----

| Commission file number 000-17729                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| FEC RESOURCES INC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (Exact name of Registrant as specified in its charter)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Not Applicable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (Translation of Registrant's Name into English)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                                            Canada                                                       |
| (Jurisdiction of incorporation or organization)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 5th Floor, 40 Mount Street, North Sydney, New South Wales, NSW 2060 Australia                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| (Address of principal executive offices)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Paul Wallace, +61-44-729-6715, 5th Floor, 40 Mount Street, North Sydney, New South Wales, NSW 2060 Australia                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| (Name, Telephone, E-mail, and/or Facsimile number and Address of Company Contact Person)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                                                                             |
|----------------------------------------------------------------------------------|
| Securities registered or to be registered pursuant to Section 12 (g) of the Act: |
| Common Stock, without par value                                                  |
| (Title of Class)                                                                 |

----

| Large accelerated filer |   | Accelerated filer |   | Non-accelerated filer | XXX |
|-------------------------|--------|-------------------|--------|-----------------------|-----|
| U.S. GAAP |   | International Financial ReportingStandards as issued by the International Accounting Standards Board | XXX          | Other |                          |
|-----------|--------|------------------------------------------------------------------------------------------------------|-----------------------------------------------------------|-------|--------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Item 17 |             |    Item 18 |         XXX       |
|--------|---------|--------------------------------------------------------------------|---------------------------|-----------------------------------------------------------------------------------------|
|   | Yes [ ] |   | No [X] |
|--------|---------|--------|--------|

----

|       |                                                                         | Page   |
|------------|------------------------------------------------------------------------------|--------|
|       | PART I                                                                       |   |
|       |                                                                         |   |
| Item 1.    | Identity of Directors, Senior Management and Advisers                        | 5      |
| Item 2.    | Offer Statistics and Expected Timetable                                      | 5      |
| Item 3.    | Key Information                                                              | 5      |
| Item 4.    | Information on the Company                                                   | 14     |
| Item 4a.   | Unresolved Staff Comments                                                    | 22     |
| Item 5.    | Operating and Financial Review and Prospects                                 | 22     |
| Item 6.    | Directors, Senior Management and Employees                                   | 27     |
| Item 7.    | Major Shareholders and Related Party Transactions                            | 31     |
| Item 8.    | Financial Information                                                        | 32     |
| Item 9.    | The Offer and Listing                                                        | 33     |
| Item 10.   | Additional Information                                                       | 34     |
| Item 11.   | Quantitative and Qualitative Disclosure About Market Risk                    | 36     |
| Item 12.   | Description of Securities other than Equity Securities                       | 37     |
|       |                                                                         |   |
|       | PART II                                                                      |   |
|       |                                                                         |   |
| Item 13.   | Defaults, Dividend Arrearages and Delinquencies                              | 38     |
| Item 14.   | Material Modifications to the Rights of Security Holders and Use of Proceeds | 38     |
| Item 15.   | Controls and Procedures                                                      | 38     |
| Item 16A.  | Audit Committee Financial Expert                                             | 40     |
| Item 16B.  | Code of Ethics                                                               | 40     |
| Item 16C.  | Principal Accountant Fees and Services                                       | 41     |
| Item 16D.  | Exemption from the Listing Standards for Audit Committee                     | 41     |
| Item 16E.  | Purchase of Equity Securities by the Issuer and Affiliated Purchaser         | 41     |
| Item 16F.  | Changes in Registrant's Certifying Accountant                                | 41     |
| Item 16G.  | Corporate Governance                                                         | 41     |
| Item 16H.  | Mine Safety Disclosure                                                       | 41     |
|       |                                                                         |   |
|       | PART III                                                                     |   |
|       |                                                                         |   |
| Item 17.   | Financial Statements                                                         | 42     |
| Item 18.   | Financial Statements                                                         | 42     |
| Item 19.   | Exhibits                                                                     | 66     |
|       |                                                                         |   |
| Signatures |                                                                         | 67     |

