---

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 March 31, 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.)

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

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

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

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

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

Common Stock, par value $.0001 per share(Title of class)

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 May 9, 2006 was 40,513,340.

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

---



FORWARD-LOOKING STATEMENTS

THIS QUARTERLY REPORT ON FORM 10-QSB CONTAINS PREDICTIONS, PROJECTIONS
  AND OTHER STATEMENTS ABOUT THE FUTURE THAT ARE INTENDED TO BE FORWARD-LOOKING
  STATEMENTS (COLLECTIVELY, FORWARD-LOOKING STATEMENTS). FORWARD-LOOKING
  STATEMENTS INVOLVE RISKS AND UNCERTAINTIES. A NUMBER OF IMPORTANT FACTORS COULD
  CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN THE FORWARD-LOOKING
  STATEMENTS. IN ASSESSING FORWARD-LOOKING STATEMENTS CONTAINED IN THIS QUARTERLY
  REPORT ON FORM 10-QSB, READERS ARE URGED TO READ CAREFULLY ALL CAUTIONARY STATEMENTS
   INCLUDING THOSE CONTAINED IN OTHER SECTIONS OF THIS QUARTERLY REPORT
  AND OF OUR ANNUAL REPORT 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 March 31, 2006 (Unaudited) and December 31, 2005                             
|--------------------------------------------------------------------------------------------------------------------
|                                                                                                                    
|Consolidated
        Statements of Operations for the three months ended March 31, 2006 and
        2005 (Unaudited)
|                                                                                                                    
|                                                                                                                    
|Consolidated
        Statement of Stockholders' Equity as of March 31, 2006 (Unaudited)                             
|                                                                                                                    
|Consolidated
        Statements of Cash Flows for the three months ended March 31, 2006 and
        2005 (Unaudited)
|                                                                                                                    
|                                                                                                                    
|Notes
        to the Interim Consolidated Financial Statements                                                      

---

WESCORP ENERGY INC. 
  CONSOLIDATED BALANCE SHEETS

|                                                             |   | March 31,   |   |   | December 31, |  
|------------------------------------------------------------ | - | ----------- | - | - | ------------ | -
|                                                             |   | 2006        |   |   | 2005         |  
|                                                             |   | (Unaudited) |   |   |              |  
|ASSETS                                                       |   |             |   |   |              |  
|CURRENT ASSETS                                               |   |             |   |   |              |  
|Cash                                                         | $ | 417,080     |   | $ | 580,430      |  
|Accounts receivable, net of allowance for doubtful           |   |             |   |   |              |  
|accounts of $20,408 and $20,429, respectively                |   | 772,185     |   |   | 511,610      |  
|Inventories (Note 4)                                         |   | 1,212,108   |   |   | 1,003,105    |  
|Prepaid expenses                                             |   | 103,869     |   |   | 26,446       |  
|Note receivable                                              |   | 71,914      |   |   | 71,989       |  
|TOTAL
      CURRENT ASSETS                                   |   | 2,577,156   |   |   | 2,193,580    |  
|                                                             |   |             |   |   |              |  
|PROPERTY
      AND EQUIPMENT, net (Note 5)                   |   | 191,791     |   |   | 209,764      |  
|                                                             |   |             |   |   |              |  
|OTHER
      ASSETS                                           |   |             |   |   |              |  
|Investments (Note 6)                                         |   | 4,084,910   |   |   | 2,872,771    |  
|Technology, net (Note 7)                                     |   | 3,082,100   |   |   | 3,211,262    |  
|Deposits                                                     |   | 27,245      |   |   | 18,318       |  
|TOTAL
      OTHER ASSETS                                     |   | 7,194,255   |   |   | 6,102,351    |  
|                                                             |   |             |   |   |              |  
|TOTAL ASSETS                                                 | $ | 9,963,202   |   | $ | 8,505,695    |  
|                                                             |   |             |   |   |              |  
|LIABILITIES AND STOCKHOLDERS' EQUITY                         |   |             |   |   |              |  
|CURRENT LIABILITIES                                          |   |             |   |   |              |  
|Accounts payable and accrued liabilities                     | $ | 1,674,801   |   | $ | 1,502,973    |  
|Current portion of notes payable (Note 8)                    |   | 447,214     |   |   | 447,038      |  
|Due to related party (Note 16)                               |   | 34,940      |   |   | 30,862       |  
|Related party note payable                                   |   | 1,924,681   |   |   | 1,924,681    |  
|Convertible debentures (Note 11)                             |   | 1,475,319   |   |   | 1,552,319    |  
|TOTAL CURRENT
      LIABILITIES                              |   | 5,556,955   |   |   | 5,457,873    |  
|                                                             |   |             |   |   |              |  
|NOTES PAYABLE, net
      of current portion (Note 8)         |   | 501,802     |   |   | 510,400      |  
|                                                             |   |             |   |   |              |  
|COMMITMENTS AND CONTINGENCIES
      (Note 15)                |   |             |   |   |              |  
|                                                             |   |             |   |   |              |  
|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;
      40,513,340 and 38,304,686 shares            |   |             |   |   |              |  
|issued
      and outstanding, respectively (Note 9)          |   | 4,051       |   |   | 3,830        |  
|Additional paid-in capital                                   |   | 16,245,541  |   |   | 15,450,433   |  
|Subscription receivable                                      |   | (7,500      | ) |   | (37,272      | )
|Funds received for exercise of warrants                      |   | 873,717     |   |   | 852,392      |  
|Accumulated other comprehensive income                       |   | 2,700,396   |   |   | 1,596,792    |  
|Accumulated deficit                                          |   | (15,911,760 | ) |   | (15,328,753  | )
|TOTAL
      STOCKHOLDERS' EQUITY                             |   | 3,904,445   |   |   | 2,537,422    |  
|                                                             |   |             |   |   |              |  
|TOTAL LIABILITIES AND                                        |   |             |   |   |              |  
|STOCKHOLDERS'
      EQUITY                                   | $ | 9,963,202   |   | $ | 8,505,695    |  

