---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-QSB

(Mark One)

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

For the quarter ended September 30, 2006

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 November 3, 2006 was 43,251,080.

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

---



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, OUR REPORT FOR THE QUARTER ENDED JUNE 30,
2006 AND OF OUR ANNUAL REPORT FORM 10-KSB FOR 2005. AMONG SAID RISKS AND
UNCERTAINTIES IS THE RISK 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; THE ELLYCRACK TECHNOLOGY MAY NOT BE TECHNICALLY EFFECTIVE OR COST
EFFECTIVE IN THE MARKETS TARGETED BY MANAGEMENT; THAT THE COMPANY WILL NOT
COMPLETE ANY OTHER SUITABLE ACQUISITIONS, THAT ITS MANAGEMENT IS ADEQUATE TO
CARRY OUT ITS BUSINESS PLAN AND THAT THERE WILL BE ADEQUATE CAPITAL; IN
ADDITION, IF SAID ACQUISITIONS ARE COMPLETED THEY MAY BE UNSUCCESSFUL FOR
TECHNICAL, ECONOMIC OR OTHER REASONS.

CURRENCIES

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

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Index

|Consolidated Balance Sheets
      at September 30, 2006 (Unaudited) and December 31, 2005                                    
|-----------------------------------------------------------------------------------------------------------------------------
|                                                                                                                             
|Consolidated Statements
      of Operations for the three and nine months ended September 30, 2006 and
      2005 (Unaudited)
|                                                                                                                             
|Consolidated Statement
      of Stockholders' Equity as of September 30, 2006 (Unaudited)                                    
|                                                                                                                             
|Consolidated Statements
      of Cash Flows for the nine months ended September 30, 2006 and 2005 (Unaudited)                
|                                                                                                                             
|Notes to the Consolidated
      Financial Statements                                                                         

---

WESCORP ENERGY INC. 
  CONSOLIDATED BALANCE SHEETS

|                                                       |   | September 30, |   |   | December 31, |  
|------------------------------------------------------ | - | ------------- | - | - | ------------ | -
|                                                       |   | 2006          |   |   | 2005         |  
|                                                       |   | (Unaudited)   |   |   |              |  
|ASSETS                                                 |   |               |   |   |              |  
|CURRENT ASSETS                                         |   |               |   |   |              |  
|Cash                                                   | $ | 1,572,349     |   | $ | 580,430      |  
|Accounts receivable, net of allowance for doubtful     |   |               |   |   |              |  
|accounts
      of $17,816 and $20,429, respectively    |   | 522,118       |   |   | 511,610      |  
|Inventories (Note 4)                                   |   | 1,153,279     |   |   | 1,003,105    |  
|Prepaid expenses                                       |   | 123,969       |   |   | 26,446       |  
|Note receivable                                        |   | 75,254        |   |   | 71,989       |  
|TOTAL CURRENT ASSETS                                   |   | 3,446,969     |   |   | 2,193,580    |  
|                                                       |   |               |   |   |              |  
|PROPERTY AND EQUIPMENT, net
      (Note 5)             |   | 154,744       |   |   | 209,764      |  
|                                                       |   |               |   |   |              |  
|OTHER ASSETS                                           |   |               |   |   |              |  
|Investments (Note 6)                                   |   | 2,841,283     |   |   | 2,872,771    |  
|Technology, net (Note 7)                               |   | 2,823,778     |   |   | 3,211,262    |  
|Deposits                                               |   | 25,582        |   |   | 18,318       |  
|TOTAL OTHER ASSETS                                     |   | 5,690,643     |   |   | 6,102,351    |  
|                                                       |   |               |   |   |              |  
|TOTAL ASSETS                                           | $ | 9,292,356     |   | $ | 8,505,695    |  
|                                                       |   |               |   |   |              |  
|LIABILITIES AND STOCKHOLDERS' EQUITY                   |   |               |   |   |              |  
|CURRENT LIABILITIES                                    |   |               |   |   |              |  
|Accounts payable and accrued liabilities               | $ | 3,868,038     |   | $ | 1,502,973    |  
|Current portion of notes payable (Note 8)              |   | 849,239       |   |   | 447,038      |  
|Due to related parties (Note 16)                       |   | 586,797       |   |   | 30,862       |  
|Related party note payable                             |   | 1,924,681     |   |   | 1,924,681    |  
|Convertible debentures (Note 11)                       |   | 1,436,019     |   |   | 1,552,319    |  
|TOTAL
      CURRENT LIABILITIES                        |   | 8,664,774     |   |   | 5,457,873    |  
|                                                       |   |               |   |   |              |  
|NOTES PAYABLE,
      net of current portion (Note 8)   |   | 88,204        |   |   | 510,400      |  
|                                                       |   |               |   |   |              |  
|COMMITMENTS
      AND CONTINGENCIES (Note 16)          |   |               |   |   |              |  
|                                                       |   |               |   |   |              |  
|STOCKHOLDERS'
      EQUITY                             |   |               |   |   |              |  
|Preferred stock, 50,000,000 shares authorized, $0.0001 |   |               |   |   |              |  
|par
      value; no shares issued (Note 9)             |   |               |   |   |              |  
|Common stock, 250,000,000 shares authorized, $0.0001   |   |               |   |   |              |  
|par
      value; 42,938,580 and 38,304,686 shares      |   |               |   |   |              |  
|issued and outstanding,
      respectively (Note 9)    |   | 4,293         |   |   | 3,830        |  
|Additional paid-in capital                             |   | 16,947,712    |   |   | 15,450,433   |  
|Subscription receivable                                |   | (7,500        | ) |   | (37,272      | )
|Funds received for exercise of warrants                |   | 315,164       |   |   | 852,392      |  
|Accumulated other comprehensive income                 |   | 1,495,240     |   |   | 1,596,792    |  
|Accumulated deficit                                    |   | (18,215,531   | ) |   | (15,328,753  | )
|TOTAL STOCKHOLDERS'
      EQUITY                       |   | 539,378       |   |   | 2,537,422    |  
|                                                       |   |               |   |   |              |  
|TOTAL LIABILITIES AND                                  |   |               |   |   |              |  
|STOCKHOLDERS'
      EQUITY                             | $ | 9,292,356     |   | $ | 8,505,695    |  

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

---

WESCORP ENERGY INC.CONSOLIDATED STATEMENTS OF OPERATIONS

|                                               |   | Three Months Ended September 30, |   |   | Nine Months Ended September 30, |  
|---------------------------------------------- | - | -------------------------------- | - | - | ------------------------------- | -
|                                               |   | 2006                             |   |   | 2005                            |  
|                                               |   | (Unaudited)                      |   |   | (Unaudited)                     |  
|                                               |   |                                  |   |   |                                 |  
|REVENUES                                       | $ | 448,041                          |   | $ | 638,536                         |  
|                                               |   |                                  |   |   |                                 |  
|COST OF SALES                                  |   | 251,827                          |   |   | 396,556                         |  
|                                               |   |                                  |   |   |                                 |  
|GROSS PROFIT                                   |   | 196,214                          |   |   | 241,980                         |  
|                                               |   |                                  |   |   |                                 |  
|EXPENSES                                       |   |                                  |   |   |                                 |  
|Wages and
      benefits                       |   | 372,580                          |   |   | 260,927                         |  
|Amortization of technology                     |   | 129,161                          |   |   | 128,449                         |  
|Engineering
      expenses for pilot plant     |   | 73,940                           |   |   | 168,044                         |  
|Consulting                                     |   | 441,764                          |   |   | 137,498                         |  
|Office                                         |   | 117,869                          |   |   | 54,355                          |  
|Interest on debentures                         |   | 22,716                           |   |   | 58,660                          |  
|Legal and
      accounting                     |   | 64,587                           |   |   | 23,743                          |  
|Advertising and investor relations             |   | 25,643                           |   |   | 29,574                          |  
|Travel                                         |   | 72,914                           |   |   | 46,948                          |  
|Insurance                                      |   | 36,723                           |   |   | 35,361                          |  
|Depreciation
      and amortization            |   | 23,833                           |   |   | 14,544                          |  
|Stock-based compensation (Note 13)             |   | 20,123                           |   |   | -                               |  
|Interest,
      finance and bank charges       |   | 8,533                            |   |   | 1,720                           |  
|Research and development                       |   | 274                              |   |   | 4,392                           |  
|Directors'
      fees                          |   | 17,754                           |   |   | -                               |  
|Beneficial conversion interest                 |   | -                                |   |   | -                               |  
|TOTAL OPERATING EXPENSES                       |   | 1,428,414                        |   |   | 964,215                         |  
|                                               |   |                                  |   |   |                                 |  
|LOSS FROM OPERATIONS                           |   | (1,232,200                       | ) |   | (722,235                        | )
|                                               |   |                                  |   |   |                                 |  
|OTHER INCOME (EXPENSES)                        |   |                                  |   |   |                                 |  
|Penalty for late delivery of shares (Note 10)  |   | (156,000                         | ) |   | (233,280                        | )
|Foreign currency
      translation gain (loss) |   | (1,737                           | ) |   | -                               |  
|Gain on disposition of assets                  |   | -                                |   |   | -                               |  
|Interest income                                |   | 12                               |   |   | -                               |  
|TOTAL OTHER EXPENSE                            |   | (157,725                         | ) |   | (233,280                        | )
|                                               |   |                                  |   |   |                                 |  
|NET LOSS                                       | $ | (1,389,925                       | ) | $ | (955,515                        | )
|                                               |   |                                  |   |   |                                 |  
|BASIC AND DILUTED NET LOSS PER SHARE           | $ | (0.03                            | ) | $ | (0.03                           | )
|                                               |   |                                  |   |   |                                 |  
|WEIGHTED AVERAGE NUMBER COMMON SHARES          |   |                                  |   |   |                                 |  
|OUTSTANDING
      - BASIC AND DILUTED          |   | 42,808,749                       |   |   | 36,597,186                      |  

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

---

WESCORPENERGYINC.CONSOLIDATEDSTATEMENTSOFSTOCKHOLDERS'EQUITY

Funds
      
      
      
      
      
      AccumulatedCommon Stock
      
      
      
      
      
      
      
