, develop and exploit Ellycrack's technology and
intellectual property and to design, manufacture, market and sell products or
systems derived from or utilizing Ellycrack's technology or sublicense others to
do the same on a world-wide basis.

The principle features of the MOU is to cancel the options to
purchase licenses in Canada, the United States and Mexico and to replace it with
an obligation to build and operate a pilot plant in Canada to determine the
overall economics of the technology and subject to the viability of these
economics, to market the technology on a world-wide basis. For further details
see our 8-K filed with The Securities Exchange Commission on Sept
28th, 2004.

The Company has purchased an aggregate 659,000 shares of Ellycrack
  representing 13.15% of Ellycrack's outstanding shares; 259,000 shares in consideration
  of $123,129 and 400,000 shares in exchange for 300,000 shares of our common
  stock issued to Ellycrack. The MOU provides an option for the Company to increase
  its equity interest up to 20% via a combination of purchase and share swap.
  For further details see our 8-K filed with The Securities Exchange Commission
  on September 28th, 2004. In the first quarter of 2005, Wescorp paid
  $75,000 for 97,000 additional shares of Ellycrack at five Kroners per share.

5

---

Ellycrack has developed what is believed to be a cost effective
technology in which heavy oil can be upgraded to lighter more commercially
saleable oil in a highly intensive cracking process which could be located
directly at the oil field. By upgrading the oil in the field, it would allow oil
companies to eliminate on-site storage tanks as well as the costly process of
transporting the heavy oil great distances to an upgrader. The oil could be
transported directly to a refinery for refining into ordinary petroleum
products.

We have since made various improvements to core technology of
the Ellycrack process in the third quarter of 2005 in order to optimize it for
the pilot plant and subsequent commercial applications. As a result of those
improvements, we have scheduled tests for several major energy producers who
have requested a demonstration of the Ellycrack process for possible
consideration within their field operations as a commercial application. To
date, the company has hired a major engineering firm to prepare the design for a
50 to 200 barrel a day pilot plant utilizing the Ellycrack technology. The
complete engineering and costing of the plant is in process, with the estimated
completion to be in mid 2006. An engineer has been recently hired to act as
project manager to oversee the Ellycrack operations.

At the time of this filing we are in the process of converting
the above mentioned MOU into a formal joint venture agreement

Plan of Operation Overview

Prior to the second quarter of operations in 2004 we had not
generated any revenues from products, services or operations since the inception
of our company. We are including herein a discussion of our plan of operation
for the next 12 months for our revised business plan, which was initiated in
late 2003.

In addition, though not required for regulatory purposes, we
are also including some additional summary analysis and information regarding
our financial condition, liquidity and capital resources. This analysis should
be read jointly with the financial statements, related notes, and the cautionary
statement regarding forward-looking statements, which appear elsewhere in this
filing.

Plan of Operation for the Next Twelve Months

The Flowstar revenue from July 01, 2004 to June 30, 2005 of
$2,350,475 is an indication that Flowstar will generate significantly higher
operating revenues in the future that will enable it to operate profitably. Our
overall future operations are dependent upon the identification and successful
completion of additional long-term or permanent equity financing, the continued
support of creditors and shareholders, and, ultimately, the achievement of
profitability in all facets of our operations. There can be no assurances that
we will be successful which would significantly affect our ability to roll out
our revised business plan. We will continue to evaluate our projected
expenditures relative to our available cash and to seek additional means of
financing in order to meet our internal and external growth.

Over the past year, we have integrated the operations of
Flowstar and Flowray into our corporate structure. We will be updating our
business plan for the operations to capitalize on the competitive advantages of
the DCR products in Canada. Over the next several months, Management will be
drawing up a plan of action to manufacture and distribute the DCR products
throughout North America and the rest of the world.

The Company has recently closed financing by way of convertible
debentures for an aggregate amount of $1,552,319 and an additional $110,000 for
which no debenture agreement has been signed. The debentures are secured by the
assets of Flowstar and carry interest at the rate of 14% per annum with a due
date of December 31, 2005. The debt is convertible into Units of the Company at
a price of $0.90 per Unit. Each Unit purchased hereunder is comprised of One (1)
common share of the Corporation (the "Common Share(s)") and One (1) Common Share
purchase warrant (the "Warrant(s)") each of which may be exercised at any time
up to December 31, 2006 as follows:

(a) if exercised on or before December 31, 2005 the holder of
each Warrant shall be entitled to purchase one (1) Common Share for each Warrant
held for $1.00 per Common Share; and

(b) thereafter until December 31, 2006 the holder of each
Warrant shall be entitled to purchase one (1) Common Share for each Warrant held
for $2.00 per Common Share.

