----

| Commission file number 0-17729                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 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)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|  1500, 222 3rd Avenue S.W., Calgary, Alberta, T2P 0B4                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (Address of principal executive offices)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Paul Wallace, (403) 290-1676, Fax (403) 770-8060, 1500, 222 3rd Avenue S.W., Calgary, Alberta, T2P 0B4                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (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                                                   | 12     |
| Item 4a.   | Unresolved Staff Comments                                                    | 16     |
| Item 5.    | Operating and Financial Review and Prospects                                 | 17     |
| Item 6.    | Directors, Senior Management and Employees                                   | 21     |
| Item 7.    | Major Shareholders and Related Party Transactions                            | 24     |
| Item 8.    | Financial Information                                                        | 25     |
| Item 9.    | The Offer and Listing                                                        | 25     |
| Item 10.   | Additional Information                                                       | 26     |
| Item 11.   | Quantitative and Qualitative Disclosure About Market Risk                    | 28     |
| Item 12.   | Description of Securities other than Equity Securities                       | 28     |
|       |                                                                         |   |
|       | PART II                                                                      |   |
|       |                                                                         |   |
| Item 13.   | Defaults, Dividend Arrearages and Delinquencies                              | 29     |
| Item 14.   | Material Modifications to the Rights of Security Holders and Use of Proceeds | 29     |
| Item 15.   | Controls and Procedures                                                      | 29     |
| Item 16A.  | Audit Committee Financial Expert                                             | 30     |
| Item 16B.  | Code of Ethics                                                               | 30     |
| Item 16C.  | Principal Accountant Fees and Services                                       | 31     |
| Item 16D.  | Exemption from the Listing Standards for Audit Committee                     | 31     |
| Item 16E.  | Purchase of Equity Securities by the Issuer and Affiliated Purchaser         | 31     |
| Item 16F.  | Changes in Registrant's Certifying Accountant                                | 31     |
| Item 16G.  | Corporate Governance                                                         | 31     |
| Item 16H.  | Mine Safety Disclosure                                                       | 31     |
|       |                                                                         |   |
|       | PART III                                                                     |   |
|       |                                                                         |   |
| Item 17.   | Financial Statements                                                         | 31     |
| Item 18.   | Financial Statements                                                         | 31     |
| Item 19.   | Exhibits                                                                     | 55     |
|       |                                                                         |   |
| Signatures |                                                                         | 56     |

----

|   | - | 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;                                                                                                                                            |
|   | - | our ability to find and acquire additional reserves;                                                                                                                                                                                                                                      |
|   | - | risks associated with acquisitions, exploration, development and production;                                                                                                                                                                                                              |
|   | - | operating hazards attendant to the oil and natural gas business;                                                                                                                                                                                                                          |
|   | - | potential constraints on our ability to market reserves due to limited transportation space;                                                                                                                                                                                              |
|   | - | climatic conditions;                                                                                                                                                                                                                                                                      |
|   | - | availability and cost of labor, material, equipment and capital;                                                                                                                                                                                                                          |
|   | - | ability 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; |
|   | - | adverse regulatory or legal decisions, including those under environmental laws and regulations; |
|--------|---|--------------------------------------------------------------------------------------------------|
|   | - | environmental risks;                                                                             |
|   | - | the strength and financial resources of our competitors;                                         |
|   | - | general economic conditions; and                                                                 |
|   | - | our ability to continue as a "going concern".                                                    |

----

|                       | Average | High | Low  | Close |
|----------------------------|---------|------|------|-------|
| 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  |
| Fiscal Year Ended 12/31/13 | 1.03    | 1.07 | 0.98 | 1.06  |