      
      Received
      
      
      
      
      
      Other
      
      
      TotalNumber
      
      
      
      
      
      Additional
      
      
      Subscription
      
      
      for Exercise
      
      
      Accumulated
      
      
      Comprehensive
      
      
      Stockholders'of
        Shares
      
      
      Amount
      
      
      Paid-in
        Capital
      
      
      Receivable
      
      
      of Warrants
      
      
      Deficit
      
      
      Income (Loss)
      
      
      EquityBalance, December 31, 2005
      
      38,304,686
      
      $
      3,830
      
      $
      15,450,433
      
      $
      (37,272
      )
      $
      852,392
      
      $
      (15,328,753
      )
      $
      1,596,792
      
      $
      2,537,422Warrants exercised at $0.35 per share
      
      2,833,894
      
      
      283
      
      
      991,580
      
      
      -
      
      
      (805,056
      )
      
      -
      
      
      -
      
      
      186,807Warrants exercised at $0.15 per
        share
      
      1,500,000
      
      
      150
      
      
      224,850
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      225,000Common stock issued for consulting fees at
        $0.54 per share
      
      200,000
      
      
      20
      
      
      107,980
      
      
      
      
      
      (33,613
      )
      
      
      
      
      
      
      
      74,387Common stock issued for director's
        fees at $0.678 per share
      
      50,000
      
      
      5
      
      
      33,895
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      33,900Common stock issued for director's fees at
        $0.60 per share
      
      50,000
      
      
      5
      
      
      29,995
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      30,000Cash received for share subscriptions
        receivable
      
      -
      
      
      -
      
      
      -
      
      
      29,772
      
      
      -
      
      
      -
      
      
      -
      
      
      29,772Foreign currency translation gain
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      242,169
      
      
      242,169Unrealized gain on available-for-sale
        securities
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (343,721
      )
      
      (343,721
      )Stock-based compensation
      
      -
      
      
      -
      
      
      62,979
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      62,979Warrants issued for investor relations
        services
      
      -
      
      
      -
      
      
      46,000
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      46,000Proceeds received from exercise of warrants
        prior to issuance
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      301,441
      
      
      -
      
      
      -
      
      
      301,441Net loss
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (2,886,778
      )
      
      -
      
      
      (2,886,778
      )Balance, September 30, 2006(Unaudited)
      
      42,938,580
      
      $
      4,293
      
      $
      16,947,712
      
      $
      (7,500
      )
      $
      315,164
      
      $
      (18,215,531
      )
      $
      1,495,240
      
      $
      539,378


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

---

WESCORP ENERGY INC.CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                          |   | Nine Months Ended September 30, |  
|------------------------------------------------------------------------- | - | ------------------------------- | -
|                                                                          |   | 2006                            |  
|                                                                          |   | (Unaudited)                     |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                     |   |                                 |  
|Net loss                                                                  | $ | (2,886,778                      | )
|Adjustments to reconcile net loss                                         |   |                                 |  
|to net cash used
      in operating activities:                           |   |                                 |  
|Depreciation
      and amortization                                       |   | 75,831                          |  
|Amortization
      of technology                                          |   | 387,484                         |  
|Stock-based
      compensation                                            |   | 62,979                          |  
|Gain
      on disposition of assets                                       |   | (1,361                          | )
|Beneficial
      conversion interest                                      |   | -                               |  
|Warrants
      issued for investor relations services                     |   | 46,000                          |  
|Changes in
      operating assets and liabilities:                        |   |                                 |  
|Accounts receivable                                                       |   | (10,508                         | )
|Inventories                                                               |   | (150,174                        | )
|Prepaid expenses                                                          |   | (97,523                         | )
|Deposits                                                                  |   | (7,264                          | )
|Accounts payable and accrued liabilities                                  |   | 2,365,065                       |  
|Net cash used
      in operating activities                               |   | (216,249                        | )
|CASH FLOWS FROM INVESTING ACTIVITIES:                                     |   |                                 |  
|Purchase of property and equipment                                        |   | (21,857                         | )
|Proceeds on disposition of assets                                         |   | 2,687                           |  
|Net cash invested in note receivable                                      |   | (3,265                          | )
|Increase in investments                                                   |   | (150,000                        | )
|Net cash used
      in investing activities                               |   | (172,435                        | )
|CASH FLOWS FROM FINANCING ACTIVITIES:                                     |   |                                 |  
|Repayments on notes payable                                               |   | (19,995                         | )
|Repayment on amounts due to shareholders                                  |   | -                               |  
|Proceeds from convertible debentures                                      |   | -                               |  
|Proceeds from notes payable                                               |   | -                               |  
|Repayments on convertible debentures                                      |   | (116,300                        | )
|Proceeds received from exercise
      of warrants prior to issuing shares |   | 301,441                         |  
|Proceeds from subscription receivable                                     |   | 29,772                          |  
|Proceeds from issuance of common
      stock                              |   | 550,094                         |  
|Increase in amounts due to related parties                                |   | 555,935                         |  
|Net
      cash provided by financing activities                           |   | 1,300,947                       |  
|Effect of exchange rates                                                  |   | 79,656                          |  
|Net increase in cash                                                      |   | 991,919                         |  
|Cash, beginning of period                                                 |   | 580,430                         |  
|Cash, end of period                                                       | $ | 1,572,349                       |  
|SUPPLEMENTAL CASH FLOW DISCLOSURES:                                       |   |                                 |  
|Cash paid for:                                                            |   |                                 |  
|Interest                                                                  | $ | 197,073                         |  
|Income taxes                                                              | $ | -                               |  

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

---

|                                                  
|--------------------------------------------------
|WESCORP ENERGY INC.                               
|NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|(Unaudited)                                       
|September 30, 2006                                
|                                                  

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, 2005. In the opinion of management,
  the unaudited interim financial statements furnished herein include all adjustments,
  all of which are of a normal recurring nature, necessary for a fair statement
  of the results for the interim period presented.

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

Operating results for the nine month period ended September 30,
  2006 are not necessarily indicative of the results that may be expected for
  the year ending December 31, 2006.

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
  has incurred an accumulated deficit of approximately $18,215,531 through September
  30, 2006. 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 raised $1,552,319 on a convertible debenture in 2005.
  These debentures were originally due on December 31, 2005, however, debentures
  in the amount of $555,769 have been extended to December 31, 2006 under similar
  terms and conditions. In addition to the investors who wish to extend the terms
  of the debenture, there are holders of debentures totaling $880,250 who wish
  to have their investment redirected to units comprised of shares of common stock
  and share purchase warrants. Management expects to complete this redirection
  transaction by the end of December 2006 (See Note 19). The remaining holders
  of $39,300 in debentures indicated that they did not wish to extend their debentures
  and this debt has been repaid.

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.

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.

---

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:

| |                |   | September 30, |  |   | December 31, | 
| | -------------- | - | ------------- |  | - | ------------ | 
| |                |   | 2006          |  |   | 2005         | 
| |                |   | (Unaudited)   |  |   |              | 
| | Finished goods | $ | 1,122,206     |  | $ | 966,170      | 
| | Raw materials  |   | 31,073        |  |   | 36,935       | 
| |                | $ | 1,153,279     |  | $ | 1,003,105    | 

NOTE 5  PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at:

| |                                |   | September 30, |  |   | December 31, | 
| | ------------------------------ | - | ------------- |  | - | ------------ | 
| |                                |   | 2006          |  |   | 2005         | 
| |                                |   | (Unaudited)   |  |   |              | 
| | Automotive equipment           |   | 166,275       |  |   | 166,275      | 
| | Computer hardware              |   | 38,112        |  |   | 36,969       | 
| | Computer software              |   | 13,968        |  |   | 11,666       | 
| | Furniture and fixtures         |   | 22,697        |  |   | 12,910       | 
| | Leasehold improvements         |   | 37,217        |  |   | 33,109       | 
| | Office equipment               |   | 45,216        |  |   | 41,262       | 
| | Tools and equipment            |   | 16,246        |  |   | 16,799       | 
| |                                |   | 339,731       |  |   | 318,990      | 
| | Less: accumulated depreciation |   | 184,987       |  |   | 109,226      | 
| |                                | $ | 154,744       |  | $ | 209,764      | 

Depreciation and amortization expense for the nine months ended
  September 30, 2006 and 2005 was $75,831 and $38,553, respectively.

NOTE 6  INVESTMENTS

Investments consisted of the following at:

| |                     |   | September 30, |  |   | December 31, | 
| | ------------------- | - | ------------- |  | - | ------------ | 
| |                     |   | 2006          |  |   | 2005         | 
| |                     |   | (Unaudited)   |  |   |              | 
| | Synenco Energy Inc. | $ | 2,303,097     |  | $ | 2,484,585    | 
| | Ellycrack AS        |   | 538,186       |  |   | 388,186      | 
| |                     | $ | 2,841,283     |  | $ | 2,872,771    | 

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 nine months ended September 30, 2006, the Company recognized an unrealized
  loss of $181,489 in comprehensive income, which includes a $162,233 translation
  adjustment. 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 unrealized gain.

Agreement with Ellycrack AS 
  Wescorp has purchased an aggregate 752,000 shares of common stock of Ellycrack
  AS (Ellycrack), a privately held company in Norway. Wescorp acquired
  255,000 shares in consideration of $119,000 that was paid in three installments,
  $50,000 each in December 2003 and February 2004, and $19,000 in May 2004. On
  September 15, 2004, the Company issued 300,000 of its common shares to Ellycrack
  in exchange for 400,000 common shares of Ellycrack. The value ascribed to the
  Ellycrack shares of $150,000 was calculated based on the median trading price
  of Wescorp shares on that day (being $0.50) . In the first quarter of 2006,
  Wescorp paid $150,000 for 65,000 additional common shares of Ellycrack at 15
  Kroners per share.

NOTE 7  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:

|                                      |   | September 30, |  |   | December 31, | 
|------------------------------------- | - | ------------- |  | - | ------------ | 
|                                      |   | 2006          |  |   | 2005         | 
|                                      |   | (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    | 
|Accumulated amortization              |   | 1,094,119     |  |   | 706,635      | 
|                                      | $ | 2,823,778     |  | $ | 3,211,262    | 

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, the Companys management
  has determined its DCR technology to not be impaired.

