FORM
10-KSB





SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





S  ANNUAL
REPORT PURSUANT TO SECTION 13 or 15(d)


OF
THE SECURITIES EXCHANGE ACT OF 1934





Commission
File Number:  000-30891





For the
Year ended December 31,
2007





Turner
Valley Oil & Gas, Inc.








Nevada
            Optional(Jurisdiction
      of Incorporation)
            (I.R.S.
      Employer Identification No.)604-700
      West Pender Street Vancouver Canada
            V6G
      1G8(Address
      of principal executive offices)
            (Zip
      Code)








Registrant's
telephone number, including area code:   (604) 602-1650








Securities
registered pursuant to Section 12(g) of the Act: Common Voting Equity
Stock





YesSNo£  (Indicate
by check mark whether the Registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required
to file such reports) and (2) has been subject to such filing requirements for
the past 90 days.)





£  (Indicate
by check mark whether if disclosure of delinquent filers (Sec.229.405) is not
and will not to the best of Registrant's knowledge be contained herein, in
definitive proxy or information statements incorporated herein by reference or
any amendment hereto.)





Issuer's
Revenues most recent fiscal year: None





As of
12/31/07 the number of
shares of common stock outstanding was 58,335,970.





As of
12/31/07 the number of
shares held by non-affiliates was approximately 54,646,975 shares, with a market
value of $3,825,288 low
bid of $0.07








Exhibit
Index is found on page 10









CONTENTS





INTRODUCTION
            3PART I
            3ITEM 1. Description of Business
            3(a) Form and Year of Organization
            3(b) Our Business
            3ITEM 2. Description of Property
            4ITEM 3. Legal Proceedings
            4ITEM 4. Submission of Matters to a Vote of Security
      Holders
            4PART II
            4ITEM 5. Market for Common Equity and Stockholder
      Matters
            4(a) Market Information
            4(b) Holders
            5(c) Dividends
            5(d) Sales of Unregistered Common Stock
    2007
            5ITEM 6. Management's Discussion and Analysis or Plan of
      Operation
            5(a) Plan of Operation
            5(c) Liquidity/Results of Operation
            5ITEM 7. Financial Statements
            7ITEM 8. Changes In and Disagreements With Accountants on
      Accounting and Financial Disclosure
            8PART III
            8ITEM 9. Directors and Executive Officers, Promoters and Control
      Persons
            8ITEM 10. Executive Compensation
            8ITEM 11. Security Ownership of Certain Beneficial Owners and
      Management
            10Item 12.  Controls and
Procedures
            10ITEM 13. Attachments, Financial Statements, Exhibits, and
      Reports on Form 8-K
            11(b) Exhibits
            11Signatures
            11


Table of Contents




INTRODUCTION





This
Registrant (Reporting Company) has elected to refer to itself, whenever
possible, by normal English pronouns, such as "We", "Us" and "Our". This Form
10-KSB may contain forward-looking statements. Such statements include
statements concerning plans, objectives, goals, strategies, future events,
results or performances, and underlying assumptions that are not statements of
historical fact. This document and any other written or oral statements made by
us or on our behalf may include forward-looking statements which reflect our
current views, with respect to future events or results and future financial
performance. Certain words indicate forward-looking statements, words like
"believe", "expect", "anticipate", "intends", "estimates", "forecast",
"projects", and similar expressions.





PART I





ITEM 1. Description of Business.





(a) Form and Year
of Organization.Our Corporate organization and history is described in
our previous annual and quarterly reports. During 2007 we issued share to
Officers, Directors and service providers, pursuant to registration, as provided
in Sections 5 and 6 of the Securities Act of 1933, with filings on Form
S-8.





The
foregoing is illustrated more fully in the table on the following
page.





Table ONCurrent Year
      Issuances
            
            Valued
      at
            
            
            SharesCarried
      from 12/31/05
            
            
            
            
            
            55,535,970Issue
      4/01/07: Registered for services @0.025
            
            $
            70,000
            
            
            
            2,800,000Total
      Issued and Outstanding 12/31/05
            
            $
            70,000
            
            
            
            58,335,970





(c) Our
Business. Turner Valley
Oil and Gas Inc. (“TVOG”) is an emerging oil and gas Company. Since
commencing operations as an Oil and Gas Company, in August of 2003, TVOG has
incorporated a wholly owned Canadian subsidiary, TV Oil and Gas Canada Limited
(Federal Canadian Registry). Our subsidiary has acquired a solid base of oil and
gas properties located in the western basin of Alberta, Canada. These properties
provide Turner Valley Oil and
Gas Inc. with a firm foothold in the oil and gas sector. It is
Management’s intent to continue to; add proven producing, development and
exploration properties during 2007. As is the case with all of our properties,
the Company has taken all necessary actions to commence operations on these
properties as quickly as possible and this has been done. The nature of the oil
and gas business requires that the Management and Board remain diligent in
assessing risk and insisting that the Company’s Operators work in strict
compliance with all prevailing legislation. This has been done.





Risk
Tolerance





Our risk
tolerance would best be described as conservative in nature. Although we
recognize that oil and commodity pricing is reaching all time highs we routinely
apply flat pricing at a discount to market, in our risk analysis. We will only
participate in programs that are; extremely well researched, fit within our
financial capacity and have undergone stringent independent reviews. If a
problem should occur at any time in the life of the property, Management has
developed an exit strategy for each property that will allow us to cap our
potential for loss. These exit stratagems are for internal use
only.


3
 Table of Contents




Please
see Management's Discussion and Analysis, Item 6 following.





DESCRIPTIONOF OIL & GAS PROPERTIES








ITEM3. Descriptionof Property.





We enjoy
the non-exclusive use of the offices of our Officers, and have no other
miscellaneous property of our own. But please see Management's Discussion and
Analysis, Item 6 following.








ITEM
5. LegalProceedings.





There are
no legal proceedings pending against we, as of the preparation of this
Report.








ITEM
7. Submission of Matters to a Vote of Security
Holders.





None.




PART II








ITEM
9. Market for Common Equityand Stockholder
Matters.





(a) Market Information.The Common Stock of this Issuer has not
been quoted Over the Counter on the Bulletin Board ("OTCBB") or the NQB Pink
Sheets or otherwise, during the period of this report. Our common stock was
cleared for quotation on the OTCBB on February 20, 2002 and had never before
traded in brokerage transactions.





Table
      ON PERIOD
            
            HIGH
      BID
            
            
            LOW
      BID
            
            
            VOLUME3rd
      2004
            
            
            0.18
            
            
            
            0.12
            
            
            
            4,784,5804th
      2004
            
            
            0.34
            
            
            
            0.12
            
            
            
            22,427,4601st
      2005
            
            
            0.38
            
            
            
            0.21
            
            
            
            59,337,3002nd
      2005
            
            
            0.29
            
            
            
            0.12
            
            
            
            15,100,1403rd
      2005
            
            
            0.19
            
            
            
            0.12
            
            
            
            11,437,0604th
      2005
            
            
            0.14
            
            
            
            0.06
            
            
            
            10,552,1401st
      2006
            
            
            0.23
            
            
            
            0.06
            
            
            
            13,434,0002nd
      2006
            
            
            0.22
            
            
            
            0.03
            
            
            
            7,754,0003rd
      2006
            
            
            0.14
            
            
            
            0.07
            
            
            
            6,864,0004th
      2006
            
            
            0.11
            
            
            
            0.07
            
            
            
            9,134,0001st
      2007
            
            
            0.08
            
            
            
            0.04
            
            
            
            10,660,0002nd
      2007
            
            
            0.04
            
            
            
            0.02
            
            
            
            10,110,0003rd
      2007
            
            
            0.02
            
            
            
            0.01
            
            
            
            10,008,0004th
      2007
            
            
            0.03
            
            
            
            0.01
            
            
            
            9,200,000





Source:
Yahoo Finance


4
 Table of Contents




(c) Holders.There are approximately 100 shareholders of the
our common stock, giving effect to shares held in brokerage
accounts.





(e) Dividends.No dividends have been paid by us on the
Common Stock or other Stock and no such payment is anticipated in the
foreseeable future. We have not paid any cash dividends on our Common Stock, and
do not anticipate paying cash dividends on our Common Stock in the next year. We
anticipate that any income generated in the foreseeable future will be retained
for the development and expansion of our business. Future dividend policy is
subject to the discretion of the Board of Directors and will depend upon a
number of factors, including future earnings, debt service, capital
requirements, business conditions, the financial condition of we and other
factors that the Board of Directors may deem relevant.





(g) Salesof
Unregistered Common Stock 2007.We made no unregistered issuances in
2005, 2006 or 2007.