----

|   | - | oil and natural gas price volatility;                                                                                                                                                                                                                                                                                       |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | - | uncertainties in the estimates of proved reserves, and in the projection of future rates of production and timing of development expenditures from companies we invest in;                                                                                                                                                  |
|   | - | the ability of companies we invest in to find and acquire additional reserves;                                                                                                                                                                                                                                              |
|   | - | risks associated with investments, acquisitions, exploration, development and production directly or by companies we invest in;                                                                                                                                                                                             |
|   | - | risks associated with owning minority interests in unlisted investments whose shares are not readily traded nor for which is there a quoted market price                                                                                                                                                                    |
|   | - | operating hazards attendant to the oil and natural gas business for companies we invest in;                                                                                                                                                                                                                                 |
|   | - | potential constraints on the ability of companies we invest in to market reserves due to limited transportation space;                                                                                                                                                                                                      |
|   | - | climatic conditions faced by companies we invest in;                                                                                                                                                                                                                                                                        |
|   | - | availability and cost of labor, material, equipment and capital to us and companies we invest in;                                                                                                                                                                                                                           |
|   | - | the ability of companies we invest in to employ and retain key managerial and technical personnel;                                                                                                                                                                                                                          |
|   | - | international, national, regional or local political and economic uncertainties, including the territorial dispute between the Republic of Philippines and the People's Republic of China, changes in energy policies, foreign exchange restrictions and currency fluctuations faced by us and companies we invest in; |
|   | - | adverse regulatory or legal decisions, including those under environmental laws and regulations affecting companies we invest in;;                                                                                                                                                                                          |
|   | - | environmental risks faced by companies we invest in;                                                                                                                                                                                                                                                                        |
|   | - | the strength and financial resources of competitors of companies we invest in;                                                                                                                                                                                                                                              |
|   | - | general economic conditions; and                                                                                                                                                                                                                                                                                            |
|   | - | our ability to continue as a "going concern".                                                                                                                                                                                                                                                                               |

----

|                       | Average | High | Low  | Close |
|----------------------------|---------|------|------|-------|
| Fiscal Year Ended 12/31/18 | 1.30    | 1.36 | 1.23 | 1.36  |
| Fiscal Year Ended 12/31/17 | 1.30    | 1.37 | 1.21 | 1.25  |
| Fiscal Year Ended 12/31/16 | 1.32    | 1.46 | 1.25 | 1.34  |
| Fiscal Year Ended 12/31/15 | 1.28    | 1.40 | 1.17 | 1.38  |
| Fiscal Year Ended 12/31/14 | 1.10    | 1.16 | 1.06 | 1.25  |

----

|   | 8/18 | 9/18 | 10/18 | 11/18 | 12/18 | 1/19 |
|--------|------|------|-------|-------|-------|------|
| High   | 1.32 | 1.32 | 1.31  | 1.33  | 1.36  | 1.36 |
| Low    | 1.29 | 1.29 | 1.28  | 1.31  | 1.32  | 1.31 |
|                                      |   | YearEnded12/31/18('000) -except per share data |    |   | YearEnded12/31/17('000) -except per share data |   |    | YearEnded12/31/16('000) -except per share data |   |   | YearEnded12/31/15('000) -except per share data |   |   | YearEnded12/31/14('000) -except per share data |    |
|-------------------------------------------|--------|------------------------------------------------|---------|--------|------------------------------------------------|--------|---------|------------------------------------------------|--------|--------|------------------------------------------------|--------|--------|------------------------------------------------|---------|
| Revenue                                   |   | $                                              | -       |   |                                           | $      | -       |                                           |   | $      | -                                              |   |   | $                                              | -       |   |   | $ | - |   |
| Net (Loss) Income                         |   | $                                              | (218    | )      |                                           | $      | 1,803   |                                           |   | $      | (250                                           | )      |   | $                                              | 341     |   |   | $ | (290 | ) |
| Net (Loss) Income Per Share               |   | $                                              | 0.00    |   |                                           | $      | 0.00    |                                           |   | $      | 0.00                                           |   |   | $                                              | 0.00    |   |   | $ | (0.00 | ) |
| Diluted  Net (Loss) Income Per Share |   | $                                              | 0.00    |   |                                           | $      | 0.00    |                                           |   | $      | 0.00                                           |   |   | $                                              | 0.00    |   |   | $ | (0.00 | ) |
| Dividends Per Share                       |   | $                                              | 0.00    |   |                                           | $      | 0.00    |                                           |   | $      | 0.00                                           |   |   | $                                              | 0.00    |   |   | $ | 0.00 |   |
| Weighted  Avg. Shares O/S ('000)     |   |                                           | 409,144 |   |                                           |   | 409,144 |                                           |   |   | 411,275                                        |   |   |                                           | 439,144 |   |   |   | 439,144 |   |
| Working Capital                           |   | $                                              | 182     |   |                                           | $      | 399     |                                           |   | $      | 261                                            |   |   | $                                              | 510     |   |   | $ | 169 |   |
| Resource Properties                       |   | $                                              | -       |   |                                           | $      | -       |                                           |   | $      | -                                              |   |   | $                                              | -       |   |   | $ | - |   |
| Long-Term Debt                            |   | $                                              | -       |   |                                           | $      | -       |                                           |   | $      | -                                              |   |   | $                                              | -       |   |   | $ | - |   |
| Shareholders' Equity                      |   | $                                              | 1,847   |   |                                           | $      | 2,065   |                                           |   | $      | 262                                            |   |   | $                                              | 511     |   |   | $ | 170 |   |
| Share Capital                             |   | $                                              | 16,732  |   |                                           | $      | 16,732  |                                           |   | $      | 16,732                                         |   |   | $                                              | 16,732  |   |   | $ | 16,732 |   |
| Capital Stock Shares  ('000)         |   |                                           | 409,144 |   |                                           |   | 409,144 |                                           |   |   | 409,144                                        |   |   |                                           | 439,144 |   |   |   | 439,144 |   |
| Total Assets                              |   | $                                              | 1,903   |   |                                           | $      | 2,099   |                                           |   | $      | 320                                            |   |   | $                                              | 572     |   |   | $ | 212 |   |

