---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-Q

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

For the quarterly period ended February 28,
2010

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

For the transition period from _________to
________
Commission File No. 000-52494

FORCE ENERGY CORP.(Exact
name of registrant as specified in its charter)

|Nevada                                                         | 98-0462664                          
|-------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction
of incorporation or organization) | (I.R.S. Employer Identification No.)

708 11th Ave SW Suite 219, Calgary, Alberta, Canada T2R
0E4(Address of principal executive offices) (zip code)

403-457-3672(Registrants telephone number,
including area code)

N/A(Former name, former address and former
fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [x]     No [ ]

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such
files).
Yes [ ]     No [ ]

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See definitions of large accelerated filer, accelerated
filer, and smaller reporting company in Rule 12b-2 of the Exchange Act.

|Large accelerated filer                       | [ ] | Accelerated filer         | [ ]
|--------------------------------------------- | --- | ------------------------- | ---
|Non-accelerated filer                         | [ ] | Smaller reporting company | [x]
|(Do not check if a smaller reporting company) |     |                           |    

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).

Yes [ ]     No [x]

---

2

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

Yes [ ]      No[ ] N/A

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the
issuers classes of common stock, as of the latest practicable date.
47,344,000 shares of common stock as of April 13, 2010

---

3

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

FORCE ENERGY CORP.

(A Development Stage Company)

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

February 28, 2010

(Stated in US Dollars)

---

|FORCE ENERGY CORP.                     
|---------------------------------------
|(A Development Stage Company)          
|INTERIM CONSOLIDATED BALANCE SHEETS    
|February 28, 2010 and November 30, 2009
|(Stated in US Dollars)                 
|(Unaudited)                            

|                                                                                                                                                                               |   | February 28 |   |   | November 30 |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | - | ----------- | - | - | ----------- | -
|                                                                                                                                                                               |   | 2010        |   |   | 2009        |  
|ASSETS                                                                                                                                                                         |  
|Current                                                                                                                                                                        |   |             |   |   |             |  
|Cash                                                                                                                                                                           | $ | 56,702      |   | $ | 162,458     |  
|Prepaid expenses                                                                                                                                                               |   | 5,538       |   |   | 1,216       |  
|                                                                                                                                                                               |   |             |   |   |             |  
|                                                                                                                                                                               |   | 62,240      |   |   | 163,674     |  
|                                                                                                                                                                               |   |             |   |   |             |  
|Property and equipment  Note 4                                                                                                                                                |   | 1,159       |   |   | 1,741       |  
|Oil and gas properties, full cost method of
      accounting Unproved Properties  Note 5                                                                                      |   | 510,840     |   |   | 504,162     |  
|                                                                                                                                                                               |   |             |   |   |             |  
|                                                                                                                                                                               | $ | 574,239     |   | $ | 669,577     |  
|                                                                                                                                                                               |   |             |   |   |             |  
|LIABILITIES                                                                                                                                                                    |  
|                                                                                                                                                                               |   |             |   |   |             |  
|Current                                                                                                                                                                        |   |             |   |   |             |  
|Accounts payable and accrued
      liabilities                                                                                                                                 | $ | 51,275      |   | $ | 58,798      |  
|Due to related parties
      - Note 6                                                                                                                                          |   | 131,722     |   |   | 113,550     |  
|                                                                                                                                                                               |   |             |   |   |             |  
|                                                                                                                                                                               |   | 182,997     |   |   | 172,348     |  
|                                                                                                                                                                               |   |             |   |   |             |  
|Asset retirement obligation  Note 7                                                                                                                                           |   | 10,697      |   |   | 10,225      |  
|                                                                                                                                                                               |   |             |   |   |             |  
|                                                                                                                                                                               |   | 193,694     |   |   | 182,573     |  
|                                                                                                                                                                               |   |             |   |   |             |  
|STOCKHOLDERS
      EQUITY                                                                                                                                                     |  
|                                                                                                                                                                               |   |             |   |   |             |  
|Preferred stock, $0.001 par value
      10,000,000 shares authorized, none outstanding                                                                                         |   |             |   |   |             |  
|Common stock, $0.001 par value  Note 8 
        
      270,000,000 shares authorized 
         47,344,000 shares issued
      (November 30, 2009, - 47,344,000 shares issued) |   | 47,344      |   |   | 47,344      |  
|Additional paid in capital                                                                                                                                                     |   | 1,717,952   |   |   | 1,717,952   |  
|Deficit accumulated during the development stage                                                                                                                               |   | (1,384,751  | ) |   | (1,278,292  | )
|                                                                                                                                                                               |   |             |   |   |             |  
|                                                                                                                                                                               |   | 380,545     |   |   | 487,004     |  
|                                                                                                                                                                               |   |             |   |   |             |  
|                                                                                                                                                                               | $ | 574,239     |   | $ | 669,577     |  

Nature of Operations and Ability to Continue as a Going Concern
   Note 2 
  Commitment  Note 9

SEE ACCOMPANYING NOTES

F-1

---

|FORCE ENERGY CORP.                                                           
|-----------------------------------------------------------------------------
|(A Development Stage Company)                                                
|INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS AND
      COMPREHENSIVE LOSS   
|for the three month periods February 28, 2010 and
      February 28, 2009 and
|for the period from November 1, 2006 (Date of Inception)                     
|to February 28, 2010                                                         
|(Stated in US Dollars)                                                       
|(Unaudited)                                                                  

|                                                     |   |              |   |   |              |   |   | Period from   |  
|---------------------------------------------------- | - | ------------ | - | - | ------------ | - | - | ------------- | -
|                                                     |   |              |   |   |              |   |   | November 1,   |  
|                                                     |   | Three Months |   |   | Three Months |   |   | 2006 (Date of |  
|                                                     |   | Ended        |   |   | Ended        |   |   | Inception) to |  
|                                                     |   | February 28  |   |   | February 28  |   |   | February 28   |  
|                                                     |   | 2010         |   |   | 2009         |   |   | 2010          |  
|                                                     |   |              |   |   |              |   |   | (cumulative)  |  
|                                                     |   |              |   |   |              |   |   |               |  
|Expenses                                             |   |              |   |   |              |   |   |               |  
|Accounting and audit
      fees                      | $ | 38,788       |   | $ | 32,933       |   | $ | 212,818       |  
|Accretion expense  Note 7                           |   | 472          |   |   | -            |   |   | 1,800         |  
|Bank charges                                         |   | 190          |   |   | 499          |   |   | 2,286         |  
|Consulting fees                                      |   | -            |   |   | -            |   |   | 408,500       |  
|Depreciation                                         |   | 582          |   |   | 582          |   |   | 3,492         |  
|Exploration expenses                                 |   | -            |   |   | -            |   |   | 15,000        |  
|Investor relations                                   |   | -            |   |   | 8,000        |   |   | 51,443        |  
|Legal fees                                           |   | 7,252        |   |   | 11,163       |   |   | 147,434       |  
|Management fees  Note
      6                       |   | 47,250       |   |   | 47,250       |   |   | 393,750       |  
|Office expenses                                      |   | 3,755        |   |   | 403          |   |   | 27,367        |  
|Rent  Note 6                                        |   | 3,150        |   |   | 5,587        |   |   | 37,094        |  
|Tax penalties and interest                           |   | -            |   |   | -            |   |   | -             |  
|Transfer and filing
      fees                       |   | 2,413        |   |   | 594          |   |   | 61,847        |  
|Travel                                               |   | -            |   |   | -            |   |   | 9,502         |  
|Write-off of oil and
      gas costs  Note 5 (b)    |   | -            |   |   | -            |   |   | 20,000        |  
|                                                     |   |              |   |   |              |   |   |               |  
|Loss before other items                              |   | (103,852     | ) |   | (107,011     | ) |   | (1,392,333    | )
|                                                     |   |              |   |   |              |   |   |               |  
|Other items:                                         |   |              |   |   |              |   |   |               |  
|Debt forgiveness                                     |   | -            |   |   | -            |   |   | 610           |  
|Foreign exchange gain
      (loss)                   |   | (2,607       | ) |   | (230         | ) |   | 6,972         |  
|                                                     |   |              |   |   |              |   |   |               |  
|                                                     |   | (2,607       | ) |   | (230         | ) |   | 7,582         |  
|                                                     |   |              |   |   |              |   |   |               |  
|Net loss and comprehensive loss for the
      period | $ | (106,459     | ) | $ | (107,241     | ) | $ | (1,384,751    | )
|                                                     |   |              |   |   |              |   |   |               |  
|Basic loss per share                                 | $ | (0.01        | ) | $ | (0.00        | ) |   |               |  
|                                                     |   |              |   |   |              |   |   |               |  
|Weighted average number of shares
      outstanding  |   | 47,344,000   |   |   | 45,994,000   |   |   |               |  