ITEM
11. Management'sDiscussion and Analysis or Plan of
Operation.





(a) Plan of Operation. Our plan of operations is a sole focus on
exploration for, development drilling for, and transmission facilities for, the
production of oil and gas. Our Nevada parent company Turner Valley Oil & Gas,
owns a wholly-owned Canadian subsidiary T.V. Oil & Gas, Limited,
a Federal Registered Canadian company in full compliance with all Canadian law
and regulations.





Our
financial statements contain the following additional material
notes:





(Note
2-Going Concern) The Company's financial statements have been prepared assuming
that the Company will continue as a going concern. The Company has suffered
recurring operating losses and is dependent upon raising capital to continue
operations. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty. It is management's plan to raise
additional funds to continue the explorations of the leases, and then to begin
producing oil and/or gas/or both to sell under contract and thereby generate the
necessary funds to continue operations.





(Note
3-Development Stage Company) We are a development stage company as defined in
Financial Accounting Standards Board Statement 7. We are concentrating on
raising capital and developing our business operation





(b) Cautionary
Statements. There can be no assurance that we will be successful in
raising capital through private placements or otherwise. Even if we are
successful in raising capital through the sources specified, there can be no
assurances that any such financing would be available in a timely manner or on
terms acceptable to us and our current shareholders. Additional equity financing
could be dilutive to our then existing shareholders, and any debt financing
could involve restrictive covenants with respect to future capital raising
activities and other financial and operational matters. While Management has
expressed confidence in the attainment of profitability sooner, rather than
later, projects and even reasonable expectations are not outcomes yet. There is
no absolute assurance that even our best laid plans and most diligent operations
will succeed.


5
 Table of Contents


(c) Discussion and Analysis of
Financial Condition and Results of Operations.During the year ended
December 31, 2007, we had royalty revenues of $4,165 from our working interest
in the Strachan property (December 31, 2006 $9,813). The decrease in royalties
was caused by a special assessment initiated by the Operator of the well during
the year ended December 31, 2006. All our properties are geographically and
physically independent of one another. They are located in the Western Canada
Geologic Basin centered in Alberta, Canada.





The Strachan Property. On
August 20, 2003, we entered into a purchase agreement to acquire 1% interest in
a producing gas well, located at 2-2-38-9W5 Red Deer, Alberta, Canada. The
Strachan Prospect is located 80 miles NW of Calgary, Alberta. The gas production
rate at the time of the acquisition fluctuated between 1.5 and 2 MMCF/Day
(million cubic feet of gas per day). The Company's senior management has set out
a rework program for this well. The rework program calls for an acid wash and
acid stimulation of the producing formation. The Company has agreed to
participate in the program. The program was completed on October 15, 2003 and as
of October 20, 2003, the new production rates have stabilized at approximately
2.66 MMCF/Day, representing a 40% increase over initial production
rates.





In
addition to the preceding acquisition, we entered into a purchase agreement to
acquire 0.5% interest in 10 Sections (6,400 acres) of drilling rights offsetting
Sct. 22-38-9W-5. These offsetting sections have identified seismic anomalies in
multiple cretaceous pay zones. The purchase price of the property was
$45,114.   The depletion for the year ended December 31, 2007 was
$10,000.  (December 31, 2006 $10,000)




The
Strachan Property – Leduc Formation





On
September 23, 2005 Turner Valley Oil and Gas Inc. through its wholly owned
subsidiary TV Oil and Gas Canada Limited, has entered into a farm-out agreement
with Odin Capital Inc. of Calgary, Alberta.





The terms
of the Farm-Out agreement are as follows:





In
exchange for our paying 3.00%  of all costs associated with drilling,
testing and completing the test well (expected drilling cost – approx. $6.3
million Canadian to the 100% interest) on the property that is referred to as
the Leduc Formation test well, we will have earned;





1)
            In
      the spacing unit for the Earning Well, a 1.500% interest in the petroleum
      and natural gas below the base of the Mannville excluding natural gas in
      the Leduc formation, and a 3.00% interest in the natural gas in the Leduc
      formation before payout subject to payment of an Overriding Royalty which
      is convertible upon payout at the Royalty Owners option to 50% of our
      interest.


2)
            A
      1.200% interest in the rights below the base line of the Shunda formation
      in Section 10,Township 38, Range
9W5M


3)
            A
      0.966% interest in the rights below the base of the Shunda formation in
      sections 15 & 16,Township 38,Range 9W5M, down to the base of the
      deepest formation penetrated.


6
 Table of Contents




ON July
6th,
2006, the Company purchased an additional 2% from its Chairman & CEO for a
total cost of $190,882. The amount was paid in WIN stock at a value of $2 when
the market value of the stock was $1.90.





Additionally,
the Company incurred $44,405 of further costs associated with the exploration of
the well during the quarter.





The total
costs are to date are $525,544 for our interest, under the terms of our
agreement.





The
Strachan Prospect is located 80 miles NW of Calgary, Alberta.  The
Company expects testing of this prospect in the near future, which will enable
the Company to determine whether to continue or abandon this
project.  Testing of the first well showed no economic hydrocarbons
and  the well was abandoned.





Mississippi
Prospect





On August
23rd,
2006, the Company entered into a joint venture agreement with Griffin &
Griffin Exploration, LLC. to acquire an interest in a drilling program
comprising 50 natural gas and/or oil wells.  The area in which the proposed
wells are to be drilled is comprised of approximately 300,000 gross acres of
land located between Southwest Mississippi and North East Louisiana. The
proposed wells will be targeting the Frio and Wilcox Geological
formations. The first 20 proposed wells are located within tie-in range of
existing pipeline infrastructures.  Turner Valley has agreed to pay 10% of
all prospect fees, mineral leases, surface leases and drilling and completion
costs to earn a net 8% share of all production zones to the base of the Frio
formation and 7.5% of all production to the base of the Wilcox
formation.  Total Costs to date are $300,000.  The Company
is in the process of re-evaluating this project to determine if it continues to
adhere to the Company’s strategic objectives. During the year the Company
disposed of its interest in this property for the liabilities incurred of
$400,000.





General
and Administrative costs





General
and Administrative costs for the year now ended decreased by 65% to $248,130,
when compared to $713,345, for the previous year. The decrease was caused by a
reduction in costs associated with common stock issued for services
rendered.





The
Company’s total expenses were $783,674 for the year ended December 31, 2007
compared to $$723,345 for the prior year.  The increase in total
expenses was caused by the abandonment of the Strachan – Leduc property due to
uneconomic hydrocarbons.  The cost associated with this abandonment
was $525,544.





The Net
Loss for the year just ended was $(614,292) as compared to a Net Loss of
$(287,237) for the previous year ended 2006. The increase in loss for the year
was caused by the costs associated with the abandonment of Strachan – Leduc
property and the reduction in gain associated with the disposal of our holding
in WIN Energy, which resulted in other income of $159,872 (December 31, 2006
$426,295). At December 31, 2007, the Company disposed of its investment in WIN
Energy Corporation (“WIN”) at a market price of $0.37 per share.





(1)Liquidity. Our net working capital for
the year ended December 31, 2007 increased to $55,907, compared to a deficit of
$(418,555) for the year ended December 31, 2006. The increase in working capital
was caused the disposal of the Company’s holdings in WIN.


7
 Table of Contents


To date
we have not invested in derivative securities or any other financial instruments
which involve a high level of complexity or risk. We expect that in the future,
any excess cash will continue to be invested in credit quality, interest-bearing
securities.





We
believe cash from operating activities, and our existing cash sources may not be
sufficient to meet our working capital requirements for the next 12 months. We
will likely require additional funds to support our business plan. Management
intends to raise additional working capital through debt and equity
financing.





(d) Cautionary Statements
Repeated. There can be no assurance that we will be successful in raising
capital through private placements or otherwise. Even if we are successful in
raising capital through the sources specified, there can be no assurances that
any such financing would be available in a timely manner or on terms acceptable
to us and our current shareholders. Additional equity financing could be
dilutive to our then existing shareholders, and any debt financing could involve
restrictive covenants with respect to future capital raising activities and
other financial and operational matters. While Management has expressed
confidence in the attainment of profitability sooner, rather than later,
projects and even reasonable expectations are not outcomes yet. There is no
absolute assurance that even our best laid plans and most diligent operations
will succeed.








ITEM
13. Financial Statements.





