UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 20-F

         |_|  REGISTRATION STATEMENT PURSUANT TO SECTION 12 (b) OR (g) OF
              THE SECURITIES EXCHANGE ACT OF 1934

                                       OR

         |X|  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
              EXCHANGE ACT OF 1934

                     For Fiscal Year ended December 31, 2002

         |_|  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
              SECURITIES EXCHANGE ACT OF 1934

                For the transition period from ________to________

                         Commission file number 0-17729

                          TRACER PETROLEUM CORPORATION
             (Exact name of Registrant as specified in its charter)

                                 Not Applicable
                 (Translation of Registrant's Name into English)

                            British Columbia, Canada
                 (Jurisdiction of incorporation or organization)

                Suite 2600 255-5th Avenue SW Calgary, AB. T2P 3G6
                    (Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12 (b) of the
Act:                                                                        None

Securities registered or to be registered pursuant to Section 12 (g) of the Act:
                         Common Stock, without par value
                                (Title of Class)
                         Common Stock Purchase Warrants
                                (Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act:                                                                 None

Indicate the number of outstanding shares of each of the issuer's classes of
capital or common stock as of the close of the period covered by the annual
report:
                                                        10,511,339 common shares

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 12 or 15 (d) of the Securities and Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports). and (2) has been subject to such filing
requirements for the past 90 days.
                                                                  Yes |X| No |_|

Indicate by check mark which financial statement item the registrant has elected
to follow:

                                                       Item 17 |X|   Item 18 |_|

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST
FIVE YEARS) Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of securities
under a plan confirmed by a court.

                                                                  Not Applicable


<PAGE>

                          TRACER PETROLEUM CORPORATION
           FORM 20-F ANNUAL REPORT FISCAL 2002 ENDED DECEMBER 31, 2002

                                TABLE OF CONTENTS

                                    PART                                   Page

Item 1.   Identity of Directors, Senior Management and Advisers             4
Item 2.   Offer Statistics and Expected Timetable                           4
Item 3.   Key Information                                                   4
Item 4.   Information on the Company                                        12
Item 5.   Operating and Financial Review and Prospects                      21
Item 6.   Directors, Senior Management and Employees                        23
Item 7.   Major Shareholders and Related Party Transactions                 31
Item 8.   Financial Information                                             33
Item 9.   The Listing                                                       33
Item 10.  Additional Information                                            35
Item 11.  Quantitative and Qualitative Disclosure About Market Risk         37
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                                  39
Item 16B. Code Of Ethics                                                    39
Item 16C. Principal Accountant Fees And Services                            40

                                    PART III

Item 17.  Financial Statements                                              40
Item 18.  Financial Statements                                              55
Item 19.  Exhibits                                                          55

Signatures                                                                  57
Certifications                                                              58
Exhibit Index                                                               61


                                       2
<PAGE>

              CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

      Some of the information in this prospectus contains forward-looking
statements. Forward-looking statements give our current expectations or
forecasts of future events and are based on our management's beliefs, as well as
assumptions made by and information currently available to them. You can
identify these statements by the fact that they do not relate strictly to
historical or current facts. These statements may include the words
"anticipate," "believe," "budget," "estimate," "expect," "intend," "objective,"
"plan," "probable" "possible," "potential," "project" and other words and terms
of similar meaning in connection with any discussion of future operating or
financial performances.

      Any or all of our forward-looking statements in this Form 20-F may turn
out to be wrong. They can be affected by inaccurate assumptions or by known or
unknown risks and uncertainties. Many of these factors, including the risks
outlined under "Risk Factors," will be important in determining our actual
future results, which may differ materially from those contemplated in any
forward-looking statements. These factors include, among others, the following:

      -     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;

      -     risks associated with the financing, construction and operation of
            the methanol plant in which we expect to acquire an interest;

      -     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 changes in energy policies, foreign
            exchange restrictions and currency fluctuations;

      -     adverse regulatory or legal decisions, including those under
            environmental laws and regulations;

      -     the strength and financial resources of our competitors;

      -     general economic conditions; and

      -     our ability to continue as a going concern.

      When you consider these forward-looking statements, you should keep in
mind these risk factors and other cautionary statements in this prospectus. Our
forward-looking statements speak only as of the date made.

      Although we believe that the expectations reflected in the forward-looking
statement are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. Except as otherwise required by United
States securities laws, we are under no duty to update any of the forward
looking statements after the date of this Form 20-F to conform them to actual
results or to changes in our expectations. All forward-looking statements
attributable to us are expressly qualified in their entirety by the foregoing
cautionary statement.


                                       3
<PAGE>

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS.

      Not applicable to Form 20-F filings as annual report.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE.

      Not applicable to Form 20-F filings as annual report.

ITEM 3. KEY INFORMATION.

      The following is a summary of key information about our financial
condition, capitalization and the risk factors pertaining to our business.

Currency Exchange Rates

      Table No. 3(A)(1) sets forth the rate of exchange for the Canadian Dollar
at the end of each of the five most recent fiscal years ended December 31, the
average rates for each year, and the range of high and low rates for each year.
Table 3(A)(2) sets forth the high and low exchange rates for each month during
the previous six months. For purposes of these tables, the rate of exchange
means the noon buying rate in New York City for cable transfers in foreign
currencies as certified for customs purposes by the Federal Reserve Bank of New
York. The table sets forth the number of Canadian Dollars required under that
formula to buy one US Dollar. The average rate means the average of the exchange
rates on the last day of each month during the year.

                                Table No. 3(A)(1)
                           U.S. Dollar/Canadian Dollar

                          Currency Exchange Table No. 1
                           U.S. Dollar/Canadian Dollar
-----------------------------------------------------------------------------
                                                Average  High    Low   Close
-----------------------------------------------------------------------------
          Fiscal Year Ended 12/31/02             1.57    1.62   1.51   1.58
-----------------------------------------------------------------------------
          Fiscal Year Ended 12/31/01             1.55    1.60   1.49   1.59
-----------------------------------------------------------------------------
          Fiscal Year Ended 12/31/00             1.49    1.56   1.44   1.50
-----------------------------------------------------------------------------
          Fiscal Year Ended 12/31/99             1.49    1.51   1.46   1.44
-----------------------------------------------------------------------------
          Fiscal Year Ended 12/31/98             1.48    1.58   1.41   1.54
-----------------------------------------------------------------------------

The current rate of exchange was 1.3702 on July 8, 2003.

                                Table No. 3(A)(2)
                           U.S. Dollar/Canadian Dollar
--------------------------------------------------------------------
                01/03    02/03    03/03    04/03    05/03    06/03
--------------------------------------------------------------------
    High       $1.5750  $1.5315  $1.4905  $1.4843  $1.4221  $1.3768
--------------------------------------------------------------------
     Low       $1.5220  $1.4880  $1.4659  $1.4336  $1.3446  $1.3348
--------------------------------------------------------------------


                                       4
<PAGE>

A. Selected Financial Data

The tables below present selected financial information. Our financial
statements are stated in Canadian Dollars and are prepared in accordance with
Canadian Generally Accepted Accounting Principles ("GAAP"). Table 3(A)(3)
presents selected financial information under Canadian GAAP and Table 3(A)(4)
presents the same information assuming we had reported under US GAAP (see note
10 to the consolidated financial statements) These tables should be read in
conjunction with the financial statements and notes thereto and Management
Discussion and Analysis included elsewhere in this annual report. All dollar
amounts in this report are expressed in Canadian dollars unless otherwise
stated.

                                Table No. 3(A)(3)
                        Selected Financial Data CDN GAAP
                           (CDN $ in '000, except EPS)

<TABLE>
<CAPTION>
                                 ------------------------------------------------------------------
                                    Year Ended    Year Ended   Year Ended   Year Ended   Year Ended
                                     12/31/02      12/31/01     12/31/00     12/31/99     12/31/98
---------------------------------------------------------------------------------------------------
<S>                                  <C>           <C>          <C>          <C>          <C>
Revenue                              $     --      $     1      $     1      $ 1,080      $  1,966
Operating Income/(Loss)              $   (783)     $(1,195)     $(1,665)     $(2,891)     $(13,071)
Income/(Loss)                        $ (1,058)     $(1,514)     $(2,028)     $(3,225)     $(12,846)
Earnings (Loss) per share            $  (0.10)     $ (0.17)     $ (0.28)     $ (0.74)     $  (3.46)
Diluted Earnings (Loss) per share          --           --           --           --            --
Dividends per share                  $   0.00      $  0.00      $  0.00      $  0.00      $   0.00
Weighted Avg. Shares O/S ('000)        10,404        8,734        7,338        4,351         3,717
---------------------------------------------------------------------------------------------------
Working Capital                      $   (587)     $  (574)     $  (281)     $   592      $    262
Resource Properties (1)              $     --      $    --      $   149      $    --      $  1,432
Long-Term Debt                       $     --      $    --        $ Nil        $ Nil         $ Nil
Shareholders' Equity                 $   (576)     $   242      $   838      $   986      $  3,404
Capital Stock                          10,511        9,529        7,845        5,111         4,087
Total Assets                         $     71      $   852      $ 1,164      $ 1,379      $  3,669
---------------------------------------------------------------------------------------------------
</TABLE>

(1)   Resource properties comprise all costs of acquisition of, exploration for,
      and development of petroleum and natural gas reserves (net of government
      incentives) less depletion and write downs.

                                Table No. 3(A)(4)
                         Selected Financial Data US GAAP
                           (CDN $ in '000, except EPS)

<TABLE>
<CAPTION>
                                 ------------------------------------------------------------------
                                    Year Ended    Year Ended   Year Ended   Year Ended   Year Ended
                                     12/31/02      12/31/01     12/31/00     12/31/99     12/31/98
--------------------------------------------------------------------------------------------------
<S>                                  <C>           <C>          <C>          <C>          <C>
Revenue                              $     --      $     1      $     1      $ 1,080      $  1,966
Operating Income/(Loss)              $   (783)     $(1,195)     $(1,665)     $(2,540)     $(12,453)
Income/(Loss)                        $ (1,064)     $(1,785)     $(2,028)     $(2,873)     $(12,228)
Earnings (Loss) per share            $  (0.10)     $ (0.20)     $ (0.28)     $ (0.66)     $  (3.29)
Diluted Earnings (Loss) per share    $  (0.10)     $ (0.20)     $ (0.28)     $ (0.66)     $  (3.29)

Dividends per share                  $   0.00      $  0.00      $  0.00      $  0.00      $   0.00
Wgt. Avg. Shares O/S ('000)            10,404        8,734        7,338        4,351         3,717
--------------------------------------------------------------------------------------------------
Working Capital                      $   (598)     $  (221)     $  (281)     $   592      $    216
Resource Properties                  $     --      $    --      $   149      $    --      $  1,080
Long-Term Debt                       $     --      $    --      $   Nil      $   Nil      $    Nil
Shareholders' Equity                 $   (876)     $   (51)     $   838      $   986      $  3,007
Capital Stock                          10,511        9,529        7,845        5,111         4,087
Total Assets                         $     71      $   852      $ 1,164      $ 1,379      $  3,272
--------------------------------------------------------------------------------------------------
</TABLE>


                                       5
<PAGE>

B. Risk Factors

GENERAL BUSINESS RISKS

      o     We have a history of operating losses.

      We sustained operating losses for each of the fiscal years ended December
31, 2002, 2001 and 2000 of, respectively $1,058,276, $1,513,911, and $2,028,006.
We also anticipate sustaining a loss from operations for the fiscal years ended
December 31, 2003. If we do not achieve profitable operations in the near future
we will be required to seek additional debt, equity, or other types of funding.
No assurance can be given that funding will be available to us when and if
required.

      o     We will need additional funds in order to implement our intended
            projects and there is no assurance that such funds will be available
            as, if and when, need.

      Cash flow from operations for the fiscal years ended December 31, 2002,
2001, and 2000 were ($715,887), $(1,193,841), and $(1,583,300) respectively. We
have been dependent upon the proceeds of equity financing to fund operations. No
assurances can be given that our actual cash requirements will not exceed our
budget, that anticipated revenues will be realized, that, when needed, lines of
credit will be available if necessary or that additional capital will be
available to us . There is no assurance that we will be able to obtain such
additional funds on terms and conditions we may deem acceptable. Failure to
obtain such additional funds may materially and adversely affect our ability to
acquire interests in oil and gas properties.

      o     We do not intend to pay dividends in the foreseeable future.

            We have paid no dividends on our common shares since inception and
do not plan to pay dividends in the foreseeable future. See "Description of
Common Shares."

      o     We are in default under the loan agreement with Roc Oil and we may
            not be able to repay our loan from Roc Oil Limited which was due on
            the May 1, 2003.

            We have received loans aggregating US$255,944 from Roc. Roc has the
option to convert this loan amount (including accrued and unpaid interest
thereon) into our common shares and warrants exercisable for our common shares
on or before May 1, 2003. We are currently in discussions with Roc which may
result in certain amendments to the loan agreement, including an extension of
the Maturity Date, revisions to the conversion privileges and deletion of the
right to receive warrants. We cannot assure you that we will be able to reach an
agreement with Roc regarding the repayment of the loan. If we do not reach an
agreement with Roc regarding the repayment of the loan we will be required to
repay the loan from current working capital which may adversely affect future
operations.

      o     The market price of our common shares has been and will in all
            likelihood, continue to be volatile.

            The market price of our common shares has fluctuated over a wide
range and it is likely that the price of our Common Stock will fluctuate in the
future. Announcements regarding acquisitions, the status of corporate
collaborations, regulatory approvals or other developments by us or our
competitors could have a significant impact on the market price of the common
shares.


                                       6
<PAGE>

      o     The value and transferability of our shares may be adversely
            impacted by the limited trading market for our shares and the penny
            stock rules.

            There is only a limited trading market for our shares on the OTCBB.
There can be no assurance that this market will be sustained or that we will be
able to satisfy any future trading criteria that may be imposed by the NASD.

            In addition, holders of our common stock may experience substantial
difficulty in selling their securities as a result of the "penny stock rules."
Our common stock is covered by the penny stock rules, a Securities and Exchange
Commission rule that imposes additional sales practice requirements on
broker-dealers who sell such securities to persons other than established
customers and accredited investors, generally institutions with assets in excess
of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouse. For
transactions covered by the rule, the broker-dealer must make a special
suitability determination for the purchaser and transaction prior to the sale.
Consequently, the rule may affect the ability of broker-dealers to sell our
securities and also may affect the ability of purchasers of our stock to sell
their shares in the secondary market. It may also cause fewer broker dealers to
make a market in our stock.

      o     The large number of shares eligible for future sale by existing
            shareholders and eventually by the recipients of the shares to be
            issued in connection with the consummation of the Forum Acquisition
            may adversely affect the market price for our common shares.

            Future sales of substantial amounts of common shares in the public
market, or the perception that such sales could occur, could adversely affect
the market price of the common shares. At July , 2003, we had 10,809,177 common
shares outstanding. On that date we also had reserved 1,039,790 common shares
for issuance under our stock option plan at per share exercise prices ranging
from $0.08 to $0.32; and 2,539,000 common shares are reserved for issuance under
the Warrants issued pursuant to various private placements. We intend to include
these common shares (as well as the shares issued in connection with the
consummation of the Forum Acquisition) in the Registration Statement to be filed
with the Commission registering the Shares. The foregoing does not include an
additional 11,600,000 shares reserved for issuance in connection with options
granted by the Board of Directors on April 27, 2003. See "Item 6. Directors,
Senior Management and Employees--Options to Purchase Securities from the Company
or Subsidiaries."

            No prediction can be made as to the effect, if any, that sales of
shares of common stock or the availability of such shares for sale will have on
the market prices of our common stock prevailing from time to time. The
possibility that substantial amounts of our common stock may be sold under Rule
144 into the public market may adversely affect prevailing market prices for the
common stock and could impair our ability to raise capital in the future through
the sale of equity securities.

      o     Foreign laws, rules and environmental regulations to which we are
            subject may adversely affect our business operations as well as the
            market price for our stock.

            The production of oil and gas is generally subject to extensive
laws, rules, orders and regulations governing a wide variety of matters,
including the drilling and spacing of wells, allowable rates or production,
prevention of waste and pollution and protection of the environment. In addition
to the direct costs borne in complying with such regulations, operations and
revenues may be impacted to the extent that certain regulations limit oil and
gas production to below economic levels. Although the particular


                                       7
<PAGE>

regulations applicable in each jurisdiction in which operations are conducted
vary, such regulations are generally designed to ensure that oil and gas
operations are carried out in a safe and efficient manner and to ensure that
similarly-situated operators are provided with reasonable opportunities to
produce their respective fair shares of available crude oil and natural gas
reserves. However, since these regulations generally apply to all oil and gas
producers, we believe that these regulations should not put us at a material
disadvantage to other oil and gas producers.

OPERATING RISKS - OIL AND GAS EXPLORATION ACTIVITIES

      o     We do not currently own properties with oil or gas reserves.

            We do not own any properties with oil or gas reserves. Our future
oil and natural gas reserves and production and therefore, cash flow and income,
and our success, are highly dependent on success in finding or acquiring
recoverable reserves. We cannot assure shareholders that we will be able to
develop, exploit, find or acquire reserves to replace future production, if any.

      o     Exploring for and producing oil and natural gas are high-risk
            activities with many uncertainties that could adversely affect our
            business, financial condition or results of operations.

            Exploration and development of oil and gas resources involve a high
degree of risk, and few properties which are explored are ultimately developed
into producing properties. There is no assurance that our exploration and
development activities will result in any discoveries of commercial bodies of
oil or gas. The long-term profitability of our operations will be in part
directly related to the cost and success of its exploration programs which may
be effected by a number of factors. Substantial expenditures are required to
establish reserves through drilling, to develop processes to extract the
resources and, in the case of new properties, to develop the extraction and
processing facilities and infrastructure at any site chosen for extraction.
Although substantial benefits may be derived from the discovery of a major
deposit, no assurance can be given that resources will be discovered in
sufficient quantities to justify commercial operations or that the funds
required for development can be obtained on a timely basis.

      o     If we are unable to continue to identify, explore and develop new
            properties, our business operations may be adversely affected.

            We expect that in order to be successful in our oil and gas
exploration activities we must continually acquire or explore for and develop
new oil and gas reserves to replace those, if any, being depleted by production.
Without successful drilling or acquisition ventures our oil and gas assets,
properties and the revenues derived therefrom, if any, will decline over time.
To the extent we engages in drilling activities, such activities carry the risk
that no commercially viable oil or gas production will be obtained. The cost of
drilling, completing and operating wells is often uncertain. Moreover, drilling
may be curtailed, delayed or cancelled as a result of many factors, including
shortage of available working capital, title problems, weather conditions,
environmental concerns, shortages of or delays in delivery of equipment, as well
as the financial instability of well operators, major working interest owners
and drilling and well servicing companies. The availability of a ready market
for our oil and gas will depend on numerous factors beyond its control,
including the demand for and supply of oil and gas, the proximity of our natural
gas reserves to pipelines, the capacity of such pipelines, fluctuations in
seasonal demand, the effects of inclement weather, and government regulation.
New gas wells may be shut-in for lack of a market until a gas pipeline or
gathering system with available capacity is extended into the area.