Our operations have been funded to date by debt and equity
financing. With the acquisition of Flowstar in 2004, we hope to achieve a
positive operating cash flow in Flowstar in 2006. However, in the event that
this does not occur, we will be relying on debt and equity financings as sources
of funding in order to provide our Company with sufficient capital to continue
our development and operational plans. There can be no assurance that the past
trend will continue, which would significantly affect the financial condition of
our Company and our ability to effectively implement the proposed business plan
for Flowstar and Ellycrack.

Over the next 12 months, we also plan to closely monitor and
  implement solutions to successfully manage our proposed future growth. This
  will include:

6

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| | 1. | Improvement of controls to ensure that information is
      processed in a more timely and efficient manner.                                                                                                          
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                       
| | 2. | Retention of key management and staff with an emphasis on
      proper training and ongoing professional development to ensure we are up
      to date with the latest advancements that affect our target industries.
| |    |                                                                                                                                                                                                                       
| | 3. | Identification of potential markets for current products
      and those under development to ensure we can optimize our revenues to
      generate profits and positive cash flows.                                  

Until the Flowstar operation becomes cash flow positive,
Wescorps cash on hand is our only source of liquidity. We do not have any
lending arrangements in place with banking or financial institutions. We hope to
secure conventional bank financing (line of credit) for Flowstar in 2006.

We believe that, with the successful completion of our current
convertible debenture financing, , our cash balances will be sufficient to carry
our normal operations for the next month, before any cash requirements that may
be needed for target investments or acquisitions (which would otherwise
accelerate our need to raise additional cash). We are in the process of
completing a Cdn.$500,000 private placement to assist us with our short term
cash flow needs. To the extent that we require additional funds to support our
operations or the expansion of our business, we may sell additional equity or
issue debt. Any sale of additional equity securities will result in dilution to
our stockholders. There can be no assurance that additional financing, if
required, will be available to our company or on acceptable terms.

We anticipate that the only major purchases of capital assets
in the next 12 months will be the building of the Ellycrack Pilot Plant.
However, there may be some purchases of office equipment and shop equipment for
Flowstar. Also, Flowstar will be conducting some research and development in its
ongoing program to maintain the competitive advantage of its products. Wescorps
current corporate employee count has increased in the second quarter with the
hiring of a full time corporate controller and the recent addition of our VP
Investor Relations and Corporate Communications. Our CFO Terry Mereniuk has
ceased to be a consultant to the Company in the third quarter and has now joined
the Wescorp payroll, the terms of which are outlined within his employment
agreement. (See Exhibit 2.1.20 below) We also executed and employment agreement
with our CEO Doug Biles. (See Exhibit 2.1.19 below) Recently we have hired an
engineer to oversee the Ellycrack project. There may be some services that
Wescorp will contract out for, given the specialized nature of the businesses of
Flowstar and Ellycrack. With the change in our business plan, we anticipate that
any change in capital assets, research and development and employees would be
subject to change in any targeted operating business that we may acquire,
including that of Flowstar and Ellycrack.

Results from Operations  2005 Compared to 2004

Revenues

Revenues increased by about $59,000, or approximately 10.2% to
almost $639,000 for the quarter ended September 30, 2005 from just over $579,000
for the quarter ended September 30, 2004. This increase can be attributed to a
strengthening of the Canadian dollar, continued strong market acceptance of the
DCR systems sold by Flowstar and increased marketing of the Flowstar products.
The increase in revenue of $911,000 for the nine months ended September 30, 2005
to $1,691,000 from $779,000 for the nine months ended September 30, 2004 can be
attributed to having only six months of revenue in 2004, as Flowstar was
acquired on March 31, 2004 Results for 2004 are indicative of the marketing of a
virtually new product in the DCR system and the initial reluctance of the
industry to accept the product as a viable alternative to existing
technology.