----

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----

----

----

----

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|  SC block       |  % interest |  Currently Producing |
|----------------------|------------------|---------------------------|
| SC72 Recto Bank      | 70%              | No                        |
| SC40 North Cebu      | 66.67%           | No                        |
| SC14C-1 Galoc        | 2.27%            | Yes                       |
| SC6A Octon           | 5.56%            | No                        |
| SC6B Bonita          | 8.18%            | No                        |
| SC14A Nido           | 8.46%            | Yes                       |
| SC14B Matinloc       | 12.40%           | Yes                       |
| SC14B-1 N. Matinloc  | 19.46%           | Yes                       |
| SC14C-2 W. Linapacan | 9.10%            | No                        |
| SC14D Retention Area | 8.16%            | No                        |
| SC14 Tara            | 10%              | No                        |

----

----

----

----

| · | Development of SC72 |
|--------|---------------------|

| · | Continued participation in Galoc |
|--------|----------------------------------|

| · | Continued review of exploration blocks to identify potential drilling targets |
|--------|-------------------------------------------------------------------------------|

| · | Continued review of administrative expenses |
|--------|---------------------------------------------|

----

| · | Forum Energy's cash inflows are dependent on the Galoc Field production and the economic life of this field is expected to end in 2021.  Forum Energy's operations do not generate sufficient cash to fund new exploration work; so in the event Forum Energy issued new capital to fund these costs, our interest in Forum Energy will be diluted. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Forum Energy is a closely held private company and there is a limited population of potential buyers for our relatively small interest in Forum Energy. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Forum Energy's interest in its main asset SC72 could be diluted depending on the agreement reached, if any, between the Philippine and Chinese governments concerning the maritime dispute in the West Philippine Sea. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Further exploration work has to be  completed on SC72 and SC40 to confirm the value of the resources within these properties. |
|--------|------------------------------------------------------------------------------------------------------------------------------------|

| · | In March 2017 Forum Energy, through a subsidiary, entered into an unsecured loan agreement with PXP that provides for a loan facility of up to US$6 million.  The balance outstanding at the end of 2017 was approximately US$5.5 million.  The loan facility has a term of three years and bears interest at LIBOR + 3.5% per annum.  There is no certainty that this loan facility will be renewed, in which case Forum Energy may issue new shares to settle this amount outstanding. Terms of the loan agreement do not include any right for PXP to convert an unpaid amount into new shares of Forum Energy. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

----

| Name                 | Age      | Position/Area of Experience/Function                                                       |
|----------------------|----------|--------------------------------------------------------------------------------------------|
| Paul Wallace (1) (2) |  68 | Director since November 2012, President and CEO since August 2015 and CFO since June 2015. |
| Claro Ramirez (1)    |  58 | Director since October 2011                                                                |
| Lyle Brown (1) (3)   |  65 | Director since October 2013                                                                |

| (1) | Member of Audit Committee in 2018. |
|-----|------------------------------------|

| (2) | Member of Compensation Committee in 2018 |
|-----|------------------------------------------|

| (3) | Member of the Corporate Governance Committee in 2018 |
|-----|------------------------------------------------------|

----

|  Directors/Officers |  Salary | Option Exercise Net Market Value(1) | TotalCompensation |
|--------------------------|--------------|-------------------------------------|-------------------|
| Claro Ramirez            | $12,000      | $0.00                               | $12,000           |
| Lyle Brown               | $24,000      | $0.00                               | $24,000           |
| Paul Wallace             | $12,000      | $0.00                               | $12,000           |
| Total                    | $48,000      | $0.00                               | $48,000           |

----

|  Directors/Officers |  Salary | Option Exercise Net Market Value(1) | TotalCompensation |
|--------------------------|--------------|-------------------------------------|-------------------|
| Claro Ramirez            | $12,000      | $0.00                               | $12,000           |
| Lyle Brown               | $24,000      | $0.00                               | $24,000           |
| Paul Wallace             | $12,000      | $0.00                               | $12,000           |
| Total                    | $48,000      | $0.00                               | $48,000           |

