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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year endedDecember 31,
2008

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

For the transition period from [      ]
to [      ]

Commission file number 000-50861

CHEETAH OIL & GAS LTD.(Exact name of registrant as specified 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)                          
|                                                                     |                                     
|Registrant's telephone number, including area code:                  | 250-714-1101                        

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

|Title of Each Class | Name of Each Exchange On Which Registered
|------------------- | -----------------------------------------
|N/A                 | N/A                                      

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

N/A(Title of class)

Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 the Securities Act.

  Yes [   ]    No [X]

Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the ActYes [   ]    No [X]

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

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not
contained herein, and will not 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-K or any amendment to this Form
10-K.[   ]

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

|Large accelerated filer [   ] | Accelerated
      filer                 
       [   ]
|----------------------------- | -----------------------------------------------------
|Non-accelerated filer   [   ] | Smaller reporting company [X]                        

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

The aggregate market value of Common Stock held by
non-affiliates of the Registrant on March 17, 2009 was $354,902 based on a
$0.01 closing price for the Common Stock on March 17, 2009. For purposes of this
computation, all executive officers and directors have been deemed to be
affiliates. Such determination should not be deemed to be an admission that
such executive officers and directors are, in fact, affiliates of the
Registrant.

Indicate the number of shares outstanding of each of the
registrants classes of common stock as of the latest practicable 
  date.37,086,740 common shares as of March 17, 2009

DOCUMENTS INCORPORATED BY REFERENCE

None.

2

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TABLE OF CONTENTS

|Item
      1.  | Business                                                                                                                 | 4 
|-------------- | ------------------------------------------------------------------------------------------------------------------------ | --
|               |                                                                                                                          |   
|Item
      1A. | Risk
      Factors                                                                                                       | 10
|               |                                                                                                                          |   
|Item
      1B. | Unresolved
      Staff Comments                                                                                          | 12
|               |                                                                                                                          |   
|Item
      2.  | Properties                                                                                                               | 12
|               |                                                                                                                          |   
|Item
      3.  | Legal
      Proceedings                                                                                                  | 12
|               |                                                                                                                          |   
|Item
      4.  | Submission
      of Matters to a Vote of Security Holders                                                                | 12
|               |                                                                                                                          |   
|Item
      5.  | Market
      for Registrants Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities | 12
|               |                                                                                                                          |   
|Item
      6.  | Selected
      Financial Data                                                                                            | 14
|               |                                                                                                                          |   
|Item
      7.  | Managements
      Discussion and Analysis of Financial Condition and Results of Operations                              | 14
|               |                                                                                                                          |   
|Item
      7A. | Quantitative
      and Qualitative Disclosures About Market Risk                                                         | 18
|               |                                                                                                                          |   
|Item
      8.  | Financial
      Statements and Supplementary Data                                                                        | 18
|               |                                                                                                                          |   
|Item
      9.  | Changes
      in and Disagreements With Accountants on Accounting and Financial
      Disclosure                         | 46
|               |                                                                                                                          |   
|Item
      9A. | Controls
      and Procedures                                                                                            | 46
|               |                                                                                                                          |   
|Item
      9B. | Other
      Information                                                                                                  | 47
|               |                                                                                                                          |   
|Item
      10. | Directors,
      Executive Officers and Corporate Governance                                                             | 47
|               |                                                                                                                          |   
|Item
      11. | Executive
      Compensation                                                                                             | 51
|               |                                                                                                                          |   
|Item
      12. | Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters               | 55
|               |                                                                                                                          |   
|Item
      13. | Certain
      Relationships and Related Transactions, and Director Independence                                          | 56
|               |                                                                                                                          |   
|Item
      14. | Principal
      Accounting Fees and Services                                                                             | 57
|               |                                                                                                                          |   
|Item
      15. | Exhibits,
      Financial Statement Schedules                                                                            | 57

3

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PART I

Item 1.      Business

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

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

Our financial statements are stated in United States Dollars
(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 current report and unless otherwise indicated,
the terms "we", "us", "our" and "Cheetah" mean Cheetah Oil & Gas Ltd.

General Overview

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.

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

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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.

We are an exploration stage oil and gas company engaged in the
exploration for petroleum and natural gas. Until recently, we were 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). On November 25, 2008, we sold our remaining 10% interest in
Cheetah BC.

Due to the implementation of British Columbia Instrument 51-509
on September 30, 2008 by the British Columbia Securities Commission, we have
been deemed to be a British Columbia based reporting issuer. As such, we are
required to file certain information and documents at www.sedar.com.