                                       8
<PAGE>

      o     The exploration and development of oil and gas properties are
            subject to operating hazards and risks as to which we will be
            uninsured.

            Exploration for natural resources involves many risks, which even a
combination of experience, knowledge and careful evaluation may not be able to
overcome. Operations in which we expect to acquire an interest will be subject
to all the hazards and risks normally incidental to exploration, development and
production of resources, any of which could result in work stoppages, damage to
persons or property and possible environmental damage. These include the
possibility of fires, earthquake activity, coastal erosion, explosions,
blowouts, catering, oil spills or seepage, gas leaks, discharge of toxic gas,
over-pressurized formations, unusual or unexpected geological conditions and the
absence of economically viable reserves. These hazards may result in cost
overruns, substantial losses and/or exposure to substantial environmental and
other liabilities.

      o     Fluctuating oil prices may adversely impact our operations and
            activities.

            The price of oil and gas has fluctuated widely, particularly in
recent years, and is affected by numerous factors beyond our control including
international, economic and political trends, expectations of inflation,
currency exchange fluctuations, interest rates, global or regional consumptive
patterns, speculative activities and increased production due to new extraction
developments and improved extraction and production methods. The effect of these
factors on the price of oil and gas, and therefore the economic viability of any
of our exploration projects, cannot accurately be predicted.

      o     If we fail to fulfill our obligations under our purchase option and
            joint venture agreements not only will our operations be adversely
            affected, but we may lose our interest in the property in question .

            We may, in the future, be unable to meet our share of costs incurred
under the joint venture agreements or other option or joint venture agreements
to which we are or may become a party, and we may have our interest in
properties in which we may acquire interests subject to such agreements reduced
as a result. Furthermore, if other parties to such agreements do not meet their
share of such costs, we may be unable to finance the cost required to complete
recommended programs.

      o     It is possible that our title for the claims in which we have an
            interest will be challenged by third parties.

            Although we will attempt to ascertain the status of the title for
any projects in which we have or will acquire a material interest, there is no
guarantee that title to such concessions will not be challenged or impugned. In
some countries, the system for recording title to the rights to explore, develop
and mine natural resources is such that a title opinion provides only minimal
comfort that the holder has title. Also, in many countries, claims have been
made and new claims are being made by aboriginal peoples that call into question
the rights granted by the governments of those countries.

      o     Reserve estimates for oil and gas reserves reported by us are
            dependent on many assumptions that may ultimately turn out to be
            inaccurate.

            Reserve estimates are imprecise and may be expected to change as
additional information becomes available. Furthermore, estimates of crude oil
and natural gas reserves, of necessity, are projections based on engineering
data, and there are uncertainties inherent in the interpretation of such data as
well as the


                                       9
<PAGE>

projection of future rates of production and the timing of development
expenditures. Reserve engineering is a subjective process of estimating
underground accumulations of oil and gas that cannot be measured in an exact
way, and the accuracy of any reserve estimate is a function of the quality of
available data of engineering and geological interpretation and judgment.
Accordingly, there can be no assurance that the information regarding reserves,
if any, set forth herein will ultimately be produced.

      o     Our oil and gas production and marketing may be adversely affected
            by factors beyond our control.

            The production and marketing of oil and gas are affected by a number
of competitive factors which are beyond our control and the effect of which
cannot be accurately predicted. These factors include crude oil imports, actions
by foreign oil-producing nations, the availability of adequate pipeline and
other transportation facilities, the availability of equipment and personnel,
the marketing of competitive fuels, the effect of governmental regulations and
other matters affecting the availability of a ready market such as fluctuating
supply and demand.

      o     Our operations will be subject to numerous environmental risks.

            Our natural gas and oil operations will be subject to compliance
with federal, state, and local laws and regulations controlling the discharge of
materials into the environment or otherwise relating to the protection of the
environment. We believe that there is a trend toward stricter standards of
environmental regulation which will in all probability continue. Compliance with
such laws may cause substantial delays and require capital outlays in excess of
those anticipated, adversely affecting our earnings and competitive position in
the future.

      o     Since we are seeking to acquire properties in less developed
            countries, our operations may be adversely affected by risks
            associated with the political, economic and social climate of the
            countries in which we will operate.

            Since our exploration and development activities will occur
primarily in countries other than Canada or the United States, we may be
effected by possible political or economic instability in those countries. The
risks include, but are not limited to, terrorism, military repression, extreme
fluctuations in currency exchange rates and high rates of inflation. Changes in
resource development or investment policies or shifts in political attitude in
these countries may adversely affect our business. Operations may be effected in
varying degrees by government regulations with respect to restrictions on
production, price controls, export controls, income taxes, expropriation of
property, maintenance of claims, environmental legislation, land use, land
claims of local people, water use and mine safety. The effect of these factors
cannot be accurately predicted. Exploration and production activities in areas
outside the United States and Canada are also subject to the risks inherent in
foreign operations, including loss of revenue, property and equipment as a
result of hazards such as expropriation, nationalization, war, insurrection and
other political risks.

      o     We face competition from larger and better financed companies
            seeking to acquire properties in our sphere of operation.

            The oil and gas industry is highly competitive, and our business
could be harmed by competition with other companies. Because oil and gas are
fungible commodities, the principal form of competition is price competition. We
will strive to maintain the lowest finding and production costs possible to
maximize profits. In addition, as an independent oil and gas company, it
frequently competes for reserve


                                       10
<PAGE>

acquisitions, exploration leases, licenses, concessions and marketing agreements
against companies with financial and other resources substantially larger than
we possess. Many of our competitors have established strategic long term
positions and maintain strong governmental relationships in countries in which
we may seek entry.

      o     We do not currently maintain insurance against potential losses and
            unexpected liabilities.

            As previously stated, exploration for and production of oil and
natural gas can be hazardous, involving natural disasters and other unforeseen
occurrences such as blowouts, cratering, fires and loss of well control, which
can damage or destroy wells or production facilities, injure or kill people, and
damage property and the environment. Although we intend to maintain insurance
against many potential losses or liabilities arising from our operations in
accordance with customary industry practices and in amounts that we believe to
be prudent, we do not presently have such insurance coverage; and, even if we
were to obtain such insurance coverage, there is no assurance that it will be
adequate protect it against all operational risks.

      o     We are dependent on retaining our senior management and key
            personnel.

            To a large extent, we depend on the services of our senior
management personnel. These individuals have critical and unique knowledge of
the areas of operations that facilitate the evaluation and acquisitions of
potential properties in our intended sphere of operations. The loss of these
experienced personnel could have a material adverse impact on our ability to
compete in this region of the world. We do not maintain any insurance against
the loss of any of these individuals.

      o     Our directors may face conflicts of interest in connection with our
            participation in certain ventures because they are directors of
            other resource companies.

            Larry Youell who serves as our Chairman, President, Chief Executive
Officer and as a director, and David Wilson who serves as a director, are also
directors of other resource companies and, to the extent that such other
companies may participate in ventures in which we may participate, our directors
may have a conflict of interest in negotiating and concluding terms respecting
the extent of such participation. It is possible that due to our directors'
conflicting interests, we may be precluded from participating in certain
projects that we might otherwise have participated in, or we may obtain less
favorable terms on certain projects than we might have obtained if our directors
were not also the directors of other participating mineral resources companies.
In their effort to balance their conflicting interests, our directors may
approve terms that are equally favorable to all of their companies as opposed to
negotiating terms that may be more favorable to us but adverse to their other
companies. Additionally, it is possible that we may not be afforded certain
opportunities to participate in particular projects because such projects are
assigned to our directors' other companies for which the directors may deem the
projects to have a greater benefit.

      o     Failure to consummate the Forum Acquisition may adversely affect our
            ability to recover monies advanced to Forum Exploration and our
            continuing operations.

We have not yet consummated the Forum Acquisition. Although we expect the
transaction to close within the next 15 days, there is not assurance that
factors beyond our control may preclude us from closing the transaction. Under
the terms of the Share Purchase Agreement, we loaned monies to Forum Exploration
in order to fund exploration activities pending consummation of the Forum
Acquisition. We have not formalized the terms of repayment of the loan. If the
Forum Acquisition is not ultimately consummated


                                       11
<PAGE>

and/or if the results of the exploration program are not satisfactory it may be
difficult for us to obtain recovery of the monies advanced by us.

ITEM 4. INFORMATION ON THE COMPANY

A. Corporate History and Development of the Company.

We were incorporated on February 8, 1982 in British Columbia, Canada under the
name Tylox Corporation. Our continuance under the Canada Business Corporation
Act, in December 1991, resulted in, among other things, our name being changed
to Tracer Petroleum Corporation. Our wholly owned subsidiary is TEPCO Ltd.
("TEPCO"). We also own 33.34% of Tracer Petroleum International Ltd. ("TPI"), a
company incorporated in Bermuda to pursue oil and gas ventures in the Middle
East. We had two other subsidiaries that were wound up in 2002, Tracer Petroleum
Iran Ltd. and Tracer Trading Ltd. Tracer Petroleum Iran Ltd was wound up as we
decided to stop pursuit of projects in Iran and Tracer Trading Ltd. was wound up
as it was dormant.

            We are engaged in the acquisition, exploration and, when warranted,
development of natural resource properties. In the years ending December 31,
1999, 2000 and 2001, our focus was on the disposition of certain of our property
interests. We successfully completed our disposition program in 2002 retaining
in some instances small working interest in some of our prior projects. We are
now in the process of reviewing a number of international oil and gas prospects
for possible acquisition and development.

The following describes the major corporate actions (other than property
dispositions, which are discussed separately) affecting our financial condition
which occurred during the years ending December 31 2000, and 2001 and 2002;

      o     On March 20, 2000 we completed a non-brokered private placement of
            1,540,000 units at US$0.50 per unit. Each unit was comprised of one
            common share and one common share purchase warrant which entitled
            the holder to purchase an additional common share at US$1.00 if
            exercised on or before March 2, 2001 and US$1.25 if exercised
            thereafter up to and including March 2, 2002 at which time the
            warrants expire. A total of $1,119,657 relating to the private
            placement was included in share capital. In addition share issuance
            costs for the private placement of $97,708 were also charged to
            share capital. A total of 70,000 warrants from a previous private
            placement were exercised during the year and net proceeds from the
            exercise of $91,520 were included in share capital.

      o     On June 29, 2000 at our annual general meeting, the shareholders
            passed a special resolution authorizing the reduction of our stated
            capital account by $35,009,518 which represented the amount of our
            accumulated deficit as recorded on our balance sheet as at December
            31, 1999. At that time this amount was applied against our
            accumulated deficit.

      o     On May 31, 2001, we completed a private placement of 460,144 Units
            at US$0.40 per Unit. Each Unit consists of one common share and one
            common share purchase warrant exercisable for a period of two years
            at an exercise price of US$0.50 in the first year and US$0.65 in the
            second year.


                                       12
<PAGE>

      At this present time, we do not have any revenue generating assets, and as
a result rely on equity and/or debt financing to fund ongoing operations. We
have experienced large operating losses and cash outflows and as such, our
ability to continue as a going concern is dependant upon achieving profitable
operations and upon obtaining additional financing. The outcome of these matters
cannot be predicted at this time

      Our head office is located at Suite 2600 255-5th Avenue SW, Calgary,
Alberta T2P 3G6. Our phone number is (403) 290-1676.

B. Business Overview

      At this present time, we do not have any revenue generating assets, and as
a result rely on equity and/or debt financing to fund ongoing operations. We
have experienced large operating losses and cash outflows and as such, our
ability to continue as a going concern is dependant upon achieving profitable
operations and upon obtaining additional financing. The outcome of these matters
cannot be predicted at this time.

      We are currently pursuing exploration and development opportunities for
oil and natural gas in the Philippines.

Recent Developments

The Philippines

      We are currently pursuing exploration and development opportunities for
oil and natural gas in Philippines. The result of these efforts have recently
resulted in the Forum Exploration Inc ("Forum") Acquisition.. The terms and
conditions of the Forum Acquisition and the Forum Properties are discussed below
under the heading "FORUM ACQUISITION."

Nigeria, Sao Tome, and Principe

      In 2002 we had been pursing oil and gas projects in Nigeria, however,
recent political strife and associated violence in Nigeria has led Tracer and
its Board of Directors to rethink its participation in the Nigerian Sao Tome and
Principe Joint Development project and we have concluded that with the ongoing
unrest within the country of Nigeria, we will not be pursuing our joint venture
with West Africa Energy Limited ("WAEL"). There is no immediate plan to consider
a re-evaluation of this project at this time.

Turkmenistan

      We have terminated our Joint Venture Agreement ("JVA") with privately-held
Canneft Inc. ("Canneft") of Houston, TX, whereby we would have participated with
Canneft in the development of the Adzhiyap project (the "Project") in
southwestern Turkmenistan. Under the terms of the JVA between us and Canneft, we
were to advance US$150,000 to the Joint Venture over a 5 month period beginning
in May 2002 to cover the remaining estimated costs to secure the project. We
were to work together with Canneft during this period to secure a
technically-competent operator to join the Project, since this would be a
requirement of the PSA. The operator was not required to be a working interest
holder in the Project, but could simply be a qualified contract operator. We had
advanced US$100,000 out of the US$150,000 to the project before deciding to
focus our efforts on projects in the Philippines and canceling the joint
venture.


                                       13
<PAGE>

Competition

      The oil and gas industry is highly competitive. We compete with major
integrated and independent oil and gas respect to marketing, particularly in the
natural gas industry. In addition, the oil and gas industry competes with other
industries to supply the energy and fuel needs of customers. Due to our
financial position, many competitors have resources substantially exceeding our
resources and may, therefore, be better able to define, evaluate and bid for
contracts.

Foreign Sales/Assets

      As of December 31, 2002, as a result of our disposition program, all of
our assets were located in Canada. We had no oil and gas revenues in 2002.

FORUM ACQUISITION

Acquisition

      We entered into a Share Purchase Agreement dated March 11, 2003, as
amended by agreements dated March 21, and April 2, 2003 (as amended, the "Forum
Acquisition Agreement") with Forum Pacific Inc., a company incorporated under
the laws of the Philippines, Forum Exploration Inc. a company incorporated under
the laws of the Philippines, and the Mullins Group, through Eastmark Limited, a
Bermuda registered company.

      Pursuant to the Share Purchase Agreement we acquired 125,000,000 shares
(the "Forum Shares") of the issued and outstanding capital stock of Forum
Exploration (the "Forum Acquisition") currently owned directly and indirectly
collectively by Forum Pacific and the Mullins Group, in exchange for 100,000,000
of our common shares at a deemed value of US$0.10. The issuance of the
100,000,000 shares will result in a change of control. The Forum Shares
represent approximately sixty-six and two-thirds (66 2/3%) percent of the issued
and outstanding voting securities of Forum Exploration.

      During the due diligence period we agreed to advance to Forum Exploration
such amounts, as a bridge loan, as we determined in our sole discretion, as was
necessary, to continue its drilling and exploration program. Consummation of the
Forum Acquisition was dependent upon our satisfaction with the results of our
due diligence investigation, which we completed. It was the Board's decision to
waive certain due diligence items that were not resolved prior to end of the due
diligence period as they were deemed not to be material or were satisfactorily
explained. To the extent that our Board waived any requirement that discovered
deficiencies be remedied prior to closing, the risk associated with the purchase
of the Shares will be increased. You will be relying solely on the judgment of
our management in this regard. See "Risk Factors."

      In addition, the consummation of the Forum Acquisition was subject to our
obtaining any necessary third party consents, including that of Roc Oil Company
Limited of Sydney, Australia. We have received loans aggregating US$255,944 from
Roc. These funds were used in connection with our efforts to identify and
acquire oil and gas projects in Iran. Ultimately, we determined not to pursue
the acquisition of any of the projects under consideration.

      The Roc loan agreement contained certain non-financial covenants
restricting us from, among other things, our amalgamation, consolidation or
merger with another entity, or issuing additional share


                                       14
<PAGE>

capital. In addition, the ROC loan agreement also gave Roc the right to
participate in certain equity financings or property acquisitions.

      Although Roc has orally indicated its consent to the Forum Acquisition, as
of the date of this report, no written consent has been obtained. We are in
default under the loan agreement with Roc Oil and we may not be able to repay
our loan from Roc Oil Limited which was due on the May 1, 2003. Although we are
currently in discussions with Roc which may result in certain amendments to the
terms of our loan agreement with Roc, including an extension of the maturity
date, no assurance can be given that we will successfully negotiate such an
amendment. See "Risk Factors."

Forum Exploration Inc.

      Forum Exploration is focusing on oil and gas exploration in the
Philippines. Currently, Forum Exploration has or had applied for a 100% interest
in two contract areas in the Philippines (the "Forum Properties").

      The first contract area is a GSEC (Geophysical Survey and Exploration
Contract), which covers Manila Bay and a portion of the contiguous landward area
of Luzon Island, including most of the area of Metro Manila. This GSEC, known as
GSEC 92, expired May 12th 2000, however Forum has recently applied for another
GSEC area which includes the Manila Bay area previously covered by GSEC 92, plus
an additional area on land in a strip extending northwards from the bay and
beyond Lincayen Gulf.

      The second contract area is a service contract (SC) area known as SC 40,
which covers the northern half of Cebu Island plus part of the Visayan sea
offshore to the west of the island. Several exploration prospects and leads have
been identified by Forum within the service contract area, both onshore Cebu,
and offshore in the Visayan Sea. A small gas field has been discovered and
appraised onshore Cebu, but its small size has meant that so far it has not been
developed.

      PGS Reservoir Consultants (UK) Limited ("PGS"), an independent consulting
firm, specializing in petroleum reservoir evaluation, has completed an
evaluation of Forum's interests in the Philippines. Based upon this evaluation,
PGS has calculated an Expected Value of Net Cash Flows (NPV10) of US$51.23
million for the interests.

      The Manila Bay prospect was identified in the early 1990s as a potential
Miocene/Pliocene gas target, and the first well was drilled on the structure by
Cophil Exploration and its partners during 1995. Unfortunately technical and
operational problems forced the abandonment of the initial hole, and a sidetrack
well also had to be abandoned after it encountered an overpressured late Miocene
limestone horizon at around 7,430 feet. Gas was detected in the drilling mud
during the penetration of the limestone section, but the lack of wireline logs
or drill stem tests meant that no further evaluation of the limestone zone was
possible at that stage.

