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10QSB form10qsb.htm QUARTERLY REPORT FOR THE QUARTER ENDED JUNE
30, 2007

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 June 30, 2007

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                       | 98-0447716         
|------------------------------ | -------------------
|State or other jurisdiction of | (I.R.S. Employer   
|incorporation or organization  | Identification No.)

Suite 770, 435 
4thAvenue South West, Calgary, Alberta
T2P 3A8(Address of principal executive offices) (Zip Code)

(403) 206 - 3990Registrant's telephone number,
including area code

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

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

Number of shares outstanding of the registrant's class of common
stock as of August 8, 2007 was 55,012,370.

Transitional Small Business Disclosure Format (Check one): Yes
[   ] No [X]

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CAUTIONARY NOTE REGARDING 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 (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 AND OF OUR ANNUAL REPORT ON FORM 10-KSB FOR 2006. AMONG THOSE
  RISKS AND UNCERTAINTIES ARE THE FOLLOWING RISKS:
- THAT OUR FLOWSTAR DCR TECHNOLOGY MAY NOT REMAIN COMPETITIVE WITHIN OUR
  CURRENT MARKETS OR THAT WE MAY NOT BE ABLE TO GENERATE SUFFICIENT REVENUE FROM
  THE TECHNOLOGY TO BECOME PROFITABLE WITHIN THAT DIVISION;
- WE MAY NOT BE ABLE TO SUCCESSFULLY DELIVER FREE-TRADING SHARES TO COMPLETE
  THE PURCHASE OF THE FLOWSTAR TECHNOLOGY;
- THE ELLYCRACK TECHNOLOGY MAY NOT BE TECHNICALLY EFFECTIVE OR COST
  EFFECTIVE IN THE MARKETS TARGETED BY MANAGEMENT; THAT WE MAY NOT BE ABLE TO
  ADEQUATLEY PROTECT OUR INTELLECTURAL PROPERTY;
- WE WILL NOT SUCCESSFULLY IDENTIFY OR COMPLETE ANY OTHER SUITABLE
  ACQUISITIONS;
- OUR PRIMARY CUSTOMERS ARE ENERGY-RELATED, WHICH TEND TO BE CYCLICAL AND
  THEREFORE ANY DOWNTURNS IN THIS CYCLICAL INDUSTRY COULD ADVERSELY AFFECT
  OPERATIONS;
- THE ENERGY-RELATED INDUSTRY THAT WE SERVICE IS HEAVILY REGULATED
  (INCLUDING CO2 RELATED ISSUES) AND THE COSTS ASSOCIATED WITH SUCH REGULATED
  INDUSTRIES INCREASE THE COSTS OF DOING BUSINESS;
- MANAGEMENT IS ADEQUATE TO INTEGRATE ANY BUSINESSES ACQUIRED;
- MANAGEMENT IS ADEQUATE TO CARRY OUT ITS BUSINESS PLAN AND TO MANAGE ITS
  GROWTH EFFECTIVELY AND EFFICIENTLY;
- MANAGEMENT WILL BE ABLE TO EFFECTIVELY DEAL WITH CURRENT AND FUTURE
  COMPETITIVE FORCES IN THE MARKET;
- THERE WILL BE ADEQUATE CAPITAL TO FUND OUR BUSINESS;
- WE MANAGE ANY FOREIGN EXCHANGE RISK ADEQUATELY;
- WE COULD FACE SIGNIFICANT LIABILITIES IN CONNECTION WITH OUR TECHNOLOGY
  AND OPERATIONIS WHICH, IF INCURRED BEYOND ANY INSURANCE LIMITS, COULD
  ADVERSELY AFFECT OUR BUSINESS AND FINANCIAL CONDITION;
- OUR NEED FOR ADDITIONAL CAPITAL MAY HARM OUR FINANCIAL CONDITION OR LIMIT
  OUR ABILITY TO FUND ACQUISITIONS; AND
- IF ACQUISITIONS ARE COMPLETED, THEY MAY BE UNSUCCESSFUL FOR TECHNICAL,
  ECONOMIC, OR OTHER REASONS.

CURRENCIES

All amounts expressed herein are in U.S. dollars unless
otherwise indicated.

PART I - FINANCIAL INFORMATION

|ITEM 1. | **FINANCIAL
      STATEMENTS**
|------- | ------------------------------

---

Index

|Consolidated Balance
      Sheets at June 30, 2007 (Unaudited) and December 31, 2006                    | F-1
|------------------------------------------------------------------------------------------------------- | ---
|                                                                                                       
|Consolidated Statements
      of Operations for the six months ended June 30, 2007 and 2006 (Unaudited) | F-2
|                                                                                                       
|Consolidated Statement
      of Stockholders' Equity (Deficit) as of June 30, 2007 (Unaudited)          | F-3
|                                                                                                       
|Consolidated Statements
      of Cash Flows for the six months ended June 30, 2007 and 2006 (Unaudited) | F-4
|                                                                                                       
|Notes to the Consolidated
      Financial Statements                                                    | F-5

---

WESCORP ENERGY INC.CONSOLIDATED BALANCE SHEETS

|                                                             |   | June 30,    |   |   | December 31, |  
|------------------------------------------------------------ | - | ----------- | - | - | ------------ | -
|                                                             |   | 2007        |   |   | 2006         |  
|                                                             |   | (Unaudited) |   |   |              |  
|ASSETS                                                       |   |             |   |   |              |  
|CURRENT ASSETS                                               |   |             |   |   |              |  
|Cash                                                         | $ | 820,190     |   | $ | 499,233      |  
|Restricted cash                                              |   | -           |   |   | 171,000      |  
|Accounts receivable, net of allowance for doubtful           |   |             |   |   |              |  
|accounts of $17,235 and $20,408, respectively                |   | 280,561     |   |   | 695,445      |  
|Inventories (Note 4)                                         |   | 1,120,870   |   |   | 1,053,258    |  
|Short-term investment (Note 5)                               |   | 1,322,367   |   |   | -            |  
|Prepaid expenses                                             |   | 353,548     |   |   | 503,264      |  
|TOTAL CURRENT ASSETS                                         |   | 3,897,536   |   |   | 2,922,200    |  
|                                                             |   |             |   |   |              |  
|PROPERTY AND EQUIPMENT, net
      (Note 6)                   |   | 102,862     |   |   | 138,196      |  
|                                                             |   |             |   |   |              |  
|OTHER ASSETS                                                 |   |             |   |   |              |  
|Investments (Note 7)                                         |   | 1,729,678   |   |   | 2,655,925    |  
|Technology, net (Note 8)                                     |   | 2,436,293   |   |   | 2,694,616    |  
|Other receivables                                            |   | 107,227     |   |   | 72,023       |  
|TOTAL OTHER ASSETS                                           |   | 4,273,198   |   |   | 5,422,564    |  
|                                                             |   |             |   |   |              |  
|TOTAL ASSETS                                                 | $ | 8,273,596   |   | $ | 8,482,960    |  
|                                                             |   |             |   |   |              |  
|LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)               |   |             |   |   |              |  
|CURRENT LIABILITIES                                          |   |             |   |   |              |  
|Accounts payable and accrued liabilities                     | $ | 2,044,003   |   | $ | 1,697,212    |  
|Current portion of notes payable (Note 9)                    |   | 371,471     |   |   | 47,936       |  
|Agreement payable (Note 10)                                  |   | 800,000     |   |   | 800,000      |  
|Due to related parties (Note 16)                             |   | 822,415     |   |   | 665,529      |  
|Related party note payable (Note 16)                         |   | 1,924,681   |   |   | 1,924,681    |  
|Convertible debentures (Note 11)                             |   | 90,000      |   |   | 90,000       |  
|TOTAL CURRENT LIABILITIES                                    |   | 6,052,570   |   |   | 5,225,358    |  
|                                                             |   |             |   |   |              |  
|NOTES PAYABLE, net of current
      portion (Note 9)         |   | 63,390      |   |   | 76,129       |  
|                                                             |   |             |   |   |              |  
|CONVERTIBLE DEBENTURES (Note
      11)                       |   | 2,250,000   |   |   | -            |  
|                                                             |   |             |   |   |              |  
|COMMITMENTS AND CONTINGENCIES
      (Note 16)                |   |             |   |   |              |  
|                                                             |   |             |   |   |              |  
|STOCKHOLDERS' EQUITY (DEFICIT)                               |   |             |   |   |              |  
|Preferred stock, 50,000,000 shares authorized,
      $0.0001 |   |             |   |   |              |  
|par value; no shares issued
      (Note 12)                  |   |             |   |   |              |  
|Common stock, 250,000,000 shares authorized,
      $0.0001   |   |             |   |   |              |  
|par value; 55,012,370 and
      52,195,130 shares            |   |             |   |   |              |  
|issued and
      outstanding, respectively (Note 12)         |   | 5,499       |   |   | 5,218        |  
|Additional paid-in capital                                   |   | 22,704,963  |   |   | 21,332,583   |  
|Deferred compensation                                        |   | (108,164    | ) |   | -            |  
|Subscription receivable                                      |   | (22,500     | ) |   | (97,500      | )
|Funds received for exercise of warrants                      |   | 316,241     |   |   | 382,354      |  
|Accumulated other comprehensive income                       |   | 380,498     |   |   | 1,259,213    |  
|Accumulated deficit                                          |   | (23,368,901 | ) |   | (19,700,395  | )
|TOTAL STOCKHOLDERS' EQUITY
      (DEFICIT)                   |   | (92,364     | ) |   | 3,181,473    |  
|                                                             |   |             |   |   |              |  
|TOTAL LIABILITIES AND                                        |   |             |   |   |              |  
|STOCKHOLDERS'
      EQUITY (DEFICIT)                         | $ | 8,273,596   |   | $ | 8,482,960    |  

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

F-1

---

WESCORP ENERGY INC.CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)

|                                                        |   | Three Months Ended June 30, |   |   | Six Months Ended June 30, |  
|------------------------------------------------------- | - | --------------------------- | - | - | ------------------------- | -
|                                                        |   | 2007                        |   |   | 2006                      |  
|                                                        |   |                             |   |   |                           |  
|REVENUES                                                | $ | 493,622                     |   | $ | 981,447                   |  
|                                                        |   |                             |   |   |                           |  
|COST OF SALES                                           |   | 300,873                     |   |   | 504,089                   |  
|                                                        |   |                             |   |   |                           |  
|GROSS PROFIT                                            |   | 192,749                     |   |   | 477,358                   |  
|                                                        |   |                             |   |   |                           |  
|EXPENSES                                                |   |                             |   |   |                           |  
|Wages and benefits                                      |   | 435,942                     |   |   | 351,520                   |  
|Wages stock-based
      (Note 14)                       |   | 37,200                      |   |   | 20,556                    |  
|Consulting                                              |   | 318,206                     |   |   | 96,351                    |  
|Research
      and development                          |   | 98,394                      |   |   | 147,132                   |  
|Amortization of technology                              |   | 129,161                     |   |   | 129,161                   |  
|Office                                                  |   | 120,787                     |   |   | 100,852                   |  
|Advertising and investor
      relations                |   | 132,335                     |   |   | 85,727                    |  
|Travel                                                  |   | 95,634                      |   |   | 73,670                    |  
|Legal and accounting                                    |   | 75,639                      |   |   | 81,437                    |  
|Insurance                                               |   | 31,120                      |   |   | 36,580                    |  
|Depreciation and amortization                           |   | 23,666                      |   |   | 25,955                    |  
|Interest,
      finance and bank charges                |   | 32,599                      |   |   | 51,792                    |  
|Directors fees                                          |   | 22,244                      |   |   | 17,605                    |  
|Interest
      on debentures                            |   | 29,687                      |   |   | 56,979                    |  
|TOTAL OPERATING EXPENSES                                |   | 1,582,614                   |   |   | 1,275,317                 |  
|                                                        |   |                             |   |   |                           |  
|LOSS FROM OPERATIONS                                    |   | (1,389,865                  | ) |   | (797,959                  | )
|                                                        |   |                             |   |   |                           |  
|OTHER EXPENSE                                           |   |                             |   |   |                           |  
|Penalty for
      late delivery of shares (Note 10)     |   | (121,808                    | ) |   | (120,000                  | )
|Penalty for late filing of
      registration statement |   | (424,839                    | ) |   | -                         |  
|Foreign currency
      translation gain (loss)          |   | (17,194                     | ) |   | 2,751                     |  
|Interest and other income                               |   | 5,791                       |   |   | -                         |  
|Gain on disposition
      of assets                     |   | -                           |   |   | 1,361                     |  
|TOTAL OTHER EXPENSE                                     |   | (558,050                    | ) |   | (115,888                  | )
|                                                        |   |                             |   |   |                           |  
|NET LOSS                                                | $ | (1,947,915                  | ) | $ | (913,847                  | )
|                                                        |   |                             |   |   |                           |  
|BASIC AND DILUTED NET LOSS PER SHARE                    | $ | (0.04                       | ) | $ | (0.02                     | )
|                                                        |   |                             |   |   |                           |  
|WEIGHTED AVERAGE NUMBER COMMON SHARES                   |   |                             |   |   |                           |  
|OUTSTANDING
      - BASIC AND DILUTED                   |   | 54,048,270                  |   |   | 41,128,176                |  

