<PAGE>

================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                              ---------------------

                                   FORM 10-QSB

(Mark One)
[X]   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2005

[ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934
      FOR THE TRANSITION PERIOD FROM              TO

                             BLUE RIDGE ENERGY, INC.
        (Exact Name of Small Business Issuer as Specified in Its Charter)

             NEVADA                                  61-1306702
  (State or Other Jurisdiction of                   (IRS Employer
   Incorporation or Organization)                 Identification No.)

               10777 WESTHEIMER RD., SUITE 170, HOUSTON, TX 77042
                    (Address of Principal Executive Offices)

                                 (832) 358-3900
                (Issuer's Telephone Number, Including Area Code)

                                       N/A
              (Former Name, Former Address and Former Fiscal Year,
                          if Changed Since Last Report)

Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 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 [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 21,266,094 shares of common stock as
of May 10, 2005 and 23,300 shares of Series E Preferred Stock as of
May 10, 2005.

                  TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT

                                 Yes [ ] No [X]

================================================================================

<PAGE>

<TABLE>
<CAPTION>
                                                                                            NUMBER
                                                                                            ------
<S>                                                                                         <C>
                                     PART I

                              FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS (UNAUDITED)

         FINANCIAL STATEMENTS OF REGISTRANT

         INDEX

         Balance Sheets as of March 31, 2005 and December 31, 2004                               3
         Statements of Operations for the three months ended March 31, 2005 and 2004             4
         Statements of Cash Flows for the three months ended March 31, 2005 and 2004             5
         Notes to Financial Statements                                                        6-11

ITEM 2.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS                              12-15
ITEM 3.      CONTROLS AND PROCEDURES                                                            15

                                         PART II

                                    OTHER INFORMATION

ITEM 1.      LEGAL PROCEEDINGS                                                                  16
ITEM 2.      CHANGES IN SECURITIES                                                              16
ITEM 3.      DEFAULTS UPON SENIOR SECURITIES                                                    16
ITEM 4.      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                16
ITEM 5.      OTHER INFORMATION                                                                  16
ITEM 6.      EXHIBITS AND REPORTS ON FORM 8-K                                                   16
SIGNATURE                                                                                       16
</TABLE>

                                       2

<PAGE>

                             BLUE RIDGE ENERGY, INC.
                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                     MARCH 31,       DECEMBER 31,
                                                                                       2005              2004
                                                                                   -----------       ------------
<S>                                                                                <C>               <C>
                                                                                   (UNAUDITED)

                                     ASSETS

CURRENT ASSETS:
   Cash                                                                            $ 1,180,685        $ 1,465,675
   Accounts Receivable:
      Managed Limited Partnerships                                                      15,365             15,365
      Related party                                                                     83,509             22,354
      Trade and Other                                                                  143,024            167,400
   Prepaid Expenses and Other Current Assets                                            30,855              5,693
                                                                                   -----------        -----------

        TOTAL CURRENT ASSETS                                                         1,453,438          1,676,487

PROPERTY AND EQUIPMENT, NET                                                            704,699            651,654
OTHER NONCURRENT ASSETS                                                                  7,024              7,024
                                                                                   -----------        -----------

        TOTAL ASSETS                                                               $ 2,165,161        $ 2,335,165
                                                                                   ===========        ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
   Accounts Payable and Accrued Liabilities                                        $   244,882        $   125,545
   Current Portion Long Term Debt                                                       57,273             47,523
                                                                                   -----------        -----------

      TOTAL CURRENT LIABILITIES                                                        302,155            173,068
                                                                                   -----------        -----------

LONG TERM DEBT                                                                         459,596            441,173
                                                                                   -----------        -----------
COMMITMENTS AND CONTINGENCIES                                                                -                  -

STOCKHOLDERS' EQUITY:
   Preferred Stock, $0.001 par value; 5,000,000 shares authorized; Series
      E 23,300 shares issued and outstanding at March 31, 2005 and
      December 31, 2004 (liquidation preference of $233,000
      at March 31, 2005 and December 31, 2004)                                              23                 23
   Common Stock, $0.005 par value; 150,000,000 shares authorized; 21,266,094
      shares issued and outstanding at March 31, 2005 and December 31, 2004            106,331            106,331
   Additional Paid-In Capital                                                        8,745,055          8,745,055
   Accumulated Deficit                                                              (7,447,999)        (7,130,485)
                                                                                   -----------        -----------

      TOTAL STOCKHOLDERS' EQUITY                                                     1,403,410          1,720,924
                                                                                   -----------        -----------

      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                   $ 2,165,161        $ 2,335,165
                                                                                   ===========        ===========
</TABLE>

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

                                       3

<PAGE>

                             BLUE RIDGE ENERGY, INC.
                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                           THREE MONTHS ENDED
                                                                                MARCH 31,
                                                                    -------------------------------
                                                                       2005                2004
                                                                    ------------        -----------
<S>                                                                 <C>                 <C>
OPERATING REVENUES:
   Oil and Gas Sales                                                $    125,398        $   130,148
                                                                    ------------        -----------

       TOTAL OPERATING REVENUES                                          125,398            130,148
                                                                    ------------        -----------
OPERATING COSTS AND EXPENSES:
   Lease Operating Costs                                                  52,502             46,282
   Dry Hole and Abandonment Costs                                              -                158
   Exploration Costs                                                     149,505                  -
   Depreciation, Depletion and Amortization                               55,957             63,969
   General and Administrative Costs                                      167,805            292,080
                                                                    ------------        -----------

       TOTAL OPERATING COSTS AND EXPENSES                                425,769            402,489
                                                                    ------------        -----------

