UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington
D.C., 20549





FORM
10-KSB





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


For
the fiscal year ended December 31, 2007





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


For
the transition period
from         to





Commission
File No. 000-51656





ECCO
ENERGY CORP.


www (Exact
name of registrant as specified in its charter)





Nevada
            
            87-0469497(State
      of other jurisdiction of incorporation)
            
            (I.R.S.
      Employer Identification No.)3315
      Marquart St.Suite
      206Houston,
      TX
            
            77027(Address
      of Principal Executive Office)
            
            (Zip
      Code)








Registrant’s
telephone number, including area code: (713) 771-5500





Securities
registered pursuant to Section 12 (b) of the Act:





NONE





Securities
registered pursuant to Section 12 (g) of the Act:





Common
Stock $0.001 par value





Check
whether the issuer (1) 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
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirement for the past 90 days. Yes [
Ö] No
[    ]





Check if
there is no disclosures of delinquent filers in response to Item 405 of
Regulations S-B not contained in this form, and no disclosure will be contained,
to the best of registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB[ Ö]


Indicate
by checkmark whether the registrant is a shell company (as defined in Rule 12b-2
of the Exchange Act). Yes [    }  No [ Ö]





The
issuer’s total revenues for the year ended December 31, 2007 were $434,245.





Applicable
Only to Corporate Registrants


State the
number of shares outstanding of each of the issuer’s classes of common equity,
as of the latest practicable date:


Class                                                                           Outstanding
as of March 6, 2007


Common
Stock, $0.001 par
value                                                                                                                     9,374,753





Documents
Incorporated by Reference


If the
following documents are incorporated by reference, briefly describe them and
identify the part of the form 10-KSB (e.g., Part I, Part II, etc.) into which
the document is incorporated: (i) any annual report to security holders; (ii)
any proxy or information statement; and 9iii) any prospectus filed pursuant to
Rule 424(b) or (c) of the Securities Act of 1933 (the “Securities Act”). The
listed documents should be clearly described for identification purposes (e.g.
annual report to security holders for fiscal year ended December 24,
1990).


Not
applicable.





Transitional
Small Business Disclosure Format (check one): Yes [  ] No [ Ö]







INDEX





INDEX
 
 ITEM 1.
DESCRIPTION OF BUSINESS
 
 ITEM 2.
DESCRIPTION OF PROPERTY
 
 ITEM 3.
LEGAL PROCEEDINGS
 
 ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
 ITEM 5.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
 MATTERS
 
 ITEM 6.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
 
 ITEM 7.
FINANCIAL STATEMENTS
 
 CONSOLIDATED
BALANCE SHEETS
 
 CONSOLIDATED
STATEMENTS OF OPERATIONS
 
 CONSOLIDATED
STATEMENTS OF SHAREHOLDERS’ EQUITY
 
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
 
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 
 ITEM 8.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
 ACCOUNTING
AND FINANCIAL DISCLOSURE
 
 ITEM 8A.
CONTROLS AND PROCEDURES
 
 ITEM
8B.  OTHER INFORMATION
 
 ITEM
9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS,
CONTROL
 PERSONS
AND CORPORATE GOVERNANCE; COMPLIANCE
 WITH
SECTION 16(a) OF THE EXCHANGE ACT
 
 ITEM
10.EXECUTIVE COMPENSATION
 
 ITEM
11.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
 AND
MANAGEMENT AND RELATED STGOCKHOLDER MATTERS
 
 ITEM
12.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 AND DIRECTOR
INDEPENDENCE
 
 ITEM
13.EXHIBITS
 
 ITEM
14.PRINCIPAL ACCOUNTANT FEES AND SERVICES


SIGNATURES











FORWARD
LOOKING STATEMENTS





The
statements included or incorporated by reference in this Annual Report, other
than statements of historical fact, are forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Act of 1934, as amended. In some cases, you can identify
forward-looking statements by the words “anticipate,” “estimate,” “expect,”
“objective,” “projection,” “forecast,” “goal,” and similar expressions. Such
forward-looking statements include, without limitation, the statements herein
and therein regarding the timing of future events regarding the operations of
the Company and its subsidiaries. Although the Company believes that the
expectations reflected in these forward-looking statements are reasonable, it
can give no assurance that such expectations will prove to have been correct.
The Company’s actual results could differ materially from those anticipated in
these forward-looking statements as a result of many factors including without
limitation the following risk factors:





-
            the
      cyclical nature of the natural gas and oil
  industries





-
            our
      ability to obtain additional
financing





-
            our
      ability to successfully and profitably find, produce and market oil and
      natural gas





-
            uncertainties
      associated with the United States and worldwide
  economies





-
            substantial
      competition from larger companies





-
            the
      loss of key personnel





-
            operating
      interruptions (including leaks, explosions and lack of rig
      availability)





as well
as other such risk factors set forth below.





Available
Information





ECCO
Energy Corp. files annual, quarterly, current reports, proxy statements, and
other information with the Securities and Exchange Commission (the
“Commission”). You may read and copy documents referred to in this Annual Report
on Form 10-KSB that have been filed with the Commission at the Commission’s
Public Reference Room, 450 Fifth Street, N.W., Washington, D.C.  You
may obtain information on the operation of the Public Reference Room by calling
the Commission at 1-800-SEC-0330. You can also obtain copies of our Commission
filings by going to the Commission’s website at http://www.sec.gov





ITEM
1, DESCRIPTION OF BUSINESS





BUSINESS
DEVELOPMENT





ECCO
Energy Corp.





We were
incorporated under the laws of the State of Utah in 1989 under the name
“Bluefield Enterprises Inc.” During July 1992, we merged with Optical Express
Inc. wherein our name as changed to “Optical Express Inc.” During August 1993,
we then merged with The AppleTree Companies, Inc., whereby we were
reincorporated as a Delaware corporation and the operating subsidiary of The
AppleTree Company, Inc. and our name was changed to J R Bassett Optical Inc.
During April 1997, The AppleTree Companies, Inc. filed chapter 11 Bankruptcy in
the U.S. Bankruptcy Court for the Eastern District of Virginia. The U.S.
Bankruptcy Court subsequently approved the sale of 28,367,500 shares of J R
Bassett Optical Inc. owned by record by The AppleTree Companies, Inc. to Robert
E. Williams.





On
October 19, 2005,  Robert E. Williams and Samuel Skipper entered into
a stock purchase agreement pursuant to which Robert E. Williams sold to Samuel
Skipper approximately 28,800,000 shares of common stock of J R Bassett Optical
Inc. and our name was subsequently changed to Samurai Energy Corp. On June 30,
2006, Samurai Energy Corp. (“Samurai”), ECCO Energy Corp. (“ECCO”) and SEI
Acquisition Corp., the wholly owned subsidiary of Samurai (“SEI”), entered into
an agreement and plan of merger (the “Merger Agreement”). In accordance with the
terms and provisions of the Merger Agreement and Nevada law: (i) each three
shares of ECCO were exchanged for one fully paid non-assessable share of the
common stock of Samurai, pursuant to which Samurai issued an aggregate of
1,415,999 shares of its common stock to the shareholders of ECCO.; (ii) the
separate corporate existence of SEI ceased; and (iii) ECCO was the surviving
entity. After completion of the transactions contemplated by the Merger
Agreement, ECCO became a wholly-owned subsidiary of Samurai and Samurai merged
with and into ECCO for the purpose of reincorporating under the laws of Nevada.
On August 28, 2006, the reincorporation became effective resulting in Samurai
continuing its corporate existence in the State of Nevada under the name ECCO
Energy Corp. (“ECCE”).





The
acquisition has been accounted for as a business combination between entities
under common control similar to a pooling of interest. Prior to the Merger
Agreement, Samurai and ECCO were controlled by the same management group and had
certain common ownership interests in their respective common stock. Therefore,
ECCE recorded the acquisition of ECCO at the carrying value of the assets
acquired with no adjustment for the fair value of the assets
acquired.





We are
currently an independent oil and gas company actively engaged in oil and gas
development, exploration and production with properties and operational focus in
the Gulf Coast Region. Our strategy is to grow our asset base by purchasing
producing assets at a discount to reserve value, increasing the production rate
of reserves, and converting proved developed non-producing reserves to proved
developed producing reserves. Acquisitions to date have provided producing
assets. Our principal assets are oil and gas properties, including a 69% working
interest in the Wilson properties. As of the date of this Annual Report, we also
intend to enter into the alternative fuel industry.





Effective
March 14, 2007, our shares of common stock commenced trading on the
Over-the-Counter Bulletin Board under the symbol: ECCE.OB. Please note that
throughout this Annual Report, and unless otherwise noted, the words “we,”
“our,” “us,” the “Company” or “ECCE” refers to ECCO Energy Corp.





ECCO
Biofuels, Inc.





ECCO
Biofuels, Inc. ("ECCO Biofuels") was our wholly-owned subsidiary and was formed
to offer plant operators the option of financing 100% of the construction of
biodiesel plants.  On June 27, 2007, we entered into that certain
letter of intent (the “Letter of Intent”) with Saber Energy Corp., a Texas
corporation (“Saber Energy”) aprivately held
company,pursuant to
which we would sell all of the total issued and outstanding shares of ECCO
Biofuels. After completion of satisfactory due diligence and conditions
precedent, we entered into a stock purchase agreement dated June 29, 2007 (the
“Stock Purchase Agreement”). In accordance with the terms and provisions of the
Stock Purchase Agreement: (i) we agreed to sell 1,000 shares of the common stock
of ECCO Biofuels, which comprises all of the total issued and outstanding shares
of ECCO Biofuels; and (ii) Saber Energy agreed to issue to us an aggregate of
250,000 shares of restricted common stock of Saber Energy and to assume all of
the liabilities of ECCO Biofuels. As of the date of this Annual Report, we hold
of record the 250,000 shares of common stock of Saber Energy.





Our Board
of Directors, by unanimous written consent, approved the consummation of the
Stock Purchase Agreement. The Board of Directors engaged in a thorough analysis
of the sale of its wholly-owned subsidiary, ECCO Biofuels including, but not
limited to: (i) maximization of shareholder value relating to the stock Purchase
Agreement in comparison with potential shareholder value relating to alternative
business strategies retaining ECCO Biofuels; (ii) the process conducted in
seeking potential buyers and analysis pertaining to reasonableness of providing
equal or greater value to us; and (iii) review of our financial condition,
results of operations and business and earning prospects.  Even though
the alternative fuel industry is increasing, our Board’s evaluation concluded
that we would be required to spend significant employee resources and money to
grow the business operations of ECCO Biofuels, therefore, our Board determined
that it was in the best interests of the company and its shareholders to
concentrate on its core business on the exploration and development of oil and
gas properties.





Transfer
Agent





Our
transfer agent is Atlas Stock Transfer, Salt Lake City, UT.