Overview of Business over the Last Five Years

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 licences: 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 licences, 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 sale of the
Companys 90% interest by virtue of the sale 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
Licences (PPL) - PPL #245 and PPL #246 - issued by the Minister of Petroleum
Energy for Papua New Guinea. The licences required 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.

Subsequent to Cheetah acquiring Scotia, the Company 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 was the only PRL  granted.

5

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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 Licences 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.

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 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

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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 sale 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 our Company, we
were 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 was 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, was required to proportionately contribute,
according to our shareholdings in Cheetah BC, any capital required by Cheetah
BC. The failure by us to contribute the required capital at the times needed to
continue to 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. To this end, we entered into
an agreement with Invicta on March 12, 2008 whereby Invicta agreed to advance by
way of a loan up to $500,000 to fund our estimated working capital requirements.
The loan carried an annual interest rate of 8% and was secured against our 10%
equity interest in Cheetah BC.

With reference to the loan agreement dated March 12, 2008
between Cheetah and Invicta for the principal amount of $500,000 due on demand,
the following events constitutes a default by Cheetah (Borrower) unless Invicta
(Lender) agrees to waive such default:

- The Borrower fails to pay any amount owing to the Lender under this
  agreement when due, and such amount remains unpaid for five days;
- Any of the representations or warranties of the Borrower in this Agreement
  are misleading, or incorrect in any material respect;
- The Lender ceases to have a valid, perfected and enforceable charge over
  the Collateral;
- An order is made or a resolution passed by the liquidation or winding-up
  of the Borrower; or
- If the Borrower becomes insolvent, admits in writing its inability to pay
  its debts as they become due or otherwise acknowledges its insolvency, commits
  an act of bankruptcy, makes an assignment or bulk sale of its assets, is
  adjudged or declared bankrupt or makes an assignment for the benefit of
  creditors or a proposal or similar action under the Bankruptcy and
  Insolvency Act(Canada), the Companies Creditors Arrangement
  Act(Canada) or any similar legislation, or commences any other
  proceedings relating to it under any reorganization, arrangement, readjustment
  of debt, dissolution or liquidation law or statute of any jurisdiction whether
  now or thereafter in effect, or consents to any such proceeding.

On March 28, 2008, Invicta changed its name to LNG Energy Ltd.

On September 11, 2008, we received notification from LNG Energy
Ltd. giving notice for all funds to be paid on the demand loan advanced. We had
90 days from receipt of the demand letter to pay LNG Energy all funds owing plus
interest due on the loan.

Effective November 25, 2008, we entered into a share purchase
agreement, with LNG Energy Ltd. (formerly, Invicta Oil and Gas Ltd.) and LNG
Energy (BC) Ltd. (formerly, Cheetah BC), wherein LNG Energy agreed to purchase
our 10% interest in LNG BC, or 100 Class A common shares of LNG BC owned by our
Company, for the purchase

7

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price of US$250,000. Once purchased, LNG Energy would be the
sole shareholder of LNG BC and LNG Energy shall forgive a loan to our Company of
Cdn$300,000 (US253,576) secured by way of a demand loan bearing interest at 8% per
annum entered into on March 12, 2008. Cheetah shall forgive all outstanding
accounts receivable between LNG Energy and Cheetah in the amount of $340,000.
Cheetah represents and warrants that LNG Energy has no further obligations on
any existing and future liabilities of Cheetah. We also entered into a warrant
cancellation agreement with Kepis & Pobe Investments Inc. pursuant to which
3,000,000 share purchase warrants held by Kepis & Pobe have been
cancelled.

On March 4, 2009 Cheetah settled outstanding liabilities with
two of our former directors paying $24,000 in the settlement of $40,249 in
consulting liabilities and the return to treasury of 3,000,000 issued and
outstanding shares to our Companys treasury. Our issued and outstanding shares
are now 37,086,740.

Our Current Business

We are an exploration stage oil and gas company engaged in the
exploration for petroleum and natural gas.

We are currently seeking opportunities to acquire prospective
or producing oil and gas properties or other oil and gas resource related
projects. Simultaneously, we are seeking business opportunities with established
business entities for the merger of a target business with our Company. In
certain instances, a target business may wish to become a subsidiary of us or
may wish to contribute assets to us rather than merge. We are currently in
negotiations with several parties to enter into a business opportunity but we
have not entered into any definitive agreements to date and there can be no
assurance that we will be able to enter into any definitive agreements. We
anticipate that any new acquisition or business opportunities by our Company
will require additional financing. There can be no assurance, however, that we
will be able to acquire the financing necessary to enable us to pursue our plan
of operation. If our Company requires additional financing and we are unable to
acquire such funds, our business may fail.