OPERATING LOSS                                                          (300,371)          (272,341)
                                                                    ------------        -----------
OTHER (EXPENSE) INCOME:
   Interest Income (Expense)                                             (10,153)                20
   Other Expense                                                               -             (4,720)
                                                                    ------------        -----------

       TOTAL OTHER (EXPENSE) INCOME                                      (10,153)            (4,700)
                                                                    ------------        -----------

       LOSS BEFORE INCOME TAXES                                         (310,524)          (277,041)

INCOME TAX PROVISION                                                           -                  -
                                                                    ------------        -----------

       NET LOSS                                                     $   (310,524)       $  (277,041)
                                                                    ------------        -----------

       SERIES E PREFERRED STOCK CASH DIVIDENDS                            (6,990)            (6,990)
                                                                    ------------        -----------

       NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS                 $   (317,514)       $  (284,031)
                                                                    ============        ===========

       NET LOSS PER COMMON SHARE                                    $      (0.01)       $     (0.04)
                                                                    ============        ===========

Weighted Average Common Shares Outstanding - Basic and Diluted        21,266,094          7,516,094
                                                                    ============        ===========
</TABLE>

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

                                        4

<PAGE>

                             BLUE RIDGE ENERGY, INC.
                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                       THREE MONTHS ENDED
                                                                            MARCH 31,
                                                                  ----------------------------
                                                                      2005              2004
                                                                  -----------        ---------
<S>                                                               <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net Loss                                                       $  (310,524)       $(277,041)
   Adjustments to Reconcile Net Loss to Net Cash Flows from
   Operating Activities:
      Depreciation, Depletion and Amortization                         55,957           63,969
      Dry Hole and Abandonment Costs                                        -              158
      Change in Operating Assets and Liabilities:
        Accounts Receivable-Trade                                      24,376          118,288
        Accounts Receivable-Related Party                             (61,155)               -
        Prepaid Expenses and Other Assets                             (25,162)         (12,871)
       Accounts Payable and Accrued Liabilities                       119,337          (14,678)
                                                                  -----------        ---------

       NET CASH USED IN OPERATING ACTIVITIES                         (197,171)        (122,175)
                                                                  -----------        ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of Furniture and Computer Equipment                       (47,087)          (8,829)
   Purchase of Oil and Gas Properties                                 (61,915)          (4,086)
                                                                  -----------        ---------

       NET CASH USED IN INVESTING ACTIVITIES                         (109,002)         (12,915)
                                                                  -----------        ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from Note Payable                                          42,095                -
   Payments on Long Term Debt                                         (13,922)          (6,000)
   Increase in Advances from Affiliate                                      -          166,469
   Dividends Paid                                                      (6,990)          (6,990)
                                                                  -----------        ---------

       NET CASH PROVIDED BY FINANCING ACTIVITIES                       21,183          153,479
                                                                  -----------        ---------

       NET INCREASE (DECREASE) IN CASH                               (284,990)          18,389

CASH AT BEGINNING OF PERIOD                                         1,465,675           71,256
                                                                  -----------        ---------

CASH AT END OF PERIOD                                             $ 1,180,685        $  89,645
                                                                  ===========        =========
</TABLE>

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

                                       5

<PAGE>

                             BLUE RIDGE ENERGY, INC.
                    NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

1.    OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

INTERIM REPORTING

The financial statements of the Registrant included herein have been prepared,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Although certain information normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States has been omitted, the Registrant believes that the
disclosures are adequate to make the information presented not misleading. It is
suggested that these financial statements be read in conjunction with the
financial statements and the notes thereto included in the Form 10-KSB of the
Registrant for its fiscal year ended December 31, 2004 and subsequent filings
with the Securities and Exchange Commission.

The financial statements included herein reflect all adjustments (consisting
only of normal recurring accruals) which, in the opinion of management, are
necessary to present a fair statement of the results for the interim periods.
The results for interim periods are not necessarily indicative of trends or of
results to be expected for a full year.

GENERAL

Blue Ridge Energy, Inc. (BR Energy), a Nevada corporation, was organized in
November, 1994, as Gem Source, Incorporated, and subsequently changed the name
to Blue Ridge Energy, Inc. in May, 1996. BR Energy's executive office is located
at 10777 Westheimer Rd., Suite 170, Houston, Texas 77042.

During 2004 BR Energy began the process of an operating strategy that should
enable BR Energy to take advantage of the following fundamentals:

      -     Focus in proven geologic trends throughout the onshore Gulf Coast
            Region of Texas and Louisiana.

      -     Control our geological ideas in both data and land positions that
            are starting to comprise our prospect inventory.

      -     Continuous expansion of our prospect inventory through acquisition
            of 3-D seismic data and land as well as constant re-processing and
            re-interpretation through fundamental geologic studies and
            sophisticated geophysical interpretive techniques.

      -     Structure our drilling program (expected to start in the summer of
            2005) to enable management to sell down enough interest in the well
            to mitigate risk and improve economics.

      -     Strive to maintain highest possible ownership of our highest
            potential drilling prospects.

Specific achievements during 2004 and the first quarter of 2005 are as follows:

      -     Raised $2.5 million in equity in 2004.

      -     Purchased license to 6,500 square miles of 3-D seismic data.

      -     Purchased license to 2,000 miles of 2-D seismic data.

      -     Entered into the Iowa\Woodlawn joint venture with Fairfield
            Resources Corp. which has created several excellent prospects.

      -     Hired several experienced oil and gas finders as well as entered
            into consulting arrangements with other experienced oil and gas
            explorationists.