CURRENT
BUSINESS OPERATIONS





Oil
and Gas





We are an
oil and gas exploration and development company engaged in the exploration and
development of properties in the United States. Our strategy is to acquire oil
and gas properties that are thought to contain economic quantities of oil and
gas and have undergone some degree of exploration but have not yet been drilled.
To date, we have acquired interests in 330 gross acres of located in the State
of Texas. These properties are producing.





We plan
to target additional exploration and developmental properties for acquisition.
Our ability to complete any acquisitions will be subject to our obtaining
sufficient financing and our being able to conclude agreements with the property
owners on terms that are acceptable to us. These potential acquisition
properties have not yet been specifically identified. We plan to conduct
exploration and developmental programs on these properties with the objective of
ascertaining whether any of these properties contain economic reserves of oil
and gas that are prospective for drilling. There is no assurance that
commercially viable oil and gas reserves exist on any of these future
properties, and a great deal of further exploration and development may be
required before a final evaluation as to the economic and legal feasibility for
our future exploration is determined.





OIL
AND GAS PROPERTIES





Wild
Tree Enterprises





On August
1, 2007, we entered into a mutual release (the “Release”) with Dr. Harold Crook
and Wild Tree Enterprises (collectively, “Wild Tree”). In accordance with the
terms and provisions of the Release: (i) Wild Tree agreed to allow us to retain
our 11% net working interest in the E.C. Wilson and Wilson State Tract Leases
located in Nueces County, Texas from February 1, 2006 to June 30, 2007; (ii)
Wild Tree agreed to allow us to retain the proceeds received by us from our 11%
net working interest in the approximate amount of $91,346; (iii) we agreed to
issue to Wild Tree an aggregate of 110,000 shares of our restricted Common
Stock; and (iv) we and Wild Tree agreed to mutually release one another from any
and all past claims, demands, obligations, actions, cause of action, rights,
damages of any nature.





Samurai
Corporation – Wilson Properties





On
December 31, 2007, ECCO acquired an 11% interest from Samurai Energy,
LLC.  The Samurai Corp. Assets were purchased by us on December 31,
2007 with a promissory note in the principal amount of $100,000 payable in one
lump sum payment on or before December 31, 2008 with interest at the rate of 10%
per annum.  Prior to the transaction, we owned 89% of working interest
of the same property. The principal owner of Samurai Corporation is Sam Skipper,
the CEO of ECCO Energy.








As of the
date of this Annual Report, our total working interest in the Wilson properties
is now 100%.





Louisiana
Shelf Partners LP





On
September 28, 2007 we executed an agreement pursuant to which we acquired all of
the assets of Louisiana Shelf Partners LP, a Delaware limited partnership
(“Louisiana Shelf Partners”), for $5,000,000 by issuing to the General Partner
and limited partners of Louisiana Shelf Partners, 1,000,000 of Convertible
Preferred Series B stock, convertible into our restricted common stock at 1
common share per share of Convertible Preferred Series B Stock. Louisiana Shelf
Partners owned Louisiana State Lease Number 17742 in Block 4, covering 600 acres
in East Cameron Area in Cameron Parish Louisiana.  The property
consists of two wells:  the #1 well, proved developed non-producing
(PDNP), and the #2 well, which is a proved undeveloped location
(PUD).  The #1 well is not connected to any platform or other pipeline
and is currently not in production.  We are currently in negotiations
to complete the platform.  See “Part II. Item 5 Market for Common
Equity, Related Stockholder Matters and Recent Sale of Unregistered Securities –
Recent Sales of Unregistered Securities.”





Bateman
Lake, St. Mary Parish, Louisiana





On
approximately December 1, 2007, we entered into a share exchange agreement (the
“Share Exchange Agreement”) with Old Jersey Oil Ventures LLC, a New Jersey
limited liability company (“Old Jersey”) and Eugene A. Noser, Jr. (“Noser”), who
holds of record 100% of the total issued and outstanding interests in Old Jersey
(the “Membership Interest”), regarding our acquisition of Old Jersey. In
accordance with the terms and provisions of the Share Exchange Agreement, we
shall acquire from Noser all of his right, title and interest in and to the
Membership Interest in exchange for the issuance of 600,000 shares of our Series
C Preferred Stock and 303,936 shares of the Company’s Series D Preferred
Stock.





Old
Jersey together with the Moffat Group is the holder of approximately
$5,900,000.00 in notes (the “Debt”) payable by VTEX Energy, Inc., a Nevada
corporation (“VTEX”), relating to that certain oil, gas and mineral lease no.
1337 located in the State of Louisiana (the “Bateman Lake Field”). Therefore, on
January 11, 2008, we entered into an assignment of oil, gas and mineral lease
(the “VTEX Assignment”) with VTEX pursuant to which VTEX assigned to us all of
its right, title and interest in and to lease no. 1337 on the Bateman Lake Field
in exchange for $1,000.00. Thus, we held 100% of the right, title and interest
in and to lease no. 1337 on the Bateman Lake Field. We also acquired the Debt
payable by VTEX to Old Jersey as a result of consummation of the Share Exchange
Agreement.





Simultaneously,
we entered into a farmout agreement dated January 11, 2008 (the “Farmout
Agreement”) with an independent oil & gas corporation (IOG), concerning the
right, title and interest of the Company in lease no. 1337 on the Bateman Lake
Field. In accordance with the terms and provisions of the Farmout Agreement, IOG
has the exclusive right, but not the obligation, to re-enter the Bateman Lake
Field for the purpose of sidetracking, deepening, working over or recompleting
any of the wells situated on the Bateman Lake Field. In accordance with the
further terms and provisions of the Farmout Agreement: (i) with regards to well
nos. 4, 11, 21 and 26 (the “Partnership Wells”), we shall receive a 5% carried
interest to the tanks until 120% of payout, at which time such carried interest
shall convert to a 25% net profit interest and we shall receive a 25% working
interest; (ii) with regards to well nos. 9 and 19 formerly operated by VTEX (the
“Partnership Retained Wells”), we shall retain ownership in the Partnership
Retained Wells and rights to any proceeds received for the sale of oil and/or
gas to which IOG shall have no rights; (iii) with regards to other workover
wells, we shall be carried to the tanks to the extent of a 5% working interest
in workover operations until 125% of payout and upon 125% of payout, we may
elect to continue to receive the 5% carried working interest or convert the 5%
carried working interest to a 25% working interest; (iv) with regards to other
sidetrack wells, we shall be carried to the tanks to the extent of a 5% working
interest in sidetrack operations until 150% of payout and upon 150% of payout,
we may elect to continue to receive the 5% carried working interest or convert
the 5% carried working interest to a 25% working interest; and (v) we shall
receive a 25% working interest upon reaching 150% of payout of all costs related
to the first three new drill wells.





Upon
consummation of the Farmout Agreement: (i) IOG paid an aggregate $750,000
relating to the Debt to us; (ii) we caused the cancellation of the Debt and any
other liens on lease no. 1337; and (iii) we entered into an assignment dated
January 11, 2008 (the “Company Assignment”) with IOG pursuant to which we
assigned to IOG all of our right, title and interest in and to lease no. 1337 on
the Bateman Lake Field. It is our intent that the Series C and D Preferred Stock
shall be redeemed out of future earnings generated from lease no. 1337 on the
Bateman Lake Field.  See “Part II. Item 5 Market for Common Equity,
Related Stockholder Matters and Recent Sale of Unregistered Securities – Recent
Sales of Unregistered Securities.”





There are
currently no producing wells on this concession.





Wilson
Lease





On July
12, 2006, as part of the merger described above, ECCE acquired through the
merger of ECCO an additional 32% working interest in oil and gas producing
properties located in Nueces County, Texas.


A
description of the lease and properties is as follows:





(1)
            Oil,
      Gas and Mineral Lease dated January 13, 1934 from Ellen C. Wilson to S. F.
      Hurlbut recorded in Volume 15, Page 608 of the Oil & Gas Lease Records
      of Nueces County, Texas insofar and only insofar as to 250 acres, more or
      less, being the eastern 250 acres of the northern 250 acres of the 434.59
      acre tract set aside to Leonora Bernard and more fully described in that
      certain Partition Decree of the Estate of W. W. Wright, Deceased, recorded
      in Book “H”, Page 313 of the Minutes of District Court of Nueces County,
      Texas.





(2)
            Oil,
      Gas and Mineral Lease dated December 9, 1950 from the State of Texas to F.
      William Carr recorded in Volume 116, Page 100 of the Oil & Gas Leases
      Records of Nueces County, Texas insofar and only insofar as to 5 acres,
      more or less, being out of Tract 5 of the Nueces River containing 80
      acres, said 5 acre tract being more fully described in that certain Gas
      Unit Pooling Agreement dated November 28, 1966 for the Wilson-State Gas
      Unit recorded in Volume 263, Page 126 of the Oil & Gas Lease Records
      of Nueces County, Texas, including all producing, non-producing and
      shut-in oil and gas wells (hereinafter called “Wells”) located on and/or
      associated with said Leases, together with all mineral leasehold estates
      and working interests created by such Leases, together with any interests
      in contracts, agreements, pipelines, pipeline right-of-ways or easements
      affecting or relating to said Leases and all material, fixtures, personal
      property and equipment associated with such
  Wells.





We
completed the workovers during December 2005 and, as of the date of this Annual
Report, continue to allow the Wells to to produce at their current production
levels.





On August
1, 2007, we purchased a 20% working interest in the E.C. Wilson and Wilson State
Tract Leases located in Nueces County, Texas from Ronald E. Reece M.D. Revocable
Trust of 2000 as outlined in the Assignment, Conveyance and Bill of Sale (the
Agreement) dated August 1, 2007 with an effective date of February 1, 2006 for
the issuance of 141,750 shares of our restricted common stock valued at $36,855
based on a share price of $.26 and a promissory note in the principal amount of
$205,548 payable in one lump sum payment on or before July 31, 2008 and interest
at the rate of seven (7%) per annum payable in monthly installments on the last
day of each month with the first installment due on August 31, 2007. See “Part
II. Item 5. Market for Common Equity, Related Stockholder Matters and Recent
Sales of Unregistered Securities.”





The net
working interest revenue on the 20% working interest purchased from Ronald E.
Reece M.D. Revocable Trust of 2000 from the effective date to the closing date
in the amount of $166,084 reduces the cost basis, whereas, the asset retirement
obligation of $12,337 at the closing date increases the cost basis resulting in
a net acquisition basis for the property of $88,656.





Oil
and Gas Exploration Regulation





Our oil
and gas exploration and development activities are, or will be, subject to
extensive laws and regulations governing prospecting, development, production,
exports, taxes, labor standards, occupational health, waste disposal, protection
and remediation of the environment, protection of endangered and protected
species, drilling safety, toxic substances and other matters. Oil and gas
exploration is also subject to risks and liabilities associated with pollution
of the environment and disposal of waste products occurring as a result of
exploration, development and production. Compliance with these laws and
regulations may impose substantial costs on us and could subject us to
significant potential liabilities. Changes in these regulations could require us
to expend significant resources to comply with new laws or regulations or
changes to current requirements and could have a material adverse effect on our
business operations.