----

|   | 8/17 | 9/17 | 10/17 | 11/17 | 12/17 | 1/18 |
|--------|------|------|-------|-------|-------|------|
| High   | 1.28 | 1.25 | 1.29  | 1.29  | 1.29  | 1.25 |
| Low    | 1.25 | 1.21 | 1.25  | 1.27  | 1.25  | 1.23 |
|                                      |   | 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 |   |   | YearEnded12/31/13('000) -except per share data |    |
|-------------------------------------------|--------|------------------------------------------------|---------|--------|------------------------------------------------|--------|---------|------------------------------------------------|--------|--------|------------------------------------------------|--------|--------|------------------------------------------------|---------|
| Revenue                                   |   | $                                              | -       |   |                                           | $      | -       |                                           |   | $      | -                                              |   |   | $                                              | -       |   |   | $ | - |   |
| Net Income (Loss)                         |   | $                                              | 1,803   |   |                                           | $      | (250    | )                                              |   | $      | 341                                            |   |   | $                                              | (290    | ) |   | $ | (367 | ) |
| 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 |   |                                           |   | 411,275 |                                           |   |   | 439,144                                        |   |   |                                           | 439,144 |   |   |   | 439,144 |   |
| Working Capital                           |   | $                                              | 399     |   |                                           | $      | 261     |                                           |   | $      | 510                                            |   |   | $                                              | 169     |   |   | $ | 458 |   |
| Resource Properties                       |   | $                                              | -       |   |                                           | $      | -       |                                           |   | $      | -                                              |   |   | $                                              | -       |   |   | $ | - |   |
| Long-Term Debt                            |   | $                                              | -       |   |                                           | $      | -       |                                           |   | $      | -                                              |   |   | $                                              | -       |   |   | $ | - |   |
| Shareholders' Equity                      |   | $                                              | 2,065   |   |                                           | $      | 262     |                                           |   | $      | 511                                            |   |   | $                                              | 170     |   |   | $ | 460 |   |
| Share Capital                             |   | $                                              | 16,732  |   |                                           | $      | 16,732  |                                           |   | $      | 16,732                                         |   |   | $                                              | 16,732  |   |   | $ | 16,732 |   |
| Capital Stock Shares  ('000)         |   |                                           | 409,144 |   |                                           |   | 409,144 |                                           |   |   | 439,144                                        |   |   |                                           | 439,144 |   |   |   | 439,144 |   |
| Total Assets                              |   | $                                              | 2,099   |   |                                           | $      | 320     |                                           |   | $      | 572                                            |   |   | $                                              | 212     |   |   | $ | 502 |   |

----

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| · | 70% interest in Service Contract 72 Reed Bank (SC 72), an offshore license which contains the Sampaguita Gas Field as well as several additional oil and gas leads;  |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | 66.7% interest in Service Contract 40 North Cebu (SC 40), an onshore and offshore license which contains the onshore Libertad Gas Field and Maya discovery and several other prospects; And,  |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | 2.28% interest in Service Contract 14C1 Galoc (SC 14C1 Galoc), an offshore license which contains the producing Galoc Field. |
|--------|------------------------------------------------------------------------------------------------------------------------------|

----

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| Name                 | Age | Position/Area of Experience/Function                                                       |
|----------------------|-----|--------------------------------------------------------------------------------------------|
| Paul Wallace (1) (2) | 67  | Director since November 2012, President and CEO since August 2015 and CFO since June 2015. |
| Claro Ramirez (1)    | 57  | Director since October 2011                                                                |
| Lyle Brown (1) (3)   | 64  | Director since October 2013                                                                |

|  (1) |  Member of Audit Committee in 2017. |
|-----------|------------------------------------------|

| (2) | Member of Compensation Committee in 2017 |
|-----|------------------------------------------|

| (3) | Member of the Corporate Governance Committee in 2017 |
|-----|------------------------------------------------------|

----

|  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 | 67,740,000             | 16.56            |

----

| Year Ended | High  | Low   |
|------------|-------|-------|
| 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 |
| 12/31/13   | $0.02 | $0.00 |