SEE ACCOMPANYING NOTES

F-2

---

|FORCE ENERGY CORP.                                                                 
|-----------------------------------------------------------------------------------
|(A Development Stage Company)                                                      
|INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS                                      
|for the three month periods ended February 28, 2010 and
      February 28, 2009 and
|for the period from November 1, 2006 (Date of Inception)
      to February 28, 2010
|(Stated in US Dollars)                                                             

|                                                                  |   |              |   |   |              |   |   | Period from   |  
|----------------------------------------------------------------- | - | ------------ | - | - | ------------ | - | - | ------------- | -
|                                                                  |   |              |   |   |              |   |   | November 1,   |  
|                                                                  |   | Three Months |   |   | Three Months |   |   | 2006 (Date of |  
|                                                                  |   | Ended        |   |   | Ended        |   |   | Inception) to |  
|                                                                  |   | February 28  |   |   | February 28  |   |   | February 28   |  
|                                                                  |   | 2010         |   |   | 2009         |   |   | 2010          |  
|                                                                  |   |              |   |   |              |   |   | (cumulative)  |  
|Cash Flows used in Operating Activities                           |   |              |   |   |              |   |   |               |  
|Net loss for the period                                           | $ | (106,459     | ) | $ | (107,241     | ) | $ | (1,384,751    | )
|Adjustments to reconcile net loss to net cash                     |   |              |   |   |              |   |   |               |  
|used in operating activities:                                     |   |              |   |   |              |   |   |               |  
|Consulting fees
      paid in stock                               |   | -            |   |   | -            |   |   | 405,000       |  
|Debt forgiveness                                                  |   | -            |   |   | -            |   |   | (610          | )
|Accretion expense                                                 |   | 472          |   |   | -            |   |   | 1,706         |  
|Depreciation                                                      |   | 582          |   |   | 582          |   |   | 3,492         |  
|Write-off of oil
      and gas costs                              |   | -            |   |   | -            |   |   | 20,000        |  
|Changes in non-cash working
      capital items                   |   |              |   |   |              |   |   |               |  
|related to
      operations:                                      |   |              |   |   |              |   |   |               |  
|Deposits                                                          |   | -            |   |   | 12,044       |   |   | -             |  
|Prepaid expenses                                                  |   | (4,322       | ) |   | 268          |   |   | (5,538        | )
|Accounts payable and accrued liabilities                          |   | (7,523       | ) |   | 3,166        |   |   | 12,123        |  
|Due to related
      parties                                      |   | 18,172       |   |   | (9,250       | ) |   | 131,722       |  
|                                                                  |   |              |   |   |              |   |   |               |  
|Net cash used in operating activities                             |   | (99,078      | ) |   | (100,431     | ) |   | (816,762      | )
|                                                                  |   |              |   |   |              |   |   |               |  
|Cash Flows used in Investing Activities                           |   |              |   |   |              |   |   |               |  
|Advance of loan
      receivable                                  |   | -            |   |   | (175,000     | ) |   | -             |  
|Acquisition of property and equipment                             |   | -            |   |   | -            |   |   | (4,651        | )
|Acquisition
      and development costs of oil and gas properties |   | (6,678       | ) |   | (38,938      | ) |   | (364,891      | )
|                                                                  |   |              |   |   |              |   |   |               |  
|Net cash used in investing activities                             |   | (6,678       | ) |   | (213,938     | ) |   | (369,542      | )
|                                                                  |   |              |   |   |              |   |   |               |  
|Cash Flows provided by Financing Activities                       |   |              |   |   |              |   |   |               |  
|Capital stock issued                                              |   | -            |   |   | -            |   |   | 1,219,000     |  
|Cash acquired on
      reverse acquisition                        |   | -            |   |   | -            |   |   | 37,058        |  
|                                                                  |   |              |   |   |              |   |   |               |  
|Net cash provided by financing activities                         |   | -            |   |   | -            |   |   | 1,256,058     |  
|                                                                  |   |              |   |   |              |   |   |               |  
|Effect of foreign currency translation                            |   | -            |   |   | -            |   |   | (13,052       | )
|                                                                  |   |              |   |   |              |   |   |               |  
|Increase (decrease) in cash during the
      period               |   | (105,756     | ) |   | (314,369     | ) |   | 56,702        |  
|                                                                  |   |              |   |   |              |   |   |               |  
|Cash, beginning of the period                                     |   | 162,458      |   |   | 458,940      |   |   | -             |  
|                                                                  |   |              |   |   |              |   |   |               |  
|Cash, end of the period                                           | $ | 56,702       |   | $ | 144,571      |   | $ | 56,702        |  
|                                                                  |   |              |   |   |              |   |   |               |  
|Supplemental disclosure of cash flow
      information            |   |              |   |   |              |   |   |               |  
|Interest paid                                                     | $ | -            |   | $ | -            |   | $ | -             |  
|Income taxes paid                                                 | $ | -            |   | $ | -            |   | $ | -             |  

SEE ACCOMPANYING NOTES

F-3

---

|FORCE ENERGY CORP.                                                                 
|-----------------------------------------------------------------------------------
|(A Development Stage Company)                                                      
|INTERIM CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY                             
|for the period from November 1, 2006 (Date of Inception)
      to February 28, 2010
|(Stated in US Dollars)                                                             
|(Unaudited)                                                                        

|                                                                   |  |             |            |  |               |        |   |           |         |   |             |   |   | Deficit     |         |   |          |  
|------------------------------------------------------------------ |  | ----------- | ---------- |  | ------------- | ------ | - | --------- | ------- | - | ----------- | - | - | ----------- | ------- | - | -------- | -
|                                                                   |  |             |            |  |               |        |   |           |         |   |             |   |   | Accumulated |         |   |          |  
|                                                                   |  |             |            |  |               |        |   |           |         |   | Additional  |   |   | During the  |         |   |          |  
|                                                                   |  |             |            |  | Common Shares |        |   | Paid-in   |         |   | Development |   |   |             |        
|                                                                   |  |             |            |  | Number        |        |   | Par Value |         |   | Capital     |   |   | Stage       |         |   | Total    |  
|                                                                   |  |             |            |  |               |        |   |           |         |   |             |   |   |             |         |   |          |  
|Capital stock issued for cash                                      |  |  at $0.005 |            |  | 23,000,000    |        | $ | 23,000    |         | $ | 92,000      |   | $ | -           |         | $ | 115,000  |  
|Less: commissions                                                  |  |             |            |  | -             |        |   | -         |         |   | (8,000      | ) |   | -           |         |   | (8,000   | )
|Net loss and comprehensive loss for the
        period             |  |             |            |  | -             |        |   | -         |         |   | -           |   |   | (8,944      | )       |   | (8,944   | )
|                                                                   |  |             |            |  |               |        |   |           |         |   |             |   |   |             |         |   |          |  
|Balance, November 30, 2006                                         |  |             |            |  | 23,000,000    |        |   | 23,000    |         |   | 84,000      |   |   | (8,944      | )       |   | 98,056   |  
|Pursuant to agreement of merger and plan of
        reorganization |  |             | 21,354,000 |  |               | 21,354 |   |           | (24,058 | ) |             | - |   |             | (2,704  | )
|Capital stock issued for cash                                      |  |  at $0.25  |            |  | 240,000       |        |   | 240       |         |   | 59,760      |   |   | -           |         |   | 60,000   |  
|                                                                   |  |  at $0.50  |            |  | 100,000       |        |   | 100       |         |   | 49,900      |   |   | -           |         |   | 50,000   |  
|Net loss and comprehensive loss for the
        year               |  |             |            |  | -             |        |   | -         |         |   | -           |   |   | (79,859     | )       |   | (79,859  | )
|                                                                   |  |             |            |  |               |        |   |           |         |   |             |   |   |             |         |   |          |  
|Balance November 30, 2007                                          |  |             |            |  | 44,694,000    |        |   | 44,694    |         |   | 169,602     |   |   | (88,803     | )       |   | 125,493  |  
|Capital stock issued for cash                                      |  |  at $0.75  |            |  | 1,000,000     |        |   | 1,000     |         |   | 749,000     |   |   | -           |         |   | 750,000  |  
|Pursuant to consulting service agreements                          |  |  at $1.35  |            |  | 300,000       |        |   | 300       |         |   | 404,700     |   |   | -           |         |   | 405,000  |  
|Net loss and comprehensive loss for the
        year               |  |             |            |  | -             |        |   | -         |         |   | -           |   |   | (786,407    | )       |   | (786,407 | )
|                                                                   |  |             |            |  |               |        |   |           |         |   |             |   |   |             |         |   |          |  
|Balance November 30, 2008                                          |  |             |            |  | 45,994,000    |        |   | 45,994    |         |   | 1,323,302   |   |   | (875,210    | )       |   | 494,086  |  
|                                                                   |  |             |            |  |               |        |   |           |         |   |             |   |   |             |         |   |          |  
|Capital stock issued for cash                                      |  | - at 0.28   |            |  | 900,000       |        |   | 900       |         |   | 251,100     |   |   | -           |         |   | 252,000  |  
|Capital stock issued for oil and gas property 
        Note 5(b)  |  |             | 450,000    |  |               | 450    |   |           | 143,550 |   |             | - |   |             | 144,000 |  
|Net loss and comprehensive loss for the
        year               |  |             |            |  | -             |        |   | -         |         |   | -           |   |   | (403,082    | )       |   | (403,082 | )
|                                                                   |  |             |            |  |               |        |   |           |         |   |             |   |   |             |         |   |          |  
|Balance November 30, 2009                                          |  |             |            |  | 47,344,000    |        |   | 47,344    |         |   | 1,717,952   |   |   | (1,278,292  | )       |   | 487,004  |  
|                                                                   |  |             |            |  |               |        |   |           |         |   |             |   |   |             |         |   |          |  
|Net loss and comprehensive loss for the
        period             |  |             |            |  | -             |        |   | -         |         |   | -           |   |   | (106,459    | )       |   | (106,459 | )
|                                                                   |  |             |            |  |               |        |   |           |         |   |             |   |   |             |         |   |          |  
|Balance February 28, 2010                                          |  |             |            |  | 47,344,000    |        | $ | 47,344    |         | $ | 1,717,952   |   | $ | (1,384,751  | )       | $ | 380,545  |  