Exploration,
development 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, development and production activities
are subject to certain federal, state and local laws and regulations relating to
environmental quality and pollution control. Such laws and regulations increase
the costs of these activities and may prevent or delay the commencement or
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. We
may be subject to legislation regarding emissions into the environment, water
discharges and storage and disposition of hazardous wastes. In addition,
legislation has been enacted which requires well and facility sites to be
abandoned and reclaimed to the satisfaction of state authorities. However, such
laws and regulations are frequently changed and we are unable to predict the
ultimate cost of compliance. Generally, environmental requirements do not appear
to affect us any differently or to any greater or lesser extent than other
companies in the industry and our current operations have not expanded to a
point where either compliance or cost of compliance with environmental
regulation is a significant issue for us. Costs may increase with the increasing
scale and scope of exploration, development and production
operations.





Oil and
gas exploration and development 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 business
operations. Oil and gas exploration and development operations are subject to
federal, state, and local laws relating to the protection of the environment,
including laws regulating removal of natural resources from the ground and the
discharge of materials into the environment. Oil and gas exploration and
development operations are also subject to federal, state, and local laws and
regulations which seek to maintain health and safety standards by regulating the
design and use of drilling methods and equipment. Various permits from
government bodies are required for drilling operations to be conducted; no
assurance can be given that such permits will be received. Environmental
standards imposed by federal, state, or local authorities may be changed and any
such changes may have material adverse effects on our activities. Moreover,
compliance with such laws may cause substantial delays or require capital
outlays in excess of those anticipated, thus causing an adverse effect on us.
Additionally, we may be subject to liability for pollution or other
environmental damages which we may elect not to insure against due to
prohibitive premium costs and other reasons. As of the date of this Annual
Report, other than with respect to the posting of a performance bond, we
have not been required to spend material amounts on compliance with
environmental regulations. However, we may be required to do so in future and
this may affect our ability to expand or maintain our operations. Environmental
regulation is discussed in further detail in the following section.





Environmental
Regulation





Our
activities will be subject to existing federal, state and local laws and
regulations governing environmental quality and pollution control. Our
operations will be subject to stringent environmental regulation by state and
federal authorities including the Environmental Protection Agency (“EPA”). Such
regulation can increase the cost of such activities. In most instances, the
regulatory requirements relate to water and air pollution control
measures.





Waste Disposal





The
Resource Conservation and Recovery Act (“RCRA”), and comparable state statutes,
affect minerals exploration and production activities by imposing regulations on
the generation, transportation, treatment, storage, disposal and cleanup of
“hazardous wastes” and on the disposal of non-hazardous wastes. Under the
auspices of the EPA, the individual states administer some or all of the
provisions of RCRA, sometimes in conjunction with their own, more stringent
requirements.





Comprehensive Environmental Response,
Compensation and Liability





The
federal Comprehensive Environmental Response, Compensation and Liability Act
(“CERCLA”) imposes joint and several liabilities for costs of investigation and
remediation and for natural resource damages, without regard to fault or the
legality of the original conduct, on certain classes of persons with respect to
the release into the environment of substances designated under CERCLA as
hazardous substances (“Hazardous Substances”). These classes of persons or
potentially responsible parties include the current and certain past owners and
operators of a facility or property where there is or has been a release or
threat of release of a Hazardous Substance and persons who disposed of or
arranged for the disposal of the Hazardous Substances found at such a facility.
CERCLA also authorizes the EPA and, in some cases, third parties to take actions
in response to threats to the public health or the environment and to seek to
recover the costs of such action. We may also in the future become an owner of
facilities on which Hazardous Substances have been released by previous owners
or operators. We may in the future be responsible under CERCLA for all or part
of the costs to clean up facilities or property at which such substances have
been released and for natural resource damages.





Air Emissions





Our
operations are subject to local, state and federal regulations for the control
of emissions of air pollution. Major sources of air pollutants are subject to
more stringent, federally imposed permitting requirements. Administrative
enforcement actions for failure to comply strictly with air pollution
regulations or permits are generally resolved by payment of monetary fines and
correction of any identified deficiencies. Alternatively, regulatory agencies
could require us to forego construction, modification or operation of certain
air emission sources.





Clean Water Act





The Clean
Water Act (“CWA”) imposes restrictions and strict controls regarding the
discharge of wastes, including mineral processing wastes, into waters of the
United States, a term broadly defined. Permits must be obtained to discharge
pollutants into federal waters. The CWA provides for civil, criminal and
administrative penalties for unauthorized discharges of hazardous substances and
other pollutants. It imposes substantial potential liability for the costs of
removal or remediation associated with discharges of oil or hazardous
substances. State laws governing discharges to water also provide varying civil,
criminal and administrative penalties and impose liabilities in the case of a
discharge of petroleum or it derivatives, or other hazardous substances, into
state waters. In addition, the EPA has promulgated regulations that may require
us to obtain permits to discharge storm water runoff. In the event of an
unauthorized discharge of wastes, we may be liable for penalties and costs.
Management believes that we are in substantial compliance with current
applicable environmental laws and regulations.








MATERIAL
AGREEMENTS





We are
not party to any material agreements other than those described
above.





EMPLOYEES





Samuel
Skipper is our President and Chief Executive Officer and N. Wilson Thomas is our
Chief Financial Officer. These individuals are primarily responsible for all our
day-to-day operations. Other services may be provided by outsourcing and
consultants and special purpose contracts. We currently employ four persons on a
full time basis and contract with approximately two individuals for ongoing
services provided to us.





RISK
FACTORS





An
investment in our common stock involves a number of very significant risks. You
should carefully consider the following risks and uncertainties in addition to
other information in evaluating our company and its business before purchasing
shares of our common stock. Our business, operating results and financial
condition could be seriously harmed due to any of the following risks. The risks
described below are all of the material risks that we are currently aware of
that are facing our company. Additional risks not presently known to us may also
impair our business operations. You could lose all or part of your investment
due to any of these risks.





Risks
Related to the Oil and Gas Industry





We
will need to obtain additional financing to complete further
exploration.





We will
require significant additional financing in order to continue our exploration,
development and production activities and our assessment of the commercial
viability of our properties. Furthermore, if the costs of our planned
exploration, development and production programs are greater than anticipated,
we may have to seek additional funds through public or private share offerings
or arrangements with corporate partners. There can be no assurance that we will
be successful in our efforts to raise these required funds, or on terms
satisfactory to us. The continued exploration of properties and the development
of our business will depend upon our ability to establish the commercial
viability of our oil and gas properties and to ultimately develop cash flow from
operations and reach profitable operations. Although we have generated revenue
from operations, we are experiencing a negative cash flow. Accordingly, the only
other sources of funds presently available to us may be through the sale of
equity or through debt financing. It is possible that debt financing may not be
an alternative to us. Alternatively, we may finance our business by offering an
interest in prospective oil and gas properties to be earned by another party or
parties carrying out further exploration and development thereof or to obtain
project or operating financing from financial institutions, neither of which is
presently intended. If we are unable to obtain this additional financing, we
will not be able to continue our business activities and our assessment of the
commercial viability of our properties. Further, if we are able to establish
that development of our properties is commercially viable, our inability to
raise additional financing at this stage would result in our inability to place
our properties into production and recover our investment.





Although
certain of our oil and gas properties contain known reserves, we may not
discover commercially exploitable quantities of oil or gas on other potential
oil and gas properties that would enable us to enter into commercial production,
achieve revenues and recover the money we spend on exploration.




There is
no assurance that any prospective oil and gas exploration and development
programs will result in establishment of reserves. Although our current oil and
gas properties are in the production stage, future prospective properties may be
only in the development stage and have no known body of reserves. Unproved or
proved reserves on these properties may never be determined to be economical. We
plan to conduct further exploration and development activities on properties,
which may include the completion of feasibility studies necessary to evaluate
whether a commercial reserve exists on any of the properties. There is a
substantial risk that these exploration activities will not result in
discoveries of commercially recoverable reserves of oil and gas. Any
determination that properties contain commercially recoverable quantities of oil
and gas may not be reached until such time that final comprehensive feasibility
studies have been concluded that establish that a reserve is likely to be
economic. There is a substantial risk that any preliminary or final feasibility
studies carried out by us will not result in a positive determination that such
properties can be commercially developed.





Exploration
activities on oil and gas properties may not be commercially successful, which
could lead us to abandon our plans to develop the property and our investments
in exploration.


Our
long-term success depends on our ability to establish commercially recoverable
quantities of oil and gas on our properties that can then be developed into
commercially viable drilling operations. Oil and gas exploration is highly
speculative in nature, involves many risks and is frequently non-productive.
These risks include unusual or unexpected geologic formations, and the inability
to obtain suitable or adequate machinery, equipment or labor. The success of oil
and gas exploration is determined in part by the following
factors:


·  identification
of potential reserves based on superficial analysis;


·  availability
of government-granted exploration permits;


·  the
quality of management and geological and technical
expertise; and


·  the
capital available for exploration and development.


Substantial
expenditures are required to establish proven and probable reserves through
drilling and analysis, and to develop the drilling and processing facilities and
infrastructure at any site chosen. Whether a property will be commercially
viable depends on a number of factors, which include, without limitation, the
particular attributes of the property, such as size, grade and proximity to
infrastructure; oil and gas prices, which fluctuate widely; and government
regulations, including, without limitation, regulations relating to prices,
taxes, royalties, land tenure, land use, importing and exporting of oil and gas
and environmental protection. We may invest significant capital and resources in
exploration activities and abandon such investments if we are unable to identify
commercially exploitable oil and gas reserves. The decision to abandon a project
may reduce the future trading price of our common stock and impair our ability
to raise financing. We cannot provide any assurance to investors that we will
discover or acquire any oil and gas reserves in sufficient quantities on any
properties to justify commercial operations. Further, we will not be able to
recover the funds that we may spend on exploration if we are not able to
establish commercially recoverable quantities of oil and gas.





We
will require additional funding in the future.





Based
upon our historical losses from operations, we will require additional funding
in the future. If we cannot obtain capital through financings or otherwise, our
ability to execute our oil and gas programs and/or alternative resource programs
will be greatly limited. Our current plans require us to make capital
expenditures for the development of our oil and gas properties. Historically, we
have funded our operations through the issuance of equity and short-term debt
financing arrangements. We may not be able to obtain additional financing on
favorable terms, if at all. Our future cash flows and the availability of
financing will be subject to a number of variables, including potential
production and the market prices of oil and gas, and our potential success in
the alternative fuel industry. Additional financing could lead to a diversion of
cash flow to satisfy debt-servicing obligations and create restrictions on
business operations. If we are unable to raise additional funds, it would have a
material adverse effect upon our operations.





As part of our growth strategy, we
intend to acquire additional oil and gas properties.