----

| Name of Director and/or Officer and number of shares held:      | Number of Shares | Percent of Class |
|-----------------------------------------------------------------|------------------|------------------|
| Paul Wallace *                                                  | -                | -                |
| Claro Ramirez                                                   | -                | -                |
| Lyle Brown                                                      | -                | -                |
| Number of shares held by all Directors and Officers as a group: | -                | -                |

----

| Name | Number of Share Purchase Warrants | Exercise Price | Expiration Date |
|------|-----------------------------------|----------------|-----------------|
| None | None                              |           |            |
| Name                      | Number of Shares Owned | Percent of Class |
|---------------------------|------------------------|------------------|
| PXP Energy Corporation *  | 225,000,000            | 54.99            |
| CDS&Co**              | 43,002,051             | 10.51            |
| CEDE & Co**           | 38,775,175             | 9.48             |
| Asian Coast International | 62,740,000             | 16.56            |

----

----

| Year Ended | High  | Low   |
|------------|-------|-------|
| 12/31/18   | $0.05 | $0.00 |
| 12/31/17   | $0.02 | $0.00 |
| 12/31/16   | $0.01 | $0.00 |
| 12/31/15   | $0.01 | $0.00 |
| 12/31/14   | $0.02 | $0.00 |
| Quarter Ended | Volume     | High  | Low   |
|---------------|------------|-------|-------|
| 12/31/18      | 7,849,233  | $0.02 | $0.01 |
| 9/30/18       | 3,777,114  | $0.02 | $0.01 |
| 6/30/18       | 26,833,298 | $0.05 | $0.01 |
| 3/31/18       | 15,372,734 | $0.02 | $0.00 |
| 12/31/17      | 2,981,775  | $0.01 | $0.00 |
| 9/30/17       | 7,899,222  | $0.01 | $0.00 |
| 6/30/17       | 889,320    | $0.01 | $0.00 |
| 3/31/17       | 4,104,943  | $0.02 | $0.00 |

----

| Month Ended | High  | Low   | Volume    |
|-------------|-------|-------|-----------|
| 1/31/19     | $0.02 | 0.01  | 2,601,942 |
| 12/31/18    | $0.02 | 0.01  | 903,842   |
| 11/30/18    | $0.02 | 0.01  | 5,119,911 |
| 10/30/18    | $0.02 | 0.01  | 1,825,480 |
| 9/30/18     | $0.02 | $0.01 | 2,211,949 |
| 8/30/18     | $0.02 | $0.01 | 1,025,817 |

----

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|  | 1. | Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; |
|--|----|---------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 2. | Full, fair, accurate, timely, and understandable disclosure in reports and documents that a registrant files with, or submits to, regulatory agencies and in other public communications made by the registrant; |
|--|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 3. | Compliance with applicable governmental laws, rules and regulations; |
|--|----|----------------------------------------------------------------------|

|  | 4. | The prompt internal reporting of violations of the standards to an appropriate person or persons identified in the standards; and |
|--|----|-----------------------------------------------------------------------------------------------------------------------------------|

|  | 5. | Accountability for adherence to the standards of the Code of Ethics. |
|--|----|----------------------------------------------------------------------|

----

----

----

----

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|  | Tel: 604  688 5421Fax: 604  688 5132www.bdo.ca | BDO Canada LLP600 Cathedral Place925 West Georgia StreetVancouver BC  V6C 3L2  Canada |
|--|----------------------------------------------------------|-------------------------------------------------------------------------------------------------|

----

|                                        |   | December 312018 |      |   | December 312017 |   |
|---------------------------------------------|--------|-----------------|-----------|--------|-----------------|--------|
| ASSETS                                      |   |            |      |   |            |   |
|                                        |   |            |      |   |            |   |
| Current assets                              |   |            |      |   |            |   |
| Cash (Note 6)                               |   | $               | 228,991   |   |            | $      | 425,148 |   |
| Receivables                                 |   |            | 2,045     |   |            |   | 960 |   |
| Prepaid expenses                            |   |            | 6,555     |   |            |   | 7,145 |   |
|                                        |   |            | 237,591   |   |            |   | 433,253 |   |
|                                        |   |            |      |   |            |   |   |   |
| Non-current assets                          |   |            |      |   |            |   |   |   |
| Equipment (Note 7)                          |   |            | 292       |   |            |   | 418 |   |
| Investment in Forum Energy Limited (Note 8) |   |            | 1,665,000 |   |            |   | 1,665,000 |   |
|                                        |   | $               | 1,902,883 |   |            | $      | 2,098,671 |   |
| Trade and accrued payables |   | $      | 55,822 |   |   | $      | 33,945 |   |
|----------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
|                       |   |   | 55,822 |   |   |   | 33,945 |   |
| Share capital (Note 9)       |   |   | 16,732,397  |   |   |   | 16,732,397  |   |
|------------------------------|--------|--------|-------------|--------|--------|--------|-------------|--------|
| Contributed surplus (Note 9) |   |   | 3,058,063   |   |   |   | 3,058,063   |   |
| Deficit                      |   |   | (17,943,399 | )      |   |   | (17,725,734 | )      |
|                         |   |   | 1,847,061   |   |   |   | 2,064,726   |   |
|                         |   | $      | 1,902,883   |   |   | $      | 2,098,671   |   |