SEE ACCOMPANYING NOTES

F-4

---

|FORCE ENERGY CORP.                                    
|------------------------------------------------------
|(A Development Stage Company)                         
|NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|February 28, 2010                                     
|(Stated in US Dollars)                                
|(Unaudited)                                           

|Note 1 | Interim Reporting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       | The unaudited 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 for the periods presented. All adjustments are of a normal
      recurring nature. These interim financial statements should be read in
      conjunction with the Companys financial statements and notes thereto
      included in the Companys audited consolidated financial statements for
      the fiscal year ended November 30, 2009. The Company assumes that the
      users of the interim financial information herein have read or have access
      to the audited financial statements for the preceding fiscal period 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
      audited consolidated financial statements for the fiscal year ended
      November 30, 2009, has been omitted. The results of operations for the
      three-month period ended February 28, 2010 are not necessarily indicative
      of results for the entire year ending November 30, 2010.                                                                                                                                  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Note 2 | Nature of Operations and Ability to Continue as a
      Going Concern                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       | The Company was incorporated in the state of Nevada,
      United States of America on November 1, 2006. The Company was formed for
      the purpose of acquiring exploration and development stage natural
      resource properties. The Companys year-end is November 30.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       | Effective December 28, 2006, the Board of Directors
      authorized a 3 for 1 forward stock split on the common shares. The
      authorized number of common shares increased from 90,000,000 to
      270,000,000 common shares with a par value of $0.001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       | On February 12, 2008, the Company acquired 100% of the
      common shares of Force Energy Corp. an inactive company incorporated in
      Nevada on July 19, 2005, for $100, to effect a name change of the Company.
      On February 12, 2008, the Company and Force Energy Corp filed articles of
      merger with the Secretary of State of Nevada to effectuate a merger
      between the two companies. The surviving entity of the merger was the
      Company. Immediately thereafter the Company changed its name to Force
      Energy Corp.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       | These financial statements have been prepared in
      accordance with generally accepted accounting principles applicable to a
      going concern, which assumes that the Company will be able to meet its
      obligations and continue its operations for its next twelve months.
      Realization values may be substantially different from carrying values as
      shown and these financial statements do not give effect to adjustments
      that would be necessary to the carrying values and classification of
      assets and liabilities should the Company be unable to continue as a going
      concern. At February 28, 2010, the Company has a working capital
      deficiency of $120,757. The Company has yet to achieve profitable
      operations, has accumulated losses of $1,384,751 since its inception and
      expects to incur further losses in the development of its business, all of
      which casts substantial doubt about the Companys ability to continue as a
      going concern. The Companys ability to continue as a going concern is
      dependent upon its ability to generate future profitable operations and/or
      to obtain the necessary financing to meet its obligations and repay its
      liabilities arising from normal business operations when they come due.
      Management has entered into a formal Share Issuance Agreement with a third
      party (Note 9) to address this concern.

F-5

---

|FORCE ENERGY CORP.                                    
|------------------------------------------------------
|(A Development Stage Company)                         
|Notes to the Interim Consolidated Financial Statements
|February 28, 2010                                     
|(Stated in US Dollars)                                
|(Unaudited) Page 2                                   

|Note 3 | New Accounting Standards                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       | On December 1, 2009 the Company adopted the guidance in
      Accounting Standards                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       | Codification (ASC) 805, Business Combinations.
      ASC 805 establishes principles and requirements for how the acquirer in a
      business combination (i) recognizes and measures in its financial
      statements the identifiable assets acquired, the liabilities assumed, and
      any non-controlling interest in the acquired business; (ii) recognizes and
      measures the goodwill acquired in the business combination or a gain from
      a bargain purchase; and (iii) determines what information to disclose to
      enable users of the financial statements to evaluate the nature and
      financial effects of the business combination. The adoption of this
      statement had no effect on the Companys reported financial position or
      results of operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       | On December 1, 2009, the Company adopted the newly
      ratified guidance which is part of ASC 815-40, Contracts in Entitys
        Own Equity. ASC 815-40 provides guidance for determining whether an
      equity-linked financial instrument (or embedded feature) is indexed to an
      entitys own stock. The adoption of this statement had no effect on the
      Companys reported financial position or results of operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       | On December 1, 2009, the Company became subject to
      revised reporting requirements relating to oil and natural gas reserves
      that a company holds, which were prescribed by the SEC. Included in the
      new rule entitled -Modernization of Oil and Gas Reporting Requirements,are the following changes: 1) permitting use of new
      technologies to determine proved reserves, if those technologies have been
      demonstrated empirically to lead to reliable conclusions about reserve
      volumes; 2) enabling companies to additionally disclose their probable and
      possible reserves to investors, in addition to their proved reserves; 3)
      allowing previously excluded resources, such as oil sands, to be
      classified as oil and natural gas reserves rather than mining reserves; 4)
      requiring companies to report the independence and qualifications of a
      preparer or auditor, based on current Society of Petroleum Engineers
      criteria; 5) requiring the filing of reports for companies that rely on a
      third party to prepare reserve estimates or conduct a reserve audit; and
      6) requiring companies to report oil and natural gas reserves using an
      average price based upon the prior 12-month period, rather than year-end
      prices. The new reporting requirements are applicable to registration
      statements filed on or after January 1, 2010, and for annual reports on
      Form 10K for fiscal years ending on or after December 31, 2009. As at
      February 28, 2010, the Company has no proved or probable reserves and is
      therefore not subject to the reporting requirement. The adoption of these
      reporting requirements will result in increased disclosures to the
      financial statements once the Company has proved and probable reserves.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       | On December 1, 2009 Accounting Standards Update (ASU) No.
      2010-03 - Oil and Gas Reserve Estimation and Disclosures.became effective for the Company. The guidance requires additional
      disclosures to be made relating to current oil and gas reserve estimation.
      The adoption of these reporting requirements will result in increased
      disclosures to the financial statements once the Company has proved and
      probable reserves.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

