---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-QSB

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended**March 31,
2007**

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

For the transition period from ______________ to
______________

Commission file number **000-52025**

PRIMEGEN ENERGY CORPORATION(Name of small business issuer as in its charter)

|Nevada                                           | 98-0502435                       
|------------------------------------------------ | ---------------------------------
|(State or other jurisdiction of incorporation or | (IRS Employer Identification No.)
|organization)                                    |                                  

Suite 900, 3625 N. Hall Street, Dallas, TX 75219-5106(Address of principal executive offices)

(214) 459-1217(Issuers telephone number)

Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12 months
(or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past
90 days. Yes [X] No [   ]

APPLICABLE ONLY TO CORPORATE REGISTRANTS

As of May 18, 2007, there were 37,590,000 shares of the issuers
common stock and outstanding, par value $0.00001.

Transitional Small Business Disclosure Format (Check one): Yes
[   ] No [X]

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). (Check one): Yes [ 
 ] No [X]

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- 2 -

PART I - FINANCIAL INFORMATION





Item 1. Financial Statements.

The accompanying unaudited financial statements have been
prepared in accordance with the instructions to Form 10-QSB and Item 310(b) of
Regulation S-B, and, therefore, do not include all information and footnotes
necessary for a complete presentation of financial position, results of
operations, cash flows, and stockholders equity in conformity with generally
accepted accounting principles. In the opinion of management, all adjustments
considered necessary for a fair presentation of the results of operations and
financial position have been included and all such adjustments are of a normal
recurring nature. Operating results for the nine and three months ended March
31, 2007 are not necessarily indicative of the results than can be expected for
the year ended June 30, 2007.

---

PRIMEGEN ENERGY CORPORATION(An
Exploration Stage Company)

Audited Financial Statements (Expressed in U.S. Dollars)

March 1, 2007

|Index                                              | Page Number
|-------------------------------------------------- | -----------
|                                                   |            
|Balance
      Sheets                               | F-1        
|                                                   |            
|Statement
      of Changes in Stockholders Equity | F-2-3      
|                                                   |            
|Statements
      of Operations                     | F-4        
|                                                   |            
|Statements
      of Cash Flows                     | F-5        
|                                                   |            
|Notes
      to Financial Statements                | F-6-16     

---

PRIMEGEN ENERGY CORPORATION (An Exploration Stage
Company)Balance Sheets March 31, 2007 and June 30,
2006 (Expressed in U.S. Dollars)

|Unaudited                                           |   | March 31, 2007 |   |   | June 30, 2006 |  
|--------------------------------------------------- | - | -------------- | - | - | ------------- | -
|                                                    |   |                |   |   |               |  
|ASSETS                                              |   |                |   |   |               |  
|Current                                             |   |                |   |   |               |  
|Cash                                                | $ | 150            |   | $ | 96,018        |  
|                                                    |   |                |   |   |               |  
|Total current assets                                |   | 150            |   |   | 96,018        |  
|                                                    |   |                |   |   |               |  
|Exploration costs                                   |   | 675,000        |   |   | -             |  
|Oil and Gas
      properties                        |   | 2,500,000      |   |   | -             |  
|Total Assets                                        | $ | 3,175,150      |   | $ | 96,018        |  
|                                                    |   |                |   |   |               |  
|                                                    |   |                |   |   |               |  
|                                                    |   |                |   |   |               |  
|                                                    |   |                |   |   |               |  
|LIABILITIES                                         |   |                |   |   |               |  
|Current                                             |   |                |   |   |               |  
|Accounts payable and accrued expenses               | $ | 228,647        |   | $ | 243           |  
|Due to a related party                              |   | 113,082        |   |   | 43,081        |  
|Interest payable                                    |   | 122,904        |   |   | -             |  
|Loans Payable                                       |   | 3,374,980      |   |   | -             |  
|Total current
      liabilities                     |   | 3,839,613      |   |   | 43,324        |  
|                                                    |   |                |   |   |               |  
|Total                                               | $ | 3,839,613      |   | $ | 43,324        |  
|Liabilities                                         |   |                |   |   |               |  
|                                                    |   |                |   |   |               |  
|STOCKHOLDERS EQUITY                                |   |                |   |   |               |  
|Share capital                                       |   |                |   |   |               |  
|Authorized:                                         |   |                |   |   |               |  
|Preferred stock $0.001 par value 100,000,000 shares |   |                |   |   |               |  
|authorized                                          |   |                |   |   |               |  
|None issued, allotted and outstanding:              |   | -              |   |   | -             |  
|                                                    |   |                |   |   |               |  
|Common stock $0.00001 par value, 1,500,000,000      |   |                |   |   |               |  
|shares authorized                                   |   |                |   |   |               |  
|Issued, allotted and outstanding:                   |   |                |   |   |               |  
|37,590,000 shares of
      common stock             |   | 376            |   |   | 526           |  
|Additional paid-in capital                          |   | 100,740        |   |   | 100,590       |  
|Deficit accumulated during exploration stage        |   | (765,579       | ) |   | (48,422       | )
|                                                    |   |                |   |   |               |  
|Total stockholders equity                          |   | (664,463       | ) |   | 52,694        |  
|                                                    |   |                |   |   |               |  
|Total liabilities and stockholders equity          | $ | 3,175,150      |   | $ | 96,018        |  

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

---

|PRIMEGEN ENERGY CORPORATION                                      |            
|---------------------------------------------------------------- | -----------
|(An Exploration Stage Company)                                   |            
|Statement of Changes in Stockholders'
      Deficiency           |            
|For the periods May 23, 2005 (Inception) to March
      31, 2007 | Page 1 of 2
|(Expressed in
      U.S. Dollars)                                |            
|Unaudited                                                        |            

Deficit
      
      
      TotalAccumulated
      
      
      Stock-Additional
      
      
      DuringCommon
        stock
      
      
      paid-in
      
      
      Exploration
      
      
      holders'Shares
      
      
      Amount
      
      
      capital
      
      
      Stage
      
      
      (deficiency)Common stock issued to founders for cash($0.00001 per share) May 25, 2005
      
      75,000,000
      
      $
      750
      
      
      
      
      $
      (700
      )
      $
      50- net loss May 23,
        2005 to June 30, 2005
      
      
      
      
      
      
      
      
      
      $
      (4,322
      )
      $
      (4,322
      )Balance, June 30, 2005
      
      75,000,000
      
      $
      750
      
      $
      -
      
      $
      (5,022
      )
      $
      (4,272
      )


The accompanying notes are an integral part of these
financial statements.
           On July 18,
2006 a forward split of (15) new for (1) old common shares was effected. Amounts
above have been
restated.           On
November 2, 2006 15,000,000 common shares were cancelled

---

|PRIMEGEN ENERGY CORPORATION                                     |            
|--------------------------------------------------------------- | -----------
|(An Exploration Stage Company)                                  |            
|Statement of Changes in Stockholders' Deficiency                |            
|For the period May 23, 2005 (Inception) to March 31,
      2007 | Page 2 of 2
|(Expressed in
      U.S. Dollars)                               |            
|Unaudited                                                       |            

DeficitAccumulated
      
      
      TotalAdditional
      
      
      During
      
      
      Stock-Common
        stock
      
      
      paid-in
      
      
      Exploration
      
      
      holders'Shares
      
      
      Amount
      
      
      capital
      
      
      Stage
      
      
      (deficiency)Balance, June 30, 2005
      75,000,000
      
      $
      750
      
      $
      -
      
      $
      (5,022
      )
      $
      (4,272
      )Common stock issued for cash at $0.10 per
        share on March 14, 2006
      15,090,000
      
      $
      151
      
      $
      100,590
      
      $
      (141
      )
      $
      100,600Common Stock cancelled June 21, 2006
      (37,500,000
      )
      $
      (375
      )
      
      
      
      $
      350
      
      $
      (25
      )- net loss year ended June 30, 2006
      
      
      
      
      
      
      
      
      $
      (43,609
      )
      $
      (43,609
      )Balance, June 30, 2006
      52,590,000
      
      $
      526
      
      $
      100,590
      
      $
      (48,422
      )
      $
      52,694-
        net loss period ended September 30, 2006
      
      
      
      
      
      
      
      
      $
      (273,574
      )
      $
      (273,574
      )Balance, September 30, 2006
      52,590,000
      
      $
      526
      
      $
      100,590
      
      $
      (321,996
      )
      $
      (220,880
      )Common Stock cancelled November 2, 2006
      (15,000,000
      )
      $
      (150
      )
      
      150
      
      
      
      
      
      --
        net loss period ended December 31, 2006
      
      
      
      
      
      
      
      
      $
      (196,988
      )
      $
      (196,988
      )Balance, December 31, 2006
      37,590,000
      
      $
      376
      
      
      100,740
      
      $
      (518,984
      )
      
      (417,868
      )-
        net loss period ended March 31, 2007
      
      
      
      
      
      
      
      
      $
      (246,595
      )
      $
      (246,595
      )Balance, March 31, 2007
      37,590,000
      
      $
      376
      
      $
      100,740
      
      $
      (765,579
      )
      $
      (664,463
      )


**The accompanying notes are an integral part of these
financial
statements.**          
On July 18, 2006 a forward split of (15) new for (1) old common shares was
effected. Amounts above have been restated.

---

PRIMEGEN ENERGY CORPORATION(An
Exploration Stage Company) Statements of Operations
(Expressed in U.S. Dollars)

UnauditedFromInception Date of
    
    
      For the nine
    
    
    For the nine
    
    
      For the three
    
    
    For the threeMay 23, 2005
    
    
      months ended
    
    
    months ended
    
    
      Months ended
    
    
    Monthsto Period Ended
    
    
      March 31, 2007
    
    
    March 31, 2006
    
    
      March 31, 2007
    
    
    ended MarchMarch 31, 2007
    
    
      
    
    
    
    
    
      
    
    
    31, 2006Operating ExpensesAudit and accounting fees
    $
      41,107
    
    
      29,120
    
    
    9,486
    
    
      3,499
    
    
    1,266Bank charges and interest
    
      1,209
    
    
      535
    
    
    593
    
    
      22
    
    
    392Consulting fees
    
      275,000
    
    
      275,000
    
    
    -
    
    
      172,500
    
    
    -Office costs
    
      2,749
    
    
      2,026
    
    
    391
    
    
      1,722
    
    
    79Investor relations
    
      33,680
    
    
      33,680
    
    
    -
    
    
      2,480
    
    
    -Legal fees
    
      50,950
    
    
      25,709
    
    
    10,241
    
    
      268
    
    
    -Filing fees
    
      5,357
    
    
      2,769
    
    
    1,290
    
    
      10
    
    
    1,000Management fees
    
      12,500
    
    
      12,500
    
    
    -
    
    
      12,500
    
    
    -Rent
    
      8,634
    
    
      8,634
    
    
    -
    
    
      2,970
    
    
    -Travel expenses
    
      4,923
    
    
      4,301
    
    
    622
    
    
      -
    
    
    257Operating (loss) for the Period
    $
      436,108
    
    $
      394,274
    
    $
    22,623
    
    $
      195,971
    
    $
    2,994Other income
      (loss)Exploration costs
    
      201,531
    
    
      195,433
    
    
    -
    
    
      -
    
    
    -Interest expense
    
      127,450
    
    
      127,450
    
    
    -
    
    
      50,624
    
    
    -Net (loss) for the Period
    $
      (765,089
    )
    $
      (717,157
    )
    $
    (22,623
    )
    $
      (246,595
    )
    $
    (2,994
    )LOSS PER SHARE  BASIC AND FULLY DILUTED
    
      
    
    $
      (0.02
    )
    
    (0.00
    )
    $
      (0.01
    )
    $
    (0.00
    )WEIGHTED AVERAGE NUMBER OF OUTSTANDING COMMON SHARES - BASIC
        and FULLY DILUTED
    
      
    
    
      44,433,066
    
    
    76,676,655
    
    
      37,590,000
    
    
    80,025,000


On July 18, 2006 a forward split of (15) new for (1) old common
  shares was effected. Weighted average amounts above have been restated.