As part
of our growth strategy, we intend to acquire additional oil and gas production
properties. Current and subsequent acquisitions may pose substantial risks to
our business, financial condition, and results of operations. In pursuing
acquisitions, we will compete with other companies, many of which have greater
financial and other resources to acquire attractive properties. Even if we are
successful in acquiring additional properties, some of the properties may not
produce positive results of exploration, or we may not complete exploration of
such prospects within specified time periods that may cause the forfeiture of
the lease in that prospect. There can be no assurance that we will be able to
successfully integrate acquired properties, which could result in substantial
costs and delays or other operational, technical, or financial problems.
Further, acquisitions could disrupt ongoing business operations. If any of these
events occur, it would have a material adverse effect upon our operations and
results from operations.





We
are a new entrant into the oil and gas exploration and development industry
without a profitable operating history.





Our
recent activities have been limited to organizational efforts, obtaining working
capital and acquiring and developing a very limited number of properties. As a
result, there is limited information regarding production or revenue generation.
Further, our future revenues may be limited.





The
business of oil and gas exploration and development is subject to many risks and
if oil and gas is found in economic production quantities, the potential
profitability of future possible oil and gas ventures depends upon factors
beyond our control. The potential profitability of oil and gas properties if
economic quantities of oil and gas are found is dependent upon many factors and
risks beyond our control, including, but not limited to: (i) unanticipated
ground conditions; (ii) geological problems; (iii) drilling and other processing
problems; (iv) the occurrence of unusual weather or operating conditions and
other force majeure events; (v) lower than expected reserve quantities; (vi)
accidents; (vii) delays in the receipt of or failure to receive necessary
government permits; (viii) delays in transportation; (ix) labor disputes; (x)
government permit restrictions and regulation restrictions; (xi) unavailability
of materials and equipment; and (xii) the failure of equipment or drilling to
operate in accordance with specifications or expectations.





Our
drilling operations may not be successful.





In the
event we acquire additional oil and gas properties, we intend to test certain
zones in wellbores already drilled on the properties and if results are positive
and capital is available, drill additional wells and begin production operations
from existing and new wells. There can be no assurance that such well
re-completion activities or future drilling activities will be successful, and
we cannot be sure that our overall drilling success rate or our production
operations within a particular area will ever come to fruition and, if it does,
will not decline over time. We may not recover all or any portion of our capital
investment in the wells or the underlying leaseholds. Unsuccessful drilling
activities would have a material adverse effect upon our results of operations
and financial condition. The cost of drilling, completing, and operating wells
is often uncertain, and a number of factors can delay or prevent drilling
operations including: (i) unexpected drilling conditions; (ii) pressure or
irregularities in geological formations; (iii) equipment failures or accidents;
(iv) adverse weather conditions; and (iv) shortages or delays in availability of
drilling rigs and delivery of equipment.








Prospects
that we decide to drill may not yield natural gas or oil in commercially viable
quantities.





We
describe some of our current prospects in this Annual Report. Our prospects are
in various stages of preliminary evaluation and assessment and we have not
reached the point where we will decide to drill at all on the subject prospects.
However, the use of seismic data, historical drilling logs, offsetting well
information, and other technologies and the study of producing fields in the
same area will not enable us to know conclusively prior to drilling and testing
whether natural gas or oil will be present or, if present, whether natural gas
or oil will be present in sufficient quantities or quality to recover drilling
or completion costs or to be economically viable. In sum, the cost of drilling,
completing and operating any wells is often uncertain and new wells may not be
productive.





We
may be unable to identify liabilities associated with the properties or obtain
protection from sellers against them.





One of
our growth strategies is to capitalize on opportunistic acquisitions of oil and
natural gas reserves. However, our reviews of acquired properties are inherently
incomplete because it generally is not feasible to review in depth every
individual property involved in each acquisition. A detailed review of records
and properties may not necessarily reveal existing or potential problems, nor
will it permit a buyer to become sufficiently familiar with the properties to
assess fully their deficiencies and potential. Further, environmental problems,
such as ground water contamination, are not necessarily observable even when an
inspection is undertaken. We may not be able to obtain indemnification or other
protections from the sellers against such potential liabilities, which would
have a material adverse effect upon our results of operations.





The
potential profitability of oil and gas ventures depends upon global political
and market related factors beyond our control.





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 and other changes and events may materially affect
our financial performance. The potential profitability of oil and gas properties
is dependent on these and other factors beyond our control.





Production
or oil and gas resources if found are dependent on numerous operational
uncertainties specific to the area of the resource that affects its
profitability.





Production
area specifics affect profitability. Adverse weather conditions can hinder
drilling operations and ongoing production work. 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.
Production and treatments on other wells in the area can have either a positive
or negative effect on our production and wells. In addition, production from any
well may be unmarketable if it is impregnated with water or other deleterious
substances. The content of hydrocarbons is subject to change over the life of
producing wells. The marketability of oil and gas from any specific reserve
which may be acquired or discovered will be affected by numerous factors beyond
our control. These factors include, but are not limited to, the proximity and
capacity of oil and gas pipelines, availability of room in the pipelines to
accommodate additional production, processing and production equipment operating
costs and equipment efficiency, market fluctuations of prices and oil and gas
marketing relationships, local and state taxes, mineral owner and other
royalties, land tenure, lease bonus costs and lease damage costs, allowable
production, and environmental protection. These factors cannot be accurately
predicted and the combination of these factors may result in us not receiving an
adequate return on our invested capital.





We
are dependent upon transportation and storage services provided by third
parties.





We are
dependent on the transportation and storage services offered by various
interstate and intrastate pipeline companies for the delivery and sale of our
oil and gas supplies.  Both the performance of transportation and
storage services by interstate pipelines and the rates charged for such services
are subject to the jurisdiction of the Federal Energy Regulatory Commission or
state regulatory agencies. An inability to obtain transportation and/or storage
services at competitive rates could hinder our processing and marketing
operations and/or affect our sales margins.





Our
results of operations are dependent upon market prices for oil and gas, which
fluctuate widely and are beyond our control.





If and
when production from oil and gas properties is reached, our revenue,
profitability, and cash flow depend upon the prices and demand for oil and
natural gas. The markets for these commodities are very volatile and even
relatively modest drops in prices can significantly affect our financial results
and impede our growth. Prices received also will affect the amount of future
cash flow available for capital expenditures and may affect our ability to raise
additional capital. Lower prices may also affect the amount of natural gas and
oil that can be economically produced from reserves either discovered or
acquired. Factors that can cause price fluctuations include: (i) the level of
consumer product demand; (ii) domestic and foreign governmental regulations;
(iii) the price and availability of alternative fuels; (iv) technical advances
affecting energy consumption; (v) proximity and capacity of oil and gas
pipelines and other transportation facilities; (vi) political conditions in
natural gas and oil producing regions; (vii) the domestic and foreign supply of
natural gas and oil; (viii) the ability of members of Organization of Petroleum
Exporting Countries to agree to and maintain oil price and production controls;
(ix) the price of foreign imports; and (x) overall domestic and global economic
conditions.





The
availability of a ready market for our oil and gas depends upon numerous factors
beyond our control, including the extent of domestic production and importation
of oil and gas, the relative status of the domestic and international economies,
the proximity of our properties to gas gathering systems, the capacity of those
systems, the marketing of other competitive fuels, fluctuations in seasonal
demand and governmental regulation of production, refining, transportation and
pricing of oil, natural gas and other fuels.





The
oil and gas industry in which we operate involved many industry related
operating and implementation risks that can cause substantial losses, including,
but not limited to, unproductive wells, natural disasters, facility and
equipment problems and environmental hazards.





Our
drilling activities are subject to many risks, including the risk that we will
not discover commercially productive reservoirs. Drilling for oil and natural
gas can be unprofitable, not only from dry holes, but from productive wells that
do not produce sufficient revenues to return a profit. In addition, our drilling
and producing operations may be curtailed, delayed or canceled as a result of
other drilling and production, weather and natural disaster, equipment and
service failure, environmental and regulatory, and site specific related
factors, including but not limited to: (i) fires; (ii) explosions; (iii)
blow-outs and surface fractures; (iv) uncontrollable flows of underground
natural gas, oil, or formation water; (v) natural disasters; (vi) facility and
equipment failures; (vii) title problems; (viii) shortages or delivery delays of
equipment and services; (ix) abnormal pressure formations; and (x) environmental
hazards such as natural gas leaks, oil spills, pipeline ruptures and discharges
of toxic gases. 1(xi) weather related events such as hurricanes can cause
disruption of deliveries or destruction of producing facilities, either on or
off shore.  Such damage may be to our facilities or to facilities
operated by other companies needed for the delivery of our
production.





If any of
these events occur, we could incur substantial losses as a result of: (i) injury
or loss of life; (ii) severe damage to and destruction of property, natural
resources or equipment; (iii) pollution and other environmental damage; (iv)
clean-up responsibilities; (v) regulatory investigation and penalties; (vi)
suspension of our operations; or (vii) repairs necessary to resume
operations.





If we
were to experience any of these problems, it could affect well bores, gathering
systems and processing facilities, any one of which could adversely affect our
ability to conduct operations. We may be affected by any of these events more
than larger companies, since we have limited working capital.





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





The oil
and natural gas industry is intensely competitive, and we compete with other
companies that have greater resources. Many of these companies not only explore
for and produce oil and natural gas, but also carry on refining operations and
market petroleum and other products on a regional, national or worldwide basis.
These companies may be able to pay more for productive oil and natural gas
properties and exploratory prospects or define, evaluate, bid for and purchase a
greater number of properties and prospects than our financial or human resources
permit. In addition, these companies may have a greater ability to continue
exploration activities during periods of low oil and natural gas market prices.
Our larger competitors may be able to absorb the burden of present and future
federal, state, local and other laws and regulations more easily than we can,
which would adversely affect our competitive position. Our ability to acquire
additional properties and to discover reserves in the future will be dependent
upon our ability to evaluate and select suitable properties and to consummate
transactions in a highly competitive environment. In addition, because we have
fewer financial and human resources than many companies in our industry, we may
be at a disadvantage in bidding for exploratory prospects and producing oil and
natural gas properties.





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 business operations.





Oil and
gas operations are subject to federal, state, and local laws relating to the
protection of the environment, including laws regulating removal of natural
resources from the ground and the discharge of materials into the environment.
Oil and gas operations are also subject to federal, state, and local laws and
regulations which seek to maintain health and safety standards by regulating the
design and use of drilling methods and equipment. Various permits from
government bodies are required for drilling operations to be conducted; no
assurance can be given that such permits will be received. Environmental
standards imposed by federal, provincial, or local authorities may be changed
and any such changes may have material adverse effects on our activities.
Moreover, compliance with such laws may cause substantial delays or require
capital outlays in excess of those anticipated, thus causing an adverse effect
on us. Additionally, we may be subject to liability for pollution or other
environmental damages 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 material amounts on compliance with environmental regulations. However,
we may be required to do so in future and this may affect our ability to expand
or maintain our operations.