Third quarter 2005 revenue reflects the recovery of the
oilfield servicing industry from the negative impact attributed to spring
breakup in Alberta and the introduction of EUB Directive 17 which affected
second quarter results. With the improved market conditions and the
strengthening of the Canadian dollar Flowstar generated its highest revenue
figures for a quarter since it was acquired by Wescorp.

Cost of Sales

As a percentage of revenues, cost of sales increased to 62.1%
  versus the 49.5% which was reflected in the results for the first six months
  of 2005. This increase is directly attributable to inventory adjustments required
  to reconcile the accounting records to the physical count taken at September
  30, 2005 and the resulting downward inventory revaluation. Even with these adjustments
  there is still an improvement over the 70.3% cost of sales figures recorded
  in the third quarter of 2004. New controls have recently been implemented that
  will improve the Companys ability to track inventory in its accounting
  records so that it will be able to maintain margins while increasing its market
  presence of the DCR systems.

7

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Expenses

Operating expenses for the three months ended September 30, 2005
  show an increase of $136,000 versus the same period in 2004. Consulting fees
  for the current years three month period ended September 30, 2005 are
  approximately $37,000 less than those for 2004. In addition, legal and accounting
  costs decreased by just over $178,000. Last years figures for legal and
  accounting were adversely affected by legal fees incurred to defend the Baum
  litigation, as well as legal and other professional fees related to the acquisition
  of Vasjar, Flowstar and Flowray. Additional savings of about $101,000 were achieved
  in the area of advertising and investor relations. Some of these savings were
  derived by having the investor relations functions performed internally by an
  employee versus contracting out these services. A minor decrease of $14,000
  relating to office expenses was also achieved.

The above decreases were offset by substantial increases in
wages and benefits. Part of the increase in wages and benefits is due to hiring
former consultants as employees. Additional staff were hired to fill the
management positions of VP Investor Relations and Communications and corporate
controller. In addition, the Companys Chief Financial Officer and Chief
Executive Officer are now being paid as employees versus consultants. The
Company has also hired administration staff necessary to support the operations
of Flowstar and enhance internal controls. Engineering of the Ellycrack pilot
project was started in the current quarter resulting in costs of $168,000 being
incurred. Travel expenses for the current quarter have risen by approximately
$43,000 versus the same period last year as a direct result of the increased
activity in the Ellycrack project and additional marketing of both Wescorp and
Flowstar in international markets. Furthermore the Company incurred costs of
about $35,000 for insurance and $4,000 for research and development in the
current quarter which did not exist in last years figures.

Other Income and Expenses

The Company had a loss from other items of $294,000 for the
three months ended September 30, 2005 compared to a loss of $102,000 for the
same period in 2004. Most of this loss can be attributed to the $233,000 penalty
for the late delivery of shares required to meet the provisions of the agreement
relating to the acquisition of Vasjar. Interest incurred on the debentures in
the amount of $59,000 was not in the prior year figures as these debentures have
been issued in the current fiscal year. The 2004 figures reflect $72,000 in
interest for amounts owing to shareholders and related parties for the three
months ended September 30, 2004. With the extinguishment of this debt in the
current fiscal year no further interest expense has been incurred on this
debt.

Net Loss

We incurred a net operating loss for the three months ended
September 30, 2005 of $827,000 compared to a net loss of $569,000 for the
comparable period in 2004. Had the Company not incurred $233,000 penalty for the
late delivery of shares it would have only shown a loss of $594,000 in the
current quarter.

Liquidity and Capital Resources  2005 Compared to
2004

From inception, we have been dependent on investment capital
and debt financing from our shareholders as our primary source of liquidity. To
September 30, 2005, we have generated revenues from operations of $2,551,000
(comprised of $860,000 for the three quarters to December 31, 2004 and
$1,691,000 for the first three quarters of 2005). We had an accumulated deficit
at September 30, 2005 of $12,791,000.