The Audit
Committee of this Corporation for this fiscal year consists of our Board of
Directors. Management is responsible for our internal controls and the financial
reporting process. Our independent auditors are responsible for performing an
independent audit of our financial statements in accordance with generally
accepted accounting standards and to issue a report thereon. It is the
responsibility of our Board of Directors to monitor and oversee these processes.
In this context the Committee has met and held discussions with management and
the independent accountants. Management recommended to the Committee that our
financial statements were prepared in accordance with generally accepted
accounting principles, and the Committee has reviewed and discussed the
financial statements with Management and such independent accountants, matters
required to be discussed by Statement on Auditing Standards No. 61
(Communication with Audit Committees). Our independent accountants also provided
to the Committee the written disclosures required by Independence Board Standard
No. 1 (Independence Discussions with Audit Committees), and the Committee
discussed with the independent accountants that firm's
independence.





Based
upon the Committee's discussions, and review, of the foregoing, the Committee
recommended that our audited financial statements in our Annual Report on Form
10-KSB for the year ended December 31, 2007 be included and filed with the
Securities and Exchange Commission.





Audited Financial Statements
for the years ended December 31, 2007, 2006, and from inception, April 14, 1999,
are included and provided as Attachment AFK-04. These financial statements
attached hereto and filed herewith are incorporated herein by this reference as
though fully set forth herein.


8
 Table of Contents




ITEM
15. Changes In and Disagreements With Accountants


on
Accounting and Financial Disclosure.





None.





PART III





ITEM
17. Directors and Executive Officers, Promoters and Control
Persons.





The
information required and appropriate for this Item is unchanged and found in our
previous annual report. Officers and Directors serve until their successors
might be elected or appointed. The time of the next meeting of shareholders has
not been determined.





ITEM 19. Executive Compensation.





Summary Compensation, Table A.
the disclosure of Executive compensation is now provided in the tabular form
required by the Securities and Exchange Commission, pursuant to Regulation
228.402. Compensation consisted of registered stock (at bid) for services in
lieu of cash.





The
Remainder of this Page is Intentionally left Blank


9
 Table of Contents





Long
      Term CompensationAnnual
      Compensation
            
            
            Awards
            
            
            Payoutsa
            b
            
            c
            
            
            d
            
            
            e
            
            
            f
            
            
            g
            
            
            h
            
            
            iName
              and
              Principal
              Position
            Year
            
            Salary
              ($)
            
            
            Bonus
              ($)
            
            
            Other
              Annual
              Compen-sation
              ($)
            
            
            Restric-ted
              Stock
              Awards
              ($)
            
            
            Securi-ties
              Under-
              lying
              Options
              SARs
      (#)
            
            
            LTIP
              Payouts
              ($)
            
            
            All
      Other
              Compen-sation
              ($)2007
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            25,000Chistopher
              Paton-Gay,
              Chairman,
      CEO
            2006
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            660,00002005
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            180,5002004
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            277,0002007
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            12,500Kulwant
      Sandher
              Treasurer,
      CFO
            2006
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            72,0002005
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            116,0002004
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            97,5002007
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            10,000Donald
      Jackson Wells,
              Director
            2006
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            23,7502005
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            29,7502004
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            37,0002007
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            10,000Joseph
      A. Kane
              Director
            2006
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            23,7502005
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            29,7502004
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            0
            
            
            
            37,000





The
foregoing “other compensation” was paid in common stock, and not in cash. Each
issuance was vallued at market prices then current.


10
 Table of Contents




ITEM 21. Security Ownership of Certain Beneficial Owners and
Management.





To the
best of Registrant's knowledge and belief the following disclosure presents the
total security ownership of all persons, entities and groups, known to or
discoverable by Registrant, to be the beneficial owner or owners of more than
five percent of any voting class of Registrant's stock, along with the total
beneficial security ownership of all Directors and Nominees, naming them, and by
all Officers and Directors as a group, without naming them. Please refer to
explanatory notes if any, for clarification or additional information. The
Registrant has only one class of stock; namely Common Stock.





Common
Stock





Name and Address of Beneficial
      Owner
            
            Share
              Ownership
            
            
            %Christopher
      Paton-Gay6160
      Genoa Bay Road
            Chairman/CEODuncan
      B.C. Canada
            Director
            
            
            2,285,000
            
            
            
            3.92Kulwant
      Sander6160
      Genoa Bay Road
            Treasurer/CFO
            
            
            1,252,395
            
            
            
            2.15Duncan
      B.C. CanadaDonald
      Jackson Wells3131
      S.W. Freeway #46Houston
      TX 77098
            Director
            
            
            75,800
            
            
            
            0.13Joseph
      Kane3131
      S.W. Freeway #46Houston
      TX 77098
            Director
            
            
            75,800
            
            
            
            0.13All
      Officers and Directors as a Group
            
            
            
            3,688,995
            
            
            
            6.32Total
      Issued and Outstanding
            
            
            
            58,335,970
            
            
            
            100.00All
      Affiliates
            
            
            
            (3,688,995
            )
            
            
            (6.32
            )Indicated
      Total Non-Affiliate Ownership
            
            
            
            54,646,975
            
            
            
            93.68





(a) Changes in Control. There
are no arrangements known to Registrant, including any pledge by any persons, of
securities of Registrant, which may at a subsequent date result in a change of
control of our Corporation. Specifically, we are not a candidate for any direct
or reverse acquisition transactions, but are devoted to bringing our business
plan to actualization and profitability.








Item 23.  Controls and Procedures.





Evaluation of Disclosure Controls and
Procedures. We carried out an evaluation of the effectiveness of the
design and operation of our disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31,
2007.  This evaluation was carried out under the supervision and with
the participation of our Chief Executive Officer and Chief Financial Officer,
Mr. Douglas Bolen.  Based upon that evaluation, our Chief Executive
Officer and Chief Financial Officer concluded that, as of December 31, 2007, our
disclosure controls and procedures are effective.


11
 Table of Contents




Disclosure
controls and procedures are controls and other procedures that are designed to
ensure that information required to be disclosed in our reports filed or
submitted under the Exchange Act are recorded, processed, summarized and
reported, within the time periods specified in the SEC's rules and forms.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed in our
reports filed under the Exchange Act is accumulated and communicated to
management, including our Chief Executive Officer and Chief Financial Officer,
to allow timely decisions regarding required disclosure.





Limitations on the
Effectiveness of Internal Controls





Our
management does not expect that our disclosure controls and procedures or our
internal control over financial reporting will necessarily prevent all fraud and
material error. Our disclosure controls and procedures are designed to provide
reasonable assurance of achieving our objectives and our Chief Executive Officer
and Chief Financial Officer concluded that our disclosure controls and
procedures are effective at that reasonable assurance level.  Further,
the design of a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their
costs. Because of the inherent limitations in all control systems, no evaluation
of controls can provide absolute assurance that all control issues and instances
of fraud, if any, within our company have been detected. These inherent
limitations include the realities that judgments in decision-making can be
faulty, and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some
persons, by collusion of two or more people, or by management override of the
internal control. The design of any system of controls also is based in part
upon certain assumptions about the likelihood of future events, and there can be
no assurance that any design will succeed in achieving its stated goals under
all potential future conditions. Over time, control may become inadequate
because of changes in conditions, or the degree of compliance with the policies
or procedures may deteriorate.


12
 Table of Contents


Management’s Annual Report
on Internal Control Over Financial Reporting





Our
management, including the Chief Executive Officer and the Chief Financial
Officer, is responsible for establishing and maintaining adequate internal
control over financial reporting, as defined in Rules 13a-15(f) and
15d-15(f) under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”). Our internal control over financial reporting was designed to provide
reasonable assurance to our management and board of directors regarding the
preparation and fair presentation of published financial
statements.





Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Therefore, even those systems determined to be
effective can provide only reasonable assurance with respect to financial
statement preparation and presentation.





Management
assessed the effectiveness of our internal control over financial reporting as
of December 31, 2007. In making this assessment, management used the
criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (“COSO”) in Internal Control — Integrated
Framework.  Based on this assessment, our management believes
that, as of December 31, 2007, our internal control over financial
reporting was effective based on those criteria.  Management reviewed
the results of its assessment with our board of directors.





Changes in Internal
Accounting. There were no significant changes in our internal controls or
other factors that could significantly affect these controls subsequent to the
date of their evaluation. There were no significant deficiencies or material
weaknesses, and therefore there were no corrective actions taken. However, the
design of any system of controls is based in part upon the assumptions about the
likelihood of future events, and there is no certainty that any design will
succeed in achieving its stated goal under all potential future considerations,
regardless of how remote.








ITEM 25. Attachments, Financial Statements, Exhibits, and Reports
on Form 8-K.





(a)
Attachments/Exhibits Hereto.





(31) Certification pursuant to 18 USC Section
302.





(32) Certification pursuant to 18 USC Section
1350.