In
general, our exploration and production activities are subject to certain
federal, state and local laws and regulations relating to environmental quality
and pollution control. Such laws and regulations increase the costs of these
activities and may prevent or delay the commencement or 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 state authorities. However, such
laws and regulations are frequently changed and we are unable to predict the
ultimate cost of compliance. Generally, environmental requirements do not appear
to affect us any differently or to any greater or lesser extent than other
companies in the industry.





We
believe that our operations comply, in all material respects, with all
applicable environmental regulations. We need insurance to protect our self
against risks associated with the leases obtained. The leases allow for entry
onto the properties for the purposes of oil and gas exploration. The insurance
we require relates solely to developments on the properties for the purposes of
oil and gas exploration.





When and
if we are convinced that our current leases or those subsequently acquired are
capable of hydrocarbon production and sales, and we plan to drill more than one
well, we intend to maintain a $2,000,000 per year limit policy on bodily injury
and general liability with regard to risks incurred for the drilling of up to 25
wells. This will allow for our growth to contain non contract labor that would
require us to carry such additional insurance for risks pertaining to oil and
gas exploration conducted directly by us. Such a policy would include coverage
for numerous locations for pollution, environmental damage, chemical spills and
commercial general liability, fire, and personal injury. Such a policy will not
be required until such time and date as we believe that we will begin a
sustained drilling and operating program, and that at least one well has been
drilled and is producing to justify and warrant further drilling and a sustained
drilling and operating program.


We
currently maintain commercial general liability and related types of insurance
coverage on the recently acquired Louisiana Shelf well.





Any
change to government regulation/administrative practices may have a negative
impact on our ability to operate and 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 our ability to carry on business. 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 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 Samuel Skipper, our Chief Executive Officer, and N.
Wilson Thomas, our Chief Financial Officer. Further, we do not have key man life
insurance on either of these individuals. We may not have the financial
resources to hire a replacement if one or both of our officers were to die. The
loss of service of either of these employees could therefore significantly and
adversely affect our operations.





Nevada
law and our articles of incorporation may protect our directors from certain
types of lawsuits.





Nevada
law provides that our officers and directors will not be liable to us or our
stockholders for monetary damages for all but certain types of conduct as
officers and directors. Our Bylaws permit us broad indemnification powers to all
persons against all damages incurred in connection with our business to the
fullest extent provided or allowed by law. The exculpation provisions may have
the effect of preventing stockholders from recovering damages against our
officers and directors caused by their negligence, poor judgment or other
circumstances. The indemnification provisions may require us to use our limited
assets to defend our officers and directors against claims, including claims
arising out of their negligence, poor judgment, or other
circumstances.




Risks
Related to Our Common and Preferred Stock





Sales
of a substantial number of shares of our common stock into the public market by
stockholders may result in significant downward pressure on the price of our
common stock and could affect your ability to realize the current trading price
of our common stock.





Sales of
a substantial number of shares of our common stock in the public market by
stockholders could cause a reduction in the market price of our common
stock.  As of the date of this Annual Report, we have 9,374,753 shares
of common stock issued and outstanding, 100,000 of our Series A Convertible
Preferred stock issued and outstanding , 1,000,000 or our Series B Convertible
Preferred stock issued and outstanding, 660,000 of our Series C Convertible
Preferred stock issued and outstanding, and 303,936 of our Series D Convertible
Preferred stock. As of the date of this Annual Report, there are 6,144,183
outstanding shares of our common stock and 2,063,936 outstanding shares of our
Convertible Preferred stock that are restricted securities as that term is
defined in Rule 144 under the Securities Act of 1933, as amended (the
“Securities Act”). Although the Securities Act and Rule 144 place certain
prohibitions on the sale of restricted securities, restricted securities may be
sold into the public market under certain conditions.  In the event
that any of the Convertible Preferred shares of stock are converted into shares
of common stock, such shares may be available for immediate resale which could
have an adverse effect on the price of our common stock.





Any
significant downward pressure on the price of our common stock as stockholders
sell their shares of our common stock could encourage short sales by others. Any
such short sales could place further downward pressure on the price of our
common stock.





The
trading price of our common stock on the OTC Bulletin Board will fluctuate
significantly and stockholders may have difficulty reselling their
shares.





Effective
March 14, 2007, our shares of common stock commenced trading on the
Over-the-County Bulletin Board. There is a volatility associated with Bulletin
Board securities in general and the value of your investment could decline due
to the impact of any of the following factors upon the market price of our
common stock: (i) disappointing results from our discovery or development
efforts; (ii) failure to meet our revenue or profit goals or operating budget;
(iii) decline in demand for our common stock; (iv) downward revisions in
securities analysts' estimates or changes in general market conditions; (v)
technological innovations by competitors or in competing technologies; (vi) lack
of funding generated for operations; (vii) investor perception of our industry
or our prospects; and (viii) general economic trends.





In
addition, stock markets have experienced price and volume fluctuations and the
market prices of securities have been highly volatile. These fluctuations are
often unrelated to operating performance and may adversely affect the market
price of our common stock. As a result, investors may be unable to sell their
shares at a fair price and you may lose all or part of your
investment.





Additional
issuance of equity securities may result in dilution to our existing
stockholders.





Our
Articles of Incorporation authorize the issuance of 75,000,000 shares of common
stock. Common stock is our only authorized class of stock. The board of
directors has the authority to issue additional shares of our capital stock to
provide additional financing in the future and the issuance of any such shares
may result in a reduction of the book value or market price of the outstanding
shares of our common stock. If we do issue any such additional shares, such
issuance also will cause a reduction in the proportionate ownership and voting
power of all other stockholders. As a result of such dilution, your
proportionate ownership interest and voting power will be decreased accordingly.
Further, any such issuance could result in a change of control.





Our
common stock is classified as a “penny stock” under SEC rules which limits the
market for our common stock.





The SEC
has adopted rules that regulate broker-dealer practices in connection with
transactions in "penny stocks." Penny stocks generally are equity securities
with a price of less than $5.00 (other than securities registered on certain
national securities exchanges or quoted on the NASDAQ system, provided that
current price and volume information with respect to transactions in such
securities is provided by the exchange or system). Penny stock rules require a
broker-dealer, prior to a transaction in a penny stock not otherwise exempt from
those rules, to deliver a standardized risk disclosure document prepared by the
SEC, which specifies information about penny stocks and the nature and
significance of risks of the penny stock market. A broker-dealer must also
provide the customer with bid and offer quotations for the penny stock, the
compensation of the broker-dealer, and sales person in the transaction, and
monthly account statements indicating the market value of each penny stock held
in the customer's account. In addition, the penny stock rules require that,
prior to a transaction in a penny stock not otherwise exempt from those 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 trading activity in the secondary market for stock that becomes
subject to those penny stock rules. If a trading market for our common stock
develops, our common stock will probably become subject to the penny stock
rules, and shareholders may have difficulty in selling their
shares.





ITEM
2. DESCRIPTION OF PROPERTY





We lease
our principal office space located at 3315 Marquart St, Ste. 206, Houston, Texas
77027 on a month to month basis, which lease is cancelable with a thirty day
notice. We also leased office space in Corpus Christi on a month to month basis
through September, 2007.  During fiscal year ended December 31, 2007,
aggregate rent expense was $26,871.68. The office space cost in Houston is
$1,988 per month.  The building at Marquart Street is partially owned
by our CEO, Sam Skipper.





ITEM
3. LEGAL PROCEEDINGS





Management
is not aware of any legal proceedings contemplated by any governmental authority
or any other party involving us or our properties. As of the date of this Annual
Report, no director, officer or affiliate is (i) a party adverse to us in any
legal proceeding, or (ii) has an adverse interest to us in any legal
proceedings. Management is not aware of any other legal proceedings pending or
that have been threatened against us or our properties.





ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS





During
fiscal year ended December 31, 2007, there were no matters submitted to a vote
by our security holders.










PART
II





ITEM
      5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND RECENT SALE
      OF


UNREGISTERED
SECURITIES





Subsequent
to consummation of the Merger Agreement, our shares of common stock traded on
the Pink Sheets under the symbol: ECCE.PK”. Effective March 14, 2007, our shares
of common stock commenced trading on the Over-the-Counter Bulletin Board under
the symbol: ECCE.OB”. The market for our common stock is and will be limited and
can be volatile. The following table sets forth the high and low bid prices
relating to our common stock on a quarterly basis for the periods indicated as
compiled by Pink Sheets LLC. These quotations reflect inter-dealer prices
without retail mark-up, mark-down, or commissions, and may not reflect actual
transactions.





Quarter
      Ended
            High
      Bid
            Low
      BidDecember
      31, 2007
            $1.58
            $  .30September 30, 2007
            $  .45
            $ 
      .26June
      30, 2007
            $
      .59
            $ 
      .15March
      31, 2007
            $1.04
            $  .15December
      31, 2006
            $1.04
            $  .10September
      30, 2006
            $2.50
            $1.04





As of
March 1, 2008, we had 233 shareholders of record.





DIVIDEND
POLICY





No
dividends have ever been declared by the Board of Directors on our common stock.
Our losses do not currently indicate the ability to pay any cash dividends, and
we do not indicate the intention of paying cash dividends either on our common
stock in the foreseeable future. We intend to apply our earnings, if any, in
expanding our operations and related activities. The payment of cash dividends
in the future will be at the discretion of the Board of Directors, our financial
condition and other facts deemed relevant by our Board of Directors. In
addition, our ability to pay dividends may be limited under future loan
agreements, which restrict or prohibit the payment of dividends.





SECURITIES
AUTHORIZED FOR ISSUANCE UNDER COMPENSATION PLANS





As of the
date of this Annual Report, we have one equity compensation plan titled the 2005
Directors, Officers and Consultants Stock Option, Stock Warrant and Stock Awards
Plan (the “Plan”).  On December 14, 2005, our Board of Directors
approved and adopted the Plan. The Plan provides for the issuance of 100,000
shares of common stock, warrants, options, preferred stock or any combination
thereof. The shares subject to the Plan shall consist of authorized but unissued
shares of common stock and such number of shares shall be and reserved for sale
for such purpose.





The
purpose of the Plan is to maintain our ability to attract and retain highly
qualified and experienced directors, employees and consultants and give to such
directors, employees and consultants a continued proprietary interest in our
success.





The Plan
will be administered by our Board of Directors who shall have sole and absolute
discretion authorizing, determining and designating those persons who are to
receive common stock, warrants, options, preferred stock or any combination
thereof.





As of the
date of this Quarterly Report, we have not granted any options under the
Plan.





RECENT
SALES OF UNREGISTERED SECURITIES





As of the
date of this Annual Report and during fiscal year ended December 31, 2006, to
provide capital, we sold stock in private placement offerings, issued stock in
exchange for our debts or pursuant to contractual agreements as set forth
below.





