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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-KSB

(Mark One)

[X] ANNUAL REPORT PURSUANT TO 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 number 000-26907

CHEETAH OIL & GAS
LTD.(Name of small business issuer in its charter)

|Nevada                                                               | 93-1118938                          
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)
|                                                                     |                                     
|17 Victoria Road                                                     |                                     
|Nanaimo, British Columbia Canada                                     | V9R 4N9                             
|(Address of principal executive offices)                             | (Zip Code)                          

Issuer's telephone number 250.714.1101

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

|Title of each class | Name of each exchange on which registered
|------------------- | -----------------------------------------
|Nil                 | Nil                                      

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

Common Stock, par value $0.001(Title of class)

Check whether the issuer is not required to file reports
pursuant to Section 13 or 15(d) of the Exchange Act. (Check one): Yes
[   ]   No [X]

Note:Checking the box above will not relieve any
registrant required to file reports pursuant to Section 13 or 15(d) of the
Exchange act from their obligations under those Sections.

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

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

Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B is 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. [   ]

State issuer's revenues for its most recent fiscal year.
$Nil

State the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the price at
which the common equity was sold, or the average id and asked prices of such
common equity, as of a specified date within 60 days. (See definition of
affiliate in Rule 12b-2 of the Exchange Act.)

Note: If determining whether a person is an affiliate will
involve an unreasonable effort and expense, the issuer may calculate the
aggregate market value of the common equity held by non-affiliates on the basis
of reasonable assumptions, if the assumptions are stated.

33,110,963 common shares @ .07(1)=
$2,317,767

(1)Average of bid and ask closing prices on May 8,
2008.

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

State the number of shares outstanding of each of the issuer's
classes of equity stock, as of the latest practicable date.

38,311,749 common shares issued and outstanding as of May 8,
2008.

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

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PART I

Item
1.           Description of
Business.

This annual report contains forward-looking statements as that
term is defined in Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. In some cases,
you can identify forward-looking statements by terminology such as "may",
"should", "expects", "plans", "anticipates", "believes", "estimates",
"predicts", "potential" or "continue" or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors, including the risks in the
section entitled "Risk Factors", that may cause our company's or our industry's
actual results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements.

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

Our financial statements are stated in United States Dollars
(US$) and are prepared in accordance with United States Generally Accepted
Accounting Principles.

In this annual report, unless otherwise specified, all dollar
amounts are expressed in United States dollars and all references to "common
shares" refer to the common shares in our capital stock.

As used in this annual report, the terms "we", "us", "our", and
"Cheetah" mean Cheetah Oil and Gas Ltd.

General Overview

We are a Nevada corporation incorporated on May 5, 1992. We are
  an exploration stage oil and gas company engaged in the exploration for petroleum
  and natural gas in the country of Papua New Guinea through our ten percent equity
  interest in Cheetah Oil & Gas B.C. Ltd. (“Cheetah BC”). We were
  previously intending to enter into the businesses of a technology venture finance
  company to organize, capitalize, acquire and finance technology companies, and
  subsequent to that attempted to acquire certain resource leases in the Raton
  Basin. Due to the inability to run these businesses with a profit, the default
  on the obligations of certain parties and the difficulty in attracting additional
  capital on terms favourable to existing shareholders, our previous management
  ceased operation of all prior businesses in 2002.

We currently hold a ten percent equity interest in Cheetah BC.
Cheetah BC currently holds five petroleum prospecting licenses and one petroleum
retention licence in Papua New Guinea covering approximately 8.3 million acres.
PRL 13, PPL 246 and PPL 250 are located in South-Central of Papua New Guinea and
PPL 245, PPL 249 and PPL 252 are located along the Northern Coast.

Corporate History

We were incorporated under the laws of the State of Nevada on
May 5, 1992 under the name Bio-American Capital Corporation.

On March 5, 2004 we acquired all of the issued and outstanding
shares of Cheetah BC, a private British Columbia company, in exchange for
25,000,000 shares of our common stock. Therefore, for accounting purposes,
Cheetah BC was deemed to have acquired Bio-American Capital Corporation.

Bio-American Capital Corporation changed its name to Cheetah
Oil & Gas Ltd. (Cheetah) by a Certificate of Amendment filed on May 25,
2004 with the Nevada Secretary of State. Immediately prior to the Cheetah
acquisition we had 62 shareholders of record.

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On April 24, 2007, we increased the authorized number of shares
of our common stock from 50,000,000 shares to 500,000,000 shares, par value of
$0.001 per share and altered our authorized share capital to authorize the
issuance of up to 100,000,000 shares of preferred stock, par value of $0.001 per
share, for which the Board of Directors may fix and determine the designations,
rights, preferences or other variations of each class or series within each
class of the preferred shares.

The general purpose and effect of the amendment to our
corporations Articles is to increase our authorized share capital and authorize
the preferred shares, which will enhance our companys ability to finance the
development and operation of our business.

Our common shares were quoted for trading on the OTCBB on
December 8, 1998 under the symbol BIAN. In October 1999, due to the change in
Rule 15c2-11, we were reduced to trading in the Pink Sheets because we did not
have an effective Form 10-SB. In August 1999 our Form 10-SB became effective. A
Form 211 application was accepted by the NASD Regulations, Inc. and our shares
of common stock were quoted for trading on the OTCBB in June 2002. On May 25,
2004 our symbol changed to COGL.

We have not been involved in any bankruptcy, receivership or
similar proceeding. All dollar amounts referred to herein are U.S. dollars,
unless otherwise noted.

Our Business Prior to the dilution of the 90% Equity
Interest in Cheetah BC.

On March 5, 2004, we entered into an acquisition agreement with
Georgina Martin, the sole shareholder of Cheetah BC a British Columbia company,
for the acquisition of all the outstanding equity securities of Cheetah BC,
being 100 shares of common stock, in exchange for 25,000,000 shares of our
common stock. As a result of this transaction, Cheetah BC became our wholly
owned subsidiary. The principal assets of Cheetah BC were three petroleum
prospecting licenses: PPL #249, PPL #250 and PPL #252 issued by the Minister of
Petroleum and Energy for Papua New Guinea. The licences required Cheetah to
engage in exploratory and developmental activities by certain dates as specified
in the respective licenses, including obtaining seismic data, drilling an
exploratory well, drilling an appraisal well and conducting related activities.
PPL #249 covers a total of 1,501,050 acres, PPL #250 covers a total of 2,001,400
acres and PPL #252 covers a total of 1,841,288 acres.

On June 24, 2004, our former wholly owned subsidiary Cheetah BC
entered into an acquisition agreement with the controlling shareholders of
Scotia Petroleum Inc. (Scotia) to acquire 31,518,829 Scotia common shares or
an 85.14% controlling interest (of a total of 37,018,829 Scotia shares issued
and outstanding). As consideration, we paid the sum of $301,887 US dollars to
the selling Scotia shareholders. In addition, one of our shareholders (who was
not an affiliate of our company) who was also a Scotia shareholder contributed
256,315 shares of restricted stock of our company valued at $1,817,273 to the
other Scotia shareholders. The share value of $7.09 was based on the average
market price of our companys common stock over the five-day period before and
after May 13, 2004, the date of agreement to purchase our company. Cheetah BC
has also acquired an option to purchase an additional 13.51%, or 5,000,000
shares, of the issued shares of Scotia for a period of two years for $1,000,000.
On March 10, 2005 we exercised our option to acquire the additional Scotia
shares, and as consideration for which we issued 142,000 restricted shares of
common stock on March 17, 2005 of our company at $7.04 per share. The share
value of $7.04 was based on the average market price of our companys common
stock over the five-day period before and after March 10, 2005. As a result,
Scotia became a majority controlled subsidiary as Cheetah BC held 98.65% of the
issued and outstanding shares of Scotia. As a consequence of the dilution of the
Companys 90% interest by virtue of the dilution of our 90% equity interest of
Cheetah BC to Invicta Oil & Gas Ltd. (Invicta) in November 2007, Scotia
ceased to remain a majority controlled subsidiary.

The principal assets of Scotia are two Petroleum Prospecting
Licenses (PPL) - PPL #245 and PPL #246 - issued by the Minister of Petroleum
Energy for Papua New Guinea. The licenses require Scotia to engage in
exploratory and developmental activities by certain dates, including obtaining
seismic data, drilling an exploratory well, drilling an appraisal well and
conducting related activities. Scotia will be required to expend certain minimum
amounts in respect of the licences.

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During the month of June 2004, Garth Braun our former chief
executive officer visited Papua New Guinea and began a detailed review of the
assets of Scotias licences 245 and 246. Mr. Braun carried out a visual
inspection of the licences with our Companys chief geologist and a review of
historical data on the licences.

From his review he determined that both licenses had
significant potential and PPL #246 offered significant opportunity to Cheetah.
Mr. Braun learned the following from his visit to Papua New Guinea in June of
2004:

|1. | PPL # 246 was adjacent to existing infrastructure, being
      the oil pipeline to the Kumul Terminal and the proposed Natural Gas
      Pipeline to Australia;                                                                                                                                                                                            
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                            
|2. | On review of the historical drilling activity on the
      license three wells had been drilled in the north east section of the
      licence;                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                            
|3. | Two of the wells drilled on the license in the 1950s had
      intersected a significant gas bearing structure. The Kuru-1 well was a gas
      discovery, which blew out on the 10thof January 1956. Records
      indicated that the well blew out for approximately 4 months at a rate of
      50 to 100 thousand cubic feet (MCF) of gas per day; and
|   |                                                                                                                                                                                                                                                                                                                                                            
|4. | The Kuru-2 well was drilled and experienced significant
      pressure as drilling proceeded.                                                                                                                                                                                                                                                              

In addition to the foregoing investigations and findings,
subsequent to Cheetah acquiring Scotia, Mr. Braun hired, Tayfun Babadagli, PhD
to prepare a reservoir study on the Kuru structure. The results of the study
were received during November 2004. Under PPL #246 Cheetah then applied for a
petroleum retention licence (PRL) on the Kuru structure on November 12, 2004 and
was granted PRL #13 on January 27, 2005, covering 40,000 acres. PRL #13 is the
only PRL that we have been granted to date.

A PRL is required given that if we are to proceed with
exploration and drilling and hopefully production, we must obtain a PRL as part
of this process to allow us to commence drilling operations.

Subject to the Oil and Gas Act of Papua New Guinea and to any
condition in the licence, a PRL remains in force:

| | a) | for a period of five years commencing on the day on which
      the licence takes effect; and
| | -- | ---------------------------------------------------------------------------------------------
| |    |                                                                                              
| | b) | where the licence is extended, for a further period of
      five years at each extension.   

The next step that follows the granting of a PRL is to put the
gas field into production and a company then must apply for Petroleum
Development Licence.

In June 2004, we also hired 3D-GEO Inc. of Melbourne, Australia
to prepare a Hydrocarbon Prospectivity Report of PPL #246. The report was
received during November of 2004.

Based on the reports received and the granting of PRL #13, it
became clear to management that PPL #246 and PRL #13 was representative of a
significant asset to our Company. As Cheetah did raise further capital in the
spring of 2005, a greater percentage ownership of Scotia would further assist in
the valuation of Cheetah. In addition it became clear that PPL #246 was becoming
the cornerstone of Cheetahs licence portfolio and management determined it to
be in the best interest of our Company to acquire the interest to ensure that
there would not be any potential disputes in the future as to the right to
acquire the interest.

PPL #245 covers a total of 2,501,750 acres and is located along
the Northern coast of Papua New Guinea, adjacent to Cheetahs existing PPL #249.
It straddles both the East and West Sepik sub-basins. Preliminary evaluation by
our former President and our Chief Geologist indicated both oil and gas seeps in
parts of PPL #245. The oil and gas seeps were identified by our former President
and our Chief Geologist when they visited PPL#245 in June of 2004. Their
physical inspection identified two locations with visible seeps in the Foruk and
Matapan locations. Seeps are areas where the hydrocarbons are reaching the
surface and "seeping" out of the ground. PPL #245 was originally issued on
September 17, 2003 and will remain valid until September 17, 2009 subject to
minimum work expenditures and accomplishments being made. The minimum forecasted
expenditures to retain this licence in good

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standing for the 6 year period will be $18,900,000 should the
further development of PPL #245 be warranted as our exploration program
proceeds.

PPL #246 covers 540,378 acres located in the south-central
region of Papua New Guinea, located south of Cheetahs existing PPL #250. The
property is within the Papuan Basin. The western part of PPL #246 is rated to be
prospective with potential for petroleum systems. Based upon our review of all
available data, we believe that there is potential for gas accumulations in the
western part of PPL #246, as also stated in the report of 3D-GEO Inc. PPL #246
was originally issued on October 15, 2003 and will remain valid until October
15, 2009 subject to minimum work expenditures and accomplishments being made.
The minimum forecasted expenditures to retain this licence in good standing for
the 6 year period will be $19,900,000 should the further development of PPL #246
be warranted as our exploration program proceeds.

We have commissioned and received a resource and risk
assessment of PPL #246 from 3D-GEO Inc. of Melbourne, Australia. As noted above,
PPL #246 is held by our majority controlled subsidiary, Scotia Petroleum Inc. 3D
Geo is a Melbourne, Australia based seismic-structural geology consulting firm.
3D Geo provides seismic/structural and tectonic interpretation, modeling,
restoration and data collection services to the oil and gas industry worldwide.
3D-GEOs particular geographic area of expertise is Australia and Southeast
Asia. For the two reports that we have received from 3D GEO, one cost $45,399
and one cost $42,564.

In late October of 2004 we entered into an agreement with Grey
Creek Petroleum Inc. pursuant to which we had the option to acquire a 97.5%
interest in two further Petroleum Prospecting Licenses in Papua New Guinea,
being PPL #257 and PPL #258. After review, we elected not to proceed with the
agreement with Grey Creek.

As a result of the above acquisitions, we held five petroleum
prospecting licences in Papua New Guinea directly and through our former
majority controlled subsidiary, Scotia, which in total are petroleum prospecting
licences in Papua New Guinea covering approximately 8.3 million acres. PRL 13,
PPL 246 and PPL 250 are located in South-Central of Papua New Guinea and PPL
245, PPL 249 and PPL 252 are located along the Northern Coast. We evaluated and
explored some of our oil and gas prospects over approximately 8.3 million acres
in our five licence areas in Papua New Guinea. Our consultants produced an
evaluation based on available existing survey and seismic data from historical
operations on the licences. In addition, we have gathered extensive information
from the reports that we have commissioned on the licences and have reviewed
information and valuations regarding competitors who have acquired similar
licences in the region.

Our Business Subsequent to the Dilution of 90% Equity
Interest in Cheetah BC

On July 20, 2007 the Company entered into a Share Subscription
Agreement (the Agreement) with Kepis & Pobe Investments Inc. (K&P)
and its assigns. Under the terms of the agreement K&P had the right to
acquire, through the subscription for shares, a 90% interest in Cheetah BC, a
wholly owned subsidiary of the Company which through ownership of other
subsidiaries has title to the Companys Petroleum Prospecting Licences and the
Petroleum Retention Licence. The subscription price for these shares would be
approximately $15,000,000 of which a maximum of $6,600,000 would be advanced to
the Company to retire its debts plus the assignment of the Convertible Notes
held by Macquarie Holdings (USA) Inc. (Macquarie), including interest, fees
and penalties, in favor of the Company at an agreed value of $7,550,000. K&P
also agreed that on or before December 31, 2008, it will make an additional
contribution of capital to Cheetah BC of $10,000,000. K&P assigned its
rights under this agreement to Invicta Oil and Gas Ltd. (Invicta), a company
listed on the TSX Venture Exchange. Under the terms of the Agreement it was
further agreed that upon closing of the transaction, the Company would transfer
all of the warrants, that were held by Macquarie, to K&P with the same terms
and conditions that existed when held by Macquarie.

On September 27, 2007 the Company entered into an amendment to
the Agreement, extending the closing of the Agreement from October 2, 2007 to
November 30, 2007 and adding a price adjustment mechanism linked to increases in
the consolidated liabilities of Cheetah BC.

The price adjustment mechanism adjusted the $15,000,000
consideration Invicta was required to pay to the Company by decreasing such
amount by the increase in the consolidated liabilities of Cheetah BC from June
30, 2007 to the closing date. As at the closing date of the transaction, Cheetah
BCs consolidated liabilities was

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approximately $850,000 higher than on June 30, 2007. Therefore,
the final consideration to be received by the Company totaled $13,691,278,
allocated between the cancellation of the Convertible Notes ($7,550,000) and
settlement of the other liabilities owing to creditors of the Company
($6,141,278).

In addition to the above, a unanimous shareholders agreement
was entered into between the Company, Invicta and Cheetah BC whereby the parties
agreed to the following:

|1. | The cancellation of any debt due from Cheetah BC to the
      Company, after the settlement of the Companys debts totaling
      $13,691,278.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|2. | Invicta agrees to contribute $10,000,000 to Cheetah BC as
      a contribution of capital on or before December 31, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|3. | Proportionate contributions to the joint oil and gas
      exploration program of 90% on the part of Invicta and 10% on the part of
      the Company, subsequent to the contribution commitment described in clause
      (2).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|4. | Once Invicta has fulfilled the contribution commitment
      described in clause (2), if the Company fails to contribute all or any
      portion of its proportionate contribution within 30 days of receiving a
      funding request, and provided that Invicta has fulfilled its contribution
      obligation with respect to such funding request, then Invicta may pay all
      of the Companys contribution deficiency. Any amount advanced by Invicta
      on behalf of the Company shall bear interest at a rate of 18% per annum,
      calculated annually on the anniversary date of such advance. The principal
      amount of such loan advance and all accrued interest payable thereon shall
      become due and payable in-full on the earlier of the third anniversary of
      such an advance and the date, if any upon which the Company disposes of
      any of its shares of Cheetah BC.

As a result of the Companys dilution of 90% ownership in
Cheetah BC on November 30, 2007, the Company ceased to consolidate the financial
position, results of operations and changes in cash flows of Cheetah BC and
subsidiary companies as at that date. In addition, the Company did not exercise
any significant influence over Cheetah BC as a result of its residual 10%
ownership interest. The carrying value of the Companys remaining investment in
Cheetah BC ($1,521,329) was calculated at 10% of the carrying value of the net
assets of Cheetah BC and subsidiary companies immediately before the dilution
under the equity method of accounting for business combinations.

As a result of the transaction entered into by the Company, the
Company was able to satisfy the Convertible Notes, including all interest, fees
and penalties at a cost of $7,550,000 resulting in a gain on settlement of debt
in the amount of $1,543,584 and retire other liabilities owing to unsecured
creditors at a cost of $6,141,278 resulting in a gain on settlement of debt in
the amount of $917,486.

Cheetah BC has an office in Papua New Guinea which houses
administrative and technical persons to carry on the exploration activities and
to further liaise with Papua New Guinea Government Officials and other oil and
gas industry participants. Our central management is carried on in British
Columbia, Canada. As a result, we do not currently maintain a permanent place of
business within the United States. In addition, a majority of our directors and
officers are nationals and/or residents of countries other than the United
States, and all or a substantial portion of such persons' assets are located
outside the United States. As a consequence, it may be difficult for investors
to enforce within the United States any judgments obtained against our company
or our officers or directors, including judgments predicated upon the civil
liability provisions of the securities laws of the United States or any state
thereof.

We have not discovered any oil or gas reserves on the
properties over which we hold our licences nor have we generated any revenue
from operations.

Cheetah BC will be required to expend certain minimum amounts
in respect of its licences. Under the terms of the agreement, to maintain our
10% equity interest in Cheetah BC, we will be required to proportionately
contribute, according to our shareholdings in Cheetah BC, any capital required
by Cheetah BC. As such, we will have to raise substantial additional capital.
The failure by us to contribute the required capital at the times needed to
continue to

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- 8 -

maintain our 10% interest in these licences, and the ability to
modify the agreements or extend the time periods, could result in their
termination and the loss of their benefits to us.

Competition

The oil and gas industry is intensely competitive. We compete
with numerous individuals and companies, including many major oil and gas
companies, which have substantially greater technical, financial and operational
resources and staffs. Accordingly, there is a high degree of competition for
desirable oil and gas licences, suitable properties for drilling operations and
necessary drilling equipment, as well as for access to funds. There are other
competitors that have operations in Papua New Guinea and the presence of these
competitors could adversely affect our ability to acquire additional licences.
Specifically, Interoil Corp. (Amex: IOC) has a substantial number of licences in
Papua New Guinea as well and so is a direct competitor in the region.

Governmental Regulations

In the United States we are subject to federal, state and local
governmental regulation that affects businesses generally, and the specific
regulations that pertain to companies with a class of securities registered
under the United States Securities and Exchange Act of 1934, as amended.

As a result of maintaining an executive office in British
Columbia, Canada, we are required to register as an extra-provincial corporation
in British Columbia, as we are deemed to be carrying on business in British
Columbia under the British Columbia Business Corporations Act. In order
to carry on business in British Columbia, Canada, a corporation incorporated in
a jurisdiction other than British Columbia must extra-provincially register in
British Columbia. Registering as an extra-provincial corporation in British
Columbia does not affect our shareholders in any adverse manner and allows us to
carry on business in British Columbia.