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

---

WESCORP ENERGY INC.CONSOLIDATED STATEMENTS OF OPERATIONS

|                                           |   | Three Months Ended March 31, |  
|------------------------------------------ | - | ---------------------------- | -
|                                           |   | 2006                         |  
|                                           |   | (Unaudited)                  |  
|                                           |   |                              |  
|REVENUES                                   | $ | 1,079,343                    |  
|                                           |   |                              |  
|COST OF SALES                              |   | 566,867                      |  
|                                           |   |                              |  
|GROSS PROFIT                               |   | 512,476                      |  
|                                           |   |                              |  
|EXPENSES                                   |   |                              |  
|Wages and benefits                         |   | 350,782                      |  
|Amortization
      of technology           |   | 129,162                      |  
|Engineering expenses for
      pilot plant |   | 125,554                      |  
|Consulting                                 |   | 124,754                      |  
|Office                                     |   | 79,665                       |  
|Interest
      on debentures               |   | 54,726                       |  
|Legal and accounting                       |   | 54,164                       |  
|Advertising
      and investor relations   |   | 44,078                       |  
|Travel                                     |   | 42,529                       |  
|Insurance                                  |   | 38,420                       |  
|Depreciation and amortization              |   | 26,043                       |  
|Stock-based
      compensation (Note 13)   |   | 22,300                       |  
|Interest, finance and bank
      charges   |   | 2,327                        |  
|Research
      and development             |   | -                            |  
|TOTAL OPERATING EXPENSE                    |   | 1,094,504                    |  
|                                           |   |                              |  
|LOSS FROM OPERATIONS                       |   | (582,028                     | )
|                                           |   |                              |  
|OTHER EXPENSE                              |   |                              |  
|Foreign currency
      translation loss    |   | (979                         | )
|TOTAL OTHER EXPENSE                        |   | (979                         | )
|                                           |   |                              |  
|NET LOSS                                   | $ | (583,007                     | )
|WEIGHTED AVERAGE NUMBER COMMON SHARES      |   |                              |  
|OUTSTANDING
      - BASIC AND DILUTED      |   | 40,300,324                   |  

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

---

WESCORPENERGYINC.CONSOLIDATEDSTATEMENTOFSTOCKHOLDERS'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
      
      
      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
      
      2,208,654
      
      
      221
      
      
      772,808
      
      
      -
      
      
      (656,362
      )
      
      -
      
      
      -
      
      
      116,667Cash received
        for share subscriptions receivable
      
      -
      
      
      -
      
      
      -
      
      
      29,772
      
      
      -
      
      
      -
      
      
      -
      
      
      29,772Foreign currency translation gain
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      38,858
      
      
      38,858Unrealized gain on available-for-sale
        securities
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      1,064,746
      
      
      1,064,746Stock-based compensation
      
      -
      
      
      -
      
      
      22,300
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      22,300Proceeds received
        from exercise of warrants prior to issuance
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      677,687
      
      
      -
      
      
      -
      
      
      677,687Net loss
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (583,007
      )
      
      -
      
      
      (583,007
      )Balance, March 31, 2006 (Unaudited)
      
      40,513,340
      
      $
      4,051
      
      $
      16,245,541
      
      $
      (7,500
      )
      $
      873,717
      
      $
      (15,911,760
      )
      $
      2,700,396
      
      $
      3,904,445


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

---

WESCORP ENERGY INC.CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                    |   | Three Months Ended March 31, |  
|------------------------------------------------------------------- | - | ---------------------------- | -
|                                                                    |   | 2006                         |  
|                                                                    |   | (Unaudited)                  |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                               |   |                              |  
|Net loss                                                            | $ | (583,007                     | )
|Adjustments to reconcile net loss                                   |   |                              |  
|to net cash
      used in operating activities:                     |   |                              |  
|Depreciation
      and amortization                                 |   | 26,043                       |  
|Amortization of technology                                          |   | 129,162                      |  
|Stock-based
      compensation                                      |   | 22,300                       |  
|Changes in operating assets and liabilities:                        |   |                              |  
|Accounts
      receivable                                           |   | (260,575                     | )
|Inventories                                                         |   | (209,003                     | )
|Prepaid
      expenses                                              |   | (77,423                      | )
|Deposits                                                            |   | (8,927                       | )
|Accounts
      payable and accrued liabilities                      |   | 171,828                      |  
|Net cash used in operating activities                               |   | (789,602                     | )
|CASH FLOWS FROM INVESTING ACTIVITIES:                               |   |                              |  
|Purchase of property and equipment                                  |   | (7,791                       | )
|Net
      cash invested in note receivable                          |   | 75                           |  
|Increase in investments                                             |   | (150,000                     | )
|Net
      cash used in investing activities                         |   | (157,716                     | )
|CASH FLOWS FROM FINANCING ACTIVITIES:                               |   |                              |  
|Payments
      on notes payable                                     |   | (8,422                       | )
|Proceeds from notes payable                                         |   | -                            |  
|Repayment
      on amounts due to shareholders                      |   | -                            |  
|Increase in amounts due to related parties                          |   | 4,078                        |  
|Payments
      on convertible debentures                            |   | (77,000                      | )
|Proceeds received from exercise of warrants prior to issuing shares |   | 677,687                      |  
|Proceeds
      from subscriptioon receivable                        |   | 29,772                       |  
|Proceeds from issuance of common stock                              |   | 116,667                      |  
|Net
      cash provided by financing activities                     |   | 742,782                      |  
|Effect of exchange rates                                            |   | 41,186                       |  
|Net increase in cash                                                |   | (163,350                     | )
|Cash, beginning of period                                           |   | 580,430                      |  
|Cash, end of period                                                 | $ | 417,080                      |  
|SUPPLEMENTAL CASH FLOW DISCLOSURES:                                 |   |                              |  
|Cash paid for:                                                      |   |                              |  
|Interest                                                            | $ | 57,053                       |  
|Income taxes                                                        | $ | -                            |  

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

---

|                                                      
|------------------------------------------------------
|WESCORP ENERGY INC.                                   
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|(Unaudited)                                           
|March 31, 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 three month period ended March 31,
  2006 are not necessarily indicative of the results that may be expected for
  the year ending December 31, 2006.