(AC-99.1) Audit Committee Report





(AFK-07)
Audited Financial Statements for the years ended December 31, 2007, 2006 and
from Inception.





(b) Exhibits Previously Filed.Please see our Previous Annual Report on Form 10-KSB, for the year ended
December 31, 2001, for Exhibits: (3.1) Articles of Incorporation; (3.2) By-Laws,
incorporated herein by this reference.


13
 Table of Contents


Signatures





Pursuant to the
requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the Registrant and in the
individual capacities and on the date indicated.





Turner
Valley Oil & Gas, Inc.


Dated:
March 31, 2008


Table
ON


Christopher
      Paton-Gay
            
            Donald
      Jackson Wells
            
            Joseph
      KaneChristopher
      Paton-Gay
            
            Donald
      Jackson Wells
            
            Joseph
      Kane




Table of Contents




Attachment
AFK-07
 
 Audited
Financial Statements
 
 
 for
the years ended
 December
31, 2007, 2006
 and
from inception
 
 Table of Contents
 
 
 C
O N T E N T S
 
 
 Report
      of Independent Registered Pubic Accounting Firm
              3Consolidated
      Balance Sheets
              4Consolidated
      Statements of Operations and Comprehensive income/(loss)
              5Consolidated
      Statements of Stockholders’ Equity
              6Consolidated
      Statements of Cash Flows
              8Notes
      to the Consolidated Financial statements
              9
  Table of Contents
  REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTINGFIRM
 
 
 To the
Stockholders and Board of Directors
 Turner
Valley Oil & Gas Corporation
 Duncan
B.C. Canada
 
 We have
audited the accompanying consolidated balance sheets of Turner Valley Oil &
Gas Corporation (a Development Stage Company) as of December 31, 2007 and 2006
and the related consolidated statements of operations, comprehensive income
(loss), stockholders’ equity and cash flows for the years then ended and
from inception on April 21, 1999 through December 31, 2007.  These
consolidated financial statements are the responsibility of the Company’s
management.  Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
 
 We
conducted our audits in accordance with standards of the PCAOB (United
States).  Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement.  The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting.  Our audit included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company’s internal control
over financial reporting.  Accordingly, we express no such
opinion.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall consolidated financial statement
presentation.  We believe that our audits provide a reasonable basis
for our opinion.
 
 In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Turner Valley
Oil & Gas Corporation as of December 31, 2007 and 2006 and the consolidated
results of their operations and their cash flows for the periods then ended and
from inception on April 21, 1999 through December 31, 2007, in conformity with
accounting principles generally accepted in the United States of
America.
 
 The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as going concerns.  As discussed in Note 2
to the consolidated financial statements, the Company has suffered recurring
operating losses, and is dependent upon financing to continue operations, which
raises substantial doubt about its ability to continue as a going
concern.  Management’s plans with regard to these matters are also
described in Note 2.  The consolidated financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
  
 Chisholm,
Bierwolf & Nilson, LLC
 Bountiful,
Utah
 March 28,
2008
  3
 Table of Contents
 
 TURNER VALLEY OIL & GAS, INC.
 (A
Development Stage Company)
 Consolidated
Balance Sheets
 
 ASSETS
 December 31,
              
              
              December 31,2007
              
              
              2006CURRENT
      ASSETSCash
              
              $
              75,688
              
              
              $
              -Accounts
      receivable
              
              
              8,088
              
              
              
              8,910Total
      Current Assets
              
              
              83,776
              
              
              
              8,910OIL
      AND GAS PROPERTIES USINGFULL COST ACCOUNTINGProperties
      subject to amortization
              
              
              18,175
              
              
              
              28,177Unproved
      properties
              
              
              -
              
              
              
              925,544Net
      Oil and Gas Properties
              
              
              18,175
              
              
              
              953,721OTHER
      ASSETSInvestments
      - Marketable Securities available for sale
              
              
              -
              
              
              
              604,349Total
      Other Assets
              
              
              -
              
              
              
              604,349TOTAL
      ASSETS
              
              $
              101,951
              
              
              $
              1,566,980LIABILITIES AND
      STOCKHOLDERS' EQUITYCURRENT
      LIABILITIESBank
      Overdraft
              
              
              
              
              
              
              3,397Accounts
      payable
              
              
              4,211
              
              
              $
              400,410Notes
      payable, related party
              
              
              23,658
              
              
              
              23,658Total
      Current Liabilities
              
              
              27,869
              
              
              
              427,465Total
      Liabilities
              
              
              27,869
              
              
              
              427,465Other
      Commitments or Contingencies
              
              
              -
              
              
              
              -STOCKHOLDERS'
      EQUITYCommon
      stock, 100,000,000 shares authorized of $0.001 par value, 61,335,984 and
      58,535,984 shares issued
              
              
              61,337
              
              
              
              58,537Capital
      in excess of par value
              
              
              4,741,873
              
              
              
              4,697,173Accumulated
      other comprehensive income
              
              
              (3,356
              )
              
              
              495,283Deficit
      accumulated during the development stage
              
              
              (4,725,772
              )
              
              
              (4,111,478
              )Total
      Stockholders' Equity
              
              
              74,082
              
              
              
              1,139,515TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
              
              $
              101,951
              
              
              $
              1,566,980
  4
 Table of Contents
 
 TURNER VALLEY OIL & GAS, INC.
 (A
Development Stage Company)
 Consolidated
Statements of Operations and Comprehensive Income/(Loss)
 
 FromInception
      onFor
      the
              
              
              April
      21, 1999Year
      Ended
              
              
              ThroughDecember 31,
              
              
              December 31,2007
              
              
              2006
              
              
              2007REVENUERoyalties
      received
              
              $
              4,165
              
              
              $
              9,813
              
              
              $
              25,039EXPENSESCost
      of production
              
              
              -
              
              
              
              -
              
              
              
              51,753Depletion
              
              
              10,000
              
              
              
              10,000
              
              
              
              30,767Abandonment
      of natural gas and oil property
              
              
              525,544
              
              
              
              -
              
              
              
              525,544General
      and administrative
              
              
              248,130
              
              
              
              713,345
              
              
              
              4,943,310Total
      Expenses
              
              
              783,674
              
              
              
              723,345
              
              
              
              5,551,374NET
      OPERATING LOSS
              
              
              (779,509
              )
              
              
              (713,532
              )
              
              
              (5,526,335
              )OTHER
      INCOME (EXPENSE)Gain
      on sale of investments
              
              
              159,872
              
              
              
              426,295
              
              
              
              798,510Rent
      Received
              
              
              5,345
              
              
              
              
              
              
              
              5,345Interest
      expense
              
              
              -
              
              
              
              -
              
              
              
              (3,292
              )Total
      Other Income (Expense)
              
              
              165,217
              
              
              
              426,295
              
              
              
              800,563NET
      PROFIT/(LOSS) BEFORE INCOME TAX
              
              $
              (614,292
              )
              
              $
              (287,237
              )
              
              $
              (4,725,772
              )Income
      tax
              
              $
              -
              
              
              $
              -
              
              
              $
              -NET
      PROFIT/(LOSS)
              
              $
              (614,292
              )
              
              $
              (287,237
              )
              
              $
              (4,725,772
              )BASIC
      LOSS PER COMMON SHARE
              
              $
              (0.01
              )
              
              $
              (0.01
              )WEIGHTED
      AVERAGE NUMBER OFCOMMON SHARES OUTSTANDING
              
              
              58,914,066
              
              
              
              55,651,737COMPREHENSIVE
      INCOME (LOSS)NET
      LOSS
              
              $
              (614,292
              )
              
              $
              (287,237
              )
              
              $
              (4,725,772
              )OTHER
      COMPREHENSIVE INCOME (LOSS)Unrealized
      Gain on Marketable Securities
              
              
              -
              
              
              
              499,368
              
              
              
              (725
              )Foreign
      Currency Translation
              
              
              (1,453
              )
              
              
              (725
              )
              
              
              (4,085
              )COMPREHENSIVE
      INCOME (LOSS)
              
              $
              (615,745
              )
              
              $
              211,406
              
              
              $
              (4,730,582
              )
  5
 Table of Contents
  Turner
Valley Oil & Gas Corporation
 (A
Development Stage Company)
 Statement
of Stockholders' Equity
 For the
Year Ended December 31, 2007
 Additional
              
              
              Comprehensive
              
              
              RetainedShares
              
              
              Amount
              
              
              Paid-in-Capital
              
              
              Income/(Loss)
              
              
              EarningsBalance
      at inception April 21, 1999
              
              
              0
              
              
              
              0
              
              
              