      -     Began negotiations with several companies to increase our seismic
            data base as well as with companies who will become our drilling
            partners.

In 2004, BR Energy conducted a "Non-U.S." private, restricted stock placement
arrangement on an exempt private placement basis pursuant to Regulation S (the
"Offering"). BR Energy offered up to an aggregate of 12,500,000 units, with no
minimum subscription, of its own issue to eligible sophisticated investors at a
subscription price of $0.20 per unit (each a Unit), with each such Unit
consisting of one common share, one non-transferable share purchase warrant with
an exercise price of $0.50 expiring on December 31, 2005 and one
non-transferable piggyback warrant with an exercise price of $1.00 expiring on
December 31, 2006. BR Energy received subscriptions totaling $2,474,000, net of
expenses, for 12,500,000 Units through December 31, 2004 and the Offering was
closed on the same date. Another 1,250,000 Units were issuable as of December
31, 2004 as a finder fee for services in connection with the Offering. Valuing
these shares at the $0.20 offering price equates to a $250,000 fee. On April 28,
2005, BR Energy and all of the investors in the Offering as well as the two
finders (collectively, the "Investors") entered into a letter agreement (the
"Letter Agreement") having an effective date of December 31, 2004, whereby all
of the Investors agreed to surrender for cancellation all of the piggyback
warrants received in the Offering in order to prevent dilution and to help
attract investors for future possible financings. In addition, BR Energy and the
Investors agreed to correct a discrepancy between the subscription agreements
and the warrant certificates to confirm that the exercise period of the warrants
is from December 31, 2004 to December 31, 2005, instead of May 17, 2004 to May
17, 2005 as set out in the subscription agreements.

                                       6

<PAGE>

                             BLUE RIDGE ENERGY, INC.
                    NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting periods. Actual results could differ from those estimates.

RECENTLY ISSUED ACCOUNTING STANDARDS

Consolidation of Variable Interest Entities: Financial Accounting Standards
Board Interpretation (FIN) No. 46(R), Consolidation of Variable Interest
Entities, was issued in December 2003. FIN No. 46(R) addresses consolidation by
business enterprises of variable interest entities. It applies to all variable
interest entities by the end of the first report period after December 15, 2004.
The adoption of FIN No. 46(R) had no impact on the financial statements and is
not expected to have a material impact on the financial statements in the
future.

Share-Based Payment: Financial Accounting Standards Board Statement (FASB)
123(R), Share-Based Payment was issued in December 2004. This Statement
eliminates the alternative to use Opinion 25's intrinsic value method of
accounting that was provided in FASB Statement 123 as originally issued. Under
Opinion 25, issuing stock options to employees generally resulted in recognition
of no compensation cost. Statement 123(R) requires entities to recognize the
cost of employee services received in exchange for awards of equity instruments
based on the grant-date fair value of those awards. This statement is effective
for public entities that file as small business issuers as of the beginning of
the first interim or annual reporting period that begins after December 15,
2005. This statement will be adopted for the first quarterly reporting period of
2006 beginning on January 1 and is not expected to have a material impact on the
financial statements.

REVENUE RECOGNITION

Under the sales method, oil and gas revenue is recognized when produced and
sold. Revenues from turnkey contract sales and property sales are recognized
when the contracts and property sales are completed.

ACCOUNTS RECEIVABLE

Accounts receivable are from oil and gas sales produced and sold during the
reporting period but awaiting cash payment and from expenditures paid on behalf
of the limited partnership and related party (BR Group) awaiting collection.
Management's assessment of the receivables indicate all will be collected and
there is no provision made for bad debt.

CASH AND CASH EQUIVALENTS

For purposes of reporting cash flows, cash and cash equivalents includes cash on
hand and cash on deposit. BR Energy defines cash equivalents as short-term and
highly liquid investments that are both readily convertible to known amounts of
cash and have an original maturity of less than 90 days.

CONCENTRATIONS OF CREDIT RISK ARISING FROM CASH DEPOSITS IN EXCESS OF INSURED
LIMITS

BR Energy maintains its cash balances in two financial institutions located in
Houston, Texas and Bowling Green, Kentucky. The balances are insured by the
Federal Deposit Insurance Corporation for up to $100,000. At March 31, 2005,
there was approximately $981,000 in cash that was uninsured by the FDIC.

ADVERTISING

BR Energy expenses advertising costs as these are incurred. For the three months
ended March 31, 2005 and March 31, 2004, there were no marketing costs incurred.

MANAGED LIMITED PARTNERSHIPS

Prior to 2004 BR Energy sponsored limited partnerships for which it served as
the Managing General Partner. The purpose of these partnerships was to acquire
and develop oil and gas leases. For the existing partnerships, BR Energy records
on its financial statements its pro rata share of the assets, liabilities,
revenues and expenses of each partnership.

                                       7

<PAGE>

                             BLUE RIDGE ENERGY, INC.
                    NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

PROPERTY AND EQUIPMENT

Property and equipment (other than oil and gas) are stated at cost. Depreciation
is recognized on the straight line method, after considering salvage value, over
the estimated useful lives of the assets as follows:

<TABLE>
<S>                                    <C>
Computer Equipment and Software         5
Furniture and Fixtures                 10
</TABLE>

BR Energy follows the successful efforts method of accounting for oil and gas
producing activities. Under the successful efforts method of accounting, costs
which relate directly to the discovery of oil and gas reserves are capitalized.
These capitalized costs include;

(1) the costs of acquiring mineral interest in properties,

(2) costs to drill and equip exploratory wells that find proved reserves,

(3) costs to drill and equip development wells, and

(4) costs for support equipment and facilities used in oil and gas producing
activities.