Management of our Company believes that there are perceived
benefits to being a reporting company with a class of publicly-traded
securities. These are commonly thought to include: (i) the ability to use
registered securities to acquire assets or businesses; (ii) increased visibility
in the financial community; (iii) the facilitation of borrowing from financial
institutions; (iv) improved trading efficiency; (v) stockholder liquidity; (vi)
greater ease in subsequently raising capital; (vii) compensation of key
employees through stock options; (viii) enhanced corporate image; and (ix) a
presence in the United States capital market.

We may seek a business opportunity with entities who have
recently commenced operations, or entities who wish to utilize the public
marketplace in order to raise additional capital in order to expand business
development activities, to develop a new product or service, or for other
corporate purposes. We may acquire assets and establish wholly-owned
subsidiaries in various businesses or acquire existing businesses as
subsidiaries.

In implementing a structure for a particular business
acquisition or opportunity, we may become a party to a merger, consolidation,
reorganization, joint venture, or licensing agreement with another corporation
or entity. We may also acquire stock or assets of an existing business. Upon the
consummation of a transaction, it is likely that our present management will no
longer be in control of our Company. In addition, it is likely that our officer
and director will, as part of the terms of the acquisition transaction, resign
and be replaced by one or more new officers and directors.

As of the date hereof, management has not entered into any
formal written agreements for a business combination or opportunity. When any
such agreement is reached, we intend to disclose such an agreement by filing a
current report on Form 8-K with the Securities and Exchange Commission.

We anticipate that the selection of a business opportunity in
which to participate will be complex and without certainty of success.
Management believes that there are numerous firms in various industries seeking
the perceived benefits of being a publicly registered corporation. Business
opportunities may be available in many different industries and at various
stages of development, all of which will make the task of comparative
investigation and

8

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analysis of such business opportunities extremely difficult and
complex. We can provide no assurance that we will be able to locate compatible
business opportunities.

As an exploration stage company, we are not able to fund our
cash requirements through our current operations. Historically, we have been
able to raise a limited amount of capital through private placements of our
equity stock, but we are uncertain about our continued ability to raise funds
privately. Further, we believe that our Company may have difficulties raising
capital until we locate a prospective property through which we can pursue our
plan of operation. If we are unable to secure adequate capital to continue our
acquisition efforts, our shareholders may lose some or all of their investment
and our business may fail.

Competition

We are an exploration stage company engaged in the acquisition
of an oil and gas property. As we currently do not own an interest in an oil and
gas property, we compete with other companies for both the acquisition of
prospective properties and the financing necessary to develop such properties.

We conduct our business in an environment that is highly
competitive and unpredictable. In seeking out prospective properties, we have
encountered intense competition in all aspects of our proposed business as we
compete directly with other development stage companies as well as established
international companies. Many of our competitors are national or international
companies with far greater resources, capital and access to information than us.
Accordingly, these competitors may be able to spend greater amounts on the
acquisition of prospective properties and on the exploration and development of
such properties. In addition, they may be able to afford greater geological
expertise in the exploration and exploitation of oil and gas properties. This
competition could result in our competitors having resource properties of
greater quality and attracting prospective investors to finance the development
of such properties on more favorable terms. As a result of this competition, we
may become involved in an acquisition with more risk or obtain financing on less
favorable terms.

Compliance with Government Regulation

We will not know the government regulations and the cost of
compliance with such regulations with which we must comply until such time as we
acquire an interest in a particular oil and gas property. If we are successful
in acquiring a property interest, we will be required to comply with the
regulations of governmental authorities and agencies applicable to the federal,
state or provincial and local jurisdictions where the property is located.
Exploitation and development of oil and gas properties may require prior
approval from applicable governmental regulatory agencies. There can be no
assurance that such approvals will be obtained.

If our activities should advance to the point where we engage
in oil and gas operations, we could become subject to environmental regulations
promulgated by federal, state or provincial, and local government agencies as
applicable. Environmental legislation provides for restrictions and prohibitions
on spills, releases or emissions of various substances produced in association
with the oil and gas industries which could result in environmental liability. A
breach or violation of such legislation may result in the imposition of fines
and penalties. In addition, certain types of operations require the submission
and approval of environmental impact assessments. Environmental assessments are
increasingly imposing higher standards, greater enforcement, fines and penalties
for non-compliance. Environmental assessments of proposed projects carry a
heightened degree of responsibility for companies, directors, officers and
employees. The cost of compliance in respect of environmental regulation has the
potential to reduce the profitability of any future revenues that our Company
may generate.