The PPL and PRL assets underlying our residual 10% investment
in Cheetah BC are subject to various federal and local governmental regulations
of Papua New Guinea. Matters subject to regulation include discharge permits for
drilling operations, drilling and abandonment bonds, reports concerning
operations, the spacing of wells, and pooling of properties and taxation. From
time to time, regulatory agencies have imposed price controls and limitations on
production by restricting the rate of flow of oil and gas wells below actual
production capacity in order to conserve supplies of oil and gas. The
production, handling, storage, transportation and disposal of oil and gas,
by-products thereof, and other substances and materials produced or used in
connection with oil and gas operations are also subject to regulation under
federal and local laws and regulations relating primarily to the protection of
human health and the environment. The requirements imposed by such laws and
regulations are frequently changed and subject to interpretation, and it is
difficult to predict the ultimate cost of compliance with these requirements or
their effect on our interests.

The licences in which we hold a 10% interest through the
residual investment in Cheetah BC are subject to a 22.5% back-in participation
right in favour of the government, which the government may exercise upon
payment of 22.5% of the expenses incurred in the development of the property.
This backin interest includes a 2% of revenue royalty payment to indigenous
groups, which is only payable if the government exercises its back-in right.

Employees

Our directors and officers conduct the day-to-day operations of
our company. We have no employees.

RISK FACTORS

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

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- 9 -

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

Our common shares are considered speculative during the
development of our new business operations. Prospective investors should
consider carefully the risk factors set out below.

Risks Related to our Business

We have yet to attain profitable operations and because we
will need to secure additional financing to maintain our 10% equity interest in
Cheetah B.C., there is substantial doubt about our ability to continue as a
going concern.

Our company has a limited operating history and is considered
in the exploration stage. The success of our company is significantly dependent
on a successful drilling, completion and production program by our partner
Invicta. Our companys investment will be subject to all the risks inherent in
the establishment of a developing enterprise and the uncertainties arising from
the absence of a significant operating history. No assurance can be given that
we may be able to operate on a profitable basis. We are in the exploration stage
and potential investors should be aware of the difficulties normally encountered
by enterprises in the exploration stage. There can be no assurance that our
business plan will prove successful, and no assurance that we may be able to
operate profitably, if at all.

In their report on our annual financial statements for the year
  ended December 31, 2007, our independent auditors included explanatory paragraphs
  regarding their substantial doubts about our ability to continue as a going
  concern. This was due to the significant uncertainty regarding our ability to
  meet our current operating and capital expenses. Notwithstanding the completion
  of the dilution of the Company 90% interest in Cheetah BC with Invicta on November
  30, 2007, our company will require a minimum of $500,000 to fund estimated working
  capital for the calendar year 2008. However, there is no assurance that actual
  cash requirements will not exceed our estimates, in which case we will require
  additional financing to fund operations.

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

Our securities must be considered highly speculative, generally
because of the nature of our business and the early stage of our development.
Our partner is engaged in the business of exploring and, if warranted,
developing commercial reserves of oil and gas. The properties in which we have a
10% equity interest through our residual investment in Cheetah BC are in the
exploration stage only and are without known reserves of oil and gas.
Accordingly, we have not received any revenues nor have we realized a profit
from our interests to date and there is little likelihood that we will generate
any revenues or realize any profits in the short term. Any profitability in the
future from our business will be dependent upon locating and developing economic
reserves of oil and gas, which itself is subject to numerous risk factors as set
forth herein. Since we have not generated any revenues, we will have to raise
additional monies through the sale of our equity securities or debt in order to
maintain our 10% equity interest in these operations. Should the Company be
unsuccessful in obtaining further debt or equity financing in the near future,
it may have to sell off its remaining 10% equity interest in Cheetah BC. The
outcome of these matters cannot be predicted at this time.

All or a portion of our interest in our properties may be
lost if we are unable to obtain significant additional financing, as we are
required to make significant contributions towards expenditures on the
exploration and development of our properties.

Our ability to fund our portion of exploration and, if
warranted, development expenditures on the properties will be dependent upon our
ability to raise significant additional financing. If we are unable to obtain
such financing, our interest in these properties may be lost in part or
entirely. We have limited financial resources and no material cash flow from
operations and we are dependent for funds on our ability to sell our common
shares, primarily on a private placement basis. There can be no assurance that
we will be able to obtain financing on that basis in light of

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- 10 -

factors such as the market demand for our securities, the state
of financial markets generally and other relevant factors.

We anticipate that we may need to obtain additional bank
financing or sell additional debt or equity securities in future public or
private offerings. There can be no assurance that additional funding will be
available to us to fulfill our obligations under the agreement with Invicta.
There can be no assurance that we will be able to obtain adequate financing in
the future or that the terms of such financing will be favourable.

Due to the losses incurred since inception, our
stockholders deficiencies and not having generated any revenues to date nor
currently generating any revenues, there is substantial doubt about our ability
to continue as a going concern.

There is substantial doubt about our ability to continue as a
going concern due to the losses incurred since inception, our accumulated
deficit, and lack of revenues.

There can be no assurance that, if required, any such financing
will be available upon terms and conditions acceptable to us, if at all. Our
inability to obtain additional financing in a sufficient amount when needed upon
terms and conditions acceptable to the company could have a materially adverse
effect upon our company. We will need funds sufficient to meet our operating
expenses and will require further funds to maintain our 10% equity interest in
Cheetah B.C. If additional funds are raised by issuing equity securities,
further dilution to existing or future shareholders is likely to result. If
adequate funds are not available on acceptable terms when needed, we may be
required to delay, scale back or eliminate the development of our company.
Inadequate funding could also impair our ability to compete in the marketplace,
which may result in the dissolution of our company.

The decisions regarding the development and exploration of
our only asset, the properties held by Cheetah BC is dependent upon the
management of Invicta, our partner, and thus beyond our control.

Since we only hold a 10% equity interest in Cheetah BC we are
not able to make any decisions regarding the development and exploration of the
properties held by Cheetah BC (the "Properties"). All development and
exploration decisions in relation to the Properties will be made by Invicta.

Substantial funds will be required to decide whether the
properties in which we have interests contain commercial oil and gas deposits
and whether they should be brought into production. If sufficient funds cannot
be secured the potential on these properties may never be realized.

Substantial funds will be required to determine whether the
properties in which we hold a 10% equity interest contain commercial oil and gas
deposits and should be brought into production. This decision will involve
consideration and evaluation of several significant factors including but not
limited to: (1) costs of bringing a property into production, including
exploration and development work, preparation of production feasibility studies,
and construction of production facilities; (2) availability and costs of
financing; (3) ongoing costs of production; (4) market prices for the oil and
gas to be produced; (5) environmental compliance regulations and restraints; and
(6) political climate, governmental regulation and control.

The properties in which we hold an interest may be subject
to prior unregistered agreements, or transfers which have not been recorded or
detected through title searches, and are subject to a governmental right of
participation, resulting in a possible claim against any future revenues
generated by such properties.

We believe our interests and that of our partners in the
licences are valid and enforceable given that they have been granted directly by
the government of Papua New Guinea, although we have not obtained an opinion of
counsel or any similar form of title opinion to that effect. However, these
licenses do not guarantee title against all possible claims. The properties may
be subject to prior unregistered agreements, or transfers which have not been
recorded or detected through title research. Further, the properties are subject
to a 22.5% back-in participation right in favour of the government, which the
government may exercise upon payment of 22.5% of the expenses incurred in the
development of the property. This backin interest includes a 2% of revenue
royalty payment to indigenous groups, which is only payable if the government
exercises its back-in right. If these interests are challenged, we may have to

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- 11 -

expend funds defending any such claims and may ultimately lose
some or all of any revenues generated from the properties if we lose our
interest in such properties.

All of our projects are located in Papua New Guinea where
oil and gas exploration activities may be affected in varying degrees by
political and government regulations which could have a negative impact on our
ability to continue our operations.

Certain projects in which we have interests are located in
Papua New Guinea. Exploration activities in Papua New Guinea may be affected in
varying degrees by political instabilities and government regulations relating
to the oil and gas industry. Any changes in regulations or shifts in political
conditions are beyond our control and may adversely affect our business.
Operations may be affected in varying degrees by government regulations with
respect to restrictions on production, price controls, export controls, income
taxes, expropriations of property, environmental legislation and safety. The
status of Papua New Guinea as a developing country may make it more difficult
for us to obtain any required financing for our projects. The effect of all
these factors cannot be accurately predicted. Notwithstanding the progress
achieved in restructuring Papua New Guinea political institutions and
revitalizing its economy, the present administration, or any successor
government, may not be able to sustain the progress achieved. While the Papua
New Guinea economy has experienced growth in recent years, such growth may not
continue in the future at similar rates or at all. If the economy of Papua New
Guinea fails to continue its growth or suffers a recession, we may not be able
to continue our operations in that country. We do not carry political risk
insurance.

The loss of any of our key management personnel w would have
an adverse impact on future development and could impair our ability to succeed.

We are dependent on our ability to hire and retain highly
skilled and qualified personnel, including Georgina Martin, Isaac Moss and Ian
McKinnon who are also our directors and officers. We face competition for
qualified personnel from numerous industry sources, and there can be no
assurance that we will be able to attract and retain qualified personnel on
acceptable terms. The loss of service of any of our key personnel could have a
material adverse effect on our operations or financial condition.

As our properties in which we have a 10% equity interest are
in the exploration stage there can be no assurance that we will establish
commercial discoveries on our properties.

Exploration for economic reserves of oil and gas is subject to
a number of risk factors. Few of the properties that are explored are ultimately
developed into producing oil and/or gas wells. Our properties are in the
exploration stage only and are without proven reserves of oil and gas. There can
be no assurance that we will establish commercial discoveries on any of our
properties.

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

The potential profitability of oil and gas properties is
dependent upon many factors beyond our control. For instance, world prices and
markets for oil and gas are unpredictable, highly volatile, potentially subject
to governmental fixing, pegging, controls, or any combination of these and other
factors, and respond to changes in domestic, international, political, social,
and economic environments. Additionally, due to world-wide economic uncertainty,
the availability and cost of funds for production and other expenses have become
increasingly difficult, if not impossible, to project. These changes and events
may materially affect our financial performance.

Adverse weather conditions can also hinder drilling operations.
A productive well may become uneconomic in the event water or other deleterious
substances are encountered which impair or prevent the production of oil and/or
gas from the well. In addition, production from any well may be unmarketable if
it is impregnated with water or other deleterious substances. The marketability
of oil and gas which may be acquired or discovered will be affected by numerous
factors beyond our control. These factors include the proximity and capacity of
oil and gas pipelines and processing equipment, market fluctuations of prices,
taxes, royalties, land tenure, allowable production and environmental
protection. The extent of these factors cannot be accurately predicted but the
combination of these factors may result in our company not receiving an adequate
return on invested capital.

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- 12 -

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

The oil and gas industry is intensely competitive. We compete
with numerous individuals and companies, including many major oil and gas
companies, which have substantially greater technical, financial and operational
resources and staffs. Accordingly, there is a high degree of competition for
desirable oil and gas properties for drilling operations and necessary drilling
equipment, as well as for access to funds. There can be no assurance that the
necessary funds can be raised or that any projected work will be completed.
There are other competitors that have operations in the properties in Papua New
Guinea and the presence of these competitors could adversely affect our ability
to acquire additional property interests.

Oil and gas operations are subject to comprehensive
regulation which may cause substantial delays or require capital outlays in
excess of those anticipated causing an adverse effect on our company. Further,
exploration and production activities are subject to certain environmental
regulations which may prevent or delay the commencement or continuance of our
operations.

Oil and gas operations in Papua New Guinea are subject to
federal 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 in Papua New Guinea
are also subject to federal 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. No assurance can be given that environmental
standards imposed by federal or local authorities will not be changed or that
any such changes would not have material adverse effects on our interests.
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, our interests 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.

Compliance with these laws and regulations has not had a
material effect on our interests or financial condition to date. Specifically,
our interests 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.

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

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

Any change to government regulation/administrative practices
in regards to conducting business generally in Papua New Guinea may have a
negative impact on our ability to operate and our profitability.

There is no assurance that the laws, regulations, policies or
current administrative practices of any government body, organization or
regulatory agency in Papua New Guinea or any other jurisdiction, will not be
changed, applied or interpreted in a manner which will fundamentally alter the
ability of our company to carry on our business in Papua New Guinea.

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- 13 -

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 profitability in Papua New
Guinea.

A majority of our directors and officers are located outside
the United States, with the result that it may be difficult for investors to
enforce within the United States any judgments obtained against us or any of our
directors or officers.

A majority of our directors and officers are nationals and/or
residents of countries other than the United States, and all or a substantial
portion of such persons assets are located outside the United States. As a
result, it may be difficult for investors to enforce within the United States
any judgments obtained against us or our officers or directors, including
judgments predicated upon the civil liability provisions of the securities laws
of the United States or any state thereof. Consequently, you may be effectively
prevented from pursuing remedies under United States federal securities laws
against our directors or officers.

Risks Related to our Common Stock

Additional authorized common shares issued in the future
will decrease the existing shareholders percentage equity ownership and,
depending upon the price at which they are issued, could be dilutive to the
existing shareholders.

Our constating documents authorize the issuance of 50,000,000
shares of common stock, each with a par value of $0.001 and 100,000,000 shares
of preferred stock, each with a par value of $0.001. The amendment to our
corporations Articles to increase our authorized share capital and authorize
the preferred shares does not have any immediate effect on the rights of
existing shareholders. However, our board of directors will have the authority
to issue authorized common stock and the preferred shares without requiring
future shareholders approval of such issuances, except as may be required by
applicable law or exchange regulations. To the extent that additional authorized
common shares are issued in the future, they will decrease the existing
shareholders percentage equity ownership and, depending upon the price at which
they are issued, could be dilutive to the existing shareholders.

The increase in the authorized number of shares of our common
stock and the subsequent issuance of such shares could have the effect of
delaying or preventing a change in control of our company without further action
by the shareholders. Shares of authorized and unissued common stock could be
issued (within limits imposed by applicable law) in one or more transactions.
Any such issuance of additional stock could have the effect of diluting the
earnings per share and book value per share of outstanding shares of common
stock, and such additional shares could be used to dilute the stock ownership or
voting rights of a person seeking to obtain control of our company.

Penny stock rules will limit the ability of our stockholders
to sell their stock.

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

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- 14 -

penny stock rules. Consequently, these penny stock rules may
affect the ability of broker-dealers to trade our securities. We believe that
the penny stock rules discourage investor interest in and limit the
marketability of our common stock.

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

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

Item
2.           Description of
Property.

In North America we operate from our offices at 17 Victoria
Road, Nanaimo, British Columbia, Canada V9R 4N9. We currently have a 10% equity
interest in Cheetah Oil and Gas (B.C.) Ltd. which holds five petroleum
prospecting licenses in Papua New Guinea. These prospecting licenses cover
approximately 8.3 million acres in Papua New Guinea. PRL 13, PPL 246 and PPL 250
are located in South-Central of Papua New Guinea and PPL 245, PPL 249 and PPL
252 are located along the Northern Coast.

Item
3.           Legal
Proceedings.

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

On January 30, 2008, at a reconvened extraordinary meeting of
Scotia, the majority shareholder of Scotia approved the sale of all the issued
and outstanding shares of Scotia to Cheetah PNG. As the sale constitutes a sale
of all of Scotias property, Section 238 of the Business Corporations Act of
British Columbia grants each of Scotias shareholders a right of dissent with
respect to the sale. Four minority shareholders of Scotia dissented with respect
to the sale and filed a claim. Under the terms of the Agreement that the Company
entered into, the Company is liable for settlement of any dissenting shareholder
claims arising out of the sale of Scotia to Cheetah PNG. In March 2008, the
Company submitted a proposal to four dissenting minority shareholders in which
it proposed to transfer an aggregate of 750,000 common stock in the capital of
the Company in full and final settlement of the dissenting minority
shareholders claim.

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

There were no matters submitted to a vote of our security
holders either through solicitation of proxies or otherwise in the fourth
quarter of the fiscal year ended December 31, 2007.

PART II

Item
5.           Market for Common
Equity and Related Stockholder Matters and Small Business Issuer Purchases of
Equity Securities.

Our common shares were quoted for trading on the OTCBB on
December 8, 1998 under the symbol "BIAN". In October 1999, due to the change in
Rule 15c2-11, we were reduced to trading in the Pink Sheets because we did not
have an effective Form 10-SB. In August 1999 our Form 10-SB became effective. A
Form 211 application was accepted by the NASD Regulations, Inc. and our shares
of common stock were quoted for trading on the OTCBB in

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- 15 -

June 2002 under the symbol BIAN. On May 25, 2004 our symbol
changed to COGL. The following quotations obtained from yahoo.com reflect the
highs and low bids for our common stock based on inter-dealer prices, without
retail mark-up, mark-down or commission and may not represent actual
transactions.

The high and low bid prices of our common stock for the periods
indicated below are as follows:

National Association of Securities Dealers OTC Bulletin
      Board(1)Quarter Ended
    High
    LowMarch 31, 2008
    $0.17
    $0.06December 31, 2007
    $0.45
    $0.08September 30, 2007
    $0.30
    $0.16June 30, 2007
    $0.51
    $0.23March 31, 2007
    $0.51
    $0.15December 31, 2006
    $0.78
    $0.32September 30, 2006
    $2.78
    $0.35June 30, 2006
    $3.55
    $2.11March 31, 2006
    $4.49
    $2.45


(1)Over-the-counter market quotations reflect
inter-dealer prices without retail mark-up, mark-down or commission, and may not
represent actual transactions.

Our common shares are issued in registered form. Standard
Registrar and Transfer Company, Inc. 12528 South 1840 East Draper, Utah 84020
(Telephone: 801.571.8844; Facsimile: 801.571.2551) is the registrar and transfer
agent for our common shares. On March 31, 2008, the shareholders' list of our
common shares showed 182 registered shareholders and 38,211,749 shares
outstanding.

Dividends

We have not declared or paid any cash dividends since inception
and we do not intend to pay any cash dividends in the foreseeable future.
Although there are no restrictions that limit our ability to pay dividends on
our common shares other than as described below, we intend to retain future
earnings for use in our operations and the expansion of our business.

Equity Compensation Plan Information

On June 6, 2005, our Board of Directors approved our 2005 Stock
Option Plan pursuant to which we may grant an aggregate of up to 3,500,000
common shares or options to purchase common shares to employees, consultants or
directors of our company or of any of our subsidiaries. The purpose of the 2005
Stock Option Plan is to give our company the ability to motivate participants to
contribute to our growth and profitability. The 2005 Stock Option Plan is
administered by our Board of Directors. It will continue in effect until the
earlier of the (a) date that we have granted all of the securities that can be
issued pursuant to its terms or (b) June 6, 2015.

Awards under our 2005 Stock Option Plan will vest as determined
by our Board of Directors and as established in stock option agreements to be
entered into between our company and each participant receiving an award.
Options granted under the 2005 Stock Option Plan will have a term of 5 years
from the date of grant but are subject to earlier termination in the event of
death, disability or the termination of the employment or consulting
relationship. During the year ended December 31, 2007, no options granted under
the 2005 stock option plan vested.

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- 16 -

On October 7, 2007, our board of directors cancelled all
current stock option grants under our 2005 Stock Option Plan.

Recent Sales of Unregistered Securities

On October 7th, 2007, our Companys board of
directors cancelled all prior stock option grants and approved the grant of
875,000 stock options at a purchase price of $0.15 per share to Georgina Martin,
Isaac Moss, Dean Swanberg and Ian McKinnon. On December 31, 2007 the Company
agreed that it would appoint an additional independent director as a consequence
of which it was resolved that the grant of stock options as of October 7, 2007,
be cancelled.

On October 31, 2007, the Company issued 1,255,510 shares of our
common stock to three of our directors and officers pursuant to the terms of
their respective Director arrangements with our Company. We issued the
securities to non U.S. persons (as that term is defined in Regulation S of the
Securities Act of 1933) in an offshore transaction relying on Regulation S
and/or Section 4(2) of the Securities Act of 1933.

On December 7, 2007 the Company entered into agreements to
issue 1,196,749 common stock to settle the accrued interest payable on advances
payable and long term debt totaling $323,123. As at December 31, 2007 the
common stock had not been issued.

On January 14, 2008 we approved the issuance of shares in lieu
of interest to the following individuals who made loans to our Company.

NAME
    INTEREST OWING
    SHARES TO BE ISSUEDZander Investments
    $89,648
    332,030Gladys Jenks
    $23,290
    86,260Kathy Gray
    $23,290
    86,260C.A.B. Financial
    $
      7,910
    29,292Lasiocarpa
      Portfolio
    $23,290
    86,260658111 B.C. Ltd.
    $23,290
    86,260Dean Swanberg
    $74,725
    276,758Sylvan Swanberg
    $37,362
    138,379Gerald Hartwig
    $20,318
    75,250


On March 12, 2008, we agreed to issue 100,000 shares of our
common stock to Invicta as consideration for providing loans to our Company.
Each share will be issuable at a deemed price of $0.08 per share. The shares
will be issued pursuant to Regulation S promulgated with the United States
Securities Act of 1933 as amended, as Invicta is not a U.S. Person as defined
under Regulation S.

Purchases of Equity Securities by the Issuer and Affiliated
Purchasers

We did not purchase any of our shares of common stock or other
securities during the year ended December 31, 2007.

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- 17 -

Item
6.           Management's
Discussion and Analysis or Plan of Operation.

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 registration statement, particularly
in the section entitled "Risk Factors" beginning on page 9 of this annual
report.

Our audited financial statements are stated in United States
Dollars and are prepared in accordance with United States Generally Accepted
Accounting Principles.

PLAN OF OPERATIONS AND CASH REQUIREMENTS

Cash Requirements

We are an exploration stage oil and gas company engaged in the
  exploration for petroleum and natural gas. We currently hold a 10% equity interest
  in Cheetah BC, an exploration stage oil and gas company engaged in the exploration
  for petroleum and natural gas in the country of Papua New Guinea.