These costs are depreciated, depleted or amortized on the unit of productions
method, based on estimates of recoverable proved developed oil and gas reserves.
Costs to drill exploratory wells that do not find proved reserves, geological
and geophysical costs, and costs of carrying and retaining unproved properties
are expensed.

The costs of acquiring unproved properties are capitalized as incurred and
carried until the property is reclassified as a producing oil and gas property,
or considered impaired as discussed below. BR Energy annually assesses its
unproved properties to determine whether they have been impaired. If the results
of this assessment indicate impairment, a loss is recognized by providing a
valuation allowance. When an unproved property is surrendered, the costs related
thereto are first charged to the valuation allowance, with any additional
balance expensed to operations.

The costs of drilling exploration wells are capitalized as wells in progress
pending determination of whether the well has proved reserves. Once a
determination is made, the capitalized costs are charged to expense if no
reserves are found or, otherwise reclassified as part of the costs of BR
Energy's wells and related equipment. In the absence of a determination as to
whether the reserves that have been found can be classified as proved, the costs
of drilling such an exploratory well are not carried as an asset for more than
one year following completion of drilling. If after a year has passed, and BR
Energy is unable to determine that proved reserves have been found, the well is
assumed to be impaired, and its costs are charged to expense. At March 31, 2005,
BR Energy had no costs capitalized pending determination, nor did it expense any
costs during the three months ended March 31, 2005 or 2004 for costs that had
exceeded the one-year determination period.

ACCOUNTING FOR ASSET RETIREMENT OBLIGATIONS

BR Energy follows the provisions of Statement of Financial Accounting Standards
(SFAS) No. 143, Accounting for Asset Retirement Obligations. SFAS No. 143
requires legal obligations associated with the retirement of long-lived assets
to be recognized at their fair value at the time that the obligations are
incurred. Upon initial recognition of a liability, that cost is capitalized as
part of the related long-lived asset and allocated to expense over the useful
life of the asset. Management has determined that any future costs related to
plugging and abandonment of producing wells will be offset by the value of
equipment removed from the well site. Therefore, no liability has been recorded
as of March 31, 2005. These costs will be evaluated quarterly and, if
circumstances dictate a liability is necessary, an amount will be recorded and
subsequently amortized over the life of the well.

SURRENDER OR ABANDONMENT OF DEVELOPED PROPERTIES

Normally, no separate gain or loss is recognized if only an individual well or
individual item of equipment is abandoned or retired or if only a single lease
or other part of a group of proved properties constituting the amortization base
is abandoned or retired as long as the remainder of the property or group of
properties continues to produce oil or gas. The asset being abandoned or retired
is deemed to be fully amortized, and its cost is charged to accumulated
depreciation, depletion or amortization. When the last well on an individual
property or group of properties with common geological structures ceases to
produce and the entire property or property group is abandoned, gain or loss, if
any, is recognized.

                                       8

<PAGE>

                             BLUE RIDGE ENERGY, INC.
                    NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

OTHER DISPOSITIONS

Upon disposition or retirement of property and equipment other than oil and gas
properties, the cost and related accumulated depreciation are removed from the
accounts and the gain or loss thereon, if any, is credited or charged to income.
BR Energy recognizes the gain or loss on the sale of either a part of a proved
oil and gas property or of an entire proved oil and gas property constituting a
part of a field upon the sale or other disposition of such. The unamortized cost
of the property or group of properties, a part of which was sold or otherwise
disposed of, is apportioned to the interest sold and interest retained on the
basis of the fair value of those interests.

IMPAIRMENT OF LONG-LIVED ASSETS

BR Energy follows the provisions of SFAS No. 144. Consequently, BR Energy
reviews its long-lived assets to be held and used, including oil and gas
properties accounted for under the successful efforts method of accounting.
Whenever events or circumstances indicate the carrying value of those assets may
not be recoverable, an impairment loss for proved properties and capitalized
exploration and development costs is recognized. BR Energy assesses impairment
of capitalized costs of proved oil and gas properties by comparing net
capitalized costs to undiscounted future net cash flows on a field-by-field
basis using known expected prices, based on set agreements. If an impairment is
indicated based on undiscounted expected future cash flows, then an impairment
is recognizable to the extent that net capitalized costs exceed the estimated
fair value of the property. Fair value of the property is estimated by BR Energy
using the present value of future cash flows discounted at 10%, in accordance
with SFAS No. 69, Disclosures about Oil and Gas Producing Activities. No
impairment expense was recorded for the three months ended March 31, 2005 or
2004.

INCOME/(LOSS) PER COMMON SHARE

BR Energy calculates basic earnings per common share ("Basic EPS") using the
weighted average number of common shares outstanding for the period. The income
available to common shareholders is computed after deducting dividends on the
Series E Preferred Stock. The convertible preferred stock and outstanding stock
warrants and options are considered anti-dilutive and therefore, excluded from
the earnings per share calculations. As BR Energy recorded a three-month loss in
2005 and 2004, common share equivalents outstanding would be anti-dilutive,
therefore, these have not been included in the weighted average shares
outstanding.

Various warrants for the purchase of common stock were outstanding as of March
31, 2005. These warrants were convertible into 13,785,300 shares of common stock
that are exercisable at prices ranging from $0.40 to $4.00 per share. The
13,785,300 takes into consideration the following agreement. On April 28, 2005,
BR Energy and all of the investors in the 2004 "Non-U.S." private, restricted
stock placement arrangement (the "Offering") as well as the two finders
(collectively, the "Investors") entered into a letter agreement (the "Letter
Agreement") having an effective date of December 31, 2004, whereby all of the
Investors agreed to surrender for cancellation all of the piggyback warrants
received in the Offering in order to prevent dilution and to help attract
investors for future possible financings. In addition, BR Energy and the
Investors agreed to correct a discrepancy between the subscription agreements
and the warrant certificates to confirm that the exercise period of the warrants
is from December 31, 2004 to December 31, 2005, instead of May 17, 2004 to May
17, 2005 as set out in the subscription agreements.