----

|                                                                        |   | Year ended December 312018 |     |   | Year endedDecember 312017 |   |      | Year endedDecember 312016 |   |
|-----------------------------------------------------------------------------|--------|----------------------------|----------|--------|---------------------------|--------|-----------|---------------------------|--------|
|                                                                        |   |                       |     |   |                      |   |      |                      |   |
|                                                                        |   |                       |     |   |                      |   |      |                      |   |
| General and administrative expenses                                         |   |                       |     |   |                      |   |      |                      |   |
| General and administration (Notes 10 and 11)                                |   | $                          | 232,326  |   |                      | $      | 166,263   |                      |   | $ | 214,571 |   |
| Operating loss                                                              |   |                       | (222,326 | )      |                      |   | (166,263  | )                         |   |   | (214,571 | ) |
|                                                                        |   |                       |     |   |                      |   |      |                      |   |   |   |   |
| Gain on reclassification of the investment in Forum Energy Limited (Note 8) |   |                       | -        |   |                      |   | 1,965,000 |                      |   |   | - |   |
| Cancellation of Indexa shares (Note 9)                                      |   |                       | -        |   |                      |   | -         |                      |   |   | (36,000 | ) |
| Interest income                                                             |   |                       | 4,661    |   |                      |   | 4,299     |                      |   |   | 1,002 |   |
| Net and Comprehensive income (loss)                                         |   | $                          | (217,665 | )      |                      | $      | 1,803,036 |                      |   | $ | (249,569 | ) |
| - Basic and diluted                                              |   | $      | (0.00       | )      |   | $      | 0.00        |   |   | $      | (0.00       | )      |
|------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|-------------|--------|--------|--------|-------------|--------|
|                                                             |   |   |        |   |   |   |        |   |   |   |        |   |
| Weighted average number of shares outstanding, basic and diluted |   |   | 409,143,765 |   |   |   | 409,143,765 |   |   |   | 411,274,913 |   |

----

|                                  |   | Share capital |       |   | Contributed surplus |   |      | Deficit |   |   | Total       |   |
|---------------------------------------|--------|---------------|------------|--------|---------------------|--------|-----------|---------|--------|--------|-------------|--------|
|                                  |   |          |       |   |                |   |      |    |   |   |        |   |
| Balance January 1, 2018               |   | $             | 16,732,397 |   |                | $      | 3,058,063 |    |   | $      | (17,725,734 | )      |   | $ | 2,064,726 |   |
| Total comprehensive loss for the year |   |          | -          |   |                |   | -         |    |   |   | (217,665    | )      |   |   | (217,665 | ) |
| Balance December 31, 2018             |   | $             | 16,732,397 |   |                | $      | 3,058,063 |    |   | $      | (17,943,399 | )      |   | $ | 1,847,061 |   |
|                                  |   |          |       |   |                |   |      |    |   |   |        |   |   |   |   |   |
|                                    |   | Share capital |       |   | Contributed surplus |   |      | Deficit |   |   | Total       |   |
|-----------------------------------------|--------|---------------|------------|--------|---------------------|--------|-----------|---------|--------|--------|-------------|--------|
|                                    |   |          |       |   |                |   |      |    |   |   |        |   |
| Balance January 1, 2017                 |   | $             | 16,732,397 |   |                | $      | 3,058,063 |    |   | $      | (19,528,770 | )      |   | $ | 261,690 |   |
| Total comprehensive income for the year |   |          | -          |   |                |   | -         |    |   |   | 1,803,036   |   |   |   | 1,803,036 |   |
| Balance December 31, 2017               |   | $             | 16,732,397 |   |                | $      | 3,058,063 |    |   | $      | (17,725,734 | )      |   | $ | 2,064,726 |   |
|                                    |   |          |       |   |                |   |      |    |   |   |        |   |   |   |   |   |
|                                    |   |          |       |   |                |   |      |    |   |   |        |   |   |   |   |   |
|                                    |   | Share capital |       |   | Contributed surplus |   |      | Deficit |   |   | Total       |   |
| Balance January 1, 2016                 |   | $             | 16,732,397 |   |                | $      | 3,058,063 |    |   | $      | (19,279,201 | )      |   | $ | 511,259 |   |
| Total comprehensive loss for the year   |   |          | -          |   |                |   | -         |    |   |   | (249,569    | )      |   |   | (249,569 | ) |
| Balance December 31, 2016               |   | $             | 16,732,397 |   |                | $      | 3,058,063 |    |   | $      | (19,528,770 | )      |   | $ | 261,690 |   |