----

| Quarter Ended | Volume    | High  | Low   |
|---------------|-----------|-------|-------|
| 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 |
| 12/31/16      | 3,586,800 | $0.01 | $0.00 |
| 9/30/16       | 1,311,059 | $0.00 | $0.00 |
| 6/30/16       | 1,621,491 | $0.00 | $0.00 |
| 3/31/16       | 838,608   | $0.00 | $0.00 |
| Month Ended | High  | Low   | Volume    |
|-------------|-------|-------|-----------|
| 1/31/18     | $0.01 | 0.00  | 1,120,131 |
| 12/31/17    | $0.01 | 0.00  | 832,942   |
| 11/30/17    | $0.01 | 0.01  | 454,485   |
| 10/30/17    | $0.01 | 0.01  | 1,694,348 |
| 9/30/17     | $0.01 | $0.00 | 4,032,057 |
| 8/30/17     | $0.01 | $0.00 | 3,079,070 |

----

----

----

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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 31 |      |   | December 31 |   |
|-------------------------------------|--------|-------------|-----------|--------|-------------|--------|
|                                |   | **2017**    |      |   | 2016        |   |
| ASSETS                              |   |        |      |   |        |   |
| Current assets                      |   |        |      |   |        |   |
| Cash (Note 6)                       |   | $           | 425,148   |   |        | $      | 312,161 |   |
| Receivables                         |   |        | 960       |   |        |   | 879 |   |
| Prepaid expenses                    |   |        | 7,145     |   |        |   | 6,690 |   |
|                                |   |        | 433,253   |   |        |   | 319,730 |   |
|  Non-current assets            |   |        |      |   |        |   |   |   |
| Equipment (Note 7)                  |   |        | 418       |   |        |   | 596 |   |
| Investment in Forum Energy (Note 8) |   |        | 1,665,000 |   |        |   | - |   |
|                                |   | $           | 2,098,671 |   |        | $      | 320,326 |   |
| Trade and accrued payables |   | $      | 33,945 |   |   | $      | 58,636 |   |
|----------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
|                       |   |   | 33,945 |   |   |   | 58,636 |   |
| Share capital (Note 9)       |   |   | 16,732,397  |   |   |   | 16,732,397  |   |
|------------------------------|--------|--------|-------------|--------|--------|--------|-------------|--------|
| Contributed surplus (Note 9) |   |   | 3,058,063   |   |   |   | 3,058,063   |   |
| Deficit                      |   |   | (17,725,734 | )      |   |   | (19,528,770 | )      |
|                         |   |   | 2,064,726   |   |   |   | 261,690     |   |
|                         |   | $      | 2,098,671   |   |   | $      | 320,326     |   |

----

|                                                       |   | Year Ended  |      |   | Year Ended  |   |     | Year Ended  |   |
|------------------------------------------------------------|--------|-------------|-----------|--------|-------------|--------|----------|-------------|--------|
|                                                       |   | December 31 |      |   | December 31 |   |     | December 31 |   |
|                                                       |   | 2017        |      |   | 2016        |   |     | 2015        |   |
| General and administrative expenses                        |   |        |      |   |        |   |     |        |   |
| General and administration (Notes 10 and 11)               |   | $           | 166,263   |   |        | $      | 214,571  |        |   | $ | 297,041 |   |
| Operating loss                                             |   |        | (166,263  | )      |        |   | (214,571 | )           |   |   | (297,041 | ) |
|                                                       |   |        |      |   |        |   |     |        |   |   |   |   |
| Gain on reclassification of the investment in FEP (Note 8) |   |        | 1,965,000 |   |        |   | -        |        |   |   | - |   |
| Gain on sale of shares in FEP                              |   |        | -         |   |        |   | -        |        |   |   | 637,902 |   |
| Cancellation of Indexa shares (Note 9)                     |   |        | -         |   |        |   | (36,000  | )           |   |   | - |   |
| Interest income                                            |   |        | 4,299     |   |        |   | 1,002    |        |   |   | 48 |   |
| Comprehensive income (loss)                                |   | $           | 1,803,036 |   |        | $      | (249,569 | )           |   | $ | 340,909 |   |
|                                                       |   |        |      |   |        |   |     |        |   |   |   |   |
| - Basic and diluted                                              |   | $      | 0.00        |   |   | $      | (0.00       | )      |   | $      | 0.00        |   |
|------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|-------------|--------|--------|--------|-------------|--------|
|                                                             |   |   |        |   |   |   |        |   |   |   |        |   |
| Weighted average number of shares outstanding, basic and diluted |   |   | 409,143,765 |   |   |   | 411,274,913 |   |   |   | 439,143,765 |   |