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
  where 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 Edmonton, 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 at March 31, 2006 and December 31,
  2005 were as follows:

March 31,
      
      
      December 31,2006
      
      
      2005(Unaudited)Finished goods
      $
      1,183,188
      
      $
      966,170Raw materials
      
      28,920
      
      
      36,935$
      1,212,108
      
      $
      1,003,105


---

NOTE 5  PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at March 31,
  2006 and December 31, 2005:

March 31,
      
      
      December 31,2006
      
      
      2005(Unaudited)Automotive equipment
      
      166,275
      
      
      166,275Computer hardware
      
      38,112
      
      
      36,969Computer software
      
      13,084
      
      
      11,666Furniture and fixtures
      
      13,466
      
      
      12,910Leasehold improvements
      
      37,217
      
      
      33,109Office equipment
      
      41,262
      
      
      41,262Tools and equipment
      
      18,465
      
      
      16,799327,881
      
      
      318,990Less: accumulated depreciation
      
      136,090
      
      
      109,226$
      191,791
      
      $
      209,764


Depreciation and amortization expense for the three months ended
  March 31, 2006 and 2005 was $26,043 and $13,419, respectively.

NOTE 6  INVESTMENTS

The components of investments at March 31, 2006 and December
  31, 2005 were as follows:

March 31,
      
      
      December 31,2006
      
      
      2005(Unaudited)Synenco Energy Inc.
      $
      3,546,724
      
      $
      2,484,585Ellycrack AS
      
      538,186
      
      
      388,186$
      4,084,910
      
      $
      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 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 three months ended March 31, 2006 the
  Company recognized an unrealized gain of $1,064,745 in comprehensive income,
  net of a $2,606 translation adjustment. No income tax effect was reflected as
  the Company has available net operating loss carryforwards in excess of the
  unrealized gain.

Agreement with Ellycrack ASWescorp has purchased an aggregate 752,000 shares of common stock of Ellycrack
  AS (Ellycrack), a privately held company in Norway. 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 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 2005, Wescorp paid
  $75,000 for 97,000 additional shares of Ellycrack at five 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:

March 31,
      
      
      December 31,2006
      
      
      2005(Unaudited)DCR technology acquired from Vasjar
      $
      3,503,824
      
      $
      3,503,824DCR technology acquired from Flowstar
      
      414,073
      
      
      414,0733,917,897
      
      
      3,917,897Accumulated amortization
      
      835,797
      
      
      706,635$
      3,082,100
      
      $
      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 8
  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.

NOTE 8  NOTES PAYABLE

The following comprise the Companys notes payable at March
  31, 2006 and December 31, 2005:

|                                                                                                                                                    |   | March 31,   |  |   | 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    | $ | 15,910      |  | $ | 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                                                                  |   | 24,795      |  |   | 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                                                                       |   | 16,418      |  |   | 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                                                                  |   | 33,158      |  |   | 34,998       | 
|Note payable  Interest at 0.0%, and secured by automotive
      assets of Flowstar, payable $825 permonth, principal only, due November
      2009 |   | 36,260      |  |   | 38,773       | 
|Notes payable  Interest at 0.0%, unsecured,
      due April 2007                                                                                   |   | 822,475     |  |   | 822,475      | 
|Total notes payable                                                                                                                                 |   | 949,016     |  |   | 957,438      | 
|Amounts
      due within one year                                                                                                                   |   | 447,214     |  |   | 447,038      | 
|                                                                                                                                                    | $ | 501,802     |  | $ | 510,400      | 

Future principal payments on notes payable are as follows:

Periods ending March 31,2007
      $
      447,2142008
      
      434,4942009
      
      30,9232010
      
      22,2732011
      
      14,112$
      949,016


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 stock shares have equal voting rights, are non-assessable
  and have one vote per share. Voting rights are not cumulative and, therefore,
  the holders of more than 50% of the common stock could, if they choose to do
  so, elect all of the directors of the Company. The preferred shares may be issued
  in series, with the powers, rights and limitations of the preferred shares to
  be determined by the Companys board of directors. As of March 31, 2006,
  no preferred shares had been issued.

---

2006 Stock Transactions 
  During the three months ended March 31, 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 exercise price of $0.35 per share.

Common Stock Warrants 
  In 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, 190,000 of these warrants were exercised. The Board of Directors has extended
  the expiry date of the remaining warrants to May 15, 2006.

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. as financing fee for providing the Company with working
  capital. The estimated fair market value of the warrants issued in conjunction
  with the promissory note due to AHC Holdings, 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 March 31, 2006, the Company has the following common stock
  purchase warrants outstanding:

Number of shares
      
      Exercise
      
      Expirationunder warrants
      
      price
      
      date736,000
      
      $0.50
      
      May 20061,400,000
      
      $0.25
      
      December 20061,000,000
      
      $0.15
      
      June 20083,136,000


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 two shareholder entities, Wescorp issued shares to the shareholders
  of Vasjar each as to 50% as follows:

(a) an aggregate 2,400,000 shares of common stock of the Company
  effective April 30, 2004 (issued and delivered on April 29, 2004); and

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

Stage One. On or before April 1, 2005, Wescorp was required
  to issue 480,000 additional shares based on sales achieved in the 2004 calendar
  year; which were less than $3,000,000. Shares were required to be registered
  at delivery. Wescorp was not able to deliver free-trading shares on April 1,
  2005, and as a result the Company was obligated to pay the Vasjar shareholders
  an additional 48,000 Wescorp shares for each of the months April through September
  2005 totaling 288,000 shares. These shares were delivered and accepted by the
  Vasjar shareholder on September 28, 2005. Wescorp may be required to issue an
  additional 120,000 shares related to this stage should sales targets be met
  for Stages Two or Three.