F-6

---

|FORCE ENERGY CORP.                                    
|------------------------------------------------------
|(A Development Stage Company)                         
|Notes to the Interim Consolidated Financial Statements
|February 28, 2010                                     
|(Stated in US Dollars)                                
|(Unaudited) Page 3                                   

|Note 4 | Property and Equipment                                 
|------ | -------------------------------------------------------
|       |                                                        
|       | Property and equipment consists of the
      following:

| |                                 |   | February 28, |   |   | November 30 |  
| | ------------------------------- | - | ------------ | - | - | ----------- | -
| |                                 |   | 2010         |   |   | 2009        |  
| | Computer equipment and software | $ | 4,275        |   | $ | 4,275       |  
| | Less: Accumulated depreciation  |   | (3,210       | ) |   | (2,675      | )
| |                                 |   | 1,065        |   |   | 1,600       |  
| | Office equipment                |   | 376          |   |   | 376         |  
| | Less: Accumulated depreciation  |   | (282         | ) |   | (235        | )
| |                                 |   | 94           |   |   | 141         |  
| |                                 | $ | 1,159        |   | $ | 1,741       |  

|Note 5 | Oil and Gas Properties
|------ | ----------------------

| |                                     |   | February 28, 2010 | 
| | ----------------------------------- | - | ----------------- | 
| |                                     |   |                   | 
| |                                     |   | United            | 
| |                                     |   | States            | 
| |                                     |   |                   | 
| | Unproved properties                 |   |                   | 
| | - acquisition
      costs           | $ | 369,000           | 
| | - development costs                 |   | 6,678             | 
| | - asset
      retirement obligation |   | -                 | 
| |                                     |   |                   | 
| |                                     | $ | 375,678           | 

| |                                     |   | November 30, 2009 | 
| | ----------------------------------- | - | ----------------- | 
| |                                     |   |                   | 
| |                                     |   | United            | 
| |                                     |   | States            | 
| |                                     |   |                   | 
| | Unproved properties                 |   |                   | 
| | - acquisition
      costs           | $ | 369,000           | 
| | - development costs                 |   | -                 | 
| | - asset
      retirement obligation |   | -                 | 
| |                                     |   |                   | 
| |                                     | $ | 369,000           | 

| | a) | Hayter Prospect, Alberta, Canada                                                                                                                                                                                                                                                                                                                                                                                                               
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    | By a participation agreement dated December 21, 2006,
      Nuance Exploration Ltd. (NEL), a wholly owned subsidiary of the Company
      acquired a 100% ownership in the interpretation of 3D seismic data
      covering four sections of certain land, known as the Hayter Prospect,
      located in the province of Alberta, Canada by paying $82,650 (CDN$95,000)
      in costs of acquiring and interpreting the seismic
      data.

F-7

---

|FORCE ENERGY CORP.                                    
|------------------------------------------------------
|(A Development Stage Company)                         
|Notes to the Interim Consolidated Financial Statements
|February 28, 2010                                     
|(Stated in US Dollars)                                
|(Unaudited) Page 4                                   

|Note 5 | Oil and Gas Properties (contd)
|------ | --------------------------------
|       |                                 
|       |                                 
|       |                                 
|       |                                 
|       |                                 
|       |                                 
|       |                                 
|       |                                 
|       |                                 
|       |                                 
|       |                                 
|       | b)                              
|       |                                 
|       |                                 
|       |                                 
|       |                                 
|       |                                 
|       |                                 

F-8

---

|FORCE ENERGY CORP.                                    
|------------------------------------------------------
|(A Development Stage Company)                         
|Notes to the Interim Consolidated Financial Statements
|February 28, 2010                                     
|(Stated in US Dollars)                                
|(Unaudited) Page 5                                   

|Note 5 | Oil and Gas Properties (contd)
|------ | --------------------------------
|       |                                 
|       | b)                              
|       |                                 
|       |                                 
|       |                                 
|       |                                 
|       |                                 
|       |                                 
|       |                                 
|       |                                 
|       |                                 
|       |                                 

|Note 6 | Related Party Transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       | Amount due to related parties includes $131,722 (November
      30, 2009 - $113,550); owing to the Companys director and companies
      controlled by the Companys director for unpaid corporate expenses of
      $3,422 (November 30, 2009 - $nil) unpaid management fees of $128,300
      (November 30, 2009 - $111,500) and rent of $nil (November 30, 2009 -
      $2,050) respectively. The amount due to related party was due to the
      Companys former director and is unsecured, non-interest bearing and has
    no specific terms for repayment.                                                                                                                                                                                                                                                                                                            
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       | During the three month period ended February 28, 2010,
      total management fees charged by the Companys director were $47,250
      (February 28, 2009- $47,250), and rent expenses reimbursed to the company
      controlled by the Companys director were $3,150 (February 28, 2009 -
    $nil).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|Note 7 | Asset Retirement Obligation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       | Total future asset retirement obligations were estimated
      by management based on the Companys net ownership interest, estimated
      costs to reclaim and abandon the wells and the estimated timing of the
      costs to be incurred in future periods. The Company has estimated the net
      present value of its total assets retirement obligations at February 28,
      2010 to be $10,697 (November 30, 2009 - $10,225), based on a total
      undiscounted liability of $16,645 (Cdn$17,500) in the Hayter Prospect,
      Alberta, Canada. These payments are expected to be made over the next nine
      years, with the majority of the cost incurred between 2016 and 2019. The
      Companys credit adjusted risk free rate of 15% and an inflation rate of
      8% were used to calculate the present value of the asset retirement
    obligation.

F-9

---

|FORCE ENERGY CORP.                                    
|------------------------------------------------------
|(A Development Stage Company)                         
|Notes to the Interim Consolidated Financial Statements
|February 28, 2010                                     
|(Stated in US Dollars)                                
|(Unaudited) Page 6                                   

|Note 7 | Asset Retirement Obligation (contd)
|------ | -------------------------------------

| |                              |   | February 28, |  |   | November 30, | 
| | ---------------------------- | - | ------------ |  | - | ------------ | 
| |                              |   | 2010         |  |   | 2009         | 
| |                              |   |              |  |   |              | 
| | Balance, beginning of period | $ | 10,225       |  | $ | -            | 
| | Liabilities incurred         |   | -            |  |   | 8,422        | 
| | Accretion expense            |   | 472          |  |   | 1,328        | 
| | Effect of foreign exchange   |   | -            |  |   | 475          | 
| |                              |   |              |  |   |              | 
| |                              | $ | 10,697       |  | $ | 10,225       | 

|Note 8 | Capital Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | During the period ended November 30, 2006, the Company
      issued 23,000,000 common shares at $0.005 for total proceeds of $115,000.
      The Company paid commissions of $8,000 for net proceeds of $107,000.                                                                                                                                                                                                                                                                                                                                                                                          
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | On December 29, 2006, the Company issued 21,354,000
      common shares as a result of the reverse merger and recapitalization.                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | On April 5, 2007, the Company issued 240,000 common
      shares at $0.25 per share for total proceeds of $60,000 pursuant to a
      private placement.                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | On November 30, 2007, the Company issued 100,000 common
      shares at $0.50 per share for total proceeds of $50,000 pursuant to a
      private placement.                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | On April 16, 2008, the Company agreed to issue 300,000
      common shares (issued May 2008) with a fair value of $1.35 per share
      totalling $405,000 pursuant to three consultancy contracts.                                                                                                                                                                                                                                                                                                                                                                                                        
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | On April 17, 2008, the Company issued 1,000,000 common
      shares at $0.75 per share for total proceeds of $750,000 pursuant to a
      private placement.                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | On September 19, 2009, the Company issued 450,000 common
      shares pursuant to the Diamond Springs Prospect property agreement with a
      fair value of $144,000.                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | On October 30, 2009, the Company issued 900,000 common
      shares at $0.28 per share for total proceeds of $252,000 pursuant to a
      private placement.                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Note 9 | Commitment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       | The Company entered into a share issuance agreement for
      gross proceeds of up to $5,000,000 which expires on November 9, 2010.
      Pursuant to the agreement the Company can request advances in amounts not
      less than $100,000 from the subscriber, and the subscriber will receive
      within 5 days of the advance being received common shares of the Company.
      The deemed issue price of the shares shall be 80% of the volume weighted
      average of the closing price of the common stock for the ten banking days
      immediately prior to the date advance was requested.

F-10

---

4

ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.

Forward-Looking Statements

This quarterly report contains forward-looking statements as
that term is defined in Section 27A of the United States Securities Act of 1933
and Section 21E of the United States Securities Exchange Act of 1934. 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, expect, plan, anticipate, believe, estimate, predict,
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 and Uncertainties, 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.

Financial information contained in this quarterly report and in
our unaudited interim financial statements is stated in United States dollars
and are prepared in accordance with United States generally accepted accounting
principles. The following discussion should be read in conjunction with our
unaudited interim financial statements and the related notes that appear
elsewhere in this quarterly report.

As used in this quarterly report, the terms we, us, our
and Force means Force Energy Corp. and its subsidiaries, unless otherwise
indicated.