      In 1996 a further well was drilled on the structure very close to the
original well location. This well successfully drilled down to a target depth of
11,684 feet. Gas shows from the drilling mud were identified in several zones,
and this information, together with wireline log data, was used to select three
zones for drill stem testing. Unfortunately, all of the three tested zones
flowed water, with only minor amounts of gas. There was the suspicion that the
final test of the shallow Malo Pungatan limestone horizon, which had been
responsible for the over-pressure problems encountered in the original well, was
compromised by a probable casing leak, adding further uncertainty to the
interpretation of the well results.


                                       15
<PAGE>

      The available seismic and well data from Manila Bay were the subject of a
detailed review and evaluation by PGS during 1997. The conclusions from this
work were that some additional prospects may be present near the original Manila
Bay wells, and that new seismic work, involving re-processing and attribute
analysis may identify potential new drilling targets.

SC 40 - Cebu

      Exploration in the Visayan basin began over 100 years ago and since then
approximately 130 wells have been drilled. The majority of the wells were very
shallow tests and drilled outside of structural closure. Oil and gas shows have
been encountered in a number of wells with oil and gas discoveries made onshore
Cebu Island. Since 1994 twelve wells have been drilled in the offshore Visayan
basin, ten of which lie within the SC 40 Licence. Of these ten wells,
nine-targeted Miocene reef plays defined on 2D seismic data and good reservoir
quality was established by 7 wells. Hydrocarbon seeps are also common in the
area indicating an active and mature petroleum system.

      The outstanding work commitments for SC 40 amount to 3 wells, which are
all to be drilled in 2003. These wells will be drilled on onshore prospects,
commencing with a re-entry or twin well on the Maya prospect in SC 40. Target
depths for onshore prospects tend to be modest, and drilling costs are therefore
not high. Forum owns its own drilling rig and ancillary equipment, and this will
be used to drill the onshore prospects. Forum have budgeted US$450,000 for these
3 shallow onshore wells.

      We intend to use approximately US$900,000 of the proceeds raised in a
recent offering of up to 24,000,000 common shares at US$0.10 per share to
continue the drilling and exploration program on the Forum Properties. We have
advanced a portion of this amount as bridge financing pending consummation of
the Forum Acquisition.

      We have not yet consummated the Forum Acquisition. Although we expect the
transaction to close within the next 15 days, there is not assurance that
factors beyond our control may preclude us from closing the transaction. Under
the terms of the Share Purchase Agreement, we loaned monies to Forum Exploration
in order to fund exploration activities pending consummation of the Forum
Acquisition. We have not formalized the terms of repayment of the loan. If the
Forum Acquisition is not ultimately consummated and/or if the results of the
exploration program are not satisfactory it may be difficult for us to obtain
recovery of the monies advanced by us.

Recent Drilling Activity

      On March 31, 2003, Forum Exploration commenced drilling of a new
Aexploration well which it named Forum 1-X. The well is located in Barangay
Maya, Daanbantayan, Cebu and was drilled to a depth of 1,000 feet using Forum's
wholly-owned Hycalog HH3500 drilling rig, as part of a commitment to the
Department of Energy (DOE) under Service Contract No. 40. Forum 1-X tested the
Central Maya Bulge structure which was proven to have oil-bearing sands during
previous drilling activity. Oil shows were encountered in various zones but
testing will not be finalized until the deepening of the well an additional
1,000 feet is completed as part of the work program.

      Forum 1-X is located close to the old MST-11 well, which flowed 540 boe
during a test conducted by American Asiatic Oil Company (AAOC) in 1961. Other
subsequent wells drilled in the 1960's and early 1970's by AAOC and by China
National Petroleum Company of Taiwan also reported to have flowed oil on test,
but sustained production at commercial rates was never established.


                                       16
<PAGE>

C. "Current Exploration/Development"

All exploration and development work is being done by Forum Exploration Inc.
with our funding assistance.

D. "Disposition of Properties"

Indonesia

      As part of our property disposition program, we have since 1999 through
the second quarter of 2002, systematically sold or abandoned all of the
properties in what which we had an interest as follows:

Indonesia

      In February 1993, our then wholly-owned subsidiary, PerminTracer Petroleum
Ltd., entered into a Production Sharing Contract ("PSC") with Pertamina, the
State oil company of the Republic of Indonesia, covering an area of
approximately 1.6 million acres onshore the island of Borneo known as the North
Tanjung Block ("NT Block PSC").

      Pursuant to a Share Sale Agreement dated as of September 1, 1999 between
us and Tradewinds Oil and Gas International, Ltd., as amended by a Share Sale
Amending Agreement dated February 11, 2000, we sold all of the shares of
PerminTracer Petroleum Ltd. to Tradewinds Oil and Gas International, Ltd. in
consideration of U.S.$10.00, the assumption of all related liabilities by
Tradewinds Oil and Gas International, Ltd., and the granting of the five percent
(5%) carried interest in the NT Block PSC pursuant to the Carried Interest
Agreement.

      Pursuant to a Carried Interest Agreement dated February 11, 2000 amongst
ourselves, PerminTracer Petroleum Ltd. and Tradewinds (the "Carried Interest
Agreement"), we owned a five percent (5%) carried interest in the NT Block PSC.
The PSC expired in February 2003. Tradewinds applied for an extension with the
new government body BPMIGAS but the effect of this on our carried interest is
not known at this time.

      We also owned directly certain assets in the Republic of Indonesia,
including a 4.25% carried working interest in a Production Sharing Contract in
the South Sumatra Area of Indonesia known as the Ogan Komering Block (the "OK
Block PSC"), an Option Agreement relating to a Technical Assistance Contract in
the Sungai Gelam A, B and D Contract Areas (the "Sungai Gelam Option") and a
certain drilling rig and related equipment (the "Drilling Rig"). Pursuant to an
Asset Sale Agreement dated as of September 1, 1999 between us and Tradewinds, we
sold all of its rights and interest in the OK Block PSC and the Sungai Gelam
Option to Tradewinds in consideration of U.S.$350,000 and the assumption of all
related liabilities by Tradewinds. We granted Tradewinds an Option to Purchase
the Drilling Rig in consideration of U.S.$350,000 and the assumption of all
related liabilities by Tradewinds, and the said Option to Purchase the Drilling
Rig was exercised and completed by way of Drilling Rig Conveyance Agreement
dated as of December 14, 1999. As part of the Agreement, we were also to receive
a 5% carried working interest in the Sungai Gelam Technical Assistance Contract
which was to be converted in to a 5% working interest on commerciality being
obtained. The interest was dependent on Tradewinds election to pursue the
project. To date, we do not know if Tradewinds elected to pursue the project.

Iran

      We entered into an Association Agreement dated December 11, 1998 with the
Mullins Group ("Mullins") in respect of petroleum projects in the Islamic
Republic of Iran. On May 15th, 2002 we announced that we were abandoning our
pursuit of oil and gas opportunities in Iran based upon the lack of


                                       17
<PAGE>

progress towards obtaining a petroleum project over the past three years. As
such, the agreement with the Mullins Group was not renewed. We informed our
representative in Tehran to cease all operations in Iran.

Kazakhstan

      We entered into a Purchase and Sale Agreement dated March 24, 2000, with
Transmeridian Exploration of Houston, TX, pursuant to which it was agreed to
acquire a net ninety percent (90%) interest in the License and the Project, as
defined below. In consideration of the sum of US$614,158 paid by us to
Transmeridian, Transmeridian granted to us the option to acquire up to fifty
percent (50%) of Transmeridian's net ninety percent (90%) interest in the
License and the Project. The Option was originally for a period of thirty (30)
days, expiring on April 30, 2000.

      In addition to the sum of US$614,158 paid by us as consideration for the
Option, which amount would be credited upon exercise of the Option, we were
obligated to pay the additional amount of US$3,385,842 upon purchase of the
interest. With the payment completed, Transmeridian would assign and transfer to
us thirty-three percent (33%) of Transmeridian's net ninety percent (90%)
interest in the License and the Project.

      Having exercised the right of first refusal, we would have then been
obligated to pay US$2,000,000, as directed by Transmeridian, towards the first
cash calls of the joint venture for the development of the Project, subject to
Transmeridian and we mutually agreeing to budgets and development plans for the
Project through the formal documentation. With the additional payment of
US$2,000,000 by us, Transmeridian would have assigned and transferred an
additional seventeen percent (17%) of its net ninety percent (90%) interest in
the License and the Project, thus bringing our interest up to fifty percent
(50%) of Transmeridian's net ninety percent (90%) interest in the License and
the Project. We would have been entitled to be paid out on a preferential basis
by receiving seventy percent (70%) of all distributable cash flow (net of all
applicable host country taxes and royalties) from the Project until payout of
the first US$6,000,000. After payout, the parties would receive distributable
cash flow in proportion to their respective interests.

      Our interests, along with those of Transmeridian were held by a resident
Kazakhstan company, of which Transmeridian owned 90% of the outstanding shares
and we owned 4.5%. On March 16, 2001 we sold our interest in the South Alibek
Field to Transmeridian, for 100,000 US$15 convertible preferred shares of
Transmeridian. The shares were convertible into 1.5 million common shares of
Transmeridian at a price of US$1.00 per share for a period of 5 years. We also
received 1,000,000 common share purchase warrants in Transmeridian entitling us
to purchase an additional 1,000,000 common shares at US$1.00 for a period of two
years. Pursuant to an Option Agreement dated March 31, 2000 between ourselves
and Transmeridian, we had a right of first refusal to acquire a net forty-five
percent (45%) working interest in Licence No. 1557 dated April 29, 2000 issued
by the Government of the Republic of Kazakhstan (the "Licence"), covering South
Alibek Field located in the Aktyubinsk Region of Kazakhstan (the "Project"). We
converted the preferred shares to common shares and by February 2003 we had
disposed of them and used the proceeds for working capital. The warrants expired
unexercised and we did not exercise our right of first refusal in Licence No.
1557.

The OK Block

      In 1991, we purchased a 2.5% fully carried interest in the OK Block in
consideration of the issuance of 1,500,000 shares of common stock and in 1992
purchased a further 1.75%, in consideration of


                                       18
<PAGE>

the issuance of an additional 625,000 shares of common stock bringing its total
interest to 4.25%. We sold our interest in the OK Block to Tradewinds in
December 1999.

Interest in Oil and Gas Reserves

A summary of our former interests in oil and gas reserves after royalties is
contained in the following tables:

                                   Table No. 1
          Supplemental Information on Oil and Gas Producing Activities
                         Schedule of Changes in Reserves
        For the Years Ended December 31, 2002 2001, 2000, 1999, and 1998
                                   (Unaudited)

<TABLE>
<CAPTION>
                          ---------------------------------------------------------------------------------
                              Oil   Gas MMScf   NGL     Oil       Gas       NGL    Oil        Gas      NGL
                             MSTB              Mbbls    MSTB     MMScf     Mbbls   MSTB      MMScf    Mbbls
                                      Other                    Indonesia                     Total
                          ---------------------------------------------------------------------------------
<S>                           <C>      <C>      <C>   <C>          <C>      <C>   <C>          <C>      <C>
Proven Reserves 12/31/98      0.0      0.0      0.0    222.9       0.0      0.0    222.9       0.0      0.0

Discoveries/Extensions         --       --       --       --        --       --       --        --       --
Revisions to previous
estimates                      --       --       --       --        --       --       --        --       --
Production                     --       --       --    (64.5)       --       --    (64.5)       --       --
Reduction due to sale of
properties                     --       --       --   (158.4)       --       --   (158.4)       --       --

                          ---------------------------------------------------------------------------------
Proven Reserves 12/31/99      0.0      0.0      0.0      0.0       0.0      0.0      0.0       0.0      0.0
                          ---------------------------------------------------------------------------------
Proven Reserves 12/31/00      0.0      0.0      0.0      0.0       0.0      0.0      0.0       0.0      0.0
                          ---------------------------------------------------------------------------------
Proven Reserves 12/31/01      0.0      0.0      0.0      0.0       0.0      0.0      0.0       0.0      0.0
                          ---------------------------------------------------------------------------------
Proven Reserves 12/31/02      0.0      0.0      0.0      0.0       0.0      0.0      0.0       0.0      0.0
                          ---------------------------------------------------------------------------------
</TABLE>

                                   Table No. 2
                               Drilling Activities
                                  Wells Drilled
                                   (Unaudited)

<TABLE>
<CAPTION>
               --------------------------------------------------------------------------------------
                     2002              2001              2000             1999             1998(1)
               --------------------------------------------------------------------------------------
               Gross      Net    Gross      Net    Gross      Net    Gross      Net    Gross      Net
<S>               <C>      <C>      <C>      <C>      <C>      <C>     <C>     <C>        <C>    <C>
Crude Oil         --       --       --       --       --       --        7     0.12       11     0.18
Natural Gas       --       --       --       --       --       --       --       --        0     0.00
Dry               --       --       --       --       --       --        3     0.05        3     1.04
Service           --       --       --       --       --       --       --       --        0     0.00
               --------------------------------------------------------------------------------------
Total              0        0        0        0        0        0       10     0.17       14     1.22
               --------------------------------------------------------------------------------------
</TABLE>

(1)   Drilling was carried out exclusively on the Ogan Komering (the "OK Block")
      in Indonesia where we had a 4.25% carried interest.

                                   Table No. 3
                        Drilling Activities Expenditures(2)
                                   (Unaudited)

<TABLE>
<CAPTION>
                              -----------------------------------------------------------
                                     2002        2001        2000        1999        1998
                              -----------------------------------------------------------
<S>                              <C>         <C>         <C>         <C>         <C>
Exploration Drilling             $     --    $     --    $     --    $     --    $901,179
Development Drilling                   --          --          --          --          --
                              -----------------------------------------------------------
                                       --          --          --          --          --
Tangible Production Equipment          --          --          --          --          --
                              -----------------------------------------------------------
Total                            $     --    $     --    $     --    $     --    $901,179
                              -----------------------------------------------------------
</TABLE>

(2)   Expenditures related exclusively to our activities on our 100% owned North
      Tanjung Block.


                                       19
<PAGE>

                                   Table No. 4
                                 Producing Wells
                                   (Unaudited)

<TABLE>
<CAPTION>
                   ----------------  ----------------  ----------------  ---------------- ----------------
                         2002              2001              2000              1999             1998
                      Gross    Net     Gross     Net     Gross     Net     Gross     Net     Gross    Net
                   ----------------  ----------------  ----------------  ---------------- ----------------
<S>                    <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>    <C>
Indonesia -- Oil       --       --       --       --       --       --       --       --       33     0.59
Indonesia -- Gas       --       --       --       --       --       --       --       --        0     0.00
                   ----------------  ----------------  ----------------  ---------------- ----------------
Total                  --       --       --       --       --       --       --       --       33     0.59
                   ----------------  ----------------  ----------------  ---------------- ----------------
</TABLE>

                                   Table No. 5
            Standardized Measure of Discounted Future Net Cash Flows
                         (Canadian Dollars in Thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                         ---------------------------------------------------------
                                            2002        2001        2000        1999        1998
                                         ---------------------------------------------------------
<S>                                       <C>         <C>         <C>         <C>         <C>
Future cash inflows                       $     --    $     --    $     --    $     --    $3,401.7
Future production/development costs             --          --          --          --    (1,124.2)
                                         ---------------------------------------------------------
                                                --          --          --          --     2,277.5
Future income tax recoveries (expense)          --          --          --          --      (638.2)
                                         ---------------------------------------------------------
Future net cash flows                           --          --          --          --     1,693.3
10% Annual discount for estimated
  timing of cash flows                          --          --          --          --      (559.2)
                                         ---------------------------------------------------------
Standardized measure of discounted
  future net cash flows                   $     --    $     --    $     --    $     --    $1,080.1
                                         ---------------------------------------------------------
</TABLE>

*     Crude oil price for the OK Block at December 31, 1998 was US$ 9.93

E. Current Exploration/Development Activities

All exploration and development work is being done by Forum Exploration Inc.
with our funding assistance.

Competition

      The oil and gas industry is highly competitive. We compete with major
integrated and independent oil and gas respect to marketing, particularly in the
natural gas industry. In addition, the oil and gas industry competes with other
industries to supply the energy and fuel needs of customers. Due to our
financial position, many competitors have resources substantially exceeding our
resources and may, therefore, be better able to define, evaluate and bid for
contracts.

Foreign Sales/Assets.

      As of December 31, 2002 and 2001 all of our assets were located in Canada.
During fiscal 2002 and 2001 all revenue was generated in Canada. As of December
31, 2000, CDN $51,426 of our assets were located in Iran, and CDN $1,112,299
were located elsewhere. During fiscal 2000 all revenue was generated in Canada.

F. Organizational Structure

      We have one wholly owned subsidiary, Tepco Ltd. ("TEPCO"), a company
incorporated in Bermuda. We also own 33.34% of Tracer Petroleum International
Ltd. ("TPI"), a company incorporated in Bermuda to originally pursue oil and gas
ventures in Iran. We sold our wholly-owned subsidiary; PerminTracer Petroleum
Ltd. in early 2000. PerminTracer was incorporated on May 5, 1992 in the British


                                       20
<PAGE>

Virgin Islands. We wound up Tracer Petroleum Iran Limited in 2002 as well as
Tracer Trading Limited which was incorporated in Bermuda.

G. Property, plant and equipment.

      We acquired interests in properties and participated with others in the
drilling of oil and gas wells in various parts of Canada prior to 1993. From
1993 to 1999 we participated indirectly in the exploration and development
activity that took place on our Canadian properties and our 4.25% carried
working interest in an oil/gas property on the island of Sumatra Indonesia. The
Indonesian interest was acquired in October 1991, and the sale of the interest
was closed in December 1999. The sale was made effective September 1, 1999.
There is no book value for the 5% carried interest that we hold in the NT Block
in Indonesia.

      Our focus is now on opportunities, which are being pursued in the
Philippines. Natural resource properties in which the Company is currently
involved are described more fully in "Item 4. Information About the
Company--Forum Acquisition."

ITEM 5. OPERATING AND FINANCIAL OVERVIEW AND PROSPECTS.

We have experienced significant operating losses and cash outflows from
operations over the last few years and as a result, our ability to continue as a
going concern is dependent on achieving profitable operations and/or upon
obtaining additional financing.

      Our financial statements were prepared in accordance with accounting
principles and practices generally accepted in Canada ("Canadian GAAP"), which
are different from those in the United States (refer to Note 10 of the financial
statements for a detailed description of differences between Canadian GAAP and
US GAAP and how those differences would affect the financial statements).

Fiscal Year Ended December 31, 2002 versus Fiscal Year Ended December 31, 2001

During the year ended December 31, 2002, we continued to focus our efforts on
the acquisition of or participation in the development of proven petroleum
reserves internationally.