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

---

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

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

The balance of the fair market value of the shares due to the
  Vasjar shareholders has been recorded in short and long-term notes payable.

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 and 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.

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 June 30, 2007 as follows:

| | a) | if exercised on or before June 30, 2006 the holder of
        a warrant shall be entitled to purchase one common share for each warrant
        held for US$1.00 per common share; and    
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                           
| | b) | thereafter until the maturity date the holder of each
        warrant shall be entitled to purchase one (1) common share for each warrant
        held for US$2.00 per share common share.

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

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

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

NOTE 12  STOCK OPTIONS

During the three months ended March 31, 2006, the Company issued
  a combined total of 43,478 options to purchase common shares to an officer.
  Changes in the number of options outstanding are summarized as follows:

|                                 |  | March 31, 2006 |  |   | December 31, 2005 | 
|-------------------------------- |  | -------------- |  | - | ----------------- | 
|                                 |  | (Unaudited)    |  |   |                   | 
|                                 |  |                |  |   | Weighted          | 
|                                 |  |                |  |   | Average           | 
|                                 |  |                |  |   | Exercise          | 
|                                 |  | Options        |  |   | Price             | 
|Outstanding, beginning of period |  | 2,326,881      |  | $ | 0.56              | 
|Granted                          |  | 43,478         |  |   | 0.69              | 
|Outstanding, end of period       |  | 2,370,359      |  | $ | 0.56              | 

The weighted average remaining contractual life of the options
  is 46 months.

---

NOTE 13  STOCK-BASED COMPENSATION

The fair value of the stock option grant for the three months
  ended March 31, 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
      $ 0.51


NOTE 14  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 15  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 March 31, 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 would also include the exclusive
  rights to manufacture, and sell products or systems derived from or utilizing
  Ellycracks technology in North America.

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

Operating Leases 
  The Company leases office space and manufacturing space in Edmonton, Alberta,
  Canada for $6,240 per month under a month-to-month operating lease agreement.
  The Company currently leases office space in Calgary, Alberta, Canada for approximately
  $3,200 per month under an operating lease agreement, which expires in June 2006.
  Upon the expiration of the current lease the Company has committed to a new
  lease for approximately $5,100 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 $640
  per month until March 2009 and a photocopier which has minimum lease payments
  of approximately $500 per month until December 2008.

Future aggregate minimum payments under operating leases are
  as follows:

Periods ending March 31,2007
      $
      69,0002008
      
      74,7602009
      
      73,2602010
      
      61,0802011
      
      15,270$
      293,370


NOTE 16 - RELATED PARTY TRANSACTIONS

---

Related Party Transactions 
  Summary of related party transactions as follows for the three months ended
  March 31, 2006 and 2005:

March 31,
      
      
      March 31,2006
      
      
      2005(Unaudited)
      
      
      (Unaudited)Stock-based compensation paid or accrued
        to directors of the Company
      $
      22,300
      
      $
      -


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. An additional
  $4,578 was incurred in the three months ended March 31, 2006. The outstanding
  balance of $34,940 is reflected in due to related party.

NOTE 17  INCOME TAXES

At March 31, 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 $5,229,000 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 March 31, 2006 and December 31, 2005
  were as follows:

March 31,
      
      
      December 31,2006
      
      
      2005(Unaudited)NOL carryforwards
      $
      12,100,000
      
      $
      12,600,000Deferred tax asset
      $
      5,022,000
      
      $
      5,229,000Deferred tax asset valuation allowance
      $
      (5,022,000
      )
      $
      (5,229,000
      )


At March 31, 2006, the Company has NOL carryforwards of approximately
  $15,100,000, which expire in the years 2015 through 2025. The Company recognized
  approximately $3,000,000 of NOL carryforwards to offset potential taxes related
  to the unrealized gain in availablefor-sale securities. The decrease in
  the allowance account from December 31, 2005 to March 31, 2006 was $207,000.

NOTE 18  SUBSEQUENT EVENTS

Exercise of WarrantsIn April 2006, the Company received $80,000 total proceeds from the exercise
  of 160,000 warrants with an exercise price of $0.50.

Conditional Purchase AgreementAs 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 liable 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. If any of the Wescorp shares to be issued
  to the former owners of Vasjar have not been delivered for a period of 182 days
  after the applicable due date, they may at their option terminate the share
  purchase agreements, without notice or prior opportunity to cure. Wescorp has
  pledged to the former owners of Vasjar all the Vasjar shares as security to
  guarantee Wescorps performance under the share purchase agreements.

---

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

Wescorp Energy Inc. is referred to herein as we, 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

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. As such, we are including herein a discussion
  of our updated plan of operation for the next 12 months. In addition, we are
  also including summary analysis and information regarding our financial condition,
  liquidity and capital resources.

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 March 31, 2006, Flowstar sold approximately 72%
more DCR units than the quarter ended March 31, 2005, while the average selling
price decreased by about 10% versus the same quarter in 2005.

Revenue from operations for the quarter ended March 31, 2006
totaled $1,079,343 compared to $620,595 for the quarter ended March 31, 2005.
Although our Flowstar division has enjoyed encouraging sales growth through 2005
and the first quarter of 2006, the Company as a whole has yet to reach
profitability. During the quarter ended March 31, 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.