----

|                                    |   | 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 |   |
|                                                                                                                         |   |          |       |   |                |   |      |    |   |   |          |   |   |   |   |   |
|                                                                                                                         |   | Share capital |       |   | Contributed surplus |   |      | Deficit |   |   | Total         |   |
| Balance January 1, 2015                                                                                                      |   | $             | 16,732,397 |   |                | $      | 3,058,063 |    |   | $      | (19,620,110   | )      |   | $ | 170,350 |   |
|                Total comprehensive income for the year |   |          | -          |   |                |   |  -   |    |   |   |  340,909 |   |   |   |  340,909 |   |
| Balance December 31, 2015                                                                                                    |   | $             | 16,732,397 |   |                | $      | 3,058,063 |    |   | $      | (19,279,201   | )      |   | $ | 511,259 |   |

----

| For the year ended                                |   | **December 31** |       |   | December 31 |   |     | December 31 |   |
|---------------------------------------------------|--------|-----------------|------------|--------|-------------|--------|----------|-------------|--------|
|                                              |   | **2017**        |       |   | 2016        |   |     | 2015        |   |
| Cash used in                                      |   |            |       |   |        |   |     |        |   |
| OPERATING ACTIVITIES                              |   |            |       |   |        |   |     |        |   |
| Net income (loss) for the year                    |   | $               | 1,803,036  |   |        | $      | (249,569 | )           |   | $ | 340,909 |   |
|                                              |   |            |       |   |        |   |     |        |   |   |   |   |
| Non-cash items included in income (loss)          |   |            |       |   |        |   |     |        |   |   |   |   |
| Amortization                                      |   |            | 178        |   |        |   | 256      |        |   |   | 365 |   |
| Gain on sale of shares in FEP                     |   |            | -          |   |        |   | -        |        |   |   | (637,902 | ) |
| Gain on reclassification of the investment in FEP |   |            | (1,965,000 | )      |        |   | -        |        |   |   | - |   |
|                                              |   |            | (161,786   | )      |        |   | (249,313 | )           |   |   | (296,628 | ) |
| Receivables                           |   |   | (81      | )      |   |   | 286      |   |   |   | 279      |   |
|---------------------------------------|--------|--------|----------|--------|--------|--------|----------|--------|--------|--------|----------|--------|
| Prepaid expenses                      |   |   | (455     | )      |   |   | (213     | )      |   |   | 10,427   |   |
| Trade and accrued payables            |   |   | (24,691  | )      |   |   | (2,323   | )      |   |   | 19,553   |   |
|                                  |   |   |     |   |   |   |     |   |   |   |     |   |
| Net cash used in operating activities |   |   | (187,013 | )      |   |   | (251,563 | )      |   |   | (266,369 | )      |
| Proceeds from sale of FEP shares        |   |   | 300,000 |   |   |   | -        |   |   |   | 637,902 |   |
|-----------------------------------------|--------|--------|---------|--------|--------|--------|----------|--------|--------|--------|---------|--------|
| Net cash provided by financing activity |   |   | 300,000 |   |   |   | -        |   |   |   | 637,902 |   |
|                                    |   |   |    |   |   |   |     |   |   |   |    |   |
| Net (decrease) increase in cash         |   |   | 112,987 |   |   |   | (251,563 | )      |   |   | 371,553 |   |
| Cash – beginning of the year      |   |   | 312,161 |   |   |   | 563,724  |   |   |   | 192,191 |   |
| Cash – end of the year            |   | $      | 425,148 |   |   | $      | 312,161  |   |   | $      | 563,724 |   |