The loss for the year was $1,058,276, or $0.10 per share (2001 - loss of
$1,513,911 or $0.16 per share). This was primarily attributed to administrative
expenditures of $782,835 (2001 - $1,196,014), which are mainly associated with
the ongoing pursuit of international petroleum development opportunities.

We had a working capital deficiency at December 31, 2002 of $587,102 (December
31, 2001 - deficiency of $573,871) and Shareholders' deficiency of $576,489
(December 31, 2001 - equity of $241,537). During the year, we raised $180,370 of
new equity capital through the exercise of stock options. In addition we sold
assets and received proceeds of $643,326, and raised a further $104,631 through
the issue of short-term loans and convertible debt. We expect that the Company
will have to raise additional funds through equity and/or debt in order to
finance acquisitions and operations.

Fiscal Year Ended December 31, 2001 versus Fiscal Year Ended December 31, 2000

      During 2001, we continued to our efforts on property disposition while
seeking to identify new international oil and gas projects for possible
acquisition.

      The loss for the year was $1,513,911, or $0.17 per share compared to
$2,028,006 or $0.28 per share in the year ended December 31, 2000. This was
primarily a result of decreased administrative


                                       21
<PAGE>

expenditures of $1,196,014 compared to $1,609,501 in 2000; these expenses are
mainly associated with the ongoing pursuit of international petroleum
development opportunities. In addition, in 2000 we recorded a write-down of
$367,365 related to our eZuz.com Inc. investment.

      We had a working capital deficiency at December 31, 2001 of $573,871
compared to $281,483 at the end of 2000. During 2001, we raised $848,600 of new
equity capital through private placements and the exercise of share purchase
warrants and stock options.

      We also received loans aggregating US$240,762 from Roc Oil Company Limited
of Sydney, Australia. These funds were used in connection with our efforts to
identify and acquire oil and gas projects in Iran. Ultimately, we determined not
to pursue the acquisition of any of the projects under consideration.

      Roc has the option to convert this loan amount (including accrued and
unpaid interest thereon) into our common shares and warrants exercisable for our
common shares on or before the May 1, 2003 Maturity Date. The conversion price
which is the lesser of US$0.20 per share or 80% of the weighted average closing
price for the previous 20 trading days, subject to a floor price of US$0.05 per
share. ROC is also entitled to receive share purchase warrants to purchase up to
an additional 5,000,000 shares at an exercise price of $0.20 per share on or
before the Maturity Date. The total number of warrants issued to Roc will depend
upon the value of the dollar figure loaned to us. If Roc elects not to convert
to common shares and receive the warrants, then Tracer will be obligated to
repay the entire outstanding principal balance and accrued interest within 30
days from the Maturity Date and that may affect the Use of Proceeds, and may
have to be paid out of the amount currently allocated for working capital. This
also may restrict our ability to fully exploit our proposed exploration program
in the Philippines.

      We are currently in discussions with Roc which may result in certain
amendments to the Convertible Loan Agreement, including an extension of the
Maturity Date, revisions to the conversion privileges and deletion of the right
to receive warrants. These certain amendments may or may not be agreed to before
May 1, 2003, if at all.

Fiscal Year Ended December 31, 2000 versus Fiscal Year Ended December 31, 1999

      During 2000, we continued to focus our efforts on property disposition; we
also sought to continue to enhance shareholder value by continuing to seek
international oil and gas projects with proven petroleum reserves which we could
acquire or participate in.

      In December of 2000, we entered into a Letter of Intent with a subsidiary
of a major Iranian company to form a joint venture for the development of a
significant offshore natural gas and gas condensate field in Iran. We were
awaiting clarification from the Iranian partner as to the acceptable options for
the development of the field, towards the preparation of a Master Development
Plan to be submitted to the National Iranian Oil Company ("NIOC") for approval.
However, NIOC approval for the Letter of Intent was not granted and we
subsequently abandoned the pursuit of this field.

      In April 2000, we purchased a 4.5% equity interest in Open Joint Stock
Company Caspi Neft ("OJSCCN") from Transmeridian Exploration Inc. ("TMEI") for
US$614,158. OJSCCN owns the exploration and production rights for the South
Alibek field in the Aktyubinsk region of the Republic of Kazakhstan. On March
16, 2001 we sold our interest in the South Alibek Field, Transmeridian, for
100,000 US$15 convertible preferred shares of Transmeridian. The shares were
convertible into 1.5 million common shares of Transmeridian at a price of
US$1.00 per share for a period of 5 years. We also received 1,000,000 common
share purchase warrants in Transmeridian entitling us to purchase an


                                       22
<PAGE>

additional 1,000,000 common shares at US$1.00 for a period of two years.
Subsequently, on March 6, 2002 we converted our preferred shareholdings into
1,500,000 common shares of Transmeridian. By February 21, 2003, we sold all of
the common shares of Transmeridian that we held.

      Revenue from oil and gas operations was negligible at $943 for the year
ended December 31, 2000 compared to $1,079,948 in 1999; this was attributable to
the completion in December 1999 of the sale of all of the Company's producing
oil and gas assets in Indonesia. Furthermore, as a result of the sale, oil and
gas operating expenses were nil in 2000 as compared to $835,840 in 1999; and,
depletion expense was reduced to $55,846 from $1,891,040 in 1999).

      The loss for the year ended December 31, 2000 was $2,028,006, or $0.28 per
share as compared to $3,224,653 or $0.74 per share in 1999. This was primarily a
result of increased administrative expenditures of from $1,243,641 in 1999 to
$1,609,501 in 2000 and a write-down of $367,375 to nil for the carrying value of
our investment in eZuz.com Inc.

      We had a working capital deficiency at December 31, 2000 of $281,483
compared to working capital of $592,197 at year end 1999. During the year ended
December 31, 2000, we raised $1,879,692 of new equity capital through private
placements and the exercise of share purchase warrants and stock options. In
2000, we were committed to our share of costs for the South Alibek field. In
2001 we sold our interest in the field to the operator, Transmeridian, thereby
relieving ourselves of any further commitments to ongoing costs.

Liquidity and Capital Resources

      At December 31, 2002 we had a working capital deficit of $587,102. Since
then, we have received subscriptions for 21,538,295 shares for an aggregate
consideration of US$2,153,829.50 pursuant to an offering of our common shares as
described below. We will need to raise additional funds in order to pursue all
of our current projects. Moreover, we may still need to raise additional funds
if the results of our exploration programs demonstrate that either further
exploration or development of our properties is warranted. No assurance can be
given such financing will be available to us when required or on commercially
viable terms. Our liquidity and capital resources will be adversely affected if
we do not successfully renegotiate the maturity date of our loan agreement with
Roc. See "RISK FACTORS."

On March 26, 2003 we announced an offering of up to 20,000,000 of our common
shares at US$0.10 per share to be used for the development of Forum Exploration
Inc.'s contract areas in the Philippines in conjunction with the Forum
Acquisition. On June 27, 2003 the offering was increased to up to 24,000,000
shares of our common stock from 20,000,000 at $0.10 and the termination of the
offering was extended from July 1, 2003 to August 15, 2003.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.

A. Directors and Senior Management

The following table lists as of the date of this report the names, ages,
functions and areas of experience in our operations of all the Directors and
Senior Management. Each Director will serve until the next annual general
meeting or until his successor is duly elected, unless his office is vacated in
accordance with our charter documents. The Executive Officers serve at the
pleasure of the Board of Directors. Since consummation of the Forum Acquisition
will result in a change of control, it is possible that there will be a change
in the constituency of our Board of Directors.


                                       23
<PAGE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
Name                         Age          Position/Area of Experience/Function
---------------------------------------------------------------------------------------------
<S>                          <C>          <C>
Larry W. Youell (1)(2)       61           Director since 6/1998, President, CEO since
                                          6/2002, Chairman since April 2003
Barry Stansfield (1)(2)(3)   53           Director, since April 2003
David G. Wilson(1)(2)(3)     59           Director since 6/1998
David Thompson(1)            50           Director and CFO since March  2003
Riaz Sumar                   33           Corporate Secretary
---------------------------------------------------------------------------------------------
</TABLE>

(1)   Member of Audit Committee.

(2)   Member of Compensation Committee

(3)   Member of the Corporate Governance Committee

      Mr. David Thompson was appointed in March 1, 2003.

      The following persons were members of our Board of Directors as of
December 31, 2002 and resigned as of the dates indicated:

      Mr. Stephen Jacobs resigned effective March 25, 2003.
      Mr. Sameer Hirji resigned effective December 31, 2002.
      Mr. David Robinson resigned effective April 30, 2003.

      In addition, Mr. David Harrison resigned as our Corporate Secretary
effective May 13, 2003 and Mr. Riaz Sumar was appointed as his replacement.

Information About our Directors and Officers

Mr. Larry Youell, Chairman, President and Chief Executive Officer

      Mr. Youell spent 21 years with Consumers Gas Company Limited and its
subsidiaries ("Consumers"), in a variety of increasingly responsible roles
including Senior Vice President Operations, and Senior Vice President Business
Support. He was also President of Rose Technology, and General Manager of
Consumers' largest division. Prior to joining Consumers, Mr. Youell was a
Management Consultant with an international base of clients. Mr. Youell was born
and raised in Calgary, Alberta. He received his Honours degree in Business from
the University of Western Ontario in 1963 and a Masters in Business
Administration from that university in 1968. Mr. Youell has been active in
charitable causes, including serving as Chair of the Arthritis Society in
Ontario and lead roles in fund raising for United Way and Skylight Theatre. He
is also Past Chair of the Ontario Natural Gas Association and International
Approvals Services Inc. Mr. Youell is Mr. Robinson's uncle.

Mr. David M. Thompson, CFO and Director

      Based in Hamilton, Bermuda, Mr. Thompson acts as our Finance Director as
well as being Managing Director and a major shareholder in AMS Limited, an
international management company in Bermuda with funds and assets under
management exceeding $200 million, Mr. Thompson was responsible for
incorporating a management company and developing it into an international
organization offering a variety of services including trading companies, foreign
sales corporations, personal trusts, asset management and financial money
management. Previously, Mr. Thompson spent nine years as Senior Vice President
and Executive Director of the Larmag Group of Companies in the Netherlands,
which is


                                       24
<PAGE>

now operated through AMS. His more than 25 years of financial experience
includes raising over US$75 million from the private debt and equity markets for
investment in an upstream oil and gas business located in Turkmenistan. He later
negotiated the terms of the sale of these holdings to Dragon Oil PLC. Mr.
Thompson received an Institute of Bankers Diploma from the University of London
and later received his CMA from York University in Toronto.

Mr. David Wilson, Director

      A resident of Calgary, Mr. Wilson is a geologist with 34 years of
experience who provides us with international oil and gas exploration and
development expertise. He spent over twelve years with a major Canadian oil and
gas company, lastly as the Senior Director - Strategic Exploration Group. He
currently is a director and Executive Vice President for Mergers and
Acquisitions of Nations Energy Company Limited, a private Canadian company with
operations in Kazakhstan, Azerbaijan, .and California. Nations energy Company
Limited currently produces 40,000 barrels of oil per day.

Mr. Barry Stansfield, Director

      A resident of London, England, Mr. Stansfield's expertise lies in
marketing. He spent the last 5 years working as a partner in B&L Estates, a
property management company.

Mr. Riaz Sumar, Corporate Secretary

      A resident of Calgary, Mr. Sumar is responsible for our corporate
governance including all public and regulatory affairs, and business operations.
Over the past seven years Mr. Sumar has been our accountant. Mr. Sumar is not
affiliated with our auditors.

      None of our directors and/or executive officers or those persons to be
appointed have been the subject of any order, judgment, or decree of any
governmental agency or administrator or of any court of competent jurisdiction,
revoking or suspending for cause any license, permit or other authority of such
person or of any corporation of which he is a director and/or executive officer,
to engage in the securities business or in the sale of a particular security or
temporarily or permanently restraining or enjoining any such person or any
corporation of which he is an officer or director from engaging in or continuing
any conduct, practice, or employment in connection with the purchase or sale of
securities, or convicting such person of any felony or misdemeanor involving a
security or any aspect of the securities business or of theft or of any felony.

      There are no other arrangements or understandings between any two or more
directors or executive officers, pursuant to which he was selected as a director
or executive officer. Except as disclosed above, there are no family
relationships between any two or more directors or executive officers.

      None of our directors and/or executive officers has been the subject of
any order, judgment, or decree of any governmental agency or administrator or of
any court of competent jurisdiction, revoking or suspending for cause any
license, permit or other authority of such person or of any corporation of which
he is a director and/or executive officer, to engage in the securities business
or in the sale of a particular security or temporarily or permanently
restraining or enjoining any such person or any corporation of which he is an
officer or director from engaging in or continuing any conduct, practice, or
employment in connection with the purchase or sale of securities, or convicting
such person of any felony or misdemeanor involving a security or any aspect of
the securities business or of theft or of any felony.


                                       25
<PAGE>

      There are no other arrangements or understandings between any two or more
directors or executive officers, pursuant to which he was selected as a director
or executive officer. There are no family relationships between any two or more
directors or executive officers.

B. Compensation.

      We have committed to pay our directors the following consulting fees and
directors fees on a monthly basis:

                       Larry Youell         US$9,000
                       David Thompson       US$6,000
                       David Wilson         US$1,000
                       Barry Stansfield     US$1,000

      In addition, the Board of Directors may award special remuneration to any
Director undertaking any special services on our behalf other than services
ordinarily required of a Director. Other than indicated below no Director
received any compensation for his services as a Director, including committee
participation and/or special assignments.

      We grant stock options to Directors, Executive Officers and employees; as
described below under, "Options to Purchase Securities from Company or
Subsidiaries".

      None of our executive officers/directors received other compensation in
excess of the lesser of US $25,000 or 10% of such officer's cash compensation as
reported in the compensation table above and all executive officers/directors as
a group did not receive other compensation which exceeded US $25,000 times the
number of persons in the group or 10% of the compensation reported in the
compensation table above.

      No funds were set aside or accrued by us during the year ending December
31, 2002 to provide pension, retirement or similar benefits for directors or
executive officers. Except for the stock option program discussed below, we have
no bonus or profit sharing plans pursuant to which cash or non-cash compensation
is or may be paid to the our directors or executive officers.

      The following tables detail the compensation paid during Fiscal Year Ended
December 31, 2001 and 2002 to our Directors and members of our administrative,
supervisory or management bodies:


                                       26
<PAGE>

                     Director/Executive Officer Compensation

                       Fiscal Year ended December 31,2002
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
                                      Option Exercise Net   Total
Directors/Officers        Salary      Market Value(1)       Compensation
-------------------------------------------------------------------------------------
<S>                     <C>                 <C>             <C>
David R. Robinson        US$56,000          US$50,000             US$106,000
Larry W. Youell          US$18,600           US$2,384              US$20,984
Stephen T. Jacobs               --                 --                     --
David G. Wilson                 --                 --                     --
David W. Harrison          $77,775           US$4,000       US$4,000 and CDN$77,775
Sameer Hirji                    --          US$23,800              US$23,800
-------------------------------------------------------------------------------------
Total                    US$74,600                                 US$154,784
                        CDN$77,775          US$80,184              CDN$77,775
-------------------------------------------------------------------------------------
</TABLE>

(1).  "Option Exercise Net Market Value" is defined as the aggregate difference
      between the exercise price and the market value of the common stock on the
      date of exercise.

                       Fiscal Year ended December 31, 2001

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
                                          Option Exercise Net Total
Directors/Officers      Salary            Market Value(1)     Compensation
-------------------------------------------------------------------------------------
<S>                     <C>               <C>                <C>
David R. Robinson       US$  96,000       US$174,805          US$270,805
Larry W. Youell                  --       US$ 19,530          US$ 19,530
Stephen T. Jacobs                --       US$     --          US$     --
David G. Wilson         $    22,917                           US$ 31,500
                                          US$ 31,500            $ 22,917
David W. Harrison       $    83,646                           US$ 14,850
                                          US$ 14,850            $ 83,646
Sameer Hirji                     --               --                  --
-------------------------------------------------------------------------------------
Total                   US$  96,000                           US$336,685
                        CDN$106,563       US$ 240,685        CDN$106,563
-------------------------------------------------------------------------------------
</TABLE>

(1).  "Option Exercise Net Market Value" is defined as the aggregate difference
      between the exercise price and the market value of the common stock on the
      date of exercise.

      The Board of Directors may award special remuneration to any Director
undertaking any special services on our behalf other than services ordinarily
required of a Director. Other than indicated below no Director received any
compensation for his services as a Director, including committee participation
and/or special assignments.

      Except for the stock option program discussed below, we have no bonus or
profit sharing plans pursuant to which cash or non-cash compensation is or may
be paid to the our directors or executive officers.

Options to Purchase Securities From Company or Subsidiaries.

      Options to purchase securities from us are granted to directors/officers
and employees on terms and conditions acceptable to the relevant regulatory
authorities. We adopted a formal stock option plan on June 19, 2000. All of the
options granted to report date, except for those granted to Eastmark Ltd. and
Westmark Ltd. were granted in accordance with the stock option plan as amended.

      In light of the substantially increased number of common shares to be
issued and outstanding as a result of both the Forum Acquisition and this
Offering, the Board of Directors has amended Tracer's 2000 Stock Option Plan, by
increasing the number of shares authorized for issuance under the Plan, and
awarded on April 27, 2003, in accordance with the Plan as amended, options to
key employees,


                                       27
<PAGE>

consultants, and officers to acquire up to an aggregate of 5,900,000 common
shares. The following officers and directors received the options to acquire the
number of shares set forth opposite his respective name below:

               Name                                       Number of Shares
               ----                                       ----------------
           Larry Youell                                        1,250,000
           David Thompson                                      1,250,000
           Barry Stansfield                                    2,000,000
           David Robinson*                                       500,000
           David Wilson                                          500,000
           Riaz Sumar                                            200,000

*     Former director and officer, and now a consultant to the Company.

      In addition, on April 27, 2003, the Board granted options to Eastmark
Limited and Westmark Limited to purchase up to an aggregate of 5,700,000 shares.
All of the Options are exercisable at US$0.08 per share and will be subject to
terms and conditions set forth in the option agreements to be executed by both
the Company and recipients. Although granted, the options (and the option
agreements) will be delivered simultaneously with the issuance of the
100,000,000 shares pursuant to the treasury order issued as contemplated by the
Share Purchase Agreement for the purchase of the interest in Forum Exploration
Inc.

      The names of the directors and executive officers to whom outstanding
stock options have been granted and the number of common shares subject to such
options are set forth in the following table as of July 8, 2003, as well as the
number of options granted to directors and all employees as a group. The
exercise price of the options is stated in U.S. Dollars.