Our Company has a limited operating history and is considered
in the development stage. The success of our Company is significantly dependent
on a successful drilling, completion and production program by our partner
Invicta.

In order to maintain our 10% equity interest in Cheetah BC, we
anticipate that we will require a minimum of $500,000 to fund estimated working
capital for the next 12 months. To this end, we entered into an agreement with
Invicta on the 17th of April whereby Invicta has agreed to advance by
way of a loan up to $500,000 to fund our estimated working capital requirements
for the next 12 months. The loan carries an annual interest rate of 8% and is
secured against our 10% equity interest in Cheetah BC. However, there is no
assurance that actual cash requirements will not exceed our estimates, in which
case we will require additional funds. These funds may be raised through equity
financing, debt financing, or other sources, which may result in further
dilution in the equity ownership of our shares. There is no assurance that we
will be able to maintain operations at a level sufficient for an investor to
obtain a return on his investment in our common stock. Further, we may continue
to be unprofitable.

For the next 12 months Cheetah BC plans to continue to explore
for petroleum and natural gas in the country of Papua New Guinea. Cheetah BC
holds five petroleum prospecting licences in Papua New Guinea which cover
approximately 8.3 million acres.

The licences held require that Cheetah BC engage in drilling
operations by certain dates, which will involve obtaining seismic data, drilling
exploratory wells, drilling appraisal wells and conducting related activities.
These licences have an initial term of six years and will remain valid until the
expiry date (between September 17, 2009 and April 8, 2010) subject to minimum
accomplishments being made.

Our net cash provided by financing activities during the year
ended December 31, 2007 was $1,285,397.

As at December 31, 2007, we had $2,473,332 in current
liabilities. Our financial statements report a net loss of $14,085,365 for the
cumulative period from January 28, 2003 to December 31, 2007 compared to a net
loss of $6,373,779 for the period from January 28, 2003 to December 31, 2006.
Our losses increased in part as a result of an overall increase in all expense
categories during the twelve month period ended December 31, 2007 as compared to
the twelve month period ended December 31,2006.

Our total liabilities as of December 31, 2007 were $2,473,332,
as compared to total liabilities of $13,489,420 as at December 31, 2006. The
decrease was primarily due to the debt settlement agreement withy Invicta.

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- 18 -

We have suffered recurring losses from operations. The
continuation of our company is dependent upon our company attaining and
maintaining profitable operations and raising additional capital. In this regard
we have raised additional capital through the equity offerings noted above.

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

There are no assurances that we will be able to obtain further
funds required for our continued operations. As noted herein, we are pursuing
various financing alternatives to meet our immediate and long-term financial
requirements. There can be no assurance that additional financing will be
available to us when needed or, if available, that it can be obtained on
commercially reasonable terms. If we are not able to obtain the additional
financing on a timely basis, we will be unable to conduct our operations as
planned, and we will not be able to meet our other obligations as they become
due. In such event, we will be forced to scale down or perhaps even cease our
operations.

Purchase of Significant Equipment

We do not intend to purchase any significant equipment over the
twelve months ending December 31, 2008.

Employees

Apart from our directors and officers we have no employees.

Going Concern

The financial statements have been prepared in accordance with
accounting principles generally accepted in the United States applicable to a
going concern, which contemplates the realization of assets and the satisfaction
of liabilities and commitments in the normal course of business. The Company has
incurred a net loss of $7,711,586 for the year ended December 31, 2007 [2006 -
$3,592,444 and 2005 - $2,176,154] and at December 31, 2007 had a deficit
accumulated during the exploration stage of $14,235,365 [2006  $6,373,779]. The
Company has not generated any revenue, has a substantial accumulated deficit and
negative working capital of $205,682 as at December 31, 2007. The Company
requires additional funds to maintain its existing operations and to acquire new
business assets. These conditions raise substantial doubt about the Companys
ability to continue as a going concern. Managements plans in this regard are to
raise equity and debt financing as required, but there is no certainty that such
financing will be available or that it will be available at acceptable terms.
Should the Company be unsuccessful in obtaining further debt or equity financing
in the near future, it may have to sell off its remaining 10% equity interest in
Cheetah BC. The outcome of these matters cannot be predicted at this time.

Subsequent to December 31, 2007, the Company received loan
advances of $50,000 from certain shareholders to provide working capital to
enable the Company to meet its current operating obligations. The funds were
paid back to the shareholders when the Company entered into a demand loan
agreement with Invicta whereby Invicta agreed to advance the Company up to
$500,000.

These financial statements do not include any adjustments to
reflect the future effects on the recoverability and classification of assets or
the amounts and classification of liabilities that might result from the outcome
of this uncertainty.

Recently Issued Accounting Standards

In September 2006, the FASB issued SFAS No. 157, Fair Value
Measurements. The objective of SFAS 157 is to increase consistency and
comparability in fair value measurements and to expand disclosures about fair
value measurements. SFAS 157 defines fair value, establishes a framework for
measuring fair value in generally accepted accounting principles, and expands
disclosures about fair value measurements. SFAS 157 applies under other
accounting pronouncements that require or permit fair value measurements and
does not require any new fair value measurements. The provisions of SFAS 157 are
effective for fair value measurements made in fiscal years beginning

---

- 19 -

after November 15, 2007. The Company is currently evaluating
the impact of adopting SFAS No. 157 but does not expect that it will have a
material effect on its financial statements.

In February 2007, the Financial Accounting Standards Board
(FASB) issued SFAS No. 159, The Fair Value Option for Financial Assets and
Financial Liabilities  Including an Amendment of FASB Statement No. 115.
This statement permits entities to choose to measure many financial instruments
and certain other items at fair value. Most of the provisions of SFAS No. 159
apply only to entities that elect the fair value option. However, the amendment
to SFAS No. 115 Accounting for Certain Investments in Debt and Equity
Securities applies to all entities with available-for-sale and trading
securities. SFAS No. 159 is effective as of the beginning of an entitys first
fiscal year that begins after November 15, 2007. Early adoption is permitted as
of the beginning of a fiscal year that begins on or before November 15, 2007,
provided the entity also elects to apply the provision of SFAS No. 157, Fair
Value Measurements. The Company is currently evaluating the impact of
adopting SFAS No. 159 but does not expect that it will have a material effect on
its financial statements.

In December 2007, the Financial Accounting Standards Board
(FASB) issued SFAS No. 141R, Business Combinations. This statement replaces
SFAS 141 and defines the acquirer in a business combination as the entity that
obtains control of one or more businesses in a business combination and
establishes the acquisition date as the date that the acquirer achieves control.
SFAS 141R requires an acquirer to recognize the assets acquired, the liabilities
assumed, and any noncontrolling interest in the acquiree at the acquisition
date, measured at their fair values as of that date. SFAS 141R also requires the
acquirer to recognize contingent consideration at the acquisition date, measured
at its fair value at that date. This statement is effective for fiscal years,
and interim periods within those fiscal years, beginning on or after December
15, 2008. Earlier adoption is prohibited.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling
Interests in Consolidated Financial Statements Liabilities an Amendment of ARB
No. 51. This statement amends ARB 51 to establish accounting and reporting
standards for the Noncontrolling interest in a subsidiary and for the
deconsolidation of a subsidiary. This statement is effective for fiscal years,
and interim periods within those fiscal years, beginning on or after December
15, 2008. Earlier adoption is prohibited.

Application of Critical Accounting Policies

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

---

- 20 -

In September 2007 management determined that the Company
realized an impairment of goodwill estimated at $497,000 arising from the July
20, 2007 agreement with K&P entered into by the Company.

Stock Based Compensation

The Company accounts for it stock options in accordance with
FAS 123 (R)  Share Based Payments, and related interpretations in
accounting for stock-based compensation awards to employees, directors and
non-employees. In accordance with FAS 123 (R)  Share Based Payments, the
Company recognizes stock-based compensation expense based on the fair value of
the stock options on the date of grant. The fair value of the stock options at
the date of grant is amortized over the vesting period, with the offsetting
credit to additional paid in capital. If the stock options are exercised, the
proceeds are credited to share capital.

Changes in Accounting Policies

In June 2006, the Financial Accounting Standards Board (the
FASB) issued FASB Interpretation No. 48, Accounting for Uncertainty in
Income Taxes; an interpretation of FASB Statement No. 109 (FIN 48), which
clarified the accounting for uncertainty in income taxes recognized in a
companys consolidated financial statements in accordance with SFAS No. 109. FIN
48 prescribes a recognition threshold and measurement attribute for the
financial statement recognition and measurement of a tax position taken or
expected to be taken in a tax return. FIN 48 requires an entity to recognize the
financial statement impact of a tax position when it is more-likely-than-not
that the position will be sustained upon examination. If the tax position meets
the more-likely-than-not recognition threshold, the tax effect is recognized at
the largest amount of the benefit that is greater than fifty percent likely of
being realized upon ultimate settlement.

FIN 48 requires that a liability created for unrecognized tax
benefits shall be presented as a liability and not combined with deferred tax
liabilities or assets. The Company adopted FIN 48 on January 1, 2007. The
cumulative effect of the adoption of FIN 48 had no impact.

Effective January 1, 2007, the Company adopted the provisions
of the FASB Staff Position (FSB) on EITF Issue 00-19-2 Accounting for
Registration Payment Arrangements. This accounting position was adopted on a
prospective basis with no restatement of prior period consolidated financial
statements. This position specifies that the contingent obligation to make
future payments or otherwise transfer consideration under a registration payment
arrangement, whether issued as a separate agreement or included as a provision
of a financial instrument or other agreement, should be separately recognized
and measured in accordance with FASB Statement No. 5 Accounting for
Contingencies. Transition to the FSP will be achieved by reporting a change in
accounting principle through a cumulative-effect adjustment to the opening
balance of deficit.

At January 1, 2007 the Company was subject to liquidated
damages or cash penalties payable to certain warrant holders if the Company
could not register the shares underlying the warrants. Because this registration
payment arrangement was entered into prior to the issuance of this accounting
position and the Company determined that payment of liquidated damages was
probable as at January 1, 2007, the Company reported a transitional adjustment
to the balance of deficit accumulated during the exploration stage as at January
1, 2007 in the amount of $150,000, representing the estimated fair value of the
liquidated damages as at that date.

---

- 21 -

Going Concern

Our annual financial statements have been prepared on the going
concern basis, which assumes the realization of assets and liquidation of
liabilities in the normal course of operations. The financial statements have
been prepared assuming we will continue as a going concern. However, certain
conditions exist which raise substantial doubt about our ability to continue as
a going concern. We have suffered recurring losses from operations and have
accumulated losses of $14,235,365 since inception through December 31, 2007.

Item
7.           Financial
Statements.

Our audited financial statements are stated in United States
dollars (US$) and are prepared in accordance with United States Generally
Accepted Accounting Principles.

The following audited financial statements are filed as part of
this annual report:

| | Report of Independent Registered
      Public Accounting Firm dated <>, 2008                                                                                                                                         
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                      
| | Balance Sheets as at December 31,
      2007 and Consolidated December 31, 2006                                                                                                                                      
| |                                                                                                                                                                                                                      
| | Consolidated Statements of Operations
      from January 28, 2003 (inception) to December 31, 2006 and Statement of
      Operations from January 1, 2007 to December 31, 2007.                                      
| |                                                                                                                                                                                                                      
| | Consolidated Statements of Cash Flows
      from January 28, 2003 (inception) to December 31, 2006 and Statements of
      Cash Flows from January 1, 2007 to December 31, 2007                                      
| |                                                                                                                                                                                                                      
| | Consolidated Statements of
      Stockholders Equity for period from January 28, 2003 (inception) to
      December 31, 2006 and Statements of Stockholders Equity from January 1,
      2007 to December 31, 2007.
| |                                                                                                                                                                                                                      
| | Notes to the Consolidated Financial
      Statements                                                                                                                                                                 

---

- 22 -

Financial Statements

Cheetah Oil & Gas Ltd.(an exploration stage enterprise) 
  December 31, 2007 & 2006

---

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Cheetah Oil & Gas Ltd.(formerly Bio-American Capital Corporation) 
  (An exploration stage enterprise)

We have audited the accompanying balance sheets of Cheetah Oil
  & Gas Ltd. (formerly Bio-American Capital Corporation) (the Company)
  (an exploration stage enterprise) as at December 31, 2007 and 2006, and the
  related statements of operations, stockholders equity, and cash flows
  for the years ended December 31, 2007, 2006 and 2005 and for the cumulative
  period from January 28, 2003 to December 31, 2007. These financial statements
  are the responsibility of the Companys management. Our responsibility
  is to express an opinion on these financial statements based on our audits.
  The financial statements as at January 31, 2004 and the period from January
  28, 2003 (inception) to January 31, 2004 were audited by other auditors whose
  report dated March 18, 2005 expressed an unqualified opinion on those statements.
  The financial statements for the period January 28, 2003 (inception) through
  January 31, 2004 include total revenues and net loss of $0 and $812 respectively.
  Our opinion on the statements of operations, stockholders equity, and
  cash flows for the period January 28, 2003 (inception) through December 31,
  2007, insofar as it relates to amounts for prior periods through January 31,
  2004, is based solely on the report of other auditors.

We conducted our audits in accordance with the standards of the
  Public Company Accounting Oversight Board (United States). Those standards require
  that we plan and perform the audit to obtain reasonable assurance about whether
  the financial statements are free of material misstatement. We were not engaged
  to perform an audit of the Companys internal control over financial reporting.
  Our audit includes consideration of internal control over financial reporting
  as a basis for designing audit procedures that are appropriate in the circumstances,
  but not for the purpose of expressing an opinion on the effectiveness of the
  Companys internal control over financial reporting. Accordingly we express
  no such opinion. An audit includes examining, on a test basis, evidence supporting
  the amounts and disclosures in the financial statements. An audit also includes
  assessing the accounting principles used and significant estimates made by management,
  as well as evaluating the overall financial statement presentation. We believe
  that our audits and the report of other auditors provide a reasonable basis
  for our opinion.

In our opinion, based on our audits and the report of other auditors,
  the financial statements referred to above present fairly, in all material respects,
  the financial position of Cheetah Oil & Gas Ltd. at December 31, 2007 and
  2006, and the results of its operations and its cash flows for the years ended
  December 31, 2007, 2006 and 2005 and for the cumulative period from January
  28, 2003 to December 31, 2007, in conformity with U.S. generally accepted accounting
  principles.

The accompanying financial statements have been prepared assuming
  the Company will continue as a going concern. As discussed in Note 2 to the
  financial statements, the Company has not generated any revenues from operations,
  has substantial accumulated deficit and working capital deficiency and this
  raises substantial doubt about its ability to continue as a going concern. Managements
  plans in regard to these matters are also described in Note 2. The 2007 and
  2006 financial statements do not include any adjustments that might result from
  the outcome of this uncertainty.

|Vancouver, Canada, | */s/ Ernst & Young LLP*
|------------------ | -----------------------
|April 14, 2008.    | Chartered Accountants  

---

|Cheetah Oil & Gas Ltd.                                                  
|------------------------------------------------------------------------
|(an exploration stage enterprise)                                       
|                                                                        
|BALANCE SHEETS                                                          
|(expressed in U.S. dollars)                                             
|[Basis of Presentation and Going Concern Uncertainty 
      See Note 2]

|As at December 31                                                   |  |             |   |  |            |  
|------------------------------------------------------------------- |  | ----------- | - |  | ---------- | -
|                                                                    |  | 2007        |   |  | 2006       |  
|                                                                    |  | $           |   |  | $          |  
|ASSETS                                                              |  |             |   |  |            |  
|Current Assets                                                      |  |             |   |  |            |  
|Cash and cash equivalents                                           |  | 7,861       |   |  | 82,688     |  
|Receivables [note 6]                                                |  | 2,259,343   |   |  | 16,063     |  
|Deferred financing costs [note 4]                                   |  | -           |   |  | 50,147     |  
|Prepaids and deposits                                               |  | 446         |   |  | 75,734     |  
|Total Current Assets                                                |  | 2,267,650   |   |  | 224,632    |  
|                                                                    |  |             |   |  |            |  
|Investment in Cheetah Oil & Gas (B.C.)
      Ltd. [note 5]          |  | 1,521,329   |   |  | -          |  
|Refundable deposits for petroleum prospecting licences              |  | -           |   |  | 227,092    |  
|Equipment [note 8]                                                  |  | 2,614       |   |  | 90,124     |  
|Oil and gas properties, unproven [note 9]                           |  | -           |   |  | 20,880,423 |  
|Goodwill [note 10]                                                  |  | -           |   |  | 497,000    |  
|Total Assets                                                        |  | 3,791,593   |   |  | 21,919,271 |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                |  |             |   |  |            |  
|Current Liabilities                                                 |  |             |   |  |            |  
|Accounts payable and accrued liabilities [note
      6 & 20]        |  | 2,457,332   |   |  | 5,136,858  |  
|Interest and penalties payable                                      |  | -           |   |  | 517,342    |  
|Advances payable [note 11]                                          |  | -           |   |  | 650,000    |  
|Convertible notes payable [note 4]                                  |  | -           |   |  | 4,986,456  |  
|Fair value of warrants [note 4]                                     |  | 16,000      |   |  | 81,041     |  
|Current portion of capital lease obligations                        |  | -           |   |  | 9,778      |  
|Total Current Liabilities                                           |  | 2,473,332   |   |  | 11,381,475 |  
|                                                                    |  |             |   |  |            |  
|Long term portion of capital lease obligations                      |  | -           |   |  | 19,584     |  
|Long term debt  Capital Loan [note 15]                             |  | -           |   |  | 781,397    |  
|Deferred income taxes [note 19]                                     |  | -           |   |  | 1,304,267  |  
|Non-controlling interest                                            |  | -           |   |  | 2,697      |  
|Total Liabilities                                                   |  | 2,473,332   |   |  | 13,489,420 |  
|                                                                    |  |             |   |  |            |  
|Contingencies [note 17]                                             |  |             |   |  |            |  
|                                                                    |  |             |   |  |            |  
|Stockholders equity                                                |  |             |   |  |            |  
|Common stock [note 12]                                              |  |             |   |  |            |  
|Common
      stock, $0.001 par value, authorized 500,000,000 shares |  |             |   |  |            |  
|(2006  50,000,000
      shares) issued and outstanding: 37,934,991 |  |             |   |  |            |  
|shares (2006 - 36,679,481 shares)                                   |  | 37,935      |   |  | 36,680     |  
|Additional paid in capital [note 12]                                |  | 15,192,568  |   |  | 14,766,950 |  
|Shares to be issued [notes 11, 12 and 16]                           |  | 323,123     |   |  | -          |  
|Deficit accumulated during the exploration stage                    |  | (14,235,365 | ) |  | (6,373,779 | )
|Total Stockholders Equity                                          |  | 1,318,261   |   |  | 8,429,851  |  
|Total Liabilities and Stockholders Equity                          |  | 3,791,593   |   |  | 21,919,271 |  