NOTE 8  NOTES PAYABLE

The following comprise the Companys notes payable at:

|                                                                                                                                                     |   | September 30, |  |   | December 31, | 
|---------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------- |  | - | ------------ | 
|                                                                                                                                                     |   | 2006          |  |   | 2005         | 
|                                                                                                                                                     |   | (Unaudited)   |  |   |              | 
|Note payable  Interest at 0.0%, and secured
      by automotive assets of Flowstar, payable $569 per month, principal only,
      due July 2008     | $ | 13,082        |  | $ | 17,634       | 
|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                                                                   |   | 22,661        |  |   | 26,358       | 
|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                                                                        |   | 15,542        |  |   | 17,200       | 
|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                                                                   |   | 30,913        |  |   | 34,998       | 
|Note payable  Interest at 0.0%, and secured by automotive
      assets of Flowstar, payable $825 per month, principal only, due November
      2009 |   | 32,770        |  |   | 38,773       | 
|Notes payable  Interest at 0.0%, unsecured,
      due April 2007                                                                                    |   | 822,475       |  |   | 822,475      | 
|Total notes payable                                                                                                                                  |   | 937,443       |  |   | 957,438      | 
|Amounts
      due within one year                                                                                                                    |   | 849,239       |  |   | 447,038      | 
|                                                                                                                                                     | $ | 88,204        |  | $ | 510,400      | 

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

---

Periods ending September 30,2007
      $
      849,2392008
      
      35,4082009
      
      30,5142010
      
      13,4252011
      
      8,857$
      937,443


NOTE 9  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 September 30, 2006, no preferred
  shares had been issued.

2006 Stock Transactions 
  In January 2006, the Company issued 2,208,654 shares of common stock for total
  proceeds of $773,029. These shares were issued on the exercise of warrants at
  an exercise price of $0.35 per share.

In May and June 2006, the Company issued 1,500,000 shares of
  common stock for total proceeds of $225,000. These shares were issued to directors
  of the Company on the exercise of warrants at an exercise price of $0.15 per
  share.

In August 2006, the Company issued 625,240 shares of common stock
  for total proceeds of $218,694. These shares were issued on the exercise of
  warrants at an exercise price of $0.35 per share.

Additional equity transactions during the nine months ended September
  30, 2006 included the issuance of 200,000 shares of common stock valued at $108,000
  to a consultant for services related to developing a marketing strategy for
  products being sold by the Company, and the issuance of 100,000 shares of common
  stock valued at $63,900 to compensate two directors of the Company.in the form
  of directors fees.

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 is included in advertising and investor relations.

During March and April 2004, the Company completed a private
  placement of 3,231,000 units with 926,000 whole share purchase warrants exercisable
  to purchase one additional common share at a price of $0.50 until March 15,
  2006, 1,740,000 one-half of one share purchase warrants where one whole warrant
  is exercisable to purchase one additional common share at a price of $1.00 until
  the close of business on March 15, 2005, and 565,000 one-half of one share purchase
  warrants, with each whole warrant exercisable to purchase one additional common
  share at a price of $1.00 until the close of business on April 16, 2005. In
  March 2006, the Company received funds from the holders of 190,000 of these
  warrants who indicated that they wished them to be exercised. Subsequent to
  receiving this notice in March 2006, these investors decided to forego their
  right to exercise these warrants and instead decided to have their investment
  redirected to units comprised of shares of common stock and share purchase warrants.
  Management expects to complete this redirection transaction by the end of December
  2006 (See Note 19). The remaining warrants not part of this redirection transaction
  have now expired.

In March 2003, the Company issued 500,000 common stock warrants
  with an exercise price of $0.15 per share and an expiration date of March 2006
  to a director for services. The fair market value of the warrants was recorded
  at $45,000. These warrants were exercised in March 2006.

In March 2003, the Company issued 1,000,000 common stock warrants
  with an exercise price of $0.15 per share and an expiration date of March 2006,
  to AHC Holdings Inc. (AHC) as a financing fee for providing the
  Company with working capital. The estimated fair value of the warrants issued
  in conjunction with the promissory note due to AHC has been recognized as a
  discount on long-term debt, and was amortized as interest over the term of the
  loan. These warrants were exercised in March 2006.

As of September 30, 2006, the Company had the following common
  stock purchase warrants outstanding:

Number of shares
      
      Exercise
      
      Expirationunder warrants
      
      price
      
      date1,400,000
      
      $0.25
      
      December 20061,000,000
      
      $0.15
      
      June 2008100,000
      
      $0.74
      
      May 20092,500,000


---

NOTE 10 AGREEMENT WITH VASJAR TRADING LTD.

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.

The purchase called for the payment of 2,400,000 common stock
  shares of Wescorp initially, with an additional minimum 2,080,000 common stock
  shares issued over three years (480,000 before April 1, 2005, 800,000 before
  April 1, 2006, and 800,000 before April 1, 2007). An additional 520,000 shares
  are payable over this three year period if certain sales targets are achieved.
  If Wescorp fails to deliver any of the shares due before April 1, 2006, then
  the Company will be subject to a penalty of 10% additional shares for each month
  of delay, with a cumulative provision. If any of the Wescorp shares to be issued
  have not been delivered for a period of 182 days after the applicable due date
  the Vasjar shareholders may, at their option, terminate the share purchase agreements
  without notice or opportunity to cure. Wescorp has pledged to the Vasjar shareholders
  all of the Vasjar shares it holds as security to guarantee Wescorps performance
  under the share purchase agreements.

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 shareholders of Vasjar in equal amounts as follows:

- Traunch 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
- Traunch2:up to an aggregate of 2,600,000
      additional shares of common stock of the Company (1,200,000 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 between 480,000 and 600,000 additional
  shares based on sales achieved in the 2004 calendar year;Based
  on the sales in 2004, the Company was required to issue 480,000 shares (240,000
  shares to each shareholder). Wescorp was not able to deliver free-trading shares
  on April 1, 2005, and as a result the Company was obligated to pay the Vasjar
  shareholders an additional 48,000 Wescorp shares for each of the months from
  April through September 2005 totalling 288,000 shares (144,000 shares to each
  shareholder). These shares were delivered and accepted by the Vasjar shareholders
  on September 28, 2005. The Company may be required to issue the additional 120,000
  shares (the difference between 480,000 and 600,000 shares) related to this Stage
  One should certain sales targets be met for Stage Two or if Stage Three. As
  of Stage Two, the sales targets had not been met.

Stage Two. On or before April
  1, 2006, the Company was required to issue between 800,000 and 1,000,000 additional
  shares based on sales achieved in the 2005 calendar year;.
  Based on the sales in 2005, the Company was required to issue 800,000 shares
  (400,000 shares to each shareholder). The Company was not able to deliver free-trading
  shares on April 1, 2006, and as a result, the Company is obligated to pay the
  Vajar shareholders an additional 80,000 Wescorp shares for each month it is
  not able to issue the freely trading shares to the Vajar shareholders. In addition,
  the Company may be required to issue the additional 200,000 shares (the difference
  between 800,000 and 1,000,000 shares) related to this Stage Two should certain
  sales targets be met for Stage Three.

Stage Three. On or before April
  1, 2007, Wescorp will be required to issue between 800,000 and 1,000,000 additional
  shares based on sales achieved in the 2006 calendar year; the lower figure being
  if sales are less than $6,000,000 and the upper figure being if sales are more
  than $11,250,000, with a pro rata distribution if sales fall in between to target
  numbers.

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

The balance of the fair market value of the shares due to the
  Vasjar shareholders is $800,000 and has been recorded in the current portion
  of notes payable.

As a condition on the acquisition of Vasjar the Company was required
  to issue on or before April 1, 2006 between 800,000 and 1,000,000 additional
  shares based on sales achieved in the 2005 calendar year. The lower figure was
  based on sales of less than $4,500,000, and the upper figure was based on sales
  in excess of $7,500,000. The shares were required to be registered at delivery.

Wescorp was not able to deliver free-trading shares on April
  1, 2006 and so the Company will be required to pay the former owners of Vasjar
  an additional 80,000 Wescorp shares for each month that the shares are not delivered,
  starting with the month of April 2006. As a result, these financial statements
  reflect an estimated cost of $276,000 to settle this commitment to deliver 480,000
  free trading common shares for the months of April through September 2006. This
  balance is included in accrued liabilities. As of November 1, 2006, the

---

Company had accrued an additional 160,000 common shares, or approximately
  $92,000, as the free-trading shares have not been issued to the former owners
  of Vasjar.

NOTE 11  CONVERTIBLE DEBENTURES

During the year ended December 31, 2005 the Company issued debentures
  in the amount of $1,552,319 which bear interest at the rate of 14% per annum
  payable quarterly that originally matured on December 31, 2005. On December
  30, 2005, holders of debentures totaling $1,475,319 agreed to extend the original
  terms of the debenture by six months to June 30, 2006. The remaining balance
  for debentures totaling $77,000 was repaid in January 2006. The debentures are
  secured by way of a security interest over the inventories and accounts receivable
  of Flowstar.

Holders of debentures totaling $555,769 have indicated that they
  wish to extend the terms of the debenture agreement by another six months to
  December 31, 2006. The debentures may, at the option of the holder, be converted
  into units of the Company at a price of US$0.90 per unit at any time prior to
  the maturity date. Each unit shall be comprised of one common share of the Company
  and one common share purchase warrant each of which may be exercised at any
  time up to December 31, 2007 as follows:

| | a) | if exercised on or before December 31, 2006, 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 US $1.35
        per share.

In addition to the investors who wish to extend the terms of
  the debenture, there are holders of debentures totaling $880,250 who wish to
  have their investment redirected to units comprised of shares of common stock
  and share purchase warrants. Management expects to complete this redirection
  transaction by the end of December 2006 (See Note 19). The remaining holders
  of $39,300 in debentures indicated that they did not wish to extend their debentures
  and this debt has been repaid.