Employees

We have no employees other than our executive officers. We
anticipate that we will be conducting most of our business through agreements
with consultants and third parties.

9

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Research and Development

We have incurred $Nil in research and development expenditures
over the last fiscal year.

Item 1A.    Risk Factors

Our business operations are subject to a number of risks and
uncertainties, including, but not limited to those set forth below:

We have had negative cash flows from operations and if we
are not able to obtain further financing, our business operations may fail.

We had cash in the amount of $1,538 and a working capital
deficit of $139,265 as of December 31, 2008. We do not have sufficient funds to
independently finance the acquisition and development of prospective oil and gas
properties, nor do we have the funds to independently finance our daily
operating costs. We do not expect to generate any revenues for the foreseeable
future. Accordingly, we will require additional funds, either from equity or
debt financing, to maintain our daily operations and to locate, acquire and
develop a prospective property. Obtaining additional financing is subject to a
number of factors, including market prices for oil and gas, investor acceptance
of any property we may acquire in the future, and investor sentiment. Financing,
therefore, may not be available on acceptable terms, if at all. The most likely
source of future funds presently available to us is through the sale of equity
capital. Any sale of share capital, however, will result in a dilution to
existing shareholders. If we are unable to raise additional funds when required,
we may be forced to delay our plan of operation and our entire business may
fail.

We currently do not generate revenues, and as a result, we
face a high risk of business failure.

We do not hold an interest in any business or revenue
generating property. From the date of our incorporation, we have primarily
focused on the location and acquisition of oil and gas properties. In order to
generate revenues, we will incur substantial expenses in the location,
acquisition and development of a prospective property. We therefore expect to
incur significant losses into the foreseeable future. We recognize that if we
are unable to generate significant revenues from our activities, our entire
business may fail. There is no history upon which to base any assumption as to
the likelihood that we will be successful in our plan of operation, and we can
provide no assurance to investors that we will generate any operating revenues
or achieve profitable operations.

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

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

Even if we discover commercial reserves, we may not be able
to successfully obtain commercial production.

Even if we are successful in acquiring an interest in a
property that has proven commercial reserves of oil and gas, we will require
significant additional funds in order to place the property into commercial
production. We can provide no assurance to investors that we will be able to
obtain the financing necessary to extract such reserves.

10

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If we are unable to hire and retain key personnel, we may
not be able to implement our plan of operation and our business may fail.

Our success will be largely dependent on our ability to hire
and retain highly qualified personnel. This is particularly true in the highly
technical businesses of oil and gas exploration. These individuals may be in
high demand and we may not be able to attract the staff we need. In addition, we
may not be able to afford the high salaries and fees demanded by qualified
personnel, or we may fail to retain such employees after they are hired. At
present, we have not hired any key personnel. Our failure to hire key personnel
when needed will have a significant negative effect on our business.

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

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 acquired.

Our common stock is illiquid and shareholders may be unable
to sell their shares.

There is currently a limited market for our common stock and we
can provide no assurance to investors that a market will develop. If a market
for our common stock does not develop, our shareholders may not be able to
re-sell the shares of our common stock that they have purchased and they may
lose all of their investment. Public announcements regarding our Company,
changes in government regulations, conditions in our market segment or changes
in earnings estimates by analysts may cause the price of our common shares to
fluctuate substantially. In addition, stock prices for junior mining and oil and
gas companies fluctuate widely for reasons that may be unrelated to their
operating results. These fluctuations may adversely affect the trading price of
our common shares.

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 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.

11

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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.

Other Risks

Trends, Risks and Uncertainties

We have sought to identify what we believe to be the most
significant risks to our business, but we cannot predict whether, or to what
extent, any of such risks may be realized nor can we guarantee that we have
identified all possible risks that might arise. Investors should carefully
consider all of such risk factors before making an investment decision with
respect to our common stock.

Item 1B.    Unresolved Staff Comments

None.

Item 2.      Properties

Executive Offices

Our executive office is located at 17 Victoria Road, Nanaimo,
B.C. V9R 4N9.

Item 3.      Legal Proceedings

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

Item 4.      Submission 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, 2008.