See accompanying notes

---

|Cheetah Oil & Gas Ltd.                                                  
|------------------------------------------------------------------------
|(an exploration stage enterprise)                                       
|                                                                        
|                                                                        
|STATEMENTS OF OPERATIONS                                                
|(expressed in U.S. dollars)                                             
|[Basis of Presentation and Going Concern Uncertainty 
      See Note 2]

|                                                               |  | Twelve months  |       |  | Twelve months  |   |  | Twelve months  |   |  | Cumulative from     |  
|-------------------------------------------------------------- |  | -------------- | ----- |  | -------------- | - |  | -------------- | - |  | ------------------- | -
|                                                               |  | ended December |       |  | ended December |   |  | ended December |   |  | January 28, 2003 to |  
|                                                               |  | 31, 2007       |       |  | 31, 2006       |   |  | 31, 2005       |   |  | December 31, 2007   |  
|                                                               |  | $              |       |  | $              |   |  | $              |   |  | $                   |  
|                                                               |  |                |       |  |                |   |  |                |   |  |                     |  
|General and administrative expenses                            |  |                |       |  |                |   |  |                |   |  |                     |  
|Liquidated damages fees [note 4]                               |  | 881,246        |       |  | 500,333        |   |  | 188,000        |   |  | 1,719,579           |  
|Accounting, audit and legal                                    |  | 453,712        |       |  | 482,735        |   |  | 225,291        |   |  | 1,285,211           |  
|Amortization of deferred charges [note 4]                      |  | 50,147         |       |  | 414,180        |   |  | -              |   |  | 464,327             |  
|Depreciation                                                   |  | 18,708         |       |  | 26,803         |   |  | 23,393         |   |  | 78,550              |  
|Interest [note 4]                                              |  | 2,662,385      |       |  | 528,495        |   |  | 1,652          |   |  | 3,192,532           |  
|Interest  long-term debt                                      |  | 58,252         |       |  | 31,397         |   |  | -              |   |  | 89,649              |  
|Application fees and permits                                   |  | 2,255          |       |  | 3,355          |   |  | 2,143          |   |  | 55,051              |  
|Accretion of debt discount on convertible notes
      [note 4] |  | 13,544         |       |  | 2,286,456      |   |  | -              |   |  | 2,300,000           |  
|Directors fees [note 14]                                      |  | 426,873        |       |  | -              |   |  | -              |   |  | 426,873             |  
|Consulting fees [note 14]                                      |  | 352,642        |       |  | 266,030        |   |  | 221,634        |   |  | 875,348             |  
|Office and miscellaneous [note 17 and 20]                      |  | 95,169         |       |  | 30,527         |   |  | 69,505         |   |  | 224,357             |  
|Investor relations and shareholder information                 |  | 25,165         |       |  | 81,386         |   |  | 161,969        |   |  | 378,568             |  
|Insurance                                                      |  | (3,403         | **)** |  | 125,770        |   |  | 58,501         |   |  | 180,868             |  
|Rental and communication                                       |  | 73,940         |       |  | 100,797        |   |  | 77,135         |   |  | 292,760             |  
|Salaries and benefits                                          |  | 61,787         |       |  | 39,575         |   |  | 23,952         |   |  | 141,031             |  
|Travel                                                         |  | 137,852        |       |  | 109,297        |   |  | 226,667        |   |  | 534,664             |  
|Stock-based compensation                                       |  | -              |       |  | 988,476        |   |  | 896,114        |   |  | 1,906,655           |  
|                                                               |  | 5,310,274      |       |  | 6,015,612      |   |  | 2,175,956      |   |  | 14,146,023          |  
|                                                               |  |                |       |  |                |   |  |                |   |  |                     |  
|Loss before other gains (losses) and other
      income        |  | (5,310,274     | **)** |  | (6,015,612     | ) |  | (2,175,956     | ) |  | (14,146,023         | )
|Impairment of oil & gas properties [note 9]                    |  | (5,648,089     | **)** |  | -              |   |  | -              |   |  | (5,648,089          | )
|Impairment of Goodwill [note 10]                               |  | (497,000       | **)** |  | -              |   |  | -              |   |  | (497,000            | )
|Foreign exchange gain (loss)                                   |  | (93,084        | **)** |  | 36,745         |   |  | (105,310       | ) |  | (272,649            | )
|Gain on settlement of debt [note 7]                            |  | 2,461,070      |       |  | -              |   |  | -              |   |  | 2,461,070           |  
|Unrealized gains on warrants [note 4]                          |  | 65,041         |       |  | 2,218,959      |   |  | -              |   |  | 2,284,000           |  
|Other income [note 8]                                          |  | 6,483          |       |  | 14,464         |   |  | 55,112         |   |  | 76,059              |  
|Loss before income taxes                                       |  | (9,015,853     | **)** |  | (3,745,444     | ) |  | (2,226,154     | ) |  | (15,742,632         | )
|Income taxes recovery  deferred [note 19]                     |  | (1,304,267     | **)** |  | (153,000       | ) |  | (50,000        | ) |  | (1,507,267          | )
|Net loss and comprehensive
      loss for the year             |  | (7,711,586     | **)** |  | (3,592,444     | ) |  | (2,176,154     | ) |  | (14,235,365         | )
|                                                               |  |                |       |  |                |   |  |                |   |  |                     |  
|                                                               |  |                |       |  |                |   |  |                |   |  |                     |  
|Loss per share - basic and diluted                             |  | (.21           | **)** |  | (0.10          | ) |  | (0.06          | ) |  |                     |  
|                                                               |  |                |       |  |                |   |  |                |   |  |                     |  
|Weighted average number of common stock
      outstanding      |  |                |       |  |                |   |  |                |   |  |                     |  
| basic and
      diluted                                      |  | 36,889,306     |       |  | 36,679,481     |   |  | 36,065,122     |   |  |                     |  

See accompanying notes

---

|Cheetah Oil & Gas Ltd.                                                  
|------------------------------------------------------------------------
|(an exploration stage enterprise)                                       
|                                                                        
|STATEMENTS OF CASH FLOWS                                                
|(expressed in U.S. dollars)                                             
|[Basis of Presentation and Going Concern Uncertainty 
      See Note 2]

|                                                                 |  | Year ended   |       |  | Year ended   |   |  | Year ended   |   |  | Cumulative from     |  
|---------------------------------------------------------------- |  | ------------ | ----- |  | ------------ | - |  | ------------ | - |  | ------------------- | -
|                                                                 |  | December 31, |       |  | December 31, |   |  | December 31, |   |  | January 28, 2003 to |  
|                                                                 |  | 2007         |       |  | 2006         |   |  | 2005         |   |  | December 31, 2007   |  
|                                                                 |  | $            |       |  | $            |   |  | $            |   |  | $                   |  
|Net loss for the year                                            |  | (7,711,586   | **)** |  | (3,592,444   | ) |  | (2,176,154   | ) |  | (14,085,365         | )
|Items not involving cash                                         |  |              |       |  |              |   |  |              |   |  |                     |  
|Amortization of deferred charges                                 |  | 50,147       |       |  | 414,180      |   |  | -            |   |  | 464,327             |  
|Depreciation                                                     |  | 18,708       |       |  | 26,803       |   |  | 23,393       |   |  | 78,550              |  
|Gain on settlement of debt                                       |  | (2,461,070   | **)** |  | -            |   |  | -            |   |  | (2,461,070          | )
|Unrealized gains on warrants                                     |  | (65,041      | **)** |  | (2,218,959   | ) |  | -            |   |  | (2,284,000          | )
|Foreign exchange                                                 |  | -            |       |  | 19,267       |   |  | 52,000       |   |  | 182,267             |  
|Deferred income taxes                                            |  | (1,304,267   | **)** |  | (153,000     | ) |  | (50,000      | ) |  | (1,507,267          | )
|Non-cash directors fees                                         |  | 426,873      |       |  | -            |   |  | -            |   |  | 426,873             |  
|Stock-based compensation                                         |  | -            |       |  | 988,476      |   |  | 896,114      |   |  | 1,906,654           |  
|Gain on disposal of equipment                                    |  | (4,000       | **)** |  | (4,311       | ) |  | -            |   |  | (8,311              | )
|Accretion of debt discount on convertible notes                  |  | 13,544       |       |  | 2,286,456    |   |  | -            |   |  | 2,300,000           |  
|Impairment of oil & gas properties                               |  | 5,648,089    |       |  | -            |   |  | -            |   |  | 5,648,089           |  
|Impairment of goodwill                                           |  | 497,000      |       |  | -            |   |  | -            |   |  | 497,000             |  
|Change in other assets and liabilities (net
      of effect of   |  |              |       |  |              |   |  |              |   |  |                     |  
|acquisition of subsidiaries):                                    |  |              |       |  |              |   |  |              |   |  |                     |  
|Prepaids and deposits                                            |  | 59,492       |       |  | 87,187       |   |  | (151,915     | ) |  | 210,209             |  
|Accounts receivable                                              |  | (16,994      | **)** |  | 118,758      |   |  | (134,821     | ) |  | (33,057             | )
|Long term deposits                                               |  | -            |       |  | 4,290        |   |  | (4,290       | ) |  | -                   |  
|Refundable licences deposits                                     |  | (13,993      | **)** |  | (23,029      | ) |  | (41,520      | ) |  | (111,941            | )
|Accounts payable and accrued liabilities                         |  | 1,313,304    |       |  | 1,291,971    |   |  | 1,286,640    |   |  | 3,942,607           |  
|Interest &
      penalties payable                               |  | 2,547,205    |       |  | -            |   |  | -            |   |  | 2,547,205           |  
|Net cash used in operating activities                            |  | (1,002,589   | **)** |  | (754,355     | ) |  | (300,553     | ) |  | (2,287,230          | )
|                                                                 |  |              |       |  |              |   |  |              |   |  |                     |  
|FINANCING ACTIVITIES                                             |  |              |       |  |              |   |  |              |   |  |                     |  
|Proceeds on issuance of common shares, net of share issuance     |  |              |       |  |              |   |  |              |   |  |                     |  
|costs                                                            |  | -            |       |  | -            |   |  | 5,922,500    |   |  | 5,922,500           |  
|Proceeds on exercise of warrants                                 |  | -            |       |  | -            |   |  | -            |   |  | 416,000             |  
|Proceeds from convertible note financing                         |  | -            |       |  | 5,000,000    |   |  | -            |   |  | 5,000,000           |  
|Net issuance costs paid relating to note financing               |  | -            |       |  | (464,328     | ) |  | -            |   |  | (464,328            | )
|Proceeds from capital loan                                       |  | -            |       |  | 750,000      |   |  | -            |   |  | 750,000             |  
|Subscriptions received                                           |  | -            |       |  | -            |   |  | -            |   |  | 750,288             |  
|Repayment of capital lease                                       |  | (8,021       | **)** |  | (6,927       | ) |  | (8,733       | ) |  | (23,681             | )
|Repayment of advances payable to related parties                 |  | -            |       |  | (1,174       | ) |  | -            |   |  | (1,174              | )
|Advances payable                                                 |  | 1,289,043    |       |  | 650,000      |   |  | (69,297      | ) |  | 1,999,864           |  
|Net cash from financing
      activities                         |  | 1,281,022    |       |  | 5,927,571    |   |  | 5,844,470    |   |  | 14,349,469          |  
|                                                                 |  |              |       |  |              |   |  |              |   |  |                     |  
|INVESTING ACTIVITIES                                             |  |              |       |  |              |   |  |              |   |  |                     |  
|Purchase of equipment                                            |  | (6,630       | **)** |  | (3,766       | ) |  | (14,306      | ) |  | (125,400            | )
|Proceeds on disposal of equipment                                |  | 8,318        |       |  | 17,415       |   |  | -            |   |  | 25,733              |  
|Cash investment in Cheetah B.C.                                  |  | (8,715       | **)** |  | -            |   |  | -            |   |  | (8,715              | )
|Oil and gas properties                                           |  | (346,233     | **)** |  | (5,735,763   | ) |  | (5,049,101   | ) |  | (11,644,292         | )
|Cash paid in connection with acquisition of
      Scotia, net of |  |              |       |  |              |   |  |              |   |  |                     |  
|cash
      received                                              |  | -            |       |  | -            |   |  | -            |   |  | (301,780            | )
|Net cash used in investing activities                            |  | (353,260     | **)** |  | (5,722,114   | ) |  | (5,063,407   | ) |  | (12,054,454         | )
|                                                                 |  |              |       |  |              |   |  |              |   |  |                     |  
|Increase (Decrease) in cash and cash equivalents                 |  | (74,827      | **)** |  | (548,898     | ) |  | 480,510      |   |  | 7,785               |  
|Cash and cash equivalents,
      beginning of year               |  | 82,688       |       |  | 631,586      |   |  | 151,076      |   |  | 76                  |  
|Cash and cash equivalents, end of year                           |  | 7,861        |       |  | 82,688       |   |  | 631,586      |   |  | 7,861               |  

See supplemental disclosure of cash flow information [note
  15] 
  See accompanying notes

---

|Cheetah Oil & Gas Ltd.                            
|--------------------------------------------------
|(an exploration stage enterprise)                 
|                                                  
|STATEMENTS OF STOCKHOLDERS
      EQUITY (contd.)
|(expressed in U.S. dollars)                       

|                                                                       |  |              |  |  |         |  |  |            |   |  |              |   |  | Deficit     |   |  |              |  
|---------------------------------------------------------------------- |  | ------------ |  |  | ------- |  |  | ---------- | - |  | ------------ | - |  | ----------- | - |  | ------------ | -
|                                                                       |  |              |  |  |         |  |  |            |   |  |              |   |  | accumulated |   |  |              |  
|                                                                       |  |              |  |  |         |  |  | Additional |   |  |              |   |  | during      |   |  | Total stock- |  
|                                                                       |  |              |  |  |         |  |  | paid in    |   |  | Shares to be |   |  | exploration |   |  | holders     |  
|                                                                       |  | Common stock |  |  | capital |  |  | issued     |   |  | stage        |   |  | equity      |  
|                                                                       |  | Shares       |  |  | $       |  |  | $          |   |  | $            |   |  | $           |   |  | $            |  
|                                                                       |  |              |  |  |         |  |  |            |   |  |              |   |  |             |   |  |              |  
|Balance, December 31, 2004                                             |  | 35,019,682   |  |  | 35,020  |  |  | 3,353,473  |   |  | 958,828      |   |  | (605,181    | ) |  | 3,742,140    |  
|Shares issued for debt settlement                                      |  | 55,165       |  |  | 55      |  |  | (55        | ) |  |             |   |  |            |   |  |             |  
|Purchased minority interest of Scotia                                  |  | 142,000      |  |  | 142     |  |  | 999,858    |   |  |             |   |  |            |   |  | 1,000,000    |  
|Shares issued for subscriptions received from April 2004 private       |  |              |  |  |         |  |  |            |   |  |              |   |  |             |   |  |              |  
|placement                                                              |  | 150,000      |  |  | 150     |  |  | 542,678    |   |  | (542,828     | ) |  |            |   |  |             |  
|Shares issued for the exercise of April 2004 stock purchase            |  |              |  |  |         |  |  |            |   |  |              |   |  |             |   |  |              |  
|warrants                                                               |  | 55,467       |  |  | 55      |  |  | 415,945    |   |  | (416,000     | ) |  |            |   |  |             |  
|Issuance of common stock pursuant to a private placement at            |  |              |  |  |         |  |  |            |   |  |              |   |  |             |   |  |              |  
|$5.00 per share, net of share
      issuance costs of $450,000 in June |  |              |  |  |         |  |  |            |   |  |              |   |  |             |   |  |              |  
|2005                                                                   |  | 1,200,000    |  |  | 1,200   |  |  | 5,548,800  |   |  |             |   |  |            |   |  | 5,550,000    |  
|Share issue costs                                                      |  | 7,500        |  |  | 8       |  |  | (8         | ) |  |             |   |  |            |   |  |             |  
|Shares issued for subscriptions received                               |  | 49,667       |  |  | 50      |  |  | 372,450    |   |  |             |   |  |            |   |  | 372,500      |  
|Stock-based compensation                                               |  |             |  |  |        |  |  | 1,949,114  |   |  |             |   |  |            |   |  | 1,949,114    |  
|Net loss for the year                                                  |  |             |  |  |        |  |  |           |   |  |             |   |  | (2,176,154  | ) |  | (2,176,154   | )
|Balance, December 31, 2005                                             |  | 36,679,481   |  |  | 36,680  |  |  | 13,182,255 |   |  |             |   |  | (2,781,335  | ) |  | 10,437,600   |  
|Stock-based compensation                                               |  |             |  |  |        |  |  | 2,717,914  |   |  |             |   |  |            |   |  | 2,717,914    |  
|Stock-based compensation forfeited or cancelled                        |  |             |  |  |        |  |  | (1,133,219 | ) |  |             |   |  |            |   |  | (1,133,219   | )
|Net loss for the year                                                  |  |             |  |  |        |  |  |           |   |  |             |   |  | (3,592,444  | ) |  | (3,592,444   | )
|Balance, December 31, 2006                                             |  | 36,679,481   |  |  | 36,680  |  |  | 14,766,950 |   |  |             |   |  | (6,373,779  | ) |  | 8,429,851    |  
|Transitional adjustments to beginning balance [note 3b]                |  |             |  |  |        |  |  |           |   |  |             |   |  | (150,000    | ) |  | (150,000     | )
|Shares to be issued [note 12]                                          |  |             |  |  |        |  |  |           |   |  | 323,123      |   |  |            |   |  | 323,123      |  
|Directors fees [note 12]                                              |  | 1,255,510    |  |  | 1,255   |  |  | 425,618    |   |  |             |   |  |            |   |  | 426,873      |  
|Net loss for the year                                                  |  |             |  |  |        |  |  |           |   |  |             |   |  | (7,711,586  | ) |  | (7,711,586   | )
|Balance, December
      31, 2007                                       |  | 37,934,991   |  |  | 37,935  |  |  | 15,192,568 |   |  | 323,123      |   |  | (14,235,365 | ) |  | (1,318,261   | )

See accompanying notes

---

|Cheetah Oil & Gas Ltd.           
|---------------------------------
|(an exploration stage enterprise)
|                                 
|NOTES TO FINANCIAL STATEMENTS    
|(expressed in U.S. dollars)      
|                                 
|December 31, 2007                

1. INCORPORATION AND NATURE OF OPERATIONS

Cheetah Oil & Gas Ltd. (Cheetah Nevada or the
  Company) was incorporated in May 1992 under the laws of the State
  of Nevada, U.S.A. The Company ceased business operations in May 2000 and changed
  its name from Bio-American Capital Corporation to Cheetah Oil & Gas Ltd.
  Effective May 26, 2004.

On February 24, 2004, the stockholder owning a majority of the
  outstanding voting securities of Cheetah Nevada approved a reverse split of
  common stock at the rate of one share for every 200 shares outstanding and thereafter
  increased the number of authorized shares of common stock to 50,000,000. Immediately
  prior to the Acquisition Agreement noted below, it had 19,682 (post-consolidation)
  shares of common stock issued and outstanding.

On March 5, 2004, Cheetah Nevada entered into an Acquisition
  Agreement (the Agreement), whereby Cheetah Nevada issued 25,000,000
  common stock in exchange for all of the issued and outstanding common stock
  of Cheetah Oil & Gas (B.C.) Ltd. (Cheetah BC), a Canadian company.
  In connection with this transaction, $130,000 debt owed by Cheetah Nevada was
  assumed and settled. For accounting purposes, the share exchange was considered
  a reverse takeover under applicable accounting rules, whereby Cheetah BC was
  considered the acquiring entity as the shareholders of Cheetah BC acquired more
  than 50% of the outstanding shares of Cheetah Nevada. Cheetah Nevada was the
  surviving entity for legal purposes. The combined company is considered to be
  a continuation of the operations of Cheetah BC.

Cheetah BC was incorporated on January 28, 2003 in British Columbia,
  Canada under the name of Universal Data Corp. and changed its name to Cheetah
  Oil & Gas Ltd. Effective December 11, 2003. Cheetah BC, an exploration stage
  enterprise, is in the business of acquiring and exploring oil and gas properties
  in Papua New Guinea (PNG).

On July 20, 2007 the Company entered into a Share Subscription
  Agreement (Agreement) with Kepis & Pobe Investments Inc. (K&P)
  and its assigns. Under the terms of the agreement K&P had the right to acquire,
  through the subscription for shares, a 90% interest in Cheetah BC, a wholly
  owned subsidiary of the Company which through ownership of other subsidiaries
  has title to the Companys Petroleum Prospecting Licences and the Petroleum
  Retention Licence. K&P entered into an agreement whereby K&P assigned
  all of its rights and obligations under the Agreement to Invicta Oil & Gas
  Ltd. (Invicta) (on March 28, 2008, Invicta changed its name to LNG
  Energy Ltd.).

On September 27, 2007 the Company entered into an amendment to
  the Agreement, extending the closing of the agreement from October 2, 2007 to
  November 30, 2007 and adding a price adjustment mechanism linked to increases
  in the consolidated liabilities of Cheetah BC.

The Company closed on the transaction on November 30, 2007 and
  received total non-cash consideration of $13,691,278. Effective December 1,
  2007 the financial statements of Cheetah BC, Cheetah BCs wholly owned
  subsidiary Cheetah Oil & Gas (PNG) Ltd. (Cheetah PNG) and Cheetah
  PNGs 98.65% owned subsidiary Scotia Petroleum Inc. (Scotia)
  ceased to be consolidated with those of the Company. Commencing December 1,
  2007, the Company recorded its remaining 10% equity investment in Cheetah BC
  at a cost of $1,521,329 [note 5].

---

|Cheetah Oil & Gas Ltd.           
|---------------------------------
|(an exploration stage enterprise)
|                                 
|NOTES TO FINANCIAL STATEMENTS    
|(expressed in U.S. dollars)      
|                                 
|December 31, 2007                

2. BASIS OF PRESENTATION AND GOING CONCERN UNCERTAINTY

The balance sheet presented is that of the Company as at December
  31, 2007. The statements of operations, cash flows and stockholders equity
  reflect the changes in stockholders equity, the results of operations and the
  changes in cash flows of the Company for the year ended December 31, 2007 consolidated
  with the results of operations and changes in cash flows of its controlled subsidiaries
  from January 1, 2007 until November 30, 2007.

These accompanying financial statements have been prepared by
  management, who is responsible for their content, in accordance with accounting
  principles generally accepted in the United States. The Company has not produced
  any revenues from its principal business and is an exploration stage company
  as defined by Statement of Financial Accounting Standard (SFAS)
  No. 7 Accounting and Reporting by Development Stage Enterprises.

Going concern uncertainty

These financial statements have been prepared in accordance with
  accounting principles generally accepted in the United States applicable to
  a going concern, which contemplates the realization of assets and the satisfaction
  of liabilities and commitments in the normal course of business. The Company
  has incurred a net loss of $7,711,586 for the year ended December 31, 2007 [2006
  - $3,592,444 and 2005 - $2,176,154] and at December 31, 2007 had a deficit accumulated
  during the exploration stage of $14,235,365 [2006 $6,373,779]. The Company
  has not generated any revenue, has a substantial accumulated deficit and negative
  working capital of $205,682 as at December 31, 2007. The Company requires additional
  funds to maintain its existing operations and to acquire new business assets.
  These conditions raise substantial doubt about the Companys ability to
  continue as a going concern. Managements plans in this regard are to raise
  equity and debt financing as required, but there is no certainty that such financing
  will be available or that it will be available at acceptable terms. Should the
  Company be unsuccessful in obtaining further debt or equity financing in the
  near future, it may have to sell off its remaining 10% equity interest in Cheetah
  BC. The outcome of these matters cannot be predicted at this time.

Subsequent to December 31, 2007, the Company received loan advances
  of $50,000 from certain shareholders to provide working capital to enable the
  Company to meet its current operating obligations. The funds were paid back
  to the shareholders when the Company entered into a demand loan agreement with
  Invicta whereby Invicta agreed to advance the Company up to $500,000 [note
  20].

These financial statements do not include any adjustments to
  reflect the future effects on the recoverability and classification of assets
  or the amounts and classification of liabilities that might result from the
  outcome of this uncertainty.