While we expect that sales will continue to increase over the
remaining three quarters of 2006 and that we will hopefully generate operating
profits in the Flowstar division within that period, cash will be required to
fund the manufacture of sufficient inventory and to finance the build up of
trade accounts receivable that will increase alongside sales. Consequently,
forecasting our total cash requirement is difficult at this time due to the
contingent nature of the timing and volume of sales we expect over that same
period. As such, we intend to raise additional capital by selling new equity,
incurring short-term debt, or selling part or all of our Synenco Energy Inc.
shareholdings in 2006 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
  our Ellycrack technology (see below), and
- The potential acquisition of new technologies and related businesses which
  should be accretive almost immediately upon closing.

In addition to improved Flowstar sales realized in the first
quarter of 2006, the market value of our Synenco Energy Inc. shares at March 31,
2006 appreciated a further 43% from December 31, 2005 year end reporting to a
market value of $4,139,500.

The rapid growth we are experiencing can place considerable
operational, managerial and financial strain on our Company. To ensure we
succeed with our new business plan, we must proactively adhere to the following:

| | 1. | Continue to improve, upgrade and expand business
      infrastructure supporting operations  Our Flowstar division is currently
      implementing a comprehensive customer relationship management system,
      enhanced training program and reporting matrix for sales professional in
      order 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 first quarter of 2006 we are actively
      recruiting personnel for key executive positions within Flowstar and
      Wescorp including those to oversee our Flowstar U.S. expansion.                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | 3. | Continue to advance commercialization development
      programs to generate positive cash flow and earnings as soon as is
      practically possible  We are actively seeking value-added acquisition
      candidates at or near revenue generation                                                                                                                                                                                                                                                                                                                                                          

---

| |    | that extend our reach into large high-growth and focused
      market segments. We are also actively assessing various options to
      accelerate the commercialization of our Ellycrack joint-venture and
      technology.                                                                                                                                             
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                           
| | 4. | Maintain adequate financial resources  As noted above,
      we intend to raise additional capital in 2006 to fund planned expansion,
      technology development and acquisition initiatives being considered, We
      are currently qualifying value-added investors and accretive sources of
      capital available to Wescorp if or when that funding is
  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, and new executives
will be hired with the skill sets and experience required in these areas. 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.

Acquisitions

In connection with the 2004 acquisition of Flowstar, the Company
  concluded the acquisition of 100% of the outstanding shares of Vasjar 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 system. With the completion of the acquisition of Vasjar, the Company
  now owns all the proprietary technology originally owned by Flowray related
  to the DCR 900 system and other products. Quadra is planning to grant Flowstar
  International a license to use the technology and to manufacture, market and
  sell products derived from the technology, including the DCR 900 system, in
  all jurisdictions worldwide except Canada.

In consideration of the purchase of all the outstanding shares
of Vasjar from two shareholder entities, Wescorp issued shares (and will issue
additional shares) to the shareholders of Vasjar each at 50% as follows:

|(a) | an aggregate 2,400,000 shares of common stock of the
      Company on April 28, 2004; and                             
|--- | ----------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                       
|(b) | up to an aggregate 2,600,000 additional shares of common
      stock of the Company to be issued in stages as
follows:

Stage One. On or before April 1,
2005, the Company was required to issue 480,000 additional shares based on sales
achieved in the 2004 calendar year; which were less than $3,000,000. Shares were
required to be registered at delivery. 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 totaling 288,000 shares. These
shares were delivered and accepted by the Vasjar shareholders on September 28,
2005. We may be required to issue an additional 120,000 shares related to this
stage should sales targets be met for Stage Two or if Stage Three sales are more
than $3,750,000. Shares are required to be registered at delivery.

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

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

Any Wescorp shares not earned in a
particular calendar year because 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.

If we fail to deliver any of the Stage 2 or 3 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. 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
48,000 Wescorp shares for each month that the shares are not delivered.

If any of the Wescorp shares to be issued to the Vasjar
shareholders have not been delivered for a period of 182 days after the
applicable due date, the Vasjar shareholders may at their option terminate the
share purchase agreements, without notice or prior

---

opportunity to cure. 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 are experiencing 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 amended Form 10-QSB for each of the quarters in
2005 must also be filed and are currently being prepared for filing in the
second quarter of 2006.

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

Pursuant to a letter of intent dated February 10, 2004,
Ellycrack 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 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 sublicense others to do the same on a world-wide
basis.

The principle features of the MOU is to cancel the options to
purchase licenses in Canada, the United States and Mexico and to replace it with
an obligation to build and operate a pilot plant in Canada to determine the
overall economics of the technology and subject to the viability of these
economics, to market the technology on a world-wide basis.

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. As such
heavy oil can be transported directly to a refinery.

We have since made various improvements to core technology
within the Ellycrack process in the third quarter of 2005 in order to optimize
it for the pilot plant and subsequent commercial applications. As a result of
those improvements, we scheduled tests for several major energy producers who
have requested a demonstration of the Ellycrack process for possible
consideration within their field operations as a commercial application. Those
improvements and tests were very successful resulting in a significant increase
in the process upper limit of API upgrading. To date, we have hired an
engineering firm to prepare the design for a 50 to 200 barrel a day pilot plant
utilizing the Ellycrack technology which was completed in the first quarter of
2006. The complete costing and fabrication of the pilot plant is in process,
with the estimated completion to be in mid 2006. In addition, we have also hired
an engineer to act as project manager for pilot plant fabrication and to oversee
Ellycrack related operations.