STOCK OPTIONS

BR Energy accounts for employee stock options in accordance with Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" (APB
25) permitted by SFAS No. 123, "Accounting for Stock-Based Compensation."
Accordingly, BR Energy has not recognized compensation expense for stock options
granted. BR Energy granted 20,000 stock options in the first quarter of 2005 and
20,000 stock options in the first quarter of 2004. Had compensation cost for
employee stock options been determined based on the fair value at the grant date
consistent with SFAS No. 123, BR Energy's net loss and loss per share for the
three months ended would have been as follows:

                                       9

<PAGE>

                             BLUE RIDGE ENERGY, INC.
                    NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

<TABLE>
<CAPTION>
                                                  MARCH 31,      MARCH 31,
                                                    2005           2004
                                                 ----------     ----------
<S>                                              <C>            <C>
Net Loss, as reported .......................    $  310,524     $  277,041
Stock Based Compensation, net of tax ........         6,324          3,844
                                                 ----------     ----------
Pro Forma Net Loss ..........................    $  316,848     $  280,885
                                                 ==========     ==========
Net Loss Attributable to Common
 Stockholders, as reported ..................    $  317,514     $  284,031
Stock Based Compensation, net of tax ........         6,324          3,844
                                                 ----------     ----------
Pro Forma Net Loss ..........................    $  323,838     $  287,875
                                                 ==========     ==========
Basic and Diluted Income (Loss) per Common
 Share, as reported .........................    $    (0.01)    $    (0.04)
                                                 ==========     ==========
Basic and Diluted Income (Loss) per Common
 Share, Pro Forma ...........................    $    (0.02)    $    (0.04)
                                                 ==========     ==========
</TABLE>

The fair value of each option grant to employees was estimated on the date of
grant using the Black-Scholes option-pricing model with the following weighted
average assumptions:

<TABLE>
<CAPTION>
                                                      MARCH 31,      MARCH 31,
                                                        2005           2004
                                                      ---------     ----------
<S>                                                   <C>           <C>
Risk free interest rate.............................       4.50%          3.86%
Expected option life................................   10 years       10 years
Expected dividend yield.............................          0%             0%
Volatility factor...................................       1.02           1.02
Weighted average grant date fair value of options...  $    0.51     $     0.31
</TABLE>

SERIES E PREFERRED STOCK DIVIDENDS

The Series E Preferred Stock bears a 12% per annum dividend payable quarterly
and a participating dividend equal to 3% of the net profits from the oil and gas
properties acquired with the proceeds of the offering, also payable quarterly.
The proceeds from the offering, after deducting expenses, were used to drill
three dry holes in September 2002, October 2002 and February 2003; therefore, no
participating dividends will be payable to stockholders.

INCOME TAXES

No income tax provision has been established for the three months ended March
31, 2005 and 2004, due to the net losses incurred or available via federal
income tax carry forward provisions. Income taxes are provided for under the
liability method in accordance with SFAS No. 109, Accounting for Income Taxes,
which takes into account the differences between financial statement treatment
and tax treatment of certain transactions. It is uncertain as to whether BR
Energy will generate sufficient future taxable income to utilize the net
deferred tax assets, primarily representing net operating loss carry forward,
and therefore for financial reporting purposes, a valuation allowance of
$1,475000 and $1,357,000 as of March 31, 2005 and December 31, 2004,
respectively, has been recognized to offset the net deferred tax assets.

2.    AFFILIATED OIL AND GAS PARTNERSHIPS

Included in the financial statements are contributions made to various sponsored
oil and gas partnerships, less the applicable loss generated by these
partnerships relative to BR Energy's percentage ownership. BR Energy has
allocated, on a pro-rata basis, the amounts associated with these investments to
the appropriate asset, liability, income and expense accounts.

3.    RELATED PARTY TRANSACTIONS

COMMON STOCK TRANSACTIONS

As of March 31, 2005, there are 21,266,094 shares of common stock issued and
outstanding. A total of 3,954,075 shares are held by BR Group and the remaining
17,312,019 shares are held by approximately 530 shareholders.

                                       10
<PAGE>

                             BLUE RIDGE ENERGY, INC.
                    NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

ADVANCES TO/FROM RELATED PARTIES

BR Group provided various management, administrative, accounting and geological
services for BR Energy at a rate of $10,000 per month from January 1, 2004
through September 30, 2004. Effective October 1, 2004, the $10,000 monthly
charge by BR Group ceased. Both companies agreed that any costs incurred on
behalf of the other will be billed in the following month with a cash settlement
for the balance due. Under this arrangement, BR Group owed $84,000 and $22,000
at March 31, 2005 and December 31, 2004, respectively.

During the third quarter of 2004, BR Energy negotiated an agreement with BR
Group whereby BR Group reimbursed BR Energy approximately $140,000 for costs
incurred by BR Energy on behalf of BR Group. For the remaining cash advances at
September 30, 2004 received from BR Group, a $500,000 promissory note was
established bearing interest at 7.95% for a term of eight years, with monthly
payments of $7,056 for principal and interest. This note is secured by any and
all oil and gas production income that BR Energy holds, now and future until the
note has been paid in full.