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

---

PRIMEGEN ENERGY CORPORATION(An
Exploration Stage Company) Statements of Cash Flows
(Expressed in U.S. Dollars)

|Unaudited                                   |   | From Inception Date |   |   | For the nine    |   |   | For the nine month |  
|------------------------------------------- | - | ------------------- | - | - | --------------- | - | - | ------------------ | -
|                                            |   | of May 23, 2005 to  |   |   | month Period    |   |   | Period Ended March |  
|                                            |   | Period Ended        |   |   | Ended March 31, |   |   | 31,                |  
|                                            |   | March 31, 2007      |   |   |                 |   |   |                    |  
|                                            |   |                     |   |   | 2006            |   |   | 2005               |  
|Cash Provided by (Used
      for) Operating |   |                     |   |   |                 |   |   |                    |  
|Activities                                  |   |                     |   |   |                 |   |   |                    |  
|Net income (loss) for the
      period      | $ | (765,089            | ) | $ | (717,157        | ) | $ | (22,623            | )
|Changes in non-cash working capital items   |   |                     |   |   |                 |   |   |                    |  
|Accounts payable and accrued                |   | 228,647             |   |   | 228,404         |   |   | (1,242             | )
|Interest payable                            |   | 122,904             |   |   | 122,904         |   |   |                    |  
|Cash (used in) operations                   |   | (413,538            | ) |   | (365,849        | ) |   | (23,865            | )
|Investing Activities                        |   |                     |   |   |                 |   |   |                    |  
|Increase in due from a
      related party  |   | 113,082             |   |   | 70,001          |   |   | 13,741             |  
|Cash provided by investing
      activities |   | 113,082             |   |   | 70,001          |   |   | 13,741             |  
|Financing Activities                        |   |                     |   |   |                 |   |   |                    |  
|Issuance of
      common stock              |   | 100,624             |   |   | -               |   |   | 100,600            |  
|Loans payable                               |   | 199,980             |   |   | 199,980         |   |   | -                  |  
|Cash provided by financing
      activities |   | 300,604             |   |   | 199,980         |   |   | 100,600            |  
|Cash Increase During the
      Period       |   | 150                 |   |   | (95,868         | ) |   | 90,476             |  
|Cash, Beginning of Period                   |   | -                   |   |   | 96,018          |   |   | 10,050             |  
|Cash and Equivalent, End of Period          | $ | 150                 |   | $ | 150             |   | $ | 100,526            |  
|SUPPLEMENTAL CASH FLOW INFORMATION          |   |                     |   |   |                 |   |   |                    |  
|Cash and Equivalents consist
      of:      |   |                     |   |   |                 |   |   |                    |  
|Cash                                        | $ | 150                 |   | $ | 150             |   | $ | 10,102             |  

The Company did not expend cash for interest or taxes during
the period from May 23, 2005 (inception) through March 31, 2007.

SUPPLEMENTAL INFORMATIONDuring the nine months ended March 31, 2007 the Company acquired interest
  in two properties totaling $3,175,000 by issuing promissory notes.

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

---

|PRIMEGEN ENERGY CORPORATION                                            
|-----------------------------------------------------------------------
|(An Exploration Stage Company)                                         
|Notes to Financial Statements                                          
|For the nine and three month period ended March 31, 2007
      and 2006
|(Expressed in
      U.S. dollars)                                      

|1. | Nature and Continuance of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Primegen Energy Corporation (The Company) was
      incorporated in the State of Nevada on May 23, 2005, as Maysia Resources
      Corporation and that is the date of inception. On August 25, 2006 the
      Company changed its name to Primegen Energy Corporation. The company is an
      Exploration Stage Company as defined by Statement of Financial Accounting
      Standard (SFAS) No. 7. The Company has acquired oil and gas interests in
      Kansas and Arkansas, as well as a mineral property located in the Province
      of British Columbia, Canada. The recoverability of resources from the
      properties will be dependent upon the discovery of economically
      recoverable reserves, and the ability of the Company to obtain necessary
      financing to satisfy the expenditure requirements under the agreements,
      and to complete the development of the property, and upon future
      profitable production or proceeds from the sale thereof.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Going Concern                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | These financial statements have been prepared in
      accordance with generally accepted accounting principles in the United
      States of America applicable to a going concern which assume that the
      Company will realize its assets and discharge its liabilities in the
      normal course of business. The Company has incurred losses of $765,089
      since inception and might not have sufficient working capital for the next
      twelve months. These factors create substantial doubt as to the ability of
      the Company to continue as a going concern. Realization values may be
      substantially different from the carrying values as shown in these
      financial statements should the Company be unable to continue as a going
      concern. Management is in the process of identifying sources for
      additional financing to fund the ongoing development of the Companys
      business.                                                        

|2. | Summary of Significant Accounting Policies
      Basis of Presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The unaudited consolidated financial information
      furnished herein reflects all adjustments which, in the opinion of
      management, are necessary to fairly state the Companys financial position
      and the results of its operations of Primegen Energy Corporation (the
      Company) for the periods presented. These unaudited financial statements
      should be read in conjunction with the Companys audited consolidated
      financial statements and notes thereto included in the Companys Form
      10-KSB for the fiscal year ended June 30, 2006. The Company assumes that
      the users of the interim consolidated financial information herein have
      read, or have access to, the audited financial statements for the
      preceding fiscal year, and that the adequacy of additional disclosure
      needed for a fair presentation may be determined in that context.
      Accordingly, footnote disclosure, which would substantially duplicate the
      disclosure contained in the Companys Form 10-KSB for the fiscal year
      ended June 30, 2006, has been omitted. The results of operations for the
      nine month period ended March 31, 2007 are not necessarily indicative of
      results for the entire year ending June 30,
2007.

| | (a)     | Cash and cash Equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |         | For purposes of the statement of cash flows cash
      equivalents usually consist of highly liquid investments which are readily
      convertible into cash with maturity of three months or less when
      purchased.                                                                                                                                                                                                                                                               
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | **(b)** | Use of Estimates and Assumptions                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |         | The preparation of financial statements in conformity
      with US generally accepted accounting principles requires management to
      make estimates and assumptions that affect the reported amounts of assets
      and liabilities and disclosure of contingent assets and liabilities at the
      date of the financial statements and the reported amounts of revenues and
      expenses during the reporting period. Actual results could differ from
      those estimates.

---

|PRIMEGEN ENERGY CORPORATION                                            
|-----------------------------------------------------------------------
|(An Exploration Stage Company)                                         
|Notes to Financial Statements                                          
|For the nine and three month period ended March 31, 2007 and
      2006
|(Expressed in U.S.
      dollars)                                      

|2. | Summary of Significant Accounting Policies(continued)
|-- | -----------------------------------------------------

| | (c) | Foreign Currency Translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | The Companys functional and reporting currency is the
      United States dollar. The financial statements of the Company are
      translated to United States dollars in accordance with SFAS No. 52
      Foreign Currency Translation. Monetary assets and liabilities
      denominated in foreign currencies are translated using the exchange rate
      prevailing at the balance sheet date. Gains and losses arising on
      translation or settlement of foreign currency denominated transactions or
      balances are included in the determination of income. Foreign currency
      transactions are primarily undertaken in Canadian dollars. The Company has
      not, to the date of these financials statements, entered into derivative
      instruments to offset the impact of foreign currency
  fluctuations.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (d) | Financial Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | The carrying value of cash, accounts payable and accrued
      liabilities and loan payable to related party approximate their fair value
      because of the short maturity of these instruments. The Companys
      operations are in Canada and virtually all of its assets and liabilities
      are giving rise to significant exposure to market risks from changes in
      foreign currency rates. The financial risk is the risk to the Companys
      operations that arise from fluctuations in foreign exchange rates and the
      degree of volatility of these rates. Currently, the Company does not use
      derivative instruments to reduce its exposure to foreign currency
    risk.                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (e) | Environmental Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | Environmental expenditures that relate to current
      operations are charged to operations or capitalized as appropriate.
      Expenditures that relate to an existing condition caused by past
      operations, and which do not contribute to current or future revenue
      generation, are charged to operations. Liabilities are recorded when
      environmental assessments and/or remedial efforts are probable, and the
      cost can be reasonably estimated. Generally, the timing of these accruals
      coincides with the earlier of completion of a feasibility study or the
      Companys commitments to a plan of action based on the then known
      facts.                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (f) | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     | Potential benefits of income tax losses are not
      recognized in the accounts until realization is more likely than not. The
      Company has adopted SFAS No. 109 as of its inception. Pursuant to SFAS No.
      109 the Company is required to compute tax asset benefits for net
      operating losses carried forward. Potential benefit of net operating
      losses have not been recognized in these financial statements because the
      Company cannot be assured it is more likely than not it will utilize the
      net operating losses carried forward in future
years.                                                                                                                                                                                                                                              