Common
Stock





During
third quarter 2007, we issued an additional 141,750 shares and 110,000 shares to
Ronald E. Reece M.D. in connection with the purchase of the 20% working interest
in the E.C. Wilson and Wilson State Tract Leases located in Nueces County, Texas
from Ronald E. Reece M.D. Revocable Trust of 2000 as outlined in the Agreement.
The securities were issued in reliance on Section 4(2) of the Securities Act.
The securities issued have not been registered under the Securities Act or under
any state securities laws and may not be offered or sold without registration
with the United States Securities and Exchange Commission or an applicable
exemption from the registration requirements.





During
fourth quarter of 2007, we offered and issued 75,000 shares of our restricted
common stock to an investor for aggregate proceeds of $30,000. The offering was
completed in reliance on Regulation D of the Securities Act. Sales were made to
only one U.S. resident. The shares were not registered under the Securities Act
or under any state securities laws and may not be offered or sold without
registration with the Securities and Exchange Commission or an applicable
exemption from the registration requirements. The per share price of the
offering was arbitrarily determined by our Board of Directors based upon
analysis of certain factors including, but not limited to, stage of development,
industry status, investment climate, perceived investment risks, our assets and
net estimated worth.





Preferred
Stock





Convertible Series B Preferred
Stock





On
September 28, 2007 we executed an agreement pursuant to which we acquired all of
the assets of Louisiana Shelf Partners for $5,000,000 by issuing to the General
Partner and limited partners of Louisiana Shelf Partners, 1,000,000 of
Convertible Preferred Series B stock, convertible into our restricted common
stock at 1 common share per share of Convertible Preferred Series B Stock.On approximately September
30, 2007, we filed with the Nevada Secretary of State a First Amended
Certificate of Designation of Series B Convertible Preferred Stock designating
1,000,000 shares of the 10,000,000 shares of authorized preferred stock as
Series B Preferred Stock, with an initial value of $5.00 (the “Initial Value”).
The Series B Preferred Stock had been authorized by our Board of Directors as a
new series of preferred stock, which ranks senior and is not subordinated in any
respects to the Series A Preferred Stock. So long as any Series B Preferred
Stock is outstanding, we are prohibited from issuing any series of stock having
rights senior to or ranking on parity with the Series B Preferred Stock without
the approval of the holders of 2/3’s of the outstanding Series B Preferred
Stock. The holders of the outstanding shares of Series B Preferred Stock shall
be entitled to receive in preference to the holders of any other shares of
capital stock of the Corporation, cumulative dividends when and as if they may
be declared by the Board of Directors at a per share equal to 8% per annum of
the Initial Value. Additionally, upon occurrence of our liquidation, dissolution
or winding up, the holder of shares of Series B Preferred Stock will be entitled
to receive, before any distribution of assets is made to holders of our common
stock or any other stock ranking junior to the Series B Preferred Stock
Preferred Stock as to dividends or liquidations rights, but only after all
distributions to holders of Series B Preferred Stock have been made in an amount
per share of Series B Preferred Stock equal to 100% of the Initial Value plus
the amount of any accrued but unpaid dividends due for each share of Series B
Preferred Stock (the “Liquidation Amount”). Lastly, in addition to the rights
discussed above of the holders of the Series B Preferred Stock, at any time
after June 15, 2008 and provided a triggering event has occurred, each holder of
Series B Preferred Stock shall have the right at such holder’s option to require
us to redeem for cash all or a portion of such holder’s shares of Series B
Preferred Stock at a price per share equal to the Liquidation Amount. A
“triggering event” shall mean that the wells owned or operated by the Limited
Partnership have generated an aggregate of 1,500,000,000 cubic feet of natural
gas.





Convertible
Series C and D Preferred Stock





On
approximately December 1, 2007, we entered into the Share Exchange Agreement
with Old Jersey and Noser, who holds of record 100% of the total issued and
outstanding interests in Old Jersey (the “Membership Interest”), regarding our
acquisition of Old Jersey. In accordance with the terms and provisions of the
Share Exchange Agreement, we shall acquire from Noser all of his right, title
and interest in and to the Membership Interest in exchange for the issuance of
600,000 shares of our Series C Preferred Stock and 303,936 shares of the
Company’s Series D Preferred Stock.





On approximately March 27, 2008, we
filed with the Nevada Secretary of State a First Amended Certificate of
Designation of Series C Convertible Preferred Stock designating 660,000 shares
of the 10,000,000 shares of authorized preferred stock as Series C Preferred
Stock, with an initial value of $5.00 (the “Initial Value”). The Series C
Preferred Stock had been authorized by our Board of Directors as a new series of
preferred stock, which ranks senior and is not subordinated in any respects to
the Series A or B Preferred Stocks. So long as any Series C Preferred Stock is
outstanding, we are prohibited from issuing any series of stock having rights
senior to or ranking on parity with the Series C Preferred Stock without the
approval of the holders of 2/3’s of the outstanding Series C Preferred Stock.
The holders of the outstanding shares of Series C Preferred Stock shall be
entitled to receive in preference to the holders of any other shares of capital
stock of the Corporation, cumulative dividends when and as if they may be
declared by the Board of Directors at a per share equal to 8% per annum of the
Initial Value. Additionally, upon occurrence of our liquidation, dissolution or
winding up, the holder of shares of Series B Preferred Stock will be entitled to
receive, before any distribution of assets is made to holders of our common
stock or any other stock ranking junior to the Series C Preferred Stock
Preferred Stock as to dividends or liquidations rights, but only after all
distributions to holders of Series B Preferred Stock have been made in an amount
per share of Series B Preferred Stock equal to 100% of the Initial Value plus
the amount of any accrued but unpaid dividends due for each share of Series C
Preferred Stock (the “Liquidation Amount).





On approximately March 27, 2008, we
filed with the Nevada Secretary of State a First Amended Certificate of
Designation of Series D Convertible Preferred Stock designating 303,396 shares
of the 10,000,000 shares of authorized preferred stock as Series D Preferred
Stock, with an initial value of $5.00 (the “Initial Value”). The Series C
Preferred Stock had been authorized by our Board of Directors as a new series of
preferred stock, which ranks senior and is not subordinated in any respects to
the Series A or B or C Preferred Stocks. So long as any Series D Preferred Stock
is outstanding, we are prohibited from issuing any series of stock having rights
senior to or ranking on parity with the Series C Preferred Stock without the
approval of the holders of 2/3’s of the outstanding Series D Preferred Stock.
The holders of the outstanding shares of Series D Preferred Stock shall be
entitled to receive in preference to the holders of any other shares of capital
stock of the Corporation, cumulative dividends when and as if they may be
declared by the Board of Directors at a per share equal to 8% per annum of the
Initial Value. Additionally, upon occurrence of our liquidation, dissolution or
winding up, the holder of shares of Series B or C Preferred Stock will be
entitled to receive, before any distribution of assets is made to holders of our
common stock or any other stock ranking junior to the Series D Preferred Stock
Preferred Stock as to dividends or liquidations rights, but only after all
distributions to holders of Series B or C Preferred Stock have been made in an
amount per share of Series B or C Preferred Stock equal to 100% of the Initial
Value plus the amount of any accrued but unpaid dividends due for each share of
Series D Preferred Stock (the “Liquidation Amount).





ITEM
6.   MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION.





The
summarized financial data set forth below is derived from and should be read in
conjunction with our audited consolidated financial statements for fiscal years
ended December 31, 2007 and 2006, including the notes to those financial
statements which are included in this Annual Report. The following discussion
should be read in conjunction with our audited financial statements and the
related notes that appear elsewhere in this Annual Report. The following
discussion contains forward-looking statements that reflect our plans, estimates
and beliefs. Our actual results could differ materially from those discussed in
the forward looking statements. Factors that could cause or contribute to such
differences include, but are not limited to those discussed below and elsewhere
in this Annual Report, particularly in the section entitled "Risk Factors". Our
audited financial statements are stated in United States Dollars and are
prepared in accordance with United States Generally Accepted Accounting
Principles.





RESULTS
OF OPERATION




We have
incurred recurring losses to date. Over the next twelve months our strategy is
to grow our asset base by acquiring producing properties and investing in
working interest in non-operated properties. In addition, we plan to use
innovative and sound engineering principles to enhance existing production. We
will acquire operated as well as non-operated properties that meet or exceed our
rate of return criteria. For acquisitions of properties with additional
development, exploitation and exploration potential, our focus has been on
acquiring operated properties so that we can better control the timing and
implementation of capital spending. We will sell properties when management is
of the opinion that the sale price realized will provide an above average rate
of return for the property or when the property no longer matches the profile of
properties we desire to own.





Our
current operations are expected to generate sufficient cash flow from operating
activities to meet our current working capital requirements. The execution of
our growth strategy is dependent on a number of factors including oil and gas
prices, the availability of oil and gas properties that meet our economic
criteria and the availability of funds on terms that are acceptable to us, if at
all. There is no assurance that these factors will occur. We expect we will
require additional capital to meet our long term operating requirements. We
expect to raise additional capital through, among other things, the sale of
equity or debt securities.





PENDING
ACQUISITIONS AND FUNDING





On
February 14, 2008, ECCO Energy purchased an additional 25% of the working
interest in Louisiana Shelf East


Cameron
Block 4, bringing the total working interest owned by ECCO to
100%.  The purchase was approved in December


by the
trustee, and  received final approval in February by the court,
whereupon the interest was purchased from the


Trustee
of the United States Bankruptcy Court.





ECCO
Energy entered into a farmout agreement dated January 11, 2008 (the “Farmout
Agreement”) with an independent oil & gas corporation (IOG), concerning the
right, title and interest of the Company in lease no. 1337 on the Bateman Lake
Field. In accordance with the terms and provisions of the Farmout Agreement, IOG
has the exclusive right, but not the obligation, to re-enter the Bateman Lake
Field for the purpose of sidetracking, deepening, working over or recompleting
any of the wells situated on the Bateman Lake Field. In accordance with the
further terms and provisions of the Farmout Agreement: (i) with regards to well
nos. 4, 11, 21 and 26 (the “Partnership Wells”), the Company shall receive a 5%
carried interest to the tanks until 120% of payout, at which time such carried
interest shall convert to a 25% net profit interest and the Company shall
receive a 25% working interest; (ii) with regards to well nos. 9 and 19 formerly
operated by VTEX (the “Partnership Retained Wells”), the Company shall retain
ownership in the Partnership Retained Wells and rights to any proceeds received
for the sale of oil and/or gas to which IOG shall have no rights; (iii) with
regards to other workover wells, the Company shall be carried to the tanks to
the extent of a 5% working interest in workover operations until 125% of payout
and upon 125% of payout, the Company may elect to continue to receive the 5%
carried working interest or convert the 5% carried working interest to a 25%
working interest; (iv) with regards to other sidetrack wells, the Company shall
be carried to the tanks to the extent of a 5% working interest in sidetrack
operations until 150% of payout and upon 150% of payout, the Company may elect
to continue to receive the 5% carried working interest or convert the 5% carried
working interest to a 25% working interest; and (v) the Company shall receive a
25% working interest upon reaching 150% of payout of all costs related to the
first three new drill wells.