3. SIGNIFICANT ACCOUNTING POLICIES

3a. Accounting Policies

Principles of consolidation

Prior to the closing of the transaction as fully disclosed in
  note 5, the financial statements included the accounts of the Company and its
  controlled subsidiaries Cheetah BC, Cheetah PNG and Scotia. All significant
  inter-company balances and transactions were eliminated. Effective November
  30, 2007 the Company ceased to own any controlled subsidiaries.

---

|Cheetah Oil & Gas Ltd.           
|---------------------------------
|(an exploration stage enterprise)
|                                 
|NOTES TO FINANCIAL STATEMENTS    
|(expressed in U.S. dollars)      
|                                 
|December 31, 2007                

3. SIGNIFICANT ACCOUNTING POLICIES (contd)

3a. Accounting Policies (contd)

Accounting estimates

The preparation of financial statements in conformity with generally
  accepted accounting principles of the United States requires management to make
  estimates and assumptions that affect the reported amounts of assets and liabilities
  at the date of the financial statements and the reported amounts of revenues
  and expenses during the reporting periods. Actual results could differ from
  those estimates and assumptions.

Cash and cash equivalents

Cash equivalents comprise certain highly liquid instruments with
  a maturity of three months or less when purchased.

Long term investment

Long term investment consists of a 10% equity ownership in Cheetah
  BC and is accounted for at cost.

Oil and gas properties

The Company follows the full cost method of accounting for its
  oil and gas operations. Under this method, costs incurred in the acquisition,
  exploration and development of oil and gas properties are capitalized in one
  cost center, including certain internal costs directly associated with such
  activities. Proceeds from the sale of oil and gas properties are credited to
  the cost center with no gain or loss recognized unless such sale would significantly
  alter the relationship between capitalized costs and proved oil and gas reserves.

If capitalized costs, less related accumulated amortization and
  deferred income taxes, exceed the full cost ceiling the excess is
  expensed in the period such excess occurs. The full cost ceiling
  is determined based on the present value, discounted at 10%, of estimated future
  net revenues attributable to proved reserves, using current product prices and
  operating costs at the balance sheet date plus the lower of cost and fair value
  of unproved properties within the cost center.

Costs of oil and gas properties are amortized using the unit-of-production
  method based upon estimated proven oil and gas reserves starting when proved
  reserves have been established. The significant unproven properties are excluded
  from the costs subject to depletion.

Equipment

Depreciation is based on the estimated useful lives of the assets
  and is computed using the declining-balance method. Equipment is recorded at
  cost. Depreciation is provided using the following rates:

| | Office furniture and equipment | 15%
| | ------------------------------ | ---
| | Vehicles                       | 30%

---

|Cheetah Oil & Gas Ltd.           
|---------------------------------
|(an exploration stage enterprise)
|                                 
|NOTES TO FINANCIAL STATEMENTS    
|(expressed in U.S. dollars)      
|                                 
|December 31, 2007                

3. SIGNIFICANT ACCOUNTING POLICIES (contd)

3a. Accounting Policies (contd)

Leases

Leases are classified as capital or operating leases. Leases
  which transfer substantially all benefits and risks incidental to ownership
  of property are accounted for as capital leases. All other leases are accounted
  for as operating leases and the related lease payments are charged to expense
  as incurred.

Stock-based compensation

The Company accounts for it stock options in accordance with
  FAS 123 (R)  Share Based Payments, and related interpretations
  in accounting for stock-based compensation awards to employees, directors and
  non-employees. In accordance with FAS 123 (R)  Share Based Payments,the Company recognizes stock-based compensation expense based on the fair
  value of the stock options on the date of grant. The fair value of the stock
  options at the date of grant is amortized over the vesting period, with the
  offsetting credit to additional paid in capital. If the stock options are exercised,
  the proceeds are credited to share capital.

Goodwill

On an annual basis and whenever events or circumstances indicate
  that the carrying value may be impaired, management reviews the carrying value
  of goodwill. The review is based on the assessment of the investments giving
  rise to the goodwill and on the estimated undiscounted cash flows expected to
  be generated from the investments giving rise to the goodwill.

Asset retirement obligations

The Company recognizes the fair value of a liability for future
  asset retirement obligations associated with the Companys oil and gas
  properties in the period in which it is incurred. The estimated fair value of
  the asset retirement obligation is based on the current cost escalated at an
  inflation rate and discounted at a credit adjusted rate. This cost of the asset
  retirement obligation is capitalized as part of the cost of the related asset
  and amortized over its productive life. The liability accretes until the Company
  settles the obligation. As of December 31, 2007 and 2006 the Company was unable
  to estimate any asset retirement obligations.

Loss per share

Loss per share is computed using the weighted average number
  of shares outstanding during the period. The treasury stock method is used to
  determine the diluted effect of stock options and warrants. Diluted loss per
  share is equal to the basic loss per share for the years ended December 31,
  2007, 2006 and 2005 because common stock equivalents consisting of stock purchase
  warrants of 4,221,429 [2006 - 4,221,429 and 2005 - 1,266,295] and stock options
  of nil [2006 - 1,125,000 and 2005 - 1,700,000] that were outstanding at December
  31, 2007 were anti-dilutive.

---

|Cheetah Oil & Gas Ltd.           
|---------------------------------
|(an exploration stage enterprise)
|                                 
|NOTES TO FINANCIAL STATEMENTS    
|(expressed in U.S. dollars)      
|                                 
|December 31, 2007                

3. SIGNIFICANT ACCOUNTING POLICIES (contd)

3a. Accounting Policies (contd)

Long-lived assets

In accordance with SFAS No. 144, Accounting for the
  Impairment or Disposal of Long-Lived Assets, the carrying value of
  intangible assets and other long-lived assets is reviewed on a regular basis
  for the existence of facts or circumstances that may suggest impairment. The
  Company recognizes impairment when the sum of the expected undiscounted future
  cash flows is less than the carrying amount of the asset. Impairment losses,
  if any, are measured as the excess of the carrying amount of the asset over
  its estimated fair value.

Foreign currency translation and its subsidiaries

The Company uses the United States Dollar as its functional currency.
  The Company accounts for foreign currency transactions in accordance with SFAS
  No. 52, Foreign Currency Translation. Monetary assets and liabilities
  denominated in foreign currencies are translated into United States Dollars
  at the period-end exchange rates. Non-monetary assets and liabilities are translated
  at the historical rates in effect when the assets were acquired or obligations
  incurred. Transactions occurring during the period are translated at rates in
  effect at the time of the transaction. The resulting foreign exchange gains
  and losses are included in operations.

Fair value of financial instruments

Fair value estimates of financial instruments are made at the
  period end based on relevant information about financial markets and specific
  financial instruments. As these estimates are subjective in nature, involving
  uncertainties and matters of significant judgment, they cannot be determined
  with precision. Changes in assumptions can significantly affect estimated fair
  value.

The carrying value of cash and cash equivalents, receivables,
  refundable deposits, accounts payable, convertible notes payable and advances
  payable approximate their fair value. Management is of the opinion that the
  Company is not exposed to significant interest or credit risks arising from
  these financial instruments.

The Company operates outside of the United States of America
  and is exposed to foreign currency risk due to the fluctuation between the currency
  in which the Company operates and the United States Dollar.

Income taxes

The Company follows the liability method of tax allocation. Under
  this method, deferred tax liabilities and assets are determined based on the
  temporary differences between the financial statement and tax bases of asset
  and liabilities using enacted tax rates in effect in the years in which the
  differences are expected to reverse.

---

|Cheetah Oil & Gas Ltd.           
|---------------------------------
|(an exploration stage enterprise)
|                                 
|NOTES TO FINANCIAL STATEMENTS    
|(expressed in U.S. dollars)      
|                                 
|December 31, 2007                

3. SIGNIFICANT ACCOUNTING POLICIES (contd)

3b. Changes in accounting policies

Changes in Accounting Policies

In June 2006, the Financial Accounting Standards Board (the
  FASB) issued FASB Interpretation No. 48, Accounting for Uncertainty
  in Income Taxes, an interpretation of FASB Statement No. 109(FIN
  48), which clarified the accounting for uncertainty in income taxes recognized
  in a companys consolidated financial statements in accordance with SFAS
  No. 109. FIN 48 prescribes a recognition threshold and measurement attribute
  for the financial statement recognition and measurement of a tax position taken
  or expected to be taken in a tax return. FIN 48 requires an entity to recognize
  the financial statement impact of a tax position when it is more-likely-than-not
  that the position will be sustained upon examination. If the tax position meets
  the more-likely-than-not recognition threshold, the tax effect is recognized
  at the largest amount of the benefit that is greater than fifty percent likely
  of being realized upon ultimate settlement.

FIN 48 requires that a liability created for unrecognized tax
  benefits shall be presented as a liability and not combined with deferred tax
  liabilities or assets. The Company adopted FIN 48 on January 1, 2007. The cumulative
  effect of the adoption of FIN 48 had no impact.

Effective January 1, 2007, the Company adopted the provisions
  of the FASB Staff Position (FSB) on EITF Issue 00-19-2 Accounting
  for Registration Payment Arrangements. This accounting position was adopted
  on a prospective basis with no restatement of prior period consolidated financial
  statements. This position specifies that the contingent obligation to make future
  payments or otherwise transfer consideration under a registration payment arrangement,
  whether issued as a separate agreement or included as a provision of a financial
  instrument or other agreement, should be separately recognized and measured
  in accordance with FASB Statement No. 5 Accounting for Contingencies.
  Transition to the FSP will be achieved by reporting a change in accounting principle
  through a cumulative-effect adjustment to the opening balance of deficit.

At January 1, 2007 the Company was subject to liquidated damages
  or cash penalties payable to certain warrant holders if the Company could not
  register the shares underlying the warrants [note 4]. Because this registration
  payment arrangement was entered into prior to the issuance of this accounting
  position and the Company determined that payment of liquidated damages was probable
  as at January 1, 2007, the Company reported a transitional adjustment to the
  balance of deficit accumulated during the exploration stage as at January 1,
  2007 in the amount of $150,000, representing the estimated fair value of the
  liquidated damages as at that date.

4. CONVERTIBLE NOTES

Convertible Notes Issued on March 14, 2006

On March 14, 2006, the Company issued convertible notes (Convertible
  Notes) to purchase shares of the Companys common stock for total
  gross proceeds of $5,000,000. The Convertible Notes were a liability that could
  have been converted into shares of the Company prior to payout by the Company,
  as outlined below.

---

|Cheetah Oil & Gas Ltd.           
|---------------------------------
|(an exploration stage enterprise)
|                                 
|NOTES TO FINANCIAL STATEMENTS    
|(expressed in U.S. dollars)      
|                                 
|December 31, 2007                

4. CONVERTIBLE NOTES (contd)

Convertible Notes Issued on March 14, 2006 (contd)

| | a) | The Company may, prior to any conversion, redeem the
        Convertible Notes for the amount of the principal and any interest and
        penalties. The Convertible Notes also had a contingent put option that
        allowed the holder to demand payment if the Company completes an offering.
        The Convertible Notes were due on March 14, 2007 and thereafter remained
        in default until the Convertible Notes were settled on November 14, 2007
        [see note 5]. The Convertible Notes did bear interest at 10% per
        annum compounded quarterly until August 31, 2006. Thereafter the interest
        compounded at a rate which increased by 2% on the last day of each calendar
        month. The total amount of interest payable on the maturity date March
        14, 2007 was $735,496. At November 14, 2007 the Company had accrued a
        total of $4,093,584 in interest and penalties. The debt was settled in-full
        for $7,550,000 resulting in a gain on settlement of debt in the amount
        of $1,543,584
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | [note 7].                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | b) | In conjunction with the Convertible Notes, the Company
        issued 3,000,000 share purchase warrants, of which 2,000,000 warrants
        are exercisable into common stock at an exercise price of $3.25 per share,
        commencing after June 1, 2006, and expire on March 14, 2009, while 1,000,000
        warrants are exercisable into common stock at an exercise price of $3.75
        per share, commencing after June 1, 2006, and expire on March 14, 2009.
        There are no conditions attached to the warrant holders ability
        to exercise the warrants in accordance with the terms noted above.                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | The fair value of the warrants is estimated using the
        Black-Scholes option pricing model with the following weighted-average
        assumptions:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

| |                         | Dec 31, 2007 | Dec 31, 2006
| | ----------------------- | ------------ | ------------
| | Risk free interest rate | 4.00%        | 4.00%       
| | Expected life           | 1.2 years    | 2.2 years   
| | Expected volatility     | 149%         | 109%        
| | Dividend per share      | $Nil         | $Nil        

The fair value of the warrants as at December 31, 2007, was $16,000
  (2006 - $81,041 and fair value upon issuance of convertible note on March 14,
  2006 was $2,300,000). During the year ended December 31, 2007 the movement in
  the fair value of the warrants was recorded as income in the statement of operations
  of $65,041 (2006 - $2,218,959).

The Company incurred financing costs of $464,328 in connection
  with the issuance of the Convertible Notes and warrants. Of this amount, $250,737
  relates to the Convertible Notes and was deferred and amortized over the term
  of the Convertible Notes and $213,590 that was assigned as relating to the warrants
  was included in net loss for the year ended December 31, 2006. $50,147 of the
  deferred financing costs were amortized as an expense during the year ended
  December 31, 2007 (2006 - $414,180).

For the year ended December 31, 2007, the Company recorded $13,544
  (2006 - $2,286,456) as the accretion of interest expense on the convertible
  notes.

---

|Cheetah Oil & Gas Ltd.           
|---------------------------------
|(an exploration stage enterprise)
|                                 
|NOTES TO FINANCIAL STATEMENTS    
|(expressed in U.S. dollars)      
|                                 
|December 31, 2007                

5. DILUTION OF 90% OF CHEETAH OIL & GAS (B.C.) LIMITED

On July 20, 2007 the Company entered into a Share Subscription
  Agreement (the Agreement) with Kepis & Pobe Investments Inc.
  (K&P) and its assigns. Under the terms of the agreement K&P
  had the right to acquire, through the subscription for shares, a 90% interest
  in Cheetah BC, a wholly owned subsidiary of the Company which through ownership
  of other subsidiaries has title to the Companys Petroleum Prospecting
  Licences and the Petroleum Retention Licence. The subscription price for these
  shares would be approximately $15,000,000 of which a maximum of $6,600,000 would
  be advanced to the Company to retire its debts plus the assignment of the Convertible
  Notes held by Macquarie Holdings (USA) Inc. (Macquarie) [see
  note 4], including interest, fees and penalties, in favor of the Company
  at an agreed value of $7,550,000. K&P also agreed that on or before December
  31, 2008, it will make an additional contribution of capital to Cheetah BC of
  $10,000,000. K&P entered into an agreement whereby K&P assigned all
  of its rights and obligations under the Agreement to Invicta. Under the terms
  of the Agreement it was further agreed that upon closing of the transaction,
  the Company would transfer all of the warrants, that were held by Macquarie,[see note 4]to K&P with the same terms and conditions that existed
  when held by Macquarie.

On September 27, 2007 the Company entered into an amendment to
  the Agreement, extending the closing of the Agreement from October 2, 2007 to
  November 30, 2007 and adding a price adjustment mechanism linked to increases
  in the consolidated liabilities of Cheetah BC.

The price adjustment mechanism adjusted the $15,000,000 consideration
  Invicta was required to pay to the Company by decreasing such amount by the
  increase in the consolidated liabilities of Cheetah BC from June 30, 2007 to
  the closing date. As at the closing date of the transaction, Cheetah BCs
  consolidated liabilities were approximately $850,000 higher than on June 30,
  2007. Therefore, the final consideration to be received by the Company totaled
  $13,691,278, allocated between the cancellation of the Convertible Notes ($7,550,000)
  and settlement of the other liabilities owing to creditors of the Company ($6,141,278).

In addition to the above, a unanimous shareholders agreement
  was entered into between the Company, Invicta and Cheetah BC whereby the parties
  agreed to the following:

| | 1. | The cancellation of any debt due from Cheetah BC to
        the Company, after the settlement of the Companys debts totaling
        $13,691,278.                                                                                                                                                                                                                                                                                                                                                                                                          
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | 2. | Invicta agrees to contribute $10,000,000 to Cheetah
        BC as a contribution of capital on or before December 31, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | 3. | Proportionate contributions to the joint oil and gas
        exploration program of 90% on the part of Invicta and 10% on the part
        of the Company, subsequent to the contribution commitment described in
        clause (2). Future contributions have not been factored into the carrying
        value of the investment.                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | 4. | Once Invicta has fulfilled the contribution commitment
        described in clause (2), if the Company fails to contribute all or any
        portion of its proportionate contribution within 30 days of receiving
        a funding request, and provided that Invicta has fulfilled its contribution
        obligation with respect to such funding request, then Invicta may pay
        all of the Companys contribution deficiency. Any amount advanced
        by Invicta on behalf of the Company shall bear interest at a rate of 18%
        per

---

|Cheetah Oil & Gas Ltd.           
|---------------------------------
|(an exploration stage enterprise)
|                                 
|NOTES TO FINANCIAL STATEMENTS    
|(expressed in U.S. dollars)      
|                                 
|December 31, 2007                

5. DILUTION OF 90% OF CHEETAH OIL & GAS (B.C.) LIMITED
  (contd)

annum, calculated annually on the anniversary
  date of such advance. The principal amount of such loan advance and all accrued
  interest payable thereon shall become due and payable in-full on the earlier
  of the third anniversary of such an advance and the date, if any upon which
  the Company disposes of any of its shares of Cheetah BC.

As a result of the Companys dilution of 90% ownership in
  Cheetah BC on November 30, 2007, the Company ceased to consolidate the financial
  position, results of operations and changes in cash flows of Cheetah BC and
  subsidiary companies as at that date. In addition, the Company did not exercise
  any significant influence over Cheetah BC as a result of its residual 10% ownership
  interest. The carrying value of the Companys remaining investment in Cheetah
  BC ($1,521,329) was calculated at 10% of the carrying value of the net assets
  of Cheetah BC and subsidiary companies immediately before the dilution under
  the equity method of accounting for business combinations. Future contributions
  have not been factored into the carrying value of the investment.

6. RECEIVABLES

|                                |  | December 31, |  |  | December 31, | 
|------------------------------- |  | ------------ |  |  | ------------ | 
|                                |  | 2007         |  |  | 2006         | 
|                                |  | $            |  |  | $            | 
|                                |  |              |  |  |              | 
|Due from Invicta                |  | 2,240,000    |  |  | -            | 
|Exploration costs - recoverable |  | -            |  |  | 472          | 
|GST receivable                  |  | 19,343       |  |  | 14,238       | 
|Interest receivable             |  | -            |  |  | 1,353        | 
|                                |  | 2,259,343    |  |  | 16,063       | 

Of the $6,141,278 of consideration agreed to be paid by Invicta
  to the Companys unsecured creditors [note 5], a balance of the
  consideration totaling $2,240,000 remained outstanding at December 31, 2007
  and was included in the balance of receivables. Subsequent to December 31, 2007
  Invicta settled $1,900,000 of the remaining balance with the Companys
  creditors.

7. GAIN ON SETTLEMENT OF DEBT

As a result of the transaction entered into by the Company as
  disclosed in note 5, the Company was able to:

| | 1. | Satisfy the Convertible Notes, including all interest,
        fees and penalties at a cost of $7,550,000 resulting in a gain on settlement
        of debt in the amount of $1,543,584; and
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                             
| | 2. | Retire other liabilities owing to unsecured creditors
        at a cost of $6,141,278 resulting in a gain on settlement of debt in the
        amount of $917,486.                          

---

|Cheetah Oil & Gas Ltd.           
|---------------------------------
|(an exploration stage enterprise)
|                                 
|NOTES TO FINANCIAL STATEMENTS    
|(expressed in U.S. dollars)      
|                                 
|December 31, 2007                

8. EQUIPMENT

|                 |  |         |  |  | Accumulated  |  |  | Net book | 
|---------------- |  | ------- |  |  | ------------ |  |  | -------- | 
|                 |  | Cost    |  |  | depreciation |  |  | value    | 
|                 |  | $       |  |  | $            |  |  | $        | 
|2007             |  |         |  |  |              |  |  |          | 
|Office equipment |  | 3,844   |  |  | 1,230        |  |  | 2,614    | 
|                 |  |         |  |  |              |  |  |          | 
|2006             |  |         |  |  |              |  |  |          | 
|Office equipment |  | 88,015  |  |  | 28,540       |  |  | 59,475   | 
|Motor vehicles   |  | 65,867  |  |  | 35,218       |  |  | 30,649   | 
|                 |  | 153,882 |  |  | 63,758       |  |  | 90,124   | 

Included within Motor vehicles at December 31, 2006, was an asset
  under capital lease with a cost of $45,022 and accumulated amortization of $18,448.
  The Company did not have any assets under capital lease at December 31, 2007.
  Amortization charged on the vehicle under capital lease was $7,602 for the year
  ended December 31, 2007 [2006 - $11,695 and 2005 - $6,753]

During the year ended December 31, 2007 the Company sold office
  furniture for proceeds of $8,318 [2006 - $17,415] resulting in a gain of $4,000
  [2006 - $4,311].

9. OIL AND GAS PROPERTIES

Prior to November 30, 2007 the Company held, through its controlled
  subsidiaries, five Petroleum Prospecting Licences (PPL) (PPL#245,
  PPL#246, PPL#249, PPL#250 and PPL#252) and one Petroleum Retention Licence (PRL)
  (PRL#13) in PNG. The Company held, through its controlled subsidiaries, leases
  for approximately 8,385,866 gross undeveloped acreage and approximately 8,344,797
  net undeveloped acreage. The Company had approximate gross acreage concentrations
  of 40,028 in PRL #13 and 500,350 in PPL #246. One Exploration Re-Entry Well
  was drilled in the fall of 2005 on the PRL. The Company had no net productive
  exploratory or development wells drilled. Also the Company had no net dry exploratory
  or development wells drilled.