---

|PRIMEGEN ENERGY CORPORATION                                            
|-----------------------------------------------------------------------
|(An Exploration Stage Company)                                         
|Notes to Financial Statements                                          
|For the nine and three month period ended March 31, 2007 and
      2006
|(Expressed in U.S.
      dollars)                                      

|2. | Summary of Significant Accounting Policies(continued)
|-- | -----------------------------------------------------

| | (g) | Basic and Diluted Net Loss Per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     | The Company computes net income (loss) per share in
      accordance with SFAS No. 128, "Earnings per Share". SFAS No. 128 requires
      presentation of both basic and diluted earnings per share (EPS) on the
      face of the income statement. Basic EPS is computed by dividing net income
      (loss) available to common shareholders (numerator) by the weighted
      average number of shares outstanding (denominator) during the period.
      Diluted EPS gives effect to all dilutive potential common shares
      outstanding during the period using the treasury stock method and
      convertible preferred stock using the if-converted method. In computing
      Diluted EPS, the average stock price for the period is used in determining
      the number of shares assumed to be purchased from the exercise of stock
      options or warrants. Diluted EPS excludes all dilutive potential shares if
      their effect is anti dilutive.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (h) | Stock-based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     | In December 2004, the Financial Accounting Standards
      Board (FASB) Issued Statement of Financial Accounting Standard (SFAS) No.
      123 R, Share Based Payment. SFAS 123R is a revision of SFAS No. 123
      Accounting for Stock-based Compensation, and supersedes APB Opinion No.
      25, Accounting for Stock Issued to Employees and its related
      implementation guidance. SFAS 123R establishes standards for the
      accounting for transactions in which an entity exchanges its equity
      instruments for goods or services. It also addresses transactions in which
      an entity incurs liabilities in exchange for goods or services that are
      based on the fair value of the entitys equity instruments or that may be
      settled by the issuance of those equity instruments. SFAS 123R focuses
      primarily on accounting for transactions in which an entity obtains
      employee services in share-based payment transactions. SFAS 123R does not
      change the accounting guidance for share-based payment transactions with
      parties other than employees provided in SFAS 123 as originally issued and
      Emerging issues Task Force Issue No. 96-18, Accounting for Equity
      Instruments that are Issued to Other Than Employees for Acquiring, or in
      Conjunction with Selling, Goods or Services. SFAS 123R does not address
      the accounting for employee share ownership plans, which are subject to
      AICPA Statement of Position 93-6, Employers Accounting for Employee
      Stock Ownership Plans. SFAS 123R requires a public entity to measure the
      cost of employee services received in exchange for an award of equity
      instruments based on the grant-date fair value of the award (with limited
      exceptions). That cost will be recognized over the period during which an
      employee is required to provide service in exchange for the award  the
      requisite service period (usually the vesting period). SFAS 123R requires
      that the compensation cost relating to share-based payment transactions be
      recognized in financial statements. That cost will be measured based on
      the fair value of the equity or liability instruments issued. The scope of
      SFAS 123R includes a wide range of share-based compensation arrangements
      including share options, restricted share plans , performance-based
      awards, share appreciation rights, and employee share purchase plans.
      Public entities that file as small business issuers will be required to
      apply SFAS 123R in the first interim or annual reporting period that
      begins after December 15, 2005. The adoption of this standard is not
      expected to have a material effect on the Companys results of operations
      or financial position.

---

|PRIMEGEN ENERGY CORPORATION                                            
|-----------------------------------------------------------------------
|(An Exploration Stage Company)                                         
|Notes to Financial Statements                                          
|For the nine and three month period ended March 31, 2007 and
      2006
|(Expressed in U.S.
      dollars)                                      

|2. | Summary of Significant Accounting Policies(continued)
|-- | -----------------------------------------------------

| | (i) | Comprehensive Income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     | The Company has no items that represent other
      comprehensive income, and therefore no statement of comprehensive income
      is provided.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (j) | Concentration of Credit Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     | Financial instruments that potentially subject the
      Company to credit risk consist principally of cash. Cash is deposited with
      a high quality credit institution.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (k) | Recent Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     | In December 2004, FASB issued SFAS No. 153, Exchanges of
      Nonmonetary Assets- An Amendment of APB Opinion No. 29. The guidance in
      APB Opinion No. 29, Accounting for Nonmonetary Transactions, is based on
      the principle that exchanges of nonmonetary assets should be measured
      based on the fair value of the assets exchanged. The guidance in that
      Opinion, however, included certain exceptions to that principle. SFAS No.
      153 amends Opinion No. 29 to eliminate the exception for nonmonetary
      exchanges of similar productive assets and replaces it with a general
      exception for exchanges of nonmonetary assets that do not have commercial
      substance. A nonmonetary exchange has commercial substance if the future
      cash flows of the entity are expected to change significantly as a result
      of the exchange. The provisions of SFAS No. 153 are effective for
      nonmonetary asset exchanges occurring in fiscal periods beginning after
      June 15, 2005. Early application is permitted and companies must apply the
      standard prospectively. The adoption of this standard is not expected to
      have a material effect on the Companys results of operations or financial
      position.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (l) | Mineral property acquisition costs and deferred
      exploration expenditures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     | Mineral properties consist of exploration and mining
      concessions, options and contracts. Acquisition and leasehold cost and
      exploration costs are capitalized and deferred until such time as the
      property is put into production or the properties are disposed of either
      through sale or abandonment. These costs are evaluated at the end of each
      reporting period for indication of impairment. An impairment of $6,098 was
      charged to income to June 30, 2006, $2,000 thereof for the year ended June
      30, 2006, and $4,098 thereof for the year ended June 30, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     | If a property is put into production the related
      acquisition and exploration costs will be depreciated over the life of the
      property, based on estimated economic reserves. Proceeds received from the
      sale of any interest in property will first be credited against the
      carrying value of the property, with any excess included in operation for
      the period. If a property is abandoned, the property and deferred
      exploration costs will be written off to operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     | If a property is put into production the related
      acquisition and exploration costs will be depreciated over the life of the
      property, based on estimated economic reserves. Proceeds received from the
      sale of any interest in property will first be credited against the
      carrying value of the property, with any excess included in operation for
      the period. If a property is abandoned, the property and deferred
      exploration costs will be written off to
operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

---

|PRIMEGEN ENERGY CORPORATION                                            
|-----------------------------------------------------------------------
|(An Exploration Stage Company)                                         
|Notes to Financial Statements                                          
|For the nine and three month period ended March 31, 2007 and
      2006
|(Expressed in U.S.
      dollars)                                      

|2. | Summary of Significant Accounting Policies(continued)
|-- | -----------------------------------------------------

| | **(m)** | Oil and Gas Activities - Successful Efforts Method
      of Accounting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |         | On April 4, 2005, the FASB adopted FASB Staff Position
      FSP FAS 19-1 that amends Statement of Financial Accounting Standards No.
      19 (FAS 19), Financial Accounting and Reporting by Oil and Gas Producing
      Companies, to permit the continued capitalization of exploratory well
      costs beyond one year if (a) the well found a sufficient quantity of
      reserves to justify its completion as a producing well and (b) the entity
      is making sufficient progress assessing the reserves and the economic and
      operating viability of the project.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |         | The Company accounts for its crude oil exploration and
      natural gas development activities utilizing the successful efforts method
      of accounting. Under this method, costs of productive exploratory wells,
      development dry holes and productive wells and undeveloped leases are
      capitalized. Oil and gas lease acquisition costs are also capitalized.
      Exploration costs, including personnel costs, certain geological and
      geophysical expenses and delay rentals for oil and gas leases, are charged
      to expense as incurred. Exploratory drilling costs are initially
      capitalized, but charged to expense if and when the well is determined not
      to have found reserves in commercial quantities. The sale of a partial
      interest in a proved property is accounted for as a cost recovery and no
      gain or loss is recognized as long as this treatment does not
      significantly affect the unit-of-production amortization rate. A gain or
      loss is recognized for all other sales of producing properties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |         | The application of the successful efforts method of
      accounting requires managerial judgment to determine that proper
      classification of wells designated as developmental or exploratory which
      will ultimately determine the proper accounting treatment of the costs
      incurred. The results from a drilling operation can take considerable time
      to analyze and the determination that commercial reserves have been
      discovered requires both judgment and industry experience. Wells may be
      completed that are assumed to be productive and actually deliver oil and
      gas in quantities insufficient to be economic, which may result in the
      abandonment of the wells at a later date. Wells are drilled that have
      targeted geologic structures that are both developmental and exploratory
      in nature and an allocation of costs is required to properly account for
      the results. Delineation seismic incurred to select development locations
      within an oil and gas field is typically considered a development cost and
      capitalized, but often these seismic programs extend beyond the reserve
      area considered proved and management must estimate the portion of the
      seismic costs to expense. The evaluation of oil and gas leasehold
      acquisition costs requires managerial judgment to estimate the fair value
      of these costs with reference to drilling activity in a given area.
      Drilling activities in an area by other companies may also effectively
      condemn leasehold positions.
| |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |         | The successful efforts method of accounting can have a
      significant impact on the operational results reported when the Company is
      entering a new exploratory area in hopes of finding an oil and gas field
      that will be the focus of future development drilling activity. The
      initial exploratory wells may be unsuccessful and will be expensed.
      Seismic costs can be substantial which will result in additional
      exploration expenses when incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

---

|PRIMEGEN ENERGY CORPORATION                                            
|-----------------------------------------------------------------------
|(An Exploration Stage Company)                                         
|Notes to Financial Statements                                          
|For the nine and three month period ended March 31, 2007 and
      2006
|(Expressed in U.S.
      dollars)                                      

|3. | Mineral Property                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | The company owns a 100% interest in a mineral claim
      referred to as SSM mineral claim, comprising a total of 20 contiguous
      units and an area of 1,038 acres. The property is situated within the
      Burrell Creek and St. Annes Creek valleys on the southern end of the
      Franklin Gold Camp in the Greenwood Mining Division, British Columbia,
      Canada. The claim was acquired on June 7, 2005 by Mr. Saleem Mohamed on
      behalf of the Company for $10.00 and in accordance with US GAAP, as the
      value is impaired, it is expensed in the period in which the cost is
      incurred. The property is held in trust for the Company by Mr. Saleem
      Mohamed. The property is in good standing until March 15, 2007.                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|4. | Oil and Gas Properties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | The Company entered into agreements to acquire interests
      in various unproven oil and gas properties as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Fayetteville Shale in Arkansas                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | On August 14 we announced that the Company had acquired
      100% of the Class A Interest of FS Sub- participation #1 LP (the
      "Partnership") for and in consideration of the sum of $2,500,000.00,
      subject to formal ratification by the general partner. The Partnership is
      secondarily participating by sub participation in a 10% working interest
      (the "Working Interest") in approximately 30,000 acres in the Fayetteville
      Shale play located in Van Buren, Stone and Cleburne Counties, Arkansas.
      Under the sub participation, the lead participant has agreed to pay the
      Company's share of the 10% Working Interest proceeds received by the lead
      participant from the operator.                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | The participants in the play are presently consolidating
      their lease positions and plan to drill the first wells in early 2007. It
      is estimated that each well will be drilled at a cost of approximately $2
      million, or $200,000 net to the interest of the Company. The horizontal
      wells will likely be drilled on 80-acre spacing; fracture stimulated and,
      if successful, will produce natural gas. There is a major (16) gas
      pipeline within close proximity.                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | The Fayetteville Shale in Arkansas is now actively being
      developed for shale-gas analogous to the successful development of the
      Barnett shale, as many mid-continent gas producers consider this region to
      be the next promising unconventional shale-gas play. The Fayetteville
      Shale Play is currently being explored and developed by, among others,
      SouthWestern Energy (SECO) (with 880,000 acres), Chesapeake (1 million
      acres), Shell (100,000 acres), Maverick (100,000 acres) and Hallwood (with
      100,000 acres). SECO recently announced an increase their daily net gas
      production for the Q2 period of 50 MMCF per day, up from 20 MMCF in Q1.
      SECO now is producing from 148 wells (94 being horizontal) and it plans to
      drill 175-200 additional wells through 2007 (for a total investment of
      $325 Million).