----

|                                                               |   |  Year ended December 312018 |     |   |  Year ended December 312017 |   |       |  Year ended December 312016 |   |
|--------------------------------------------------------------------|--------|----------------------------------|----------|--------|----------------------------------|--------|------------|----------------------------------|--------|
|                                                               |   |                             |     |   |                             |   |       |                             |   |
| Cash used in                                                       |   |                             |     |   |                             |   |       |                             |   |
| OPERATING ACTIVITIES                                               |   |                             |     |   |                             |   |       |                             |   |
| Net income (loss) for the year                                     |   | $                                | (217,665 | )      |                             | $      | 1,803,036  |                             |   | $ | (249,569 | ) |
|                                                               |   |                             |     |   |                             |   |       |                             |   |   |   |   |
| Non-cash items included in net income (loss)                       |   |                             |     |   |                             |   |       |                             |   |   |   |   |
| Amortization                                                       |   |                             | 126      |   |                             |   | 178        |                             |   |   | 256 |   |
| Gain on reclassification of the investment in Forum Energy Limited |   |                             | -        |   |                             |   | (1,965,000 | )                                |   |   | - |   |
|                                                               |   |                             | (217,539 | )      |                             |   | (161,786   | )                                |   |   | (249,313 | ) |
| Receivables                           |   |   | (1,085   | )      |   |   | (81      | ) |   |   | 286      |   |
|---------------------------------------|--------|--------|----------|--------|--------|--------|----------|---|--------|--------|----------|--------|
| Prepaid expenses                      |   |   | 590      |   |   |   | (455     | ) |   |   | (213     | )      |
| Trade and accrued payables            |   |   | 21,877   |   |   |   | (24,691  | ) |   |   | (2,323   | )      |
| Net cash used in operating activities |   |   | (196,157 | )      |   |   | (187,013 | ) |   |   | (251,563 | )      |
| Proceeds from sale of Forum Energy Limited shares |   |   | -        |   |   |   | 300,000 |   |   |   | -        |   |
|---------------------------------------------------|--------|--------|----------|--------|--------|--------|---------|--------|--------|--------|----------|--------|
| Net cash provided by financing activity           |   |   | -        |   |   |   | 300,000 |   |   |   | -        |   |
|                                              |   |   |     |   |   |   |    |   |   |   |     |   |
| Net increase (decrease) in cash                   |   |   | (196,157 | )      |   |   | 112,987 |   |   |   | (251,563 | )      |
| Cash – beginning of the year                |   |   | 425,148  |   |   |   | 312,161 |   |   |   | 563,724  |   |
| Cash – end of the year                      |   | $      | 228,991  |   |   | $      | 425,148 |   |   | $      | 312,161  |   |

----

| a) | Statement of Compliance |
|----|-------------------------|

| b) | Basis of Measurement |
|----|----------------------|

----

| c) | Nature of Operations and Going Concern |
|----|----------------------------------------|

----

| b) | Foreign Currency Translation |
|----|------------------------------|

----

| c) | Income Taxes |
|----|--------------|

| d) | Earnings / Loss Per Share |
|----|---------------------------|

| e) | Financial Instruments |
|----|-----------------------|

----

| e) | Financial Instruments (continued) |
|----|-----------------------------------|

| (i) | The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows, and |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii) | The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| e) | Financial Instruments (continued) |
|----|-----------------------------------|

| (i) | The financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii) | The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| e) | Financial Instruments (continued) |
|----|-----------------------------------|

----

| f) | Share capital |
|----|---------------|

| g) | Finance income and expenses |
|----|-----------------------------|

----

| (i) | IFRS 9 uses a single approach to determine whether a financial asset is classified and measured at amortized cost or fair value. The classification and measurement of financial assets is based on the Company's business models for managing its financial assets and whether the contractual cash flows represent solely payments for principal and interest. Most of the requirements in IAS 39 for classification and measurement of financial liabilities were carried forward in IFRS 9.  The change did not impact the carrying amounts of any of the Company's financial assets on the transition date.  The Company designated its equity securities such as its investment in FEP as financial assets at fair value through other comprehensive income ("FVTOCI"), where they will be recorded initially at fair value. Subsequent changes in fair value will be recognized in other comprehensive income only and will not be transferred into earnings (loss) upon disposition.  As a result of adopting IFRS 9, the net change in fair value of the equity securities, including realized and unrealized gains and losses, if any, is now presented as an item that will not be reclassified subsequently to net income (loss) in the statements of comprehensive income (loss) Realized gains and losses on securities derecognized prior to January 1, 2018 have not been restated in prior year comparatives. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii) | The adoption of the new "expected credit loss" impairment model under IFRS 9, as opposed to an incurred credit loss model under IAS 39, had no impact on the carrying amounts of the Company's financial assets on the transition date given the Company transacts exclusively with large international financial institutions and other organizations with strong credit ratings and the negligible historical level of customer default. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| i) | Investments in Associates |
|----|---------------------------|

| ii) | Deferred tax assets and liabilities |
|-----|-------------------------------------|