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

F-2

---

WESCORP ENERGY INC.CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

|                                |  |                    |  |   |        |  |   |                 |   |   |              |   |   |              |   |   | Funds        |   |   |             |   |   | Accumulated         |   |   | Total      |   |   |               |  
|------------------------------- |  | ------------------ |  | - | ------ |  | - | --------------- | - | - | ------------ | - | - | ------------ | - | - | ------------ | - | - | ----------- | - | - | ------------------- | - | - | ---------- | - | - | ------------- | -
|                                |  | Common
      Stock |  |   |        |  |   |                 |   |   |              |   |   | Received     |   |   |              |   |   | Other       |   |   | Stockholders'       |   |   |            |  
|                                |  | Number             |  |   |        |  |   | Additional      |   |   | Deferred     |   |   | Subscription |   |   | for Exercise |   |   | Accumulated |   |   | Comprehensive       |   |   | Equity     |   |   | Comprehensive |  
|                                |  | of
      Shares    |  |   | Amount |  |   | Paid-in Capital |   |   | Compensation |   |   | Receivable   |   |   | of Warrants  |   |   | Deficit     |   |   | Income
      (Loss) |   |   | (Deficit)  |   |   | Loss          |  
|                                |  |                    |  |   |        |  |   |                 |   |   |              |   |   |              |   |   |              |   |   |             |   |   |                     |   |   |            |   |   |               |  
|Balance, December 31, 2006      |  | 52,195,230         |  | $ | 5,218  |  | $ | 21,332,583      |   | $ | -            |   | $ | (97,500      | ) | $ | 382,354      |   | $ | (19,700,395 | ) | $ | 1,259,213           |   | $ | 3,181,473  |   | $ | (4,709,221    | )
|Warrants exercised at $0.25     |  |                    |  |   |        |  |   |                 |   |   |              |   |   |              |   |   |              |   |   |             |   |   |                     |   |   |            |   |   |               |  
|per share                       |  | 200,000            |  |   | 20     |  |   | 49,980          |   |   | -            |   |   | -            |   |   | -            |   |   | -           |   |   | -                   |   |   | 50,000     |   |   |               |  
|Warrants exercised at $0.35     |  |                    |  |   |        |  |   |                 |   |   |              |   |   |              |   |   |              |   |   |             |   |   |                     |   |   |            |   |   |               |  
|per share                       |  | 570,000            |  |   | 57     |  |   | 199,443         |   |   | -            |   |   | -            |   |   | (199,500     | ) |   | -           |   |   | -                   |   |   | -          |   |   |               |  
|Proceeds received from          |  |                    |  |   |        |  |   |                 |   |   |              |   |   |              |   |   |              |   |   |             |   |   |                     |   |   |            |   |   |               |  
|common stock issued for         |  |                    |  |   |        |  |   |                 |   |   |              |   |   |              |   |   |              |   |   |             |   |   |                     |   |   |            |   |   |               |  
|private placement at            |  |                    |  |   |        |  |   |                 |   |   |              |   |   |              |   |   |              |   |   |             |   |   |                     |   |   |            |   |   |               |  
|$0.50 per unit                  |  | -                  |  |   | -      |  |   | -               |   |   | -            |   |   | 85,000       |   |   | -            |   |   | -           |   |   | -                   |   |   | 85,000     |   |   |               |  
|Common stock issued to settle   |  |                    |  |   |        |  |   |                 |   |   |              |   |   |              |   |   |              |   |   |             |   |   |                     |   |   |            |   |   |               |  
|accounts payable at $0.44       |  |                    |  |   |        |  |   |                 |   |   |              |   |   |              |   |   |              |   |   |             |   |   |                     |   |   |            |   |   |               |  
|per share                       |  | 321,059            |  |   | 32     |  |   | 141,234         |   |   | -            |   |   | -            |   |   | -            |   |   | -           |   |   | -                   |   |   | 141,266    |   |   |               |  
|Common stock issued to settle   |  |                    |  |   |        |  |   |                 |   |   |              |   |   |              |   |   |              |   |   |             |   |   |                     |   |   |            |   |   |               |  
|accounts payable at $0.50       |  |                    |  |   |        |  |   |                 |   |   |              |   |   |              |   |   |              |   |   |             |   |   |                     |   |   |            |   |   |               |  
|per share                       |  | 532,624            |  |   | 53     |  |   | 266,259         |   |   | -            |   |   | -            |   |   | -            |   |   | -           |   |   | -                   |   |   | 266,312    |   |   |               |  
|Common stock issued for         |  |                    |  |   |        |  |   |                 |   |   |              |   |   |              |   |   |              |   |   |             |   |   |                     |   |   |            |   |   |               |  
|private placement at $0.50      |  |                    |  |   |        |  |   |                 |   |   |              |   |   |              |   |   |              |   |   |             |   |   |                     |   |   |            |   |   |               |  
|per unit                        |  | 20,000             |  |   | 2      |  |   | 9,998           |   |   | -            |   |   | (10,000      | ) |   | -            |   |   | -           |   |   | -                   |   |   | -          |   |   |               |  
|Common stock issued for         |  |                    |  |   |        |  |   |                 |   |   |              |   |   |              |   |   |              |   |   |             |   |   |                     |   |   |            |   |   |               |  
|director's fees at $0.48        |  |                    |  |   |        |  |   |                 |   |   |              |   |   |              |   |   |              |   |   |             |   |   |                     |   |   |            |   |   |               |  
|per share                       |  | 250,000            |  |   | 25     |  |   | 119,975         |   |   | (120,000     | ) |   | -            |   |   | -            |   |   | -           |   |   | -                   |   |   | -          |   |   |               |  
|Amortization of deferred        |  |                    |  |   |        |  |   |                 |   |   |              |   |   |              |   |   |              |   |   |             |   |   |                     |   |   |            |   |   |               |  
|compensation                    |  | -                  |  |   | -      |  |   | -               |   |   | 11,836       |   |   | -            |   |   | -            |   |   | -           |   |   | -                   |   |   | 11,836     |   |   |               |  
|Common stock issued             |  |                    |  |   |        |  |   |                 |   |   |              |   |   |              |   |   |              |   |   |             |   |   |                     |   |   |            |   |   |               |  
|pursuant to terms of cashless   |  |                    |  |   |        |  |   |                 |   |   |              |   |   |              |   |   |              |   |   |             |   |   |                     |   |   |            |   |   |               |  
|warrant at $0.49 per share      |  | 73,780             |  |   | 7      |  |   | 36,145          |   |   | -            |   |   | -            |   |   | -            |   |   | -           |   |   | -                   |   |   | 36,152     |   |   |               |  
|Common shares issued to         |  |                    |  |   |        |  |   |                 |   |   | -            |   |   |              |   |   |              |   |   |             |   |   |                     |   |   |            |   |   |               |  
|delay in share registration     |  | 849,677            |  |   | 85     |  |   | 424,754         |   |   | -            |   |   | -            |   |   | -            |   |   | -           |   |   | -                   |   |   | 424,839    |   |   |               |  
|Private placement issuance      |  |                    |  |   |        |  |   |                 |   |   |              |   |   |              |   |   |              |   |   |             |   |   |                     |   |   |            |   |   |               |  
|costs                           |  | -                  |  |   | -      |  |   | (13,008         | ) |   | -            |   |   | -            |   |   | -            |   |   | -           |   |   | -                   |   |   | (13,008    | ) |   |               |  
|Foreign currency translation    |  |                    |  |   |        |  |   |                 |   |   |              |   |   |              |   |   |              |   |   |             |   |   |                     |   |   |            |   |   |               |  
|gain                            |  | -                  |  |   | -      |  |   | -               |   |   | -            |   |   | -            |   |   | -            |   |   | -           |   |   | 47,532              |   |   | 47,532     |   |   | 47,532        |  
|Unrealized holding loss on      |  |                    |  |   |        |  |   |                 |   |   |              |   |   |              |   |   |              |   |   |             |   |   |                     |   |   |            |   |   |               |  
|available-for-sale securities   |  | -                  |  |   | -      |  |   | -               |   |   | -            |   |   | -            |   |   | -            |   |   | -           |   |   | (926,247            | ) |   | (926,247   | ) |   | (926,247      | )
|Stock-based compensation        |  | -                  |  |   | -      |  |   | 137,600         |   |   | -            |   |   | -            |   |   | -            |   |   | -           |   |   | -                   |   |   | 137,600    |   |   |               |  
|Proceeds received from exercise |  |                    |  |   |        |  |   |                 |   |   |              |   |   |              |   |   |              |   |   |             |   |   |                     |   |   |            |   |   |               |  
|of warrants prior to            |  |                    |  |   |        |  |   |                 |   |   |              |   |   |              |   |   |              |   |   |             |   |   |                     |   |   |            |   |   |               |  
|issuance                        |  | -                  |  |   | -      |  |   | -               |   |   | -            |   |   | -            |   |   | 133,387      |   |   | -           |   |   | -                   |   |   | 133,387    |   |   |               |  
|Net loss                        |  | -                  |  |   | -      |  |   | -               |   |   | -            |   |   | -            |   |   | -            |   |   | (3,668,506  | ) |   | -                   |   |   | (3,668,506 | ) |   | (3,668,506    | )
|Balance, June 30, 2007          |  |                    |  |   |        |  |   |                 |   |   |              |   |   |              |   |   |              |   |   |             |   |   |                     |   |   |            |   |   |               |  
|(Unaudited)                     |  | 55,012,370         |  | $ | 5,499  |  | $ | 22,704,963      |   | $ | (108,164     | ) | $ | (22,500      | ) | $ | 316,241      |   | $ | (23,368,901 | ) | $ | 380,498             |   | $ | (92,364    | ) | $ | (4,547,221    | )

The accompanying notes are and integral part of these consolidated
  financial statements.

F-3

---

WESCORP ENERGY INC.CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)

|                                                                          |   | Six Months Ended June 30, |  
|------------------------------------------------------------------------- | - | ------------------------- | -
|                                                                          |   | 2007                      |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                     |   |                           |  
|Net loss                                                                  | $ | (3,668,506                | )
|Adjustments to reconcile net loss                                         |   |                           |  
|to net cash used
      in operating activities:                           |   |                           |  
|Depreciation
      and amortization                                       |   | 46,320                    |  
|Amortization
      of technology                                          |   | 258,323                   |  
|Wages stock-based                                                         |   | 137,600                   |  
|Fair
      value of common stock issued to pay penalty for late filing of |   |                           |  
|registration
      statement                                              |   | 424,839                   |  
|Gain
      on disposition of assets                                       |   | -                         |  
|Fair value
      of common stock and warrants issued for services         |   | 47,988                    |  
|Changes
      in operating assets and liabilities:                        |   |                           |  
|Restricted
      cash                                                     |   | 171,000                   |  
|Accounts receivable                                                       |   | 414,884                   |  
|Inventories                                                               |   | (67,612                   | )
|Prepaid expenses                                                          |   | 149,716                   |  
|Deposits                                                                  |   | -                         |  
|Accounts payable and accrued liabilities                                  |   | 754,369                   |  
|Net cash used
      in operating activities                               |   | (1,331,079                | )
|CASH FLOWS FROM INVESTING ACTIVITIES:                                     |   |                           |  
|Increase in
      short-term investment                                   |   | (1,322,367                | )
|Purchase
      of property and equipment                                  |   | (10,986                   | )
|Cash invested
      in other receivables                                  |   | (28,297                   | )
|Proceeds
      from disposition of assets                                 |   | -                         |  
|Increase in
      investments                                             |   | -                         |  
|Net
      cash used in investing activities                               |   | (1,361,650                | )
|CASH FLOWS FROM FINANCING ACTIVITIES:                                     |   |                           |  
|Repayments
      on notes payable                                         |   | (8,940                    | )
|Proceeds from
      notes payable                                         |   | 319,736                   |  
|Proceeds
      from convertible debentures                                |   | 2,250,000                 |  
|Increase in
      amounts due to related parties                          |   | 156,886                   |  
|Repayments
      on convertible debentures                                |   | -                         |  
|Proceeds received
      from exercise of warrants prior to issuing shares |   | 133,387                   |  
|Proceeds
      from subscriptions receivable                              |   | 85,000                    |  
|Proceeds from
      issuance of common stock                              |   | 50,000                    |  
|Private
      placement issuance costs                                    |   | (13,008                   | )
|Net cash provided
      by financing activities                           |   | 2,973,061                 |  
|Effect of exchange rates                                                  |   | 40,625                    |  
|Net increase (decrease) in cash                                           |   | 320,957                   |  
|Cash, beginning of period                                                 |   | 499,233                   |  
|Cash, end of period                                                       | $ | 820,190                   |  
|SUPPLEMENTAL CASH FLOW DISCLOSURES:                                       |   |                           |  
|Cash paid for:                                                            |   |                           |  
|Interest                                                                  | $ | 36,581                    |  
|Income taxes                                                              | $ | -                         |  
|                                                                          |   |                           |  
|NON-CASH INVESTING AND FINANCING ACTIVITIES:                              |   |                           |  
|Shares issued to settle accounts
      payable                            | $ | 407,578                   |  

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

F-4

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|                                          
|------------------------------------------
|WESCORP ENERGY INC.                       
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(Unaudited)                               
|June 30, 2007                             
|                                          

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.
  The accompanying unaudited financial statements and related notes should be
  read in conjunction with the audited financial statements and the Form 10-KSB
  of the Company for the year ended December 31, 2006. 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 six month period ended June 30, 2007
  are not necessarily indicative of the results that may be expected for the year
  ending December 31, 2007.

Going Concern

These consolidated financial statements have been prepared under
  the assumption 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
  had a working capital deficit of $2,046,870 at June 30, 2007 and has incurred
  an accumulated deficit of approximately $23,368,901 through June 30, 2007. The
  Company has changed its focus to acquire, develop, and commercialize technologies
  that are designed to improve the management, environmental and economic performance
  of field operations 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 as a going concern.

The Companys continuance as a going concern is dependent
  upon its ability to raise financing and generate revenue in the future. Management
  believes the Company will attain these goals by seeking additional capital from
  new equity securities offerings that will provide funds needed to increase liquidity,
  fund internal growth, and fully implement its business plan.

Through the next fiscal year, management estimates that significant
  additional funding is necessary to continue operations, expand Canadian markets
  and develop markets in the United States for the Flowstar technology, develop
  a pilot plant for the Ellycrack technology, and to acquire any new businesses.
  The timing and amount of capital requirements will depend on a number of factors,
  including demand for products and services and the availability of opportunities
  for international expansion through affiliations and other business relationships.

NOTE 2 ORGANIZATION AND DESCRIPTION OF BUSINESS

Wescorp Energy Inc. (Wescorp or the Company)
  was incorporated in Delaware on August 11, 1998. The Company acquires, develops,
  and commercializes technologies that are designed to improve the management,
  environmental and economic performance of field operations for energy producers.
  The Companys business model is to acquire, fund and develop new systems
  and technologies in this field through investments in companies or products
  for which early stage product development has been completed.

During the year ended December 31, 2004, the Company completed
  the purchase of two companies, Flowstar Technologies Inc. and Flowray Inc. (collectively
  called Flowstar) involved in the development of products for the
  petroleum industry. The original purchase agreement of the two companies was
  amended in 2004 to increase the interest to be acquired by Wescorp from 51%
  to 100%. The target companies were in the start-up phase of operations in 2003.
  In 2004, Flowstar completed the development and testing of its products and
  reported sales. In August 2004, the Company acquired 100% of the outstanding
  shares of Vasjar Trading Ltd. (Vasjar) in order to obtain the rights
  to the Digital Chart Recording (DCR) technology.

F-5

---

The DCR system consists of a turbine based flow measurement signal
  generating device, temperature and pressure probes and a flow computer, which
  performs all of the corrected flow calculations. The primary source of revenue
  for the Company is from the sale of DCR systems, related accessories and service
  of the systems.

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

NOTE 3  RECLASSIFICATIONS

Certain amounts from prior periods have been reclassified to
  conform to the current period presentation.

NOTE 4  INVENTORIES
  The components of inventory were as follows at:

|               |   | June 30,    |  |   | December 31, | 
|-------------- | - | ----------- |  | - | ------------ | 
|               |   | 2007        |  |   | 2006         | 
|               |   | (Unaudited) |  |   |              | 
|Finished goods | $ | 1,097,539   |  | $ | 1,025,847    | 
|Raw materials  |   | 23,331      |  |   | 27,410       | 
|               | $ | 1,120,870   |  | $ | 1,053,258    | 

NOTE 5  SHORT-TERM INVESTMENT

During the period the Company invested approximately $1,316,577
  (CAD 1,400,000) in a debenture certificate. This investment bears simple interest
  at a rate of 7% per annum and matures on December 31, 2007. The balance of $1,322,367
  at June 30, 2007 includes accrued interest.

NOTE 6  PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at:

|                               |   | June 30,    |  |   | December 31, | 
|------------------------------ | - | ----------- |  | - | ------------ | 
|                               |   | 2007        |  |   | 2006         | 
|                               |   | (Unaudited) |  |   |              | 
|Automotive equipment           | $ | 166,275     |  | $ | 166,275      | 
|Computer hardware              |   | 40,599      |  |   | 37,135       | 
|Computer software              |   | 14,489      |  |   | 13,852       | 
|Furniture and fixtures         |   | 26,273      |  |   | 23,584       | 
|Leasehold improvements         |   | 38,143      |  |   | 38,143       | 
|Office equipment               |   | 43,702      |  |   | 43,318       | 
|Tools and equipment            |   | 26,299      |  |   | 22,489       | 
|                               |   | 355,780     |  |   | 344,796      | 
|Less: accumulated depreciation |   | 252,918     |  |   | 206,600      | 
|                               | $ | 102,862     |  | $ | 138,196      | 

Depreciation and amortization expense for the six months ended
  June 30, 2007 and 2006 was $46,320 and $51,998, respectively.