SENIOR MANAGEMENT FEE ARRANGEMENTS

BR Energy's former CEO and President, Patrick A. Kelleher, appointed vice
president of geology on April 25, 2005, receives a 2% carried working interest
on all new oil and gas prospects developed by him for BR Energy and receives a
0.5% carried working interest on oil and gas prospects developed from a 2D
seismic program. Morris T. Hewitt, current CEO and President, hired on April 25,
2005, receives a 1% carried working interest on all new oil and gas wells
drilled by BR Energy.

4. COMMITMENTS AND CONTINGENCIES

COMMITMENTS

Neither BR Energy nor any of its properties is subject to any material pending
legal proceedings. From time to time, BR Energy may be a party to litigation in
the ordinary course of business, none of which is expected to have a material
adverse effect on the financial condition of BR Energy.

CONTINGENCIES

BR Energy's oil and gas exploration and production operations are subject to
inherent risks, including blowouts, fire and explosions which could result in
personal injury or death, suspended drilling operations, damage to or
destruction of equipment, damage to producing formations and pollution or other
environmental hazards. As a protection against these hazards, BR Energy
maintains general and umbrella liability insurance coverage of approximately $5
million per occurrence and in the aggregate. BR Energy believes it is adequately
insured for public liability and property damage to others with respect to its
operations. However, such insurance may not be sufficient to protect BR Energy
against liability for all consequences of well disasters, extensive fire damage,
or damage to the environment. BR Energy has never been fined or incurred
liability for pollution or other environmental damage in connection with its
operations.

                                       11
<PAGE>

                 MANAGEMENTS' DISCUSSION AND FINANCIAL ANALYSIS

GENERAL

Blue Ridge Energy, Inc. ("BR Energy"), a Nevada corporation, was organized in
November, 1994, as Gem Source, Incorporated, and subsequently changed the name
to Blue Ridge Energy, Inc. in May 1996. BR Energy's executive office is located
at 10777 Westheimer Rd., Suite 170, Houston, TX 77042.

All of the periodic report filings with the Securities and Exchange Commission
("SEC") pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934,
as amended, are available through the SEC web site located at www.sec.gov,
including the annual report on Form 10-KSB, quarterly reports on Form 10-QSB,
current reports on Form 8-K and any amendments to those reports. BR Energy will
also make available to any stockholder, without charge, copies of its Annual
Report on Form 10-KSB as filed with the SEC. For copies of this, or any other
filings, please contact: Norman Haisler at Blue Ridge Energy, Inc. 10777
Westheimer Rd., Suite 170 Houston, Texas 77042 or call (832) 358-3900.

During 2004 BR Energy began the process that will lead in growing our prospect
inventory and once drilling commences, will give BR Energy the emphasis needed
to grow exponentially. We should not have to depend on acquisitions to increase
our reserve base, however, if the proper opportunity presents itself we will
evaluate it to see if it fits our growth profile. We do not, however, intend to
make an acquisition as a short term fix that would jeopardize our long term
goals. Our operating strategy should enable us to take advantage of these
fundamentals:

      -     Focus in proven geologic trends throughout the onshore Gulf Coast
            Region of Texas and Louisiana.

      -     Control our geological ideas in both data and land positions that
            are starting to comprise our prospect inventory.

      -     Continuous expansion of our prospect inventory through acquisition
            of 3-D seismic data and land as well as constant re-processing and
            re-interpretation through fundamental geologic studies and
            sophisticated geophysical interpretive techniques.

      -     Structure our drilling program (expected to start in the summer of
            2005) to enable management to sell down enough interest in the well
            to mitigate risk and improve economics.

      -     Strive to maintain highest possible ownership of our highest
            potential drilling prospects.

Specific achievements during 2004 and the first quarter of 2005 are as follows:

      -     Raised $2.5 million in equity in 2004.

      -     Purchased license to 6,500 square miles of 3-D seismic data.

      -     Purchased license to 2,000 miles of 2-D seismic data.

      -     Entered into the Iowa\Woodlawn joint venture with Fairfield
            Resources Corp. which has created several excellent prospects.

      -     Hired several experienced oil and gas finders as well as entered
            into consulting arrangements with other experienced oil and gas
            explorationists.

      -     Began negotiations with several companies to increase our seismic
            data base as well as with companies who will become our drilling
            partners.

In 2004, BR Energy conducted a "Non-U.S." private, restricted stock placement
arrangement on an exempt private placement basis pursuant to Regulation S (the
"Offering"). BR Energy offered up to an aggregate of 12,500,000 units, with no
minimum subscription, of its own issue to eligible sophisticated investors at a
subscription price of $0.20 per unit (each a Unit), with each such Unit
consisting of one common share, one non-transferable share purchase warrant with
an exercise price of $0.50 expiring on December 31, 2005 and one
non-transferable piggyback warrant with an exercise price of $1.00 expiring on
December 31, 2006. BR Energy received subscriptions totaling $2,474,000, net of
expenses, for 12,500,000 Units through December 31, 2004 and the Offering was
closed on the same date. Another 1,250,000 Units were issuable as of December
31, 2004 as a finder fee for services in connection with the Offering. Valuing
these shares at the $0.20 offering price equates to a $250,000 fee. On April 28,
2005, BR Energy and all of the investors in the Offering as well as the two
finders (collectively, the "Investors") entered into a letter agreement (the
"Letter Agreement") having an effective date of December 31, 2004, whereby all
of the Investors agreed to surrender for cancellation all of the piggyback
warrants received in the Offering in order to prevent dilution and to help
attract investors for future possible financings. In addition, BR Energy and the
Investors agreed to correct a discrepancy between the subscription agreements
and the warrant certificates to confirm that the exercise period of the warrants
is from December 31, 2004 to December 31, 2005, instead of May 17, 2004 to May
17, 2005 as set out in the subscription agreements.