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

Plan of Operation for the Next Twelve Months

The increase we realized in Flowstar sales during the first
quarter of 2006 over the same quarter of 2005 is an indication that we are
starting to generate stronger growth that management hopes will result in
operating profits for the Flowstar division in the 2006 fiscal year. However,
our future operations and expansion are dependent on identifying and securing
additional long-term or permanent equity 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 revised 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 integrated 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 the year and sales increases from
prior periods. This trend has continued with Flowstar having higher sales in the
first quarter of 2006. Over the next several months, Management will finalize a
plan of action to manufacture and distribute the DCR product line throughout
North America.

As part of our business development efforts, Flowstar continues
to become more deeply involved with industry organizations and in particular
those focused on the upstream measurement market. With that in mind our Flowstar
Technologies Inc. is an active member of the Industry Measurement Group, a
non-profit organization comprised of corporations with a common interest in
issues affecting measurement within the petroleum industry (IMG). 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 is affiliated with The University of
Texas continuing Education program PETEX. The CSHM event titled Getting it
right the first time 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
will be participating and exhibiting at the Gas City Petroleum Show in Medicine
Hat Alberta, and in June 2006 well be participating in the Global Petroleum
Show in Calgary, Alberta.

In the past twelve months, we made significant advancements in
the design and engineering of our Ellycrack technology with contributions from
an engineering firm we retained to provide related services to our
joint-venture. Based on these engineering advancements, we will undertake to
build a pilot plant facility to test the technology in a controlled field
testing setting to more accurately define critical operating parameters for
commercial applications. Once those parameters are established, it will allow us
to modify the original engineering and design plans in order to optimize
manufacturing and units processing for subsequent applications of the technology
within commercial upgrading facilities.

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 by the end of fiscal 2006, 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
      ensure we are 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 ensure we optimize 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 is our only source 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 affect the conversion all 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. It is hoped that any potential acquisitions would also contribute to
our current revenue and cash flow streams immediately after the acquisition. Our
total anticipated funding requirement for 2006 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/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 March 31, 2006 Compared to Three Months
Ended March 31, 2005

Revenues

Revenues during the quarter ended March 31, 2006 were over
$1,079,000, compared to approximately $621,000 for the quarter ended March 31,
2005, an increase of over $458,000 (roughly 73.8%) . 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 quarter
ended March 31, 2006 increased slightly to 52.5% versus 49.5% for the quarter
ended March 31, for 2005. This deterioration in the gross margin is directly
attributable to market conditions which have forced us reduce prices slightly to
ensure our products are priced in line with our competitors.

Expenses

Operating expenses for the quarter ended March 31, 2006 were
$1,094,504 versus $988,760 for the quarter ended March 31, 2005, an increase of
$106,000. Expansion of our Ellycrack and Flowstar operations were the principal
reasons for this increase. The largest increases in our operating expenses were
in engineering expenses for the Ellycrack pilot plant, and wages and benefits as
explained below.

Additional staff was 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 2005. The Company
has also hired administration staff necessary to support the operations of
Flowstar and enhance internal controls. As a result, wages and benefits were
$350,782 during the quarter ended March 31, 2006 versus $156,313 during the
quarter ended March 31, 2006, an increase of approximately $194,000.

Engineering of the Ellycrack pilot project didnt start until
the third quarter of 2005 and as a result, costs of approximately $126,000 were
incurred during the quarter ended March 31, 2006 with no corresponding cost
during the quarter ended March 31, 2005. Also, included in the new compensation
package for the Chief Executive Officer were stock options which did not exist
during the quarter ended March 31, 2005. Thus, the Company incurred
approximately $22,000 in stock based compensation during the quarter ended March
31, 2006 with no corresponding cost during the quarter ended March 31, 2005.

Travel expenses during the quarter ended March 31, 2006
increased by approximately $21,000 versus the quarter ended March 31, 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 $6,000 during the quarter ended March 31, 2006
versus the quarter ended March 31, 2005 were directly related the expansion of
the Flowstar and Ellycrack operations. Additionally, we incurred interest
expenses of approximately $55,000 on our debentures during the quarter ended
March 31, 2006 with no corresponding cost during the quarter ended March 31,
2005.

---

Depreciation expense for the quarter ended March 31, 2006 was $26,043 versus $13,419, an increase of just under $13,000. This increase was due to assets acquired during the last nine months of 2005 and the first three 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 approximately $16,000 for the quarter ended March 31, 2006 compared to the quarter ended March 31,
2005.

The above increases were offset by a substantial decrease in consulting fees for the current quarter of approximately $74,000 less than those incurred 2005. This decrease was caused by the expiration of consulting contracts which were not
renewed in 2006. In addition, 2006 results reflect approximately $191,000 less in interest, finance and bank charges as a direct result of the 2005 figures including the cost of a finders fee in relation to the debenture financing secured
during 2005. As well, legal and accounting costs decreased by just under $74,000 compared to the corresponding period of 2005. Last years figures for legal and accounting were adversely affected by legal fees incurred to defend the Baum
litigation, as well as legal and other professional fees related to the private placement of the debentures. The decrease of close to $28,000 for research and development in the current year compared to 2005 is a direct result of deferring new
developments in the Flowstar product line to the latter part of 2006.

Net Loss

The net loss for the quarter ended March 31, 2006 of $583,007 compared to a net loss of $675,392 for 2005 is due to the net effect of the increase in gross profit of approximately $199,000 offset by an overall increase of approximately
$106,000 in operating expenses as explained above.

Liquidity and Capital Resources  2006 Compared to 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
March 31, 2006, we have generated revenues from operations of $4,631,000 (comprised of $1,079,000 for the three months ended March 31, 2006 and $2,324,000 and $1,228,000 for the years ended December 31, 2005 and 2004, respectively).
We had an accumulated deficit at March 31, 2006 of $15,911,761.

Our cash position at March 31, 2006 increased to $417,080 from the $368,914 balance we had at March 31, 2005.