              0Shares
      issued for services during 1999
              
              
              41,080
              
              
              
              41
              
              
              
              5,094Shares
      issued for cash during 1999
              
              
              16,000
              
              
              
              16
              
              
              
              99,984Net
      Loss for the period ended December 31, 1999
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (96,935
              )Balance
      at December 31, 1999
              
              
              57,080
              
              
              
              57
              
              
              
              105,078
              
              
              
              0
              
              
              
              (96,935
              )Net
      Loss for the period ended December 31, 2000
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (27,242
              )Balance
      at December 31, 2000
              
              
              57,080
              
              
              
              57
              
              
              
              105,078
              
              
              
              0
              
              
              
              (124,177
              )Net
      Loss for the period ended December 31, 2001
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (65,380
              )Balance
      at December 31, 2001
              
              
              57,080
              
              
              
              57
              
              
              
              105,078
              
              
              
              0
              
              
              
              (189,557
              )Shares
      issued for debt reduction during 2002
              
              
              8,000
              
              
              
              8
              
              
              
              99,992Shares
      issued for services during 2002
              
              
              2,190,150
              
              
              
              2,190
              
              
              
              1,092,885Net
      Loss for the period ended December 31, 2002
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (1,240,008
              )Balance
      at December 31, 2002
              
              
              2,255,230
              
              
              
              2,255
              
              
              
              1,297,955
              
              
              
              0
              
              
              
              (1,429,565
              )Shares
      issued for services at $.02 per share
              
              
              1,500,000
              
              
              
              1,500
              
              
              
              298,500Rounding
      of shares from reverse split
              
              
              2,000
              
              
              
              2
              
              
              
              (2
              )Shares
      issued for accounts payable at $.05 Per share
              
              
              8,000,000
              
              
              
              8,000
              
              
              
              392,000Shares
      issued for services at $.015 per share
              
              
              31,729,200
              
              
              
              31,729
              
              
              
              444,209Shares
      issued for services at $.015 per share
              
              
              9,487,504
              
              
              
              9,488
              
              
              
              132,825Shares
      issued pursuant to S-8 registration at $.05 per share
              
              
              2,000,000
              
              
              
              2,000
              
              
              
              98,000Shares
      issued pursuant to S-8 registration at $.05 per share
              
              
              650,000
              
              
              
              650
              
              
              
              31,850Cancellation
      of Common Stock
              
              
              (16,691,520
              )
              
              
              (16,692
              )
              
              
              (220,459
              )Shares
      issued for cash at $.05 per share
              
              
              3,000,000
              
              
              
              3,000
              
              
              
              147,000Shares
      issued for cash at $.30 per share
              
              
              100,000
              
              
              
              100
              
              
              
              29,900Shares
      issued for cash at $.35 per share
              
              
              528,570
              
              
              
              529
              
              
              
              184,471Foreign
      Currency Translation
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (1,718
              )Net
      Loss for the period ended December 31, 2003
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              
              
              
              
              (1,137,760
              )Balance
      at December 31, 2003
              
              
              42,560,984
              
              
              
              42,561
              
              
              
              2,836,249
              
              
              
              (1,718
              )
              
              
              (2,567,325
              )Shares
      issued pursuant to S-8 registration at $.20 per share
              
              
              932,500
              
              
              
              933
              
              
              
              185,567Shares
      issued pursuant to S-8 registration at $.08 per share
              
              
              1,597,500
              
              
              
              1,598
              
              
              
              126,202Shares
      issued pursuant to S-8 registration at $.08 per share
              
              
              1,000,000
              
              
              
              1,000
              
              
              
              79,000Shares
      issued pursuant to S-8 registration at $.11 per share
              
              
              85,000
              
              
              
              85
              
              
              
              9,2659/30/2004Shares
      issued pursuant to S-8 registration at $.20 per share
              
              
              1,385,000
              
              
              
              1,385
              
              
              
              275,615Shares
      issued for Cash at $.05 per share
              
              
              975,000
              
              
              
              975
              
              
              
              47,775Subscription
      RecievableForeign
      Currency Translation
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (2,367
              )Net
      Loss for the period ended December 31, 2004
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              0
              
              
              
              (784,001
              )Balance
      at December 31, 2004
              
              
              48,535,984
              
              
              
              48,537
              
              
              
              3,559,673
              
              
              
              (4,085
              )
              
              
              (3,351,325
              )Shares
      issued pursuant to S-8 registration at $.13 per share
              
              
              2,850,000
              
              
              
              2,850
              
              
              
              367,650Shares
      issued pursuant to S-8 registration at $.13 per share
              
              
              2,000,000
              
              
              
              2,000
              
              
              
              258,000Foreign
      Currency Translation
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (725
              )Subscription
      RecievableNet
      Loss for the period ended December 31, 2005
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (472,917
              )Balance
      at January 1, 2006
              
              
              53,385,984
              
              
              
              53,387
              
              
              
              4,185,323
              
              
              
              (4,810
              )
              
              
              (3,824,242
              )Shares
      issued pursuant to S-8 registration at $.13 per share
              
              
              2,000,000
              
              
              
              2,000
              
              
              
              258,000Shares
      issued pursuant to S-8 registration at $.08 per share
              
              
              1,600,000
              
              
              
              1,600
              
              
              
              126400Shares
      issued pursuant to S-8 registration at $.08 per share
              
              
              1,450,000
              
              
              
              1,450
              
              
              
              114,550Shares
      issued under Rule 144 at $0.13 per share
              
              
              100,000
              
              
              
              100
              
              
              
              12,900Revaluation
      of available for sale investments Unrealized gain
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              500,093Net
      Income for the year endedDecember
      31, 2006
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (287,238
              )Balance
      as at December 31, 2006
              
              
              58,535,984
              
              
              
              58,537
              
              
              
              4,697,173
              
              
              
              495,283
              
              
              
              (4,111,480
              )Realization
      of unrealized gains on investments
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (500,093
              )Foreign
      currency transalation
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              1,453Issuance
      of S-8 stock for services at $0.01
              
              
              1,500,000
              
              
              
              1,500
              
              
              
              13,500Issuance
      of S-8 stock for services at $0.025
              
              
              1,300,000
              
              
              
              1,300
              
              
              
              31,200Net
      Income/(loss) for the year ended December 31, 2007
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (614,292
              )Balance
      as at December 31, 2007
              
              
              61,335,984
              
              
              
              61,337
              
              
              
              4,741,873
              
              
              
              (3,357
              )
              
              
              (4,725,772
              )
  6
 Table of Contents
 
 TURNER VALLEY OIL & GAS, INC.
 (A
Development Stage Company)
 Consolidated
Statements of Cash Flows
 
 FromInception
      onApril 21,
      1999Year
      Ended
              
              
              ThroughDecember 31,
              
              
              December 31,2007
              
              
              2006
              
              
              2007CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      Income/(Loss)
              
              $
              (614,292
              )
              
              $
              (287,234
              )
              
              $
              (4,725,772
              )Adjustments
      to reconcile net loss to net cashused in operating
      activities:Depletion
              
              
              10,000
              
              
              
              10,000
              
              
              
              30,767Loss
      on abandonment of property
              
              
              525,544
              
              
              
              -
              
              
              
              551,025Gain
      on sale of Investment
              
              
              (159,872
              )
              
              
              (436,388
              )
              
              
              (834,085
              )Common
      stock issued for services rendered
              
              
              47,500
              
              
              
              517,000
              
              
              
              4,289,460Change
      in Comprehensive Income
              
              
              1,274
              
              
              
              
              
              
              
              1,274Non-cash
      Effect from Foreign Currency Translation
              
              
              (1,453
              )
              
              
              725
              
              
              
              (4,085
              )Non-cash
      effect of revaluing Marketable Securities
              
              
              -Changes
      in operating assets and liabilities:Increase
      (Decrease) in bank Overdraft
              
              
              (3,397
              )
              
              
              3,397
              
              
              
              -Increase
      (Decrease) in accounts receivable
              
              
              843
              
              
              
              (6,364
              )
              
              
              (719
              )Increase
      (Decrease) in accounts payable - related Party
              
              
              -
              
              
              
              -
              
              
              
              23,659Increase
      in accounts payable and accrued expenses
              
              
              3,981
              
              
              
              394,450
              
              
              
              295,590Net
      Cash Used in Operating Activities
              
              
              (189,872
              )
              
              
              195,586
              
              
              
              (372,886
              )CASH
      FLOWS FROM INVESTING ACTIVITIES:Proceeds
      from sale of investments
              
              
              265,560
              
              
              
              487,058
              
              
              
              1,073,082Investing
      in new Oil & Gas working interests
              
              
              -
              
              
              