Upon
consummation of the Farmout Agreement: (i) IOG paid an aggregate $750,000
relating to the Debt to the Company; (ii) the Company caused the cancellation of
the Debt and any other liens on lease no. 1337; and (iii) the Company entered
into an assignment dated January 11, 2008 (the “Company Assignment”) with IOG
pursuant to which the Company assigned to IOG all of its right, title and
interest in and to lease no. 1337 on the Bateman Lake Field. It is the Company’s
intent that the Series C and D Preferred Stock shall be redeem out of future
earnings generated from lease no. 1337 on the Bateman Lake Field.








Existing
working capital, future revenues, further advances and debt instruments, and
anticipated cash flow are expected to be adequate to fund our operations over
the next twelve months. Generally, we have financed operations to date through
generation of revenues from operations and with proceeds from the private
placement of equity and debt instruments and funding from related parties.
Management anticipates additional increases in operating expenses and capital
expenditures relating to: (i) oil and gas operating properties; (ii) possible
drilling initiatives on current properties and future properties; and (iii)
future property acquisitions. We intend to fund these expenses with further
issuances of securities, and debt issuances. Thereafter, we expect we will need
to raise additional capital and generate revenues to meet long-term operating
requirements. Additional issuances of equity or convertible debt securities will
result in dilution to our current shareholders. Further, such securities might
have rights, preferences or privileges senior to our common stock. Additional
financing may not be available upon acceptable terms, or at all. If adequate
funds are not available or are not available on acceptable terms, we may not be
able to take advantage of prospective new business endeavors or opportunities,
which could significantly and materially restrict our business
operations.





MATERIAL
COMMITMENTS





As noted
in the December 31, 2006 Annual Report, we had a material commitment for fiscal
year ended December 31, 2007, which consists of a promissory note payable to a
related party in the principal amount of $155,000 (the “Promissory Note”). The
terms of the Promissory Note required us to make monthly payments of $7,150,
including principal and interest at 10% per annum. The unsecured Promissory Note
was paid in full before December 7, 2007.





As noted
in the December 31, 2006 Annual Report, we have a promissory note payable to the
Reece Revocable Trust in the principal amount of $205,548 payable in one lump
sum payment on or before July 31, 2008 with interest accruing at the rate of 7%
per annum payable in monthly installments on the last day of each month, with
the first payment made on August 31, 2007.





During
fiscal year 2008, we have certain short-term unsecured debt aggregating
approximately $500,000 payable to certain creditors. In general, the terms
include interest at the rate of 10% per annum with monthly payments of principal
and interest.





PURCHASE
OF SIGNIFICANT EQUIPMENT





We do not
intend to purchase any significant equipment during the next twelve
months.








OFF-BALANCE
SHEET ARRANGEMENTS





As of the
date of this Annual Report, we do not have any 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 investors.





RECENT
ACCOUNTING PRONOUNCEMENTS





In
December 2004, the FASB issued SFAS No.123R, "Accounting for Stock-Based
Compensation".  SFAS No.123R establishes standards for the
accounting for transactions in which an entity exchanges its equity instruments
for goods or services. This Statement focuses primarily on accounting for
transactions in which an entity obtains employee services in share-based payment
transactions.  SFAS No.123R requires that the fair value of such
equity instruments be recognized as expense in the historical financial
statements as services are performed. Prior to SFAS No.123R, only certain pro
forma disclosures of fair value were required. ECCE adopted SFAS No. 123R as of
January 1, 2006.  As of December 31, 2006, we have not issued any
options or warrants.










PART
III





ITEM
9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND
CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE
ACT





IDENTIFICATION
OF DIRECTORS AND EXECUTIVE OFFICERS





All of
our directors hold office until the next annual general meeting of the
shareholders or until their successors are elected and qualified. Our officers
are appointed by our board of directors and hold office until their earlier
death, retirement, resignation or removal.





Our
directors and executive officers, their ages, positions held are as
follows:





Name
            
            Age
            
            Position
      with the CompanySamuel
      Skipper
            
            48
            
            President,
      Chief Executive Officer and a DirectorN.
      Wilson Thomas
            
            53
            
            Chief
      Financial Officer





Business
Experience





The
following is a brief account of the education and business experience of each
director, executive officer and key employee during at least the past five
years, indicating each person's principal occupation during the period, and the
name and principal business of the organization by which he or she was employed,
and including other directorships held in reporting companies.





Samuel M. Skipperis our
President/Chief Executive Officer and a director. For the past sixteen years,
Mr. Skipper has assisted in the consolidation of private and public companies
and the entry of such companies into the public markets. From 1998 to 2003, Mr.
Skipper was the founder, chairman of the board and the chief executive officer
of VTEX Energy, Inc., a public oil and gas company with over $100 million in
assets. From 1990 to 1993, Mr. Skipper was the founder of and served as the
president and chief executive officer of ImageTrust, Inc. a public company in
the health care industry. Under his leadership, ImageTrust Inc. assembled over
$25 million in assets for owned and operated MRI diagnostic clinics in South
Carolina and Texas. In 1993 Mr. Skipper sold ImageTrust, Inc. for seven figures.
In 1990, Mr. Skipper served as the founder and the vice president of corporate
development of Diagnostic Health Corporation (DHC), where he assisted DHC in the
identification and closing of over $100 million of assets until DHC’s
acquisition by HealthSouth Corporation in 1994.





N. Wilson
Thomas was appointed C.F.O of ECCO Energy Corp., a public oil and gas company
trading under the symbol (ECCE.OB) in late November 2007.  Mr. Thomas
is a CPA and received a BBA from the University of Texas, Austin in
1976.  Since 2006, Mr. Thomas has worked as a CPA specializing in
working with emerging companies.  Prior to 2006, he spent twenty years
in the distribution industry, with sixteen of those years working for SYSCO
Corporation as a CFO of a SYSCO subsidiary.  As CFO he was involved in
the rapid growth of a major subsidiary, with annual sales approaching $350
million.





FAMILY
RELATIONSHIPS





There are
no family relationships among our directors or officers.





INVOLVEMENT
IN CERTAIN LEGAL PROCEEDINGS





During
the past five years, none of our directors, executive officers or persons that
may be deemed promoters is or have been involved in any legal proceeding
concerning: (i) any bankruptcy petition filed by or against any business of
which such person was a general partner or executive officer either at the time
of the bankruptcy or within two years prior to that time; (ii) any conviction in
a criminal proceeding or being subject to a pending criminal proceeding
(excluding traffic violations and other minor offenses); (iii) being subject to
any order, judgment or decree, not subsequently reversed, suspended or vacated,
of any court of competent jurisdiction permanently or temporarily enjoining,
barring, suspending or otherwise limiting involvement in any type of business,
securities or banking activity; or (iv) being found by a court, the Securities
and Exchange Commission or the Commodity Futures Trading Commission to have
violated a federal or state securities or commodities law (and the judgment has
not been reversed, suspended or vacated).





AUDIT
COMMITTEE





As of the
date of this Annual Report, we have not appointed members to an audit committee
and, therefore, the respective role of an audit committee has been conducted by
our Board of Directors. When established, the audit committee's primary function
will be to provide advice with respect to our financial matters and to assist
our Board of Directors in fulfilling its oversight responsibilities regarding
finance, accounting, tax and legal compliance. The audit committee's primary
duties and responsibilities will be to: (i) serve as an independent and
objective party to monitor our financial reporting process and internal control
system; (ii) review and appraise the audit efforts of our independent
accountants; (iii) evaluate our quarterly financial performance as well as our
compliance with laws and regulations; (iv) oversee management's establishment
and enforcement of financial policies and business practices; and (v) provide an
open avenue of communication among the independent accountants, management and
our Board of Directors.





The Board
of Directors has considered whether the regulatory provision of non-audit
services is compatible with maintaining the principal independent accountant's
independence.





COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT





Section
16(a) of the Exchange Act requires our directors and officers, and the persons
who beneficially own more than ten percent of our common stock, to file reports
of ownership and changes in ownership with the Securities and Exchange
Commission. Copies of all filed reports are required to be furnished to us
pursuant to Rule 16a-3 promulgated under the Exchange Act. Based solely on the
reports received by us and on the representations of the reporting persons, we
believe that these persons have complied with all applicable filing requirements
during the fiscal year ended December 31, 2007.





ITEM
10. EXECUTIVE COMPENSATION





The
following table sets forth the compensation paid to our Chief Executive Officer
and those executive officers that earned in excess of $100,000 during fiscal
year ended December 31, 2007 (collectively, the “Named Executive
Officers”):




SUMMARY
COMPENSATION TABLE




Non-Equity
            Non-QualifiedName
      and
            
            
            
            
            
            Incentive
            DeferredPrincipal
            
            
            
            Stock
            Option
            Plan
            Compensation
            All
      OtherPosition
            Year
            Salary
            Bonus
            Awards
            Awards
            Compensation
            Earnings
            Compensation
            Total($)
            ($)
            ($)
            ($)
            ($)
            ($)
            ($)
            ($)Samuel
      Skipper,President/CEO
            2007
            $60,000
            $            -
            $   0
            $            -
            $                    -
            $                    -
            $                    -
            $
      60,000John
      Vise,CFO
            2007
            $68,850
            $            -
            $            -
            $            -
            $            -
            $            -
            $            -
            $
      68,850









(1)This
      amount represents fees paid by us to the Named Executive Officer during
      the past year pursuant to services provided in connection with their
      respective position as Chief Executive Officer and Chief Financial
      Officer.







STOCK
OPTIONS/SAW GRANTS IN FISCAL YEAR ENDED DECEMBER 31, 2006





DIRECTOR
COMPENSATION TABLE





During
fiscal year ended December 31, 2007, we did not pay any compensation to our
directors for their respective position on the Board of Directors.





ITEM
11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS





As of the
date of this Annual Report, the following table sets forth certain information
with respect to the beneficial ownership of our common stock by each stockholder
known by us to be the beneficial owner of more than 5% of our common stock and
by each of our current directors and executive officers. Each person has sole
voting and investment power with respect to the shares of common stock, except
as otherwise indicated. Beneficial ownership consists of a direct interest in
the shares of common stock, except as otherwise indicated. As of the date of
this Annual Report, there are 9,374,753 shares of common stock issued and
outstanding.







Name
      and Address
            Amount
      and nature of
            
            Percentage
      ofof Beneficial Owner(1)
            Beneficial Ownership(1)
            
            Beneficial
      OwnershipDirectors
      and Officers:Samuel
      Skipper3315
      Marquart St,  Ste. 206Houston,
      TX 77027
            5,120,499
            (2)
            56.59%John
      Vise14231
      KellywoodHouston,
      TX 77079
            90,000
            
            *All
      executive officers and directorsas
      a group (2 persons)
            5,210,499
            
            57.58%Major
      Shareholders:Richard
      A. Bobigian15907
      Chilton CircleSpring,
      TX 77379
            1,180,998
            (3)
            13.05%




*Less than
one percent.