We used cash in operations of approximately $790,000 in the first three months of 2006 compared to cash used in operations of just over $41,000 during the same period in 2005. Approximately $470,000 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. In our efforts to maintain good supplier relationships we did not rely on accounts payable as a source of
funding to the same degree we did in 2005. As a result, the positive impact our trade payables had on our cash flows at March 31, 2006 was not as great as it was at March 31, 2005.

We also had a net outflow of cash of approximately $158,000 from investing activities for quarter ended March 31, 2006, which consisted of the purchase of plant and equipment of about $8,000 (March 31, 2005 - $7,000), and we used
$150,000 in cash for the purchase of shares in Ellycrack (March 31, 2005 - $75,000).

The net cash used in operating and investing activities was financed with approximately $743,000 from financing activities for the quarter ended March 31, 2006. The cash flow from financing activities was primarily a result of the issuance of
stock net of shares issued for services in the amount of close to $117,000 (March 31, 2005  270,000), cash received on the exercise of warrants for which shares were not yet issued in the amount of just under $678,000 ( March 31, 2005
 nil) and the funding of approximately $30,000 for a share subscription receivable (March 31, 2005  nil). In the quarter ended March 31, 2006 we incurred debt of about $4,000 relating to unpaid remuneration for our Chief
Executive Officer (2005  nil). Results for first quarter of 2005 also reflected a positive cash flow of $200,000 related to proceeds from convertible debentures which were issued subsequent to March 31, 2005. During the three months ended
March 31, 2006 we had to repay convertible debentures in the amount of $77,000 (2005 - $nil) and debt in the amount of just over $8,000 (2005 - $3,000). In the first quarter of 2005 we made payments of almost $45,000 on the
amounts due to a shareholder in order to extinguish that debt.

At March 31, 2006, we had current assets totaling approximately $2,577,000 compared to $1,490,000 at March 31, 2005. This increase is a direct result of the positive cash flow described above and managements decision to increase
inventory levels to support the increased business activities of Flowstar. Our investment in property and equipment at the end of the first quarter of 2006 increased to almost $192,000 compared to the $100,000 reported in the fist quarter of
2005, reflecting the expansion of our Flowstar business. The increase in investments to approximately $4,085,000 at March 31, 2006 from the March 31, 2005 balance of $994,000 was a direct result of being able to reflect the investment in
Synenco at March 31, 2005 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 $5,557,000 in current liabilities at March 31, 2006 compared to $3,808,435 at March 31, 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 approximately $302,000 when compared to the March 31, 2005 figures. To support current operations net funding of just over $1,475,000 in the form of short-term
convertible debentures was still on the books at March 31, 2006 while we had only received $200,000 of that financing as at March 31, 2005. In addition, the current portion of debt increased by $181,000 at March 31, 2006 versus March 31,
2005.

We had long-term liabilities of $502,000 at March 31, 2006 compared to $848,000 at March 31, 2005.

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 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 March 31, 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.

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

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

PART 1I  DESCRIPTION OF BUSINESS

Since 2003 Wescorp has focused on identifying and making
strategic early investments in oil and gas related businesses participating in
sectors that are beginning to grow in importance with large emerging market
opportunities that have yet to be fully exploited. We primarily acquire,
actively develop, and commercialize innovative technologies that improve the
management, environmental and economic performance of field operations for
conventional and unconventional energy producers. We prefer investments where 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 formed by inventors with more than one technology product
being developed, and that can benefit from the financial, technical, and
business development expertise of our management to bring those products to
market in a meaningful manner after they have been fully developed. We further
intend to license or form third-party commercial partnerships based on acquired
technologies as a means to accelerate growth beyond the early-stage of
commercialization on a cost-effective basis within global markets. Our goal is
to generate enhanced capital appreciation for our shareholders by continuing to
acquire, develop, and commercialize timely effective product solutions and/or
strategic investment opportunities that generate real returns with above-average
cash flow and margins.

In early 2003, we acquired 170,000 shares of Synenco Energy
Inc., then a private tar-sands exploration company with significant undeveloped
heavy oil and bitumen reserves in the Athabasca region of Northern Alberta,
Canada. That equity interest has since become free-trading and grown
significantly in value when Synenco closed its initial public offering in
November, 2005. Synenco stock now trades on the Toronto Stock Exchange under the
symbol SYN.

In June 2003 we entered into an agreement to purchase 100% of
the outstanding shares of two companies, Flowstar Technologies Inc. (Flowstar)
and Flowray Inc. (Flowray) which was subsequently amended in January 2004. 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. Flowstar and Flowray were legally amalgamated on December 31, 2004 into
one company that continued under the name Flowstar Technologies Inc.

In connection with the acquisition of Flowstar, the Company
also concluded the acquisition of 100% of the outstanding shares of Vasjar
Trading Inc., a British Virgin Islands company (Vasjar) 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 system. Flowstar,
Flowray, Vasjar and its subsidiaries, (collectively referred to as the Flowstar
Group) are involved in the natural gas flow measurement and service industry in
North America.

Based on preliminary and ongoing sales of Flowstars principal
product, we believe there are significant additional sales opportunities for
Flowstar products worldwide. Flowstars principal product is the Digital Chart
Recorder (DCR) gas flow measurement and well monitoring system that have proven
to be very effective in several applications, including those for;

- Coal bed methane production  low pressure well monitoring and gas
  metering
- Wet gas production  as stand-alone units without heated shelters or added
  infrastructure
- Plunger lifts  to monitor and measure highly variable gas flows
- Test separators  eliminating the need to change orifice plates

---

- Fuel gas  to measure gas consumption of pipeline compressors

During 2003 and 2004, we purchased 259,000 shares of Ellycrack AS, a private technology research and development company based in Florø, Norway (Ellycrack). In September, 2004 we purchased an additional 400,000 treasury shares of
Ellycrack by issuing 300,000 shares of Wescorp common stock to Ellycrack resulting in an equity interest in Ellycrack of 12.90% . In January 2006 we purchased an additional 65,000 shares of Ellycrack bringing our current equity interest to
13.45%

Also in 2004, we entered into a Memorandum of Understanding (MOU) to form a 50/50 joint venture with Ellycrack. At the time of this filing we are in the process of preparing a formal joint venture agreement that is based on the terms and
conditions outlined in the MOU. The joint venture agreement will provide Wescorp a 50% interest in the worldwide rights to use and benefit from the commercial application of Ellycracks VISCOSITOR technology and intellectual property.