<TABLE>
<CAPTION>
                              Stock Options Granted and Outstanding
-------------------------------------------------------------------------------------------------
                                                   Number of       Exercise
                     Name                        Common Shares       Price      Expiration Date
-------------------------------------------------------------------------------------------------
<S>                                                 <C>           <C>             <C>
               Larry W. Youell                        142,659        $0.10        Nov. 16, 2003
                                                       34,060        $0.16        Jan. 18, 2004
                                                    1,250,000        $0.08              *
-------------------------------------------------------------------------------------------------
               Barry Stansfield                     2,000,000        $0.08              *
-------------------------------------------------------------------------------------------------
               David G. Wilson                         18,200        $0.11        Apr. 22, 2004
                                                        5,000        $0.11        Nov. 19, 2004
                                                      500,000        $0.08              *
-------------------------------------------------------------------------------------------------
                David Thompson                      1,250,000        $0.08              *
-------------------------------------------------------------------------------------------------
                  Riaz Sumar                           67,560        $0.14        Jan. 17, 2004
                                                       34,970        $0.16        Jan. 18, 2004
                                                      200,000        $0.08              *
-------------------------------------------------------------------------------------------------
     Total Officers/Directors (5 persons)           5,502,449
-------------------------------------------------------------------------------------------------
   Total Employees/Consultants (8 persons,          7,137,341     $0.08 - $0.32   Jun. 30, 2003 -
   including 1 former officer and director                                              *
  holding 1,057,341 options in aggregate and
   Eastmark and Westmark holding 5,700,000
             options in aggregate
-------------------------------------------------------------------------------------------------
Total Officers/Directors/Consultants/Employees     12,639,790
-------------------------------------------------------------------------------------------------
</TABLE>


                                       28
<PAGE>

*     Certain options, although granted, expire three years from the date of
      issuance of the 100,000,000 shares to the Mullins Group/Eastmark Limited
      that has not been completed yet

C. Board Practices

      We have an audit committee, a compensation committee, and a corporate
governance committee.

      Audit Committee. The audit committee oversees the retention, performance
and compensation of our independent auditors, and the establishment and
oversight of our systems of internal accounting and auditing control. Members of
the audit committee are Larry Youell, David Thompson, Barry Stansfield, and
David Wilson.

      Compensation Committee. The compensation committee reviews and makes
recommendations to our board concerning the terms of the compensation packages
provided to our senior executive officers, including salary, bonus and awards
under our stock option plan and any other compensation plans that we may adopt
in the future. Members of the compensation committee are Larry Youell, Barry
Stansfield, David Wilson.

      Corporate Governance Committee The corporate governance committee meets
with and discusses current disclosure issuances with our management personnel,
directors, and with both our Canadian and United States counsel, in order to not
only report to the Board of Directors any matters which should be the subject of
either public disclosure or remedial action but also to assist the Board of
Directors in establishing reporting and disclosure procedures to ensure that we
are in compliance with our disclosure and compliance obligations under
applicable laws, rules and obligations. Members of the corporate governance
committee are David Wilson, and Barry Stansfield.

D. Employees

      As of December 31, we had no employees and 2 consultants, located in
Calgary, Alberta Canada. Of the consultants, 1 is a member of our Senior
Management and one was administrative personnel

E. Share Ownership

The following table lists as of June 30, 2003, the share ownership of our
directors and executive officers.

The following table sets forth certain information as of June 30, 2003 regarding
the ownership of our common stock by (i) each beneficial owner more than 5% of
our outstanding common stock, (ii) each of our directors, (iii) each of our
named executive officers and (iv) all of our directors and executive officers as
a group. Except as otherwise indicated, the address of each person identified
below is c/o Tracer Petroleum Corporation, Suite 2600, 255 - Fifth Avenue SW,
Calgary, AB, T2P 3G6. We believe that ownership of the shares by the persons
identified below is both of record and beneficial and that such persons have
sole voting and investment power with respect to the shares indicated.
Percentage of class in the following table is calculated individually based on
the following formula: (Shares directly or indirectly controlled + shares
issuable on the exercise or conversion of various securities) / (total shares
outstanding + shares issuable on the exercise or conversion of various warrant,
debentures and options by the director or officer). The total shares outstanding
on June 30, 2003 was 10,809,177. The table does not take into account any shares
to be issued pursuant to the Forum Acquisition or any shares to be issued
pursuant to a recently announced Offering Memorandum.


                                       29
<PAGE>

Name and Address of                   Number of              Percent
Beneficial Owner                        Shares               of Class
--------------------
Ergon Power Pte, Ltd                 2,000,000(1)              15.6%
David Robinson                       1,775,285(2)              14.1%
Larry Youell                           341,700(3)               3.1%
David Wilson                           224,200(4)               2.0%
David Thompson                          10,000                  0.0%
Barry Stansfield                            --                  0.0%
Riaz Sumar                              10,000                  0.0%

(1)   Includes warrants to purchase up to 1,000,000 shares.

(2)   Includes share issuable on the exercise of 557,341 incentive stock
      options, shares issuable on the exercise of 340,000 warrants purchased
      pursuant to various private placements (280,000 of which are held by
      D.R.R. Capital Corporation which is a wholly owned company of David
      Robinson)

(3)   Includes shares issuable on the exercise of 176,719 incentive stock
      options and shares issuable on the exercise of 100,000 warrants purchased
      pursuant to various private placements.

(4)   Includes shares issuable on the exercise of 23,200 incentive stock options
      and shares issuable on the exercise of 74,000 warrants purchased pursuant
      to various private placements.

      The particulars of the stock options granted to officers and directors are
set forth in the preceding section entitled "DIRECTORS, SENIOR MANAGEMENT AND
EMPLOYEES." The particulars regarding convertible debentures and warrants
acquired by certain officers and directors are as follows:

      The following table lists the current directors, executive officers and
employees to whom warrants to purchase our shares were sold and the number of
share purchase warrants so sold as of the date of this report, as well as the
number of share purchase warrants sold to Directors and all employees as a
group.

<TABLE>
<CAPTION>
                        Warrants Held by Directors and Officers
----------------------------------------------------------------------------------------
Name                                 Number of share      Exercise Price    Expiration
                                    Purchase Warrants                          Date
----------------------------------------------------------------------------------------
<S>                                      <C>                  <C>           <C>
Larry Youell                             100,000              US$0.25       09/03/2003
----------------------------------------------------------------------------------------
David G. Wilson                           74,000              US$0.25       09/03/2003
----------------------------------------------------------------------------------------
Total Officers/Directors/Employees       174,000

----------------------------------------------------------------------------------------
</TABLE>

      We are a publicly-owned corporation, the shares of which are owned by
Canadian residents, US residents, and residents of other countries. Currently,
we are not controlled directly or indirectly by another corporation or any
foreign government.

      Except as contemplated by the Forum Acquisition Agreement and the ROC loan
agreement, there are no arrangements, known to the Company, the operation of
which may at a subsequent date result in a change of in control the Company
other than as noted above.

      The above listed organizations and individuals have no special or separate
voting rights than those rights held by our shareholders.

      On December 31, 2002 the shareholder's list showed 854 registered
shareholders and 10,511,339 shares outstanding. 809 of these shareholders were
US residents, owning 3,933,739 shares representing 37.42% of the issued and
outstanding shares. Based upon research in the indirect holdings of depository
agencies and financial institutions and other research, we believe that there
are in excess of 5,000 beneficial shareholders.


                                       30
<PAGE>

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A. Major Shareholders

      We are a publicly-owned corporation, the shares of which are owned by
Canadian residents, US residents, and residents of other countries. We are not
currently controlled directly or indirectly by another corporation or any
foreign government. The following table provides the names and share ownership
of those parties that have ownership of 5% or more of each class of the
Company's voting securities as of June 30, 2003:

<TABLE>
<CAPTION>
          Name                  Number of Shares Owned     Percentage of Class
          ----                  ----------------------     -------------------
<S>                                   <C>                         <C>
         Ergon Power Pte, Ltd         1,000,000                   9.3%
         David Robinson                 877,944                   8.1%
         Roc Oil Corp (2)
</TABLE>

      (2) Under the terms of the Convertible Loan Agreement with Roc Oil Company
Limited, dated May 22, 2001, ROC had the option to convert any and all amounts
of the funding it provided to us, along with accrued interest into shares of
Tracer at a conversion price which is the lesser of US$0.20 per share or 80% of
the weighted average closing price for the previous 20 trading days, subject to
a floor price of US$0.05 per share. ROC was also to receive up to 5,000,000
share purchase warrants exercisable at US$0.20 per share on or before May 1,
2003. The final number of warrants issued to ROC was dependent depend upon the
value of the dollar figure loaned to us. We are in default under the loan
agreement with Roc Oil and we may not be able to repay our loan from Roc Oil
Limited which was due on the May 1, 2003. We are currently in discussions with
Roc which may result in certain amendments to the Convertible Loan Agreement,
including an extension of the Maturity Date, revisions to the conversion
privileges and deletion of the right to receive warrants. These certain
amendments may or may not be agreed to in writing although verbal understandings
are in place. The amount of the loan was US$255,944 plus accrued interest and
319,828 warrants were issued but expired unexercised.

      There are no arrangements, known to the Company, the operation of which
may at a subsequent date result in a change of in control the Company other than
as noted above and described in the Forum Acquisition.

      As at July 8, 2003 management is not aware of any person holding a greater
than 5% beneficial interest in any class of the Registrant's voting securities
other than as set forth above. The above listed organizations and individuals
have no special or separate voting rights than those rights held by our
shareholders.

      On June 30, 2003, the shareholder's list showed 868 registered
shareholders and 10,809,177 shares outstanding. 822 of these shareholders were
US residents, owning 3,943,289 shares representing 36.48% of the issued and
outstanding shares. Based upon research in the indirect holdings of depository
agencies and financial institutions and other research, we believe that there
are in excess of 5,000 beneficial shareholders.


                                       31
<PAGE>

B. Related Party Transactions

Related Party Transactions

      Messrs. Larry Youell, David Robinson, Stephen Jacobs, David Wilson, David
Thompson, Riaz Sumar and David Harrison, directors and executive officers, have
participated in a number of our private placements, in which they acquired our
securities on the same terms and conditions as offered to all prospective
investors in such private placements.

      At December 31, 2002 the Company owed D.R.R. Capital Corporation $59,730
and Canadian International Royalty Corporation $14,442 for short term loans.
D.R.R. Capital Corporation and Canadian International Royalty Corporation are
wholly owned by David Robinson, a former Director. The Company also owed AMS
Limited $9,480 for a short term loan. AMS Limited is owned by David Thompson, a
current director. The loans are non-interest bearing with no specified repayment
terms.

      We sold our interest in the South Alibek Field to Transmeridian for
100,000 US$15 convertible preferred shares of Transmeridian. The shares are
convertible into 1.5 million common shares of Transmeridian at a deemed price of
US$1.00 per share for a period of 5 years. Tracer also received 1,000,000 common
share purchase warrants in Transmeridian entitling the Company to purchase an
additional 1,000,000 common shares at US$1.00 for a period of two years. See
"Disposition of Properties." Subsequent to year end we exchanged our preferred
shares for 1,500,000 common shares of Transmeridian. Mr. David Wilson, one of
our executive officers, serves as an advisor to Transmeridian on mergers and
potential acquisitions. Mr. Wilson owns shares in Transmeridian.

      Other than the above referenced situations, no Director or Executive
Officer and no associate or affiliate of the foregoing persons has or has had
any material interest, direct or indirect, in any transaction since the
beginning of fiscal 2002 or in any proposed transaction, which in either such
case has materially affected or will materially affect the Company.

      At December 31, 2001 the Company owed D.R.R. Capital Corporation US$85,000
($127,458) for a non-interest bearing short-term loan. D.R.R. Capital
Corporation is wholly-owned by David R. Robinson, a Director. This amount was
repaid in 2002.

      On May 31, 2001, Mr. David Robinson, Mr. David Wilson and Mr. David
Harrison each participated in a private placement of 460,144 units at US $0.40
per unit. Each unit consists of one share plus one two year share-purchase
warrant ("Warrant"), with each Warrant being exercisable into one additional
common share at US$0.50 up to May 31, 2002, and US$0.65 up to May 31, 2003. The
number of units purchased by each individual were 261,944, 25,000, and 10,000
respectively.

      The transactions discussed above with management were on terms as
favorable us as would have been obtained from unaffiliated parties. Other than
the above referenced situations, no Director or Executive Officer and no
associate or affiliate of the foregoing persons has or has had any material
interest, direct or indirect, in any transaction since the beginning of fiscal
2002 or in any proposed transaction, which in either such case has materially
affected or will materially affect the Company.


                                       32
<PAGE>

ITEM 8. FINANCIAL INFORMATION

A. Consolidated Financial Statements and Other Financial Information

See "Item 17. Financial Statements."

      We know of no pending legal or arbitration proceedings including those
relating to bankruptcy, governmental receivership or similar proceeding and
those involving any third party against it, nor are we involved as a plaintiff
in any material pending litigation.

      We know of no pending proceedings to which any director, member of senior
management, or affiliate is either a party adverse to us or our subsidiaries or
has a material interest adverse to us or our subsidiaries. We have not declared
any dividends for the last five years, nor do we intend to declare any dividends
for the foreseeable future.

B. Significant Changes

      The Company is in the final stages of closing an offering of up to
24,000,000 shares at US$0.10 per share. As of the date of this report an
aggregate of US$2,153,829.50 has been subscribed for.

      We entered into a Share Purchase Agreement dated March 11, 2003, as
amended by agreements dated March 21, and April 2, 2003 (as amended, the "Forum
Acquisition Agreement") with Forum Pacific Inc., a company incorporated under
the laws of the Philippines, Forum Exploration Inc. a company incorporated under
the laws of the Philippines, and the Mullins Group, through Eastmark Limited, a
Bermuda registered company.

      Pursuant to the Share Purchase Agreement we acquired 125,000,000 shares of
the issued and outstanding capital stock of Forum Exploration currently owned
directly and indirectly collectively by Forum Pacific and the Mullins Group, in
exchange for 100,000,000 of our common shares. The Forum Shares represent
approximately sixty-six and two-thirds (66 2/3%) percent of the issued and
outstanding voting securities of Forum Exploration. See "Item 4. Information
About the Company--Forum Acquisition."

ITEM 9. THE LISTING

A. Listing Details and Markets

      Our common shares traded on the Vancouver Stock Exchange ("VSE") in
British Columbia, Canada under the symbol "TPC". Trading on the VSE commenced on
May 25, 1983. We voluntarily delisted from the VSE on August 6, 1999. Our common
shares traded on the NASDAQ SMALL CAP BOARD under the symbol "TCXXF". Trading
commenced on NASDAQ on October 30, 1989. Our shares were delisted from the
NASDAQ SMALL CAP Board on September 22, 1999. Our shares now trade on the OTC -
Bulletin Board under the symbol "TCXXF".


                                       33
<PAGE>

      The table below lists the volume of trading and high/low bid/ask prices on
NASD/OTC-Bulletin Board for our shares for each full quarterly period within the
two most recent fiscal years.

   NASDAQ Small Cap/OTC Bulletin Board Stock Trading Activity - Common Shares
                                  (US Dollars)

           ----------------------------------------------------
              Quarter Ended       Volume         High      Low
           ----------------------------------------------------
                12/31/02          550,000       $0.15    $0.08
                09/30/02        1,023,900       $0.24    $0.10
                06/30/02        1,373,400       $0.25    $0.10
                03/31/02        2,447,800       $0.61    $0.13

           ----------------------------------------------------
                12/31/00        1,817,800       $0.20    $0.09
                 9/30/01        1,184,700       $0.51    $0.14
                06/30/01        3,377,300      $2.062   $0.562
                03/31/01        1,459,600       $0.75    $0.45
           ----------------------------------------------------

      Our shares are issued in registered form and the following information is
taken from the records of Computershare Investor Services (located in Vancouver,
British Columbia), the lead registrar and transfer agent for the common shares.

      On June 30, 2003, the shareholder's list showed 868 registered
shareholders and 10,809,177 shares outstanding. 822 of these shareholders were
US residents, owning 3,943,289 shares representing 36.48% of the issued and
outstanding shares. Based upon research in the indirect holdings of depository
agencies and financial institutions and other research, we believe that we have
in excess of 5,000 beneficial shareholders. Our shares are not registered to
trade in the US in the form of American Depository Receipts (ADR's) or similar
certificates.

      The table below highlights the historical trading activity of our shares,
on NASDAQ Small Cap and OTC Bulletin Board exchanges.

 NASDAQ Small Cap/OTC Bulletin Board Stock Annual Price History - Common Shares
                                  (US Dollars)

------------------------------------------------------------------------------
      Year Ended               High             Low                 Volume
------------------------------------------------------------------------------
       12/31/02                $0.61           $ 0.08                5,395,100
       12/31/01               $2.063           $ 0.09                7,839,300
       12/31/00                $3.00           $ 0.38               10,434,900
       12/31/99                $2.75           $0.312                6,869,300
       12/31/98                $2.50           $0.113                9,435,900
------------------------------------------------------------------------------

The table below highlights our historical trading activity on the Vancouver
Stock Exchange.

                   VSE Stock Trading Activity - Common Shares
                               (Canadian Dollars)
------------------------------------------------------------------------------
      Year Ended               High             Low                 Volume
------------------------------------------------------------------------------
       12/31/02                 N/A             N/A                   N/A
       12/31/01                 N/A             N/A                   N/A
       12/31/00                 N/A             N/A                   N/A
       12/31/99                 N/A             N/A                   N/A
       12/31/98                $3.60           $0.50                59,997
------------------------------------------------------------------------------


                                       34
<PAGE>

The table below highlights for the most recent six months, the high and low
market prices for each month of our common shares on the OTC Bulletin Board.

         OTC Bulletin Board Stock Monthly Price History - Common Shares
                                  (US Dollars)

-----------------------------------------------------------------------------
     Month Ended         High                  Low                 Volume
-----------------------------------------------------------------------------
       06/30/03          $0.66                $0.12              1,146,400
       05/31/03          $0.18                $0.10                583,900
       04/30/03          $0.15                $0.08                351,900
       03/31/03          $0.18                $0.11                153,600
       02/28/03          $0.21                $0.09                941,400
       01/31/03          $0.10                $0.08                 76,500
-----------------------------------------------------------------------------

ITEM 10. ADDITIONAL INFORMATION.

A. Memorandum and Articles of Association

Reference is hereby made to our Certificate of Continuance, and to our Bylaws,
each of which is incorporated herein by reference to, respectively, exhibit 3.1
and 3.2 to our Registration Statement on Form F-1, file number 33-81290.

B. Material Contracts.

      We entered into a Share Purchase Agreement dated March 11, 2003, as
amended by agreements dated March 21, and April 2, 2003 (as amended, the "Forum
Acquisition Agreement") with Forum Pacific Inc., a company incorporated under
the laws of the Philippines, Forum Exploration Inc. a company incorporated under
the laws of the Philippines, and the Mullins Group, through Eastmark Limited, a
Bermuda registered company, pursuant to which we will acquire an approximate
66.7 % interest in Forum Exploration, Inc.. See "Item 4. Information About the
Company--Forum Acquisition."