The convertible debentures contained a beneficial conversion
  feature computed at its intrinsic value, which was the difference between the
  conversion price and the fair value on the debenture issuance date of the units
  into which the debt was convertible, multiplied by the number of shares into
  which the debt was convertible at the commitment date. Since the beneficial
  conversion feature was to be settled by issuing equity, the amount attributed
  to the beneficial conversion feature, or $207,000, was recorded as an interest
  expense and a component of equity on the issuance date.

NOTE 12  STOCK OPTIONS

During the nine months ended September 30, 2006, the Company
  granted a combined total of 156,825 options to purchase common shares to an
  officer. Changes in the number of options outstanding are summarized as follows:

|                                 |  | September 30, 2006 |  |   | December 31, 2005 | 
|-------------------------------- |  | ------------------ |  | - | ----------------- | 
|                                 |  | (Unaudited)        |  |   |                   | 
|                                 |  |                    |  |   | Weighted          | 
|                                 |  |                    |  |   | Average           | 
|                                 |  |                    |  |   | Exercise          | 
|                                 |  | Options            |  |   | Price             | 
|Outstanding, beginning of period |  | 2,326,881          |  | $ | 0.56              | 
|Granted                          |  | 156,825            |  |   | 0.57              | 
|Outstanding, end of period       |  | 2,483,706          |  | $ | 0.56              | 

The weighted average remaining contractual life of the options
  is 38 months.

---

NOTE 13  STOCK-BASED COMPENSATION

The fair value of the stock options granted in the nine months
  ended September 30, 2006 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
      4 yearsWeighted average grant date fair value per
        option
      $ 0.57


NOTE 14  WARRANTS

The fair value of the warrants issued for the nine months ended
  September 30, 2006 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
      3 yearsWeighted average grant date fair value per
        option
      $ 0.46


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

In 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 September 30, 2006, 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 AS 
  In 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 Memorandum of Understanding
  to form a joint venture (JV) with Ellycrack (superseding prior agreements)
  that gave 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 was required to 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 that point, all future costs would be shared
  equally between the Company and Ellycrack. During the nine months ended September
  30, 2006, the Company incurred $254,704 of salary and other direct costs related
  to the development of the prototype plant.

Operating Leases 
  The Company leases office and manufacturing space in Edmonton, Alberta, Canada
  for $6,480 per month and office space in Houston,

---

Texas, U.S.A. for $800 per month under month-to-month operating
  lease agreements. The Company also leases office space in Calgary, Alberta,
  Canada for approximately $5,450 per month which expires in June 2011.

In addition, the Company has entered into lease agreements with
  respect to a vehicle which has minimum lease payments of approximately $670
  per month until March 2009 and a photocopier which has minimum lease payments
  of approximately $520 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 $16,590 (CAD $18,500) per month commencing
  February 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 $161,388 (CAD
  $180,000).

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

Periods ending September 30,2007
      $
      212,4002008
      
      278,7602009
      
      140,9102010
      
      71,9402011
      
      53,955$
      757,965


NOTE 17 - RELATED PARTY TRANSACTIONS

Related Party Transactions 
  Summary of related party transactions as follows for the nine months ended September
  30, 2006 and 2005:

|                                                                            |   | September 30, |  |   | September 30, | 
|--------------------------------------------------------------------------- | - | ------------- |  | - | ------------- | 
|                                                                            |   | 2006          |  |   | 2005          | 
|                                                                            |   | (Unaudited)   |  |   | (Unaudited)   | 
|Interest accrued on note payable to AHC                                     | $ | 11,288        |  | $ | -             | 
|Consulting fees accrued to AHC                                              | $ | 65,000        |  | $ | -             | 
|Stock-based compensation paid or accrued to
      a director of the Company | $ | 62,979        |  | $ | -             | 

Executive Compensation 
  During the year ended December 31, 2005, the Company incurred a liability for
  compensation to its chief executive officer in the amount of $30,862 which was
  paid in September, 2006. An additional $10,509 in compensation was incurred
  during the nine months ended September 30, 2006. The outstanding balance of
  $10,509 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
  and is due on demand. The outstanding balance of $500,000 and the related accrued
  interest of $11,288 are reflected in due to related parties.

Note PayableThe 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 $65,000 is reflected in due to related parties.

---

NOTE 18  INCOME TAXES

At September 30, 2006, the Company had net deferred tax assets
  calculated at an expected combined rate of 41.5%, 34% for federal purposes and
  an effective rate of 7.5% for state purposes, of approximately $6,474,000 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 at September 30, 2006 and
  December 31, 2005 were as follows:

|                                       |   | September 30, |   |   | December 31, |  
|-------------------------------------- | - | ------------- | - | - | ------------ | -
|                                       |   | 2006          |   |   | 2005         |  
|                                       |   | (Unaudited)   |   |   |              |  
|NOL carryforwards                      | $ | 15,600,000    |   | $ | 12,600,000   |  
|Deferred tax asset                     | $ | 6,474,000     |   | $ | 5,229,000    |  
|Deferred tax asset valuation allowance | $ | (6,474,000    | ) | $ | (5,229,000   | )

At September 30, 2006, the Company had NOL carryforwards of approximately
  $17,400,000 which expire in the years 2015 through 2025. The Company recognized
  approximately $1,700,000 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, 2005 to September 30, 2006 was $1,245,000.

NOTE 19  SUBSEQUENT EVENT

The Company is presently engaged in discussions with existing
  investors in its debentures and holders of its exercised warrants (for which
  shares have not yet been delivered) who wish to have their investments redirected
  to units comprised of shares of common stock and share purchase warrants. Management
  expects to complete this redirection transaction by the end of December 2006.

---

ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

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.

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

Overview

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 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 for
energy-related applications.

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. To this end, we currently
operate through our three small business unites, or SBUs, including (i) our
subsidiary, Flowstar; (ii) our joint venture with Ellycrack; and (iii) our
investment in a Canadian tar sands exploration company.

Company Background

Prior to 2004, we had not generated any revenues from products,
services, or operations since the inception of our Company. In 2004 and 2005,
the Company recorded revenue from the acquired operating businesses of Flowstar,
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 September 30, 2006, Flowstar sold approximately
46% fewer DCR units than the quarter ended September 30, 2005, while the average
selling price stayed approximately the same.

Revenues for the quarter ended September 30, 2006 totaled
$448,041 compared to $638,536 for the quarter ended September 30, 2005. Although
our Flowstar division suffered its first decline in sales when compared to the
corresponding quarter from the previous year, overall it has experienced
encouraging sales growth through 2005 and the first nine months of 2006. The
current decline is a direct result of the decrease in natural gas prices and the
corresponding reduction in new natural gas wells being brought into production.
While Flowstar has had an increase in year to date sales the Company as a whole
has yet to reach profitability. During the nine months ended September

---

30, 2006, we experienced negative cash flows and we have funded
our operations by the issuance of new equity and the assumption of short-term
debt.

Although we expect that sales will continue to increase during
the fourth quarter of 2006, cash will be required to fund the manufacture of
sufficient inventory and to finance the accumulating trade accounts receivables
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
and/or long-term debt, and/or selling part or all of our Synenco Energy Inc.
shareholdings in 2006/2007 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 which
  management hopes would add value to our overall business almost immediately
  upon closing. And
- Any negative cash flow resulting from operations.

In addition, the market value of our Synenco Energy Inc. shares
at September 30, 2006 has declined by 11% from our December 31, 2005 year end
reporting to a market value of $2,568,700. As of November 3, 2006 the market
value of this investment had decreased to $2,101,200 from the September 30, 2006
market value.

Over the past year we have developed a business plan and
strategy to develop and expand our operations. The rapid growth we are
experiencing and intend to continue 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  Our Flowstar division has finalized
      the implementation of a comprehensive customer relationship management
      system. It has also enhanced the training program and reporting matrix to
      allow our sales professionals to become more consultative and
      strategically aligned with our customers. We expect these initiatives will
      allow Flowstar to realize even higher customer satisfaction, more
      efficient product development cycles and higher capture rates within our
      current and expanding markets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | 2. | Continue to hire, train and retain key management within
      Wescorp, our subsidiaries and any target company we may acquire  In 2006
      we hired a new sales professional for Flowstar and plan to continue to
      expand our sales force. In the three quarters of 2006 we continue to
      actively recruit personnel for key executive positions within Flowstar and
      Wescorp. In the second quarter we engaged two consultants to assist in
      planning our expansion of Flowstar operations into the U.S. market. In the
      third quarter we appointed Dr. Scott Shemwell as Chief Operating Officer
      to oversee the implementation and execution of that plan from a base of
      operations to be formed in the U.S. As well we appointed Mr. Dave LeMoine
      as Wescorps Executive Vice President of Sales and Marketing and President
      of Flowstar.                                                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | 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 their Viscositor test-rig from Norway to Canada. The terms of the
      agreement allow Wescorp to modify the test-plant and install all necessary
      instrumentation to undertake a continuous test program in an accredited
      facility as a substitute to fabricating a pre-commercial pilot-plant for
      final development purposes. The unit has arrived in Canada and is
      currently being reassembled so that it is equipped with a skid and minor
      changes to comply with Canadian safety and environmental standards prior
      to being shipped to the test facility.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | 4. | Maintain adequate financial resources  As noted above,
      we intend to raise additional capital in 2006/2007 to fund planned
      expansion, technology development and acquisition initiatives being
      considered, We are currently qualifying investors and other sources of
      capital available to Wescorp to provide that 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 at potential target companies. As we continue to grow the
demands and skill sets of our senior management will change. New executives will
be hired with the skill sets and

---

experience required to enhance those areas which require
specialized expertise. In addition, we will be seeking to add new directors to
our board that bring significant industry knowledge and expertise in the fields
we are expanding into, including the U.S. market for Flowstar, and the heavy oil
upgrading market for Ellycrack. We also recognize that the increased need for
corporate compliance within new regulatory reporting requirements compels us to
look for new potential board members.

On May 1, 2006 we appointed Mr. Robert M. Nicolay to our Board
of Directors. Mr. Nicolay is President of Aurora Borealis Management, an Alberta
firm that provides corporate governance, energy investment, operations analysis,
strategic development and execution advisory services for public, private and
government energy corporations. Prior to joining Aurora Borealis Management, Mr.
Nicolay was President and CEO of ENMAX Corporation. ENMAX is an electric utility
owned by the City of Calgary, Alberta.