              (761,492
              )
              
              
              (825,544
              )Expenditures
      for oil and gas property development
              
              
              -
              
              
              
              -
              
              
              
              (312,714
              )Net
      Cash Used in Investing Activities
              
              
              265,560
              
              
              
              (274,434
              )
              
              
              (65,176
              )CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from issuance of common stock
              
              
              -
              
              
              
              -
              
              
              
              465,000Receipt
      of subscription receivable
              
              
              -
              
              
              
              -
              
              
              
              48,750Net
      Cash Provided by Financing Activities
              
              
              -
              
              
              
              -
              
              
              
              513,750NET
      INCREASE (DECREASE) IN CASH
              
              
              75,688
              
              
              
              (78,848
              )
              
              
              75,688CASH
      AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
              
              
              -
              
              
              
              78,848
              
              
              
              -CASH
      AND CASH EQUIVALENTS AT END OF PERIOD
              
              $
              75,688
              
              
              $
              -
              
              
              $
              75,688SUPPLEMENTAL
      CASH FLOW INFORMATIONCASH
      PAID FOR:Interest
              
              $
              -
              
              
              $
              -
              
              
              $
              -Income
      taxes
              
              $
              -
              
              
              $
              -
              
              
              $
              -NON-CASH
      FINANCING ACTIVITIESCommon
      stock issued for services rendered
              
              $
              47,500
              
              
              $
              260,000
              
              
              $
              3,756,960Common
      stock issued for retirement of payables
              
              $
              -
              
              
              $
              -
              
              
              $
              532,500Transfer
      of working Interest for payment of Debt
              
              $
              (400,000
              )
              
              $
              400,000
              
              
              $
              -
  7
 Table of Contents
  TURNER
VALLEY OIL & GAS CORPORATION
 (a
Development Stage Company)
 Notes to
the Financial Statements
 December
31, 2007 and 2006
  NOTE 1 -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 A.  Organization
 
 The
Company was incorporated under the laws of Nevada on April 21, 1999 as
NetParts.com.  The Company was originally organized to create a series
of 16 specialized auto salvage yards whereby the salvageable components would be
inventoried on a computer and listed on the internet.   The
Company, however, changed their operations and their name on July 24, 2003 to
Turner Valley Oil & Gas Corporation.  On August 1, 2003, the
Company incorporated T.V. Oil & Gas Canada Limited, a wholly owned
subsidiary, into the financial statements of the Company.  The Company
holds a working interest in an oil lease and an investment in an oil and gas
entity.
 
 B. Revenue and Cost
Recognition
  Revenue
from sales of crude oil, natural gas and refined petroleum products are recorded
when deliveries have occurred and legal ownership of the commodity transfers to
the customers.  Title transfers for crude oil, natural gas and bulk
refined products generally occur at pipeline custody points or when a tanker
lifting has occurred.  Revenues from the production of oil and natural
gas properties in which the Company shares an undivided interest with other
producers are recognized based on the actual volumes sold by the Company during
the period.  Gas imbalances occur when the Company’s actual sales
differ from its entitlement under existing working interest.  The
Company records a liability for gas imbalances when it has sold more than its
working interest of gas production and the estimated remaining reserves make it
doubtful that the partners can recoup their share of production from the
field.  At December 31, 2007 and 2006, the Company had no over
produced imbalances.
 Oil and Gas
Properties
 
 The full
cost method is used in accounting for oil and gas
properties.  Accordingly, all costs associated with acquisition,
exploration, and development of oil and gas reserves, including directly related
overhead costs, are capitalized.  In addition, depreciation on
property and equipment used in oil and gas exploration and interest costs
incurred with respect to financing oil and gas acquisition, exploration and
development activities are capitalized in accordance with full cost
accounting.  Capitalized interest for the years ended December 31,
2007 and 2006 was $0.  All capitalized costs of proved oil and gas
properties subject to amortization are being amortized on the unit-of-production
method using estimates of proved reserves.  Investments in unproved
properties and major development projects not subject to amortization are not
amortized until proved reserves associated with the projects can be determined
or until impairment occurs.  If the results of an assessment indicate
that the properties are impaired, the amount of the impairment is added to the
capitalized costs to be amortized.  During the year ended December 31,
2007 and 2006, the Company recorded depletion of $10,000 and $10,000 on its
property, respectively.
 
 C.  Basis of
Consolidation
 
 The
consolidated financial statements include the accounts of Turner Valley Oil
& Gas Corporation and T.V. Oil & Gas Canada Limited.  All
significant inter-company accounts and transactions have been eliminated in the
consolidation.
  8
 Table of Contents
  TURNER
VALLEY OIL & GAS CORPORATION
 (a
Development Stage Company)
 Notes to
the Financial Statements
 December
31, 2007 and 2006
  NOTE 1 -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 D.  Earnings
(Loss) Per Share
 
 The
computation of earnings per share of common stock is based on the weighted
average number of shares outstanding at the date of the financial
statements.  The Company has no stock equivalents outstanding as at
December 31, 2007, and hence the basic and diluted loss per share is the
same.
 
 Income
      (Loss)
              
              
              Shares
              
              
              Per-Share(Numerator)
              
              
              (Denominator)
              
              
              AmountFor
      the year ended December 31, 2007:Basic
      & Diluted EPSIncome
      (loss) to common stockholders
              
              $
              (614,292
              )
              
              
              58,914,066
              
              
              $
              (0.01
              )For
      the year ended December 31, 2006:Basic
      & Diluted EPSIncome
      (loss) to common stockholders
              
              $
              (287,237
              )
              
              
              55,651,737
              
              
              $
              (0.01
              )
 
 
 E.  Cash and Cash
Equivalents
 
 The
Company considers all highly liquid investments with maturities of three months
or less to be cash equivalents.
 
 F.  Income
Taxes
 
 Income
taxes are provided for the tax effects of transactions reported in the financial
statements and consist of taxes currently due plus deferred
taxes.  Deferred taxes are provided on a liability method whereby
deferred tax assets are recognized for deductible temporary differences and
operating loss, tax credit carry-forwards, and deferred tax liabilities are
recognized for taxable temporary differences.  Temporary differences
are the differences between the reported amounts of assets and liabilities and
their tax bases.  Deferred tax assets are reduced by a valuation
allowance when, in the opinion of management, it is more likely than not that
some portion or all of the deferred tax will not be
realized.  Deferred tax assets and liabilities are adjusted for the
effects of changes in tax laws and rates on the date of enactment.
  9
 Table of Contents
  TURNER
VALLEY OIL & GAS CORPORATION
 (a
Development Stage Company)
 Notes to
the Financial Statements
 December
31, 2007 and 2006
  NOTE 1
- SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 F.  Income Taxes
(continued)
 
 December 31,
              
              
              December 31,2007
              
              
              2006Deferred
      tax assets:Net
      operation loss carry-forwards
              
              $
              4,725,722
              
              
              $
              3,612,110Total
      Deferred Tax Assets
              
              
              1,606,745
              
              
              
              1,228,123Valuation
      allowance for deferred tax assets
              
              
              (1,606,745
              )
              
              
              (1,228,123
              )$
              -
              
              
              $
              -
 
 At
December 31, 2007, the Company has net operating losses of $4,725,722 which
begin to expire in 2020.
 
 The
income tax provision differs from the amount of income tax determined by
applying the U.S. federal and state income tax rates of 39% to pretax income
from continuing operations for the years ended December 31, 2007 and 2006 due to
the following:
 
 2007
              
              
              2006Book
      loss from operations
              
              $
              154,248
              
              
              $
              72,125Common
      stock issued for services
              
              
              47,500
              
              
              
              175,780Valuation
      allowance
              
              
              (201,748
              )
              
              
              (247,905
              )$
              -
              
              
              $
              -
 
 
 G.  Use of
estimates
 
 The
preparation of financial statements in conformity with generally accepted
accounting principles re-quires management to make estimates and assumptions
that affect reported amounts of assets and liabilities, disclosure of contingent
assets and liabilities at the date of the financial statements and revenues and
expenses during the reporting period.  In these financial statements
assets and liabilities involve extensive reliance on management’s
estimates.  Actual results could differ from those
estimates.
  10
 Table of Contents
  TURNER
VALLEY OIL & GAS CORPORATION
 (a
Development Stage Company)
 Notes to
the Financial Statements
 December
31, 2007 and 2006
  NOTE 1 -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 H.  New Technical
Pronouncements
 
 In
February 2007, the Financial Accounting Standards Board (“FASB”) issued SFAS No.
159, “The Fair Value Option for Financial Assets and Financial Liabilities”,
which permits an entity to measure certain financial assets and financial
liabilities at fair value. The objective of SFAS No. 159 is to improve financial
reporting by allowing entities to mitigate volatility in reported earnings
caused by the measurement of related assets and liabilities using different
attributes, without having to apply complex hedge accounting provisions. Under
SFAS No. 159, entities that elect the fair value option (by instrument) will
report unrealized gains and losses in earnings at each subsequent reporting
date. The fair value option election is irrevocable, unless a new election date
occurs. SFAS No. 159 establishes presentation and disclosure requirements to
help financial statement users understand the effect of the entity's election on
its earnings, but does not eliminate disclosure requirements of other accounting
standards. Assets and liabilities that are measured at fair value must be
displayed on the face of the balance sheet.  This statement is
effective beginning January 1, 2008 and the Company is evaluating this
pronouncement.
 