---

|PRIMEGEN ENERGY CORPORATION                                            
|-----------------------------------------------------------------------
|(An Exploration Stage Company)                                         
|Notes to Financial Statements                                          
|For the nine and three month period ended March 31, 2007 and
      2006
|(Expressed in U.S.
      dollars)                                      

|4. | Oil and Gas Properties(continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Joes Landing in Yolo County, California                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | On August 11th, we announced that it has
      executed an agreement to acquire a 32.5% working interest in a natural gas
      play known as Joes Landing located near Sacramento, California.                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The Joes Landing Prospect is situated in Yolo County,
      California, approximately 10 miles northwest of the City of Sacramento.
      The 1,400 plus gross acres is targeting Upper Cretaceous Starkey and
      Markley gas potential above 5,000 feet. The estimated prospect potential
      was based on the interpretation of seismic tests and if all anomalies were
      productive was projected to possibly indicate 15 BCF gas. Analogous
      production near the prospect is the Sacramento Airport field that has an
      estimated recovery of 16.8 BCF. Other similar fields are the Rio Jesus,
      Karnak and Freemont Landing.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Production estimates on a successful gas well were
      between 1.5 and 2.5 MMCF per day on an I.P.R. basis. PrimeGen and working
      interest partners drilled the first gas well at Joes landing in
      approximately 3 weeks. The well was determined to be uneconomical and was
      plugged and abandoned in August 2006. Total cost of the well of $195,433
      was expensed and allocated to exploration costs as a dry hole.                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Kansas Petroleum Database                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | On October 31, 2006 The Company has acquired a 90%
      participation right for $675,000 to plays resulting from the analysis of a
      proprietary database encompassing the geological analysis of approximately
      one million acres located in central Kansas, covering parts of Ellsworth,
      Salina, McPherson, Reno, Harvey, Kingman, and Sedgwick counties. The
      detailed analysis of the data-base will be used to generate oil and gas
      drilling opportunities which may have been overlooked by traditional
      exploration methods.                                                                                      

---

|PRIMEGEN ENERGY CORPORATION                                            
|-----------------------------------------------------------------------
|(An Exploration Stage Company)                                         
|Notes to Financial Statements                                          
|For the nine and three month period ended March 31, 2007 and
      2006
|(Expressed in U.S.
      dollars)                                      

|5. | Preferred Stock  Terms and Conditions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The preferred stock may be divided into, and issued, in
      series. The Board of Directors of the Company is authorized to divide the
      authorized shares of preferred stock into one or more series, each of
      which shall be so designated as to distinguish the shares thereof from the
      shares of all other series and classes. The Board of Directors of the
      Company is authorized, within any limitations prescribed by law and this
      Article, to fix and determine the designations, rights, qualifications,
      preferences, limitations and terms of the shares of any series of
      preferred stock including but not limited to the
  following:

| | (a) | The rate of dividend, the time of payment of dividends,
      whether dividends are cumulative, and the date from which any dividends
      shall accrue;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (b) | Whether shares may be redeemed, and, if so, the
      redemption price and the terms and conditions of redemption;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (c) | The amount payable upon shares in the event of voluntary
      or involuntary liquidation;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (d) | Sinking fund or other provisions, if any, for the
      redemption or purchase of shares;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (e) | The terms and conditions on which shares may be
      converted, if the shares of any series are issued with the privilege of
      conversion;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (f) | Voting powers, if any, provided that if any of the
      preferred stock or series thereof shall have voting rights, such preferred
      stock or series shall vote only on a share for share basis with the common
      stock on any matter, including but not limited to the election of
      directors, for which such preferred stock or series has such rights; and,                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (g) | Subject to the foregoing, such other terms,
      qualifications, privileges, limitations, options, restrictions, and
      special or relative rights and preferences, if any, of shares or such
      series as the Board of Directors of the Company may, at the time so
      acting, lawfully fix and determine under the laws of the State of Nevada.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     | The Company shall not declare, pay or set apart for
      payment any dividend or other distribution (unless payable solely in
      shares of common stock or other class of stock junior to the preferred
      stock as to dividends or upon liquidation) in respect of common stock, or
      other class of stock junior the preferred stock, nor shall it redeem,
      purchase or otherwise acquire for consideration shares of any of the
      foregoing, unless dividends, if any, payable to holders of preferred stock
      for the current period (and in the case of cumulative dividends, if any,
      payable to holder of preferred stock for the current period and in the
      case of cumulative dividends, if any, for all past periods) have been
      paid, are being paid or have been set aside for payments, in accordance
      with the terms of the preferred stock, as fixed by the Board of Directors

---

|PRIMEGEN ENERGY CORPORATION                                            
|-----------------------------------------------------------------------
|(An Exploration Stage Company)                                         
|Notes to Financial Statements                                          
|For the nine and three month period ended March 31, 2007 and
      2006
|(Expressed in U.S.
      dollars)                                      

|5. | Preferred Stock  Terms and Conditions(continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | In the event of the liquidation of the Company, holders
      of preferred stock shall be entitled to receive, before any payment or
      distribution on the common stock or any other class of stock junior to the
      preferred stock upon liquidation, a distribution per share in the amount
      of the liquidation preference, if any, fixed or determined in accordance
      with the terms of such preferred stock plus, if so provided in such terms,
      and amount per share equal to accumulated and unpaid dividends in respect
      of such preferred stock (whether or not earned or declared) to the date of
      such distribution. Neither the sale, lease or exchange of all or
      substantially all of the property and assets of the Company, nor any
      consolidation or merger of the Company, shall be deemed to be a
      liquidation for the purposes of these terms and conditions
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|6. | Common Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | On July 11, 2006, we split our common shares on the basis
      of 15 for 1. As a result, our articles of incorporation were amended to
      increase our authorized common stock from 100,000,000 shares to
      1,500,000,000 shares. The par value of our common stock remained $0.00001
      per share. Our preferred stock was not affected by the split. Further, no
      shareholder approval was required or obtained pursuant to NRS 78.209.
      Prior to the stock split, there were 3,506,000 shares of common stock
      outstanding. After the stock split there were 52,590,000 shares of common
      stock outstanding. The record date for the split was July 18, 2006. The
      financial statements and notes have been changed to reflect the
      retroactive effect of the 15 to 1 forward stock split which has been
      accounted for as a stock dividend.                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|7. | Related Parties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | As at March 31, 2007, loans of $113,082 (June 30, 2006 -
      $43,081) are payable to related parties. These amounts are unsecured, bear
      no interest and have no specific terms of
repayment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

Short term loans
    
    March 31, 2007Non interest
      bearing and unsecuredSaleem Mohamed
    $
    43,082Glen Harder
    
    15,000Mike Mustafoglu
    
    15,000Gordon Samson
    
    15,000William Marshall
    
    25,000Total
    $
    113,082


|8. | Deferred Tax Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The Company has $765,089 in losses forward for income tax
      purposes at March 31, 2007. There are no current or deferred tax expenses
      for the period ended March 31, 2007, due to the Company's loss position.
      The Company has fully reserved for any benefits of these losses. The
      deferred tax consequences of temporary differences in reporting items for
      financial statement and income tax purposes are recognized, as
      appropriate. Realization of the future tax benefits related to the
      deferred tax assets is dependent on many factors, including the Company's
      ability to generate taxable income within the net operating loss carry
      forward period. Management has considered these factors in reaching its
      conclusion as to the valuation for financial reporting
  purposes.

---

|PRIMEGEN ENERGY CORPORATION                                            
|-----------------------------------------------------------------------
|(An Exploration Stage Company)                                         
|Notes to Financial Statements                                          
|For the nine and three month period ended March 31, 2007 and
      2006
|(Expressed in U.S.
      dollars)                                      

|8. | Deferred Tax Assets(continued)                                                                                                                                                                          
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                         
|   | The income tax effect of temporary differences comprising
      the deferred tax assets and deferred tax liabilities on the accompanying
      consolidated balance sheets is a result of the
following:

March
      31, 2007
    
    
    March
      31, 2006Deferred tax assets
    $
    765,089
    
    $
    15,109Valuation allowance
    $
    (765,089
    )
    $
    (15,109
    )Net
      deferred tax assets
    $
    -
    
    $
    -


A reconciliation between the statutory
federal income tax rate and the effective income rate of income tax expense for
the period ended March 31, 2007 is as follows:

March
      31, 2007
    
    
    March
      31, 2006Statutory federal income tax
    
    34.00%
    
    
    34.00%rateValuation allowance
    
    (34.00%
    )
    
    (34.00%
    )Effective income tax rate
    
    0.00%
    
    
    0.00%


|   | The benefit of a potential reduction in future income
      taxes has not been recorded as an asset at March 31, 2007 as it is reduced
      to nil by a valuation allowance, due to uncertainty of the application of
      losses. The company has net operating losses carried forward of
      $765,089.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                             
|9. | Demand Loans                                                                                                                                                                                                                                                                                                

March 31, 2007
    
    
    March 31, 2006i. Interest at 6% per
      annum:- Aquilla Finance Capital Ltd.
    
    199,980
    
    
    -- Issue Date July 26, 2006ii. Interest at 8% per annum:- Aquilla Finance Capital Ltd.
    
    675,000
    
    
    -- Issue Date October 30, 2006iii. Interest at 6% per
      annum:-
      Projection Capital Ltd.
    
    2,500,000
    
    
    -- Issue Date
      August 11, 2006Total
    $
    3,374,980
    
    $
    -


As at March 31, 2007, $122,904 has been
accrued in interest expense on these notes.

|10. | Oil and Gas Activities
|--- | ----------------------

Property
    Reserve
    
    Revenue
    
    
    Amortization
    
    
    Capitalized
    
    
    Dry HoleCostsJoes
    Unproved
    $
    -
    
    $
    -
    
    $
    -
    
    $
    195,433Fayetteville
    Unproved
    
    -
    
    
    -
    
    
    2,500,000
    
    
    -Kansas
    Unproved
    
    
    
    
    
    
    
    675,000$
    -
    
    $
    -
    
    $
    3,175,000
    
    $
    195,433


On April 4, 2005, the FASB adopted FASB
Staff Position FSP FAS 19-1 that amends Statement of Financial Accounting
Standards No. 19 (FAS 19), Financial Accounting and Reporting by Oil and Gas
Producing Companies, to permit the continued capitalization of exploratory well
costs beyond one year if (a) the well found a sufficient quantity of reserves to
justify its completion as a producing well and (b) the entity is making
sufficient progress assessing the reserves and the economic and operating
viability of the project. Once exploration activities demonstrate that
sufficient quantities of commercially producible reserves have been discovered,
continued capitalization is dependent on project reviews, which take place at
least annually, to ensure that satisfactory progress toward ultimate development
of the reserves is being achieved. Exploratory well costs not meeting these
criteria are charged to expense. The Company's properties have been held less
than one year and progress in their development continues. Consequently the
Company does not believe that the application of FSP FAS 19-1 will have a
material impact on its financial statements. Costs of unproved properties will
be assessed periodically to determine if an impairment loss should be
recognized.