The VISCOSITOR is a low energy (low cost) heavy oil upgrading process which is self sustained by fuel produced by the process itself. This technology primarily upgrades the quality of heavy oil by producing lighter, more valuable synthetic grades of
crude oil which dramatically improves the economics of heavy-oil production and transportation projects. It also has various environmental benefits, is a low cost alternative for small and mid-sized heavy oil field production and provides enhanced
economies of scale for larger heavy oil production and processing projects. All research and development for the VISCOSITOR was carried out in cooperation with one of Norways biggest research organizations, SINTEF ENERGY RESEARCH A/S at the
Norwegian Institute of Technology in Trondheim, Norway. Subsequent improvements to optimize the process were contributed by Wescorp, Ellycrack and an engineering firm engaged to provide design and engineering services to the pending
joint-venture.

Primary features and benefits of this technology include but are not limited to

- Converting kinetic energy to required temperatures at the molecular level to crack heavy oil  requires lower ambient temperature and atmospheric pressure to significantly reduce capital and energy costs
- Colliding atomized oil and active steam with fluidized sand at high velocity to crack oil without additional catalysts or hydrogenation  output remains stable and does not repolymerize after processing to retain the added value of
upgrading
- Generating coke by-product from cracking as the primary fuel for all unit operations  process requires very little energy input and generates significantly more energy than is required to potentially drive onsite electricity or steam co-
generating capacity
- Raising the API of processed oil from 6° to 28° in a single pass and over 30° with medium grade feedstock  raising significantly the value of processed oil and reducing heavy oil differentials of pricing relative to world
benchmarks

As part of the joint-venture agreement being prepared with Ellycrack, Wescorp must pay for the design modifications, construction and field testing of a pilot plant to be fabricated in Canada. Subsequent to that benchmark being achieved, all future
costs associated with commercial applications of VISCOSITOR technology will be shared equally by Wescorp and Ellycrack. We expect to substantially increase our investment in developing this technology for commercial launch throughout 2006.

On February 16, 2006 we announced that the engineering phase of the patented Ellycrack heavy oil upgrader pilot plant has been completed and are now moving to fabricate the plant in Canada. Final design contributions and engineering services were
provided by a major international engineering company with over 40 years of combined tar-sands, heavy oil and upgrader project experience. Pilot plant fabrication will be overseen by our newly appointed Ellycrack joint-venture project manager.
Completion of the engineering stage is the direct result of having undertaken an extended period of testing through the latter half of 2005 which resulted in design modifications that allowed us to significantly improve the upgrading capabilities of
the Ellycrack process as outlined above. The extended design and testing period allowed us to optimize the process to where it can now upgrade heavy oil to over 30 degrees API. That enhanced upgrading capacity has in turn also expanded the scope of
commercial applications being considered for the process which we demonstrated for several energy producers in that testing period, with particular attention paid to demonstrating:

- How the innovative process can upgrade heavy oil in a more cost-effective manner than most other known field upgrader or primary cracking technologies currently in use
- How the process can upgrade oil without specialized catalysts, custom infrastructure or emulsifying feedstock
- Why the process can scale with enhanced efficiencies to larger pilot-plants and commercial units
- The range, consistency and stability of output from a wide range of native feedstock
- How the technology can be configured for specific applications being considered by each producer

Subsequent to fabrication, the VISCOSITOR pilot plant will undergo a period of continuous field testing to further define performance parameters beyond API uplift including details related to material balance, energy balance and composition of
processed output to determine final capital and operating costs for commercial users.

---

PART III  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 Baum and Wescorp. 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. Wescorp was
awarded $42,471 plus court costs. Mr. Baum appealed the judgment. The final
determination of the case at this time is not certain, nor is it certain when
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 three months ended March 31, 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. 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)

Also during the three months ended March 31, 2006, the Company
received proceeds of $269,500 on the exercise of additional warrants at an
exercise price of $0.35 per share pursuant to 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. Share certificates for the
exercise of these warrants have not been issued as at the date of this report

We also received proceeds of $235,328 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), and $95,000 on the exercise of warrants at an exercise price of $0.50 per
share pursuant to a private placement dated March 15, 2004 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 April 14, 2004). Share certificates for the exercising of these
warrants have not been issued as at the date of this report.

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 March 31, 2006.

ITEM 5. OTHER INFORMATION

Not applicable.

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

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

|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).                                                          
|        |                                                                                                                                                                                                                             
|16.1*   | Letter from Williams
        & Webster, P.S. (Incorporated by reference to Form 8-K filed on February
        17, 2006).                                                                                                    
|        |                                                                                                                                                                                                                             
|21.1*   | Schedule of Subsidiaries
        of Wescorp Energy Inc. (Incorporated by reference to Form 10-KSB/A filed
        on May 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                       
|        |                                                                                                                                                                                                                             
|99.1*   | Press release
        announcing appointment of Robert Martin Nicolay to Wescorp Board of Directors.
        (Incorporated by reference to Form 8-K filed on May 1, 2006).                                                  

*Previously filed

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
11thday of May, 2006.

|                   | WESCORP ENERGY INC.
|------------------ | -------------------
|                   |                    
|Date: May 11, 2006 | By:                
|                   |                    
|                   |                    
|                   | By:                
|                   |                    

---