Past Acquisitions

Flowstar and Flowray Terms of Acquisition of Flowstar and
Flowray

On March 31, 2004, Wescorp, through our Alberta subsidiary
1049265 Alberta Ltd., completed the acquisition of 100% of the outstanding
shares of Flowstar and Flowray in consideration of cash payments to the selling
shareholders totaling CDN$550,000 (US $414,074) 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.

Wescorp also entered into share purchase agreements dated
effective January 14, 2004 pursuant to which Wescorp acquired 100% of the
outstanding shares of 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 described below, in consideration of a promissory note in the principal
amount of CDN$604,500 without interest. The promissory note is now an asset of
Flowstar).

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 shareholders of Vasjar in equal amounts as follows:

- Traunch 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
- Traunch 2: up to an aggregate of 2,600,000 additional shares of
  common stock of the Company (1,200,000 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 between 480,000 and 600,000
additional shares based on sales achieved in the 2004 calendar year. Based on
the sales in 2004, we were required to issue 480,000 shares (240,000 shares to
each shareholder). Wescorp was not able to deliver free-trading shares on April
1, 2005, and as a result the Company was obligated to pay the Vajar shareholders
an additional 48,000 Wescorp shares for each of the months from April through
September 2005 totalling 288,000 shares (144,000 shares to each shareholder).
These shares were delivered and accepted by the Vajar shareholders on September
28, 2005. We may be required to issue the additional 120,000 shares (the
difference between 480,000 and 600,000 shares) related to this Stage One should
certain sales targets be met for Stage Two or if Stage Three. As of Stage Two,
the sales targets had not been met.

Stage Two. On or before April
1, 2006, the Company was required to issue between 800,000 and 1,000,000
additional shares based on sales achieved in the 2005 calendar year. Based on
the sales in 2005, we were required to issue 800,000 shares (400,000 shares to
each shareholder). We were not able to deliver free-trading shares on April 1,
2006, and as a result we are obligated to pay the Vajar shareholders an
additional 80,000 Wescorp shares for each month we are not able to issue the
freely trading shares to the Vajar shareholders. In addition, we may be required
to issue the

---

additional 200,000 shares (the
difference between 800,000 and 1,000,000 shares) related to this Stage Two
should certain sales targets be met for Stage Three.

Stage Three. On or before April
1, 2007, Wescorp will be required to issue between 800,000 and 1,000,000
additional shares based on sales achieved in the 2006 calendar year; the lower
figure being if sales are less than $6,000,000 and the upper figure being if
sales are more than $11,250,000, with a pro rata distribution if sales fall in
between to target numbers.

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

According to the agreement with Vasjar, if we fail to deliver
all the shares, the Company will be subject to a penalty of 10% in additional
shares to be issued to the Vasjar shareholders each month of delay, with a
cumulative provision. We were not able to deliver free-trading shares on April
1, 2005, and so we were required to pay the Vasjar shareholders an additional
48,000 Wescorp shares for each month the shares were not delivered, covering the
months April through September 2005. These shares were delivered and accepted by
the Vasjar shareholders on September 28, 2005.

On April 1, 2006, we were not able to deliver free-trading
shares called for under Stage 2, and thus we are required to pay the Vasjar
shareholders an additional 80,000 Wescorp common shares for each month that the
shares are not delivered. As of November 1, 2006, Wescorp was required to pay an
additional 640,000 common shares.

If any of the Wescorp common shares to be issued to the Vasjar
shareholders have not been delivered for a period of 182 days after the
applicable due date, the Vasjar shareholders may at their option terminate the
share purchase agreements, without notice or prior opportunity to cure. We have,
however, received oral assurances from the Vasjar shareholders that they will
not exercise these rights but that they expect to receive all penalty shares
until a registration statement for these shares goes effective. We are
attempting to have a written waiver of this provision executed by the Vasjar
shareholders, however, there can be no assurances that such waiver will be
executed. We have pledged to the Vasjar shareholders all the Vasjar shares as
security to guarantee Wescorps performance under the share purchase
agreements.

The delay in delivering free-trading shares which would
eliminate further additional share penalties is largely attributed to setbacks
we experienced in filing an effective registration statement with the SEC. We
were unable to file a registration statement until we filed an amended Form
10-KSB for 2004. In addition, we were required to file amended Form 10-QSBs for
each of the quarters in 2005 also had to be filed before we could submit the
registration statement. As of November 3, 2006, we have filed an amended Form
10-KSB for 2004 as well as Form 10-QSBs for all quarters of 2005.

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 had granted the Company 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 the 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.

---

As of December 31, 2005, the Company had purchased an aggregate 659,000 common 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 common shares of Ellycrack bringing our current equity interest to 13.45% . Additionally, the MOU provides an option for the Company to increase its
equity interest up to 20% of Ellycrack's outstanding shares via a combination of purchase and share swap

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.

Since Wescorps business relationship with Ellycrack A/S started, Ellycrack has reported improved results in experiments with their 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, Wescorp has been committed to developing a pilot plant. A major engineering company was commissioned by Wescorp resulting in a 200 barrel per day design. However, as a cost saving measure, Wescorp and
Ellycrack A/S have now moved the test rig to Canada in order to automate it as an approximately 20-50 barrel per day pilot plant and prove out longer term operation. It is to be housed at a major Canadian research and development
organization test facility with proximity to numerous potential clients. Canadian expertise in heavy oil upgrading is known to be world class.

Testing and automation are scheduled to start in the first quarter of 2007. This will be overseen by a project Engineer that Wescorp has hired.

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

Plan of Operation for the Next Twelve Months

The increase we realized in Flowstar sales during the first three quarters of 2006 over the same period in 2005 is an indication that we are starting to generate stronger growth that management hopes will result in a break even position in the 2006
fiscal year and operating profits in the 2007 fiscal year for the Flowstar division. However, 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.

During the year ended December 31, 2004, we integrated the operations of Flowstar and Flowray into our corporate structure and prepared a comprehensive updated plan to capitalize on the competitive advantages of the DCR technology in Canada. In
2005, we successfully implemented this plan by setting up an experienced sales team and establishing a sales office in Calgary, Alberta, which hosts the largest single concentration of oil/gas company head offices in North America. This allowed the
Company to achieve higher sales for 2005 from prior quarterly reporting periods. Flowstar also experienced higher sales in the first nine months of 2006 as compared to the same period in 2005.

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 the DCR technology throughout the United States market. During the second quarter, we
engaged two consultants to assist in planning of this expansion. The initial element of this plan was the appointment of Dr. Scott Shemwell to oversee expansion into the U.S. market. Dr. Shemwell along with Dave LeMoine will be responsible for
establishing a sales and technical support infrastructure within each state or region being targeted for DCR sales. That infrastructure is expected to be based on having a direct sales force distribute DCR technology within defined territories and
by contracting qualifying third-parties for technical support.

---

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. Our Flowstar Technologies Inc. division 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. In March 2006, Flowstar participated in a trade event hosted by the Canadian School of Hydrocarbon Measurement (CSHM), which focused on
hydrocarbon measurement accounting compliance. We also participated in the Instrumentation, Systems, and Automation Society (ISA) technical conference held in Edmonton in April 2006. ISA is a United States based organization setting
global standards for and certifying professionals involved in the industrial automation industry.

In May 2006, we exhibited at the Gas City Petroleum Show in Medicine Hat, Alberta. In June 2006, we participated in the Global Petroleum Show in Calgary, Alberta where our Flowstar DCR was showcased as part of a new separator package being marketed
for wet-gas applications. That package is currently being implemented as an exclusive metering/separation solution by a major coal-bed methane producer in Canada.

In addition to participating in focused industry events, we also commissioned Colorado Engineering Experiment Station Inc. (CEESI) to test, quantify, and provide reference data on the performance of our DCR technology in a variety of wet-gas field
conditions. These comprehensive test results were presented to both (AEUB) Alberta Energy Utilities Board and the (BCOGC) British Columbia Oil and Gas Commission resulting in policy approval and compliance. These results further demonstrate
Flowstars ability to bring leading edge technology to our industry. Our test results have been presented in client specific applications, providing them with an opportunity to reduce capital expenditures, increase accuracy, and improve their
well completions. Based on customer feedback, we expect sales of DCR technology for wet-gas applications to increase considerably as supported by the reference data produced by CEESI.

For the Ellycrack heavy oil upgrading process, Wescorp aims to automate the test rig and then run extended trials at the Canadian research facility.

In June 2006, we entered into an agreement with Ellycrack AS allowing the joint-venture to borrow the Viscositor test-plant from the SINTEF facilities in Norway, and ship it to Canada. The unit has arrived in Canada and is currently being
reassembled so that it is equipped with a skid and minor changes to comply with Canadian safety and environmental standards prior to being shipped to the test facility. With the test-plant at our facilities in Canada, 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.

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
CAD $18,500 per month (USD $16,590) commencing February 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 CAD $180,000 (USD $161,388).

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 CAD $290,000 (USD $260,000) for costs incurred and paid in direct
performance of testing of the pilot plant as described above.

To date, our operations have been funded by a combination of short-term debt and equity financing. In the event that we do not achieve positive cash flow from operations by the end of fiscal 2006 and early 2007, we will be relying on debt and equity
financings to provide our Company sufficient capital to continue our development and operational plans. We may also liquidate all or part of our investment in Synenco Energy Inc. shares to raise additional capital. There can be no assurance that the
growth we have been experiencing will continue, which would have a significant affect on the financial condition of our Company and our ability to effectively implement the proposed business plan for Flowstar and Ellycrack.

---

Over the next 12 months, we plan to closely monitor and
implement solutions to manage our proposed future growth. Those monitoring
efforts 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 development
      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 value-added acquisition candidates to further
      enhance revenue, profitability, cash-flow and shareholder value within
      highly-levered high growth energy-related markets.                                                                        

Currently, cash on hand and collection of trade accounts
receivable are our only sources of liquidity. We cannot provide any assurance
that we will be able to reach a level of operations within our Flowstar division
to finance our day-to-day activities. Although we do not have any lending
arrangements in place with banking or financial institutions, we intend to
secure conventional bank financing for Flowstar once we redeem or effect the
conversion of all of the outstanding convertible debentures to equity as noted
herein. We are also currently in the process of arranging financing for our 2006
operations and investment plan. As part of our overall investment objectives we
intend to acquire and develop one or more technologies in 2006. We hope that any
potential acquisitions would also contribute to our current revenue and cash
flow streams immediately after the acquisition. Our total anticipated funding
requirement through to the end of 2007 is estimated to be approximately $15
million.