                                       12
<PAGE>

                 MANAGEMENTS' DISCUSSION AND FINANCIAL ANALYSIS

At March 31, 2005, BR Energy had total assets of $2,165,000, total liabilities
of $762,000 and stockholders' equity of $1,403,000. BR Energy had a net loss of
$311,000 during the three months ended March 31, 2005 and net loss of $277,000
for the same period in 2004. The net loss per common share, which takes into
account cash dividends paid on preferred stock, was $0.01 per share during the
three months ended March 31, 2005 as compared to $0.04 during the same period in
2004. All per share data in this report has been adjusted to give effect to
applicable stock issues and conversions.

As of March 31, 2005, BR Energy has participated, either directly or indirectly
through its sponsored limited partnerships, in 108 wells, of which 28 are
presently productive and located in Kentucky, Texas, West Virginia and New
Mexico. In addition to the 28 producing wells, there are 41 producing wells in
four partnerships operated by Eagle Energy, Inc., an unaffiliated entity.

KEY PROPERTIES

The working interest owned by BR Energy, either directly or indirectly through
the oil and gas partnerships, is owned jointly with other working interest
partners. Management does not believe any of these other ownerships materially
detract from the value of the properties or materially interfere with their use.

The following are the primary properties held by BR Energy as of March 31, 2005:

DEVELOPED PROPERTIES

      Twin Leaf Prospect: BR Energy owns a 4.25% working interest, with a 3.24%
      net revenue interest, in 1 well located in Polk County, Texas which was
      drilled during the fourth quarter of 2004. The well is producing 300 Mcf
      per day.

      Pepperbush West Prospect: BR Energy owns a 4.25% working interest, with a
      3.29% net revenue interest, in 1 well located in Polk County, Texas which
      was drilled during the first quarter of 2004. The well is producing 100
      Mcf per day.

      Hobblebush Prospect: BR Energy owns a 4.25% working interest, with a 3.23%
      net revenue interest, in 1 well located in Polk County, Texas which was
      drilled during the first quarter of 2004. The well is producing 200 Mcf
      per day.

      May Apple Prospect: BR Energy owns a 4.25% working interest, with a 3.23%
      net revenue interest, in 1 well located in Polk County, Texas which was
      drilled during the first quarter of 2004. The well is producing 100 Mcf
      per day.

      Wolfsbane Prospect: BR Energy owns a 13.6% working interest, with a 10.53%
      net revenue interest, in 1 well located in Walker County, Texas. The well
      ceased production in January 2004. Additional seismic was shot in the
      fourth quarter of 2004 and it is being evaluated to determine if the well
      is to be recompleted or if another well should be drilled.

      Pepperbush Prospect: BR Energy owns a 13.6% working interest, with a
      10.34% net revenue interest, in 1 well located in Polk County, Texas which
      began producing in the second quarter of 2003. It is currently producing
      150 Mcf per day.

      Yarrow Prospect: BR Energy owns a 13.6% working interest, with a 10.41%
      net revenue interest, in 1 well located in Polk County, Texas which began
      producing in the fourth quarter of 2002. It is currently producing 450 Mcf
      per day.

      West Pebble Island Prospect: BR Energy owns a 7.7% working interest, with
      a 5.59% net revenue interest, in the 1 well located in Tyler County, Texas
      which began producing in the first quarter of 2003. It is currently
      producing 30 barrels per day.

      Shelby County, Texas: BR Energy owns a 0.71% working interest, with a
      0.42% net revenue interest, in the Bridges #1 well in Shelby County, Texas
      which began producing in September 2000. It is currently producing 1,100
      Mcf per day.

      In March 2003, BR Energy transferred all of its rights and interest in the
      Boon's Camp Partnership, the BR Development 2001-II Partnership, the BR
      Development Plus 2000 Partnership and the BR Private Development 2001-A
      Partnership to Eagle Energy, Inc. (a company formed by BR Energy's former
      president) in exchange for a 1% interest in these four partnerships. In
      addition, BR Energy still retains its 25% ownership as a limited partner
      through its direct investment in the BR Development 2000 Partnership. As
      noted above, there are 41 gas wells producing in these four partnerships.

                                       13
<PAGE>

                 MANAGEMENTS' DISCUSSION AND FINANCIAL ANALYSIS

UNDEVELOPED PROPERTIES

      Webb Prospect: BR Energy owns a 10% working interest in 1,050 acres of oil
      and gas leases located in Jasper County, Texas. The prospect is a
      seismically well-defined structural four way closure designed to test the
      highly prolific Upper Wilcox Sands as they produce in southeast Texas.
      Drilling on this prospect is anticipated to occur during 2005.

      N. Champions Prospect: BR Energy owns a 10% working interest in 307 acres
      of oil and gas leases located in Jasper County, Texas. The prospect is a
      seismically well-defined structural four way closure designed to test the
      highly prolific Upper Wilcox Sands as they produce in southeast Texas.
      Drilling on this prospect is anticipated to occur during 2005.