Our Current Business

We are currently engaged in the business of identifying,
evaluating, and qualifying potential natural gas and oil wells; investing in
interests in those wells with the goal of producing commercially marketable
quantities of oil and natural gas. The majority of our business is derived from
projects identified by our principals. Our strategy is to identify low to
moderate risk oil and natural gas reserves by reviewing and reprocessing
previously recorded seismic data with a view to a deeper target in our analysis
than when the data was originally recorded. This approach allows us to evaluate
potential oil and natural gas sites for development without the operational and
financial commitment which would be required to record new seismic data on
comparable sites. By entering into participation agreements with companies which
have possession of such seismic data, our operational costs are limited to the
cost of analysis until such time as we have identified reserves for development.
We intend to expand our operations into these areas of activity should we
establish sufficient cash flows in the next twelve months to support these
activities. We presently hold a 50% working interest of the County Line Energy
Corp. interest in the Hayter Well located in Alberta, Canada, and a 75% working
interest in the Diamond Springs Prospect located within the Wind River Basin,
Wyoming.

County Line Energy Corp. is the operator of the Hayter well. As
of the date of this quarterly report, the Hayter well has been cased and
cemented in anticipation of the completion of the drill program. County Line
plans to enter the Hayter well, perforate the potential pay zone(s) and conduct
regular production testing of the zone(s). Should the testing confirm adequate
oil reserves and potential economic flow rates, County Line is expected to
install adequate pumping equipment and other surface facilities in anticipation
of the projected flow rates. Currently, there are no known oil reserves on the
Hayter well.

We are the operator of the Diamond Springs Prospect being the
largest working interest partner. Continental Production Co. has been sub
contracted by us to be our operator in the field. Continental has been hired to
permit two wells in section nine of the property. Once the new geothermal work
is complete by Hawkeye Geosensing Ltd., the company may stake wells in other sections. Once the well
locations are staked, the company intends to apply for drilling permits to be
ready for this summers drilling season.

---

5

We did not earn any revenues during the three months ended
February 28, 2010. We do not anticipate earning revenues until identifiable
reserves are discovered and exploited from the Hayter well, the Diamond Springs
Prospect, or from any other properties or projects in which we hold a working or
direct interest.

As of the date of this quarterly report the status of our
agreements respecting our oil and gas properties is as follows:

| | (i)  | Hayter Well.During our first fiscal quarter of
      2009 we advanced $23,938 (CDN$29,000) to County Line Energy Corp for costs
      and expenses associated with the Hayter Well as an unsecured loan. On
      October 16, 2009 we entered into an amendment to our participation
      agreement with County Line pursuant to which we acquired an additional 30%
      working interest in the Hayter Well in consideration of a release by Force
      from all amounts owed by County Line to Force. Following our entry into
      the amended participation agreement we now hold a 50% working interest of
      the County Line Energy Corp. interest in the Hayter Well.                                                                                                                                                               
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |      | On March 9, 2009, Force received a report on reserves
      data for the Hayter Well prepared by its independent engineers. The report
      was prepared in accordance with the standards set out in the Canadian Oil
      and Gas Evaluation Handbook (COGE handbook). The reserves data are
      estimates of proved reserves and probable reserves and related future net
      revenue as at November 30, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                             
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (ii) | Diamond Springs Prospect.On March 11, 2009 we
      entered into a loan agreement with G2 Petroleum, LLC pursuant to which we
      advanced to G2 Petroleum, LLC $175,000. The loan was intended to form part
      of the purchase price for our acquisition of a working interest in the
      Diamond Springs Prospect. As consideration for the advance of the loan, G2
      Petroleum agreed that the $50,000 paid by us under the prior letter
      agreement between the parties would be included as part of the purchase
      price of a new agreement between the parties respecting the acquisition of
      G2 Petroleums working interest in the Diamond Springs Prospect. The loan
      is unsecured and payable on demand.                                                                                                    
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |      | On July 9, 2009 we completed the acquisition of a 50%
      interest in the Diamond Springs Prospect in accordance with the terms of
      an assignment agreement with G2 Petroleum, LLC dated effective June 20,
      2009. Pursuant to the terms of the assignment agreement, in consideration
      of the transfer of the 50% interest in the Diamond Springs Prospect we
      agreed to set-off $50,000 of G2s indebtedness to us under the prior
      letter agreement between the parties and we agreed to set-off $175,000
      against G2s indebtedness under the loan agreement between the parties
      dated March 11, 2009. In connection with the assignment agreement we
      agreed to sign a release in favor of G2, releasing them from all further
      obligations under the loan agreement and the letter agreement.
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |      | Effective September 16, 2009 we completed the acquisition
      of a further 25% interest in the Diamond Springs Prospect in accordance
      with the terms of an assignment agreement with G2 Petroleum, LLC dated
      effective September 16, 2009. Pursuant to the terms of the assignment
      agreement, in consideration of the purchase of a 25% working interest in
      the Diamond Springs Prospect we agreed to issue G2 Petroleum 450,000
      common shares at a price of $0.32 per common share for total consideration
      of $144,000. Following completion of the acquisition, we currently hold a
      75% working interest in the Diamond Springs Prospect located within the
      Wind River Basin, Wyoming.                                                                                                         
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |      | We did not earn any revenues during the three months
      ended February 28, 2010. We do not anticipate earning revenues until
      identifiable reserves are discovered and exploited from the Hayter well,
      Diamond Springs Prospect, or from any other properties or projects in
      which we hold a working or direct interest.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

---

6

The following summary of our results of operations should be
read in conjunction with our unaudited consolidated financial statements for the
three month period ended February 28, 2010 which are included herein.

Our operating results for the three month period ended February
28, 2010 and February 28, 2009 are summarized as follows:

|                                |   | Three Month Period Ended | 
|------------------------------- | - | ------------------------ | 
|                                |   | February 28,             | 
|                                |   | 2010                     | 
|Revenue                         | $ | -                        | 
|Operating Expenses              |   | 103,852                  | 
|Net Loss and Comprehensive Loss | $ | 106,459                  | 

Revenues

We have not earned any revenues to date, and do not anticipate
earning revenues until such time as we encounter commercially productive oil or
gas reservoirs on our oil and gas prospects. All of our oil and gas prospects
are undeveloped. The significant reduction in the price of oil following the
global economic crises has materially affected our anticipated revenue stream
from our property interests. As a result of the current low price of oil, our
company will continue to incur expenses in excess of the revenues generated from
our properties. We anticipate that we will have to address the cash shortfall
through additional equity financings in the future. We can offer no assurance,
however, that such financings will be available on terms acceptable to our
company. We also intend to generate additional funds in the future through
increased output following our companys plan to increase the number of wells on
our producing properties.

Expenses

Our expenses for the three month period ended February 28, 2010
and February 28, 2009 are outlined in the table below:

|                          |   | Three Month Period Ended |  |   | Percentage   | 
|------------------------- | - | ------------------------ |  | - | ------------ | 
|                          |   |                          |  |   |              | 
|                          |   |                          |  |   |              | 
|                          |   | February 28,             |  |   | February 28, | 
|                          |   | 2010                     |  |   | 2009         | 
|                          |   |                          |  |   |              | 
|Accounting and audit fees | $ | 38,788                   |  | $ | 32,933       | 
|Accretion expense         |   | 472                      |  |   | -            | 
|Bank charges              |   | 190                      |  |   | 499          | 
|Depreciation              |   | 582                      |  |   | 582          | 
|Investor relations        |   | -                        |  |   | 8,000        | 
|Legal fees                |   | 7,252                    |  |   | 11,163       | 
|Management fees           |   | 47,250                   |  |   | 47,250       | 
|Office expenses           |   | 3,755                    |  |   | 403          | 
|Rent                      |   | 3,150                    |  |   | 5,587        | 
|Transfer and filing fees  |   | 2,413                    |  |   | 594          | 
|Total Expenses            | $ | 103,852                  |  | $ | 107,011      | 

Our expenses decreased by 2.9% for the quarter ended February
28, 2010 as compared to the quarter ended February 28, 2009. The decrease in our
expenses for the quarter ended February 28, 2010 was due mainly to a reduction
in investor relations expenses.