F-6

---

NOTE 7  INVESTMENTS

Investments consisted of the following at:

|                    |   | June 30,    |  |   | December 31, | 
|------------------- | - | ----------- |  | - | ------------ | 
|                    |   | 2007        |  |   | 2006         | 
|                    |   | (Unaudited) |  |   |              | 
|Oilsands Quest Inc. | $ | 1,161,253   |  | $ | -            | 
|Ellycrack AS        |   | 538,186     |  |   | 538,186      | 
|Eureka Oil AS       |   | 15,840      |  |   | 15,840       | 
|Tarblaster AS       |   | 14,399      |  |   | 14,399       | 
|Synenco Energy Inc. |   | -           |  |   | 2,087,500    | 
|                    | $ | 1,729,678   |  | $ | 2,655,925    | 

Synenco Energy Inc.On June 9, 2003, the Company signed an option agreement allowing the Company
  to purchase up to 1,000,000 common stock shares of Synenco Energy Inc. (Synenco),
  a company involved in the potential development of an oil sands lease in the
  Athabasca Oil Sands area of northern Alberta, Canada. Under the terms of the
  option, the Company could acquire the maximum number of Synenco shares upon
  payment of $3,700,000 as follows: $2,815,000 in cash and $885,000 ($0.30 per
  share) in Company stock. To date, the Company has purchased 170,000 Synenco
  shares and paid $530,462, which was recorded as an investment using the cost
  basis. On April 23, 2004, the Company set aside 600,000 shares of common stock
  for delivery to the vendor as partial consideration of the proposed acquisition.
  On May 6, 2004, Wescorp delivered these shares to the vendor's legal counsel
  with an undertaking not to release the Wescorp shares until 170,000 Synenco
  shares have been transferred to Wescorp. The number of Synenco shares to be
  transferred to Wescorp corresponds to the amount of cash paid and shares issued
  by Wescorp in proportion to the total purchase price for the 1,000,000 Synenco
  shares. The balance of the option expired without being exercised on March 31,
  2004. In November 2005, Synenco became a publicly traded company on the TSX
  Exchange and the value of the shares increased substantially. As such, the Company
  reclassified this investment to available-for-sale securities and recorded the
  investment at its fair value. During the quarter ended March 31, 2007 these
  shares were exchanged for shares of Oilsands Quest Inc. as described below.

Oilsands Quest IncOn March 23, 2007, the Company exchanged its 170,000 shares of Synenco for
  470,143 common shares of Oilsands Quest Inc. (Oilsands), a company
  publicly traded on the American Stock Exchange under the symbol BQI.
  During the six months ended June 30, 2007, the Company recognized an unrealized
  holding loss of $926,247 in comprehensive income associated with the decline
  in the market value of the investment, inclusive of the Synenco investment prior
  to this transaction. No income tax effect has been reflected in accumulated
  other comprehensive income as the Company has available net operating loss carryforwards
  in excess of the net unrealized holding gain.

Agreement with Ellycrack ASWescorp has purchased an aggregate 752,000 shares of common stock of Ellycrack
  AS (Ellycrack), a privately held company in Norway, in exchange
  for 300,000 shares of its common stock and $269,000. Wescorps investment
  represents approximately 13% of the issued and outstanding common shares of
  Ellycrack.

Investment in Eureka Oil ASIn 2006, Wescorp paid $15,840 for 66,667 common shares of Eureka Oil AS
  (Eureka), a privately held company in Norway, at 1.50 Kroners per
  share (approximately $0.24 per share). Wescorps investment represents
  0.03% of the issued and outstanding common shares of Eureka.

Investment in Tarblaster ASIn 2006, Wescorp paid $14,399 for 900,000 common shares of Tarblaster AS
  (Tarblaster), a privately held company in Norway, at 0.10 Kroners
  per share (approximately $0.02 per share). Wescorps investment represents
  13.85% of the issued and outstanding common shares of Tarblaster

F-7

---

NOTE 8  TECHNOLOGY

The Company acquired DCR technology rights through its acquisitions
  of Flowstar and Vasjar which are included in intangible assets. These items
  represent the acquisition cost of the assets purchased from Flowstar and Vasjar
  in 2004. The Companys intangible assets are summarized as follows:

|                                      |   | June 30,    |  |   | December 31, | 
|------------------------------------- | - | ----------- |  | - | ------------ | 
|                                      |   | 2007        |  |   | 2006         | 
|                                      |   | (Unaudited) |  |   |              | 
|DCR technology acquired from Vasjar   | $ | 3,503,824   |  | $ | 3,503,824    | 
|DCR technology acquired from Flowstar |   | 414,073     |  |   | 414,073      | 
|                                      |   | 3,917,897   |  |   | 3,917,897    | 
|Less: accumulated amortization        |   | 1,481,604   |  |   | 1,223,281    | 
|                                      | $ | 2,436,293   |  | $ | 2,694,616    | 

The technology acquired from Flowstar relates to the right to
  use the DCR technology in markets in Canada and the technology acquired from
  Vasjar relates to markets outside of Canada. Amortization of the technology
  is recorded on a straight-line basis over its useful life of approximately eight
  years which is estimated to expire in March 2012. The Company periodically reviews
  its DCR technology rights to assess recoverability based on projected undiscounted
  cash flows from operations. Impairments are recognized in operating results
  when a permanent diminution in value occurs. To date, no indication of impairment
  of the Companys DCR technology has been identified.

NOTE 9  NOTES PAYABLE

The following comprises the Companys notes payable at:

|                                                                                                      |   | June 30,    |  |   | December 31, | 
|----------------------------------------------------------------------------------------------------- | - | ----------- |  | - | ------------ | 
|                                                                                                      |   | 2007        |  |   | 2006         | 
|                                                                                                      |   | (Unaudited) |  |   |              | 
|Note payable  Interest at 0.0%, and secured
      by automotive assets of Flowstar, payable $569 per |   |             |  |   |              | 
|month, principal only, due July 2008                                                                  | $ | 8,108       |  | $ | 10,813       | 
|Note payable  Interest at 7.75%, compounded
      monthly and secured by automotive assets of        |   |             |  |   |              | 
|Flowstar, payable $677 per month, principal and interest, due
      September 2009                    |   | 18,327      |  |   | 20,064       | 
|Note payable  Interest at 9.45%, compounded
      monthly and secured by automotive assets of        |   |             |  |   |              | 
|Flowstar, payable $387 per month, principal and interest, due
      July 2010                         |   | 13,554      |  |   | 14,059       | 
|Note payable  Interest at 0.90%, compounded
      monthly and secured by automotive assets of        |   |             |  |   |              | 
|Flowstar, payable $627 per month, principal and interest, due
      September 2010                    |   | 26,431      |  |   | 27,767       | 
|Note payable  Interest at 0.0%, and secured
      by automotive assets of Flowstar, payable $825 per |   |             |  |   |              | 
|month, principal only, due November 2009                                                              |   | 26,230      |  |   | 28,887       | 
|Notes payable  Interest at 0.0%, unsecured                                                           |   | 22,475      |  |   | 22,475       | 
|Notes payable  Interest at 12.0%, secured
      by accounts receivable and inventories of Flowstar,  |   |             |  |   |              | 
|payable $3,197 interest only per month, due
      November 2007                                       |   | 319,736     |  |   | -            | 
|Total notes payable                                                                                   |   | 434,861     |  |   | 124,065      | 
|Amounts
      due within one year                                                                     |   | 371,471     |  |   | 47,936       | 
|                                                                                                      | $ | 63,390      |  | $ | 76,129       | 

Annual future aggregate principal payments on notes payable are
  as follows:

|Periods ending June 30, |   |         |  |  |  | 
|----------------------- | - | ------- |  |  |  | 
|2007                    | $ | 371,471 |  |  |  | 
|2008                    |   | 32,351  |  |  |  | 
|2009                    |   | 19,704  |  |  |  | 
|2010                    |   | 2,478   |  |  |  | 
|2011                    |   | 8,857   |  |  |  | 
|                        | $ | 434,861 |  |  |  | 

NOTE 10 AGREEMENT PAYABLE

In connection with the acquisition of Flowstar, the Company concluded
  the acquisition of 100% of the outstanding shares of Vasjar, a British Virgin
  Islands company on August 19, 2004. Vasjar in turn owns five Barbadian subsidiaries
  including 100% of the outstanding shares of Quadra Products International Inc.
  (Quadra) and Flowstar International, Inc. (Flowstar International).
  Vasjars wholly-owned subsidiary Quadra owns the rights to the technology
  related to the DCR 900 system. Pursuant to an agreement dated effective as of
  August 30, 2003, Flowray Inc. had transferred to Quadra all of its intellectual
  property rights, including rights to DCR technology, in consideration of a promissory
  note in the principal amount of $436,270 (CDN$604,500) without interest. On
  December 31, 2004 Flowray

F-8

---

and Flowstar were amalgamated and as a result the promissory
  note is now an asset of Flowstar. This promissory note is eliminated upon consolidation.

The purchase called for the initial payment of 2,400,000 common
  shares of Wescorp, with an additional minimum 2,080,000 common shares issued
  over three years (480,000 on or before April 1, 2005, 800,000 on or before April
  1, 2006, and 800,000 on or before April 1, 2007).

In consideration of the purchase of all the outstanding shares
  of Vasjar from its two shareholder entities that each owned 50% of Vasjars
  outstanding shares, Wescorp issued shares (and will issue additional shares),
  all of which are required to be registered for resale upon delivery, to each
  of the two former shareholders of Vasjar in equal amounts as follows:

- Tranche 1: an aggregate of 2,400,000 shares of common stock of the Company
    (1,200,000 shares to each of the shareholders) issued on April 28, 2004; and
- Tranche 2: up to an aggregate of 2,080,000 additional shares of common stock
    of the Company (1,040,000 additional shares to each of the two former shareholders
    to be issued in stages as follows:

Stage One. On or before April
  1, 2005, the Company was required to issue 480,000 additional shares based on
  sales achieved in the 2004 calendar year. (240,000 shares to each shareholder).

Stage Two. On or before April
  1, 2006, the Company was required to issue between 800,000 additional shares
  based on sales achieved in the 2005 calendar year (400,000 shares to each shareholder).

Stage Three. On or before April
  1, 2007, Wescorp was required to issue 800,000 additional shares based on sales
  achieved in the 2006 calendar year.

The shares required to satisfy the requirements under Tranche
  2, Stage One were issued in 2006.

On April 1, 2006, the Company was not able to deliver free-trading
  shares called for under Tranche 2, Stage Two, and thus the Company was required
  to pay the former Vasjar shareholders an additional 80,000 Wescorp common shares
  for each month that the shares were not delivered. In February 2007, Mr. Jack
  Huber acquired the interests of the former Vasjar shareholders in connection
  with the share delivery requirements of Tranche 2, Stage Two. As a result, the
  Company now owes the shares under Tranche 2, Stage Two to Mr. Huber. As of March
  31, 2007, in addition to the 960,000 penalty shares incurred under the provisions
  of Tranche 2, Stage Two, Wescorp agreed to pay an additional 1,163,800 penalty
  shares to Mr. Huber. No further penalty shares will be incurred for Tranche
  2, Stage Two. As of the date of these financial statements, the Company had
  not yet delivered the shares owed to Mr. Huber pursuant to Tranche 2, Stage
  Two. The aggregate penalty shares under this stage resulted in a charge to operations
  of $617,672 during the three months ended March 31, 2007 and the liability related
  to the additional shares is reflected in accounts payable.

On April 1, 2007, the Company was not able to deliver free-trading
  shares called for under Tranche 2, Stage Three, and thus the Company is required
  to pay the former Vasjar shareholders an additional 80,000 Wescorp common shares,
  compounded monthly, for each month that the shares are not delivered and will
  incur a charge to operations for the fair value of these common shares. Through
  August 2007, the Company has recorded a charge to operations of $224,600 to
  issue an additional 488,408 common shares as the free-trading shares associated
  with Stage Three have not been issued.

If any of the Wescorp shares to be issued to the former Vasjar
  shareholders have not been delivered for a period of 182 days after the applicable
  due date, the former Vasjar shareholders may at their option terminate the share
  purchase agreements. The former Vasjar shareholders did not exercise these rights,
  and they received all of the penalty shares that accrued until this obligation
  had been met under both Stage One and Stage Two. Wescorp has also received a
  written waiver from Mr. Huber waiving and canceling any termination rights that
  Mr. Huber may have as a result of his acquisition of certain rights under the
  Vasjar purchase agreements. In addition, the Company pledged to the former Vasjar
  shareholders all the Vasjar shares as security to guarantee Wescorps performance
  under the share purchase agreements.

The balance of the fair value of the 1.6 million shares relating
  to Tranche 2, Stages Two and Three is $800,000 and has been included in current
  liabilities.

NOTE 11  CONVERTIBLE DEBENTURES

Short-termDuring the year ended December 31, 2005, the Company issued debentures in
  the amount of $1,552,319 that bear interest at the rate of 14% per annum payable
  quarterly that originally matured on December 31, 2005. During the year ended
  December 31, 2006, holders of debentures totaling $1,180,250 agreed to have
  their investment redirected to units of the private placement that was completed
  in December 2006 (see Note 8). In addition, the holders of $90,000 in debentures
  have agreed to extend the terms of the debenture agreement through June 30,
  2007. The remaining balance for debentures totaling $282,069 was repaid in the
  year ended December 31, 2006. The remaining debentures are secured by way of
  a security interest over the inventories and accounts receivable of Flowstar.

F-9

---

The debentures may, at the option of the holder, be converted
  into units of the Company at a price of $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, 2007 as follows:

| | a) | if exercised on or before June 30, 2007, the holder
        of a warrant shall be entitled to purchase one common share for each warrant
        held for $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 $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 months
  prior written notice 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 $1.35 per share.

The convertible debentures contained a beneficial conversion
  feature computed at their 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 $207,000, was recorded as an interest
  expense and a component of equity on the issuance date.

Long-termDuring the period ended June 30, 2007, the Company issued a debenture in
  the amount of $2,250,000 which bears interest at the rate of 10% per annum.
  Interest on the principal amount of the debenture is payable biannually and
  commences December 31, 2007. The debenture is unsecured and matures on June
  9, 2009.

The debentures may, at the option of the holder, be converted
  into units of the Company at a price of $1.00 per unit at any time prior to
  the maturity date. Each unit shall be comprised of one common share of the Company
  and one half common share purchase warrant. Each warrant entitles the holder
  thereof to purchase one (1) common share for each warrant held for a price of
  $3.00 per share common share for a period of up to two years from the date the
  warrant was issued. Management has determined that the fair value of the conversion
  feature is insignificant and has not recorded an equity component of this debenture.