----

| Computer Equipment               |   | December 31 2018 |    |   | December 31 2017 |   |    | December 31 2016 |   |
|----------------------------------|--------|------------------|---------|--------|------------------|--------|---------|------------------|--------|
| Cost                             |   |             |    |   |             |   |    |             |   |
| Opening Cost                     |   | $                | 15,543  |   |             | $      | 15,543  |             |   | $ | 15,543 |   |
| Additions                        |   |             | -       |   |             |   | -       |             |   |   | - |   |
| Ending Cost                      |   |             | 15,543  |   |             |   | 15,543  |             |   |   | 15,543 |   |
|                             |   |             |    |   |             |   |    |             |   |   |   |   |
| Accumulated Depreciation         |   |             |    |   |             |   |    |             |   |   |   |   |
| Opening Accumulated Depreciation |   | $                | (15,125 | )      |             | $      | (14,947 | )                |   | $ | (14,691 | ) |
| Charge for the year              |   |             | (126    | )      |             |   | (178    | )                |   |   | (256 | ) |
| Ending Accumulated Depreciation  |   |             | (15,251 | )      |             |   | (15,125 | )                |   |   | (14,947 | ) |
|                             |   |             |    |   |             |   |    |             |   |   |   |   |
| Carrying Value                   |   | $                | 292     |   |             | $      | 418     |             |   | $ | 596 |   |

| i) | Investment in FEP |
|----|-------------------|

|                               |   | Number of shares held |       |   | Amount |   |
|------------------------------------|--------|-----------------------|------------|--------|--------|--------|
|                               |   |                  |       |   |   |   |
|                               |   |                  |       |   |   |   |
| Balance, December 31, 2016         |   |                  | 6,550,200  |   |   | $      | - |   |
| Gain on dilution of investment     |   |                  | -          |   |   |   | 1,965,000 |   |
| Disposition                        |   |                  | (1,000,000 | )      |   |   | (300,000 | ) |
|                               |   |                  |       |   |   |   |   |   |
| Balance December 31, 2017 and 2018 |   |                  | 5,550,200  |   |   | $      | 1,665,000 |   |

----

| a) | Authorized: |
|----|-------------|

|   | Common Shares                                    |   | Number |        |   | Amount |   |
|--------|--------------------------------------------------|--------|--------|-------------|--------|--------|--------|
|   | Balance, December 31, 2017 and December 31, 2018 |   |   | 409,143,765 |   |   | $      | 16,732,397 |   |

| b) | Nature and Purpose of Equity and Reserves |
|----|-------------------------------------------|

----

| c) | Share based payments: |
|----|-----------------------|

|                     |   | December 31, 2018 |    |   | December 31, 2017 |   |    | December 31, 2016 |   |
|--------------------------|--------|-------------------|---------|--------|-------------------|--------|---------|-------------------|--------|
| Professional fees        |   | $                 | 44,836  |   |              | $      | 10,641  |              |   | $ | 64,681 |   |
| Bank charges             |   |              | 3,567   |   |              |   | 3,283   |              |   |   | 3,324 |   |
| Listing and filing fees  |   |              | 31,201  |   |              |   | 10,873  |              |   |   | 18,105 |   |
| Office and miscellaneous |   |              | 25,883  |   |              |   | 22,895  |              |   |   | 29,924 |   |
| Consulting (Note 10)     |   |              | 108,000 |   |              |   | 108,000 |              |   |   | 108,000 |   |
| Amortization (Note 7)    |   |              | 126     |   |              |   | 178     |              |   |   | 256 |   |
| Travel                   |   |              | 8,691   |   |              |   | -       |              |   |   | - |   |
| Foreign exchange         |   |              | 22      |   |              |   | 10,393  |              |   |   | (9,719 | ) |
|                     |   | $                 | 222,326 |   |              | $      | 166,263 |              |   | $ | 214,571 |   |
|                                                                               |   | December 31, 2018 |     |   | December 31, 2017 |   |      | December 31, 2016 |   |
|------------------------------------------------------------------------------------|--------|-------------------|----------|--------|-------------------|--------|-----------|-------------------|--------|
| Income (loss) before income taxes                                                  |   | $                 | (217,665 | )      |              | $      | 1,803,036 |              |   | $ | (249,569 | ) |
| Tax expense (recovery) based on statutory rate of 27.0% (2017: 27.0%, 2016: 27.0%) |   |              | (59,000  | )      |              |   | 487,000   |              |   |   | (67,000 | ) |
| Non-deductible expenditures and non-taxable revenues                               |   |              | -        |   |              |   | (265,000  | )                 |   |   | - |   |
| Foreign currency adjustment on non-monetary items                                  |   |              | -        |   |              |   | (55,000   | )                 |   |   | (256,000 | ) |
| Expiry of loss carry forward                                                       |   |              | -        |   |              |   | -         |              |   |   | 333,000 |   |
| Adjustment to prior years provision versus statutory tax return                    |   |              | -        |   |              |   | (567,000  | )                 |   |   | - |   |
| Other                                                                              |   |              | 1,000    |   |              |   | -         |              |   |   | - |   |
|                                                                               |   |              | (58,000  | )      |              |   | (400,000  | )                 |   |   | 10,000 |   |
| Changes  in unrecognized deferred tax assets                                  |   |              | 58,000   |   |              |   | 400,000   |              |   |   | (10,000 | ) |
| Total income tax expense                                                           |   | $                 | -        |   |              | $      | -         |              |   | $ | - |   |