The properties over which the Company held licenses were subject
  to a 22.5% back-in participation right in favour of the government, which the
  government could exercise upon payment of 22.5% of the expenses incurred in
  the development of the property. This back-in interest included a 2% revenue
  royalty payment to indigenous groups, which was only payable if the government
  exercised its back-in right.

---

|Cheetah Oil & Gas Ltd.           
|---------------------------------
|(an exploration stage enterprise)
|                                 
|NOTES TO FINANCIAL STATEMENTS    
|(expressed in U.S. dollars)      
|                                 
|December 31, 2007                

9. OIL AND GAS PROPERTIES (contd)

Acquisition and exploration costs incurred were as follows:

|                                                                        |  | December 31, |   |  | December 31, | 
|----------------------------------------------------------------------- |  | ------------ | - |  | ------------ | 
|                                                                        |  | 2007         |   |  | 2006         | 
|                                                                        |  | $            |   |  | $            | 
|                                                                        |  |              |   |  |              | 
|Capitalized cost - beginning of year - unproven                         |  | 20,880,423   |   |  | 11,520,322   | 
|                                                                        |  |              |   |  |              | 
|Exploration costs incurred during the period                            |  | 1,885,999    |   |  | 9,360,101    | 
|Impairment of oil
      & gas properties                                |  | (5,648,089   | ) |  |             | 
|                                                                        |  | 17,118,333   |   |  | 20,880,423   | 
|                                                                        |  |              |   |  |              | 
|Elimination of carrying value of oil &
      gas properties as a result |  |              |   |  |              | 
|of the dilution of a controlling investment in Cheetah BC [note         |  |              |   |  |              | 
|5]                                                                      |  | (17,118,333  | ) |  |             | 
|Capitalized cost 
      end of year  unproven                         |  |             |   |  | 20,880,423   | 

|                               |  | Year ended December |  |  | Year ended December |  |  | Year ended December | 
|------------------------------ |  | ------------------- |  |  | ------------------- |  |  | ------------------- | 
|                               |  | 31, 2007            |  |  | 31, 2006            |  |  | 31, 2005            | 
|                               |  |                     |  |  |                     |  |  |                     | 
|                               |  | $                   |  |  | $                   |  |  | $                   | 
|                               |  |                     |  |  |                     |  |  |                     | 
|Stock based compensation       |  |                    |  |  | 596,219             |  |  | 1,053,000           | 
|Communication                  |  | 8,883               |  |  | 17,963              |  |  | 11,470              | 
|Consulting, engineering,       |  |                     |  |  | 8,316,452           |  |  | 4,401,475           | 
|geology and contracts          |  | 1,588,076           |  |  |                     |  |  |                     | 
|Depreciation                   |  |                    |  |  |                    |  |  | 5,343               | 
|Mapping and office expenses    |  | 18,383              |  |  | 6,366               |  |  | 69,403              | 
|Registration, license fees and |  |                     |  |  | 50,574              |  |  | 132,597             | 
|permits                        |  | 134,134             |  |  |                     |  |  |                     | 
|Salaries and wages             |  | 47,264              |  |  | 112,259             |  |  | 107,521             | 
|Staff allowance and            |  |                     |  |  | 62,982              |  |  | 82,888              | 
|accommodations                 |  | 26,340              |  |  |                     |  |  |                     | 
|Travel                         |  | 10,896              |  |  | 14,010              |  |  | 64,179              | 
|Insurance                      |  | 52,023              |  |  | 183,276             |  |  | 174,226             | 
|                               |  | 1,885,999           |  |  | 9,360,101           |  |  | 6,102,102           | 

On an ongoing basis management reviewed the carrying value of
  the oil & gas properties and considered whether there had been events or
  circumstances that indicate that the carrying value of the oil & gas properties
  may not be recoverable. The review was based on the assessment of the licences,
  the Companys intended use and the estimated future recoverable value.

In September 2007 management determined that the Company realized
  an impairment of oil & gas properties estimated at $5,648,089 arising from
  the July 20, 2007 agreement with K&P entered into by the Company as described
  in note 5.

---

|Cheetah Oil & Gas Ltd.           
|---------------------------------
|(an exploration stage enterprise)
|                                 
|NOTES TO FINANCIAL STATEMENTS    
|(expressed in U.S. dollars)      
|                                 
|December 31, 2007                

10. GOODWILL

On an annual basis and whenever events or circumstances indicate
  that the carrying value may be impaired, management reviews the carrying value
  of goodwill. The review is based on the assessment if the investments giving
  rise to the goodwill and on the estimated undiscounted cash flows expected to
  be generated from the investment giving rise to the goodwill.

In September 2007 management determined that the Company realized
  an impairment of goodwill estimated at $497,000 arising from the July 20, 2007
  agreement with K&P entered into by the Company as described in note 5.

11. ADVANCES PAYABLE

|a) | In January and February 2006 a total of $450,000 was
        advanced by four unrelated parties. The advances are due on demand for
        a term of one year with an interest rate of 4% per annum compounded semi-annually.
        In August 2007 the Company agreed to increase the rate of interest from
        4% to 15% compounded semi annually, effective April 2007. At any time
        after May 31, 2007 the Lenders had the right to demand payment of the
        principal and any interest outstanding
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|b) | In November 2006 a total of $200,000 was advanced by
        four parties at 15% per annum compounded semi annually commencing January
        1, 2007. At any time after May 31, 2007 the Lender had the right to demand
        payment of the principal and any interest outstanding;                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|c) | In January 2007 a total of $750,000 was advanced by
        two parties at 15% per annum compounded semi- annually commencing January
        1, 2007. At any time after May 31, 2007 the Lender had the right to demand
        payment of the principal and any interest outstanding; and                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|d) | In January 2007 a total of $150,000 was advanced by
        one party at 15% per annum compounded semi- annually commencing February
        1, 2007. At any time after May 31, 2007 the Lender had the right to demand
        payment of the principal and any interest outstanding.                                                                                                                                                                                                                                   

On December 7, 2007 the Company entered into agreements to issue
  common stock to settle the accrued interest payable on the advances totaling
  $233,474. The common stock was not issued by December 31, 2007, therefore, the
  accrued interest payable was disclosed on the balance sheet as shares to be
  issued as at that date [note 12]. As at December 31, 2007, the principle
  balances of all the advances payables noted above had been settled in-full as
  part of the transaction entered into by the Company as disclosed in note 5.

12. COMMON STOCK

Common Stock

On October 31, 2007 the Company paid directors fees by
  issuing 1,255,510 common stock to directors of the Company at a price of $0.34
  per share [note 14].

---

|Cheetah Oil & Gas Ltd.           
|---------------------------------
|(an exploration stage enterprise)
|                                 
|NOTES TO FINANCIAL STATEMENTS    
|(expressed in U.S. dollars)      
|                                 
|December 31, 2007                

12. COMMON STOCK (contd)

On December 7, 2007 the Company entered into agreements to issue
  1,196,749 common stock to settle the accrued interest payable on advances payable
  and long-term debt totaling $323,123 [notes 11 & 16]. As at December
  31, 2007 the common stock had not been issued.

Stock Options

The Company has a stock option plan for its directors, officers,
  employees and consultants. Under the terms of the plan, options become exercisable
  immediately upon grant. All stock options granted to date have been pursuant
  to separate agreements which override the terms of the standard plan. The vesting
  period of the stock options is 50% over the first twelve months and 50% over
  the remaining twelve months.

A summary of the status of the Companys stock option plan
  as of December 31, 2007 and 2006 and changes during the years is presented below:

|                                 |  | 2007      |   |  | 2006     | 
|-------------------------------- |  | --------- | - |  | -------- | 
|                                 |  |           |   |  | Weighted | 
|                                 |  |           |   |  | average  | 
|                                 |  | Number of |   |  | exercise | 
|                                 |  | shares    |   |  | price    | 
|                                 |  | #         |   |  | $        | 
|Outstanding at beginning of year |  | 865,000   |   |  | 4.88     | 
|Granted                          |  |          |   |  |          | 
|Exercised                        |  |          |   |  |         | 
|Forfeited or cancelled           |  | (865,000  | ) |  | 4.88     | 
|Outstanding at end of year       |  |          |   |  |         | 
|Vested or expected
      to vest |  |          |   |  |         | 
|Exercisable                      |  |          |   |  |         | 

During the year ended December 31, 2007, the Company recorded
  total stock based compensation for directors of $nil (2006 - $988,476 and 2005
  - $896,114) and $nil for consultants (2006 - $596,219 and 2005 - $1,053,000).

On October 2, 2007 the Board of Directors and option holders
  agreed to the cancellation of all stock options granted under the Companys
  Stock Option Plan.

---

|Cheetah Oil & Gas Ltd.           
|---------------------------------
|(an exploration stage enterprise)
|                                 
|NOTES TO FINANCIAL STATEMENTS    
|(expressed in U.S. dollars)      
|                                 
|December 31, 2007                

12. COMMON STOCK (contd)

Warrants

The following summarizes the stock purchase warrant transactions
  for the year ended December 31, 2007 and 2006.

|                                     |  |             |   |  | Weighted average |  
|------------------------------------ |  | ----------- | - |  | ---------------- | -
|                                     |  | Number      |   |  | exercise price   |  
|                                     |  | of warrants |   |  | $                |  
|Outstanding, January 31, 2005        |  | 1,266,295   |   |  | 7.02             |  
|Warrants issued [note 4]             |  | 3,000,000   |   |  | 3.42             |  
|Warrants exercised                   |  |            |   |  |                 |  
|Warrants forfeited/expired/cancelled |  | (44,866     | ) |  | (7.50            | )
|Outstanding, December 31, 2006       |  | 4,221,429   |   |  | 4.46             |  
|Warrants issued                      |  |            |   |  |                 |  
|Warrants exercised                   |  |            |   |  |                 |  
|Warrants forfeited/expired/cancelled |  |            |   |  |                 |  
|Outstanding, December 31, 2007       |  | 4,221,429   |   |  | 4.46             |  

13. SEGMENTED INFORMATION

The Companys business is considered as operating in one
  segment based upon the Companys organizational structure, the way in which
  the operation is managed and evaluated, the availability of separate financial
  results and materiality considerations. The Companys assets by geographical
  location are as follows:

|                          |  | December 31 |  |  | December 31, | 
|------------------------- |  | ----------- |  |  | ------------ | 
|                          |  | 2007        |  |  | 2006         | 
|                          |  | $           |  |  | $            | 
|                          |  |             |  |  |              | 
|Assets                    |  |             |  |  |              | 
|North America (corporate) |  | 3,791,593   |  |  | 241,769      | 
|Papua New Guinea          |  |            |  |  | 21,677,502   | 
|Total                     |  | 3,791,593   |  |  | 21,919,271   | 

14. RELATED PARTY TRANSACTIONS

Related party transactions are measured at the exchange amount
  which is the amount of consideration established and agreed to by the related
  parties.

For the year ended December 31, 2007, the Company incurred consulting
  fees to three directors of the Company in the amount of $210,000 [2006 - $197,500].
  Of this balance $34,568 remained unpaid as at December 31, 2007 and is included
  in accounts payable and accrued liabilities.

Following the agreement entered into on July 20, 2007 with K&P
  and its assigns [see notes 5], the Chief Executive Officer (CEO)
  of the Company at that time became a director of Invicta on September 19, 2007
  [note 5]. At December 31, 2007 a balance of $2,536,938 was due from Invicta
  [note 6].

---

|Cheetah Oil & Gas Ltd.           
|---------------------------------
|(an exploration stage enterprise)
|                                 
|NOTES TO FINANCIAL STATEMENTS    
|(expressed in U.S. dollars)      
|                                 
|December 31, 2007                

14. RELATED PARTY TRANSACTIONS (contd)

On October 31, 2007 the Company paid directors fees consisting
  of 1,255,510 common stock to directors of the Company at a price of $0.34 per
  share [note 12].

15. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

|                                                      |  |              |  |  |                  |  |  |                  |  |  | Cumulative from  | 
|----------------------------------------------------- |  | ------------ |  |  | ---------------- |  |  | ---------------- |  |  | ---------------- | 
|                                                      |  |              |  |  |                  |  |  |                  |  |  | January 28, 2003 | 
|                                                      |  | December 31, |  |  | **December 31,** |  |  | **December 31,** |  |  | to December 31,  | 
|                                                      |  | 2007         |  |  | 2006             |  |  | 2005             |  |  | 2007             | 
|                                                      |  | **$**        |  |  | **$**            |  |  | **$**            |  |  | **$**            | 
|                                                      |  |              |  |  |                  |  |  |                  |  |  |                  | 
|Cash paid during the year:                            |  |              |  |  |                  |  |  |                  |  |  |                  | 
|Interest                                              |  |             |  |  | 12,857           |  |  | 1,652            |  |  | 14,509           | 
|                                                      |  |              |  |  |                  |  |  |                  |  |  |                  | 
|Non-cash transactions:                                |  |              |  |  |                  |  |  |                  |  |  |                  | 
|Shares issued for acquisition of Scotia               |  |             |  |  |                 |  |  | 1,000,000        |  |  | 1,000,000        | 
|Purchase of capital lease assets                      |  |             |  |  |                 |  |  | 45,022           |  |  | 45,022           | 
|                                                      |  |             |  |  |                 |  |  | 71,429           |  |  | 71,429           | 
|Share and warrants issued as share issue costs        |  |              |  |  |                  |  |  |                  |  |  |                  | 
|Contribution received from a shareholder of
      the |  |             |  |  |                 |  |  |                 |  |  | 1,817,273        | 
|Company in connection with the acquisition of         |  |              |  |  |                  |  |  |                  |  |  |                  | 
|Scotia                                                |  |              |  |  |                  |  |  |                  |  |  |                  | 
|Debt settled for shares [note 11 & 16]                |  | 323,123      |  |  |                 |  |  |                 |  |  | 680,501          | 
|Shares issued for services [note 14]                  |  | 426,873      |  |  |                 |  |  |                 |  |  | 1,426,873        | 
|Oil and gas property costs not paid yet               |  | 1,539,766    |  |  | 3,027,396        |  |  | 946,467          |  |  | 5,513,629        | 
|Settlement of debt [note 5]                           |  | 13,691,278   |  |  |                 |  |  |                 |  |  | 13,691,278       | 

16. LONG TERM DEBT  CAPITAL LOAN

On June 23, 2006 the Company received a subordinated and unsecured
  capital loan in the amount $750,000 due June 23, 2008. The loan bears interest
  at a rate of 8% per annum calculated annually and not in advance, payable on
  the Maturity Date of June 23, 2008. This debt is unsecured.

In December 2007 the principal portion of the capital loan in
  the amount of $750,000 was repaid in-full as part of the transaction entered
  into by the Company as disclosed in note 5. On December 7, 2007 Company entered
  into and agreement to issue common stock to settle the accrued interest payable
  on the capital loan totaling $89,648. The common stock was not issued by December
  31, 2007, therefore, the accrued interest payable was disclosed on the balance
  sheet as shares to be issued as at that date [note 12].

---

|Cheetah Oil & Gas Ltd.           
|---------------------------------
|(an exploration stage enterprise)
|                                 
|NOTES TO FINANCIAL STATEMENTS    
|(expressed in U.S. dollars)      
|                                 
|December 31, 2007                

17. CONTINGENCIES

On April 19, 2006 the Company was named as a defendant in an
  action taken by Gryphon Master Fund LP (Gryphon) and GSSF, two institutional
  investment funds who participated in a private placement that closed on May
  26, 2005. Pursuant to the terms of that private placement, the investors were
  granted a bonus warrant to acquire additional shares of common stock if certain
  conditions were satisfied. The Plaintiffs alleged that they were owed additional
  shares of common stock pursuant to the bonus warrant provisions. The Company
  took the position that the bonus warrant provisions were not applicable in the
  circumstances and accordingly defended the action.

However, on July 9th, 2007 the Company consented to
  final judgment in this matter and agreed to pay Gryphon and GSSF $100,000 and
  $50,000 respectively. These amounts were paid in full prior to December 31,
  2007.

Subsequent to December 31, 2007 four minority shareholders of
  Scotia dissented with respect to the disposition of Scotia to Cheetah PNG, following
  the closing of the transaction that the Company entered into as disclosed in
  note 5. The Company can not determine the outcome of this action at this time,
  however it has accrued $60,000 as an estimate for this liability at December
  31, 2007 [note 20].

18. RECENT ACCOUNTING PRONOUNCEMENTS

In September 2006, the FASB issued SFAS No. 157, Fair
  Value Measurements. The objective of SFAS 157 is to increase consistency
  and comparability in fair value measurements and to expand disclosures about
  fair value measurements. SFAS 157 defines fair value, establishes a framework
  for measuring fair value in generally accepted accounting principles, and expands
  disclosures about fair value measurements. SFAS 157 applies under other accounting
  pronouncements that require or permit fair value measurements and does not require
  any new fair value measurements. The provisions of SFAS 157 are effective for
  fair value measurements made in fiscal years beginning after November 15, 2007.
  The Company is currently evaluating the impact of adopting SFAS No. 157 but
  does not expect that it will have a material effect on its financial statements.

In February 2007, the Financial Accounting Standards Board (FASB)
  issued SFAS No. 159, The Fair Value Option for Financial Assets and
  Financial Liabilities  Including an Amendment of FASB Statement No. 115.
  This statement permits entities to choose to measure many financial instruments
  and certain other items at fair value. Most of the provisions of SFAS No. 159
  apply only to entities that elect the fair value option. However, the amendment
  to SFAS No. 115 Accounting for Certain Investments in Debt and Equity
  Securities applies to all entities with available-for-sale and trading
  securities. SFAS No. 159 is effective as of the beginning of an entitys
  first fiscal year that begins after November 15, 2007. Early adoption is permitted
  as of the beginning of a fiscal year that begins on or before November 15, 2007,
  provided the entity also elects to apply the provision of SFAS No. 157, Fair
  Value Measurements.The Company is currently evaluating the impact
  of adopting SFAS No. 159 but does not expect that it will have a material effect
  on its financial statements.

In December 2007, the Financial Accounting Standards Board (FASB)
  issued SFAS No. 141R, Business Combinations. This statement replaces
  SFAS 141 and defines the acquirer in a business combination as the entity that
  obtains control of one or more businesses in a business combination and establishes
  the acquisition date as the date that the acquirer achieves control. SFAS 141R
  requires an acquirer to recognize the assets acquired, the liabilities assumed,
  and any noncontrolling interest in the acquiree at the acquisition date, measured
  at their fair values as of that date. SFAS 141R also requires the acquirer to
  recognize contingent consideration at the acquisition date, measured at its
  fair value at that date. This statement is

---

|Cheetah Oil & Gas Ltd.           
|---------------------------------
|(an exploration stage enterprise)
|                                 
|NOTES TO FINANCIAL STATEMENTS    
|(expressed in U.S. dollars)      
|                                 
|December 31, 2007                

18. RECENT ACCOUNTING PRONOUNCEMENTS (contd)

effective for fiscal years, and interim periods within those
  fiscal years, beginning on or after December 15, 2008. Earlier adoption is prohibited.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling
  Interests in Consolidated Financial Statements Liabilities an Amendment
  of ARB No. 51. This statement amends ARB 51 to establish accounting and
  reporting standards for the Noncontrolling interest in a subsidiary and for
  the deconsolidation of a subsidiary. This statement is effective for fiscal
  years, and interim periods within those fiscal years, beginning on or after
  December 15, 2008. Earlier adoption is prohibited.

19. INCOME TAXES

The Company accounts for income taxes under FASB Statement No.
  109, "Accounting for Income Taxes." Deferred income tax assets and liabilities
  are determined based upon differences between financial reporting and tax bases
  of assets and liabilities and are measured using the enacted tax rates and laws
  that will be in effect when the differences are expected to reverse.

Income tax expense differs from the amount that would result
  from applying the U.S federal and state income tax rates to earnings before
  income taxes.

Pursuant to SFAS 109, the potential benefit of net operating
  loss carry forwards has not been recognized in the financial statements since
  the Company cannot be assured that it is more likely than not that such benefit
  will be utilized in future years.

The Company is subject to United States federal and state income
  taxes at an approximate rate of 35%. The reconciliation of the provision for
  income taxes at the United States federal statutory rate compared to the Companys
  income tax expense as reported is as follows:

|                                                  |  | Year Ended   |       |  | Year Ended   |   |  | Year Ended   |  
|------------------------------------------------- |  | ------------ | ----- |  | ------------ | - |  | ------------ | -
|                                                  |  | December 31, |       |  | December 31, |   |  | December 31, |  
|                                                  |  | 2007         |       |  | 2006         |   |  | 2005         |  
|                                                  |  | $000         |       |  | $000         |   |  | $000         |  
|                                                  |  |              |       |  |              |   |  |              |  
|Loss before income taxes per financial statements |  | (9,016       | **)** |  | (3,745       | ) |  | (2,226       | )
|Income tax rate                                   |  | 35%          |       |  | 35%          |   |  | 35%          |  
|Income tax recovery                               |  | (3,156       | **)** |  | (1,310       | ) |  | (779         | )
|Permanent differences                             |  | 292          |       |  | 1,148        |   |  | (18          | )
|Valuation allowance change                        |  | (460         | **)** |  | 9            |   |  | 747          |  
|True Up                                           |  | 491          |       |  |             |   |  |             |  
|Effect of dilution transaction                    |  | 1,529        |       |  |             |   |  |             |  
|Deferred income tax
      (recovery)              |  | (1,304       | **)** |  | (153         | ) |  | (50          | )

Deferred income taxes reflect the net tax effects of temporary
  differences between the carrying amounts of assets and liabilities for financial
  reporting purposes and the amounts used for income tax purposes.