 On
December 4, 2007 the FASB issued SFAS No. 160, Non-controlling Interests in
Consolidated Financial Statements - An Amendment of ARB No. 51. SFAS 160
establishes new accounting and reporting standards for the non-controlling
interest in a subsidiary and for the deconsolidation of a subsidiary.
Specifically, this statement requires the recognition of a non-controlling
interest (minority interest) as equity in the consolidated financial statements
and separate from the parent's equity. The amount of net income attributable to
the non-controlling interest will be included in consolidated net income on the
face of the income statement. SFAS 160 clarifies that changes in a parent's
ownership interest in a subsidiary that do not result in deconsolidation are
equity transactions if the parent retains its controlling financial interest. In
addition, this statement requires that a parent recognize a gain or loss in net
income when a subsidiary is deconsolidated. Such gain or loss will be measured
using the fair value of the non-controlling equity investment on the
deconsolidation date. SFAS 160 also includes expanded disclosure requirements
regarding the interests of the parent and its non-controlling interest. SFAS 160
is effective for fiscal years, and interim periods within those fiscal years,
beginning on or after December 15, 2008. Earlier adoption is prohibited. We do
not expect the adoption of SFAS 160 will have an effect on our financial
statements.
  11
 Table of Contents
  TURNER
VALLEY OIL & GAS CORPORATION
 (a
Development Stage Company)
 Notes to
the Financial Statements
 December
31, 2007 and 2006
  NOTE 1 -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
  In
December 2007, the FASB issued SFAS No. 141 (revised), Business Combinations.
This revision statements objective is to improve the relevance, representational
faithfulness, and comparability of the information that a reporting entity
provides in its effects on recognizing
 
 H.  New Technical
Pronouncements
 
 identifiable
assets and measuring goodwill. The adoption of SFAS 141 (revised) did not have
an impact on the Company’s financial statements.
 
 I. Financial
Instruments
 
 The
recorded amounts of financial instruments, including cash equivalents, accounts
receivable, accounts payable and short term notes approximate their market
values as of December 31, 2007 and 2006.  The Company has no
investments in derivative financial instruments.
 
 J. Functional Currency &
Foreign Currency Translation
 
 The
Company’s functional currency is the U.S. dollar.  In accordance with
the Statement of Financial Accounting Standard No. 52, Foreign Currency Translation,
the assets and liabilities denominated in foreign currency are translated into
U.S. dollars at the current rate of exchange existing at period end and revenues
and expenses are translated at average monthly exchange
rates.  Related translation adjustments are reported as a separate
component of stockholders’ equity, whereas, gains or losses relating from
foreign currency transactions are included in the results of
operations.
  12
 Table of Contents
  TURNER
VALLEY OIL & GAS CORPORATION
 (a
Development Stage Company)
 Notes to
the Financial Statements
 December
31, 2007 and 2006
  NOTE 1 -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 K. Impairment of Long-Lived
Assets
 
 In
accordance with Financial Accounting Standards Board Statement No. 144, the
Company records impairment of long-lived assets to be held and used or to be
disposed of when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the carrying
amount.  At December 31, 2007 the abandonment charge was $525,544, and
at December 31, 2006 the impairment charge was $0.
 
 
 L. Accounts
Receivable
 
 2007
              
              
              2007Accounts
      Receivable
              
              $
              8,088
              
              
              $
              8,911Less:  Allowance
      for Doubtful Debts
              
              
              -
              
              
              
              -Net
      Accounts Receivable
              
              $
              8,088
              
              
              $
              8,891
 
 Management
reviews its accounts receivable on a regular basis. If an account has a balance
which is six months old, it is the policy of the company to record an allowance
for doubtful accounts. The Company will continue to pursue all collection
efforts. If at a later date, the account is deemed uncollectible, the account
balance will be written off.
  NOTE 2 -
GOING CONCERN
 
 The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern.  The Company has suffered recurring
operating losses and is dependent upon raising capital to continue
operations.  The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.  It is
management’s plan to raise additional funds to share in the exploration of
leases individually as well as with WIN Energy, and then to begin extracting gas
and oil to sell and generate the necessary funds to continue
operations.
  13
 Table of Contents
  TURNER
VALLEY OIL & GAS CORPORATION
 (a
Development Stage Company)
 Notes to
the Financial Statements
 December
31, 2007 and 2006
 
 NOTE 3 –
OIL & GAS PROPERTIES
 
 Strachan
Property
 
 On August
20, 2003, the Company entered into a purchase agreement to acquire 1% interest
in a producing gas well, located at 22-38-9W5 Red Deer, Alberta,
Canada.  During the end of 2003, the Company’s senior management set
out a rework program for this well.  The rework program called for an
acid wash and acid stimulation of the producing formation.  The
Company agreed to participate in the program which increased their interest to
6.67%.  The program was completed on October 15, 2003 and extraction
continued in 2004.  As of December 31, 2003, $300,672 of costs have
been capitalized under “Properties not subject to amortization”. The Strachen
Property has proved gas reserves of 3.68 MMCF.
 
 During
2004, two of the Companies properties were deemed to be impaired and the Company
abandoned these properties and wrote off $71,072 of capitalized costs. The
Strachen Property began to be extracted and was therefore moved to Properties
being amortized with a capitalized cost of $48,942. Accumulated amortization at
December 31, 2005 and 2004 is $10,767, respectively. During the year ended
December 31, 2005, the Company entered into farm-out agreement with Odin Capital
for the Strachan Leduc formation.  The costs recorded for the year
ended December 31, 2005 are $164,054.  The remaining properties
recorded at $192,700 was sold for common stock in Win Energy, see Note
5.
 
 During
the year the Company determined that its working interest in the Strachan-Leduc
region had no economic hydrocarbons and hence impaired its
holding.  The amount of the impairment for the year ended December 31,
2007 was $525,544.
 
 During
the year the Company disposed of its holding in the Mississippi project for
forgiveness of the amount owing of $400,000.
  14
 Table of Contents
  TURNER
VALLEY OIL & GAS CORPORATION
 (a
Development Stage Company)
 Notes to
the Financial Statements
 December
31, 2007 and 2006
 
 NOTE 4
- STOCK TRANSACTIONS
 
 During
2007, the Company issued 2,800,000 shares pursuant to an S-8 Registration
Statement.  These shares were issued for services totaling
$47,500.
 
 During
2006, the Company issued 5,050,000 shares pursuant to an S-8 registration
Statement and 100,000 shares under rule 144.  These shares were issued
for services totaling $517,000.
 
 During
2005, the Company issued 4,800,000 shares pursuant to an S-8 Registration
Statement.  These shares were issued for services totaling
$630,000.
  During
2004, the Company issued 5,000,000 shares pursuant to an S-8 Registration
Statement.  These shares were issued for services totaling
$680,650.
 
 During
2004, the Company issued 975,000 shares pursuant to a Private Placement and
received a subscription for the amount of $48,750.  The proceeds were
received subsequent to December 31, 2004.
 
 On
January 5, 2003, the Company issued 15,000,000 pre-split shares of common stock
for services rendered on behalf of the Company totaling $298,500, and in
satisfaction of accounts payable totaling $1,500.
 
 On July
1, 2003, the Company enacted a 10 for 1 reverse split of its common
stock.  Stock has been retroactively restated to reflect this
split.
 
 During
July 2003, the Company issued 39,729,200 post-split shares of common stock for
settlement of $196,146 of accounts payable and services valued at
$679,792.
 
 In August
2003, the Company issued 9,487,504 post-split shares of common stock in
settlement of $28,971 of accounts payable and services valued at
$113,360.
 
 On
October 21, 2003, the Company issued 2,000,000 post-split shares of common stock
for services rendered on behalf of the Company totaling $100,000.
 
 On
November 21, 2003, the Company issued 650,000 post-split shares of common stock
valued at $32,500 for professional services rendered in behalf of the
Company.
 