      We also intend to continue reviewing other undrilled acreage in East Texas
      and the Texas and Louisiana Gulf Coast areas, which are currently
      controlled by the major oil and gas companies, for potential drilling
      prospects. We believe this acreage has not yet been drilled because of a
      shift of funding by the larger companies towards larger international
      projects. The major oil and gas companies are actively encouraging joint
      ventures (farm-outs of their leases and/or direct leasing of their mineral
      ownership) in these areas with other oil and gas companies, including
      smaller companies such as us. With respect to these prospects, the major
      oil and gas companies generally allow us to use their proprietary geologic
      and seismic databases at no cost to us to evaluate the prospect before our
      risk capital is committed to drilling the well. Other areas of interest
      for acquiring prospects and drilling wells are North Louisiana and West
      Texas.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2005 AND 2004

BR Energy had a net loss of $311,000 during the first quarter of 2005 compared
to net loss of $277,000 for the same period in 2004. The loss per common share,
which takes into account cash dividends paid on preferred stock, was $0.01 per
share during the first quarter of 2005 and $0.04 per share during the first
quarter of 2004.

OPERATING REVENUES

Operating revenues totaled $125,000 during the three months ended March 31,
2005, as compared to $130,000 during the three months ended March 31, 2004.
Revenue from oil and gas sales remained steady between the two quarters.

DIRECT OPERATING COSTS

Direct operating costs totaled $53,000 during the three months ended March 31,
2005, as compared to $46,000 during the same period in 2004. These expenses also
remained steady between the two quarters.

EXPLORATION COSTS

As a result of the prospecting for oil and gas which began after the acquisition
of the Echo 3D seismic data in the middle of 2004, exploration costs during the
first quarter of 2005 was $150,000. There were no such costs incurred during the
comparable period in 2004.

OTHER OPERATING EXPENSES

General and administrative expenses decreased by $124,000 to $168,000 during the
first quarter of 2005, as compared to $292,000 during the same period in 2004.
The major reason for the decrease was that during the first quarter of 2005 BR
Energy invoiced BR Group $84,000 for G&A costs incurred on their behalf.
Depreciation, depletion and amortization decreased $8,000 due to lower depletion
rates on oil and gas properties in 2005.

OTHER INCOME

Interest expense increased to $10,000 during the first quarter of 2005 due to
the note with BR Group and a promissory note entered into in January 2005 to
acquire computer software for a land/lease system.

                                       14
<PAGE>

                 MANAGEMENTS' DISCUSSION AND FINANCIAL ANALYSIS

INCOME TAX PROVISION

Consistent with prior quarters, BR Energy did not record a provision for income
taxes due to the continued net losses incurred or available via the federal
income tax carry forward provisions. A valuation allowance continues to be
recognized due to the uncertainty regarding recognition of the deferred tax
assets.

CAPITAL RESOURCES AND FINANCIAL CONDITION

BR Energy's current ratio (current assets / current liabilities) was 4.8 to 1 at
March 31, 2005 compared to 9.7 to 1 at December 31, 2004. Such calculations
include cash ($1,181,000 in 2005 and $1,466,000 in 2004), accounts
receivable-trade ($143,000 in 2005 and $167,000 in 2004), accounts
receivable-related parties ($84,000 in 2005 and $22,000 in 2004), prepaid
expenses ($31,000 in 2005 and $6,000 in 2004), accounts payable ($245,000 in
2005 and $126,000 in 2004) and current portion of long-term debt ($57,000 in
2005 and $48,000 in 2004). The change in the current ratio from March 31, 2005
to December 31, 2004 was due primarily to expenditures for exploration (G&G)
costs and for general and administrative costs.

BR Energy's primary source of cash in the first quarter of 2005 was oil and gas
sales while the primary sources of cash in 2004 were $2,474,000, net of
expenses, received from the private placement stock offering as well as the sale
of oil and gas production and short term advances from BR Group.

During the past quarter and year-end, BR Energy has relied upon net inflows of
cash generated by its operating activities, equity offerings and short term
advances from BR Group to fund the purchase of assets and its expansion.
Management intends to fund further growth with current cash reserves, equity
transactions and improved cash flows from operations.

Management has taken significant steps designed to address the financial
condition of BR Energy, to increase cash flows and to achieve improved operating
results, principally by implementing its new business plan and having a
successful completion of the Non-U.S. private stock offering.

ITEM 3. CONTROLS AND PROCEDURES

As of the end of the period covered by this quarterly report, an evaluation was
performed under the supervision and with the participation of BR Energy's
management, including the Chief Executive Officer (the "CEO") and the Chief
Financial Officer (the "CFO"), of the effectiveness of the design and operation
of the disclosure controls and procedures. Based on that evaluation, BR Energy's
management, including the CEO and CFO, concluded that the disclosure controls
and procedures were effective. There have been no changes in these internal
controls over financial reporting that occurred during the quarter ended March
31, 2005, that have materially affected, or are reasonably likely to materially
affect, our internal controls over financial reporting.

                                       15
<PAGE>

                                     PART II

                                OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

      There are no legal proceedings pending against BR Energy

ITEM 2. CHANGES IN SECURITIES

      None

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

      Not Applicable

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

      None

ITEM 5. OTHER INFORMATION

      None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

      An 8-K report was filed on January 6, 2005 reporting the completion of a
regulation S offering of common stock and warrants.

      Exhibit 31.1      Chief Executive Officer's 302 Certification
      Exhibit 31.2      Chief Financial Officer's 302 Certification
      Exhibit 32.1      Chief Executive Officer's 906 Certification
      Exhibit 32.2      Chief Financial Officer's 906 Certification

                                   SIGNATURES

      In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                              BLUE RIDGE ENERGY, INC.

Date: May 13, 2005                            By /s/ Norman G. Haisler
                                                 -------------------------------
                                                 Norman G. Haisler
                                                 Senior Vice President-Finance &
                                                 Chief Financial Officer

                                       16