Future income taxes arise from temporary differences in the recognition
  of income and expenses for financial reporting and tax purposes. The significant
  components of future income tax assets and liabilities at December 31 are as
  follows:

---

|Cheetah Oil & Gas Ltd.           
|---------------------------------
|(an exploration stage enterprise)
|                                 
|NOTES TO FINANCIAL STATEMENTS    
|(expressed in U.S. dollars)      
|                                 
|December 31, 2007                

19. INCOME TAXES (contd)

|                                      |  | Year Ended   |   |  | Year Ended   |  
|------------------------------------- |  | ------------ | - |  | ------------ | -
|                                      |  | December 31, |   |  | December 31, |  
|                                      |  | 2007         |   |  | 2006         |  
|                                      |  | $000         |   |  | $000         |  
|                                      |  |              |   |  |              |  
|                                      |  |              |   |  |              |  
|Net operating loss carryforwards      |  | 943          |   |  | 428          |  
|Warrants                              |  |             |   |  | (777         | )
|Stock based compensation              |  |             |   |  | 660          |  
|Investment in Cheetah BC              |  | (532         | ) |  |             |  
|Other                                 |  | (13          | ) |  | 547          |  
|Total deferred tax assets             |  | 398          |   |  | 858          |  
|Valuation allowance                   |  | (398         | ) |  | (858         | )
|                                      |  |              |   |  |              |  
|Net deferred tax assets               |  |             |   |  |             |  
|Deferred income tax
      (liability) |  |             |   |  | (1,304       | )

The Company has recognized a valuation allowance for the deferred
  tax assets for which it is more likely than not that the realization will not
  occur. The valuation allowance is reviewed periodically. When circumstance change
  and this causes a change in management's judgment about the realizeability of
  deferred tax assets, the impact of the change on the valuation allowance is
  generally reflected in current income.

The net operating loss carryforwards for income tax purposes
  are approximately $2,694,175 and will begin to expire in 2024.

Pursuant to Section 382 of the Internal Revenue Code, use of
  the Companys net operating loss carryforwards may be limited if the Company
  experiences a cumulative change in ownership of greater than 50% in a moving
  three year period. Ownership changes could impact the Companys ability
  to utilize net operating losses and credit carryforwards remaining at the ownership
  change date. The limitation will be determined by the fair market value of common
  stock outstanding prior to the ownership change, multiplied by the applicable
  federal rate. The Canadian non-capital loss carryforwards may also be limited
  by a change in Company ownership.

20. SUBSEQUENT EVENTS

|a) | The Company obtained additional funding in the amount
        of $50,000 from certain shareholders. The funds borrowed are repayable
        on August 31, 2008 including interest calculated at 15% per annum compounded
        monthly. This loan is unsecured. The loan was repaid in-full when additional
        funds were borrowed from Invicta [note 20(c)].                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|b) | On January 30, 2008, at a reconvened extraordinary meeting
        of Scotia, the majority shareholder of Scotia approved the sale of all
        the issued and outstanding shares of Scotia to Cheetah PNG. As the sale
        constitutes a sale of all of Scotias property, Section 238 of the
        Business Corporations Act of British Columbia grants each of Scotias
        shareholders a right of dissent with respect to the sale. Four minority
        shareholders of Scotia dissented with respect to the sale and filed a
        claim. Under the terms of the Agreement that the Company entered into
        as disclosed in note 5, the Company is liable for settlement of any dissenting
        shareholder claims arising out of the sale of Scotia to Cheetah PNG. In
        March 2008, the Company submitted a proposal to four dissenting minority
        shareholders in which it

---

|Cheetah Oil & Gas Ltd.           
|---------------------------------
|(an exploration stage enterprise)
|                                 
|NOTES TO FINANCIAL STATEMENTS    
|(expressed in U.S. dollars)      
|                                 
|December 31, 2007                

20. SUBSEQUENT EVENTS (contd)

|   | proposed to transfer an aggregate of 750,000 common
        stock in the capital of the Company in full and final settlement of the
        dissenting minority shareholders claim. The Company has accrued
        $60,000 for this liability as at December 31, 2007 representing the approximate
        fair value of common stock being offered to the dissenting minority shareholders.                                                                                                                                                                                                                                                          
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|c) | On March 12, 2008 the Company entered into a demand
        loan agreement with Invicta where Invicta agreed to advance up to $500,000
        in tranches to the Company by way of a working capital loan. The loan
        is secured against the Companys 10% equity investment in Cheetah
        BC. and carries an interest rate of 8% per annum. An initial amount of
        $200,000 was advanced to the Company on March 25, 2008. On March 12, 2008,
        the Company agreed to issue 100,000 shares of common stock at a deemed
        price of $0.08 per share to Invicta as consideration for providing loans
        to the Company.

21. COMPARATIVE FIGURES

Certain comparative figures have been reclassified to conform
  with the financial statement presentation adopted for 2007.

---

- 23 -

Item
8.           Changes In and
Disagreements With Accountants on Accounting and Financial Disclosure.

None.

Item
8A.        Controls and Procedures.

As required by Rule 13a-15 under the Exchange Act, as of the
end of the period covered by this report, being December 31st 2007,
we evaluated the effectiveness of the design and operation of our disclosure
control and procedures. We are responsible for establishing and maintaining
adequate internal controls and procedures for the financial reporting of the
Company. Disclosure control and procedures are the controls and other procedures
that we designed to ensure that we record, process, summarize and report in a
timely manner, the information we must disclose in reports that we file with or
submit to the SEC. It should be noted that in the fourth financial quarter of
2006 we appointed a new Chief Executive Officer and Chief Financial Officer. Our
Chief Executive Officer and Chief Financial Officer concluded that the internal
controls and procedures as implemented by prior Management were inadequate.
Since their appointment in October 2006, our Chief Executive Officer and Chief
Financial Officer have implemented measures to revise and improve our internal
controls and procedures to increase our effectiveness. In addition, further
changes were implemented over the past year to insure compliance with internal
policies and to evaluate on an ongoing basis the effectiveness of our policies
and improved disclosure control and procedures as they relate to Section 404 of
the Sarbanes-Oxley Act of 2003. In particular, as part of this program we
engaged an independent accounting firm experienced in GAAP to review and to
advise in respect to the preparation of our financial statements, and to provide
accounting counsel on various matters relating thereto on an ongoing basis.
Further, we also engaged independent accounting counsel with experience in
matters relating to taxation on a multi-jurisdictional level, to advise and
ensure the adequacy and accuracy of our tax reporting and disclosure and that we
are in compliance in this regard. In addition to the foregoing we continue to
monitor our internal controls and in particular, to segregate accounting and
financial reporting duties. There have been no changes in our internal control
over financial reporting other than the changes disclosed above that occurred
during our fourth fiscal quarter that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.

Item 8B.        Other
Information.

None.

PART III

Item
9.           Directors,
Executive Officers, Promoters, Control Persons and Corporate Governance;
Compliance with Section 16(a) of the Exchange Act.

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

Our directors, executive officers and other significant
employees, their ages, positions held and duration each person has held that
position, are as follows:

Name
      Position Held with the Company
      Age
      Date First Elected or
      AppointedIan
        McKinnon
      Director
      58
      October 16, 2006Isaac Moss
      President, Chief Executive Officer 
        Chief Financial Officer and Director
      55
      February 5, 2008 
        October 30, 2006Georgina
        Martin
      Secretary, Treasurer and Director
      59
      March
        5, 2004


---

- 24 -

Name
      Position Held with the Company
      Age
      Date First Elected or
      AppointedDean
        Swanberg
      Director
      46
      January
        16, 2007David
        Martin
      Director
      45
      February
        5, 2008


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.

Isaac Moss  President, Chief Executive Officer, Chief
Financial Officer and Director

Mr. Moss has been our President and Chief Executive Officer
since February 5, 2008 and our Chief Financial Officer since October 30, 2006.
Mr. Moss was our Senior Vice President from October 30, 2006 to February 5, 2008

During the 1990s through 2002 Isaac Moss was associated with a
mid market investment banking company based in Geneva, where he provided
corporate, strategic and investment banking advisory services to micro and small
cap client companies in the energy and resource, telecommunications, chemicals
and industrial minerals, entertainment, forest products and hospitality
industries. From February 1991 to July 1994 he was the Director and Vice
President for Cycomm International Inc. From 1994 to 1997 Mr. Moss was President
of Calcitech Inc., a specialty chemical company headquartered in France. In May
1991 to December 2006 Mr. Moss was a Director and Chief Financial Officer for
Resource Finance and Investment Inc. and from 2005 to May 2006 he was Chief
Financial Officer of Cirond Corporation. He currently remains an independent
director of that company.

Ian McKinnon  Director

Ian McKinnon has been a director of our company since October
16, 2006. Mr. McKinnon was our President and Chief Executive Officer from
October 16, 2006 to February 5, 2008.

Mr. McKinnon has over thirty years of experience primarily
focused in the energy sector ranging from oil field trucking to energy
exploration and production. He was a director and shareholder of Norscot Ltd.
from September 1973 to May 2004. Norscot Ltd. is a diversified holding company
with interests in the energy sector. He also held senior executive positions in
oil and gas exploration companies, oil well drilling and energy transportation
companies. During September 1993 to June 1999 he was Contracts Manager for
Command Drilling and from May 2000 to April 2004 Mr. McKinnon was Vice President
of Redwood Energy.

Georgina Martin  Secretary, Treasurer and Director

Ms. Martin the Secretary, Treasurer and Director of our company
since March 5, 2004. Ms. Martin has been in the private sector for over 35 years
starting in the insurance field and then soon changed for a brief period of time
to work in public practice.

Ms. Martin took a position with Mutual Life Insurance as an
underwriter assistant from 1965 to 1966. She then went to work for Regmil
Industries as a bookkeeper until 1971. From 1971 to 1975, she worked as an
assistant to the accountant for Westcoast Plywood. In 1975 Ms. Martin was hired
by Bartell Bros. Construction as an accountant. From 1978 to 1988, she was
employed by Brink Remanufacturing Industries Ltd. as a Comptroller, a lumber
re-manufacturing company specializing in added value timber products. Ms. Martin
left Brink Remanufacturing Industries Ltd. in 1988 and joined the Jemi Group of
Companies and holds the position of Comptroller/Chief Financial Officer to the
present date, which is a group of private companies engaged in the logging and
land development industry. Ms. Martin is also a director of KOKO Petroleum Inc.,
having been appointed on October 21, 2004.

---

- 25 -

In 1986 Ms. Martin obtained her designation as a Certified
General Accountant with a focus on finance. In 1988 Ms. Martin and a business
partner incorporated a private corporation. This served as a base towards her
comptrollership of the many companies that followed over the next 16 years.

KOKO Petroleum Inc. is a company engaged in exploration and
drilling for oil and natural gas in the State of Texas. Given that our
operations are in Papua, New Guinea, and will remain so for the foreseeable
future, we do not view the affiliation of Ms. Martin to KOKO Petroleum Inc. as
creating any potential for conflicts of interest with our company.

Dean Swanberg  Director

Mr. Dean Swanberg has been a director of our Company since
January 16, 2007. Mr. Swanberg is President of Swanberg Bros. Trucking LP, an
Alberta based drilling rig transportation company which is part of the Mullen
Group Income Fund, a large Canadian service company focused on the oil and gas
industry and distribution of freight. Mr. Swanberg is also a director of Horizon
North Logistics Inc., an oil field services company which is listed on the
Toronto Stock Exchange.

David Martin  Director

Mr. David Martin was appointed as a new board director on
February 5, 2008. David Martin has had a varied and successful business career.
He has operated a commercial construction business. For ten years he owned and
leased helicopters to international flight training companies. Mr. Martin also
has substantial strategic marketing experience. He is a founder and advisory
board member of an international marketing company with annual sales of $240
million. More recently Mr. Martin has been an investor in oil and gas projects.

Family Relationships

There are no family relationships among our directors or
officers.

Board and Committee Meetings

The Board of Directors of our Company held two formal meetings
during the year ended December 31, 2007. All proceedings of the Board of
Directors were conducted by resolutions that are consented to in writing by all
the directors and filed with the minutes of the proceedings of the directors.
Such resolutions consented to in writing by the directors entitled to vote on
that resolution at a meeting of the directors are, according to the Nevada
General Corporate Law and the By-laws of our company, as valid and effective as
if they had been passed at a meeting of the directors duly called and held.

For the year ended December 31, 2007 our only standing
committee of the Board of Directors was our audit committee.

Audit Committee

Currently our audit committee consists of our entire Board of
Directors. We currently do not have nominating, compensation committees or
committees performing similar functions. There has not been any defined policy
or procedure requirements for shareholders to submit recommendations or
nomination for directors.

During fiscal 2007, there were no meetings held by this
Committee. The business of the Audit Committee was conducted by resolutions
consented to in writing by all the members and filed with the minutes of the
proceedings of the Audit Committee.

---

- 26 -

Audit Committee Financial Expert

Our board of directors has determined that it does not have a
member of its audit committee that qualifies as an "audit committee financial
expert" as defined in Item 401(e) of Regulation S-B, and is "independent" as the
term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities Exchange
Act of 1934, as amended.

We believe that the members of our Board of Directors are
collectively capable of analyzing and evaluating our financial statements and
understanding internal controls and procedures for financial reporting. In
addition, we believe that retaining an independent director who would qualify as
an "audit committee financial expert" would be overly costly and burdensome and
is not warranted in our circumstances given the early stages of our development
and the fact that we have not generated any material revenues to date.

Involvement in Certain Legal Proceedings

Our directors, executive officers and control persons have not
been involved in any of the following events during the past five years:

|1. | 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;                                                                                                            
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                
|2. | any conviction in a criminal proceeding or being subject
      to a pending criminal proceeding (excluding traffic violations and other
      minor offences);                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                
|3. | 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 his involvement in any type of business, securities or
      banking activities; or
|   |                                                                                                                                                                                                                                                                                                                                
|4. | being found by a court of competent jurisdiction (in a
      civil action), the 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.                                           

Section 16(a) Beneficial Ownership Compliance

Section 16(a) of the Securities Exchange Act requires our
executive officers and directors, and persons who own more than 10% of our
common stock, to file reports regarding ownership of, and transactions in, our
securities with the Securities and Exchange Commission and to provide us with
copies of those filings. Based solely on our review of the copies of such forms
received by us, or written representations from certain reporting persons, we
believe that during fiscal year ended December 31, 2007, all filing requirements
applicable to our officers, directors and greater than 10% percent beneficial
owners were complied with, with the exception of the following:

Name
    Number of Late Reports
    Number of Transactions Not
      Reported on a Timely Basis
    Failure to File Requested
      FormsGeorgina Martin
    1(1)
    1
    NilIan McKinnon
    1(1)
    1
    NilIsaac Moss
    1(1)(2)
    2
    1(2)Dean Swanberg
    1(2)
    1
    1(2)David Martin
    1(2)
    1
    1(2)


|(1) | The named officer, director or greater than 10%
      stockholder, as applicable, filed a late Form 4  Statement of Changes in
      Beneficial Ownership of Securities.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

- 27 -

|(2) | The named officer, director or greater than 10%
      stockholder, as applicable, filed a late Form 3  Initial Statement of
      Beneficial Ownership of Securities.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

Code of Ethics

Effective April 6, 2005, our Company's Board of Directors
adopted a Code of Business Conduct and Ethics that applies to, among other
persons, our company's President, Chief Executive Officer and Chief Financial
Officer (being our principal executive officer, principal financial officer and
principal accounting officer) and Secretary, as well as persons performing
similar functions. As adopted, our Code of Business Conduct and Ethics sets
forth written standards that are designed to deter wrongdoing and to promote:

|1. | honest and ethical conduct, including the ethical
      handling of actual or apparent conflicts of interest between personal and
      professional relationships;                                                          
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                              
|2. | full, fair, accurate, timely, and understandable
      disclosure in reports and documents that we file with, or submit to, the
      Securities and Exchange Commission and in other public communications made
      by us;
|   |                                                                                                                                                                                                                              
|3. | compliance with applicable governmental laws, rules and
      regulations;                                                                                                                                                   
|   |                                                                                                                                                                                                                              
|4. | the prompt internal reporting of violations of the Code
      of Business Conduct and Ethics to an appropriate person or persons
      identified in the Code of Business Conduct and Ethics; and                            
|   |                                                                                                                                                                                                                              
|5. | accountability for adherence to the Code of Business
      Conduct and Ethics.                                                                                                                                               

Our Code of Business Conduct and Ethics requires, among other
things, that all of our company's senior officers commit to timely, accurate and
consistent disclosure of information; that they maintain confidential
information; and that they act with honesty and integrity.

In addition, our Code of Business Conduct and Ethics emphasizes
that all employees, and particularly senior officers, have a responsibility for
maintaining financial integrity within our company, consistent with generally
accepted accounting principles, and federal and state securities laws. Any
senior officer, who becomes aware of any incidents involving financial or
accounting manipulation or other irregularities, whether by witnessing the
incident or being told of it, must report it to our company. Any failure to
report such inappropriate or irregular conduct of others is to be treated as a
severe disciplinary matter. It is against our company policy to retaliate
against any individual who reports in good faith the violation or potential
violation of our company's Code of Business Conduct and Ethics by another.

Our Code of Business Conduct and Ethics was filed with the
Securities and Exchange Commission on April 8, 2005 as Exhibit 14.1 to our
annual report. We will provide a copy of the Code of Business Conduct and Ethics
to any person without charge, upon request. Requests can be sent to: Cheetah Oil
& Gas Ltd., 17 Victoria Road, Nanaimo, British Columbia, Canada V9R 4N9.

Item
10.         Executive Compensation.

The particulars of compensation paid to the following persons:

- our principal executive officer;
- each of our two most highly compensated executive officers who were serving
  as executive officers at the end of the year ended December 31, 2007; and
- up to two additional individuals for whom disclosure would have been
  provided under (b) but for the fact that the individual was not serving as our
  executive officer at the end of the most recently completed financial year,

---

- 28 -

who we will collectively refer to as
the named executive officers, of our year ended December 31, 2007 and 2006 are
set out in the following summary compensation table:

SUMMARY COMPENSATION
        TABLEName and
        Principal Position
      Year
      Salary
        ($)
      Bonus
        ($)
      Stock Awards ($)
      Option
        Awards ($)
      Non-Equity Incentive
        Plan Compensa- tion ($)
      Change in Pension Value and Nonqualified Deferred Compensation
        Earnings ($)
      All Other
        Compensa- tion ($)
      Total
        ($)Ian McKinnon(1)
        Chairman and 
        Director; Former 
        President, Chief 
        Executive Officer 
        and Director
      2007 
        2006
      84,000 
        21,000
      Nil 
        Nil
      173,526 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      257,526 
        21,000Isaac Moss(2)
        President, Chief 
        Executive Officer 
        and Chief Financial 
        Officer; Former 
        Senior Vice 
        President
      2007 
        2006
      84,000 
        21,000
      Nil 
        Nil
      173,526 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      257,526 
        21,000Garth Braun(3)
        Former President, 
        Chief Executive 
        Officer, Chairman 
        and Director
      2007 
        2006
      N/A 
        135,000
      N/A 
        Nil
      N/A 
        Nil
      N/A 
        500,000
      N/A 
        Nil
      N/A 
        Nil
      N/A 
        Nil
      N/A 
        135,000Ted Kozub(4)
        Former Chief 
        Financial Officer 
        and Director
      2007 
        2006
      N/A 
        10,000
      N/A 
        Nil
      N/A 
        Nil
      N/A 
        Nil
      N/A 
        Nil
      N/A 
        Nil
      N/A 
        Nil
      N/A 
        10,000Georgina Martin(5)
        Secretary and 
        Director
      2007 
        2006
      42,000 
        10,500
      Nil 
        Nil
      79,822 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      121,822 
        10,500


|(1) | Mr. McKinnon became our Chairman and a director of our
      Company on October 16, 2006. Mr. McKinnon was our President and Chief
      Executive Officer from October 16, 2006 to February 5, 2008.                                                
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                      
|(2) | Mr. Moss became our Chief Financial Officer of our
      Company on October 30, 2006 and our President and Chief Executive Officer
      on February 5, 2008. Mr. Moss was our Senior Vice President from October
      30, 2006 to February 5, 2008.
|    |                                                                                                                                                                                                                                                      
|(3) | Mr. Braun was the President, Chief Executive Officer,
      Chairman and a director of our Company from July 19, 2004 until October
      16, 2006.                                                                                                  
|    |                                                                                                                                                                                                                                                      
|(4) | Mr. Kozub was the Chief Financial Officer and a director
      of our Company from December 15, 2003 until October 4, 2006.                                                                                                                          
|    |                                                                                                                                                                                                                                                      
|(5) | Ms. Martin became our Secretary, Treasurer and a director
      of our Company on March 5, 2004.                                                                                                                                                     

We entered into a management agreement dated May 1, 2005 with
Garth Braun, our former President, Chairman, Chief Executive Officer and
director. Under the terms of the agreement, commencing June 1, 2005, Mr. Braun
received $15,000 per month for the services he provided to our company. In
addition, Mr. Braun was granted 500,000 stock options at an exercise price of
$5.00 per share for a period of five years, of which 250,000 options

---

- 29 -

have vested and 250,000 options were to vest in 2007. The
options have been granted pursuant to our 2005 Stock Option Plan. The management
agreement terminated October 16, 2006, being the date that Mr. Braun resigned as
our President, Chief Executive Officer, Chairman and director. All options were
forfeited and/or cancelled due to the resignation of Mr. Braun on October 16,
2006.