----

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

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

----

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

|  | a) | Investment in associates |
|--|----|--------------------------|

----

----

| c) | Foreign Currency Translation |
|----|------------------------------|

----

| d) | Income Taxes |
|----|--------------|

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

----

| f) | Financial Instruments |
|----|-----------------------|

----

| g) | Share capital |
|----|---------------|

| h) | Finance income and expenses |
|----|-----------------------------|

----

----

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

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

| Computer Equipment               |   | December 31 2017 |    |   | December 31 2016 |   |    | December 31 2015 |   |
|----------------------------------|--------|------------------|---------|--------|------------------|--------|---------|------------------|--------|
| Cost                             |   |             |    |   |             |   |    |             |   |
| Opening Cost                     |   | $                | 15,543  |   |             | $      | 15,543  |             |   | $ | 15,543 |   |
| Additions                        |   |             | -       |   |             |   | -       |             |   |   | - |   |
| Ending Cost                      |   |             | 15,543  |   |             |   | 15,543  |             |   |   | 15,543 |   |
|                             |   |             |    |   |             |   |    |             |   |   |   |   |
| Accumulated Depreciation         |   |             |    |   |             |   |    |             |   |   |   |   |
| Opening Accumulated Depreciation |   | $                | (14,947 | )      |             | $      | (14,691 | )                |   | $ | (14,326 | ) |
| Charge for the year              |   |             | (178    | )      |             |   | (256    | )                |   |   | (365 | ) |
| Ending Accumulated Depreciation  |   |             | (15,125 | )      |             |   | (14,947 | )                |   |   | (14,691 | ) |
|                             |   |             |    |   |             |   |    |             |   |   |   |   |
| Carrying Value                   |   | $                | 418     |   |             | $      | 596     |             |   | $ | 852 |   |

----

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

|                                |   | Number of shares held |       |   | Amount |   |
|-------------------------------------|--------|-----------------------|------------|--------|--------|--------|
|                                |   |                  |       |   |   |   |
|                                |   |                  |       |   |   |   |
| Balance, December 31, 2015 and 2016 |   |                  | 6,550,200  |   |   | $      | - |   |
| Gain on dilution of investment      |   |                  | -          |   |   |   | 1,965,000 |   |
| Disposition                         |   |                  | (1,000,000 | )      |   |   | (300,000 | ) |
|                                |   |                  |       |   |   |   |   |   |
| Balance December 31, 2017           |   |                  | 5,550,200  |   |   | $      | 1,665,000 |   |

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

----

| Common Shares                                    |   | Number |        |   | Amount |   |
|--------------------------------------------------|--------|--------|-------------|--------|--------|--------|
|                                             |   |   |        |   |   |   |
| Balance, January 1, 2015                         |   |   | 439,143,765 |   |   | $      | 16,732,397 |   |
|                                             |   |   |        |   |   |   |   |   |
| Balance December 31, 2015                        |   |   | 439,143,765 |   |   | $      | 16,732,397 |   |
| Returned to treasury (i)                         |   |   | (30,000,000 | )      |   |   | - |   |
| Balance, December 31, 2016 and December 31, 2017 |   |   | 409,143,765 |   |   | $      | 16,732,397 |   |

| (i) | 30,000,000 common shares of the Company were issued into escrow which were to be awarded to Indexa Corp., the vendor of an investment the Company had previously made in Lascogon Mining Corporation ("Lascogon"), upon the declaration of commerciality of the mining project as full and final consideration for the investment. As the commerciality of Lascogon was considered to be remote, no value was assigned to the shares. On January 18, 2016, a settlement was reached whereby the shares were cancelled and returned to treasury for a payment of $36,000 to Indexa Corp. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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