We believe that with completion of our proposed financing, our
cash balances will be sufficient to carry on normal operations for the next
twelve months and meet any cash requirements that may be needed for target
investments or acquisitions. To the extent that we require additional funds to
support our operations or the expansion of our business, we may sell additional
equity or issue debt, or we may sell part or all of our Synenco Energy Inc.
shareholdings. 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 our company or on
acceptable terms.

We anticipate that the only major purchases of capital assets
in the next 12 months will be the building of the Ellycrack pilot plant, 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 has increased with
the recent hiring of an additional salesman for Flowstar in the Calgary office
and now stands at twenty-three. 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.

Results from Operations  2006 Compared to 2005

Three Months Ended September 30, 2006 Compared to Three
Months Ended September 30, 2005

Revenues

Revenues during the quarter ended September 30, 2006 were
$448,041, compared to $638,536 for the quarter ended September 30, 2005, a
decrease of $190,495, or 30%. This decrease can be 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. 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 are
confident that with these efforts improved results will come to fruition in the
near future. In addition, 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.

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Cost of Sales

As a percentage of revenues, cost of sales for the quarter ended September 30, 2006 improved to 56.2% versus 62.1 % for the quarter ended September 30, for 2005. The major reason for the decrease in cost of sales as a percentage of revenue and
corresponding increase in the gross margin can be attributed to a significant downward adjustment to inventories required to reconcile the accounting records to the physical count taken at September 30, 2005. The adjustment that was required at
September 30, 2006 was relatively small in comparison.

Expenses

Operating expenses for the quarter ended September 30, 2006 were $1,428,414 versus $964,215 for the quarter ended September 30, 2005, an increase of $464,199. Expansion of our Ellycrack and Flowstar operations was the principal reason
for this increase. The largest increases in our operating expenses were in consulting fees and wages and benefits as explained below.

Consulting fees for the current quarter of $441,764 were $304,266 higher than those incurred in 2005. Although many consulting contracts which existed in 2005 were not renewed, additional consulting agreements were entered into during the
last quarter of 2005 and the first nine months of 2006 which exceeded the cost of those contracts that existed in the same period of 2005. The new contracts included the hiring of a consultant to assist in developing a marketing strategy that can be
applied to current products being sold as well as potential new products that may be marketed by existing businesses or future business acquisitions. We also hired consultants to assist with developing a business strategy which would allow Wescorp
to enter the flow measurement market in the U.S.A. Additional consulting fees were also paid to help assess the viability of potential business acquisition candidates, and to assist Flowstar in its sales, marketing and investor relations efforts
going forward.

Since the third quarter of 2005, additional staff has been hired to fill the management position of Project Manager for the Ellycrack pilot plant. To improve sales coverage, one additional sales representative and two shop technicians have been
hired by Flowstar that were not employed during the first nine months of 2005. In addition cost of living and merit increases were necessary in order to retain valued employees. As a result, wages and benefits were $372,580 during the quarter
ended September 30, 2006 versus $260,927 during the quarter ended September 30, 2005, an increase of $111,653. Also, included in the new compensation package for the Chief Executive Officer were stock options which did not exist during the
quarter ended September 30, 2005. Thus, the Company incurred $20,123 in stock based compensation during the quarter ended September 30, 2006 with no corresponding cost during the quarter ended September 30, 2005.

Legal and accounting costs during the quarter ended September 30, 2006 were $64,587 which was an increase of $40,844 compared to the corresponding period of 2005. Most of this increase can be attributed to increased compliance costs with
respect to the requirements for the year end audit as well as the reviews of the quarterly financial statements. Additional costs were also incurred for legal fees with respect to potential financing and for due diligence work undertaken with
respect to potential business acquisitions.

Travel expenses during the quarter ended September 30, 2006 increased by $25,966 versus the quarter ended September 30, 2005, a direct result of the increased activity in the Ellycrack project and additional marketing of both Wescorp and
Flowstar in international markets. Similarly, the increase in office expenses of $63,514 during the quarter ended September 30, 2006 versus the quarter ended September 30, 2005 were directly related to the expansion of the Flowstar and Ellycrack
operations.

Depreciation expense for the quarter ended September 30, 2006 was $23,833 versus $14,544 for the same period during 2005, an increase of $9,289. This increase was due to assets acquired during the last three months of 2005 and the first
nine months of 2006 to support the expanded Flowstar operations.

Results for the quarter ended September 30, 2006 reflect interest, finance and bank charges of $8,533 which is $6,813 higher than the $1,720 reflected in the same period for 2005. This is a direct result of the current years
figures including the cost of interest on the short-term borrowings from AHC Holdings.

In addition, $17,754 in directors fees was incurred in the quarter ended September 30, 2006 as compensation for outside directors to be members of the board. These fees did not exist in the same period for 2005.

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The above increases were offset by the reduction of $94,104 in the engineering expenses for the quarter ended September 30, 2006 versus the same quarter in 2005. Engineering of the Ellycrack pilot project started in the third quarter of 2005 and
was completed in February 2006. As a result, costs of $168,044 were incurred during the quarter ended September 30, 2005 with very little corresponding costs incurred during the quarter ended September 30, 2006. The engineering of the Ellycrack
pilot project costs of $73,940 incurred in the quarter ended September 30, 2006 mostly relate to the decommissioning and preparation of the Viscositor for its shipment to Canada.

Additionally, we incurred interest expenses of only $22,716 on our debentures during the quarter ended September 30, 2006 compared to the $58,660 incurred during the quarter ended September 30, 2005. This decrease of $35,944 is due to
having repaid $77,000 of the debentures in January of 2006 and an additional $39,300 in the third quarter of 2006. In addition, holders of $880,250 in debentures have indicated they wish to have their investments redirected to units
comprised of shares of common stock and share purchase warrants and therefore no interest has accrued on this amount during the quarter ended September 30, 2006.

Advertising and investor relations expenses declined by $3,931 to $25,643 for the quarter ended September 30, 2006 versus the $29,574 reported for the quarter ended September 30, 2005.

Research and development costs declined by $4,118 for the quarter ended September 30, 2006 when compared to the same quarter of 2005 as Flowstar incurred costs in developing its wireless communications for the DCR units in the third quarter of
2005. No similar development costs were incurred in the third quarter of 2006.

The decrease in other expenses of $75,555 is directly attributable to the penalty for the late delivery of shares to the former shareholders of Vasjar. On April 1, 2006, we were not able to deliver free-trading shares called for under Stage 2 of
the agreement to acquire Vasjar, and thus we are required to pay the Vasjar shareholders an additional 80,000 Wescorp common shares for each month that the shares are not delivered. This has resulted in an accrual of $156,000 being recorded for
the three months ended September 30, 2006 which reflects the increase in shares needed to be delivered and the closing trading price of Wescorp shares as at September 30, 2006. The financial statements for the same period in 2005 reflect the
requirements for late delivery of shares as stipulated by Stage 1 of the agreement to acquire Vasjar at the closing trading price of Wescorp shares as at September 30, 2005. Since the shares were trading at a higher value in 2005 the costs reflected
on the statements for that period are higher.

Net Loss

The net loss for the quarter ended September 30, 2006 of $1,389,925 compared to a net loss of $955,515 for 2005 is due to the net effect of the decrease in gross profit of $45,766 and an overall increase of $464,199 in operating
expenses partially offset by a decrease of $75,555 in other expenses as explained above.

Nine Months Ended September 30, 2006 Compared to Nine Months Ended September 30, 2005

Revenues

Revenues during the nine months ended September 30, 2006 were $2,508,831, compared to $1,690,558 for the nine months ended September 30, 2005, an increase of $818,273, or 48%. This increase can be attributed to the growing market
acceptance of the DCR systems sold by Flowstar, increased marketing of the Flowstar products, and strengthening of the Canadian dollar. 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. In addition, Flowstar has been focusing its sales efforts by identifying applications and markets where the DCR system has advantages over competing products.

Cost of Sales

As a percentage of revenues, cost of sales for the nine months ended September 30, 2006 decreased slightly to 52.7 % versus 54.3% for the nine months ended September 30, for 2005. The major reason for the decrease in cost of sales as a percentage of
revenue and the corresponding increase in the gross margin can be attributed to a significant downward adjustment to inventories required to reconcile the accounting records to the physical count taken at September 30, 2005. The adjustment that was
required at September 30, 2006 was relatively small in comparison.

Expenses

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Operating expenses for the nine months ended September 30, 2006 were $3,798,235 versus $2,964,195 for the nine months ended September 30, 2005, an increase of $834,040. Expansion of our Ellycrack and Flowstar operations 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.

Additional staff has been hired to fill the management positions of Project Manager for the Ellycrack pilot plant, Vice President of Investor Relations and Communications and Corporate Controller, positions which did not exist at March 31, 2005. In
addition, the Companys Chief Financial Officer is now being paid as an employee as opposed to a consultant in the first six months of 2005. To improve sales coverage, two additional sales representatives were hired by Flowstar in the third
quarter of 2005 and an additional sales representative has been hired in 2006. Two additional shop technicians have been hired by Flowstar that were not employed during the first nine months of 2005. In addition cost of living and merit increases
were necessary in order to retain valued employees. As a result, wages and benefits were $1,097,692 during the nine months ended September 30, 2006 versus $617,815 during the nine months ended September 30, 2005, an increase of $479,877.
Also, included in the new compensation package for the Chief

Executive Officer were stock options which did not exist during the nine months ended September 30, 2005. Thus, the Company incurred $62,979 in stock based compensation during the nine months ended September 30, 2006 with no corresponding cost
during the nine months ended September 30, 2005.