We agreed to enter into consulting agreements with Ian
McKinnon, Isaac Moss and Georgina Martin respectively, in consideration for
which each of Messrs. McKinnon and Moss are to receive USD$7,000 per month and
Ms. Martin is to receive USD$3,500 per month effective October 1, 2006. During
the year ended December 31, 2007, we paid $84,000 to Mr. McKinnon, $84,000 to
Mr. Moss and $42,000 to Ms. Martin.

Our Company has no plans or arrangements in respect of
remuneration received or that may be received by named executive officers of our
Company in fiscal 2008 to compensate such officers in the event of termination
of employment (as a result of resignation, retirement, change of control) or a
change of responsibilities following a change of control.

Outstanding Equity Awards at Fiscal Year-End

The particulars of unexercised options, stock that has not
vested and equity incentive plan awards for our named executive officers are set
out in the following table:

Options Awards
      Stock AwardsName
      NumberofSecuritiesUnderlyingUnexercisedOptions(#)Exercisable
      NumberofSecuritiesUnderlyingUnexercisedOptions(#)Unexercisable
      EquityIncentivePlanAwards:NumberofSecuritiesUnderlyingUnexercisedUnearnedOptions(#)
      OptionExercisePrice($)
      OptionExpirationDate
      NumberofSharesorUnitsofStockThatHaveNotVested(#)
      MarketValueofSharesorUnitsofStockThatHave NotVested($)
      EquityIncentivePlanAwards:Number ofUnearnedShares,Units orOtherRights
        ThatHave NotVested(#)
      EquityIncentivePlanAwards:Market orPayoutValue ofUnearnedShares,Units
        orOtherRights ThatHave NotVested ($)Ian McKinnon(1)
        Chairman 
        and 
        Director; 
        Former 
        President, 
        Chief 
        Executive 
        Officer and 
        Director
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      N/A
      Nil
      NilIsaac Moss(2)
        President, 
        Chief 
        Executive 
        Officer and 
        Chief 
        Financial 
        Officer; 
        Former 
        Senior Vice 
        President
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      N/A
      Nil
      Nil


---

- 30 -

Garth Braun(3)
        Former President,
      Chief Executive Officer, Chairman and Director
    Nil
    Nil
    Nil
    N/A
    N/A
    Nil
    N/A
    Nil
    NilTed Kozub(4)
        Former Chief
      Financial Officer and Director
    Nil
    Nil
    Nil
    N/A
    N/A
    Nil
    N/A
    Nil
    NilGeorgina Martin(5)
        Secretary and
      Director
    Nil
    Nil
    Nil
    Nil
    Nil
    Nil
    N/A
    Nil
    Nil


|(1) | Mr. McKinnon became our Chairman and a director of our
      Company on October 16, 2006. Mr. McKinnon was our President and Chief
      Executive Officer from October 16, 2006 to February 5, 2008.                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                         
|(2) | Mr. Moss became our Chief Financial Officer of our
      Company on October 30, 2006 and our President and Chief Executive Officer
      of on February 5, 2008. Mr. Moss was our Senior Vice President from
      October 30, 2006 to February 5, 2008.
|    |                                                                                                                                                                                                                                                         
|(3) | Mr. Braun was the President, Chief Executive Officer,
      Chairman and a director of our Company from July 19, 2004 until October
      16, 2006.                                                                                                     
|    |                                                                                                                                                                                                                                                         
|(4) | Mr. Kozub was the Chief Financial Officer and a director
      of our Company from December 15, 2003 until October 4, 2006.                                                                                                                             
|    |                                                                                                                                                                                                                                                         
|(5) | Ms. Martin became our Secretary, Treasurer and a director
      of our Company on March 5, 2004.                                                                                                                                                        

Director Compensation

The particulars of compensation paid to our directors for our
year ended December 31, 2007, is set out in the following director compensation
table:

Name
      Fees Earned or Paid
      in Cash ($)
      Stock Awards ($)
      Option Awards
      ($)
      Non-Equity Incentive
      Plan Compensation($)
      Change in Pension Value
      and **Nonqualified** Deferred
      Compensation Earnings
      All Other
      Compensation ($)
      Total ($)(a)
    (b)
    (c)
    (d)
    (e)
    (f)
    (g)
    (h)Dean Swanberg
    Nil
    Nil
    Nil
    Nil
    Nil
    Nil
    NilDavid Martin
    Nil
    Nil
    Nil
    Nil
    Nil
    Nil
    Nil


Our Directors do receive consulting fees on a monthly basis for
serving as directors, for attending meetings of the board of directors and for
serving on committees of the board of directors. We did pay directors fees but
no other cash compensation for services rendered as a director in the year ended
December 31, 2007. Directors are entitled to reimbursement of expenses incurred
in attending meetings. In addition, our directors are entitled to participate in
our stock option plan. Directors are entitled to reimbursement for reasonable
travel and other out-of-pocket expenses incurred in connection with attendance
at meetings of our board of directors. Our board of directors may award

---

- 31 -

special remuneration to any director undertaking any special
services on our behalf other than services ordinarily required of a director. No
director received and/or accrued any compensation for their services in
committee participation and/or special assignments.

We have no plans or arrangements in respect of remuneration
received or that may be received by our executive officers to compensate such
officers in the event of termination of employment (as a result of resignation,
retirement, change of control) or a change of responsibilities following a
change of control.

There are no arrangements or plans in which we provide pension,
retirement or similar benefits for directors or executive officers. We have no
material bonus or profit sharing plans pursuant to which cash or non-cash
compensation is or may be paid to our directors or executive officers, except
that stock options may be granted at the discretion of the board of directors or
a committee thereof.

Item 11.        
Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters.

The following table sets forth, as of March 31, 2008 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.

Name and Address of Beneficial
      Owner
      Amount and Nature of Beneficial Ownership
      Percentage of Class(1)Ian McKinnon 3183 West 16th
      Avenue Vancouver, BC V6K 3C9
    1,500,000
    4%Isaac Moss 1122 West 27th
      Avenue Vancouver, BC V6H 2B8
    1,500,000
    4%Georgina Martin Box 172,
      Station A Nanaimo, BC V9R 5K9
    1,547,270
    4%Dean Swanberg 14840 
      100thStreet,Grand
      Prairie, Alberta T8W 7C5
    276,758
    .01%David Martin 8992 King George
      Highway Surrey, BC V3V 5V8
    Nil
    0%Directors and Executive Officers as a
      Group
    4,824,028
    12.7%


(1)         Based on
38,211,749 shares of common stock issued and outstanding as of March 31, 2008.
Beneficial ownership is determined in accordance with the rules of the SEC and
generally includes voting or investment power with respect to securities. Except
as otherwise indicated, we believe that the beneficial owners of the common
stock listed above, based on information furnished by such owners, have sole
investment and voting power with respect to such shares, subject to community
property laws where applicable.

Changes in Control

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

---

- 32 -

Item 12.        
Certain Relationships and Related Transactions.

Except as described below, no director, executive officer,
principal shareholder holding at least 5% of our common shares, or any family
member thereof, had any material interest, direct or indirect, in any
transaction, or proposed transaction, during the year ended December 31, 2007,
in which the amount involved in the transaction exceeded or exceeds the lesser
of $120,000 or one percent of the average of our total assets at the year end
for the last three completed fiscal years.

Corporate Governance

We currently act with five directors consisting of Ian
McKinnon, Isaac Moss, Georgina Martin, Dean Swanberg and David Martin, of which
Ian McKinnon, Isaac Moss and Georgina Martin are not independent as defined in
Item 7(d)(3)(iv) of Schedule 14A under the Exchange Act.

We do not have a standing audit, compensation or nominating
committee, but our entire board of directors acts in such capacities. We believe
that our board of directors are capable of analyzing and evaluating our
financial statements and understanding internal controls and procedures for
financial reporting. The board of directors of our company do not believe that
it is necessary to have a standing audit, compensation or nominating committee
because we believe that the functions of such committees can be adequately
performed by the board of directors. In addition, we believe that retaining one
or more directors who would qualify as independent in accordance with Item
7(d)(3)(iv) of Schedule 14A under the Exchange Act would be overly costly and
burdensome and is not warranted in our circumstances given the early stages of
our development and the fact the we have not generated any revenues from
operations to date.

Item 13.        
Exhibits.

Exhibits required by Item 601 of Regulation
S-B

| | Exhibit |                                                                                                                                                                 
| | ------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Number  | Description                                                                                                                                                     
| |         |                                                                                                                                                                 
| | (3)     | (i) Articles
      of Incorporation; and (ii) Bylaws                                                                                                            
| |         |                                                                                                                                                                 
| | 3.1     | Articles of Incorporation (incorporated by reference from
      our Form 10-SB filed on August 2, 1999)                                                         
| |         |                                                                                                                                                                 
| | 3.2     | Certificate of Amendment (incorporated by reference from
      our Form 10-SB filed on August 2, 1999)                                                          
| |         |                                                                                                                                                                 
| | 3.3     | Certificate of Amendment dated February 19, 2004
      (incorporated by reference from our Registration Statement on Form SB-2/A
      filed on August 15, 2005)
| |         |                                                                                                                                                                 
| | 3.4     | Certificate of Amendment dated May 25, 2004 (incorporated
      by reference from our Registration Statement on Form SB-2/A filed on
      August 15, 2005)     
| |         |                                                                                                                                                                 
| | 3.5     | Bylaws (incorporated by reference from our Form 10-SB
      filed on August 2, 1999)                                                                            
| |         |                                                                                                                                                                 
| | (4)     | Instruments Defining the Rights of Security
      Holders                                                                                                       
| |         |                                                                                                                                                                 
| | 4.1     | 2004 Equity Performance Plan (incorporated by reference
      from our Registration Statement on Form S-8 filed on February 25, 2004)                           
| |         |                                                                                                                                                                 
| | 4.2     | 2005 Stock Option Plan (incorporated by reference from
      our Registration Statement on Form S-8 filed on June 10, 2005)                                     

---

- 33 -

| | (10)  | Material Contracts                                                                                                                                                                                                              
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                 
| | 10.1  | Acquisition Agreement with Georgina Martin dated March 5,
      2004 (incorporated by reference from our Current Report on Form 8-K filed
      on March 18, 2004)                                                              
| |       |                                                                                                                                                                                                                                 
| | 10.2  | Form of Share Purchase Agreement dated May 13, 2004
      (incorporated by reference from our Current Report on Form 8-K filed on
      July 8, 2004)                                                                           
| |       |                                                                                                                                                                                                                                 
| | 10.3  | Engagement Letter with CK Cooper & Co. dated February
      10, 2005 (incorporated by reference from our Current Report on Form 8-K
      filed on February 16, 2005)                                                           
| |       |                                                                                                                                                                                                                                 
| | 10.4  | Managing Dealer Agreement with CK Cooper & Co. dated
      March 31, 2005 (incorporated by reference from our Form 10-KSB filed on
      April 8, 2005)                                                                         
| |       |                                                                                                                                                                                                                                 
| | 10.5  | Form of Subscription Agreement with the following
      subscribers, in connection with the private placement on May 26, 2005
      (incorporated by reference from our Current Report on Form 8-K filed on
      June 2, 2005):
| |       |                                                                                                                                                                                                                                 
| |       | Gary Brennglass                                                                                                                                                                                                                 
| |       | B&E Apartments, LP                                                                                                                                                                                                              
| |       | HEM Properties                                                                                                                                                                                                                  
| |       | Frey Living Trust                                                                                                                                                                                                               
| |       | Edward Ajootian                                                                                                                                                                                                                 
| |       | Bruce E. OBrien Living Trust Dated 12/17/91                                                                                                                                                                                    
| |       | Kent Seymour & Maskaria Seymour                                                                                                                                                                                                 
| |       | GSSF Master Fund, LP                                                                                                                                                                                                            
| |       | Gryphon Master Fund, L.P.                                                                                                                                                                                                       
| |       | Colonial Fund, LLC                                                                                                                                                                                                              
| |       | Enable Opportunity Partners L.P.                                                                                                                                                                                                
| |       | Enable Growth Partners L.P.                                                                                                                                                                                                     
| |       | Cranshire Capital, L.P.                                                                                                                                                                                                         
| |       | Bushido Capital Master Fund, LP                                                                                                                                                                                                 
| |       | Gamma Opportunity Capital Partners, LP Class C                                                                                                                                                                                  
| |       | Gamma Opportunity Capital Partners, LP Class A                                                                                                                                                                                  
| |       | Renata Kalweit                                                                                                                                                                                                                  
| |       |                                                                                                                                                                                                                                 
| | 10.6  | Management Agreement with Garth Braun dated for reference
      May 1, 2005. (incorporated by reference from our Registration Statement on
      Form SB-2 filed on June 23, 2005)                                              
| |       |                                                                                                                                                                                                                                 
| | 10.7  | Agreement dated effective July 14, 2005 between Cheetah
      Oil and Gas (PNG) Limited and Halliburton Overseas Limited. (incorporated
      by reference from our Current Report on Form 8-K filed on August 12, 2005)        
| |       |                                                                                                                                                                                                                                 
| | 10.8  | Securities Purchase Agreement dated March 14, 2006 with
      Macquarie Holdings (USA) Inc. (incorporated by reference from our Current
      Report on Form 8-K filed on March 17, 2006)                                       
| |       |                                                                                                                                                                                                                                 
| | 10.9  | Registration Rights Agreement dated March 14, 2006 with
      Macquarie Holdings (USA) Inc. (incorporated by reference from our Current
      Report on Form 8-K filed on March 17, 2006)                                       
| |       |                                                                                                                                                                                                                                 
| | 10.10 | Senior Secured Convertible Note dated March 14, 2006 with
      Macquarie Holdings (USA) Inc. (incorporated by reference from our Current
      Report on Form 8-K filed on March 17, 2006)                                     

---

- 34 -

| | 10.11 | Pledge and Security
        Agreement dated March 14, 2006 with Scotia Petroleum Inc. in favour of
        Macquarie Holdings (USA) Inc. (incorporated by reference from our Current
        Report on Form 8-K filed on March 17, 2006)
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                         
| | 10.12 | Guaranty dated
        March 14, 2006 with Scotia Petroleum Inc. in favour of Macquarie Holdings
        (USA) Inc. (incorporated by reference from our Current Report on Form
        8-K filed on March 17, 2006)                     
| |       |                                                                                                                                                                                                                                         
| | 10.13 | A-1 Warrant with
        Macquarie Holdings (USA) Inc. (incorporated by reference from our Current
        Report on Form 8-K filed on March 17, 2006)                                                                                  
| |       |                                                                                                                                                                                                                                         
| | 10.14 | A-2 Warrant with
        Macquarie Holdings (USA) Inc. (incorporated by reference from our Current
        Report on Form 8-K filed on March 17, 2006)                                                                                  
| |       |                                                                                                                                                                                                                                         
| | 10.15 | B-1 Warrant with
        Macquarie Holdings (USA) Inc. (incorporated by reference from our Current
        Report on Form 8-K filed on March 17, 2006)                                                                                  
| |       |                                                                                                                                                                                                                                         
| | 10.16 | B-2 Warrant with
        Macquarie Holdings (USA) Inc. (incorporated by reference from our Current
        Report on Form 8-K filed on March 17, 2006)                                                                                  
| |       |                                                                                                                                                                                                                                         
| | 10.17 | Letter Agreement
        dated May 23, 2007 (incorporated by reference from our Current Report
        on Form 8-K filed on May 31, 2007)                                                                                               
| |       |                                                                                                                                                                                                                                         
| | 10.18 | Amended Share
        Subscription Agreement dated for reference September 27, 2007 (incorporated
        by reference from our Current Report on Form 8-K filed on November 27,
        2007)                                          
| |       |                                                                                                                                                                                                                                         
| | 10.19 | Unanimous Shareholders
        Agreement with an effective date of November 22, 2007 (incorporated by
        reference from our Current Report on Form 8-K filed on November 27, 2007)                                                
| |       |                                                                                                                                                                                                                                         
| | (14)  | Code of Ethics                                                                                                                                                                                                                          
| |       |                                                                                                                                                                                                                                         
| | 14.1  | Code of Business
        Conduct and Ethics (incorporated by reference from our Form 10- KSB filed
        on April 8, 2005)                                                                                                            
| |       |                                                                                                                                                                                                                                         
| | (21)  | Subsidiaries
        of the Registrant                                                                                                                                                                                                  
| |       |                                                                                                                                                                                                                                         
| | 21.1  | Cheetah Oil and
        Gas Ltd., a company incorporated pursuant to the laws of British Columbia                                                                                                                                       
| |       |                                                                                                                                                                                                                                         
| |       | Scotia Petroleum
        Inc., a company incorporated pursuant to the laws of British Columbia                                                                                                                                          
| |       |                                                                                                                                                                                                                                         
| | (31)  | Rule 13a-14(a)/15d-14(a)
        Certifications                                                                                                                                                                                         
| |       |                                                                                                                                                                                                                                         
| | 31.1* | Section
        302 Certification under Sarbanes-Oxley Act of 2002 of Isaac Moss                                                                                                                                                        
| |       |                                                                                                                                                                                                                                         
| | (32)  | Section 1350
        Certifications                                                                                                                                                                                                     
| |       |                                                                                                                                                                                                                                         
| | 32.1* | Section
        906 Certification under Sarbanes-Oxley Act of 2002                                                                                                                                                                      

---

- 35 -

| | (99) | Additional Exhibits                                                                                                                                
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                    
| | 99.1 | Petroleum Prospecting Licence #245 (incorporated by
      reference from our Registration Statement on Form SB-2/A filed on December
      1, 2005)
| |      |                                                                                                                                                    
| | 99.2 | Petroleum Prospecting Licence #246 (incorporated by
      reference from our Registration Statement on Form SB-2/A filed on December
      1, 2005)
| |      |                                                                                                                                                    
| | 99.3 | Petroleum Prospecting Licence #249 (incorporated by
      reference from our Registration Statement on Form SB-2/A filed on December
      1, 2005)
| |      |                                                                                                                                                    
| | 99.4 | Petroleum Prospecting Licence #250 (incorporated by
      reference from our Registration Statement on Form SB-2/A filed on December
      1, 2005)
| |      |                                                                                                                                                    
| | 99.5 | Petroleum Prospecting Licence #252 (incorporated by
      reference from our Registration Statement on Form SB-2/A filed on December
      1, 2005)
| |      |                                                                                                                                                    
| | 99.6 | Petroleum Retention Licence #13 (incorporated by
      reference from our Registration Statement on Form SB-2/A filed on December
      1, 2005)   

* Filed herewith.

Item 14.        
Principal Accountants Fees and Services

Audit Fees

For the period ended December 31, 2007 and 2006, the aggregate
  fees billed by Ernst & Young LLP for professional services rendered for
  the audit of our annual consolidated financial statements included in our annual
  report on Form 10-KSB were $212,069 and $225,000, respectively.

Audit Related Fees

For the period ended December 31, 2007 and December 31, 2006,
the aggregate fees billed for assurance and related services by Ernst &
Young LLP relating to the performance of the audit of our financial statements
which are not reported under the caption "Audit Fees" above, was $Nil and $Nil,
respectively.

Tax Fees

For the period ended December 31, 2007 and December 31, 2006,
the aggregate fees billed by Ernst & Young LLP for other non-audit
professional services, other than those services listed above, totalled $Nil and
$Nil, respectively.

We do not use Ernst & Young LLP for financial information
system design and implementation. These services include designing or
implementing a system that aggregates source data underlying the financial
statements or generates information that is significant to our financial
statements, are provided internally or by other service providers. We do not
engage Ernst & Young LLP to provide compliance outsourcing services.

Effective May 6, 2003, the Securities and Exchange Commission
adopted rules that require that before Ernst & Young LLP is engaged by us to
render any auditing or permitted non-audit related service, the engagement be:

- approved by our audit committee (which consists of our entire board of
  directors); or
- entered into pursuant to pre-approval policies and procedures established
  by the board of directors, provided the policies and procedures are detailed
  as to the particular service, the board of directors is

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informed of each service, and such
policies and procedures do not include delegation of the board of directors'
responsibilities to management.

The board of directors pre-approves all services provided by
our independent auditors. All of the above services and fees were reviewed and
approved by the board of directors either before or after the respective
services were rendered.

The board of directors has considered the nature and amount of
fees billed by Ernst & Young LLP and believes that the provision of services
for activities unrelated to the audit is compatible with maintaining Ernst &
Young LLPs independence.

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

CHEETAH OIL & GAS LTD.

By: */s/ Isaac Moss*
  Isaac Moss 
  President, Chief Executive Officer, 
  Chief Financial Officer and Director 
  (Principal Executive Officer, Financial Officer 
  and Principal Accounting Officer) 
  Date: May 15, 2008

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.

By: */s/ Isaac Moss*
  Isaac Moss 
  President, Chief Executive Officer, 
  Chief Financial Officer and Director 
  (Principal Executive Officer, Financial Officer 
  and Principal Accounting Officer) 
  Date: May 15, 2008

By: */s/ Ian McKinnon*
  Ian McKinnon, Director 
  Date: May 15, 2008

By: */s/ Georgina Martin*
  Georgina Martin, Secretary, Treasurer and Director 
  Date: May 15, 2008

By: */s/ Dean Swanberg*
  Dean Swanberg, Director 
  Date: May 15, 2008

By: */s/ David Martin*
  David Martin, Director 
  Date: May 15, 2008

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