---

7

Liquidity and Capital Resources

Working Capital

|                           |   | As at        |   |   | As at        |   |  | Percentage |  
|-------------------------- | - | ------------ | - | - | ------------ | - |  | ---------- | -
|                           |   | February 28, |   |   | November 30, |   |  | Increase / |  
|                           |   | 2010         |   |   | 2009         |   |  | (Decrease) |  
|Current assets             | $ | 62,240       |   | $ | 163,674      |   |  | (61.9%     | )
|Current liabilities        | $ | 182,997      |   | $ | 172,348      |   |  | 6.2%       |  
|Working capital deficiency | $ | (120,757     | ) | $ | (8,674       | ) |  | 1,292.2%   |  

Cash Flows

|                                          |   | Three Month       |   |   | Three Month       |   |  | Percentage |  
|----------------------------------------- | - | ----------------- | - | - | ----------------- | - |  | ---------- | -
|                                          |   | Period Ended      |   |   | Period Ended      |   |  | Increase / |  
|                                          |   | February 28, 2010 |   |   | February 28, 2009 |   |  | (Decrease) |  
|Net cash used in operating activities     | $ | (99,078           | ) | $ | (100,431          | ) |  | (1.3%      | )
|Net cash used in investing activities     | $ | (6,678            | ) | $ | (213,938          | ) |  | (96.9%     | )
|Net cash provided by financing activities | $ | -                 |   | $ | -                 |   |  | N/A        |  
|Effect of foreign currency translation    | $ | -                 |   | $ | -                 |   |  | N/A        |  
|Increase (decrease) in cash               | $ | (105,756          | ) | $ | (314,369          | ) |  | (66.4%     | )

We anticipate that we will incur approximately $1,000,000 for
operating expenses, including, legal, accounting and audit expenses associated
with our reporting requirements as a public company under the Exchange Act
during the next twelve months.

Cash Used In Operating Activities

We used cash in operating activities in the amount of $99,078
during the three month period ended February 28, 2010 and $100,431 during the
three month period ended February 28, 2009. Cash used in operating activities
was funded by cash on hand at the end of each of the prior fiscal years.

Cash Used In Investing Activities

We used cash in investing activities in the amount of $6,678
during the three month period ended February 28, 2010 and $213,938 during the
three month period ended February 28, 2009. Cash used in investing activities
was funded by cash on hand at the end of each of the prior fiscal years.

Cash Provided by Financing Activities

No cash was provided by financing activities during the three
month periods ended February 28, 2010 and February 28, 2009.

Disclosure of Outstanding Share Data

As at the date of this quarterly report, we had 47,344,000
shares of common stock issued and outstanding. We do not have any warrants,
options or shares of any other class issued and outstanding as at the date of
this quarterly report.

Going Concern

Due to our being an exploration stage company and not having
generated revenues, in their report on our audited financial statements for the
year ended November 30, 2009, our independent auditors included an explanatory
paragraph regarding concerns about our ability to continue as a going
concern.

---

8

We have historically incurred losses, and through February 28,
2010 have incurred losses of $1,384,751 since 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 achieve
a level of revenues adequate to generate sufficient cash flow from operations,
or 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 or continue with our exploration or development plan.

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.

Future Financings

To date we have had negative cash flows from operations and we
have been dependent on sales of our equity securities and debt financing to meet
our cash requirements and have incurred a net loss of $106,459 for the three
month period ended February 28, 2010. As of February 28, 2010, we had working
capital deficit of $120,757 and our estimated expenses over the next twelve
months are $1,000,000. We do not expect positive cash flow from operations in
the near term. Accordingly we will be required to obtain additional financing to
fund our operations for the next twelve months.

We will depend almost exclusively on outside capital to pay for
the continued exploration and development of our properties. Such outside
capital may include the sale of additional stock and/or commercial borrowing.
Capital may not continue to be available if necessary to meet these continuing
development costs or, if the capital is available, that it will be on terms
acceptable to us. The issuance of additional equity securities by us would
result in a significant dilution in the equity interests of our current
stockholders. Obtaining commercial loans, assuming those loans would be
available, will increase our liabilities and future cash commitments.

If we are unable to obtain financing in the amounts and on
terms deemed acceptable to us, we may be unable to continue our business and as
a result may be required to scale back or cease operations for our business, the
result of which would be that our stockholders would lose some or all of their
investment.

On November 16, 2009 the company entered into a share issuance
agreement for gross proceeds of up to $5,000,000 which expires on November 9,
2010. Pursuant to the agreement the company can request advances in amounts not
less than $100,000 from the subscriber, and the subscriber will receive within 5
days of the advance being received common shares of the company. The deemed
issue price of the shares shall be 80% of the volume weighted average of the
closing price of the common stock for the ten banking days immediately prior to
the date advance was requested. The company has not yet drawn any funds under
this agreement.

---

9

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that are material to
stockholders.

Risks and Uncertainties

Much of the information included in this quarterly report
includes or is based upon estimates, projections or other forward-looking
statements. Such forward looking statements include any projections or estimates
made by us and our management in connection with our business operations. While
these forward-looking statements, and any assumptions upon which they are based,
are made in good faith and reflect our current judgment regarding the direction
of our business, actual results will almost always vary, sometimes materially,
from any estimates, predictions, projections, assumptions or other future
performance suggested herein.

Such estimates, projections or other forward-looking statements
involve various risks and uncertainties as outlined below. We caution the reader
that important factors in some cases have affected and, in the future, could
materially affect actual results and cause actual results to differ materially
from the results expressed in any such estimates, projections or other
forward-looking statements. Prospective investors should consider carefully the
risk factors set out below.

We have had negative cash flows from operations.

To date we have had negative cash flows from operations and we
have been dependent on sales of our equity securities and debt financing to meet
our cash requirements and have incurred losses totalling approximately $106,459
for the three month period ended February 28, 2010. As of February 28, 2010, we
had working capital deficit of $120,757. We do not expect positive cash flow
from operations in the near term. Our independent auditors have noted in their
report concerning our annual financial statements for the fiscal year ended
November 30, 2009 that we have incurred substantial losses since inception,
which raises substantial doubt about our ability to continue as a going concern.
In the event we are not able to continue operations you will likely suffer a
complete loss of your investment in our securities. There is no assurance that
actual cash requirements will not exceed our estimates. In particular,
additional capital may be required in the event that:

- drilling and completion costs increase beyond our
expectations; or
- we encounter greater costs associated with general and
administrative expenses or operating costs.

Due to our being an exploration stage company and not having
generated revenues, in their report on our audited financial statements for the
year ended November 30, 2009, 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 February 28,
2010 have incurred losses of $1,384,751 since our inception. Because of these
historical losses, we will require additional working capital to develop our
business operations. On November 16, 2009 to address our working capital
concerns we entered into a share issuance agreement with Villa Atmu S.A.,
pursuant to which Villa Atmu agreed to advance to us up to US$5,000,000 in
exchange for shares of common stock of our company. We intend to raise
additional working capital through private placements, public offerings, bank
financing and/or advances from related parties or stockholder 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.

---

10

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.

We depend on outside capital to pay for the exploration and
development of our properties

We depend almost exclusively on outside capital to pay for the
continued exploration and development of our properties. Such outside capital
may include the sale of additional stock and/or commercial borrowing. Capital
necessary to meet these continuing exploration and development costs may not
continue to be available or, if the capital is available, it may not be
available on terms acceptable to us. The issuance of additional equity
securities by us would result in a significant dilution in the equity interests
of our current stockholders. Obtaining commercial loans, assuming those loans
would be available, will increase our liabilities and future cash commitments.

If we are unable to obtain financing in the amounts and on
terms deemed acceptable to us, we may be unable to continue our business and as
a result may be required to scale back or cease operations for our business, the
result of which would be that our stockholders would lose some or all of their
investment.

A decline in the price of our common stock could affect our
ability to raise further working capital and adversely impact our operations.

A prolonged decline in the price of our common stock could
result in a reduction in the liquidity of our common stock and a reduction in
our ability to raise capital. Because our operations have been primarily
financed through the sale of equity securities, a decline in the price of our
common stock could be especially detrimental to our liquidity and our continued
operations. Any reduction in our ability to raise equity capital in the future
would force us to reallocate funds from other planned uses and would have a
significant negative effect on our business plans and operations, including our
ability to continue our current operations. If our stock price declines, we may
not be able to raise additional capital or generate funds from operations
sufficient to meet our obligations.

We have a history of losses and fluctuating operating
results.

From inception through to February 28, 2010, we have incurred
aggregate losses of approximately $1,384,751. Our net loss for the three month
period ended February 28, 2010 was $106,459 and $107,241 for the three month
period ended February 28, 2009. There is no assurance that we will operate
profitably or will generate positive cash flow in the future. In addition, our
operating results in the future may be subject to significant fluctuations due
to many factors not within our control, such as the general economic cycle, the
market price of oil and gas and exploration and development costs. If we cannot
generate positive cash flows in the future, or raise sufficient financing to
continue our normal operations, then we may be forced to scale down or even
close our operations.

Until such time as we generate revenues, we expect an increase
in development costs and operating costs. Consequently, we expect to incur
operating losses and negative cash flow until our properties enter commercial
production, if any.

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 no history of revenues from operations and have no
significant tangible assets. 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 and must be considered in the development stage. The
success of our company is significantly dependent on a successful acquisition,
drilling, completion and production program. Our companys 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.

---

11

Due to the speculative nature of the exploration of oil and
gas properties, there is substantial risk that our business will fail.