----

|                             |   | December 31, 2018 |       |   | December 31, 2017 |   |
|----------------------------------|--------|-------------------|------------|--------|-------------------|--------|
|                             |   |              |       |   |              |   |
| Allowable capital losses         |   | $                 | 468,000    |   |              | $      | 410,000 |   |
| Non-capital losses               |   |              | 1,619,000  |   |              |   | 1,560,000 |   |
| Capital assets and other         |   |              | 1,000      |   |              |   | 2,000 |   |
| Investments                      |   |              | 858,000    |   |              |   | 916,000 |   |
| Unrecognized deferred tax assets |   |              | (2,946,000 | )      |              |   | (2,888,000 | ) |
|                             |   | $                 | -          |   |              | $      | - |   |

| - | Market Risk |
|---|-------------|

| - | Credit Risk |
|---|-------------|

| - | Liquidity Risk |
|---|----------------|

----

| a) | Market Risk |
|----|-------------|

| b) | Credit risk |
|----|-------------|

| c) | Liquidity risk |
|----|----------------|

----

| Note 14 | Capital Management |
|---------|--------------------|

----

| 1.1 | Certificate of Continuance of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant's Registration Statement on Form F-1, File No. 33-81290 (the "Registration"); * |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 1.2 | By-Laws of the Registrant (incorporated by reference to Exhibit 3.2 to the Registration Statement); * |
|-----|-------------------------------------------------------------------------------------------------------|

| 4.1 | Consulting Agreement dated March 1, 2004 between the Company and David Robinson *; |
|-----|------------------------------------------------------------------------------------|

| 4.2 | Consulting Agreement dated March 1, 2004 between the Company and Barry Stansfield *; |
|-----|--------------------------------------------------------------------------------------|

| 4.3 | Consulting Agreement dated November 23, 2003 between the Company and Larry Youell *; |
|-----|--------------------------------------------------------------------------------------|

| 4.4 | Consulting Agreement dated March 1, 2004 between the Company and David Wilson * |
|-----|---------------------------------------------------------------------------------|

| 4.5 | Consulting Agreement dated March 1, 2004 between the Company and David *; |
|-----|---------------------------------------------------------------------------|

| 4.6 | Exchange and Release Agreement between Tracer Petroleum Corporation and Transmeridian Exploration, Inc., dated March 16, 2001; * |
|-----|----------------------------------------------------------------------------------------------------------------------------------|

| 4.7 | Share Purchase Agreement dated March 11, 2003, as amended by agreements dated March 21, and April 2, 2003; * |
|-----|--------------------------------------------------------------------------------------------------------------|

| 4.8 | Amendment dated March 21, 2003 to Share Purchase Agreement dated March 11, 2003 as amended by an agreement dated April 2, 2003; * |
|-----|-----------------------------------------------------------------------------------------------------------------------------------|

| 4.9 | Amendment dated April 2, 2003 to Share Purchase Agreement dated March 11, 2003 as amended by agreement dated March 21, 2003; * |
|-----|--------------------------------------------------------------------------------------------------------------------------------|

| 11. | Code of Ethics *; |
|-----|-------------------|

| 12.1 | Certification by the Chief Executive Officer and Chief Financial Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith); |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------|

| 13.1 | Certification by the Chief Executive Officer and Chief Financial Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith); |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                 | **FEC Resources Inc.** |                                  |
|----------------------|------------------------|---------------------------------------|
|                 |                   |                                  |   |
| Date: March 29, 2019 | By:                    | /s/Paul Wallace                       |   |
|                 |                   | Paul Wallace                          |   |
|                 |                   | President and Chief Executive Officer |   |
|                 |                   |                                  |   |