Engineering of the Ellycrack pilot project started in the third quarter of 2005 and was completed in February 2006. As a result, costs of $265,016 were incurred during the nine months ended September 30, 2006 compared to the $168,044 in
costs incurred during the nine months ended September 30, 2005.

Consulting fees incurred in the current nine month period in the amount of $695,979 were $248,236 higher than the $447,743 incurred in 2005. Although many consulting contracts which existed in 2005 were not renewed, additional consulting
agreements were entered into during the last quarter of 2005 and the first nine months of 2006 which exceeded the cost of those contracts that existed in the same period of 2005. The new contracts included the hiring of a consultant to assist in
developing a marketing strategy that can be applied to current products being sold as well as potential new products that may be marketed by existing businesses or future business acquisitions. We also hired consultants to assist with developing a
business strategy which would allow Wescorp to enter the flow measurement market in the U.S.A. Additional consulting fees were also paid to help assess the viability of potential business acquisition candidates, and to assist Flowstar in its sales,
marketing and investor relations efforts going forward.

Travel expenses during the nine months ended September 30, 2006 increased by $59,764 versus the nine months ended September 30, 2005, a direct result of the increased activity in the Ellycrack project and additional marketing of both Wescorp and
Flowstar in international markets. Similarly, the increase in office expenses of $119,543 during the nine months ended September 30, 2006 versus the nine months ended September 30, 2005 were directly related to the expansion of the Flowstar and
Ellycrack operations.

Depreciation expense for the nine months ended September 30, 2006 was $75,831 versus $38,553 for the first nine months of 2005, an increase of $37,278. This increase was due to assets acquired during the last three months of 2005 and the
first nine months of 2006 to support the expanded Flowstar operations. Further, the increase in our asset base contributed to an increase in commercial insurance premiums of $17,687 for the nine months ended September 30, 2006 compared to the
nine months ended September 30, 2005.

Advertising and investor relations expenses rose by $16,425 to $155,448 for the nine months ended September 30, 2006 versus $139,023 reported for the nine months ended September 30, 2005. This increase is the direct result of issuing
warrants in the second quarter of 2006 valued at $46,000 to various consultants to assist with investor relations.

We incurred interest expenses of $134,421 on the convertible debentures during the nine months ended September 30, 2006 compared to $135,800 incurred during the nine months ended September 30, 2005. This decrease of $1,379 is a direct
result of having repaid $77,000 of the debentures in January of 2006 and an additional $39,300 in the third quarter of 2006. In addition, holders of $880,250 in debentures have indicated they wish to have their investments redirected to
units comprised of shares of common stock and share purchase warrants and therefore no interest has accrued on this amount during the quarter ended September 30, 2006. The 2005 figures only include interest from the date of the original investment
in the debentures.

In addition, $35,359 in directors fees was incurred in the quarter ended September 30, 2006 as compensation for outside directors to be members of the board. These fees did not exist in the same period for 2005.

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The above increases were offset by the reduction of $207,000 in the beneficial conversion interest related to the debentures issued in the nine months ended September 30, 2005. No costs related to beneficial conversion interest were incurred in
the nine months ended September 30, 2006 as no new convertible debentures have been issued.

Results for the nine months ended September 30, 2006 reflect interest, finance and bank charges of $62,652 which is $140,179 lower than the $202,831 reflected in the same period for 2005. This decrease is a direct result of the 2005
figures including a finders fee in relation to the debenture financing secured during the first quarter of 2005 of approximately $191,000 whereas the current years figures include the cost of about $40,000 finders fee in
relation to potential financing.

Legal and accounting costs for the nine months ended September 30, 2006 were $200,188 which was an increase of $29,624 compared to the corresponding period of 2005. The 2005 figures for legal and accounting were adversely affected by legal
fees incurred to defend the Baum litigation, as well as legal and other professional fees related to the private placement of the debentures incurred in the first quarter of 2005. The reductions of not having these same costs in 2006 were offset by
increased compliance costs with respect to the requirements for the year end audit as well as the reviews of the quarterly financial statements. Additional costs were also incurred for legal fees with respect to potential financing and for due
diligence work undertaken with respect to potential business acquisitions.

During the six months ended September 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. For the same nine months of 2005 the Company incurred patent costs in the amount of $44,851 related to the Ellycrack project and $3,878 in costs to develop its wireless
communications for the DCR units. As a result, research and development expenses decreased by $23,279 in the current year compared to 2005.

For the nine months ended September 30, 2006, other expenses have increased by $44,520 from the same period during 2005, which is directly attributable to the increase in the penalty for the late delivery of Stage 2 shares to the former
shareholders of Vasjar recorded on the September 30, 2006 financial statements. On April 1, 2006, we were not able to deliver free-trading shares called for under Stage 2 of the agreement to acquire Vasjar, and thus we are required to pay the Vasjar
shareholders an additional 80,000 Wescorp common shares for each month that the shares are not delivered. This has resulted in an accrual of $276,000 being recorded for the nine months ended September 30, 2006 which reflects the increase in
shares needed to be delivered and the closing trading price of Wescorp shares as at September 30, 2006. The financial statements for the same period in 2005 reflect the requirements for late delivery of shares as stipulated by Stage 1 of the
agreement to acquire Vasjar at the closing trading price of Wescorp shares as at September 30, 2005 at a value of $233,280. Although the shares were trading at a higher value in 2005, the requirement to issue more shares under Stage 2 versus
Stage 1 results in costs that are higher on the statements for the nine months ended September 30, 2006 versus those costs reflected for the same period in 2005.

Net Loss

The increase in the net loss for the nine months ended September 30, 2006 to $2,886,778 compared to a net loss of $2,420,957 for the same period during 2005 is due to the net effect of the increase in gross profit of $412,739 offset by
an overall increase of $834,040 in operating expenses and $44,520 in other expenses as explained above.

Liquidity and Capital Resources  September 30, 2006 Compared to September 30, 2005

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. To
September 30, 2006, we have generated revenues from operations of $6,060,951 (comprised of $2,508,831 for the nine months ended September 30, 2006 and $2,323,589 and $1,228,531 for the years ended December 31, 2005 and 2004,
respectively). We had an accumulated deficit at September 30, 2006 of $18,215,531. Our cash position at September 30, 2006 increased to $1,572,349 from the $259,708 balance we had at September 30, 2005.

We used cash in operations of $216,249 in the first nine months of 2006 compared to cash used in operations of $1,549,113 during the same period in 2005. Approximately $161,000 of this amount was used to fund the increased accounts
receivable and inventory levels that are necessary to support the higher level of activity in the Flowstar operations.

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We also had a net outflow of cash of $172,435 from investing activities for the nine months ended September 30, 2006, which consisted of the purchase of plant and equipment of $21,857 (September 30, 2005 - $77,326), and we used
$150,000 in cash for the purchase of shares in Ellycrack (September 30, 2005 - $75,000). The net change in the note receivable for the first nine months of 2006 was only $3,265 versus $287,616 reported for the same period in 2005 as
this note was issued in the nine months ended September 30, 2005.

The net cash used in operating and investing activities was supported with $1,300,947 from financing activities for the nine months ended September 30, 2006. The cash flow from financing activities was primarily a result of the issuance of
shares, net of shares issued for services, in the amount of $550,094 (September 30, 2005  $600,728), cash received on the exercise of warrants for which shares were not yet issued in the amount of $301,441 (September 30, 2005
 nil) and the funding of $29,772 for a share subscription receivable (September 30, 2005  nil). During the nine months ended September 30, 2006 we incurred debt of $500,000 in the form of a short-term note payable issued to the
Company by a company controlled by a director of Wescorp. As of September 30, 2006 interest on this debt has amounted to $11,288. In addition, there is a balance outstanding in the amount of $10,509 relating to unpaid remuneration for our
Chief Executive Officer (2005  nil) and $65,000 in consulting fees owed to a company controlled by a director of Wescorp. During the nine months ended September 30, 2006 we had to repay convertible debentures in the amount of $116,300
(2005 - $nil) and debt in the amount of $19,995 (2005 - $7,970). In the nine months ended September 30, 2006 we also paid to our Chief Executive Officer $30,862 relating to unpaid remuneration accrued to December 31, 2005. In the
first nine months of 2005 we made payments of $44,836 on the amounts due to a shareholder in order to extinguish that debt. Results for the first nine months of 2005 also reflected a positive cash flow of $1,552,319 related to proceeds from
convertible debentures.

At September 30, 2006, we had current assets totaling $3,446,969 compared to $2,056,559 at September 30, 2005. This increase is a direct result of managements decision to increase inventory levels indicative of the increased business
activities of Flowstar. This increase was offset by the collection of approximately $212,000 of the note receivable.

Our investment in property and equipment at September 30, 2006 increased to $154,744 from $144,611 reported at September 30, 2005, reflecting the expansion of our Flowstar business. The increase in investments to $2,841,283 at September
30, 2006 from the September 30, 2005 balance of $993,648 was a direct result of being able to reflect the investment in Synenco at September 30, 2006 market values now that Synenco became publicly traded. 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 $8,664,774 in current liabilities at September 30, 2006 compared to $5,646,133 at September 30, 2005. Part of the increase can be attributed to additional trade payables and financing required to sustain the higher level of
activity in the operations of Flowstar and Ellycrack, resulting in an increase of about $336,000 when compared to the September 30, 2005 figures. Also included in accrued liabilities is approximately $2,100,000 in funds received by the
Company that are to be directed to units comprised of shares of common stock and share purchase warrants which did not exist at September 30, 2005. To support current operations net funding of $1,436,019 in the form of short-term convertible
debentures was still on the books at September 30, 2006 compared to the $1,552,319 balance of that financing as at September 30, 2005. As described above, the Company also incurred a debt owed to related parties in the amount of $586,797
versus the $300,000 which existed at September 30, 2005. In addition, the current portion of debt increased by $412,212 at September 30, 2006 versus September 30, 2005 as now the entire amount owed to the former Vasjar shareholders is due
within the next twelve months.

We had long-term liabilities of $88,204 at September 30, 2006 compared to $487,818 at September 30, 2005. Most of this change is a direct result of the entire amount owed to the former Vasjar shareholders is now due within the next 12
months.

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.