The business of oil and gas exploration and development is
highly speculative involving substantial risk. There is generally no way to
recover any funds expended on a particular property unless reserves are
established and unless we can exploit such reserves in an economic manner. We
can provide investors with no assurance that any property interest that we may
acquire will provide commercially exploitable reserves. Any expenditure by our
company in connection with locating, acquiring and developing an interest in a
mineral or oil and gas property may not provide or contain commercial quantities
of reserves.

Because of the early stage of development and the nature of
our business, our securities are considered highly speculative.

Our securities must be considered highly speculative, generally
because of the nature of our business and the early stage of our development. We
are engaged in the business of exploring and, if warranted, developing
commercial reserves of oil and gas. Our properties are in the exploration stage
only and are without known reserves of oil and gas. Accordingly, we have not
generated any revenues nor have we realized a profit from our operations to date
and there is little likelihood that we will generate any revenues or realize any
profits in the short term. Any profitability in the future from our business
will be dependent upon locating and developing economic reserves of oil and gas,
which itself is subject to numerous risk factors as set forth herein. Since we
have not generated any revenues, we will have to raise additional monies through
the sale of our equity securities or debt in order to continue our business
operations.

The potential profitability of oil and gas ventures depends
upon factors beyond the control of our company.

The oil and gas industry in general is cyclical in nature. It
tends to reflect and be amplified by general economic conditions, both
domestically and abroad. Historically, in periods of recession or periods of
minimal economic growth, the operations of oil and gas companies have been
adversely affected. Certain end-use markets for oil and petroleum products
experience demand cycles that are highly correlated to the general economic
environment which is sensitive to a number of factors outside our control.

The current global financial crisis that began in 2008 has had
a material adverse effect on our financial results and proposed plan of
operations due to a significant reduction in the demand and pricing for oil and
gas. A continued recession in 2010 may lead to further significant fluctuations
in demand and pricing for oil and gas. If we elect to proceed with the
development of any of our property interests, our profitability may be
significantly affected by decreased demand. We are not able to predict the
timing, extent and duration of the economic cycles in the markets in which we
operate.

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. These changes and events
may materially affect our financial performance.

Adverse weather conditions can also hinder drilling operations.
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. The marketability
of oil and gas which may be acquired or discovered will be affected by numerous
factors beyond our control. These factors include 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. 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.

---

12

Competition in the oil and gas industry is very intense and
there is no assurance that we will be successful in acquiring additional
property interests.

The oil and gas industry is very 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 interests, 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.

We are required to obtain licenses and permits from various
governmental authorities. We anticipate that we will be able to obtain all
necessary licenses and permits to carry on the activities which we intend to
conduct, and that we intend to comply in all material respects with the terms of
such licenses and permits. However, there can be no guarantee that we will be
able to obtain and maintain, at all times, all necessary licenses and permits
required to undertake our proposed exploration and development or to place our
properties into commercial production. In the event that we proceed with our
operation without necessary licenses and permits, we may be subject to large
fines and possibly even court orders and injunctions to cease operations.

The acquisition of oil and gas interests involves many risks
and disputes as to the title of such interests will result in a material adverse
effect on our company.

The acquisition of interests in oil and gas properties involves
certain risks. Title to such interests and the borders of such interests may be
disputed. Such interests may be subject to prior unregistered agreements or
transfers and title may be affected by undetected defects. If it is determined
that any of our company's interests are based upon an invalid title, a disputed
border, or subject to a prior right, the balance sheet of our company will be
adversely affected and we may not be able to recover damages without incurring
expensive litigation costs.

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, local,
and foreign 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, local, and foreign 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, and no assurance can be given that such permits will
be received. Environmental standards imposed by federal, state, local or foreign
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 which we may elect not to
insure against due to prohibitive premium costs and other reasons. 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.

---

13

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

In general, our exploration and production activities are
subject to certain federal, state, local, and foreign 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 continuance 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
governmental 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. However, we are not
fully insured against all possible environmental risks.

Any future operations will involve many risks and we may
become liable for pollution or other liabilities which may have an adverse
effect on our financial position.

In the course of the exploration, acquisition and development
of oil and gas properties, several risks and, in particular, unexpected or
unusual geological or operating conditions may occur. Drilling operations
generally involve a high degree of risk. Hazards such as unusual or unexpected
geological formations, power outages, labor disruptions, blow-outs, sour gas
leakage, fire, inability to obtain suitable or adequate machinery, equipment or
labor, and other risks are involved. We may become subject to liability for
pollution. It is not always possible to fully insure against such risks, and we
do not currently have any insurance against such risks nor do we intend to
obtain such insurance in the near future due to high costs of insurance. Should
such liabilities arise, they could reduce or eliminate any future profitability
and result in an increase in costs and a decline in value of the securities of
our company.

We are not insured against most environmental risks. Insurance
against environmental risks (including potential liability for pollution or
other hazards as a result of the disposal of waste products occurring from
exploration and production) has not been generally available to companies within
the industry. We will periodically evaluate the cost and coverage of such
insurance. If we became subject to environmental liabilities and do not have
insurance against such liabilities, the payment of such liabilities would reduce
or eliminate our available funds and may result in bankruptcy. Should we be
unable to fully fund the remedial cost of an environmental problem, we might be
required to enter into interim compliance measures pending completion of the
required remedy.

Resource exploration involves many risks, regardless of the
experience, knowledge and careful evaluation of the property by our company.
These hazards include unusual or unexpected formations, formation pressures,
fires, power outages, labour disruptions, flooding, explosions and the inability
to obtain suitable or adequate machinery, equipment or labour.

Operations in which we will have a direct or indirect interest
will be subject to all the hazards and risks normally incidental to the
exploration, development and production of oil and gas properties, any of which
could result in damage to or destruction of mines and other producing
facilities, damage to life and property, environmental damage and possible legal
liability for any or all damage. We do not currently maintain liability
insurance and may not obtain such insurance in the future. The nature of these
risks is such that liabilities could represent a significant cost to our
company, and may ultimately force our company to become bankrupt and cease
operations.

Any change to government regulation/administrative practices
may have a negative impact on our ability to operate and/or our
profitability.

The laws, regulations, policies or current administrative
practices of any government body, organization or regulatory agency in the
United States or any other jurisdiction, may be changed, applied or interpreted
in a manner which will fundamentally alter the ability of our company to carry
on our business.

---

14

The actions, policies or regulations, or changes thereto, of
any government body or regulatory agency, or other special interest groups, may
have a detrimental effect on us. Any or all of these situations may have a
negative impact on our ability to operate and/or our profitably.

We may be unable to retain key employees or
consultants.

We may be unable to retain key employees or consultants or
recruit additional qualified personnel. Our extremely limited personnel means
that we would be required to spend significant sums of money to locate and train
new employees in the event any of our employees resign or terminate their
employment with us for any reason. Due to our limited operating history and
financial resources, we are entirely dependent on the continued service of Mr.
Rahim Rayani, our chief executive officer. Further, we do not have key man life
insurance on Mr. Rayani. We may not have the financial resources to hire a
replacement if Mr. Rayani were to die. The loss of service of Mr. Rayani could
therefore significantly and adversely affect our operations.

Our stock is a penny stock. Trading of our stock may be
restricted by the Securities and Exchange Commission's penny stock regulations
which may limit a stockholder's ability to buy and sell our stock.

Our stock is a penny stock. The Securities and Exchange
Commission has adopted Rule 15g-9 which generally defines penny stock to be
any equity security that has a market price (as defined) less than $5.00 per
share or an exercise price of less than $5.00 per share, subject to certain
exceptions. Our securities are covered by the penny stock rules, which impose
additional sales practice requirements on broker-dealers who sell to persons
other than established customers and accredited investors. The term
accredited investor refers generally to institutions with assets in excess of
$5,000,000 or individuals with a net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock
rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from the rules, to deliver a standardized risk disclosure
document in a form prepared by the Securities and Exchange Commission which
provides information about penny stocks and the nature and level of risks in the
penny stock market. The broker-dealer also must provide the customer with
current bid and offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction and monthly account
statements showing the market value of each penny stock held in the customer's
account. The bid and offer quotations, and the broker-dealer and salesperson
compensation information, must be given to the customer orally or in writing
prior to effecting the transaction and must be given to the customer in writing
before or with the customer's confirmation. In addition, the penny stock rules
require that prior to a transaction in a penny stock not otherwise exempt from
these rules, the broker-dealer must make a special written determination that
the penny stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of our common stock.

Financial Industry Regulatory Authority, or FINRA, has
adopted sales practice requirements which may also limit a stockholder's ability
to buy and sell our stock.