The number of common shares and warrants that may be issued pursuant
  to the conversion of this debenture are subject to adjustments in the event
  that the Company: [This is pretty standard contract  probably not necessary
  to disclose]

| | a) | subdivides its outstanding common shares;                                                                                                                                                                                                                                      
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                
| | b) | combines its outstanding common shares into a smaller
        number of common shares; or                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                
| | c) | issues by reclassification of its common shares, other
        securities of the Company (including any such reclassification in connection
        with a consolidation, merger, amalgamation or other combination in which
        the Company is the surviving corporation).

The Company shall be entitled to prepay the debenture in whole
  or in part, at any time prior to the maturity date by providing at least 30
  days written notice to the debenture holder.

NOTE 12  COMMON STOCK AND WARRANTS

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 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. As of June 30, 2007, no preferred
  shares had been issued.

2007 Stock TransactionsIn January 2007, the Company issued 200,000 shares of common stock for total
  proceeds of $50,000. These shares were issued on the exercise of warrants at
  an exercise price of $0.25 per share.

In June 2007, the Company issued 570,000 shares of common stock
  for total proceeds of $199,500. The proceeds for this transaction were received
  during the year ended December 31, 2006. These shares were issued on the exercise
  of warrants at an exercise price of $0.35 per share.

F-10

---

In June 2007, the Company issued 73,780 shares of common stock
  valued at $36,152 pursuant to the terms of a cashless warrant. The warrant was
  originally issued in December 2003 in relation to the provision of services
  by a consultant.

In June 2007, the Company issued 849,577 units valued at a price
  of $0.50 per unit. These units were issued pursuant to the same terms as a private
  placement of 7,944,150 units that was completed December 2006 which entitled
  each investor to an additional 10% of the original units subscribed for if the
  Company did not file a registration statement within 90 days of the closing
  of the private placement Each unit consists of one share of common stock and
  one common stock warrant. One warrant entitles the holder to purchase one additional
  common share at a price of $0.75 per share at any time until the close of business
  on December 15, 2008. After six months from the date of issue, the warrants
  shall be deemed exercised, in accordance with their terms, if at any time prior
  to their expiry the weighted average trading price of the Company's common shares
  as traded on the NASD OTC Bulletin Board for the previous ten (10) trading days
  is at least $1.50 per share. In the event that the aggregate exercise price
  for the warrants is not tendered to the Company within 30 days of their deemed
  exercise, at the option of the Company, such warrants will be deemed cancelled.
  The Company has recorded a charge of $424,839 to operations to account for this
  transaction.

In June 2007, the Company issued 20,000 units at a price of $0.50
  per unit for total proceeds of $10,000 relating to a private placement of 7,944,150
  units that was completed December 2006. These units were fully paid for at the
  time the private placement had been closed but the Company inadvertently failed
  to issue the units at that time.

Additional equity transactions during the six months ended June
  30, 2007 included the issuance of 853,683 shares of common stock to settle certain
  accounts payable totaling $407,578 and the issuance of 250,000 shares of common
  stock valued at $120,000 to compensate two directors of the Company in the form
  of directors fees for periods ranging from one to four years.

Common Stock Warrants

In May 2006, the Company issued 100,000 common stock warrants
  with an exercise price of $0.74 per share and an expiration date of May 2009
  in exchange for investor relations services. The fair market value of the warrants
  was recorded at $46,000 and was included in advertising and investor relations
  expense.

In November 2006, the Company issued 275,000 common stock warrants
  with an exercise price of $0.50 per share and an expiration date of November
  2009 in exchange for investor relations services. The estimated fair value of
  the warrants was recorded at $72,400 and was included in advertising and investor
  relations expense.

In December 2003, the Company issued 1,400,000 common stock warrants
  with an exercise price of $0.25 per share and an expiration date of December
  2006, to three consultants for providing services. During the current year,
  the Company received notice from a warrant holder of their intention to exercise
  200,000 warrants. The funds relating to the exercise of these warrants were
  not received until January 2007 and accordingly the expiry date for these warrants
  was extended to that date. In addition, the holders of 300,000 warrants gave
  the Company notice of their intention to exercise their warrants however no
  funds have been received relating to the exercise of these warrants. The expiry
  date relating to these 300,000 warrants was extended to April 2007 at which
  time the warrants were not exercised. These warrants contain provisions which
  provide for an automatic cashless exercise feature that requires the Company
  to issue 73,780 shares common stock to the holder of these warrants. As at the
  date of these financial statements no shares have been issued pursuant to the
  terms of these warrants. The incremental value attributed to the extension of
  these warrants was nominal. The remaining warrants expired December 1, 2006

In December 2006, the Company completed a private placement of
  7,944,150 units at a price of $0.50 per unit for total proceeds of $3,972,075.
  Each unit consists of one share of common stock and one common stock warrant.
  One warrant entitles the holder to purchase one additional common share at a
  price of $0.75 per share at any time until the close of business on December
  15, 2008. After six months from the date of issue, the warrants shall be deemed
  exercised, in accordance with their terms, if at any time prior to their expiry
  the weighted average trading price of the Company's common shares as traded
  on the NASD OTC Bulletin Board for the previous ten (10) trading days is at
  least $1.50 per share. In the event that the aggregate exercise price for the
  warrants is not tendered to the Company within 30 days of their deemed exercise,
  at the option of the Company, such warrants will be deemed cancelled

As of June 30, 2007, the Company had the following common stock
  purchase warrants outstanding:

Number of shares
      
      Exercise
      
      Expirationunder warrants
      
      price
      
      date1,000,000
      
      $ 0.15
      
      June 2008100,000
      
      $ 0.74
      
      May 20097,964,150
      
      $ 0.75
      
      December 2008532,624
      
      $ 0.75
      
      December 2008849,677
      
      $ 0.75
      
      December 2008275,000
      
      $ 0.50
      
      November 200910,721,451


F-11

---

NOTE 13  STOCK OPTIONS

During the six months ended June 30, 2007, issued a combined
  total of 494,564 options to purchase common shares to officers. Changes in the
  number of options outstanding are summarized as follows:

|                                 |  | June 30, 2007 |  |   | December 31, 2006 | 
|-------------------------------- |  | ------------- |  | - | ----------------- | 
|                                 |  | (Unaudited)   |  |   |                   | 
|                                 |  |               |  |   | Weighted          | 
|                                 |  |               |  |   | Average           | 
|                                 |  |               |  |   | Exercise          | 
|                                 |  | Options       |  |   | Price             | 
|Outstanding, beginning of period |  | 2,853,272     |  | $ | 0.55              | 
|Granted                          |  | 494,564       |  |   | 0.47              | 
|Outstanding, end of period       |  | 3,347,836     |  | $ | 0.54              | 

The weighted average remaining contractual life of the options
  is 27 months.

NOTE 14  WAGES STOCK-BASED

The fair value of the stock options granted in the six months
  ended June 30, 2007 was calculated using the Black-Scholes option pricing model
  incorporating the following weighted average assumptions:

Risk free interest rate
      4.0%Expected dividend yield
      NilExpected stock price volatility
      111%Expected average option life
      2 to 4 yearsWeighted average grant date fair value per
        option
      $ 0.27


NOTE 15  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. Stock options and 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 16  COMMITMENTS AND CONTINGENCIES

Agreement with Legal Service ProviderIn 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 shares and an additional 100,000
  common stock warrants exercisable at $0.50 for five years with a cashless exercise
  feature. As part of the transaction, the party agreed to cap legal service costs
  at an agreed upon maximum rate from September 2003 to December 2004, amounting
  to a reduction of $100 per hour. As of June 30, 2007, the Company had issued
  100,000 shares but no warrants to the legal service provider. The Company no
  longer has engaged this legal service provider.

Agreement with Ellycrack ASIn March 2004, Ellycrack 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 option also included
  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.

F-12

---

Operating Leases

The Company leases office and manufacturing space in Edmonton,
  Alberta, Canada for approximately $8,210 per month and office space in Houston,
  Texas for $3,200 per month under month-to-month operating lease agreements.
  The Company also leases office space in Calgary, Alberta, Canada for approximately
  $5,720 per month which expires in June 2011.

In addition, the Company has entered into lease agreements with
  respect to vehicles which have minimum lease payments of approximately $3,120
  per month until May 2010 and a photocopier which has minimum lease payments
  of approximately $550 per month until December 2008.

In October 2006, the Company entered into an agreement with a
  Canadian research and development organization to provide facilities and other
  resources necessary to test the Ellycrack pilot plant under long-term usage.
  These tests are necessary in order to determine the potential commercial feasibility
  of this process and what, if any, modifications will be required to the design
  of a commercially viable plant. Under the terms of this agreement, the Company
  is required to pay a minimum fee of approximately $17,400 (CAD $18,500) per
  month commencing August 2007 for the provision of technical and research assistance
  and related services as well as facility rental for a period of twenty-four
  months. Upon signing the agreement the Company paid a deposit in the amount
  of $169,272 (CAD $180,000).

Annual future aggregate minimum payments under operating leases
  and commitments are as follows:

Periods ending June 30,2007
      $
      199,6802008
      
      313,8002009
      
      208,3702010
      
      75,504$
      797,354


NOTE 16 - RELATED PARTY TRANSACTIONS

Summary of related party transactions as follows for the six
  months ended:

|                                                                            |   | June 30,    |  |   | June 30,    | 
|--------------------------------------------------------------------------- | - | ----------- |  | - | ----------- | 
|                                                                            |   | 2007        |  |   | 2006        | 
|                                                                            |   | (Unaudited) |  |   | (Unaudited) | 
|Interest accrued on note payable to AHC                                     | $ | 19,335      |  | $ | -           | 
|Consulting fees accrued to AHC                                              | $ | 130,000     |  | $ | -           | 
|Stock-based compensation paid or accrued to
      a director of the Company | $ | 45,200      |  | $ | 42,856      | 

Executive CompensationDuring the six months ended June 30, 2007, the Company incurred an expense
  for compensation to its Chief Executive Officer in the amount of $7,051 (June
  30, 2006 - $7,263) which has not yet been paid . The outstanding balance of
  $21,210 (December 31, 2006 -14,159) is reflected in due to related parties.

Note PayableOn June 20, 2006, the Company entered entered into an agreement with AHC,
  under which AHC would lend the Company $500,000. AHC is a private company beneficially
  owned and controlled by a director of the Company. The loan is structured as
  a promissory note that is unsecured, bears interest at the rate of 8% per annum,
  is due on demand, and is guaranteed by two of the Companys officers. At
  June 30, 2007, the outstanding principal balance of $500,000 and the related
  accrued interest of $41,205 (December 31, 2006  $21,370) are reflected
  in due to related parties.

Consulting AgreementThe Company has entered into an agreement with AHC, under which AHC would
  provide consulting services to the Company at a rate of $21,667 per month. The
  outstanding balance of $260,000 (December 31, 2006 - $130,000) is reflected
  in due to related parties.

Related Party Notes PayableOn January 28, 2003, the Company entered into an agreement with AHC, under
  which AHC would lend Wescorp up to $1,750,000. 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 originally
  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 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
  June 30, 2008 as follows:

F-13

---

| | a) | if exercised on or before June 30, 2007, the holder
        of each Warrant shall be entitled to purchase one common share for $1.00;
        and
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                  
| | b) | thereafter until to June 30, 2008, the holder of each
        Warrant shall be entitled to purchase one common share for $2.00.                  

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, the Company agreed
  to issue 2,212,277 units in full settlement of the debt and accrued interest.
  As of June 30, 2007, these units had not yet been issued.

NOTE 17  INCOME TAXES

At June 30, 2007, the Company had net deferred tax assets, calculated
  at an expected combined rate of 40%, of approximately $7,530,000 principally
  arising from net operating loss (NOL) carryforwards for income tax
  purposes. As management of the Company cannot determine that it is more likely
  than not that the Company will realize the benefit of the net deferred tax asset,
  a valuation allowance equal to the net deferred tax asset has been established.
  The significant components of the deferred tax asset as follows:

|                                       |   | June 30, 2007 |   |   | December 31, 2006 |  
|-------------------------------------- | - | ------------- | - | - | ----------------- | -
|                                       |   | (Unaudited)   |   |   |                   |  
|NOL carryforwards                      | $ | 18,600,000    |   | $ | 16,000,000        |  
|Deferred tax asset                     | $ | 7,530,000     |   | $ | 6,454,000         |  
|Deferred tax asset valuation allowance | $ | (7,530,000    | ) | $ | (6,454,000        | )

At June 30, 2007, the Company had NOL carryforwards of approximately
  $19,230,000 which expire in the years 2014 through 2025. The Company recognized
  approximately $630,000 of NOL carryforwards to offset potential taxes related
  to the unrealized gain in availablefor-sale securities. The increase in
  the allowance account from December 31, 2006 to June 30, 2007 was $1,076,000.

F-14

---

|ITEM 2. | **MANAGEMENTS
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF**
      **OPERATION**
|------- | ----------------------------------------------------------------------------------------------------

The following discussion and analysis should be read in
conjunction with the consolidated financial statements and related notes
included elsewhere in this Report on Form 10-QSB. This discussion contains
forward-looking statements reflecting our current expectations and estimates and
assumptions concerning events and financial trends that may affect our future
operating results or financial position. Actual results and the timing of events
may differ materially from those contained in these forward-looking statements
due to a number of factors, including those discussed in the Cautionary Note
Regarding Forward-Looking Statements set forth above.

Wescorp Energy Inc. is referred to herein as we, us, our,
Wescorp, the Company or our Company.

Overview

We are an energy services and engineering company committed to
acquiring, developing, and commercializing technologies that are designed to
improve the management, environmental, and economic performance of field
operations for energy producers. To this end, our primary business strategy is
to acquire, fund and develop new systems and technologies in our field through
investments in companies or products for which early stage product development
has been completed. We prefer investments for which we can control the
intellectual property of technologies that have emerged from research and
initial development and are essentially market-ready. We also acquire companies
with one or more technology products being developed that can benefit from the
financial, technical, and business development experience of our management to
bring those products to market in a meaningful manner after they have been fully
developed. Among other strategies, we may attempt to license or form joint
ventures or third-party commercial partnerships based on these acquired
technologies. In short, our goal is to generate enhanced capital appreciation
for our shareholders by continuing to acquire, develop, and commercialize timely
effective product solutions or strategic investment opportunities that generate
real returns with above-average cash flow and margins.

Company Background

In 2004 and 2005, the Company recorded its first operating
revenue from the acquired operating businesses of Flowstar Technologies Inc,
Flowray and their affiliated companies.

Currently our sole source of revenue is from our subsidiary,
Flowstar Technologies Inc., which produces advanced natural gas and gas liquids
measurement devices based on a proprietary Digital Chart Recorder (DCR) and
advanced turbine measurement technology. Flowstar DCR-based devices are
self-contained, energy-efficient flow computers with turndown ratios of 40:1 or
more for more precise flow measurements and volume calculations that are
installed directly to the well-head. Currently, these products carry a one-year
warranty and have no right of return. There is no price protection plan in
place. During the quarter ended June 30, 2007, Flowstar sold approximately 67 %
fewer DCR units than the quarter ended June 30, 2006, while the average selling
price per unit increased by about 13% versus the same quarter in 2006. Higher
per unit selling prices in 2007 reflect an increase in the number of higher
priced products we sold rather than an increase in sales prices of similar
products sold in 2006.