11.       Subsequentevents

Subsequent to December 31, 2006 certain
  shareholders agreed to transfer 7,866,000 shares of common stock owned by them
  to a consultant. The Consultant resigned effective January 26, 2007 and no shares
  of common stock were transferred.

---

Item
2.            Plan of
Operation.

FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements.
These statements relate to future events or our future financial performance. In
some cases, you can identify forward-looking statements by terminology such as
may, should, expects, plans, anticipates, believes, estimates,
predicts, potential or continue or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors, including the risks in the
section entitled Risk Factors, that may cause our or our industrys actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Except as required by
applicable law, including the securities laws of the United States, we do not
intend to update any of the forward-looking statements to conform these
statements to actual results.

Our financial statements are stated in United States dollars
and are prepared in accordance with United States Generally Accepted Accounting
Principles. In this quarterly report, unless otherwise specified, all dollar
amounts are expressed in United States dollars. All references to common
shares refer to the common shares in our capital stock.

As used in this quarterly report, the terms we, us, our
company, and Primegen means Primegen Energy Corporation, a Nevada
corporation, unless otherwise indicated.

Corporate History

We were incorporated in the State of Nevada on May 23, 2005
with authorized capital of 100,000,000 shares of common stock with a par value
of $0.00001 and 100,000,000 shares of preferred stock with a par value of
$0.00001.

One July 11, 2006, we split our common shares on the basis of
15 for 1. As a result, our articles of incorporation were amended to increase
our authorized common stock from 100,000,000 shares to 1,500,000,000 shares. The
par value of our common stock remained $0.00001 per share.Our preferred
stock was not affected by the split. Further, no shareholder approval was
required or obtained pursuant to NRS 78.209. Prior to the stock split, there
were 3,506,000 shares of common stock outstanding. After the stock split there
were 52,590,000 shares of common stock outstanding. The record date for the
split was July 18, 2006. The financial statements and notes have been changed to
reflect the retroactive effect of the 15 to 1 forward stock split which has been
accounted for as a stock dividend. On November 2, 2006, 15,000,000 common shares
were cancelled and 37,590,000 common shares are outstanding. Our trading symbol
on the OTC Bulletin Board was changed from MAYR to MYAR in connection with
the forward stock split. On August 25, 2006 we changed our name to Primegen
Energy Corporation and our trading symbol on the OTC Bulletin Board was changed
to PGNE on September 15, 2006.

Our Current Business

We are in the resource business. To date, we have not derived
any income from any of the resource properties in which we have and are
acquiring interests. We are currently in the process of our phase 1 program on
our SSM Project.

We are in the business of the acquisition, and exploration of
properties with a view to exploiting any resource deposits we discover that
demonstrate economic feasibility.

Our plan of operation is to conduct exploration work on our properties
  in order to ascertain whether they possess economic quantities of gold, or oil
  and gas. There can be no assurance that economic deposits or reserves, exist
  on our properties until appropriate exploration work is done and an economic
  evaluation based on such work concludes that production of resources from the
  properties is economically feasible.

---

Resource property exploration is typically conducted in phases.
  Each subsequent phase of exploration work is recommended by a geologist based
  on the results from the most recent phase of exploration. Once we have completed
  each phase of exploration, we will make a decision as to whether or not we proceed
  with each successive phase based upon the analysis of the results of that program.
  Our directors will make this decision based upon the recommendations of the
  independent geologist and the oil and gas property operators who oversees the
  program and record the results.

There is no assurance that a commercially viable resource
exists on any of our properties; further exploration is required before we can
evaluate whether any exist and, if so, whether it would be economically and
legally feasible to develop or exploit those resources. Even if we complete an
exploration program and we are successful in identifying a mineral deposit, we
would be required to spend substantial funds on further drilling and engineering
studies before we could know whether that mineral or oil and gas deposits would
constitute a reserve (a reserve is a commercially viable mineral deposit).
Please refer to the section entitled Risk Factors, beginning at page 5 of our
annual report on Form 10-KSB, for additional information about the risks of
mineral and resource exploration.

Mineral Property

The SSM Property lies within the Interior Wet Belt
biotic zone and experiences between 25" and 35" of precipitation annually of
which about 30% may occur as a snow equivalent. The summers can experience hot
squally weather while the winters may be cold and last from November through
March.

The valley bottoms are thick conifer forest covered which
accounts for the very active logging industry in the area. Mining holds an
historical and contemporary place in the development and economic well being of
the area.

The Town of Grand Forks, British Columbia which lies 34 miles
by road south of the mineral claim offers the necessary infrastructure required
to base and carry out an exploration program.

The property is located in the south-central part of the
Interior Plateau at the southern end of the Monashee Mountains. The
physiographic setting of the property can be described as rounded, mountainous
terrain that has been surficially altered both by the erosional and depositional
(drift cover) effects of glaciation. The broad north-south trending valleys,
i.e. the Granby, Burrell and Bluejoint all exhibit the U-shaped, glacial eroded
cross section. Drift cover in the valleys may vary considerably.

The property is recorded as follows:

|Tenure No. | Document Description | Date of Recording | Date of Expiration
|---------- | -------------------- | ----------------- | ------------------
|           |                      |                   |                   
|508964     | SSM                  | March 14, 2005    | March 14, 2007    

In order to maintain this property we must pay a fee of CND$100
per year per claim.

Oil and Gas Properties

The Fayetteville Shale Prospect in Arkansas is
  now actively being developed for shale-gas analogous to the successful development
  of the Barnett shale, as many mid-continent gas producers consider this region
  to be the next promising unconventional shale-gas play. The Fayetteville Shale
  Play is currently being explored and developed by, among others, SouthWestern
  Energy (SECO) (with 880,000 acres), Chesapeake (1 million acres),
  Shell (100,000 acres), Maverick (100,000 acres) and Hallwood (with 100,000 acres).
  SECO recently announced an increase their daily net gas production for the Q2
  period of 50 MMCF per day, up from 20 MMCF in Q1. SECO now is producing from
  148 wells (94 being horizontal) and it plans to drill 175-200 additional wells
  through 2007 (for a total investment of $325 Million).

---

We acquired 100% of the Class A Interest of FS Sub-participation
  #1 LP (the "Partnership") for and in consideration of the sum of $2,500,000.00,
  subject to formal ratification by the general partner. This ultimately completed
  by an Instrument of Accession and Amendment dated effective November 2, 2006.The
  Partnership is secondarily participating by sub participation in a 10% working
  interest (the "Working Interest") in approximately 30,000 acres in the Fayetteville
  Shale play located in Van Buren, Stone and Cleburne Counties, Arkansas. Under
  the sub participation, the lead participant has agreed to pay our share of the
  10% Working Interest proceeds received by the lead participant from the operator.

The Joes Landing Prospect is situated in Yolo County,
California, approximately 10 miles northwest of the City of Sacramento. The
1,400 plus gross acres is targeting Upper Cretaceous Starkey and Markley gas
potential above 5,000 feet. The estimated prospect potential was based on the
interpretation of seismic and if all anomalies were productive was projected to
possibly indicate 15 BCF gas. Analogous production near the prospect is the
Sacramento Airport field that has an estimated recovery of 16.8 BCF. Other
similar fields are the Rio Jesus, Karnak and Freemont Landing.

Production estimates on a successful gas well were between 1.5
and 2.5 MMCF per day on an I.P.R. basis. PrimeGen and working interest partners
drilled the first gas well at Joes landing in approximately 3 weeks. The well
was determined to be uneconomical and was plugged and abandoned in August 2006.
Total cost of the well of $195,433 was expensed and allocated to exploration
costs as a dry hole.

The Kansas Prospect is situated in central Kansas,
covering parts of Ellsworth, Salina, McPherson, Reno, Harvey, Kingman, and
Sedgwick counties. We have acquired a 90% participation right to plays resulting
from the analysis of a proprietary database encompassing the geological analysis
of approximately one million acres located in central Kansas. The detailed
analysis of the data-base will be used to generate oil and gas drilling
opportunities which may have been overlooked by traditional exploration methods.

Plan of Operation and Cash Requirements

We anticipate that we will expend approximately $9,600,000
during the twelve-month period ending December 31, 2007 to develop our current
portfolio of properties, and for working capital. Our priorities are the
identification and funding of our working interest Fayetteville drill targets
and the Phase 1 and 2 program analysis of the Kansas data for identification of
potential lease acquisitions and subsequent drill targets. These expenditures
are broken down as follows:

Major expenditures expected for the next 12 months include the
following:

Exploration and drilling:
    $
    7,000,000Mining Phase 1 & 2:
    
    100,000General working capital:
    
    2,500,000Total:
    $
    9,600,000


Management Discussion and Analysis

Corporate DiscussionDuring the
quarter ended March 31, 2007, the Company continued to seek funding for property
related cash calls, funding commitments and general operating capital. Natural
gas prices remained strong and management continued to focus on gas project
interests in and around both Fayatteville, Arkansas, and Manyberries, Alberta.
On January 26, 2007, Mr. Mike Mustafoglu resigned as the Companys President,
Chief Executive Officer and from the board of directors for personal reasons. On
March 13, 2007, Mr. Gordon Samson resigned as the Companys President, Chief
Executive Officer and from the board of directors for personal reasons. Mr.
William S. Marshall became acting President and CEO. Mr. Glen D. Harder remains
a director.

---

Mineral Property The Company owned a 100%
interest in a mineral claim referred to as SSM mineral claim, comprising a total
of 20 contiguous units and an area of 1,038 acres. The property is situated
within the Burrell Creek and St. Annes Creek valleys on the southern end of the
Franklin Gold Camp in the Greenwood Mining Division, British Columbia, Canada.
The claim was acquired on June 7, 2005 by Mr. Saleem Mohamed on behalf of the
Company for $10.00 and was allowed to expired on March 15, 2007.