C. Exchange Controls

Investment Canada Act

      The Investment Canada Act (the "ICA") prohibits the acquisition of control
of a Canadian business enterprise in Canada by non-Canadians without the prior
consent of Investment Canada, the agency that administers the ICA, unless such
acquisition is exempt under the provisions of the ICA. Investment Canada must be
notified of such exempt acquisitions. The ICA covers acquisitions of control of
corporate enterprises, whether by purchase of assets, shares or "voting
interests" of an entity that controls, directly or indirectly, another entity
carrying on a Canadian business.

      Apart from the ICA, there are no other limitations on the right of
non-resident or foreign owners to hold or vote securities imposed by Canadian
law or our Certificate of Continuance. There are no other decrees or regulations
in Canada which restrict the export or import of capital, including foreign
exchange controls, or that affect the remittance of dividends, interest or other
payments to non-resident holders of our securities except as discussed in
"Taxation", below.


                                       35
<PAGE>

D. Taxation

      The following is a summary of the principal Canadian federal income tax
considerations generally applicable in respect of our common stock. The tax
consequences to any particular holder of common stock will vary according to the
status of that holder as an individual, trust, corporation or member of a
partnership, the jurisdiction in which that holder is subject to taxation, the
place where that holder is resident and, generally, according to that holder's
particular circumstances. This summary is applicable only to holders who are
resident in the United States, have never been resident in Canada, deal at arm's
length with us, hold their common stock as capital property and who will not use
or hold the common stock in carrying on a business in Canada.

      This summary does not take into account provincial income tax
consequences. The summary assumes that the publicly announced proposals will be
enacted as proposed with the effective dates set out therein; otherwise, the
summary assumes that there will be no other changes in law whether by judicial
or legislative action.

      If a non-resident were to dispose of common stock to another Canadian
corporation which deals or is deemed to deal on a non-arm's length basis with
the non-resident and which, immediately after the disposition, is connected with
the Company (i.e. which holds shares representing more than 10% of the voting
power and more than 10% of the market value of all of our issued and outstanding
shares), the excess of the proceeds over the paid-up capital of the common stock
sold will be deemed to be taxable as a dividend either immediately or eventually
by means of a deduction in computing the paid-up capital of the purchasing
corporation.

      Under the Canadian Tax Act, a gain from the sale of common stock by a
non-resident will not be subject to Canadian tax, provided the stockholder
(and/or persons who do not deal at arm's length with the stockholder) has not
held a "substantial interest" in our shares (25% or more of the shares of any
class of our equity securities) at any time in the five years preceding the
disposition. Generally, the Canadian-United States Tax Convention (the "Tax
Convention") will exempt from Canadian taxation any capital gain realized by a
resident of the United States, provided that the value of the common stock is
not derived principally from real property situated in Canada.

      In the case of any dividends paid to non-residents, the Canadian tax is
withheld by us, which remits only the net amount to the stockholder. By virtue
of Article X of the Tax Convention, the rate of tax on dividends paid to
residents of the United States is generally limited to 15% of the gross dividend
(or 10% in the case of certain corporate stockholders owning at least 10% of the
Company's voting shares). In the absence of the treaty provisions, the rate of
Canadian withholding tax imposed on non-residents is 25% of the gross dividend.
Stock dividends received by non-residents from us are taxable by Canada as
ordinary dividends.

      This summary is of a general nature only and is not exhaustive of all
possible income tax consequences. It is not intended as legal or tax advice to
any particular holder of common stock and should not be so construed. Each
holder should consult his/her own tax advisor with respect to the income tax
consequences applicable to him/her in his/her own particular circumstances.


                                       36
<PAGE>

E. Documents on Display

      The documents concerning us which are referred to in this Report are
either annexed hereto at exhibits (see Item 19) or may be inspected at our
principal executive offices in Calgary.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Currency Exchange Rate Sensitivity

      The results of our operations are subject to currency translational risk
and currency transaction risk. Regarding currency translational risk, the
operating results and financial position of our subsidiaries are reported in US
dollars and then translated into Canadian dollars at the applicable exchange
rate for preparation of our consolidated financial statements. The fluctuation
of the US dollar in relation to Canadian dollar will therefore have an impact
upon profitability of our and may also affect the value of our assets and the
amount of shareholders' equity.

      In regards to transaction risk, our functional currency is the US dollar
and its activities are predominantly executed using the US dollar. We incur a
relatively small amount of expenses in Canadian and Iranian currencies. However,
due to the fact that the majority of our financings are completed in US dollars,
we are not subject to significant operational exposures due to fluctuations in
these currencies. Our common shares are listed on the OTC-BB and are bought and
sold in US dollars (see tables in Item 8.) We have not entered into any
agreements or purchased any instruments to hedge any possible currency risks at
this time.

Interest Rate Sensitivity

      We currently have no significant short term or long term debt requiring
interest payments, accept as discussed in the provisions of the ROC loan
agreement (see Exhibit 4.14, herewith attached). However, this does not require
us to consider entering into any agreements, or purchasing any instruments to
hedge against possible interest rate risks at this time. Our interest earning
investments are short term. Thus any reductions in future income or carrying
values due to future interest rate declines are believed to be immaterial.

Commodity Price Sensitivity

      Our future revenue and profitability will be dependant, to a significant
extent, upon prevailing spot market prices for oil and gas. In the past oil and
gas prices have been volatile. Prices are subject to wide fluctuations in
response to changes in supply of and demand for oil and gas, market uncertainty
and a variety of additional factors that are beyond the control of the Company.
We currently have no significant operating revenue.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.

Not Applicable


                                       37
<PAGE>

                                     PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.

We are currently in discussions with Roc Oil which may result in certain
amendments to the Convertible Loan Agreement that matured May 1, 2003 between
ourselves and Roc Oil , including an extension of the Maturity Date, revisions
to the conversion privileges and deletion of the right to receive warrants.
These certain amendments may or may not be agreed to if at all and the result
could be that we would have to pay back the entire loan out of funds raised..

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
PROCEEDS.

None.

ITEM 15: CONTROLS AND PROCEDURES.

      The Board of Directors has overall responsibility for reviewing the
Company's disclosure to ensure the Company provides full and plain disclosure to
shareholders and other stakeholders. The Board discharges its responsibilities
through its committees, specifically, with respect to financial disclosure, the
Audit and Compliance Committee are responsible for reviewing the Company's
financial reporting procedures and internal controls to ensure full and accurate
disclosure of the Company's financial position.

      Our chief executive officer and our chief financial officer, after
evaluating the effectiveness of the Company's "disclosure controls and
procedures" (as defined in the Securities Exchange Act of 1934 Rules 13a-14(c)
and 15-d-14(c))as of a date (the "Evaluation Date") within 90 days before filing
date of this report, have concluded that as of the Evaluation Date, our
disclosure controls and procedures were adequate and designed to ensure that
material information relating to us and our consolidated subsidiaries would be
made known to them by others within those entities.

      There were no significant changes in our internal controls or to our
knowledge, in other factors that could significantly affect our disclosure
controls and procedures subsequent to the Evaluation Date.


                                       38
<PAGE>

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

      The Audit Committee is responsible for reviewing the Company's financial
reporting procedures, internal controls, the performance of the Company's
auditors and reviewing the reserve evaluations prepared by the Company's
independent reserves evaluation engineering consultants. The Audit Committee is
also responsible for reviewing all disclosure with respect to financial matters
prior to filing or release and quarterly and annual financial statements prior
to their approval by the full Board. Members of the Audit Committee are Larry
Youell, David Thompson, Barry Stansfield, and David Wilson.

The Company's Board of Directors has determined that it has at least one
financial expert serving on its Audit Committee. This individual is Mr. David
Thompson who has served as a Director of the Company since March 1, 2003. Mr.
Thompson is a Certified Management Accountant.

ITEM 16 B: CODE OF ETHICS.

      The Company has not adopted a formal "code of ethics", however, it does
maintain written standards that are reasonably designed to deter wrong-doing and
to promote:

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.

      In addition the Company practices corporate governance in accordance with
rules and regulations in Canada.

      Corporate Governance relates to the activities of the Board of Directors
who are elected by and accountable to the Shareholders, and takes into account
the role of management who are appointed by the Board of Directors and who are
charged with the on-going management of the Company. The Board of Directors of
the Company encourages sound corporate governance practices designed to promote
the well being and on-going development of the Company, having always as its
ultimate objective the best long-term interests of the Company and the
enhancement of value for all Shareholders. The Board also believes that sound
corporate governance benefits the Company's employees and the communities in
which the Company operates. The Board is of the view that the Company's
corporate governance policies and practices, outlined below, are appropriate and
substantially consistent with the guidelines for improved corporate governance
in Canada as adopted by the Toronto Stock Exchange.


                                       39
<PAGE>

      To better fulfill and implement the Boards corporate governance policies,
a Corporate governance Committee has been established. The Corporate Governance
Committee meets with and discusses current disclosure issuances with our
management personnel, directors, and with both our Canadian and United States
counsel, in order to not only report to the Board of Directors any matters which
should be the subject of either public disclosure or remedial action but also to
assist the Board of Directors in establishing reporting and disclosure
procedures to ensure that we are in compliance with our disclosure and
compliance obligations under applicable laws, rules and obligations. Members of
the corporate governance committee are David Wilson and Barry Stansfield.

ITEM 16 C.  ACCOUNTANTS FEES AND SERVICES

      The Company's external auditors, Ernst & Young LLP, received total fees of
$52,593 for the year ended December 31, 2002. and $27,512 for the year ended
December 31, 2001. Ernst & Young LLP provides audit and review services for
respectively annual and interim financial statements of the Company.

                                    PART III

ITEM 17.  FINANCIAL STATEMENTS.

The auditors' report, financial statements and notes thereto, schedules thereto
as required under Item 17 are found immediately below.

     Financial Statements:

        Report of Auditors, dated May 27, 2003

        Consolidated Balance Sheets at December 31, 2002 and December 31, 2001

        Consolidated Statements of Loss and Deficit for the Years ended December
        31, 2002, December 31, 2001, and December 31, 2000

        Consolidated Statements of Cash Flows for the Years ended December 31,
        2002, December 31, 2001, and December 31, 2000

        Notes to the Consolidated Financial Statements


                                       40
<PAGE>

                                AUDITORS' REPORT

To the Shareholders of
Tracer Petroleum Corporation

We have audited the consolidated balance sheets of Tracer Petroleum Corporation
as at December 31, 2002 and 2001 and the consolidated statements of loss and
deficit and cash flows for each of the years in the three-year period ended
December 31, 2002. These financial statements are the responsibility of the
Corporation's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with Canadian and United States generally
accepted auditing standards. Those standards require that we plan and perform an
audit to obtain reasonable assurance whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation.

In our opinion, these consolidated financial statements present fairly, in all
material respects, the financial position of the Corporation as at December 31,
2002 and 2001 and the results of its operations and its cash flows for each of
the years in the three-year period ended December 31, 2002 in accordance with
Canadian generally accepted accounting principles.

                                                           /s/ Ernst & Young LLP
Calgary, Canada
May 27, 2003                                               Chartered Accountants

Comments by Auditor for U.S. Readers on Canada-U.S. Reporting Difference

      In the United States, reporting standards for auditors require the
addition of an explanatory paragraph (following the opinion paragraph) when the
financial statements are affected by conditions and events that cast substantial
doubt on the Corporation's ability to continue as a going concern, such as those
described in Note 1 to these financial statements. The above opinion is
expressed in accordance with Canadian reporting standards which do not permit a
reference to such events and conditions in the auditors' report when these are
adequately disclosed in the financial statements.

                                                           /s/ Ernst & Young LLP
Calgary, Canada
May 27, 2003                                               Chartered Accountants

MANAGEMENT'S RESPONSIBILITY FOR THE CONSOLIDATED FINANCIAL STATEMENTS

      The accompanying consolidated financial statements and all information in
the annual report are the responsibility of management. The consolidated
financial statements have been prepared by management in accordance with the
accounting policies outlined in the notes to the consolidated financial
statements. When alternative accounting methods exist, management has chosen
those that seem most appropriate in the circumstances. Where necessary,
management has made informed judgments and estimates in accounting for
transactions which were not complete at the balance sheet date. In the opinion
of management, the consolidated financial statements have been prepared within
acceptable limits of materiality and are in accordance with accounting
principles and practices generally accepted in Canada.

      Management maintains appropriate systems of internal accounting and
administrative controls. Policies and procedures are designed to provide
reasonable assurance that transactions are appropriately authorized, assets are
safeguarded and financial records are properly maintained to provide reasonable
assurance that the financial information is relevant, reliable and accurate.

      Ernst & Young LLP, an independent firm of chartered accountants, has been
engaged, as approved by a vote of the shareholders at the Corporation's most
recent annual general meeting, to examine the consolidated financial statements
in accordance with auditing standards generally accepted in Canada and the
United States and provide an independent audit opinion.

      The Board of Directors annually appoints an audit committee consisting of
a majority of non-management directors. The committee meets with the
Corporation's independent auditors to review any significant accounting and
auditing matters and to discuss the results of the annual audit examination.
Ernst and Young LLP has full and free access to the audit committee. The audit
committee also reviews the consolidated financial statements and auditors'
report and submits its findings to the Board of Directors. The audit committee
has reported its findings to the Board of Directors who have approved the
consolidated financial statements.

               "David M Thompson"                      "Barry Stansfield"
             ------------------------------------     --------------------------
             David M. Thompson                        Barry Stansfield
             Director and Chief Financial Officer     Director


                                       41
<PAGE>

Tracer Petroleum Corporation

                          CONSOLIDATED BALANCE SHEETS
                      (See Basis of Presentation - Note 1)

As at December 31

                                                           2002        2001
                                                            $           $
-----------------------------------------------------------------------------

ASSETS
Current
Cash                                                      24,376       9,371
Accounts receivable                                        7,510      27,660
Prepaid expenses                                             519          --
Investments [note 6]                                      27,776          --
-----------------------------------------------------------------------------
                                                          60,181      37,031
Investments [note 6]                                          --     761,474
Properties and equipment [note 3]                         10,613      53,934
-----------------------------------------------------------------------------
                                                          70,794     852,439
=============================================================================

LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities [note 5]        194,647     296,252
Short term loans [note 5]                                 83,652          --
Convertible loan [note 9]                                368,984     314,650
-----------------------------------------------------------------------------
                                                         647,283     610,902
-----------------------------------------------------------------------------
Commitments and contingencies [note 7]

Shareholders' equity (deficiency)
Share capital [note 4]                                 4,001,710   3,762,591
Equity component of convertible loan [note 9]             21,994      20,863
Deficit                                               (4,600,193) (3,541,917)
-----------------------------------------------------------------------------
                                                        (576,489)    241,537
-----------------------------------------------------------------------------
                                                          70,794     852,439
=============================================================================

See accompanying notes

On behalf of the Board:

                             David Thompson           Barry Stansfield

                             Director                 Director


                                       42
<PAGE>

Tracer Petroleum Corporation

                   CONSOLIDATED STATEMENTS OF LOSS AND DEFICIT

Years ended December 31

                                              2002         2001        2000
                                                $           $            $
--------------------------------------------------------------------------------

REVENUE                                            --        1,494          943
--------------------------------------------------------------------------------

EXPENSES
Depletion, depreciation and amortization           --           --       55,846
Administrative expenses [notes 5 and 8]       782,835    1,196,014    1,609,501
Other                                              --           --          142
--------------------------------------------------------------------------------
                                              782,835    1,196,014    1,655,489
--------------------------------------------------------------------------------
Operating loss                               (782,835)  (1,194,520)  (1,664,546)

OTHER REVENUE AND EXPENSES
Loss on sale of investments [note 6]          (42,000)          --           --
Loss on sale of furniture and fixtures         (9,967)          --           --
Gain on sale of oil and gas properties             --           --       28,075
Interest and miscellaneous income              13,953          679       25,400
Write down of investments [note 6]            (48,372)    (283,050)    (367,375)
Amortization and writedowns                  (189,055)     (37,020)     (49,560)
--------------------------------------------------------------------------------
                                             (275,441)    (319,391)    (363,460)
--------------------------------------------------------------------------------

Loss for the year                          (1,058,276)  (1,513,911)  (2,028,006)
Deficit, beginning of the year             (3,541,917)  (2,028,006) (35,009,518)
Deficit elimination [note 4]                       --           --   35,009,518
--------------------------------------------------------------------------------
Deficit, end of the year                   (4,600,193)  (3,541,917)  (2,028,006)
================================================================================

Loss per common share
  - basic and diluted [note 4]                  (0.10)       (0.17)       (0.28)
================================================================================

See accompanying notes


                                       43
<PAGE>

Tracer Petroleum Corporation

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended December 31

<TABLE>
<CAPTION>
                                                  2002           2001           2000
                                                    $              $              $
---------------------------------------------------------------------------------------
<S>                                            <C>            <C>            <C>
Cash provided by (used in)
OPERATING ACTIVITIES
Net loss for year                              (1,058,276)    (1,513,911)    (2,028,006)
Non-cash items included in loss
  Depletion, depreciation and amortization        189,055         37,020        105,406
  Write down of investments                        48,372        283,050        367,375
  Loss on sale of investments and furniture
    and fixtures                                   51,967             --             --
  Options issued to non-employees                  52,995             --             --
  Gain on sale of oil and gas properties               --             --        (28,075)
---------------------------------------------------------------------------------------
                                                 (715,887)    (1,193,841)    (1,583,300)
Changes in working capital related to
  operating activities
  Accounts receivable                              20,150        (13,493)         7,594
  Prepaid expenses                                   (519)        17,806         35,504
  Accounts payable and accrued liabilities        (61,364)        98,070       (194,893)
---------------------------------------------------------------------------------------
                                                 (757,620)    (1,091,458)    (1,735,095)
---------------------------------------------------------------------------------------

INVESTING ACTIVITIES
Additions to properties and equipment, net         (1,638)        (3,084)      (302,995)
Proceeds on sale of investments [note 6]          643,326             --             --
Proceeds on disposal of resource properties
  and other                                            --             --         28,075
Investments [note 7]                             (154,064)       (12,826)      (895,152)
---------------------------------------------------------------------------------------
                                                  487,624        (15,910)    (1,170,072)
---------------------------------------------------------------------------------------

FINANCING ACTIVITIES
Short-term loans                                   83,652       (127,458)       127,458
Convertible loan                                   20,979        383,413             --
Issuance of share capital, net of costs           180,370        848,600      1,879,692
---------------------------------------------------------------------------------------
                                                  285,001      1,104,555      2,007,150
---------------------------------------------------------------------------------------

Net increase (decrease) in cash                    15,005         (2,813)      (898,017)
Cash, beginning of year                             9,371         12,184        910,201
---------------------------------------------------------------------------------------
Cash, end of year                                  24,376          9,371         12,184
=======================================================================================
</TABLE>

See accompanying notes


                                       44
<PAGE>

1. BASIS OF PRESENTATION

Tracer Petroleum Corporation (the "Corporation" or "Tracer") is engaged
primarily in the business of exploration and development of oil and gas
reserves. The exploration and development of oil and gas reserves involves
significant financial risks. The success of the Corporation is dependent upon
its ability to discover economically recoverable reserves and to bring such
reserves into profitable production, and is subject to a number of risks,
including environmental risks, contractual risks, legal and political risks,
fluctuations in the price of oil and gas and other factors beyond the
Corporation's control.