Revenue from operations for the quarter ended June 30, 2007
totaled $493,622 compared to $981,447 for the quarter ended June 30, 2006. This
decrease in revenue is primarily the result of reductions in well licensing,
drilling activities, and capital spending. Based on information published by the
Canadian Association of Petroleum Producers, well licensing is down 55%

---

and well completions are down 44% for gas wells in the second
quarter of 2007 when compared to the same period for 2006. These current
declines are directly attributable to the decrease in natural gas prices and the
corresponding reduction in new natural gas wells being brought into production.
The result of the decreases in these activities has had a negative impact on
market demand for providing Flowstars gas flow measurement solutions. In
addition, the normal seasonal downturn in Canadian natural gas drilling was
longer than normal due to the early spring breakup and a wetter than normal
spring and early summer. This further depressed the market for Flowstar
products.

Although our Flowstar division enjoyed encouraging sales growth
through 2006, results for the first six months of 2007 have not been as
encouraging. The Company as a whole has yet to reach profitability and during
the six months ended June 30, 2007, we experienced negative cash flows. If we
continue to experience negative cash flows, then we will have to continue to
fund our operations by the issuance of new equity and/or the assumption of debt.

Although we expect that sales will increase over the remaining
two quarters of 2007, cash will be required to fund the manufacture of
sufficient inventory and to finance the build up of trade accounts receivable
that will increase alongside sales. Consequently, forecasting our total cash
requirement is difficult at this time due to the contingent nature of the timing
and volume of sales we expect over that same period. In the near future, we
intend to raise additional capital by selling new equity, incurring short-term
debt, or selling part or all of our Oilsands Quest Inc. shareholdings in 2007 to
finance:

- The continued expansion of Flowstar operations within our current markets
  and into the United States;
- The continuing development, pilot plant fabrication and field-testing of
  the Ellycrack technology (see below);
- The potential acquisition of new technologies and related businesses; and
- Any negative cash flow resulting from operations.

Over the past year we have developed a business plan and
strategy to develop and expand our operations. The rapid growth we intend to
experience in connection with this plan will likely place considerable
operational, managerial and financial strain on our Company. To enhance our
ability to succeed with our new business plan, we intend to proactively adhere
to the following:

|1. | Continue to improve, upgrade, and expand business
      infrastructure supporting operations  We have completed our evaluation of
      Enterprise Resource Planning (ERP) software and selected a vendor. It is
      anticipated that the new system will be implemented in the last half of
      2007. We expect this initiative will improve the quality of information
      available to management and staff                                                                                                                                                                                   
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|2. | Continue to hire, train and retain key management within
      Wescorp, our subsidiaries and any target companies we may acquire  We
      intend to continue to actively recruit personnel for key executive
      positions within Flowstar and Wescorp                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|3. | Continue to advance commercialization development
      programs to generate positive cash flow and earnings as soon as is
      practically possible  We are actively assessing value-added acquisition
      candidates at or near revenue generation that extend our reach into large
      high-growth and focused market segments. We are also accelerating
      commercialization of our Ellycrack joint venture and technology and have
      negotiated an agreement with Ellycrack A/S which has allowed the transfer
      of the VISCOSITOR test-rig from Norway to Canada.                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|4. | Maintain adequate financial resources  As noted above,
      we intend to raise additional capital during the second half of 2007 to
      fund planned expansion, technology development and acquisition initiatives
      being considered. We are currently evaluating sources of capital that
      might be available to us for funding as needed. Our current and future
      opportunities for success depend to a great extent on the continued
      employment of and performance by senior management and key personnel in
      our existing operations and at potential target companies.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|5. | In the first quarter of 2007, Flowstar hired an
      additional technical sales professional to support vertical markets. Plans
      for 2007 include the expansion of our direct sales force and expansion of
      our services network particularly into the US
Market.                                                                                                                                                                                                                                                                                                                            

---

Past Acquisitions

Flowstar and Flowray Terms of Acquisition of Flowstar and
Flowray

On March 31, 2004, we, through our Alberta subsidiary 1049265
Alberta Ltd., acquired 100% of the outstanding shares of Flowstar and Flowray
for cash payments to the selling shareholders totaling approximately $414,074
(CAD $550,000) pursuant to the share purchase and subscription agreement dated
June 9, 2003, as amended effective January 14, 2004.

Related Agreements to Acquire 100% of Vasjar Trading
Ltd.

We also entered into share purchase agreements dated effective
January 14, 2004 pursuant to which we acquired 100% of the outstanding shares of
Vasjar Trading Ltd. (Vasjar). Vasjar in turn owns 100% of the outstanding
shares of Quadra, a Barbados corporation. Pursuant to an agreement dated
effective as of 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, in consideration of a promissory note in the principal amount of
CAD $604,500 without interest. Flowstar and Flowray were legally amalgamated on
December 31, 2004 into one company that continued under the name Flowstar
Technologies Inc.

In consideration of the purchase of all the outstanding shares
of Vasjar from its two shareholder entities that each owned 50% of Vasjars
outstanding shares, we issued shares (and will issue additional shares), all of
which are required to be registered for resale upon delivery, to each of the two
shareholders of Vasjar in equal amounts as follows:

- Tranche 1: an aggregate of 2,400,000 shares of common stock of the
  Company (1,200,000 shares to each of the two shareholders) on April 28, 2004;
  and
- Tranche 2: an aggregate of 2,080,000 additional shares of common
  stock of the Company (1,040,000 additional shares to each of the two
  shareholders) to be issued in stages as follows:

Stage One. On or before April 1,
2005, the Company was required to issue 480,000 additional shares based on sales
achieved in the 2004 calendar year (240,000 shares to each shareholder).

Stage Two. On or before April 1,
2006, the Company was required to issue between 800,000 additional shares based
on sales achieved in the 2005 calendar year (400,000 shares to each
shareholder).

Stage Three. On or before April
1, 2007, the Company was required to issue 800,000 additional shares based on
sales achieved in the 2006 calendar year (400,000 shares to each shareholder).

We were not able to deliver free-trading shares on April 1,
2005, and under the Vasjar purchase agreements we were required to pay an
additional 48,000 common shares for each month that the shares were not
delivered, covering the months April through September 2005. In September, 2005,
Mr. Jack Huber acquired the interests of the former Vasjar shareholders in
connection with the share delivery requirements of Tranche 2, Stage One. As a
result, we owed shares under Tranche 2, Stage One to Mr. Huber.

On November 22, 2006, we entered into a letter agreement with
Mr. Huber (the Huber Letter Agreement), pursuant to which we agreed to pay Mr.
Huber 1,000,000 shares of our common stock to fulfill the Tranche 2, Stage One
debt requirements that Mr. Huber acquired from the former Vasjar shareholders.
These shares were delivered to, and accepted by, Mr. Huber on November 22, 2006.

On April 1, 2006, we were not able to deliver free-trading
shares called for under Tranche 2, Stage Two, and thus we are required to pay
the former Vasjar shareholders an additional 80,000 common shares for each month
that the shares were not delivered. In February 2007, Mr. Jack Huber acquired
the interests of the former Vasjar shareholders in connection with the share
delivery requirements of Tranche 2, Stage Two. As a result, we now owe the
shares under Tranche 2, Stage Two to Mr. Huber. As of March 31, 2007, we were
required to pay an additional 2,123,800 common shares to Mr. Huber. As of August
8, 2007, we had not yet delivered the shares owed to Mr. Huber pursuant to
Tranche 2, Stage Two.

As of August 8, 2007, we had not delivered to the former Vasjar
shareholders free-trading shares called for under Tranche 2, Stage Three. Thus
we are required to pay the former Vasjar shareholders an additional 80,000
common shares for each month that the shares are not delivered. We intend to
file a Registration Statement on Form SB-2 during the third quarter of 2007,
which, when declared effective by the S.E.C., will enable us to meet the Tranche
2, Stage Three requirements.

---

If any of the shares to be issued to the former Vasjar
shareholders have not been delivered for a period of 182 days after the
applicable due date, the former Vasjar shareholders may at their option
terminate the share purchase agreements, without notice or prior opportunity to
cure. The former Vasjar shareholders did not exercise these rights, and they
received all of the penalty shares that accrued until this obligation had been
met under both Stage One and Stage Two. We have also received a written waiver
from Mr. Huber waiving and canceling any termination rights that Mr. Huber may
have as a result of his purchase of certain rights under the Vasjar purchase
agreements. In addition, we pledged to the former Vasjar shareholders all the
Vasjar shares as security to guarantee our performance under the share purchase
agreements.

With the completion of the acquisition of Vasjar, we now own
all the proprietary technology originally owned by Flowray (which was
subsequently amalgamated with Flowstar) related to the DCR 900 system and other
products.

Memorandum of Understanding to Form a Joint Venture with and
Purchase 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 to sublicense others to do the same in each territory.

However, on September 28, 2004, Ellycrack and the Company
signed the 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 to sublicense others to do the same on a world-wide
basis.

The principal features of the MOU are to cancel Wescorps
options to purchase licenses in Canada, the United States and Mexico and to
replace them 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 Current Report on Form 8-K filed with the Securities Exchange
Commission (SEC) on September 28, 2004.

As at December 31, 2005 the Company had purchased an aggregate
659,000 shares of Ellycrack representing 12.90% 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. In January
2006, we purchased an additional 65,000 shares of Ellycrack bringing our
aggregate number of shares owned to 724,000 and our current equity interest to
approximately 13%.

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 via a low-energy mechanical cracking process which can be located
directly in a field environment. By upgrading heavy oil in the field, oil
companies can eliminate on-site storage tanks as well as the cost associated
with transporting heavy oil great distances to centralized upgraders. As a
result, heavy oil can be transported directly to a refinery.

Since our business relationship with Ellycrack A/S started,
Ellycrack has reported improved results in experiments with its test rig.
These experiments have been conducted by the prestigious Norwegian research
center SINTEF. Demonstration tests for several major oil companies were done at
Wescorps expense. This has resulted in current negotiations by Ellycrack with
two major companies to conduct further testing in Canada at their expense.

In accordance with the MOU with Ellycrack, we have been working
with Ellycrack on plans to develop a pilot plant. During the third quarter of
2005, we made various improvements to core technology within the Ellycrack
process in order to optimize it for the pilot plant and subsequent commercial
applications. As a result of those improvements, we 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. Those improvements and tests were very successful, resulting in a
significant increase in the process upper limit of API upgrading. To date, we
have hired an engineering firm to prepare the design for a 50 to 200 barrel a
day pilot plant utilizing the Ellycrack technology, which design was completed
in the first quarter of 2006. In addition, we have also hired an engineer to act
as project manager for pilot plant fabrication and to oversee Ellycrack related
operations

As a time saving measure, we have moved the VISCOSITOR test
plant from the Norwegian site at Trondheim to Canada. The decision to move the
test rig to Canada was to automate it as an approximately 20 to 50
barrel-per-day pilot plant and prove out longer term operation. It is to be
housed at a Canadian research and development organization test facility with

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proximity to numerous potential clients. Testing and automation
are scheduled to start in the third quarter of 2007. This will be overseen by a
project engineer that we hired in 2006.

At the time of this filing we are working toward converting the
above mentioned MOU into a formal joint venture agreement.

Plan of Operation for the Next Twelve Months

The normal seasonal downturn in Canadian natural gas drilling
was longer than normal due to the early spring breakup and a wetter than
normal spring and early summer. This situation was further accentuated by a
lower price point for natural gas. Many observers believe that natural gas is
trading at the lower end of its range and that demand will increase as the
northern hemisphere winter approaches.

Despite the downturn in the natural gas market and the decrease
in sales generated by our Flowstar product line in the first half of 2007, we
think that the downturn in the price of natural gas is a temporary situation.
Once natural gas prices recover, we believe that Flowstar sales also will
increase. We also intend to seek alternative product offerings that are not as
susceptible to market fluctuations in the price of natural gas.

Our future operations and expansion are dependent on
identifying and securing additional long-term or permanent equity financing;
identifying potential sources of short and/or long-term debt financing; enjoying
the continued support of creditors and shareholders; and ultimately achieving
profitability in all facets of our operations. There can be no assurances that
we will be successful in these regards, which would significantly affect our
ability to execute our business plan. We will continue to evaluate projected
expenditures relative to available cash and seek additional means to finance
operations to meet our internal and external growth as new capital is required.

Over the next several months, the leadership team will finalize
a plan of action to enhance the current manufacturing process, and implement the
distribution of our solutions throughout the United States market. During the
first quarter of 2007, we engaged our US service providers to assist us in this
planning process. Now that the initial element has been completed, we are
working on establishing a sales and technical support infrastructure within each
state or region being targeted for DCR sales. The current business plan to
penetrate this market is based on having a direct sales force distribute our
solutions within defined territories and by contracting qualifying third-parties
for technical support.

Our new Houston, Texas office is staffed and fully functioning.
We are aggressively addressing the US markets for our solutions. While there is
a start up period associated with a new office, we expect to build from our
Canadian installed base and reputation to shorten this start up cycle.

In 2006, Flowstar completed implementation of an on-demand
Customer Relationship Management (CRM) system provided by a proven CRM industry
leader. This CRM system delivers innovative technology that makes it easier to
share and manage business information, sales processes, and customer strategies,
as well as products and services life cycles. Continued use of this product in
2007, in conjunction with a proven sales approach has enabled Flowstar to
optimize sales productivity and revenues which has been beneficial during the
current downturn in the natural gas market.

In the fourth quarter of 2006, Flowstar partnered with an
existing customer, an Energy Trust company, to define and document the economic
value of the Flowstar solution. The study quantitatively assessed the benefits
from Wescorp's natural gas and gas liquids measuring devices in low-pressure,
low-flow coal bed methane (CBM) wells. According to the study's authors, the
Flowstar solution significantly increased the economic value of those wells
using the Flowstar solution.

Wells in the Clive Field in Alberta, Canada typically have an
average depth of 400 to 500 meters with approximately a 35-year life cycle. The
study compared the performance of ninety (90) CBM wells monitored by Flowstar
DCRs, with the performance of thirty (30) wells monitored by orifice plate
monitors.

According to the study, the operator observed that:

- Orifice plate meters are consistently out of tolerance by a minimum of 5%
  or more.
- By using the Flowstar solution, the volume of gas throughput increased by
  over 100%, because back pressure from the turbine unit is virtually
  nonexistent, as compared to constricting type measurement devices that
  actually degrade production in low-pressure, low-flow CBM wells.

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- Back office accounting functions must reconcile the books at the end of the month for the orifice plate measuring devices, whereas the Flowstar meters are accurate and require no adjustments, thus saving valuable staff time and resources.

Once the data was collected using DCR's use of SD/MMC cards, it only took approximately twenty minutes to complete weekly production data from the 90 Flowstar wells. On the other hand, collecting the mechanical charts from the 30 non-Flowstar wells
took approximately six hours to input the gathered data into the production application. Flowstar technology increased field tech productivity, allowing them to complete other tasks .

As part of our business development efforts, Flowstar continues to be deeply involved with industry organizations and in particular those focused on the upstream measurement market. Flowstar is an active member of the Industry Measurement Group
(IMG), a non-profit organization comprised of corporations with a common interest in issues affecting measurement within the petroleum industry. Included within IMG are measurement specialists, operating companies, service providers,
regulators, production accountants, and consultants, among others. Flowstar continues to expand its industry related expertise and is now an active member of the Petroleum Technology Alliance Canada (PTAC). PTAC is a not-for-profit association that
facilitates collaborative research and technology development to improve the financial, environmental and safety performance of the Canadian upstream conventional oil and gas industry.