Business Risks and Uncertainty

Wescorp is exposed to a number of risks in the normal course of business that have the potential to adversely affect our business, financial condition and results of operations. We seek to avoid unnecessary risk and initiate policies and

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processes to limit any significant risk as much as practical. Many of the risks that may affect our performance are outlined within other sections of this Quarterly Report and in our Annual Report Form 10-KSB for 2005, and include those outlined
below.

Financing

Our operations to date have been funded by debt and equity financing. In the event that we do not achieve positive cash flow we will be relying on debt and equity financings as sources of funding in order to provide our Company with sufficient
capital to continue our development and operational plans. There can be no assurance that we will be able to obtain adequate financing in the future which would significantly affect the financial condition of our Company and our ability to
effectively implement the proposed business plans.

Fair Values

The carrying values of cash, accounts receivable, accounts payable and accrued liabilities approximate their fair value due to the relatively short periods to maturity of the instruments.

Credit Risk

At September 30, 2006, no customer represented a significant percentage of total accounts receivable. The Company does not obtain collateral or other security to support financial instruments subject to credit risk but mitigates this risk by dealing
with financially sound counterparties and, accordingly, does not anticipate significant loss for non-performance.

Foreign Exchange Risk

The Companys reporting currency is the United States dollar. The Companys functional currency for its subsidiary Flowstar is the Canadian dollar. The Company does not use derivative instruments to mitigate the effects of foreign exchange
changes between the recording date of accounts receivable and accounts payable denominated in Canadian dollars and the settlement date of those transactions. These transactions are short-term in nature and therefore the effect of the foreign
exchange changes has not been significant. Foreign exchange gains and losses related to the activities of Flowstar are included in other comprehensive income as they occur.

Regulatory Risks

We are subject to various laws, regulations, regulatory actions and court decisions that may have negative effects on our Company. Related changes in the regulatory environment imposed upon us could adversely affect our ability to operate in certain
jurisdictions or to meet certain corporate objectives. There can be no assurance that regulatory bodies within foreign jurisdictions will not adopt laws or regulatory requirements that could adversely affect our Company.

Competition

The market for flow metering devices and heavy-oil upgrading technology is expected to remain highly competitive. While we believe our products are unique and have adequate patent protection for the underlying technologies, there can be no assurance
that competitors will not emerge in the near to medium term with comparable products or technologies. There are several large companies involved in gas flow metering and heavy oil upgrading technology with larger more established sales and marketing
organizations, technical staff and financial resources. It is our intention to establish marketing and distribution partnerships or alliances with several of these companies but there can be no assurance that such alliances will be formed.

Dependence On A Market That Has Historic Volatility

Our products are sold into the oil and gas industry which historically has realized significant shifts in activity and spending due to fluctuations in commodity prices. Our revenues are primarily dependant upon spending by oil and gas producers,
therefore a reduction in spending by producers can have a materially adverse effect on our business, financial conditions and results of operations.

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Liability Risks

We are subject to a variety of potential liabilities connected to our technology development and business operations. Although we have obtained insurance against certain of these risks, no assurance can be given that such insurance will be adequate
to cover related liabilities or will be available in the future or, if available, that premiums will be commercially justifiable. If we were to incur any substantial liability and related damages were not covered by our insurance or exceeded policy
limits, or if we were to incur such liability at a time when we are not able to obtain liability insurance, our business, financial conditions and results of operations could be materially adversely affected.

Dependence On Key Personnel

The success of our Company is dependent on the performance of executive management and key personnel in the areas of finance, product development, sales and marketing. There is intense competition for qualified personnel and there can be no
assurance that we will be able to attract and retain qualified personnel to execute our revised business plan. The failure to attract or loss of any such personnel could adversely affect the success of our business for the period of time required to
recruit any replacement.

Management Of Growth

Rapid growth places a significant strain on our financial, operational and managerial resources. While we engage in strategic and operational planning to adequately manage anticipated growth, there can be no assurance that our Company will be able
to implement and subsequently improve operations and financial systems successfully and in a timely manner to fully manage our growth. There can be no assurance that our Company will be able to manage its growth and any inability to successfully
manage growth successfully could materially adversely affect our business, financial condition and results of operation.

Recent Accounting Pronouncements

In February 2006, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 155, Accounting for Certain Hybrid Financial Instruments-an amendment of FASB Statements No. 133 and 140,
to simplify and make more consistent the accounting for certain financial instruments. SFAS No. 155 amends SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, to permit fair value remeasurement for any hybrid
financial instrument with an embedded derivative that otherwise would require bifurcation, provided that the whole instrument is accounted for on a fair value basis. SFAS No. 155 amends SFAS No. 140, Accounting for the Impairment or Disposal
of Long-Lived Assets, to allow a qualifying special-purpose entity to hold a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument. SFAS No. 155 applies to all financial
instruments acquired or issued after the beginning of an entity's first fiscal year that begins after September 15, 2006, with earlier application allowed. We do not expect the adoption of this statement will have a significant effect on our future
reported financial position or results of operations.

In March 2006, the FASB issued SFAS No. 156, "Accounting for Servicing of Financial Assets, an amendment of FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities". This statement
requires all separately recognized servicing assets and servicing liabilities be initially measured at fair value, if practicable, and permits for subsequent measurement using either fair value measurement with changes in fair value reflected in
earnings or the amortization and impairment requirements of Statement No. 140. The subsequent measurement of separately recognized servicing assets and servicing liabilities at fair value eliminates the necessity for entities that manage the risks
inherent in servicing assets and servicing liabilities with derivatives to qualify for hedge accounting treatment and eliminates the characterization of declines in fair value as impairments or direct write-downs. SFAS No. 156 is effective for an
entity's first fiscal year beginning after September 15, 2006. This adoption of this statement is not expected to have a significant effect on our future reported financial position or results of operations.

ITEM 3. CONTROLS AND PROCEDURES

The management of Wescorp, 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

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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

There was an action brought by Mark Baum against Wescorp (Baum
  v. Wescorp Energy Inc., f/k/a CTI Diversified Holdings, Inc., case number 50T
  181 00033 04 - American Arbitration Association, International Centre for Dispute
  Resolution). The case was commenced January 15, 2004 and the hearing thereon
  was held in October 2004. The claim was for $300,000 plus attorneys
  fees and costs. Principal parties were Mr. Baum and Wescorp. Mr. Baums
  claim was based on a purported agreement whereby he or an affiliate were to
  provide various services to Wescorp for payments of $6,000 per month in
  Wescorp stock payable six months in advance. (When the purported agreement was
  allegedly made in July 2003, the stock was trading at a much lower price than
  at this time). The Company was successful in its arbitration hearings with Mr.
  Baum and was awarded $42,471 plus court costs. Mr. Baum appealed the judgment.
  The final determination of the case at this time is not certain, nor is it certain
  when the company will receive the court awarded award and costs (if any).

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the nine months ended September 30, 2006, the Company issued 2,833,894 shares of common stock for total proceeds of $991,863. These shares were issued on the exercise of warrants at an exercise price of $0.35 per share. The warrants
were issued as part of a private placement dated December 17, 2003 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 (See Form 8-K filed
December 18, 2003.

During the nine months ended September 30, 2006, the Company issued 1,500,000 shares of common stock for total proceeds of $225,000 on the exercise of warrants at an exercise price of $0.15 per share pursuant to a loan agreement with a
Company director dated January 28, 2003 (See Form 8-K filed April 23, 2003). The shares were issued 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, and Section 4(2) of the Securities Act.

During the nine months ended September 30, 2006, the Company issued 300,000 shares of common stock for total proceeds of $171,900. These shares were issued for directors fees at values ranging from $0.60 to $0.678 per share and for
consulting fees at $0.54 per share. The shares were issued to the directors and consultants as private transactions under Section 4(2) of the Securities Act.

No commissions or fees were paid in connection with any of the foregoing sales of 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 September 30, 2006.

ITEM 5. OTHER INFORMATION

Not applicable.

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

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|Exhibit |                                                                                                                                                                                                                             
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                                                                                                                                                 
|        |                                                                                                                                                                                                                             
|2.1.13* | Share Purchase
        Agreement dated as of January 14, 2004 between the Company and the Trustee
        of the Epitihia Trust. (Incorporated by reference to Form 8-K/A filed
        on May 12, 2004).                   
|        |                                                                                                                                                                                                                             
|2.1.14* | Share Purchase
        Agreement dated as of January 14, 2004 between the Company and the Trustee
        of the Abuelo Trust. (Incorporated by reference to Form 8-K/A filed on
        May 12, 2004).                     
|        |                                                                                                                                                                                                                             
|2.1.15* | Amending Agreement
        dated as of June 16, 2004 between the Company and the Trustee of the Epitihia
        Trust. (Incorporated by reference to Form 10QSB filed on September 26,
        2004).                      
|        |                                                                                                                                                                                                                             
|2.1.16* | Amending Agreement
        dated as of June 16, 2004 between the Company and the Trustee of the Abuelo
        Trust. (Incorporated by reference to Form 10QSB filed on September 26,
        2004).                        
|        |                                                                                                                                                                                                                             
|2.1.17* | Hypothecation
        Agreement dated as of July 6, 2004 between the Company, the Trustee of
        the Epitihia Trust and Yearwood & Boyce. (Incorporated by reference
        to Form 10QSB filed on September 26, 2004).
|        |                                                                                                                                                                                                                             
|2.1.18* | Hypothecation
        Agreement dated as of July 6, 2004 between the Company, the Trustee of
        the Abuelo Trust and Yearwood & Boyce. (Incorporated by reference
        to Form 10QSB filed on September 26, 2004).  
|        |                                                                                                                                                                                                                             
|3.1.5*  | Restated Articles
        of Incorporation of Wescorp Energy Inc filed February 17, 2004. (Incorporated
        by reference to Form 8-K filed on April 13, 2004).                                                          
|        |                                                                                                                                                                                                                             
|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                       

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
13thday of November, 2006.

|                        | **WESCORP ENERGY INC.**
|----------------------- | -----------------------
|                        |                        
|Date: November 13, 2006 | By:                    
|                        |                        
|                        |                        
|                        | By:                    
|                        |                        

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