These consolidated financial statements have been prepared in accordance with
Canadian generally accepted accounting principles on a going concern basis,
which presumes the realization of assets and discharge of liabilities in the
normal course of business for the foreseeable future. The Corporation has
experienced significant operating losses and cash outflows from operations in
the years ended December 31, 2002, 2001, and 2000, has a $587,102 working
capital deficiency and a shareholders' deficiency of $576,489 at December 31,
2002, and has no producing properties. The Corporation's ability to continue as
a going concern is dependent on achieving profitable operations and upon
obtaining additional financing. The outcome of these matters cannot be predicted
at this time. These consolidated financial statements do not contain any
adjustments to the amounts and classifications of assets and liabilities that
might be necessary should the Corporation be unable to continue in business.

2. SIGNIFICANT ACCOUNTING POLICIES

These consolidated financial statements have been prepared in accordance with
Canadian generally accepted accounting principles ("Canadian GAAP"), which are
different from those in the United States ("US GAAP"), as explained in Note 10.

a) Consolidation and use of estimates

These financial statements include the accounts of the Corporation and its
subsidiaries Tracer Petroleum International ("TPI"), Tracer Trading Ltd.
("TTL"), TEPCO Ltd. ("TEPCO"), and Tracer Petroleum Iran Limited ("TPIL").

The preparation of financial statements in conformity with Canadian GAAP
requires management to make certain estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities as at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results may
differ from these estimates.

b) Properties and equipment

The Corporation follows the full cost method of accounting for its petroleum and
natural gas properties whereby all costs of acquisition of, exploration for, and
development of petroleum and natural gas reserves (net of related government
incentives) are capitalized in separate cost centres on a country-by-country
basis. Capitalized costs are generally limited under "ceiling tests." A ceiling
test is applied to ensure that capitalized costs do not exceed the sum of
estimated undiscounted future net revenues from estimated gross proven reserves
less the cost incurred or estimated to develop those reserves, production costs,
interest, general and administration costs, and an estimate for restoration
costs and applicable taxes plus the lower of cost or estimated market value of
unproved properties. Costs are depleted by cost centre using the composite
unit-of-production method based upon gross proved developed reserves estimated
by professional engineers. Reserves are converted to equivalent units on the
basis of approximate relative energy content.

Unproved properties consist primarily of expenditures for property acquisition,
office and administrative expenses relating specifically to exploration
activities, data processing, drilling and acquisition of seismic data. These
properties are periodically reviewed for evidence of impairment and are carried
at cost less write-down for impairment, if any. These costs are transferred to
the amortization pool on an ongoing basis as the project is evaluated and/or
proved reserves are established.


                                       45
<PAGE>

Certain exploration and production activities related to petroleum and natural
gas are conducted jointly with others. Only the Corporation's proportionate
interest in such activities is reflected in the financial statements.

The Corporation provides for amortization of its equipment, fixtures and
automobile at the rate of 30% per annum utilizing the declining balance method.
It provides for a full year's amortization of these assets in the year of
acquisition.

c) Future removal and site restoration costs - oil and gas properties

Estimated future removal and site restoration costs are provided for using the
unit-of-production method based upon estimated gross proven reserves.

d) Foreign currency translation

The accounts of the Corporation's integrated wholly-owned subsidiary have been
translated into Canadian dollars on the following basis:

Monetary assets and liabilities at the exchange rate at year-end. Non-monetary
assets and liabilities at historical exchange rates. Exchange gains and losses
are credited or charged to income in the year incurred.

e) Stock option plan

The Corporation has a fixed price stock option plan. No compensation expense is
recognized when stock options are issued to or exercised by employees, officers
or directors. Any consideration paid on exercise of stock options by employees,
officers or directors is credited to share capital. Effective January 1, 2002
the Corporation adopted section 3870 of the Canadian Institute of Chartered
Accountant's Handbook for stock-based compensation and other stock-based
payments. The section requires that the Corporation provide pro-forma earnings
and pro-forma earnings per share for employee stock option grants, as if the
fair value method of accounting for stock-based compensation had been used. The
fair value of any stock option grants to non-employees is charged to income
during the year.

The following table provides pro forma measures of loss and loss per common
share had stock options granted to employees, officers and directors in 2002
been recognized as compensation expense based on the estimated fair value of the
options on the grant date.

                                                            $
             ------------------------------------------------------

             Loss for the year as reported              (1,058,276)
             Compensation expense                          250,188
             ------------------------------------------------------
             Pro-forma loss for the year                (1,308,464)
             ======================================================

             Loss per common share as reported               (0.10)
             Pro-forma loss per common share                 (0.13)
             ======================================================

f) Financial instruments

Financial instruments of the Corporation consist mainly of cash, accounts
receivable, accounts payable and accrued liabilities, short-term loans and
convertible loans. As at December 31, 2002 and 2001, there were no significant
differences between the carrying amounts of these financial instruments reported
on the balance sheet and their estimated fair values.

g) Income taxes

The Corporation follows the liability method to account for income taxes. Under
this method, future tax assets and liabilities are determined based on the
differences between the carrying value and the tax bases of assets and


                                       46
<PAGE>

liabilities, and measured using the substantively enacted tax rates and laws
expected to be in effect when the differences are expected to reverse.

h) Investments

Investments consist of equity securities held for sale and are accounted for
using the cost method of accounting. The securities are recorded at cost unless
there has been a loss in value that is other than a temporary decline, at which
time the investment is written down to market value.

3. PROPERTIES AND EQUIPMENT

                                                      2002
                                   -------------------------------------------
                                                   Accumulated
                                                   Depletion,
                                                Depreciation and   Net book
                                       Cost       Amortization       value
                                        $               $              $
------------------------------------------------------------------------------

Equipment and fixtures                75,799           65,186        10,613
------------------------------------------------------------------------------
                                      75,799           65,186        10,613
==============================================================================

                                                      2001
                                   -------------------------------------------
                                                   Accumulated
                                                   Depletion,
                                                Depreciation and   Net book
                                       Cost       Amortization       value
                                        $               $              $
------------------------------------------------------------------------------

Equipment and fixtures               292,246          250,232        42,014
Automobile                            25,026           13,106        11,920
------------------------------------------------------------------------------
                                     317,272          263,338        53,934
==============================================================================

On December 3, 1999 the Corporation sold all of its oil and gas assets in
Indonesia to Tradewinds Oil and Gas International Inc. ("Tradewinds"). In
addition to initial cash consideration of US$350,000 on closing, the Corporation
is also entitled to the following:

a)    Tracer retained a 5% carried interest in the North Tanjung Block (NT
      Block) PSC and will receive preferential recovery of US$2,000,000 to be
      paid out of production from 30% of the cost recovery cash flow, net of
      operating costs. After the preferential recovery of US$2,000,000 the
      carried interest will be converted into a working interest. The NT Block
      PSC expired in February 2003. Tradewinds has applied for an extension with
      the new government body BPMIGAS. The effect of this on Tracer's carried
      interest is not known.

b)    Tracer will receive a 5% carried working interest in the Sungai Gelam
      Technical Assistance Contract, which will be converted to a 5% working
      interest upon commerciality being obtained. This is contingent upon
      Tradewinds election to pursue the project. The Corporation has not yet
      been advised whether Tradewinds has elected to pursue the project.

4. SHARE CAPITAL

a) Authorized:

      Unlimited number of Common shares without par value

      Unlimited number of Class A and Class B preferred convertible redeemable
      voting shares without par value


                                       47
<PAGE>

Issued
                                                          Number       Amount
                                                                          $
    ----------------------------------------------------------------------------

    Common Shares
    Balance December 31, 1999                            5,111,205   35,995,917
    Stated capital reduction (i)                                --  (35,009,518)
    ----------------------------------------------------------------------------
                                                         5,111,205      986,399
    Issued for cash pursuant to private placements (ii)  1,610,000    1,113,469
    Issued pursuant to exercise of stock options         1,123,500      766,223
    ----------------------------------------------------------------------------
    Balance December 31, 2000                            7,844,705    2,866,091
    Issued for cash pursuant to private placement (iii)    460,144      280,995
    Issued pursuant to exercise of stock options         1,224,900      567,605
    ----------------------------------------------------------------------------
    Balance December 31, 2001                            9,529,749    3,714,691
    Issued pursuant to exercise of stock options           981,590      180,370
    Options issued for services                                 --       52,995
    ----------------------------------------------------------------------------
    Balance December 31, 2002                           10,511,339    3,948,056
    ============================================================================

    Warrants [ii, iii and note 9]
    Balance, December 31, 1999 and 2000                  2,539,000           --
    Issued                                                 760,994       47,900
    ----------------------------------------------------------------------------
    Balance, December 31, 2001                           3,299,994       47,900
    Issued                                                  18,978        5,754
    ----------------------------------------------------------------------------
    Balance, December 31, 2002                           3,318,972       53,654
    ============================================================================

i)    On June 29, 2000 at the Corporation's annual general meeting, the
      shareholders passed a special resolution authorizing the reduction of the
      Corporation's stated capital account by $35,009,518 which represented the
      amount of the Corporation's accumulated deficit as recorded on the
      Corporation's balance sheet as at December 31, 1999. At that time this
      amount was applied against the Corporation's accumulated deficit.

ii)   On March 20, 2000 the Corporation completed a non-brokered private
      placement of 1,540,000 units at US$0.50 per unit. Each unit was comprised
      of one common share and one common share purchase warrant which entitled
      the holder to purchase an additional common share in the capital of the
      Corporation at US$1.00 if exercised on or before March 2, 2001 and US$1.25
      if exercised thereafter up to and including March 2, 2002 at which time
      the warrants were set to expire. On November 16, 2001, the exercise price
      of all 1,540,000 warrants was reduced to US$0.25 per share. The expiry
      date of these warrants has been extended to September 3, 2003. A total of
      $1,119,657 relating to the private placement was included in share
      capital. In addition, share issuance costs for the private placement of
      $97,708 were also charged to share capital.

      A total of 70,000 warrants from a previous private placement were
      exercised during 2000 and net proceeds from the exercise of $91,520 were
      included in share capital.

iii)  On December 19, 2000 the Corporation announced a private placement of
      687,500 Units at US$0.40 per Unit. Each Unit consisted of one common share
      and one common share purchase warrant exercisable for a period of two
      years at an exercise price of US$0.50 in the first year and US$0.65 in the
      second year. The private placement closed with 460,144 Units being issued
      on May 31, 2001 for net proceeds of $280,995. On November 16, 2001, the
      exercise price of all 460,144 warrants was reduced to US$0.25 per share.
      The warrants expire on May 31, 2003.

b) Options

      The Corporation has established a stock option plan whereby options may be
      granted to its directors, officers, consultants, and employees. The
      exercise price of each option equals the market price of the Corporation's
      stock on the date of the grant and an option's maximum term is three
      years. The options vest immediately. At


                                       48
<PAGE>

      December 31, 2002 there were 1,907,121 (2001- 1,387,121; 2000 - 1,317,321)
      stock options outstanding to purchase common shares at US$0.10 - US$0.32
      per share. These options expire on various dates between May 14, 2003 and
      April 22, 2004.

                                                                 Weighted
                                                                  Average
                                                   Number of      Exercise
                                                    Options     Price/Share
-----------------------------------------------------------------------------

Outstanding and exercisable January 1, 2000           488,000       $0.79
Granted                                             2,565,821       $1.11
Exercised                                          (1,123,500)      $0.68
Canceled/Expired                                     (313,000)      $2.00
-----------------------------------------------------------------------------
Outstanding and exercisable December 31, 2000 (1)   1,617,321       $0.86
Granted                                             1,727,000       $0.67
Exercised                                          (1,224,900)      $0.46
Canceled/Expired                                     (387,300)      $1.28
-----------------------------------------------------------------------------
Outstanding and exercisable December 31, 2001(2)    1,732,121       $0.16
Granted                                             1,482,290       $0.26
Exercised                                            (981,590)      $0.18
Canceled/Expired                                     (325,700)      $1.28
-----------------------------------------------------------------------------
Outstanding and exercisable December 31, 2002       1,907,121       $0.22
=============================================================================

(1)   On November 15, 2000 the Corporation re-priced a total of 675,921
      outstanding stock options to US$0.68 per share.

(2)   During 2001 the Corporation re-priced all of its outstanding stock options
      to US$0.10 per share.

      At December 31, 2002, 5,226,093 shares of common stock were reserved
      including 1,907,121 shares reserved for issuance under stock option
      agreements and 3,318,972 reserved for issuance in conjunction with
      outstanding warrants. Subsequent to December 31, 2002, the expiry date of
      2,539,000 of these warrants was extended to September 2, 2003. On November
      16, 2001 all but 150,000 outstanding warrants which are exercisable at
      US$0.90 were repriced to US$0.25.

c)    Subsequent to December 31, 2002 11,600,000 stock options were issued with
      an exercise price of US$0.08 and 50,000 stock options were issued with an
      exercise price of U.S.$0.15. A total of 17,850 options were exercised in
      the period from January 1 2003 to May 27, 2003 for proceeds of US$1,785
      and 619,500 options expired unexercised or were cancelled.

d)    The loss per common share computations are based on the weighted average
      number of shares outstanding which was 10,404,169 (2001 - 8,733,625; 2000
      - 7,337,553). Diluted earnings per share amounts are not recorded, as
      these amounts would be anti-dilutive.

5.  RELATED PARTY TRANSACTIONS

Management, consulting and investor relations fees and benefits in the amount of
$190,578 (2001 - $255,267; 2000 - $286,364) were paid or credited to five (2001
- six; 2000 - seven) directors or officers or companies controlled by them.
Included in accounts payable and accrued liabilities at December 31, 2002, is
$46,373 (2001 - $142,400) owed to directors, officers and companies controlled
by them. All transactions were recorded at the exchange amounts.

At December 31, 2002 the Corporation owed D.R.R Capital Corporation $59,730 and
Canadian International Royalty Corporation $14,442 for short-term loans. D.R.R.
Capital Corporation and Canadian International Royalty Corporation are wholly
owned by David Robinson, Chairman of the Board of Directors. The Corporation
also owed


                                       49
<PAGE>

AMS Limited $9,480 for a short-term loan. AMS Limited is owned by David
Thompson, a current Director of the Corporation. The loans are non-interest
bearing with no specified repayment terms.

6. INVESTMENTS

a)    On February 5, 2002 the Corporation reported that it had entered into a
      Joint Venture Agreement ("JVA") with privately-held Canneft Inc.
      ("Canneft") of Houston, TX, whereby the Corporation agreed to participate
      with Canneft in the development of the Adzhiyap project in southwestern
      Turkmenistan. Under the terms of the JVA between the Corporation and
      Canneft, Tracer would advance US$150,000 to the Joint Venture during the 5
      month period ended September 30, 2002, to cover the remaining estimated
      costs to secure the PSA. At December 31, 2002, the Corporation had
      advanced US$100,000 and as a result of political unrest decided not to
      pursue the project any further. A write down of $154,064 was recorded as a
      result.

b)    On April 3, 2000 the Corporation purchased a 4.5% equity interest in Open
      Joint Stock Company Caspi Neft ("OJSCCN") from Transmeridian Exploration
      Inc. ("TMEI") for US$614,158 ($895,152) cash. OJSCCN owns the exploration
      and production rights for the South Alibek field in the Aktyubinsk region
      of the Republic of Kazakhstan.

      On March 16, 2001 the Corporation sold its interest in OJSCCN to TMEI for
      US$1.5 million of convertible preferred shares of TMEI plus 1 million
      warrants exercisable at US$1.00 per share for a period of two years. The
      preferred shares were convertible at the Corporation's option into 1.5
      million common shares of TMEI at a deemed value of US$1.00 per share at
      any time within 5 years. The sale was recorded at the carrying value of
      the assets given up being the shares of OJSCCN which were carried at
      $895,152 plus the capitalized resource property costs which were $149,372.
      The total carrying value of $1,044,524 was allocated to the preferred
      shares and included in investments. At December 31, 2001 the Corporation
      recorded a write down on its investment of $283,050 and on December 31,
      2002 a further write down of $48,372 was recorded. TMEI commenced trading
      on the NASDAQ OTC-BB market on March 6, 2002. The Corporation elected to
      convert its preferred shares into 1,500,000 common shares of TMEI on the
      commencement of trading. By December 31, 2002, the Corporation had sold
      1,350,000 shares of TMEI for proceeds of $643,326, net of commissions and
      recorded a loss on disposal of $42,000. The balance of the Corporation's
      TMEI shares were sold on February 21, 2003 for proceeds of $27,776 net of
      commissions. All of the warrants expired, unexercised on March 16, 2003.

c)    On January 19, 2001 the Corporation announced that it had entered into a
      joint venture agreement with A. Brown Company Inc. ("ABC") in the
      Philippines. The joint venture known as A. Brown Energy Inc. ("ABEI") was
      set up in order to market and trade crude oil and petroleum products in
      the Philippines and other countries in the Far East and Australia. To earn
      its full interest the Corporation had to advance US$50,000 and issue
      50,000 common shares to ABC. On May 7, 2001 the joint venture agreement
      was terminated with the Corporation having advanced a total of US$8,500
      ($12,826). This amount was included in amortization and write-downs.

d)    The Corporation wrote off its investment in eZuz Inc., with a book value
      of $367,375, in 2000 due to market conditions for Internet based stocks
      and the fact that no public market was established for the shares.

7.  COMMITMENTS AND CONTINGENCIES

During the year the Corporation, assigned its office lease to a third party. The
Corporation is liable for any defaults on payments by this party.