In March 2007, Flowstar participated in a trade event hosted by the Canadian School of Hydrocarbon Measurement (CSHM), which is affiliated with the University of Texas continuing education program PETEX. Flowstar also participated in the
Instrumentation, Systems, and Automation Society (ISA) technical conference held in Edmonton in April 2007. ISA is a United States based organization setting global standards for and certifying professionals involved in the industrial
automation industry. In June 2007, we participated in the Global Petroleum Show in Calgary, Alberta.

These activities are part of our continuing efforts to enhance our reputation and expand the markets awareness of our solutions (including the economic business case as described above). We strongly believe that making these types of
investments with our customers contributes to our long-term success and we expect to continue these types of activities.

In an effort to reduce the impact that downturns in natural gas prices have on sales of gas measurement devices, Flowstar plans to diversify and expand its product line for 2007 as follows:

- By working with our suppliers, we have brought our customers a new Class 1 Div 1 Intrinsically Safe radio package. This package provides end users with an easy to install, low power, wireless communications link to the DCR flow computer. The
introduction of this product focuses towards improving field and operations efficiencies, while having a positive impact on our customers who are interested in reducing their monthly monitoring fees, and allocating their field resources to more
productive areas.
- We continue to work with our communication partners and are reviewing many products, including remote monitoring technology which uses Bluetooth®communications.
- Focusing on providing end to end solutions.
- By continuing to improve our operational infrastructure we are able to expand service offerings. We are now managing more of the field implementation and commissioning process.
- We are working with select customers to provide a leasing solution that will assist them in implementing new technologies within their existing budgetary constraints.

We are aware of the many challenges that most service providers and contractors are having. We continue to be in communications with existing and potential customers and are taking a proactive approach on providing them with cost effective total
solutions.

For the Ellycrack heavy oil upgrading process, we have moved the VISCOSITOR test plant from the Norwegian site at Trondheim to Canada. The decision by Wescorp and Ellycrack to move the test rig to Canada was made in order to automate it as an
approximately 20 to 50 barrel-per-day pilot plant and prove out longer term operation. We will make all necessary modifications to it to undertake a continuous test program to define those operating parameters as a substitute to
fabricating a pre-commercial pilot-plant for such a purpose. Once those parameters are established it will allow us to modify the original engineering and design plans as necessary to produce a fully commercial package for the technology.

The test rig is currently being reassembled so that it is equipped with an oilfield float and minor changes to comply with Canadian safety and environmental standards prior to being shipped to the test facility. An oilfield float with an access

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platform has been designed and fabricated to which the VISCOSITOR components were mounted. In addition, a control room was installed. A special research electrical steam generator to deliver controlled amounts of high temperature steam to the
process has been constructed, shipped, and installed. Designs for the electrical and instrumentation components have been completed. Qualified vendors have been found for those components and the installation of these components is nearly complete.
A minor amount of plumbing and electrical inspection remains to be done on the VISCOSITOR. Once this is completed the VISCOSITOR must be adequately packaged for shipping to the research facility.

The building to house the VISCOSITOR is nearly complete but is still awaiting the installation of an additional compressed air supply. After the VISCOSITOR arrives at the research facility a propane tank will need to be installed and utilities will
have to be connected before testing can commence.

Lab testing of oil and sand materials to be used in the continuous test program has commenced. Our research contractor has been testing a number of alternative Canadian process consumables as alternatives to the Norwegian sand used during European
testing.

Engineering work has identified testing strategies that should reveal the underlying mechanisms involved in the VISCOSITORs upgrading performance. Alternative strategies for pollution control have also been identified to help ensure our goal
of a small scale field upgrader is met.

In October 2006, the Company entered into an agreement with a Canadian research and development organization to provide facilities and other resources necessary to test the Ellycrack pilot plant under long term usage. These tests are necessary in
order to determine the potential commercial feasibility of this process and what, if any, modifications will be required to the design of a commercially viable plant. Under the terms of this agreement, the Company is required to pay a minimum fee of
approximately $17,400 (CAD $18,500) per month commencing September 2007 for the provision of technical and research assistance and related services as well as facility rental for a period of twenty-four months. Upon signing the agreement,
the Company paid a deposit in the amount of approximately $162,900 (CAD $180,000).

The Company has been approved to receive a grant administered by a Canadian Federal government agency. Under the terms of the agreement, the Company may receive up to approximately $272,700 (CAD $290,000) for costs incurred and paid in
direct performance of testing of the pilot plant as described above. To date we have received approximately $44,000 (CAD $50,000) related to this grant.

On May 10, 2007, we entered into a non-binding Letter of Intent (LOI) with a private Canadian corporation to acquire certain North American technology rights relating to a water purification system. In accordance with the terms of the LOI, Wescorp
would purchase the right to manufacture, market, and service the seller's proprietary water purification system. The system, currently in use in Europe, was created and commercialized using Swiss, German, Italian, and Canadian engineering. The
portable facility uses waste heat to flash-distill oilfield reclamation water, mining leachates, landfill and factory wastewater, and seawater resulting in potable water, and mineable brines. Assuming the completion of the transaction, Wescorp
anticipates that it will use the system independently or in conjunction with other water remediation technologies to address the critical water issues facing the oil and gas industry today.

On May 22, 2007, we entered into a non-binding Letter of Intent (LOI) with a private Canadian corporation to acquire two operating business units. These organizations use proprietary technology to improve the management, environmental and economic
performance of field operations for energy producers. The transaction is subject to due diligence, the usual and customary conditions, and entering into a definitive agreement.

Under the proposed terms of the May 22, 2007 LOI, Wescorp would purchase the business units providing full ownership of the technologies.

Final terms of each of these pending transactions are subject to the results of further due diligence and ongoing negotiations.

The engineering firm supplies process-driven solutions that substantially reduce direct and indirect operating costs. A typical solution involves a field re-engineering process and can deliver a 40  60% reduction in costs while providing
better decision making support. The firm currently is involved with projects in the deepwater the Gulf of Mexico, in Alberta, Canada and in Alaska.

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The second business unit is involved in the remediation of water contaminated during the exploration and production of oil and gas. During the water flood process that is common throughout the world as part of Enhanced Oil Recovery (EOR),
approximately 0.5 - 3% residual oil remains in the water using current remediation practices. This technology was designed to remove this residual oil, resulting in a significant positive economic and environmental impact.

The addition of these business units will have immediate impact on Wescorp's ability to enhance the economic performance and environmental impact of its clients.

To date, our operations have been funded by a combination of short-term debt and equity financing. Currently, cash on hand and collection of trade accounts receivable are our only existing sources of liquidity. In the event that we do not achieve
positive cash flow from operations in 2007, we will be relying on debt and equity financings to provide our Company with sufficient capital to continue our development and operational plans. We may also liquidate all or part of our investment in
Oilsands Quest Inc. shares to raise additional capital. There can be no assurance that we can continue to grow, which would have a significant effect on the financial condition of our Company and our ability to effectively implement the proposed
business plan for Flowstar and Ellycrack.

Although we do not have any lending arrangements in place with banking or financial institutions, we intend to seek conventional bank financing for Flowstar once we redeem or effect the conversion of the outstanding short-term convertible debenture
to equity as noted herein.

We are also currently in the process of arranging financing for our 2007 operations and investment plan. As part of our overall investment objectives we intend to acquire and develop one or more technologies in 2007. Our total anticipated funding
requirement through the end of 2007 is estimated to be approximately $7.5 million. We believe that if we are able to obtain this financing, of which there is no assurance, our cash balances will be sufficient to carry on normal operations for
the next twelve months plus meet any cash requirements that may be needed for target investments or acquisitions. Any sale of additional equity securities, if undertaken, will result in dilution to our stockholders. There can be no assurance that
additional financing, when required, will be available to us or on acceptable terms.

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

|1. | Retaining key management and employees with an emphasis on providing proper training and ongoing professional development to assist us in staying current with the latest advancements and developments that affect our target markets
and industries.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                       
|2. | Identifying further potential markets for our current products and those under development to obtain additional revenue that generates enhanced profits, positive cash flows, and shareholder value.                                                  
|   |                                                                                                                                                                                                                                                       
|3. | Identifying and acquiring additional business opportunities that further enhance revenue, profitability, cash flow, business potential, and/or shareholder value within highly-leveraged high growth energy-related markets.                          
|   |                                                                                                                                                                                                                                                       
|4. | Maintaining adequate financial resources.                                                                                                                                                                                                             

We anticipate that the only major purchases of capital assets in the next 12 months will be the building of the Ellycrack pilot plant, the expansion of Flowstar operations into the United States, and the potential acquisition of one or more new
businesses and/or technologies. However, there may be additional purchases of office equipment and shop equipment for Flowstar. Also, Flowstar will be conducting research and development in its ongoing program to maintain the competitive advantage
of its products.

Wescorps current corporate employee count now stands at twenty-three (23). Additionally, there may be services that Wescorp will contract out for, given the specialized nature of the business of Flowstar. 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.

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.

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Results from Operations  2007 Compared to 2006

Three Months Ended June 30, 2007 Compared to Three Months Ended June 30, 2006

Revenues

Revenues during the quarter ended June 30, 2007 were $493,622, compared to $981,447 for the quarter ended June 30, 2006, a decrease of $487,825, or 50%. This decrease is attributed to the decline in the price of natural gas which has
resulted in the customers of Flowstar to either defer or abandon plans to bring new wells into production. Based on information published by the Canadian Association of Petroleum Producers, well licensing is down 55% and well completions are down
44% for gas wells in the second quarter of 2007 when compared to the same period for 2006. In addition, the normal seasonal downturn in Canadian natural gas drilling was longer than normal due to the early spring breakup, and a wetter
than normal spring and early summer which further depressed the market for Flowstar products.

Sales coverage for the Flowstar DCR systems has been improved through the hiring of additional direct sales staff and increased exposure to the upstream measurement community. During this period of time these efforts were successful in increased
market awareness of the Flowstar products, but unsuccessful in improving sales. We believe that these efforts will lead to increases in revenues in the future. Flowstar has been focusing its sales efforts by identifying applications and markets
where the DCR system has advantages over competing products in order to increase its market share in the Canadian natural gas flow measurement market. In addition, plans are underway to expand the existing product line being offered by Flowstar.

Cost of Sales

As a percentage of revenues, cost of sales for the quarter ended June 30, 2007 increased to 61.0% versus 51.4% for the quarter ended June 30, 2006. Most of this increase can be attributed to an increase in discounts given to customers due to the
depressed market conditions for the sale of the Flowstar products. These higher discounts were not given to customers in the same period of 2006.

Expenses

Operating expenses for the quarter ended June 30, 2007 were $1,582,614 versus $1,275,317 for the quarter ended June 30, 2006, an increase of $307,297. New consulting contracts and additions to the management team for Wescorp were the
principal reasons for this increase. The largest increases in our operating expenses were in consulting fees and wages and benefits as explained below.

In the fourth quarter of 2006, Mr. Dave LeMoine was hired as President of Flowstar and as Executive Vice President of Sales and Marketing for both Wescorp and Flowstar. To improve sales coverage, the Company hired additional sales staff necessary
for Flowstar. It also provided merit increases in order to retain key employees. As there is currently a shortage of qualified employees, additional costs were incurred in 2007 in relation to the use of an employment agency to assist in the search
and selection of competent employees. Even though the position of Vice-President of Investor Relations and Communications was eliminated in the third quarter of 2006, we incurred an overall increase in wages and benefits in the amount of
$84,422. As a result, wages and benefits were $435,942 during the quarter ended June 30, 2007 versus $351,520 during the quarter ended June 30, 2006. These results are consistent with the $430,378 in wages and benefits incurred
during the quarter ended March 31, 2007 and the $326,610 incurred during the quarter ended March 31, 2006.

Also included in the new compensation package for Mr. Dave LeMoine were stock options which did not exist during the three months ended June 30, 2006. Thus, the Company incurred an increase of $16,644 in stock based compensation during the three
months ended June 30, 2007 to $37,200 compared to the $20,556 incurred during the three months ended June 30, 2006.

Consulting fees incurred in the current three month period in the amount of $318,206 were $221,855 higher than the $96,351 incurred in the same period for 2006. Additional contracts for five consultants, which did not exist in the second
quarter of 2006, include the engagement of consultants to assist with developing a business strategy that would allow Wescorp to enter the flow measurement market in the U.S. and the development of additional technologies that we hope to market in
2007. One of these contracts is for our Chief Operating Officer, Mr. Scott Shemwell. Additional consulting fees were also paid to help assess the viability of potential business acquisition candidates, assist in developing a business identity,
assess the

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availability of Canadian government grants, and upgrades to our websites. The costs associated to the shares issued pursuant to the terms of a cashlesss warrant that were issued during the quarter ended June 30, 2007 were also recorded as consulting
fees. In comparison we had only entered into two consulting contracts in the second quarter of 2006 and those contracts were for significantly lower amounts.

Travel expenses during the quarter ended June 30, 2007 increased by $21,964 versus the quarter ended June 30, 2006, a direct result of the increased activity in the Ellycrack project and additional marketing of both Wescorp and Flowstar in
international markets. The opening of offices in Houston and Austin, Texas and the engagement of additional consultants located in the U.S. have also directly contributed to these increases in cost.

Office expenses for the quarter ended June 30, 2007 were $120,787 compared to $100,852 for the quarter ended June 30, 2006. The increase of $19,935 is a direct result of the increased rental space occupied to accommodate the growth in
operations, including the setting up of offices in Texas.

Advertising and investor relations expenses rose by $46,608 to $132,335 for the quarter ended June 30, 2007 versus the $85,727 reported for the quarter ended June 30, 2006. This increase is a direct result of additional costs being
incurred in the second quarter of 2007 for brand imaging and extensive promotion of the Flowstar product line. There was an increase in costs for having the investor relations functions contracted out for the quarter ended June 30, 2007 instead of
having these services performed internally by an employee as was done for the comparative period in 2006. These costs were fully offset by not incurring any expense associated with warrants issued for the provision of investor relations services as
was done in the second quarter of 2006.

In order to strengthen the Board of Directors, the Company has decided to compensate outside directors in the form of shares commencing April 1, 2006. During the quarter ended June 30, 2007, the Company had three outside directors and as a result
incurred $22,244 in directors fees. As there were only two outside directors in the same period in 2006 the cost for directors fees for that period was $17,605. The higher costs associated with the increase in the number of
outside directors was partially mitigated by the decrease in the market price of Wescorp shares at April 1, 2007 versus April 1, 2006.

The above increases were partially offset by a substantial decrease in interest on debentures. We incurred interest expense of $29,687 on our debentures during the quarter ended June 30, 2007 compared to $56,979 incurred during the quarter
ended June 30, 2006. This decrease of $27,292 is a direct result of only having $90,000 in short-term debentures outstanding at June 30, 2007 versus the $1,475,319 in debentures that were outstanding at June 30, 2006. While new debt in
the form of a long-term debenture in the amount of $2,250,000 was incurred on June 7, 2006, this only resulted in an additional $14,178 in interest for the current period and was not enough to offset the decrease in interest due to the
reduction in the balance for the short-term debentures.