During the third quarter of 2005, our cash position decreased
to $260,000 from a June 30, 2005 balance of $1,003,000. This is an increase over
the September 30, 2004 balance of $44,000. We had cash used in operations of
$1,549,000 in the first nine months of fiscal 2005 compared to cash used in
operations of $1,676,000 in the same period of fiscal 2004. We also had a net
outflow of cash of $415,000 from investing activities in the first nine months
of 2005, which consisted of cash used of $75,000 for the purchase of shares in
Ellycrack as noted in the "Financing" section above (2004 - $108,000), the
purchase of plant and equipment of $77,000 (2004 - $29,000), the issuance of a
note receivable in the amount of $288,000, which was offset by the change in
deposits of $25,000 (2004 - ($44,000)). The 2004 figures reflect net balances
received of $15,000 from Flowstar and Flowray on the purchase of their shares.
The net cash used in operating and investing activities was financed by
$2,130,000 from financing activities, resulting in a net increase in our cash
position for the nine month period of $209,000. The cash flow from financing
activities is primarily a result of the issuance of some common stock net of
shares issued for services in the amount of $575,000 and convertible debentures
in the amount of $1,552,000 (see Part II, Item 2).

The Company had $5,661,000 in total liabilities at September
30, 2005 compared to $2,473,000 at the end of September 2004. Part of the
increase can be attributed to additional trade payables and financing required
to sustain the higher level of activity in the operations of Flowstar, resulting
in an increase of approximately $611,000. In addition, $800,000 in debt was
incurred as part of the purchase of Vasjar.

The note payable to the related shareholder also increased in
  value by approximately $222,000 versus September 2004 as a result of the US
  dollar weakening against the Canadian dollar and additional interest accruing
  on the loan until it was crystallized into equity. This amount is reflected
  as deposit equity on the balances sheet as these shares are yet to be issued
  by the Company.

8

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The Company also obtained additional financing of $2,153,000
through the issue of $601,000 in share capital and an additional $1,552,000 in
convertible debentures. New financing utilized to acquire automotive equipment
during the nine month period was incurred in the amount of $55,000. There was a
repayment of $8,000 on loans used to finance the vehicles acquired after
September 30, 2004.

ITEM
3.           CONTROLS AND
PROCEDURES

The Company maintains disclosure controls and procedures
designed to ensure that information required to be disclosed in reports filed
under the Securities Exchange Act of 1934, as amended, is recorded, processed,
summarized and reported within the specified time periods. As of the end of the
period covered by this report, Wescorp's Chief Executive Officer and its Chief
Financial Officer evaluated, with the participation of Wescorp management, the
effectiveness of the Company's disclosure controls and procedures. Wescorp's
Chief Executive Officer and Chief Financial Officer each concluded that the
Company's disclosure controls and procedures were effective as required. There
were several changes in the Company's internal controls over financial reporting
that occurred during the Company's most recently filed quarter that increased
the effectiveness of the Company's internal control over financial
reporting.

Disclosure controls and procedures are our controls and other
procedures that are designed to ensure that information required to be disclosed
by us in the reports that we file or submit under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the
Securities and Exchange Commission's rules and forms. Disclosure controls and
procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed by us in the reports that we
file under the Exchange Act, is accumulated and communicated to our management,
including our principal executive office and principal officer, as appropriate
to allow timely decisions regarding required disclosure.

PART II  OTHER INFORMATION

ITEM
1.           LEGAL
PROCEEDINGS

ASI Claim

Shortly after year end, the Company settled a claim made by
Advanced Systems Foundation (ASI) regarding ASIs claim of entitlement to
shares of Wescorp stock in settlement of unpaid debts from Sentry Telecom
Systems, Inc., a former subsidiary of the Company. The settlement calls for ASI
to receive a certificate for 592,826 Wescorp common stock shares with a fair
market value of approximately $224,000.

Baum Lawsuit

The Company was successful in its lawsuit with Mr. Mark Baum.
  Wescorp was awarded $42,471 plus court costs. Mr. Baum appealed the judgment.
  The final determination of the case at this time is not certain, nor is it certain
  when or if the Company will receive the court award and costs.

9

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ITEM
2.           CHANGES IN
SECURITIES

To the end of the third quarter of 2005, Wescorp has raised
$1,552,319 on the issuance of a convertible debenture (the closing of which was
on April 28) and $635,500 on the exercise of outstanding warrants. In addition,
the loan from AHC Holdings Ltd. for Cdn $2,382,755 (US$1,924,681) was converted
to shares of the company at $0.87 per share, resulting in the complete
elimination of the loan. On September 28, 2005, the Company issued 768,000
shares to settle obligations pursuant to Stage One of the agreement reached on
the acquisition of Vasjar Trading Ltd.