                                       50
<PAGE>

8. ADMINISTRATIVE EXPENSES

Administrative expenses were comprised of the following:

                                               2002        2001        2000
                                                $           $           $
-------------------------------------------------------------------------------

Engineering and geological consulting          (3,820)     21,453      65,264
Foreign exchange loss (gain)                   (2,114)     17,290     (27,761)
Interest and bank charges [note 9]             73,562      13,940       2,155
Investor relations (note 5)                   193,160     111,721      82,600
Shareholder information                        27,583      40,339      51,860
Management fees (note 5)                      112,804     199,503     213,173
Consulting fees (note 5)                       56,434     203,355     354,355
Office and miscellaneous                       65,049     250,904     239,697
Personnel                                          --      83,184      70,293
Professional fees                             124,999     127,149     204,494
Compensation expense                           52,995          --          --
Travel                                         82,183     127,176     353,371
-------------------------------------------------------------------------------
                                              782,835   1,196,014   1,609,501
===============================================================================

9. CONVERTIBLE LOAN

On May 24, 2001 the Corporation announced that it had entered into an agreement
with Roc Oil Company Limited ("ROC") by which ROC agreed to provide the
Corporation with staged financing over 15 months up to a discretionary maximum
of US$4,000,000. The financing was by way of a series of convertible loans. ROC
was initially loaning funds to the Corporation during a due diligence period
ending February 28, 2002 with the option to lend further funds to the
Corporation beyond that date, subject to the Corporation meeting certain project
milestones. Under the agreement the Corporation granted ROC the right of first
refusal to participate, up to a 25% equity level, with the Corporation in
upstream development opportunities in Iran. ROC had the option of appointing up
to 3 members of the Board of Directors of Tracer depending upon the level of
funding provided. Under the terms of the agreement, ROC was also provided an the
option of providing further funding to the Corporation directly or converting
the loan and accrued interest into either a 50% interest in TEPCO Ltd., the
wholly-owned subsidiary of Tracer was to hold the Iranian projects or into a
direct 50% interest in the projects. ROC would then be required to provide
further funding to TEPCO, via either loans or direct investment in the projects
for a total of US$3,765,000.

If ROC elected not to convert its loan amounts and accrued interest into a
direct interest in TEPCO Ltd. or into a direct interest in the projects, it had
the option to provide funding of up to US$4,000,000 directly to the Corporation.
Until the maturity date of May 1, 2003, ROC would also have the option of
converting any and all amounts of this funding and accrued interest into shares
of Tracer at a conversion price which is the lesser of US$0.20 per share or 80%
of the weighted average closing price for the previous 20 trading days, subject
to a floor price of US$0.05 per share. ROC will also receive up to 5,000,000
share purchase warrants exercisable at US$0.20 per share on or before May 1,
2003. The final number of warrants issued to ROC was 319,828. All of the
warrants expired unexercised.

The loan agreement contains certain non-financial covenants restricting the
Corporation from certain activities such as paying dividends, adopting any
shareholders' rights plan where the rights of ROC would be adversely affected,
sale of assets other than in the normal course of business, restricting the use
of proceeds received under the loan agreement and prohibiting the amalgamation,
consolidation or merger of the Corporation with another entity. To be in
compliance with these covenants Tracer must provide ROC with advance
notification of any such anticipated activity. Failure to meet the covenants
would result in the loan becoming immediately repayable. As at December 31, 2002
the Corporation had met all covenants.

To December 31, 2002 ROC had advanced US$255,944 ($404,392) (2001 - US$240,762
($383,413)) on which $31,992 (2001 - $12,272) of interest expense has been
accrued. The gross proceeds received as of December 31, 2002 have been allocated
to the convertible loan and warrants based on the relative fair value of each
security.


                                       51
<PAGE>

Accordingly, $350,738 (2001 - $335,513) was allocated to the notes and $53,654
(2001 - $47,900) was allocated to the 319,828 (2001 - 300,850) issuable
warrants. The fair value of the warrants was estimated using the Black-Scholes
option-pricing model. The $53,654 discount for the warrants will be accrued and
recorded as interest expense over the term of the loan. For the year ended
December 31, 2002 $40,241 (2001 - $nil) has been accrued.

The amount allocated to the convertible loan of $350,738 (2001 - $335,513) has
been segregated into debt and equity components based on their respective fair
values. The equity component represents the holder conversion right. It will
continue to be disclosed separately in shareholders' equity until the loan is
either converted or repaid at which time it will be transferred to share
capital. The amount allocated to equity as at December 31, 2002 was $21,994
(2001 - $20,863).

The loan matured on May 1, 2003, however presently remains outstanding. The
Corporation is presently in discussions regarding possible conversion of the
loan, however at the present time the outcome is not known.

10. DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING
    PRINCIPLES

The Corporation's consolidated financial statements have been prepared in
accordance with Canadian GAAP, which differs in certain respects from US GAAP as
follows:

Financial statement presentation

<TABLE>
<CAPTION>
Statements of Loss                             2002        2001           2000
                                                 $           $              $
                                                        (restated)(1)
---------------------------------------------------------------------------------
<S>                                         <C>          <C>           <C>
Loss for the year - Canadian basis          (1,058,276)  (1,513,911)   (2,028,006)
Beneficial conversion feature (a)              (13,441)     (45,143)           --
Stock option repricing (c)                       7,502     (226,400)
---------------------------------------------------------------------------------
Loss and comprehensive loss for the year -
  U.S. basis                                (1,064,215)  (1,785,454)   (2,028,006)
=================================================================================

Loss per common share (basic and diluted)
  - Canadian basis                               (0.10)       (0.17)        (0.28)
Loss and comprehensive loss per common
  share (basic and diluted) - U.S. basis         (0.10)       (0.20)        (0.28)
=================================================================================
</TABLE>

Balance Sheet                              2002                    2001
                                 ----------------------  ----------------------
                                   Canadian     U.S.        Canadian    U.S.
                                     GAAP       GAAP          GAAP      GAAP
                                       $          $             $         $
-------------------------------------------------------------------------------

Convertible loan (b)                368,984    390,978       314,650   335,513
Shareholders' equity (deficiency)  (576,489)  (875,965)      241,537   (50,869)


                                       52
<PAGE>

The cumulative effect of these adjustments on consolidated shareholders' equity
(deficiency) is as follows:

                                                            2002        2001
                                                             $            $
--------------------------------------------------------------------------------

Shareholders' equity (deficiency) using Canadian GAAP    (576,489)     241,537
Beneficial conversion feature (a)                         (58,584)     (45,143)
Equity component of convertible loan (b)                  (21,994)     (20,863)
Stock option repricing (c)                               (218,898)    (226,400)
--------------------------------------------------------------------------------
Shareholders' equity (deficiency) using U.S. GAAP        (875,965)     (50,869)
================================================================================

(1)   The statement of loss for 2001 prepared in accordance with U.S. GAAP has
      been restated to reflect the following:

      i)    a restatement of the loss for the year - Canadian basis from
            $1,226,706 to $1,513,911 to reflect the balance as presented in the
            2001 statement of loss and deficit

      ii)   recognition of the beneficial conversion feature on the convertible
            loan at inception of $45,143 [see (a) below]

(a)   Under US GAAP, the terms of the convertible notes provide the lenders with
      an 'in-the-money' variable conversion rate. A beneficial conversion
      feature on the convertible loan is calculated at issuance based on the
      difference between the effective conversion price of the allocated
      proceeds and the market price of the common stock. The amount of the
      beneficial conversion feature at inception was $45,143, however, because
      of the variability of the conversion ratio, it is remeasured each
      reporting period until conversion, extinguishment or maturity. The
      remeasurement of the beneficial conversion feature at December 31, 2001
      did not result in any change to the amount originally calculated. The
      remeasurement at December 31, 2002 resulted in an increase in the amount
      allocated to the beneficial conversion feature of $13,441.

(b)   Under Canadian GAAP, the amount allocated to the convertible loan has been
      segregated into debt and equity components based on their respective fair
      values (note 9). Under U.S. GAAP the amount allocated to the convertible
      loan would not be bifurcated.

(c)   Under APB Opinion 25 the repricing of outstanding stock options under a
      fixed price stock option plan results in these options being recognized as
      variable price options from the date of the modification until they are
      exercised, forfeited or expire. Accordingly, changes in the intrinsic
      value of the stock options from the modification date to the period end
      date would be recognized in the consolidated statements of loss as
      adjustments to general and administrative expense. For the year ended
      December 31, 2002, income would increase by $7,502 (2001 - decrease by
      $226,400; 2000 - $nil), as the market value of the Corporation's common
      shares at December 31, 2002 was higher than the revised exercise price.

(d)   As described in note 4, the Corporation has granted stock options to
      selected employees, directors and officers. For US GAAP purposes,
      Financial Accounting Standard ("FAS") 123, "Accounting for Stock-Based
      Compensation," requires that an enterprise recognize, or at its option,
      disclose the impact of the fair value of stock options and other forms of
      stock-based compensation cost by the intrinsic value method set out in
      Accounting Principles Board (APB) Opinion 25. As options are granted at
      exercise prices based on the market value of the Corporation's shares at
      the date of grant, there is no compensation expense relating to ABP
      Opinion 25. Had the Corporation followed FAS 123, there would be no
      material impact on the loss for the year or loss per common share.

New pronouncements

In August 2001, the Financial Accounting Standards Board approved FAS 144,
"Impairment of Long-Lived Assets." FAS 144 requires that in cases where
undiscounted expected cash flows associated with long-lived assets are less than
their carrying value, an impairment provision is recognized in an amount by
which the carrying value exceeds the estimated fair value of such assets. FAS
144 will be applicable for fiscal years beginning after December 15, 2003.


                                       53
<PAGE>

The adoption of this standard will not have any impact on the Corporation's
current financial position or results of operations; however, the impact of this
standard in future years could be material.

11. INCOME TAX LOSSES CARRIED FORWARD

The Corporation has incurred losses for Canadian income tax purposes in the
amount of approximately $3,925,585, which, together with accumulated resource
and equipment cost pools of approximately $803,719, may be carried forward to
offset future taxable income. The benefit, if any, of these income tax losses
and resource pool balances carried forward has not been reflected in the
accounts. The income tax losses carried forward expire as follows: 2006 -
$1,958,105; 2007 - $1,113,394; 2008 -$854,086; 2009 - $675,748. The resource
pool balances may be carried forward indefinitely.

12. COMPARATIVE INFORMATION

Certain amounts for prior years have been reclassified to conform to the current
year's presentation.

13. SUBSEQUENT EVENTs

a)    The Corporation entered into a Share Purchase Agreement dated March 11,
      2003 among Forum Pacific, Inc. ("Forum"), Mullins Group/ Eastmark Limited
      ("Mullins/Eastmark") and the Corporation, providing for the purchase by
      the Corporation of 66?% of the issued and outstanding shares of Forum
      Exploration, Inc., a Philippines corporation. The Share Purchase Agreement
      was amended by a Share Purchase Amending Agreement dated March 21, 2003.

      Forum Exploration, Inc. is the legal and beneficial holder of 100%
      interests in two upstream oil and gas contract areas in the Philippines.
      The first contract is a Geophysical Survey and Exploration Contract
      covering the Manila Bay area, and the second contract is a Service
      Contract covering the northern half of Cebu Island in the Philippines. The
      Corporation conducted extensive due diligence with respect to the
      corporate status of Forum Exploration, Inc., in addition to the status of
      the underlying assets, including the Geophysical Survey and Exploration
      Contract for Manila Bay and the Service Contract for Cebu Island. After
      extensive due diligence, it was determined that the Corporation would
      proceed with the acquisition, subject to certain deficiencies having been
      rectified. The deficiencies were rectified, and the Corporation decided to
      proceed.

      On April 28, 2003, the Corporation closed the acquisition of 125,000,000
      shares in the capital of Forum Exploration, Inc., representing 66?% of the
      issued and outstanding shares of Forum Exploration, Inc. The remaining
      33?% of the shares of Forum Exploration, Inc. was retained by Forum. The
      transfer of the 125,000,000 shares of Forum Exploration, Inc. to the
      Corporation was confirmed by final regulatory approval and transfer of
      Stock Certificates on May 23, 2003.

      The consideration to be paid by the Corporation for the acquisition of the
      125,000,000 shares of Forum Exploration, Inc. is to be the issuance of
      100,000,000 common shares of the Corporation at a deemed value of US$0.10
      per share for total consideration of US$10,000,000. While the issuance of
      the 100,000,000 common shares of the Corporation has been approved by the
      Board of Directors of the Corporation, and while the Corporation has
      received all of the consideration that is due, the Corporation awaits
      final confirmation and executed subscription forms from Mullins/Eastmark
      with respect to the treasury instructions for the issuance of the
      100,000,000 common shares of the Corporation.

b)    Subsequent to December 31, 2002 the Corporation announced a private
      placement of 20,000,000 common shares at US$0.10 per common share. The
      Corporation has received US$328,284 to date from the private placement.


                                       54
<PAGE>

ITEM 18. FINANCIAL STATEMENTS.

The Company has elected to report under Item #17.

ITEM 19. EXHIBITS

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 Statement"); *

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

2.1   Form of Warrant Agreement between Tracer Petroleum Corporation and
      Continental Stock Transfer and Trust Company, as Transfer Agent and
      Warrant Agent (incorporated by reference to Exhibit 4.1 to Amendment No. 2
      ("Amendment No. 2") to the Registration Statement); *

4.1   Production Sharing Contract, dated February 27, 1993, between Pertamina
      and PerminTracer Ltd. (incorporated by reference to Exhibit 10.3 to the
      Registration Statement); *

4.2   Assignment and Novation Agreement, dated July 31, 1992, among Rainbow
      Energy Ltd., Tracer Petroleum Corporation, Canada Northwest Energy Limited
      and Canada Northwest Energy (South Sumatra) Ltd. (incorporated by
      reference to Exhibit 10.4 to the Registration Statement); *

4.3   Agreement, dated June 6, 1994, between Spring Energy Ltd. and PerminTracer
      Petroleum Ltd. (incorporated by reference to Amendment No. 1); *

4.4   Association Agreement between Mullins Group and Tracer Petroleum
      Corporation, dated December 3, 1998.; *

4.5   Letter of Intent between eZuz.com, Inc and Tracer Petroleum Corporation,
      dated July 27, 1999; *

4.6   Asset Sale Agreement between Tradewinds Oil and Gas International, Ltd.
      and Tracer Petroleum Corporation, dated September 1, 1999; *

4.7   Option to Purchase Drilling Rig between Tracer Petroleum Corporation and
      Tradewinds Oil and Gas International, Ltd., dated December 3, 1999; *

4.8   Share Sale Agreement between Tracer Petroleum Corporation and Tradewinds
      Oil and Gas International, Ltd., dated September 1, 1999 ; *

4.9   Option Agreement between Tracer Petroleum Corporation and Transmeridian
      Exploration, Inc., dated March 31, 2000 ; *

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

4.11  Convertible Loan Agreement with Roc Oil Company Limited, dated May 22,
      2001; *

4.12  Tracer Canneft Joint Venture Agreement, dated February 3, 2002; *

4.13  Tracer Canneft Joint Venture Agreement Amendment, dated June 1, *


                                       55
<PAGE>

4.14  Amended Convertible Loan Agreement with Roc Oil Limited dated August 15,
      2001; *

4.15  Share Purchase Agreement dated March 11, 2003, as amended by agreements
      dated March 21, and April 2, 2003; (filed herewith)

4.16  Amendment dated March 21, 2003 to Share Purchase Agreement dated March 11,
      2003 as amended by an agreement dated April 2, 2003; (filed herewith)

4.17  Amendment dated April 2, 2003 to Share Purchase Agreement dated March 11,
      2003 as amended by agreement dated March 21, 2003; (filed herewith)

4.18  Code of Ethics. (filed herewith)

7.0   List of subsidiaries; *

10.0  Consent of Ernst & Young LLP (filed herewith).

*     Previously Filed.


                                       56

<PAGE>

                                   SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing
on Form 20-F and that it has duly caused and authorized the undersigned to sign
this Annual Report on its behalf.

Date: July 23, 2003                              TRACER PETROLEUM CORPORATION
                                              ----------------------------------
                                                         (Registrant)


                                                      /s/ Larry W. Youell
                                              ----------------------------------
                                                            President


                                       57

<PAGE>

Certifications

I, Larry Youell, certify that:

1. I have reviewed this annual report on Form 20-F of Tracer Petroleum
Corporation.

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this annual report;

4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a. designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including it consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;

b. evaluated the effectiveness of the registrant's disclosure controls and
procedures as a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

c. presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a. all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b. any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control; and

6. The registrant's other certifying officer and I have indicated in this annual
report whether or not there were significant change in internal controls or I
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date:  July 23, 2003

                                         s/Larry Youell
                                         Chairman and Chief Executive Officer


                                       58
<PAGE>

I, David Thompson, certify that:

1. I have reviewed this annual report on Form 20-F of Tracer Petroleum
Corporation.

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this annual report;

4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a. designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including it consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;

b. evaluated the effectiveness of the registrant's disclosure controls and
procedures as a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

c. presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

a. all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b. any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control; and

6. The registrant's other certifying officer and I have indicated in this annual
report whether or not there were significant change in internal controls or I
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

Date: July 23, 2003

                             s/ David Thompson
                            Chief Financial Director


                                       59
<PAGE>

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

      In connection with the periodic report of Tracer Petroleum
Corporation.(the "Company") on Form 20-F for the year ending December 31, 2002
as filed with the Securities and Exchange Commission on the date hereof (the
"Report"), I, David M. Thompson, Chief Financial Officer of the Company,
certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the
Sarbanes-Oxley Act of 2002, that:

      (1)   The Report fully complies with the requirements of Section 13(a) or
            Section 15(d) of the Securities Exchange Act of 1934; and

      (2)   The information contained in the Report fairly presents, in all
            material respects, the financial condition and results of operations
            of the Company.

Date: July 23, 2003                      s/ David Thompson

In connection with the periodic report of Tracer Petroleum Corporation.(the
"Company") on Form 20-F for the year ending December 31, 2002 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Larry
W. Youell, Chief Executive Officer of the Company, certify, pursuant to 18
U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of
2002, that:

      (1)   The Report fully complies with the requirements of Section 13(a) or
            Section 15(d) of the Securities Exchange Act of 1934; and

      (2)   The information contained in the Report fairly presents, in all
            material respects, the financial condition and results of operations
            of the Company.

Date: July 23, 2003                      s/ Larry Youell


                                       60
<PAGE>

                          TRACER PETROLEUM CORPORATION

                            ANNUAL REPORT ON FORM 20F

                               FOR THE YEAR ENDED

                                DECEMBER 31, 2002

                                  EXHIBIT INDEX

4.15  Share Purchase Agreement dated March 11, 2003, as amended by agreements
      dated March 21, and April 2, 2003

4.16  Amendment dated March 21, 2003 to Share Purchase Agreement dated March 11,
      2003 as amended by an agreement dated April 2, 2003; (filed herewith)

4.17  Amendment dated April 2, 2003 to Share Purchase Agreement dated March 11,
      2003 as amended by agreement dated March 21, 2003; (filed herewith)

4.18  Code of Ethics. (filed herewith)

10.1  Consent of Independent Chartered Accountants.


                                       61