We incurred interest, finance and bank charges of $32,599 for the quarter ended June 30, 2007 compared to $51,792 incurred during the quarter ended June 30, 2006. This decrease of $19,193 is due to only incurring financing fees of
$20,000 in the three months ended June 30, 2007 versus financing fees of $50,000 incurred in the same period in 2006. This decrease was offset by $9,972 in interest incurred on the loan obtained from AHC Holdings Inc. for which no
interest costs were recorded in the prior periods comparative figures.

Costs for research and development, all related to the Ellycrack project, dropped in the quarter ended June 30, 2007 to $98,394 compared to the $147,132 incurred in the quarter ended June 30, 2006. While additional costs related to modifying
the VISCOSITOR to be a 20 to 50 barrel-per-day pilot plant were incurred in the first quarter of 2007, a grant of approximately $31,900 was received to offset these costs. No corresponding grant money was received in 2006. In addition, during
the quarter ended June 30, 2006, Flowstar commissioned Colorado Engineering Experiment Station Inc. (CEESI) to undertake tests in response to customer and regulator requests for reference data to quantify DCR technology performance in a variety of
wet-gas field conditions at a cost of $25,690.

Legal and accounting costs for the three months ended June 30, 2007 were $75,639, which was a decrease of $5,798 compared to the corresponding period of 2006. The decrease in 2007 is directly related to slightly lower legal fees required for
compliance with various regulatory filings, and for due diligence work undertaken with respect to potential business acquisitions and other contracts.

Depreciation and amortization expense for the quarter ended June 30, 2007 was $23,666 versus $25,955 for the quarter ended June 30, 2006, a decrease of $2,289. This decrease was due to having fully depreciated property and equipment as
at

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December 31, 2006 that were still being utilized by the Company in the second quarter of 2007. The value of property and equipment that was not fully depreciated at June 30, 2006 was higher than at June 30, 2007.

Insurance expense for the quarter ended June 30, 2007 was $31,120 compared to $36,580 for the quarter ended June 30, 2006. The decrease in our premium for Directors and Officers liability insurance is the primary reason for the $5,460
reduction in insurance expense.

Other Income and Expenses

For the quarter ended June 30, 2007, other expenses have increased by $442,162 from the same period during 2006. Most of the 2007 expense was directly attributable to the penalty for the late filing of the registration statement pursuant to the
terms of the subscription agreements for the private placement that was completed in December of 2006. As a result the Company was required to issue additional shares to the investors in the private placement which were valued at $424,839. In
addition, we were not able to deliver free-trading shares called for under Tranche 2, Stage 3 of the agreement to acquire Vasjar, and thus we were required to pay the former Vasjar shareholders an additional 80,000 Wescorp common shares for each
month that the shares are not delivered. This resulted in an accrual of $121,808 being recorded for the quarter ended June 30, 2007, which reflects the increase in shares needed to be delivered and the closing trading price of Wescorp shares as
at June 30, 2007. The financial statements for the same period in 2006 reflect the requirements for late delivery of shares as stipulated by Tranche 2, Stage 2 of the agreement at a cost of $120,000. The foreign currency loss of $17,194 for
the quarter ended June 30, 2007 is a direct result of the Canadian dollar consistently strengthening against the U.S. dollar throughout the period. As Wescorp has many payables denominated in Canadian dollars as that currency strengthens exchange
losses result when those payables are settled. Interest income for the three months ended June 30, 2007 is directly related to the short-term investment made in June 2007.

Net Loss

The net loss for the quarter ended June 30, 2007 of $1,947,915 compared to a net loss of $913,847 for 2006 is due to the net effect of the decrease in gross profit of $284,609 and increases of $307,297 in operating expenses and
$442,162 in other expenses as explained above

Six Months Ended June 30, 2007 Compared to Six Months Ended June 30, 2006

Revenues

Revenues during the six months ended June 30, 2007 were $1,311,604, compared to $2,060,790 for the six months ended June 30, 2006, a decrease of $ 749,186, or 36%. This decrease is attributed to the decline in the price of natural gas
which has resulted in the customers of Flowstar to either defer or abandon plans to bring new wells into production. Based on information published by the Canadian Association of Petroleum Producers well completions are down 19% for gas wells in the
first six months of 2007 when compared to the same period for 2006. In addition, the normal seasonal downturn in Canadian natural gas drilling was longer than normal due to the early spring breakup, and a wetter than normal spring and
early summer which further depressed the market for Flowstar products.

Sales coverage for the Flowstar DCR systems has been improved through the hiring of additional direct sales staff and increased exposure to the upstream measurement community. During this period of time these efforts were successful in increased
market awareness of the Flowstar products, but unsuccessful in improving sales. We believe that these efforts will lead to increases in revenues in the near future. Flowstar has been focusing its sales efforts by identifying applications and markets
where the DCR system has advantages over competing products in order to increase its market share in the Canadian natural gas flow measurement market. In addition, plans are underway to expand the existing product line being offered by Flowstar.

Cost of Sales

As a percentage of revenues, cost of sales for the six months ended June 30, 2007 increased to 56.0% versus 51% for the six months ended June 30, for 2006. Most of this increase can be attributed to an increase in discounts given to customers in the
second quarter of 2007 due to the depressed market conditions for the sale of the Flowstar products. These higher discounts were not given to customers in the first quarter of 2007 or the first six months of 2006.

---

Expenses

Operating expenses for the six months ended June 30, 2007 were $3,073,635 versus $2,369,821 for the six months ended June 30, 2006, an increase of $703,814. New consulting contracts and additions to the management team for Wescorp were
the principal reasons for this increase. The largest increases in our operating expenses were in consulting fees and wages and benefits as explained below.

In the fourth quarter of 2006, Mr. Dave LeMoine was hired as President of Flowstar and as Executive Vice President of Sales and Marketing for both Wescorp and Flowstar. To improve sales coverage, the Company hired additional sales staff necessary
for Flowstar. It also provided merit increases in order to retain key employees. As there is currently a shortage of qualified employees, additional costs were incurred in 2007 in relation to the use of an employment agency to assist in the search
and selection of competent employees. Even though the position of Vice-President of Investor Relations and Communications was eliminated in the third quarter of 2006, we incurred an overall increase in wages and benefits in the amount of
$188,190. As a result, wages and benefits were $866,320 during the six months ended June 30, 2007 versus $678,130 during the six months ended June 30, 2006.

Also included in the new compensation package for Mr. Dave LeMoine were stock options which did not exist during the six months ended June 30, 2006. Thus, the Company incurred an increase of $94,744 in stock based compensation during the six
months ended June 30, 2007 to $137,600 compared to the $42,856 incurred during the six months ended June 30, 2006.

Consulting fees incurred in the current six month period in the amount of $557,895 were $360,913 higher than the $196,982 incurred in the same period for 2006. Additional contracts for five consultants that did not exist in the first six
months of 2006 include the engagement of consultants to assist with developing a business strategy which would allow Wescorp to enter the flow measurement market in the U.S. and the development of additional technologies that we hope to market in
2007. One of these contracts is for our Chief Operating Officer, Mr. Scott Shemwell. Additional consulting fees were also paid to help assess the viability of potential business acquisition candidates, assist in developing a business identity,
assess the availability of Canadian government grants, and upgrades to our websites. The costs associated to the shares issued pursuant to the terms of a cashlesss warrant that were issued during the six months ended June 30, 2007 were also recorded
as consulting fees. In comparison we had only entered into two consulting contracts in the first six months of 2006 and those contracts were for significantly lower amounts.

Travel expenses during the six months ended June 30, 2007 increased by $60,206 to $176,405 versus $116,199 for the six months ended June 30, 2006. This increase is a direct result of the increased activity in the Ellycrack project and
additional marketing of both Wescorp and Flowstar in international markets. The opening of offices in Houston and Austin, Texas and the engagement of additional consultants located in the U.S. have also directly contributed to these increases in
cost.

Similarly, the increase in office expenses of $33,878 during the six months ended June 30, 2007 to $214,395 versus $180,517 for the six months ended June 30, 2006 is a direct result of the increased rental space required to accommodate
the growth in operations, including the setting up of offices in Texas.

Advertising and investor relations expenses rose by $58,081 to $187,886 for the six months ended June 30, 2007 versus the $129,805 reported for the six months ended June 30, 2006. This increase is a direct result of additional costs
being incurred in 2007 for brand imaging and extensive promotion of the Flowstar product line. There was an increase in costs for having the investor relations functions contracted out for the six months ended June 30, 2007 instead of having these
services performed internally by an employee as was done for the comparative period in 2006. These costs were fully offset by not incurring any expense associated with warrants issued for the provision of investor relations services as was done in
the first six months of 2006.

Legal and accounting costs were $175,352, which was an increase of $39,751, compared to the corresponding period of 2006. The increase in 2007 is directly related to legal fees required for compliance with various regulatory filings, and for
due diligence work undertaken with respect to potential business acquisitions and other contracts.

In order to strengthen the Board of Directors, the Company has decided to compensate outside directors in the form of shares commencing April 1, 2006. During the six months ended June 30, 2007, the Company had three outside directors and as a result
incurred $39,732 in directors fees. As there were only two outside directors for which fees commenced on April 1, 2006 the cost for directors fees for the comparative period in 2006 were $17,605. The higher costs associated with
the increase in the number of outside directors was partially mitigated by the decrease in the market price of Wescorp shares at April 1, 2007 versus April 1, 2006.

---

The above increases were partially offset by a substantial decrease in interest on debentures. We incurred interest expense of $36,591 on our debentures during the six months ended June 30, 2007 compared to $111,705 incurred during the six
months ended June 30, 2006. This decrease of $75,114 is a direct result of only having $90,000 in short-term debentures outstanding at June 30, 2007 versus the $1,475,319 in debentures that were outstanding at June 30, 2006. While new
debt in the form of a long-term debenture in the amount of $2,250,000 was incurred on June 7, 2006 this only resulted in an additional $14,178 in interest for the current period and was not enough to offset the decrease in interest due to
the reduction in the balance for the short-term debentures.

Costs for research and development, all related to the Ellycrack project, dropped in the six months ended June 30, 2007 to $266,679 compared to the $320,981 incurred in the six months ended June 30, 2006. While additional costs related to
modifying the VISCOSITOR to be a 20 to 50 barrel per day pilot plant were incurred in the first six months of 2007, a grant of approximately $$44,000 was received to offset these costs. No corresponding grant money was received in 2006. In
addition, during the six months ended June 30, 2006 Flowstar commissioned Colorado Engineering Experiment Station Inc. (CEESI) to undertake tests in response to customer and regulator requests for reference data to quantify DCR technology
performance in a variety of wet-gas field conditions at a cost of $25,690.

We incurred interest, finance and bank charges of $44,832 for the six months ended June 30, 2007 compared to $54,119 incurred during the six months ended June 30, 2006. This decrease of $9,287 is due to only incurring financing fees of
$20,000 in the six months ended June 30, 2007 versus financing fees of $50,000 incurred in the same period in 2006. This decrease was offset by $19,835 in interest incurred on the loan obtained from AHC Holdings Inc. for which no
interest costs were recorded in the prior periods comparative figures.

Depreciation expense for the six months ended June 30, 2007 was $46,320 versus the $51,998 for the first six months of 2006, a decrease of $5,678. This decrease was due to having fully depreciated property and equipment as at December
31, 2006 that were still being utilized by the Company in the first six months of 2007. The value of property and equipment that was not fully depreciated at June 30, 2006 was higher than at June 30, 2007.

Insurance expense for the six months ended June 30, 2007 was $65,305 compared to $75,000 for the six months ended June 30, 2006. The decrease in our premium for Directors and Officers liability insurance is the primary reason for the
$9,695 reduction in insurance expense.

Other Income and Expenses

For the six months ended June 30, 2007, other expenses have increased by $1,061,080 from the same period during 2006. Most of the 2007 expense was directly attributable to the increase in the penalty for the late delivery of Tranche 2, Stage 2
shares to the former shareholders of Vasjar. We were not able to deliver free-trading shares called for under Tranche 2, Stage 2 of the agreement to acquire Vasjar, and thus we were required to pay the former Vasjar shareholders an additional 80,000
Wescorp common shares for each month that the shares are not delivered. This resulted in an accrual of $617,672 being recorded for the quarter ended March 31, 2007, which reflects the increase in shares needed to be delivered and the closing
trading price of Wescorp shares as at March 31, 2007. In addition, we were not able to deliver free-trading shares called for under Tranche 2, Stage 3 of the agreement to acquire Vasjar and this resulted in an accrual of $121,808 being recorded
for the quarter ended June 30, 2007. This cost reflects the additional shares needed to be delivered under Tranche 2, Stage 3 and the closing trading price of Wescorp shares as at June 30, 2007. The financial statements for the same period in 2006
reflect the requirements for late delivery of shares as stipulated by Tranche 2, Stage 2 of the agreement at a cost of $120,000. The Company also incurred a penalty for the late filing of the registration statement pursuant to the terms of the
subscription agreements for the private placement that was completed in December of 2006. As a result, the Company was required to issue additional shares to the investors in the private placement which were valued at $424,839. The foreign
currency loss of $21,275 for the six months ended June 30, 2007 is a direct result of the Canadian dollar consistently strengthening against the U.S. dollar throughout the period. As Wescorp has many payables denominated in Canadian dollars, as
that currency strengthens, exchange losses result when those payables are settled. Interest income for the six months ended June 30, 2007 is directly related to the short-term investment made in June 2007.

Net Loss

The net loss for the six months ended June 30, 2007 of $3,668,506 compared to a net loss of $1,496,854 for 2006 is due to the net effect of the decrease in gross profit of $406,758 and increases of $1,110,572 in operating expenses
and $1,061,080 in other expenses as explained above.

---

Liquidity and Capital Resources  2007 Compared to 2006

Six Months Ended June 30, 2007 Compared to Six Months Ended June 30, 2006

From inception, we have been dependent on investment capital and debt financing from our shareholders as our primary source of liquidity. Prior to our acquisition of Flowstar in 2004, we had not generated any revenue or income from our operations.
Through June 30, 2007, we have generated revenues from operations of $8,048,221 (comprised of $1,311,604 for the six months ended June 30, 2007, $3,184,461, $2,323,589, and $1,228,531 for the years ended December 31, 2006, 2005
and 2004, respectively). We had an accumulated deficit at June 30, 2007 of $23,368,901.

Our cash position at June 30, 2007 increased to $820,190 from the $499,233 balance of December 31, 2006, and from the $300,899 balance we had at June 30, 2006.

We used cash in operations of $1,331,079 in the first six months of 2007 compared to cash used in operations of $1,434,886 during the same period in 2006. Most of this amount relates to the operating loss adjusted for non-cash items, which
were $2,645,272 for the six months ended June 30, 2007 (June 30, 2006 - $1,099,038). Changes in operating assets and liabilities are explained below.

We also had a net outflow of cash of $1,361,650 from investing activities for the six months ended June 30, 2007. An investment in a short-term interest bearing deposit accounted for $1,322,367 of this amount (June 30, 2006  nil). In
addition $10,986 was utilized to purchase plant and equipment (June 30, 2006  $12,628), and $28,297 was invested in other receivables (June 30, 2006  nil). During the six months ended June 30, 2006, $150,000 was used for
the purchase of shares in Ellycrack AS and assets were disposed of for proceeds of $2,687.