Oil and GasProperties
The Company has entered into agreements to acquire interests in various
unproven oil and gas properties as follows:

Fayetteville Shale, ArkansasIn August 2006
the Company acquired 100% of the Class A Interest of FS Sub-participation #1 LP
(the "Partnership") for and in consideration of the sum of $2,500,000.00. The
Partnership is secondarily participating by sub participation in a 10% working
interest (the "Working Interest") in approximately 32,000 acres in the
Fayetteville Shale play located in Van Buren, Stone and Cleburne Counties,
Arkansas. Under the sub participation, the lead participant has agreed to pay
the Company's share of the 10% Working Interest proceeds received by the lead
participant from the operator.

The participants in the play are continuing to consolidate
their lease positions and now plan to drill the first wells in later Q2 or early
Q3 of 2007. Up to 20 wells are planned for the 12-month period following the
commencement of drilling operations. It is estimated that each well will be
drilled at a cost of approximately $2 million, or $200,000 net to the interest
of the Company. The horizontal wells will likely be drilled on 80-acre spacing;
fracture stimulated and, if successful, will produce natural gas.

Kansas Petroleum DatabaseIn or around
October 2006 the Company paid $675,000 to acquire a 90% participation right to
plays resulting from the analysis of a proprietary database encompassing the
geological analysis of approximately one million acres located in central
Kansas, covering parts of Ellsworth, Salina, McPherson, Reno, Harvey, Kingman,
and Sedgwick counties. The detailed analysis of the data-base will be used to
generate oil and gas drilling opportunities which may have been overlooked by
traditional exploration methods.

According to 3-D seismic analysis which appears to confirm RAM
anomalies, one of the areas of interest (Prospect 12) hosts what appears to be
a significant and previously undiscovered oil pool. In this regard, casing has
been set and this well is currently being drilled. The Companys interest in
this drilling program is 22.5% .

MB Gas Inc.In March 2007 the Company
completed and executed a definitive funding and revenue sharing agreement with
MB Gas Inc. ("MB"), a private Alberta oil and gas exploration company. PrimeGen
agreed to advance a loan (the "Loan") of up to $3 million to MB in return for
the assignment of revenue from MB's oil and gas operations. Loan advances will
be repaid from MB's revenues, as 75% to the Company and 25% to MB until payout;
thereafter 30% to the Company and 70% to MB in perpetuity, proportionally
reduced if less than the full Loan is advanced. PrimeGen has an option to loan
MB an additional $3 million (the "Option Loan") with similar payout terms and,
in such case, the ongoing revenue split will be 60% to PrimeGen and 40% to MB in
perpetuity. The proceeds from the Loan and Option Loan will be used to complete
the tie-in of certain gas wells, fund seismic surveys, and perform related
studies, exploration analyses, and general operations on other targeted
lands.

MB owns a majority interest in a sweet-sour gas processing
facility and pipeline located in the Province of Alberta that is linked to a
transporting pipeline that runs south to Encana's Hub near the U.S. - Canada
border. MB is presently connecting 3 Sawtooth formation natural gas wells (the
"Wells") owned and operated by Provident Energy Trust. This work is scheduled to
be completed within the next six months. Flow tests on the wells indicate that
they should produce a minimum of 1,300 Mcf per day when they are connected, of
which MB Gas will earn up to a 67.5% net revenue interest before payout (B.P.O.)
and 45.0% after payout (A.P.O.). Environmental assessments are currently being
conducted to allow MB to complete the ongoing connection of the wells to its
main pipeline.

MB also controls certain prospective lands in the area
targeting mostly middle and deeper gas-bearing formations. These are in
relatively close proximity to the pipeline system, and it is expected that the
gas from any new commercial grade discoveries made by MB on those lands together
with gas from a number of previously plugged gas wells in the area will be
carried in MB's pipeline.

---

Franklin Gas Field In the present quarter,
the Company determined that it would no longer acquire an interest in the
Franklin Gas Field in Sacramento, California. This was based in large part on
PrimeGens significant outstanding cash commitments respecting its other
projects.

Liquidity and Capital Resources

Cash and cash equivalents from inception have been insufficient
to provide the operating capital necessary to operate our company. The necessary
capital to operate our company was initially provided by the principals and
founders of our company in the form of both debt and capital stock issuances as
set forth in the financial statements incorporated herein. The working capital
necessary to operate our company and provide for acquisition capital came from
the proceeds of loans as previously disclosed.

As at March 31, 2007, we had a working capital deficiency of
$3,839,463 and our cash on hand was $150 compared to a working capital of
$52,694 and cash of $96,018 at June 30, 2006.

At March 31, 2007 our total assets were $3,175,150 which almost
entirely consists of working interest acquisitions, compared to total assets of
$96,018 as at June 30, 2006 comprised exclusively of cash.

At March 31, 2007 our total liabilities were $3,839,613
including $3,374,980 in short term 6% and 8% per annum one year loans compared
to total liabilities of $43,324 as at June 30, 2006.

During the nine month period ended March 31, 2007, we
capitalized our acquisition cost of our Fayetteville interest of $2,500,000, our
acquisition cost in the exploration costs of our Kansas interest of $675,000,
and expensed dry hole costs of $195,433 at Joes Landing.

During the period we executed 3 separate loan agreements for
$2,500,000 and $199,980, both with one year terms and with an interest rate at
6% per annum and one for $675,000 at a rate of 8% and a one year term. We expect
to repay these notes with generated cash flow or an operational financing.

Results of Operations

For the nine month period ended March 31, 2007 compared to the
three month period ended March 31, 2006.

We have had only limited operations, and havent yet realized
  any revenues from the sale of oil or gas or from any mineralization from any
  prospective lands. We have realized a net loss from operations of $765,089 since
  inception. The expensing of dry hole costs of $195,433 associated with our Joes
  Landing prospect accounts for approximately 25.5% of this loss.

Operating expenses for the nine month period ended March 31,
2007, totaled $394,274 not including exploration costs of $195,433 and interest
costs of $127,450. Operating expenses consist primarily of accounting,
consulting, investor relations, and legal fees. These four items total 92% of
total operating expenses.

Cash Requirements

We will require additional funds to implement our growth
strategy in exploration operations. These funds may be raised through equity
financing, debt financing, or other sources, which may result in further
dilution in the equity ownership of our shares. There is still no assurance that
we will be able to maintain operations at a level sufficient for an investor to
obtain a return on his investment in our common stock. Further, we may continue
to be unprofitable.

Going Concern

Due to our being an exploration stage company and not having
  generated revenues, in their Notes to our financial statements for the year
  ended June 30, 2006, our independent auditors included an explanatory paragraph
  regarding concerns about our ability to continue as a going concern.

---

We have historically incurred losses, and through December
  31, 2006 have incurred losses of $518,494 from our inception. Because of these
  historical losses, we will require additional working capital to develop our
  business operations. We intend to raise additional working capital through private
  placements, public offerings, bank financing and/or advances from related parties
  or shareholder loans.

The continuation of our business is dependent upon obtaining further financing and achieving a break even or profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity
interests of our current or future stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

There are no assurances that we will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from operations; or (2) obtain additional financing through either private placements, public offerings and/or bank
financing necessary to support our working capital requirements. To the extent that funds generated from operations and any private placements, public offerings and/or bank financing are insufficient, we will have to raise additional working
capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to us. If adequate working capital is not available we may not increase our operations.

These conditions raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and
classification of liabilities that might be necessary should we be unable to continue as a going concern.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States.  Preparing financial statements requires management to make estimates and assumptions that affect the
reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by managements application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions
involved with the following aspects of our financial statements is critical to an understanding of our financials.

In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates.

Recently Issued Accounting Standards

In December 2004, the Financial Accounting Standards Board
  (FASB) Issued Statement of Financial Accounting Standard (SFAS) No. 123 R, Share
  Based Payment. SFAS 123R is a revision of SFAS No. 123  Accounting
  for Stock-based Compensation, and supersedes APB Opinion No. 25, Accounting
  for Stock Issued to Employees and its related implementation guidance.
  SFAS 123R establishes standards for the accounting for transactions in which
  an entity exchanges its equity instruments for goods or services. It also addresses
  transactions in which an entity incurs liabilities in exchange for goods or
  services that are based on the fair value of the entitys equity instruments
  or that may be settled by the issuance of those equity instruments. SFAS 123R
  focuses primarily on accounting for transactions in which an entity obtains
  employee services in share-based payment transactions. SFAS 123R does not change
  the accounting guidance for share-based payment transactions with parties other
  than employees provided in SFAS 123 as originally issued and Emerging issues
  Task Force Issue No. 96-18, Accounting for Equity Instruments that are
  Issued to Other Than Employees for Acquiring, or in Conjunction with Selling,
  Goods or Services. SFAS 123R does not address the accounting for employee
  share ownership plans, which are subject to AICPA Statement of Position 93-6,
  Employers Accounting for Employee Stock Ownership Plans. SFAS
  123R requires a public entity to measure the cost of employee services received
  in exchange for an award of equity instruments based on the grant-date fair
  value of the award (with limited exceptions). That cost will be recognized over
  the period during which an employee is required to provide service in exchange
  for the award  the requisite service period (usually the vesting period).
  SFAS 123R requires that the compensation cost relating to share-based payment
  transactions be recognized in financial statements. That cost will be measured
  based on the fair value of the equity or liability instruments issued. The scope
  of SFAS 123R includes a wide range of share-based compensation arrangements
  including share options, restricted share plans , performance-based awards,
  share appreciation rights, and employee share purchase plans.

---

Public entities that file as small business issuers will be
  required to apply SFAS 123R in the first interim or annual reporting period
  that begins after December 15, 2005. The adoption of this standard is not expected
  to have a material effect on our results of operations or financial position.

In December 2004, FASB issued SFAS No. 153, Exchanges of Nonmonetary Assets- An Amendment of APB Opinion No. 29. The guidance in APB Opinion No. 29, Accounting for Nonmonetary Transactions, is based on the principle that
exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. The guidance in that Opinion, however, included certain exceptions to that principle. SFAS No. 153 amends Opinion No. 29 to eliminate the exception
for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of
the entity are expected to change significantly as a result of the exchange. The provisions of SFAS No. 153 are effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. Early application is permitted and
companies must apply the standard prospectively. The adoption of this standard is not expected to have a material effect on our results of operations or financial position.

On April 4, 2005, the FASB adopted FASB Staff Position FSP FAS 19-1 that amends Statement of  Financial Accounting Standards No. 19 (FAS 19), Financial Accounting and Reporting by Oil and Gas Producing Companies, to permit the continued
capitalization of exploratory well costs beyond one year if (a) the well found a sufficient quantity of reserves to justify its completion as a producing well and (b) the entity is making sufficient progress assessing the reserves and the economic
and operating viability of the project.

We account for our crude oil exploration and natural gas development activities utilizing the successful efforts method of accounting. Under this method, costs of productive exploratory wells, development dry holes and productive wells and
undeveloped leases are capitalized. Oil and gas lease acquisition costs are also capitalized. Exploration costs, including personnel costs, certain geological and geophysical expenses and delay rentals for oil and gas leases, are charged to expense
as incurred. Exploratory drilling costs are initially capitalized, but charged to expense if and when the well is determined not to have found reserves in commercial quantities. The sale of a partial interest in a proved property is accounted for as
a cost recovery and no gain or loss is recognized as long as this treatment does not significantly affect the unit-of-production amortization rate. A gain or loss is recognized for all other sales of producing properties.