ITEM
3.           DEFAULTS UPON
SENIOR SECURITIES

Not applicable.

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

No matters were submitted to a vote of our security holders
during the three months ended September 30, 2005.

ITEM
5.           OTHER
INFORMATION

Not applicable

ITEM
6.           EXHIBITS AND
REPORTS ON FORM 8-K.

(a) Pursuant to Rule 601 of Regulation SB, the following
exhibits are included herein or incorporated by reference.

|Exhibit |                                                                                                                                                                                                                                                                                                                                                                                     
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                                                                                                                                                                                                                                                                                                         
|        |                                                                                                                                                                                                                                                                                                                                                                                     
|2.1.1*  | Loan Agreement dated
        January 28, 2003 between the Company and AHC Holdings Ltd. Addendum to
        the Loan Agreement dated February 6, 2003 providing AHC a warrant to purchase
        1,000,000 shares of the Company's common stock at $0.15 per share as a
        bonus for providing the Loan. (Incorporated by reference to Form 8-K filed
        April 28, 2003).
|
|
|
|        |                                                                                                                                                                                                                                                                                                                                                                                     
|2.1.13* | Share Purchase Agreement
        dated as of January 14, 2004 between the Company and the Trustee of the
        Epitihia Trust. (Incorporated by reference to Form 8-K/A filed on May
        12, 2004).                                                                                                                                                                           
|
|        |                                                                                                                                                                                                                                                                                                                                                                                     
|2.1.14* | Share Purchase Agreement
        dated as of January 14, 2004 between the Company and the Trustee of the
        Abuelo Trust. (Incorporated by reference to Form 8-K/A filed on May 12,
        2004).                                                                                                                                                                             
|
|        |                                                                                                                                                                                                                                                                                                                                                                                     
|2.1.15* | Amending Agreement dated as
        of June 16, 2004 between the Company and the Trustee of the Epitihia Trust.                                                                                                                                                                                                                                                                     
|        |                                                                                                                                                                                                                                                                                                                                                                                     
|2.1.16* | Amending Agreement dated as
        of June 16, 2004 between the Company and the Trustee of the Abuelo Trust.                                                                                                                                                                                                                                                                       
|        |                                                                                                                                                                                                                                                                                                                                                                                     
|2.1.17* | Hypothecation Agreement
        dated as of July 6, 2004 between the Company, the Trustee of the Epitihia
        Trust and Yearwood & Boyce.                                                                                                                                                                                                                                       
|
|        |                                                                                                                                                                                                                                                                                                                                                                                     
|2.1.18* | Hypothecation Agreement
        dated as of July 6, 2004 between the Company, the Trustee of the Abuelo
        Trust and Yearwood & Boyce.                                                                                                                                                                                                                                         
|
|        |                                                                                                                                                                                                                                                                                                                                                                                     
|2.1.19  | Employment
        Agreement of Douglas Biles                                                                                                                                                                                                                                                                                                                                       
|        |                                                                                                                                                                                                                                                                                                                                                                                     
|2.1.20  | Employment
        Agreement of Terry Mereniuk                                                                                                                                                                                                                                                                                                                                      
|        |                                                                                                                                                                                                                                                                                                                                                                                     
|31.1    | Certification
        of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002                                                                                                                                                                                                                                                                  
|        |                                                                                                                                                                                                                                                                                                                                                                                     
|31.2    | Certification
        of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002                                                                                                                                                                                                                                                                  
|        |                                                                                                                                                                                                                                                                                                                                                                                     
|32.1    | Certification
        of Chief Executive Officer and Chief Financial Officer pursuant to 18
        U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
        Act of 2002                                                                                                                                                                               
|

*Previously filed

10

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(b)   Reports on Form 8-K

March 21, 2005 reporting the converting of the AHC Holdings
Loan to Company shares.

April 29, 2005 reporting the closing of the Convertible
Debenture for total proceeds of $ 1,656,819.

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, on this
10)th day of November, 2005.

|                        | WESCORP ENERGY
      INC.
|----------------------- | -------------------------
|                        |                          
|Date: November 10, 2005 | By:                      
|                        |                          
|                        |                          
|                        | By:                      
|                        |                          

11

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