----

| Note 11 | General and administrative expenses |
|---------|-------------------------------------|

|                                |   | December 31, 2017 |    |   | December 31, 2016 |   |    | December 31, 2015 |   |
|-------------------------------------|--------|-------------------|---------|--------|-------------------|--------|---------|-------------------|--------|
| Professional fees                   |   | $                 | 10,641  |   |              | $      | 64,681  |              |   | $ | 37,205 |   |
| Bank charges                        |   |              | 3,283   |   |              |   | 3,324   |              |   |   | 2,961 |   |
| Listing and filing fees             |   |              | 10,873  |   |              |   | 18,105  |              |   |   | 23,479 |   |
| Office and miscellaneous            |   |              | 22,895  |   |              |   | 29,924  |              |   |   | 33,552 |   |
| Consulting (Note 10)                |   |              | 108,000 |   |              |   | 108,000 |              |   |   | 187,042 |   |
| Engineering and geological expenses |   |              | -       |   |              |   | -       |              |   |   | 6,753 |   |
| Amortization (Note 7)               |   |              | 178     |   |              |   | 256     |              |   |   | 365 |   |
| Foreign exchange                    |   |              | 10,393  |   |              |   | (9,719  | )                 |   |   | 5,684 |   |
|                                |   | $                 | 166,263 |   |              | $      | 214,571 |              |   | $ | 297,041 |   |
|                                                                             |   | December 31, 2017 |      |   | December 31, 2016 |   |     | December 31, 2015 |   |
|----------------------------------------------------------------------------------|--------|-------------------|-----------|--------|-------------------|--------|----------|-------------------|--------|
| Income (loss) before income taxes                                                |   | $                 | 1,803,036 |   |              | $      | (249,569 | )                 |   | $ | 340,909 |   |
|                                                                             |   |              |      |   |              |   |     |              |   |   |   |   |
| Tax expense (recovery) based on statutory rate of 27.0% (2016: 27%, 2015: 26.0%) |   |              | 487,000   |   |              |   | (67,000  | )                 |   |   | 89,000 |   |
| Impact of disallowed capital losses                                              |   |              | -         |   |              |   | -        |              |   |   | 268,000 |   |
| Non-deductible expenditures and non-taxable revenues                             |   |              | (265,000  | )      |              |   | -        |              |   |   | - |   |
| Foreign currency adjustment on non-monetary items                                |   |              | (55,000   | )      |              |   | (256,000 | )                 |   |   | 552,000 |   |
| Effect of reduction in statutory rate                                            |   |              | -         |   |              |   | -        |              |   |   | (249,000 | ) |
| Non-taxable portion of capital gains                                             |   |              | -         |   |              |   | -        |              |   |   | (86,000 | ) |
| Expiry of loss carry forward                                                     |   |              | -         |   |              |   | 333,000  |              |   |   | 332,000 |   |
| Adjustment to prior years provision versus statutory tax return                  |   |              | (567,000  | )      |              |   | -        |              |   |   | - |   |
| Changes  in unrecognized deferred tax assets                                |   |              | 400,000   |   |              |   | (10,000  | )                 |   |   | (906,000 | ) |
| Total income tax expense                                                         |   |              | -         |   |              |   | -        |              |   |   | - |   |

----

|                             |   | December 31, 2017 |       |   | December 31, 2016 |   |
|----------------------------------|--------|-------------------|------------|--------|-------------------|--------|
|                             |   |              |       |   |              |   |
| Allowable capital losses         |   | $                 | 410,000    |   |              | $      | - |   |
| Non-capital losses               |   |              | 1,560,000  |   |              |   | 811,000 |   |
| Capital assets and other         |   |              | 2,000      |   |              |   | 240,000 |   |
| Investments                      |   |              | 916,000    |   |              |   | 1,437,000 |   |
| Unrecognized deferred tax assets |   |              | (2,888,000 | )      |              |   | (2,488,000 | ) |
|                             |   | $                 | -          |   |              | $      | - |   |

| - | 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; * |
|-----|--------------------------------------------------------------------------------------------------------------------------------|

| 5.0 | BDO Canada, LLP letter dated April 30, 2018 to the SEC stating whether it agrees with the statements made in Item 16F of the 20F for the fiscal year end December 31, 2017; |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 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.** |                                  |
|----------------------|------------------------|---------------------------------------|
|                 | (Registrant)           |                                  |
|                 |                   |                                  |   |
| Date: April 30, 2018 | By:                    | /s/ Paul Wallace                 |   |
|                 |                   | Paul Wallace                          |   |
|                 |                   | President and Chief Executive Officer |   |
|                 |                   |                                  |   |