In May 2005, the FASB issued Statement of Financial Accounting Standard No. 154 ("FAS 154"), "Accounting Changes and Error Corrections"  a replacement of APB No. 20, "Accounting Changes" and FAS No. 3, "Reporting Accounting Changes in Interim
Financial Statements".  FAS 154 provides guidance on the accounting for and reporting of accounting changes and error corrections. APB Opinion 20 previously required that most voluntary changes in accounting principle to be recognized by including
in the net income of the period of the change the cumulative effect of changing to the new accounting principle. FAS 154 requires retrospective application to prior periods' financial statements of a voluntary change in accounting principle unless
it is impracticable. FAS 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. We estimate that the adoption of FAS 154 will not have a significant impact on our results of
operations, financial condition and liquidity.

In March 2005, the SEC released SEC Staff Accounting Bulletin No. 107, "Share-Based Payment" ("SAB 107"). SAB-107 provides the SEC staff's position regarding the application of Statement 123(R), which contains interpretive guidance related to the
interaction between Statement 123R and certain SEC rules and regulations, and also provides the staff's views regarding the valuation of share-based payment arrangements for public companies. SAB 107 highlights the importance of disclosures made
related to the accounting for share-based payment transactions.

Risks Relating to Our Business:

We have a history of losses which may continue, which may negatively impact our ability to achieve our business objectives.

We incurred net losses of $518,494 for the period from
  May 23, 2005 (inception) to December 31, 2006. We cannot be assured that we
  can achieve or sustain profitability on a quarterly or annual basis in the future.

---

Our operations are subject to the risks and competition inherent
  in the establishment of a business enterprise. There can be no assurance that
  future operations will be profitable. We may not achieve our business objectives
  and the failure to achieve such goals would have an adverse impact on us.

If we are unable to obtain additional funding our business
operations will be harmed and if we do obtain additional financing our then
existing shareholders may suffer substantial dilution.

We will require additional funds to sustain and expand our oil
and gas exploration activities. We anticipate that we will require up to
approximately $9,600,000 to fund our continued operations for the twelve month
period ending December 31, 2007, well in excess of the cash on hand of $150 as
at March 31, 2007. Historically, we have financed these expenditures primarily
with proceeds from the sale of debt.In order to meet these obligations or
acquire any additional business interest, we will have to raise additional
funds. We also make offers to acquire oil and natural gas properties in the
ordinary course of our business. If these offers are accepted, our capital needs
may increase substantially.

We have arrangements for limited financing and we can provide
no assurance that we will be able to obtain the additional required financing
when needed. Obtaining additional financing will be subject to a number of
factors, including:

| | 1. | market conditions;                                        
| | -- | ----------------------------------------------------------
| | 2. | investor acceptance of potential business assets;
    and,
| | 3. | investor sentiment.                                       

These factors may make the timing, amount, terms and conditions
of additional financing unattractive or unavailable to us. If we are not
successful in achieving financing in the amount necessary to meet our present
obligations in connection with the oil and gas interests that we have acquired
or business interests that we may acquire, implementation of our business plan
may fail or be delayed.

Our independent auditors have expressed substantial doubt
about our ability to continue as a going concern, which may hinder our ability
to obtain future financing.

In their report dated June 30, 2006, our independent auditors
stated that our financial statements for the fiscal year ended June 30, 2006
were prepared assuming that we would continue as a going concern. Our ability to
continue as a going concern is an issue raised as a result of recurring losses
from operations. We continue to experience net operating losses. Our ability to
continue as a going concern is subject to our ability to obtain necessary
funding from outside sources, including obtaining additional funding from the
sale of our securities. Our continued net operating losses increase the
difficulty in meeting such goals and there can be no assurances that such
methods will prove successful.

We have a limited operating history and if we are not
successful in continuing to grow our business, then we may have to scale back or
even cease our ongoing business operations.

We have yet to generate positive earnings and there can be no
assurance that we will ever operate profitably. Our company has a limited
operating history in the business of oil and gas exploration and must be
considered in the development stage. Our success is significantly dependent on a
successful acquisition, drilling, completion and production program. Our
operations will be subject to all the risks inherent in the establishment of a
developing enterprise and the uncertainties arising from the absence of a
significant operating history. We may be unable to locate recoverable reserves
or operate on a profitable basis. We are in the development stage and potential
investors should be aware of the difficulties normally encountered by
enterprises in the development stage. If our business plan is not successful,
and we are not able to operate profitably, investors may lose some or all of
their investment in our company.

We do not control all of our operations.

We do not operate any of our properties and we therefore have
limited influence over the testing, drilling and production operations of our
properties. Our lack of control could result in the following:

---

| | 1. | the operator might initiate exploration or development on
      a faster or slower pace than we prefer;                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | 2. | the operator might propose to drill more wells or build
      more facilities on a project than we have funds for or that we deem
      appropriate, which could mean that we are unable to participate in the
      project or share in the revenues generated by the project even though we
      paid our share of exploration costs, and we could have our working
      interest ownership in the related lands and petroleum reserves reduced as
      a result of our failure to participate in development expenditures;
      and,
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | 3. | if an operator refuses to initiate a project, we might be
      unable to pursue the project.                                                                                                                                                                                                                                                                                                                                                                                                                                              

Any of these events could materially reduce the value of our
properties.

If we are unable to access our properties or conduct our
operations due to surface conditions, our business will be adversely
affected.

Our exploitation and development of oil and natural gas
reserves depends upon access to the areas where our operations are to be
conducted. We conduct a portion of our operations in northern regions where we
are only able to do so on a seasonal basis. Unless the surface is sufficiently
frozen, we are unable to access our properties, drill or otherwise conduct our
operations as planned. In addition, if the surface thaws earlier than expected,
we must cease our operations for the season earlier than planned. Our operations
are affected by road bans imposed from time to time during the break-up and thaw
period in the spring. Road bans are also imposed due to snow, mud and rock
slides and periods of high water, which can restrict access to our well sites
and production facility sites. In recent years, winters in our northern
operating areas have been warmer than normally experienced and, as a result, our
operating seasons have been shorter than in the past. Our inability to access
our properties or to conduct our operations as planned will result in a shutdown
or slow down of our operations, which will adversely affect our business.

If we are not able to effectively manage our anticipated
expansion and growth, our business and financial condition will be negatively
affected.

We have recently expanded our business operations. Any future
growth in our business may place significant strain on our limited managerial
and operational resources. We cannot assure you that we will be able to
implement adequate controls over the risks associated with our planned
expansion. If we are unable to effectively manage expanded operations, our
revenues may not concurrently increase with rising costs of operations and our
business will be negatively affected.

Our compliance with the Sarbanes-Oxley Act and SEC rules
concerning internal controls may be time-consuming, difficult and costly for
us.

It may be time consuming, difficult and costly for us to develop
  and implement the internal controls and reporting procedures required by the
  Sarbanes-Oxley Act. We may need to hire additional financial reporting, internal
  controls and other finance staff in order to develop and implement appropriate
  internal controls and reporting procedures. If we are unable to comply with
  the internal controls requirements of the Sarbanes-Oxley Act, we may not be
  able to obtain the independent accountant certifications that the Sarbanes-Oxley
  Act requires publicly-traded companies to obtain.

---

Risks Relating to Our Industry:

As our properties are in the exploration stage, there can
  be no assurance that we will establish commercial discoveries on our properties.

Exploration for economic reserves of oil and gas is subject to a number of risk factors. Few properties that are explored are ultimately developed into producing oil and/or gas wells. Our properties are in the exploration stage only and are without
proven reserves of oil and gas. We may not establish commercial discoveries on any of our properties.

Even if we are able to, the potential profitability of oil and gas ventures depends upon factors beyond the control of our company.

The potential profitability of oil and gas properties is dependent upon many factors beyond our control. For instance, world prices and markets for oil and gas are unpredictable, highly volatile, potentially subject to governmental fixing, pegging,
controls or any combination of these and other factors, and respond to changes in domestic, international, political, social and economic environments. Additionally, due to worldwide economic uncertainty, the availability and cost of funds for
production and other expenses have become increasingly difficult, if not impossible, to project. In addition, adverse weather conditions can also hinder drilling operations.  These changes and events may materially affect our future financial
performance.  These factors cannot be accurately predicted and the combination of these factors may result in our company not receiving an adequate return on invested capital.

Even if we are able to discover and generate a gas or oil well, there can be no assurance the well will become profitable.

We have not yet made a discovery of economically recoverable reserves. Even if we are able to, a productive well may become uneconomic in the event water or other deleterious substances are encountered which impair or prevent the production of oil
and/or gas from the well. In addition, production from any well may be unmarketable if it is impregnated with water or other deleterious substances. In addition, the marketability of oil and gas which may be acquired or discovered will be affected
by numerous factors, including the proximity and capacity of oil and gas pipelines and processing equipment, market fluctuations of prices, taxes, royalties, land tenure, allowable production and environmental protection, all of which could result
in greater expenses than revenue generated by the well.

Competition in the oil and gas industry is highly competitive and there is no assurance that we will be successful in acquiring the leases.

The oil and gas industry is intensely competitive. We compete with numerous individuals and companies, including many major oil and gas companies which have substantially greater technical, financial and operational resources and staffs.
Accordingly, there is a high degree of competition for desirable oil and gas leases, suitable properties for drilling operations and necessary drilling equipment, as well as for access to funds. We cannot predict if the necessary funds can be raised
or that any projected work will be completed. Our budget anticipates our acquisition of additional acreage of lease in the Coos Bay basin. This acreage may not become available or if it is available for leasing, that we may not be successful in
acquiring the leases.

The marketability of natural resources will be affected by numerous factors beyond our control which may result in us not receiving an adequate return on invested capital to be profitable or viable.

The marketability of natural resources which may be acquired or discovered by us will be affected by numerous factors beyond our control. These factors include market fluctuations in oil and gas pricing and demand, the proximity and capacity of
natural resource markets and processing equipment, governmental regulations, land tenure, land use, regulation concerning the importing and exporting of oil and gas and environmental protection regulations. The exact effect of these factors cannot
be accurately predicted, but the combination of these factors may result in us not receiving an adequate return on invested capital to be profitable or viable.

Oil and gas operations are subject to comprehensive regulation which may cause substantial delays or require capital outlays in excess of those anticipated causing an adverse effect on our company.