(1)
            Under
      Rule 13d-3, a beneficial owner of a security includes any person who,
      directly or indirectly, through any contract, arrangement, understanding,
      relationship, or otherwise has or shares: (i) voting power, which includes
      the power to vote, or to direct the voting of shares; and (ii) investment
      power, which includes the power to dispose or direct the disposition of
      shares. Certain shares may be deemed to be beneficially owned by more than
      one person (if, for example, persons share the power to vote or the power
      to dispose of the shares). In addition, shares are deemed to be
      beneficially owned by a person if the person has the right to acquire the
      shares (for example, upon exercise of an option) within 60 days of the
      date as of which the information is provided. In computing the percentage
      ownership of any person, the amount of shares outstanding is deemed to
      include the amount of shares beneficially owned by such person (and only
      such person) by reason of these acquisition rights. As a result, the
      percentage of outstanding shares of any person as shown in this table does
      not necessarily reflect the person’s actual ownership or voting power with
      respect to the number of shares of common stock actually outstanding as of
      the date of this Annual Report. As of the date of this Annual Report,
      there are 9,374,753 shares issued and
  outstanding.




(2)
            This
      figure includes: (i) 2,406,000 shares of common stock held of record by
      Mr. Skipper; (ii) 2,611,500 shares of common stock held of record by
      Samurai Corp., of which Mr. Skipper is the sole director and president and
      has sole dispositive and voting power over the 2,611,500 shares; and (iii)
      102,999 shares of common stock held of record by Samurai Energy LLC, of
      which Mr. Skipper is the sole manager and has sole dispositive and voting
      power over the 102,999 shares.




(3)
            This
      figure includes: (i) 125,000 shares of common stock held of record by Mr.
      Bobigian; and (ii) 1,080,999 shares of common stock held of record by RAB
      Ventures, Inc., of which Mr. Bobigian is the sole director and president
      and has sole dispositive and voting power over the 1,080,999
      shares.









CHANGES
IN CONTROL





We are
unaware of any contract, or other arrangement or provision, the operation of
which may at a subsequent date result in a change of control of our
company.





ITEM
12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE





Except
for the transactions described below, none of our directors, officers or
principal stockholders, nor any associate or affiliate of the foregoing, have
any interest, direct or indirect, in any transaction or in any proposed
transactions, which has materially affected or will materially affect us during
fiscal years ended December 31, 2007 and 2006.





SAMURAI
OPERATING COMPANY LLC





Samurai
Operating Company L.L.C., a related party, is the operator of the properties and
provides production, engineering and maintenance services. Accordingly, Samurai
Operating Company L.L.C. charged an operating fee for its services of $28,800
and $16,560 in 2007 and 2006, respectively.





ITEM
13. EXHIBITS


The
following exhibits are filed with this Annual Report on Form
10-KSB:





Exhibit
      Number
            Description
      of Exhibit3.1
            Articles
      of Incorporation, as amended(1)3.1.1
            Certificate
      of Amendment to Articles of Incorporation(2)3.1.2
            First
      Amended Certificate of Designation of Convertible Series B Preferred Stock
      (4)3.1.3
            First
      Amended Certificate of Designation of Convertible Series C Preferred Stock
      (5)3.1.4
            First
      Amended Certificate of Designation of Convertible Series D Preferred Stock
      (5)3.2
            Bylaws(1)4.1
            Form of Common Stock Certificate(1)4.2
            Agreement
      and Plan of Merger among Samurai Energy Corp. and ECCO Energy Corp. dated
      June 26, 2000. (2)4.4
            Assignment, Conveyance and Bill
      of Sale with respect to 37% working interest in the Wilson Wells.(3)10.1
            2005 Directors, Officers and
      Consultants Stock Option, Stock Warrants and Stock Awards Plan.(4)31.1
            Certification
      of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002.31.2
            Certification
      of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002.32.1
            Certification
      of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
      Act of 2002.32.2
            Certification
      of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
      Act of 2002.









(1)
            Incorporated
      by reference to our Registration Statement on Form 8-A filed with the
      Securities and Exchange Commission on December 7,
  2005.




(2)
            Incorporated
      by reference to our Report on Form 8-K filed with the Securities and
      Exchange Commission on June 30,
2006.




(3)
            Incorporated
      by reference to our Annual Report on Form 10-KSB filed with the Securities
      and Exchange Commission on March 20,
2006.




(4)
            Incorporated
      by reference to our Registration Statement on Form S-8 filed with the
      Securities and Exchange Commission on June 26,
  2006.




(4)
            Incorporated
      by reference to our Current Report on Form 8-K filed with the Securities
      and Exchange Commission on October 5,
2007.




(5)
            Incorporated
      by reference to our Current Report on Form 8-K filed with the Securities
      and Exchange Commission on April 11,
2008.








ITEM
14.  PRINCIPAL ACCOUNTING FEES AND SERVICES





During
fiscal year ended December 31, 2007, we incurred approximately $55,300 in fees
to our principal independent accountant for professional services rendered in
connection with the audit of our financial statements for the fiscal year ended
December 31, 2007 and for the review of our financial statements for the
quarters ended March 31, 2007, June 30, 2007 and September 30,
2007.





During
fiscal year ended December 31, 2007, we did not incur any other fees for
professional services rendered by our principal independent accountant for all
other non-audit services which may include, but is not limited to, tax-related
services, actuarial services or valuation services.









Item  15.
            CONTROLS
      AND PROCEDURES






Our chief
executive officer and chief financial officer have reviewed and continue to
evaluate the effectiveness of our controls and procedures over financial
reporting and disclosure (as defined in the Securities Exchange Act of 1934
(“Exchange Act”) Rules 13a-15(e) and 15d-15(e)) as of the end of the period
covered by this annual report. The term “disclosure controls and procedures” is
defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. This term refers
to the controls and procedures of our company that are designed to ensure that
information required to be disclosed by us in the reports that we file under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified by the Securities and Exchange Commission’s rules and forms,
and that such information is accumulated and communicated to our management,
including our chief executive officer and chief financial officer, as
appropriate, to allow timely decisions regarding required disclosures. In
designing and evaluating our controls and procedures over financial reporting
and disclosure, our management recognized that any controls and procedures, no
matter how well designed and operated, can provide only reasonable assurance of
achieving the desired control objectives and our management necessarily was
required to apply its judgment in evaluating the cost-benefit relationship of
possible controls and procedures.






Evaluation of Disclosure Controls and
Procedures.  Based on management’s evaluation, our chief
executive officer and chief financial officer concluded that, as of December 31,
2007, our disclosure controls and procedures are effective to provide reasonable
assurance that information we are required to disclose in reports that we file
or submit under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in Securities and Exchange Commission rules
and forms, and that such information is accumulated and communicated to our
management, including our chief executive officer and chief financial officer,
as appropriate, to allow timely decisions regarding required
disclosure.






Changes in Internal Control over
Financial Reporting.  There were no changes in our internal
control over financial reporting that occurred during the fourth quarter of 2007
that have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.






Management’s Report on Internal
Control over Financial Reporting.  Our management is
responsible for establishing and maintaining adequate internal control over
financial reporting, as defined in Exchange Act Rule 13a-15(f).  Our
management conducted an evaluation of the effectiveness of our internal control
over financial reporting based on the framework in Internal Control—Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission.  Based on this evaluation, management concluded that our
internal control over financial reporting was effective as of December 31,
2007.  This annual report does not include an attestation report of
our registered public accounting firm regarding internal control over financial
reporting.  Management’s report was not subject to attestation by the
company’s registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permit us to provide only management’s
report in this annual report.







SIGNATURES





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










ECCO
ENERGY CORP.








Dated:
April 15,
2008                                                                           By:
/s/SAMUEL M.
SKIPPER


Samuel M.
Skipper, President/Chief


Executive Officer











Dated:
April 15,
2008                                                                            By:
/s/N. Wilson Thomas


N. Wilson
Thomas/Chief Financial
Officer













Chief
Executive Officer and Chief Financial Officer Certifications





ECCO
Energy Corp.





Certifications
Pursuant to Section 302 of


The
Sarbanes-Oxley Act of 2002





CERTIFICATIONS





I, Samuel
M. Skipper, certify that:





1.
            I
      have reviewed this annual report on Form 10-KSB of ECCO Energy
      Corp.;





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





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





4.
            I
      am responsible for establishing and maintaining disclosure controls and
      procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
      registrant and I have:





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


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


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





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





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


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





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








By: /s/ Samuel M. Skipper


Name:
            Samuel
      M. Skipper


Title:
            President
      and CEO





Date:
            March
      30, 2008








Chief
Executive Officer and Chief Financial Officer Certifications





ECCO
Energy Corp.





Certifications
Pursuant to Section 302 of


The
Sarbanes-Oxley Act of 2002





CERTIFICATIONS





I, N.
Wilson Thomas, certify that:





1.
            I
      have reviewed this annual report on Form 10-KSB of ECCO Energy
      Corp.;





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





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





4.
            I
      am responsible for establishing and maintaining disclosure controls and
      procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
      registrant and I have:





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


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


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





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





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


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





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








By: /s/N. Wilson Thomas


Name:
            N.
      Wilson Thomas


Title:
            CFO











Date:
            April
      15, 2008





CERTIFICATION  OF  ANNUAL  FINANCIAL  REPORT





I, Samuel
M. Skipper, Chairman of the Board and Chief Executive Officer of ECCO Energy
Corp. hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that:





(1)
            the
      Annual Report on Form 10-KSB for the period ended December 31, 2006 (the
      “Annual Report”) which this statement accompanies fully complies with the
      requirements of Section 13 (a) or 15 (d) of the Securities Exchange Act of
      1934 (15 U>S>C> 78m or 78o(d))
and


(2)
            information
      contained in the Annual report fairly presents, in all material respects,
      the financial condition and results of operations of ECCO Energy
      Corp.











By: /s/ Samuel M. Skipper


Name:
            Samuel
      M. Skipper


Title:
            President
      and CEO





Date:
            April
      15, 2008





A signed
original of this written statement required by Section 906 has been provided to
the Company and will be retained by the Company and furnished to the Securities
and Exchange Commission or its staff upon request.

















CERTIFICATION
      OF ANNUAL FINANCIAL REPORT





I, N.
Wilson Thomas, Chief Financial Officer of ECCO Energy Corp. hereby certify,
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:





(3)
            the
      Annual Report on Form 10-KSB for the period ended December 31, 2007 (the
      “Annual Report”) which this statement accompanies fully complies with the
      requirements of Section 13 (a) or 15 (d) of the Securities Exchange Act of
      1934 (15 U>S>C> 78m or 78o(d))
and


(4)
            information
      contained in the Annual report fairly presents, in all material respects,
      the financial condition and results of operations of ECCO Energy
      Corp.











By: /s/N. Wilson Thomas





Name:
            N.
      Wilson Thomas


Title:
            CFO








Date:
            April
      15, 2008





A signed
original of this written statement required by Section 906 has been provided to
the Company and will be retained by the Company and furnished to the Securities
and Exchange Commission or its staff upon request.