 During
2003, the Company issued a total of 3,628,570 post-split shares of common stock
for cash at a total value of $365,000.
 
 15
 Table of Contents
  In April
2002, the Company purposed a 2 for 1 forward split of its outstanding common
stock.  In October of 2002, the Company enacted a 25 for 1 reverse
split of its common stock.  During the year, 80,000 shares of common
stock were issued to reduce a payable by $100,000.  In October 2002,
21,901,500 shares of common stock were issued for services rendered totaling
$1,095,075.
  16
 Table of Contents
  TURNER
VALLEY OIL & GAS CORPORATION
 (a
Development Stage Company)
 Notes to
the Financial Statements
 December
31, 2007 and 2006
 
 NOTE 5 –
INVESTMENTS AND SALE OF OILS & GAS PROPERTIES
 
 Pursuant
to SFAS 115 “Accounting for Certain Investments in Debt and Equity Securities”
management determines the appropriate classification of investment securities at
the time they are acquired and evaluates the appropriateness of such
classification at each balance sheet date. The classification of those
securities and the related accounting policies are as follows:
 
 Available-for-sale-securities:
Available-for-sale securities consist of marketable equity securities not
classified as trading securities.  Available-for-sale securities are stated
at fair value, and unrealized holding gains and losses, net of the related
deferred tax effect, are reported as a separate component of stockholders'
equity.
 
 On May
25, 2004, the Company entered into an Asset Purchase Agreement with Win Energy
Corporation (“WIN”), wherein T.V. Oil & Gas Canada, Ltd. sold all its
interests held in the other ten sections of the Strachan Property, the Karr
Property, the Turner Valley Project and the Triangle Lands.  In return
for this conveyance the Company received 1,300,303 shares of common stock in
WIN.
 
 The
Company valued its investment in WIN at the carrying cost of the oil and gas
properties conveyed of $192,700.  Subsequent to this transaction the
Company sold 75,000 shares with a basis of $11,115 ($.1482 per share) and
realized proceeds of $56,706 thus crating a gain of $45,591.
 
 During
2005, the Company sold 175,000 shares of its investment in WIN Energy, realizing
a gain of $237,825. The sale agreement includes a half warrant to enable the
purchaser to purchase additional WIN shares at $1.75 per share until March 31,
2006.
 
 During
2006, WIN Energy listed its shares on the Toronto Stock Exchange.  The
Company sold 253,029 shares of its investment in WIN Energy realizing a gain of
$436,388 at a various prices.  The Company re-valued its investment at
an open market price of $0.87, creating an unrealized gain of $500,093 at
December 31, 2006.
 
 During
2007, the Company sold the remainder of its investment in WIN Energy realizing a
gain of $159,872 after receiving gross proceeds of
$265,560.  Following the disposition of shares, the Company removed
its unrealized gain of $500,093 from Comprehensive Income.
 
 WIN
Energy Corporation ("Win"), formed in 2004, is a Calgary based private
corporation. The company is actively engaged in the exploration, development and
production of petroleum, natural gas and natural gas liquids. Win's core area is
in the triangle zone ("Triangle Zone"), which is located along the eastern edge
of the Foothills Belt in southern Alberta, extending from Turner Valley, 25
miles southwest of Calgary, to Pincher Creek, near the Alberta-Montana
border.
  17
 Table of Contents
  TURNER
VALLEY OIL & GAS CORPORATION
 (a
Development Stage Company)
 Notes to
the Financial Statements
 December
31, 2007 and 2006
 
 NOTE 6 –
OTHER COMPREHENSIVE INCOME
 
 The
Company reports other comprehensive income in accordance with Statement of
Financial Accounting Standards No. 130, “Reporting Comprehensive Income” (“SFAS
No. 130").  SFAS No. 130 establishes standards for reporting in the
financial statements all changes in equity during a period, except those
resulting from investments by and distributions to owners.  The
cumulative effect of foreign currency translation adjustments to a cash account
held by the Company in Canadian dollars, which is included in other
comprehensive income in the stockholders’ equity section, consisted of the
following:
 
 December 31,2007
              
              
              2006Balance,
      beginning of year
              
              $
              495,283
              
              
              $
              (4,810
              )Unrealized
      gain on marketable securities
              
              $
              (500,093
              )
              
              $
              499,368Effect
      of currency exchange rate changes
              
              
              1,453
              
              
              
              725Balance,
      end of year
              
              $
              3,356
              
              
              $
              495,283
 
 NOTE 7 –
RELATED PARTY TRANSACTION
 
 The
transaction with Win Energy as described in Note 5 was a related party
transaction due to the fact that the Company’s Chairman Christopher Paton-Gay
was the Chairman of Win Energy.
 
 The
Company’s Chairman has advanced funds to the Company as needed to cover
operating costs. The Advances are non-interest bearing and due on demand. The
detail to such advances is as follows:
 
 December 31,Note
      payable
              
              2007
              
              
              2006Balance,
      beginning of year
              
              $
              23,658
              
              
              $
              23,658Advances
      received
              
              $
              0
              
              
              $
              0Effect
      of currency exchange rate changes
              
              $
              0
              
              
              $
              0Balance,
      end of year
              
              $
              23,658
              
              
              $
              23,658
  NOTE 8 –
LEASE COMMITMENTS
 
 The
Company entered into a lease for its premises on February 17th,
2006.  The term is for 42 months ending September 30,
2009.  The lease commitments are as follows;
 
 Year
      ended December 31, 2008
              
              $
              40,338Year
      ended December 31, 2009
              
              $
              30,254
  18
 Table of Contents
  TURNER
VALLEY OIL & GAS CORPORATION
 (a
Development Stage Company)
 Notes to
the Financial Statements
 December
31, 2007 and 2006
 
 S.F.A.S.
69  SUPPLEMENTAL DISCLOSURES
 
 
 (1)           Capitalized
Costs Relating to
 Oil and
Gas Producing Activities
 
 December 31,
                2007
              
              
              December 31,
                2006Proved
      oil and gas producing properties and related lease and well
      equipment
              
              $
              48,942
              
              
              $
              48,942Accumulated
      depreciation and depletion
              
              
              (30,767
              )
              
              
              (20,767
              )Net
      Capitalized Costs
              
              $
              18,175
              
              
              $
              28,175
 
 (2)           Costs
Incurred in Oil and Gas Property
 Acquisition,
Exploration, and Development Activities
 
 
 December
      31,
                2007
              
              
              December 31,
                2006Acquisition
      of Properties
              
              $
              -
              
              
              $
              -Proved
              
              
              264,054
              
              
              
              264,054Unproved
              
              
              -
              
              
              
              -Exploration
      Costs
              
              
              661,490
              
              
              
              661,490Total
      Costs Incurred
              
              $
              925,544
              
              
              $
              925,544
  19
 Table of Contents
  TURNER
VALLEY OIL & GAS CORPORATION
 (a
Development Stage Company)
 Notes to
the Financial Statements
 December
31, 2007 and 2006
 
 S.F.A.S.
69  SUPPLEMENTAL DISCLOSURES (Continued)
 The
Company does not have any investments accounted for by the equity
method.
  (3)           Results
of Operations for
 Producing
Activities
 
 December
      31,
                2007
              
              
              December
      31,
                2006Sales
              
              $
              4,165
              
              
              $
              9,813Production
      Costs
              
              
              0
              
              
              
              0Depreciation
      and depletion
              
              
              (10,000
              )
              
              
              (10,000
              )Results
      of operations for producing activities (excluding corporate overhead and
      interest costs)
              
              
              (5,835
              )
              
              
              (187
              )
 
 
 
 
 Reserve
Quantity Information
 
 Oil
              
              
              GasBBL
              
              
              MMCFProved
      developed and undeveloped reserves:Balance,
      December 31, 2006
              
              
              -
              
              
              
              3.68Change
      in estimates
              
              
              -
              
              
              
              -Production
              
              
              -
              
              
              
              .99Balance,
      December 31, 2007
              
              
              -
              
              
              
              2.69Proved
      developed reserves:
              
              Oil
              
              
              GasBBL
              
              
              MMCFBeginning
      of the year ended December 31, 2006
              
              
              -
              
              
              
              3.68End
      of the year ended December 31, 2007
              
              
              -
              
              
              
              2.68
 
 The
Company has reserve studies and estimates prepared on the properties acquired
and developed.  The difficulties and uncertainties involved in
estimating proved oil and gas reserves makes comparisons between companies
difficult.  Estimation of reserve quantities is subject to wide
fluctuations because it is dependent on judgmental interpretation of geological
and geophysical data.
   20