In addition to the penny stock rules described above, FINRA
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, FINRA believes that there is a high probability that speculative
low priced securities will not be suitable for at least some customers. The
FINRA requirements make it more difficult for broker-dealers to recommend that
their customers buy our common stock, which may limit your ability to buy and
sell our stock and have an adverse effect on the market for our shares.

Item 3. Quantitative and Qualitative Disclosures About
Market Risk.

Not Applicable.

---

15

Item 4T. Controls and Procedures.

Disclosure Controls and Procedures

As required by Rule 13a-15 of the Securities Exchange Act of
1934, our principal executive officer and principal financial officer evaluated
our company's disclosure controls and procedures (as defined in Rules 13a-15(e)
of the Securities Exchange Act of 1934) as of the end of the period covered by
this report. Based on this evaluation, our principal executive officer and
principal financial officer concluded that as of the end of the period covered
by this report, these disclosure controls and procedures were not effective to
ensure that the information required to be disclosed by our company in reports
it files or submits under the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods specified in the
rules and forms of the Securities Exchange Commission and to ensure that such
information is accumulated and communicated to our company's management,
including our principal executive officer and principal financial officer, to
allow timely decisions regarding required disclosure. The conclusion that our
disclosure controls and procedures were not effective was due to the presence of
the following material weaknesses in internal control over financial reporting
which are indicative of many small companies with small staff: (i) inadequate
segregation of duties and effective risk assessment; and (ii) insufficient
written policies and procedures for accounting and financial reporting with
respect to the requirements and application of both United States generally
accepted accounting principles and Securities and Exchange Commission
guidelines. Management anticipates that such disclosure controls and procedures
will not be effective until the material weaknesses are remediated.

We plan to take steps to enhance and improve the design of our
internal controls over financial reporting. During the period covered by this
quarterly report on Form 10-Q, we have not been able to remediate the material
weaknesses identified above. To remediate such weaknesses, we plan to implement
the following changes during our fiscal year ending November 30, 2010, subject
to obtaining additional financing: (i) appoint additional qualified personnel to
address inadequate segregation of duties and ineffective risk management; and
(ii) adopt sufficient written policies and procedures for accounting and
financial reporting. The remediation efforts set out above are largely dependent
upon our securing additional financing to cover the costs of implementing the
changes required. If we are unsuccessful in securing such funds, remediation
efforts may be adversely affected in a material manner.

Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues,
if any, within our company have been detected. These inherent limitations
include the realities that judgments in decision-making can be faulty and that
breakdowns can occur because of simple error or mistake.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial
reporting during the quarter ended February 28, 2010 that have materially
affected or are reasonably likely to materially affect, our internal control
over financial reporting.

---

16

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 1A. RISK FACTORS.

Not Applicable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. (REMOVED AND RESERVED).

None.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS

|Exhibit | Description                                                                                                                                                                                                         
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  |                                                                                                                                                                                                                     
|        |                                                                                                                                                                                                                     
|3.1     | Articles of Incorporation (incorporated by reference from
      our Registration Statement on Form SB-2 filed on March 16, 2007).                                                                                   
|        |                                                                                                                                                                                                                     
|3.2     | Bylaws (incorporated by reference from our Registration
      Statement on Form SB-2 filed on March 16, 2007).                                                                                                      
|        |                                                                                                                                                                                                                     
|3.3     | Certificate of Change filed with the Secretary of State
      of Nevada on December 28, 2006 (incorporated by reference from our Current
      Report on Form 8-K filed on January 4, 2007).                        
|        |                                                                                                                                                                                                                     
|3.4     | Articles of Merger filed with the Secretary of State of
      Nevada on January 4, 2007 (incorporated by reference from our Quarterly
      Report on Form 10-QSB filed on April 17, 2008).                         
|        |                                                                                                                                                                                                                     
|3.5     | Articles of Merger filed with the Secretary of State of
      February 12, 2008 (incorporated by reference from our Quarterly Report on
      Form 10-QSB filed on April 17, 2008).                                 
|        |                                                                                                                                                                                                                     
|10.1    | Participation Agreement dated November 30, 2007 between
      County Line Energy Corp. and Nuance Exploration Ltd. (incorporated by
      reference from our Current Report on Form 8-K filed on December 19, 2007).
|        |                                                                                                                                                                                                                     
|10.2    | Letter Agreement dated March 11, 2008 with G2 Petroleum,
      LLC (incorporated by reference from our Current Report on Form 8-K filed
      on April 4, 2008).                                                    

---

17

|Exhibit | Description                                                                                                                                                                                                                          
|------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  |                                                                                                                                                                                                                                      
|        |                                                                                                                                                                                                                                      
|10.3    | Promissory Note to G2 Petroleum, LLC (incorporated by
    reference from our Current Report on Form 8-K filed on April 4, 2008).                                                                                                     
|        |                                                                                                                                                                                                                                      
|10.4    | Letter of Intent to Farm out dated April 17, 2008 between
      our company and Desert Mining Inc. (incorporated by reference from our
      Current Report on Form 8-K filed on April 23, 2008).                                    
|        |                                                                                                                                                                                                                                      
|10.5    | Advisory and Business Consulting Services Agreement dated
      April 16, 2008 with Robert B. Perry (incorporated by reference from our
      Current Report on Form 8-K filed on May 1, 2008).                                      
|        |                                                                                                                                                                                                                                      
|10.6    | Advisory and Business Consulting Services Agreement dated
      April 16, 2008 with Leon Hinton (incorporated by reference from our
      Current Report on Form 8-K filed on May 1, 2008).                                          
|        |                                                                                                                                                                                                                                      
|10.7    | Advisory and Business Consulting Services Agreement dated
      April 16, 2008 with Bourgeois Energy, Inc. (incorporated by reference from
      our Current Report on Form 8-K filed on May 1, 2008).                               
|        |                                                                                                                                                                                                                                      
|10.8    | Loan Agreement between Force Energy Corp. and G2
      Petroleum, LLC dated March 11, 2009 (incorporated by reference from our
      Annual Report on Form 10-K filed on March 17, 2009)                                             
|        |                                                                                                                                                                                                                                      
|10.9    | Lease Agreement between Force Energy Corp. and TEG Inc.
      dated September 11, 2008 (incorporated by reference from our Annual Report
      on Form 10-K filed on March 17, 2009)                                                 
|        |                                                                                                                                                                                                                                      
|10.10   | Assignment Agreement between Force Energy Corp. and G2
      Petroleum, LLC dated effective June 20, 2009 (incorporated by reference
      from our Quarterly Report on Form 10-Q filed on July 15, 2009)                            
|        |                                                                                                                                                                                                                                      
|10.11   | Assignment Agreement between Force Energy Corp. and G2
      Petroleum, LLC dated effective September 16, 2009 (incorporated by
      reference from our Current Report on Form 8-K filed on September 24, 2009)                     
|        |                                                                                                                                                                                                                                      
|10.12   | Addendum to Participation Agreement between Force Energy
      Corp. and County Line Energy Corp. dated October 16, 2009 (incorporated by
      reference from our Quarterly Report on Form 10-Q filed on October 23,
      2009)    
|        |                                                                                                                                                                                                                                      
|10.13   | Share Issuance Agreement between Force Energy Corp. and
      Villa Atmu S.A. dated November 16, 2009 (incorporated by reference from
      our Current Report on Form 8-K filed on November 24, 2009)                               
|        |                                                                                                                                                                                                                                      
|10.14   | Form of Subscription Agreement dated October 30, 2009 (incorporated by reference from our Annual Report on Form 10-K filed on March 15, 2010)                                                                                        
|        |                                                                                                                                                                                                                                      
|10.15   | Amendment No. 1 to Addendum to Participation Agreement
      between County Line Energy Corp. and Force Energy Corp. dated February 1,
  2010 (incorporated by reference from our Annual Report on Form 10-K filed on March 15, 2010)
|        |                                                                                                                                                                                                                                      
|31.1*   | Certification of Chief Executive Officer and Chief
      Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
  2002.                                                                                              
|        |                                                                                                                                                                                                                                      
|32.1*   | Certification of Chief Executive Officer and Chief
      Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.                                                                                          
|        |                                                                                                                                                                                                                                      
|99.1    | Code of Ethics (incorporated by reference from our Annual Report on Form 10-K filed on March 15, 2010)                                                                                                                               

* Filed herewith.

---

18

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.

FORCE ENERGY CORP.

By /s/ Rahim
RayaniRahim RayaniPresident, Chief Executive Officer, Chief Financial
Officer, Secretary and Director(Principal Executive Officer, Principal
Accounting Officerand Principal Financial Officer) Date: April 13,
2010

---