---

Oil and gas operations are subject to federal, state, and local laws relating to the protection of the environment, including laws regulating removal of natural resources from the ground and the discharge of materials into the environment. Oil and
gas operations are also subject to federal, state, and local laws and regulations which seek to maintain health and safety standards by regulating the design and use of drilling methods and equipment. Various permits from government bodies are
required for drilling operations to be conducted; no assurance can be given that such permits will be received. Environmental standards imposed by federal, provincial, or local authorities may be changed and any such changes may have material
adverse effects on our activities. Moreover, compliance with such laws may cause substantial delays or require capital outlays in excess of those anticipated, thus causing an adverse effect on us. Additionally, we may be subject to liability for
pollution or other environmental damages. To date, we have not been required to spend any material amount on compliance with environmental regulations. However, we may be required to do so in the future and this may affect our ability to expand or
maintain our operations.

Exploration and production activities are subject to certain environmental regulations which may prevent or delay the commencement or continuation of our operations.

In general, our exploration and production activities are subject to certain federal, state and local laws and regulations relating to environmental quality and pollution control. Such laws and regulations increase the costs of these activities and
may prevent or delay the commencement or continuation of a given operation. Compliance with these laws and regulations has not had a material effect on our operations or financial condition to date. Specifically, we are subject to legislation
regarding emissions into the environment, water discharges and storage and disposition of hazardous wastes. In addition, legislation has been enacted which requires well and facility sites to be abandoned and reclaimed to the satisfaction of state
authorities. However, such laws and regulations are frequently changed and we are unable to predict the ultimate cost of compliance. Generally, environmental requirements do not appear to affect us any differently or to any greater or lesser extent
than other companies in the industry. We believe that our operations comply, in all material respects, with all applicable environmental regulations. Our operating partners maintain insurance coverage customary to the industry; however, we are not
fully insured against all possible environmental risks.

Exploratory drilling involves many risks and we may become liable for pollution or other liabilities which may have an adverse effect on our financial position.

Drilling operations generally involve a high degree of risk. Hazards such as unusual or unexpected geological formations, power outages, labour disruptions, blow-outs, sour gas leakage, fire, inability to obtain suitable or adequate machinery,
equipment or labour, and other risks are involved. We may become subject to liability for pollution or hazards against which it cannot adequately insure or which it may elect not to insure. Incurring any such liability may have a material adverse
effect on our financial position and operations.

Risks Relating to Our Shares of Common Stock:

If we fail to remain current in our reporting requirements, we could be removed from the OTC Bulletin Board which would limit the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the
secondary market.

Companies trading on the OTC Bulletin Board, such as us, must be reporting issuers under Section 12 of the Securities Exchange Act of 1934, as amended, and must be current in their reports under Section 13, in order to maintain price quotation
privileges on the OTC Bulletin Board. If we fail to remain current on our reporting requirements, we could be removed from the OTC Bulletin Board. As a result, the market liquidity for our securities could be severely adversely affected by limiting
the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market.

Our shares of common stock is subject to the penny stock rules of the Securities and Exchange Commission and the trading market in our securities is limited, which makes transactions in our shares of common stock cumbersome and may
reduce the value of an investment in our shares of common stock.

The Securities and Exchange Commission has adopted Rule 15g-9
  which establishes the definition of a penny stock, for the purposes
  relevant to us, as any equity security that has a market price of less than
  $5.00 per share or with an exercise price of less than $5.00 per share,
  subject to certain exceptions. For any transaction involving a penny stock,
  unless exempt, the rules require:

---

- that a broker or dealer approve a
persons account for transactions in penny stocks; and - the broker or
dealer receive from the investor a written agreement to the transaction, setting
forth the identity and quantity of the penny stock to be purchased.

In order to approve a persons account for transactions in
penny stocks, the broker or dealer must:

- obtain financial information and
investment experience objectives of the person; and - make a reasonable
determination that the transactions in penny stocks are suitable for that person
and the person has sufficient knowledge and experience in financial matters to
be capable of evaluating the risks of transactions in penny stocks.

The broker or dealer must also deliver, prior to any
transaction in a penny stock, a disclosure schedule prescribed by the Securities
and Exchange Commission relating to the penny stock market, which, in highlight
form:

- sets forth the basis on which the
broker or dealer made the suitability determination; and - that the broker
or dealer received a signed, written agreement from the investor prior to the
transaction.

Generally, brokers may be less willing to execute transactions
in securities subject to the penny stock rules. This may make it more
difficult for investors to dispose of our shares of common stock and cause a
decline in the market value of our shares of common stock.

Disclosure also has to be made about the risks of investing in
penny stocks in both public offerings and in secondary trading and about the
commissions payable to both the broker-dealer and the registered representative,
current quotations for the securities and the rights and remedies available to
an investor in cases of fraud in penny stock transactions. Finally, monthly
statements have to be sent disclosing recent price information for the penny
stock held in the account and information on the limited market in penny
stocks.

National Association of Securities Dealers Inc. sales
practice requirements may also limit a stockholders ability to buy and sell our
shares of common stock.

In addition to the penny stock rules described above, the
National Association of Securities Dealers Inc. has adopted rules that require
that in recommending an investment to a customer, a broker-dealer must have
reasonable grounds for believing that the investment is suitable for that
customer. Prior to recommending speculative low priced securities to their
non-institutional customers, broker-dealers must make reasonable efforts to
obtain information about the customers financial status, tax status, investment
objectives and other information. Under interpretations of these rules, the
National Association of Securities Dealers Inc. believes that there is a high
probability that speculative low priced securities will not be suitable for at
least some customers. The National Association of Securities Dealers Inc.
requirements make it more difficult for broker-dealers to recommend that their
customers buy our shares of common stock, which may limit your ability to buy
and sell our shares of common stock and have an adverse effect on the market for
its shares.

Item
3.           Disclosure
Controls and Procedures

As required by Rule 13a-15 under the Exchange Act, we have
carried out an evaluation of the effectiveness of the design and operation of
our companys disclosure controls and procedures as of the end of the period
covered by this quarterly report, December 31, 2006. This evaluation was carried
out under the supervision and with the participation of our companys
management, including our companys president and chief executive officer. Based
upon that evaluation, our companys president and chief executive officer
concluded that our companys disclosure controls and procedures are effective as
at the end of the period covered by this report. There have been no changes in
our companys internal controls or in other factors, which could significantly
affect internal controls subsequent to the date we carried out our evaluation.

Disclosure controls and procedures are controls and other procedures
  that are designed to ensure that information required to be disclosed in our
  companys reports filed or submitted under the Exchange Act is recorded,
  processed, summarized and reported, within the time periods specified in the
  Securities and Exchange Commissions rules and forms.

---

Disclosure controls and procedures include, without limitation,
  controls and procedures designed to ensure that information required to be disclosed
  in our companys reports filed under the Exchange Act is accumulated and
  communicated to management, including our companys president and chief
  executive officer as appropriate, to allow timely decisions regarding required
  disclosure

PART II - OTHER INFORMATION

Item
1.            Legal
Proceedings.

We know of no material, active or pending legal proceedings
against our company, nor are we involved as a plaintiff in any material
proceeding or pending litigation. There are no proceedings in which any of our
directors, officers or affiliates, or any registered or beneficial shareholder,
is an adverse party or has a material interest adverse to our interest.

Item
2.           
Unregistered Sales of Equity Securities and Use of Proceeds

None

Item
3.            Defaults
Upon Senior Securities

None.

Item
4.            Submission
of Matters to a Vote of Security Holders.

None.

Item
5.            Other
Information.

None

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Item
6.           
Exhibits

Exhibits required by Item 601 of Regulation S-B

|Exhibit Number | Description                                                                                                                                   
|-------------- | ----------------------------------------------------------------------------------------------------------------------------------------------
|               |                                                                                                                                               
|(3)            | (i) Articles
        of Incorporation; and (ii) Bylaws                                                                                        
|               |                                                                                                                                               
|3.1            | Articles of
        Incorporation (incorporated by reference from our Form SB-2/A Registration
        Statement, filed on September 9, 2005).
|               |                                                                                                                                               
|3.2            | Bylaws (incorporated
        by reference from our Form SB-2/A Registration Statement, filed on September
        9, 2005).                   
|               |                                                                                                                                               
|(10)           | Material
        Contracts                                                                                                                    
|               |                                                                                                                                               
|10.1           | Bill of Sale
        (incorporated by reference from our SB-2/A Registration Statement, filed
        on September 9, 2005).                  
|               |                                                                                                                                               
|10.2           | Trust Agreement
        (incorporated by reference from our SB-2/A Registration Statement, filed
        on September 9, 2005).               
|               |                                                                                                                                               
|10.3           | Purchase Agreement
        Joes Landing (incorporated by reference from our Current Report
        on Form 8-K, filed on August 15, 2006).   
|               |                                                                                                                                               
|10.4           | Purchase Agreement
        Fayetteville (incorporated by reference from our Current Report on Form
        8-K, filed on August 18, 2006).    
|               |                                                                                                                                               
|10.5           | Letter Agreement
        MB Gas (incorporated by reference from our Current Report on Form 8-K,
        filed on August 23, 2006).            
|               |                                                                                                                                               
|10.6           | Subscription
        Agreement (incorporated by reference from our SB-2/A Registration Statement,
        filed on September 9, 2005).        
|               |                                                                                                                                               
|10.7           | Purchase Agreement
        Kansas (incorporated by reference from our Current Report on Form 8-K,
        filed on November 2, 2006)          
|               |                                                                                                                                               
|(31)           | 302 Certification                                                                                                                             
|               |                                                                                                                                               
|31.1*          | Section
        302 Certification under Sarbanes-Oxley Act of 2002 of William Marshall.                                                       
|               |                                                                                                                                               
|31.2*          | Section
        302 Certification under Sarbanes-Oxley Act of 2002 of Glen Harder.                                                            
|               |                                                                                                                                               
|(32)           | 906 Certification                                                                                                                             
|               |                                                                                                                                               
|32.1*          | Section
        906 Certification under Sarbanes-Oxley Act of 2002 of William Marshall.                                                       
|               |                                                                                                                                               
|32.2*          | Section
        906 Certification under Sarbanes-Oxley Act of 2002 of Glen Harder.                                                            

*Filed herewith

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SIGNATURES

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

PRIMEGEN ENERGY CORPORATION

|By: | William S. Marshall                                                 | 
|--- | --------------------------------------------------------------------- | 
|    | William Marshall                                                      | 
|    | Director & Chairman                                                   | 
|    | (Principal Executive Officer)                                         | 
|    |                                                                       | 
|    |                                                                       | 
|    | Date: May 18, 2007                                                    | 
|    |                                                                       | 
|    |                                                                       | 
|    |                                                                       | 
|    |                                                                       | 
|By: | Glen D. Harder                                                      | 
|    | Glen D. Harder                                                        | 
|    | CFO & Director                                                        | 
|    | (Principal Financial Officer, and
      Principal Accounting Officer) | 
|    |                                                                       | 
|    | Date: May 18, 2007                                                    | 

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