The net cash used in operating and investing activities was funded with $2,973,061 from financing activities for the six months ended June 30, 2007. The cash flow from financing activities for the six months ended June 30, 2007 was primarily a
result of:

- Proceeds on the issuance of a convertible debenture in the amount of $2,250,000, as compared to no proceeds received in the same period in 2006;
- The issuance of stock in the amount of consideration equal to $50,000, as compared to $479,954 for the same period in 2006;
- Cash received on the exercise of warrants for which shares were not yet issued in the amount of $133,387, as compared to $311,589 for the same period in 2006; and
- The funds received for share subscriptions receivable in the amount of $85,000, as compared to $29,772 for the same period in 2006.

In the six months ended June 30, 2007, we incurred debt of:

- $2,250,000 on the issuance of a convertible debenture, as compared to no convertible debentures issued in the same period in 2006;
- $319,736 from a new note payable, as compared to no proceeds received in the same period in 2006;
- $7,051 relating to unpaid remuneration for our Chief Executive Officer, as compared to $7,263 for the same period in 2006;
- $130,000 in consulting fees, as compared to no fees incurred in the same period in 2006; and
- $19,835 in interest owed to a company controlled by a director of Wescorp, as compared to no such interest owed in the same period in 2006.

During the six months ended June 30, 2007, we had to repay debt in the amount of $8,940, as compared to $11,200 for the same period in 2006. In the six months ended June 30, 2006, we had to repay convertible debentures in the amount of
$77,000 and received a loan from a related company in the amount of $500,000.

At June 30, 2007, we had current assets totaling $3,897,536 compared to $2,531,822 at June 30, 2006. This increase is a direct result of the positive cash flow described above as well as the increase in short-term investments, and prepaid
deposits offset by a reduction in accounts receivable.. The major portion of the prepaid deposits was made with our Canadian partner who is assisting us with assessing the Ellycrack technology. Additional deposits were made with key vendors to
ensure that they would be able to provide us with an adequate supply of our vital products. Decreases in accounts receivable at June 30,

---

2007, over the balances at June 30, 2006 were primarily due to the reduced sales during the current period versus the same period last year.

Our investment in property and equipment at the end of June 2007 decreased to $102,862 compared to $169,347 reported at June 30, 2006. This decrease is a direct result of only investing $28,273 in property and equipment while
depreciating those assets by $94,758 since June 30, 2006.

The decrease in investments to $1,729,678 at June 30, 2007 from the June 30, 2006 balance of $3,991,699 was a direct result of the decline in the market price of our available for sale investment at these respective dates. At June 30, 2006,
we had invested in 170,000 shares of Synenco Energy Inc. (Synenco) that, at that time, traded at approximately $16.56 (CAD $22.65) per share. On March 23, 2007 we exchanged the 170,000 Synenco shares for 470,143 shares of
Oilsands Quest Inc. At June 30, 2007 Oilsands Quest Inc. was trading at $2.47.

The reduction in our technology is due to the amortization of this asset over its estimated useful life of approximately eight years.

The Company had $6,052,570 in current liabilities at June 30, 2007 compared to $6,581,724 at June 30, 2006. Only $90,000 in the form of short-term convertible debentures was still on the books at June 30, 2007, which reflects debentures
totaling $1,180,250 being redirected to units of the private placement that closed in December 2006 and $205,069 in repayments of convertible debentures since June 30, 2006. The decrease in debentures has been offset by an increase in
additional trade payables and financing required to sustain the higher level of activity of our growing organization. Trade payables have increased by $249,420 when compared to the June 30, 2006 figures and an additional note payable in the
amount of $319,736 has been incurred in the current period.

We had long-term notes payable of $63,390 at June 30, 2007, compared to $97,222 at June 30, 2006. The decrease is due to the paying down of existing vehicle loans while not incurring any new debt as no new equipment purchases were financed.
In June 2007, we issued a new long-term convertible debenture in the amount of $2,250,000.

Off-Balance Sheet Arrangements

We have never entered into any off-balance sheet financing arrangements and have not formed any special purpose entities. We have not guaranteed any debt or commitments of other entities or entered into any options on non-financial assets.

Risk Factors

You should carefully consider each of the risk factors provided in the Companys Annual Report on Form 10-KSB. These risks are those we currently believe may materially affect us. Our future development is and will continue to be dependent upon
a number of factors.

ITEM 3. CONTROLS AND PROCEDURES

The management of the Company, under the supervision and with the participation of the Companys Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the Companys disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) or 15d-15(e)) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Companys disclosure controls and
procedures were effective as of the end of the period covered by this report.

There was no change in the Companys internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during the Companys last fiscal
quarter that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.

---

PART II - OTHER INFORMATION

|ITEM 1. | **LEGAL
      PROCEEDINGS**
|------- | ---------------------------

None

|ITEM 2. | **UNREGISTERED SALES OF
      EQUITY SECURITIES AND USE OF PROCEEDS**
|------- | ---------------------------------------------------------------------

On January 22, 2007, upon the exercise of previously
outstanding warrants at $0.25 per share, the Company issued 200,000 shares of
common stock for total proceeds of $50,000. The warrants originally were issued
as part of a private placement to accredited investors outside the United States
in reliance upon an exemption from registration under Regulation S of the
Securities Act of 1933, as amended.

On February 23, 2007, in connection with an agreement with OKKO
International Inc., the Company issued 321,059 shares of common stock to settle
an outstanding liability. The shares were issued to a single non-U.S. resident,
who is also an accredited investor, in reliance upon the exemption from
registration under Regulation S of the Securities Act as a private transaction
under Section 4(2) of the Securities Act.

On June 22, 2007, upon the exercise of previously outstanding
warrants at $0.35 per share, the Company issued 570,000 shares of common stock
for total proceeds of $199,500. The warrants originally were issued as part of a
private placement to accredited investors outside the United States in reliance
upon an exemption from registration under Regulation S of the Securities Act of
1933, as amended.

On June 22, 2007, pursuant to the terms of a cashless warrant,
the Company issued 73,780 shares of common stock. The warrants originally were
issued as part of a private placement to accredited investors outside the United
States in reliance upon an exemption from registration under Regulation S of the
Securities Act of 1933, as amended.

On June 22, 2007, the Company issued 250,000 shares of common
stock for total proceeds of $120,000. These shares were issued for directors
fees at a value of $0.48 per share. The shares were issued to the directors as
accredited investors through private transactions under Section 4(2) and
Regulation D of the Securities Act.

On June 22, 2007, we issued 20,000 units of unregistered common
stock, for $0.50 per unit, for total proceeds of $10,000. These units were
issued pursuant to a private offering closed on December 14, 2006, under
Regulation D of the Securities Act pursuant to which we sold 7,944,150 units of
unregistered common stock, for $0.50 per unit, for total proceeds of $3,972,075.
Each unit consists of one share of common stock and one common stock warrant.
One warrant entitles the holder to purchase one additional common share at a
price of $0.75 per share at any time until the close of business on December 14,
2008. After six months from the date of issue, the warrants shall be deemed
exercised, in accordance with their terms, if at any time prior to their expiry
the weighted average trading price of the Company's common shares as traded on
the NASD OTC Bulletin Board for the previous ten (10) trading days is at least
$1.50 per share. In the event that the aggregate exercise price for the warrants
is not tendered to the Company within 30 days of their deemed exercise, at the
option of the Company, such warrants will be deemed cancelled.

All of the foregoing units were issued either to non-U.S.
residents or companies outside the United States in reliance upon the exemption
from registration under Regulation S of the Securities Act, or to accredited
investors as defined in Rule 501 of the Securities Act in reliance upon an
exemption from registration under Regulation D of the Securities Act. These
issuances qualified for exemption from registration because (i) the units were
purchased by accredited or foreign investors only; (ii) the Company did not
engage in any general solicitation or advertising to market the securities;
(iii) each purchaser was provided the opportunity to ask questions and receive
answers from the Company regarding the offering; and (iv) the purchasers
received restricted securities.

The Company agreed to file a registration statement within 45
days after the final closing in order to register for resale both the shares and
the shares issuable upon exercise of the warrants. The Company was unable to
comply with the requirement to file the registration statement within the
required time frame and has incurred a 10% penalty with respect to this
registration. On June 22, 2007, we issued 849,677 units of unregistered common
stock, for $0.50 per unit, for total proceeds of $424,839 pursuant to this
requirement. All of the foregoing Units were issued either to non-U.S. residents
or companies outside the United States in reliance upon the exemption from
registration under Regulation S of the Securities Act, or to accredited
investors as defined in Rule 501 of the Securities Act in reliance upon an
exemption from registration under

---

Regulation D of the Securities Act. These issuances qualified
for exemption from registration because (i) the units were purchased by
accredited or foreign investors only; (ii) the Company did not engage in any
general solicitation or advertising to market the securities; (iii) each
purchaser was provided the opportunity to ask questions and receive answers from
the Company regarding the offering; and (iv) the purchasers received restricted
securities.

In conjunction with the private placement closed on December
14, 2006, the Company paid a 10% commission in the form of 796,274 units that
have the same terms and conditions as the private placement. On June 22, 2007,
we issued 532,624 units of unregistered common stock, for $0.50 per unit, for
total proceeds of $266,312 in relation to this commission. All of the foregoing
units were issued either to non-U.S. residents or companies outside the United
States in reliance upon the exemption from registration under Regulation S of
the Securities Act, or to accredited investors as defined in Rule 501 of the
Securities Act in reliance upon an exemption from registration under Regulation
D of the Securities Act. These issuances qualified for exemption from
registration because (i) the units were purchased by accredited or foreign
investors only; (ii) the Company did not engage in any general solicitation or
advertising to market the securities; (iii) each purchaser was provided the
opportunity to ask questions and receive answers from the Company regarding the
offering; and (iv) the purchasers received restricted securities.

|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 June 30, 2007.

|ITEM 5. OTHER INFORMATION
|-------------------------

Not applicable.

|ITEM 6. EXHIBITS.
|-----------------

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

|Exhibit |                                                                                                                                                                                                                                                                                                                                   
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                                                                                                                                                                                                                                                       
|        |                                                                                                                                                                                                                                                                                                                                   
|3.1     | Restated Articles of
      Incorporation of the Company filed February 17, 2004. (Incorporated by
      reference to the Companys Annual Report on Form 10-KSB/A filed with the
      Commission on May 13, 2004, File No. 000- 30095.)                                                                                          
|        |                                                                                                                                                                                                                                                                                                                                   
|3.2     | Bylaws of the Company (Incorporated by
      reference to the Companys Form 10SB12G filed with the Commission on March
      24, 2000, File No. 000- 30095.)                                                                                                                                                                     
|        |                                                                                                                                                                                                                                                                                                                                   
|4.1     | Form of Common Stock Purchase
      Warrant dated March 15, 2005. (Incorporated by reference to the Companys
      Current Report on Form 8-K filed with the Commission on March 21, 2005,
      File No. 000-30095.)                                                                                                            
|        |                                                                                                                                                                                                                                                                                                                                   
|4.2     | Certificate for 14% Secured
      Convertible Debenture dated April 28, 2005 (Incorporated by reference to
      the Companys Current Report on Form 8-K filed with the Commission on
      April 29, 2005, File No. 000-30095.)                                                                                                 
|        |                                                                                                                                                                                                                                                                                                                                   
|4.3     | Form of Common Stock Purchase
      dated April 28, 2005. (Incorporated by reference to the Companys Current
      Report on Form 8-K filed with the Commission on April 29, 2005, File No.
      000-30095.)                                                                                                                    
|        |                                                                                                                                                                                                                                                                                                                                   
|4.4     | Addendum dated February 6, 2003
      to that certain Loan Agreement dated January 28, 2003 between the Company
      and AHC Holdings Ltd. containing Stock Purchase Warrant (Incorporated by
      reference to the Companys Current Report on Form 8-K filed with the
      Commission on April 28, 2003, File No. 000-30095.)
|        |                                                                                                                                                                                                                                                                                                                                   
|4.5     | Form of Warrant issued to the
      United States Resident Purchaser named therein. (Incorporated by reference
      to the Companys Current Report on Form 8-K filed with the Commission on
      December 24, 2006, File No. 000-30095.)                                                                                       

---

|4.6    | Form of Warrant issued to the Non-United
      States Resident Purchaser named therein. (Incorporated by reference to the
      Companys Current Report on Form 8-K filed with the Commission on December
      24, 2006, File No. 000-30095.)
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                
|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                                                

*Filed herewith.

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
14thday of August, 2007.

|                      | WESCORP ENERGY INC.
|--------------------- | -------------------
|                      |                    
|Date: August 14, 2007 | By:                
|                      |                    
|                      |                    
|                      | By:                
|                      |                    

---

EXHIBIT INDEX

|Exhibit |                                                                                                                                                                                                                                                                                                                                   
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                                                                                                                                                                                                                                                       
|        |                                                                                                                                                                                                                                                                                                                                   
|3.1     | Restated Articles of
      Incorporation of the Company filed February 17, 2004. (Incorporated by
      reference to the Companys Annual Report on Form 10-KSB/A filed with the
      Commission on May 13, 2004, File No. 000- 30095.)                                                                                          
|        |                                                                                                                                                                                                                                                                                                                                   
|3.2     | Bylaws of the Company
      (Incorporated by reference to the Companys Form 10SB12G filed with the
      Commission on March 24, 2000, File No. 000- 30095.)                                                                                                                                                                     
|        |                                                                                                                                                                                                                                                                                                                                   
|4.1     | Form of Common Stock Purchase
      Warrant dated March 15, 2005. (Incorporated by reference to the Companys
      Current Report on Form 8-K filed with the Commission on March 21, 2005,
      File No. 000-30095.)                                                                                                            
|        |                                                                                                                                                                                                                                                                                                                                   
|4.2     | Certificate for 14% Secured
      Convertible Debenture dated April 28, 2005 (Incorporated by reference to
      the Companys Current Report on Form 8-K filed with the Commission on
      April 29, 2005, File No. 000-30095.)                                                                                                 
|        |                                                                                                                                                                                                                                                                                                                                   
|4.3     | Form of Common Stock Purchase
      dated April 28, 2005. (Incorporated by reference to the Companys Current
      Report on Form 8-K filed with the Commission on April 29, 2005, File No.
      000-30095.)                                                                                                                    
|        |                                                                                                                                                                                                                                                                                                                                   
|4.4     | Addendum dated February 6, 2003
      to that certain Loan Agreement dated January 28, 2003 between the Company
      and AHC Holdings Ltd. containing Stock Purchase Warrant (Incorporated by
      reference to the Companys Current Report on Form 8-K filed with the
      Commission on April 28, 2003, File No. 000-30095.)
|        |                                                                                                                                                                                                                                                                                                                                   
|4.5     | Form of Warrant issued to the
      United States Resident Purchaser named therein. (Incorporated by reference
      to the Companys Current Report on Form 8-K filed with the Commission on
      December 24, 2006, File No. 000- 30095.)                                                                                      
|        |                                                                                                                                                                                                                                                                                                                                   
|4.6     | Form of Warrant issued to the
      Non-United States Resident Purchaser named therein. (Incorporated by
      reference to the Companys Current Report on Form 8-K filed with the
      Commission on December 24, 2006, File No. 000- 30095.)                                                                                  

|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

*Filed herewith.

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