PART II

Item 5.      Market for
Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities

Our common shares are quoted on the Over-the-Counter Bulletin
Board under the symbol COGL. The following quotations, obtained from Yahoo
Finance, reflect the high and low bids for our common shares based on
inter-dealer prices, without retail mark-up, mark-down or commission and may not
represent actual transactions.

12

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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
      LowDecember 31, 2008
      $0.03
      $0.01September 30, 2008
      $0.13
      $0.02June 30, 2008
      $0.08
      $0.03March 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
      $0.32


(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 17, 2009, the shareholders' list showed 186 registered
shareholders and 37,086,740 common shares outstanding.

Dividend Policy

We have not paid any cash dividends on our common stock and
have no present intention of paying any dividends on the shares of our common
stock. Our current policy is to retain earnings, if any, for use in our
operations and in the development of our business. Our future dividend policy
will be determined from time to time by our board of directors.

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.

On July 31, 2008 our Companys board of directors approved the
grant of 2,000,000 stock options at a purchase price of $0.15 per share to
Robert McAllister with 500,000 options vested immediately, 500,000 vested on
October 31, 2008 and the balance will vest on January 31, 2009.

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The following table summarizes certain information regarding
our equity compensation plans as at December 31, 2008:

Equity
        Compensation Plan InformationPlan category
      Number of securities to be issued upon exercise of outstanding options, warrants and rights
      Weighted-average exercise
        price of outstanding options, warrants and rights
      Number
        of securities remaining available for future issuance
        under equity compensation plans (excluding securities
        reflected in column (a))Equity compensation plans approved by security holders
      Nil
      Nil
      NilEquity compensation plans not approved by security holders
      2,000,000
      $0.15
      1,500,000Total
      2,000,000
      $0.15
      1,500,000


Recent Sales of Unregistered Securities; Use of Proceeds
from Registered Securities

We did not sell any equity securities which were not registered
under the Securities Act during the year ended December 31, 2008 that were not
otherwise disclosed on our quarterly reports on Form 10-Q or our current reports
on Form 8-K filed during the year ended December 31, 2008.

Purchase of Equity Securities by the Issuer and Affiliated
Purchasers

We did not purchase any of our shares of common stock or other
securities during our fourth quarter of our fiscal year ended December 31, 2008.

Item 6.      Selected
Financial Data

As a smaller reporting company, we are not required to
provide the information required by this Item.

Item 7.      Managements
Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our
audited financial statements and the related notes that appear elsewhere in this
annual report. The following discussion contains forward-looking statements that
reflect our plans, estimates and beliefs. Our actual results could differ
materially from those discussed in the forward looking statements. Factors that
could cause or contribute to such differences include, but are not limited to;
those discussed below and elsewhere in this annual report, particularly in the
section entitled "Risk Factors" beginning on page 10 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.

Results of Operations for our Years Ended December 31,
2008 and 2007

Our net loss and comprehensive loss for our year ended December
31, 2008, for our year ended December 31, 2007 and the changes between those
periods for the respective items are summarized as follows:

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Year Ended December
      31, 2008 $
    Year Ended December
      31, 2007 $ Restated
    Change Between Year Ended
      December 31,, 2008 and Year Ended December
      31, 2007 $ RestatedLegal, accounting
      and audit
    (114,216)
    (439,793)
    325,577General and
      administrative
    (52,272)
    (1,233,803)
    1,181,531Consulting fees
      & Director Fees
    (130,783)
    (757,913)
    627,130Interest and
      accretion
    (22,320)
    (2,566,193)
    2,543,873Discontinued
      Operations
    (1,354,753)
    (3,090,110)
    1,735,357Unrealized gains
      (loss) on warrants
    13,000
    65,041
    (52,041)Foreign exchange
      gain (loss)
    43,676
    157,185
    (113,509)Other Income
    -
    4,000
    (4,000)Net loss and comprehensive loss for the period
    (1,617,668)
    (7,861,586)
    6,243,918


General and Administrative

The decrease in our general and administrative expenses for our
year ended December 31, 2008 was due to the transaction for the sale of 90%
ownership of LNG BC (formerly Cheetah BC) on November 30, 2007, the retirement
of the convertible notes payable to Macquarie Holdings (USA) Inc. (Macquarie)
on November 14, 2007 and the sale of our 10% investment in LNG BC on November
25, 2008.

Accounting, Audit and Legal

The decrease in accounting, audit and legal fees for our year
ended December 31, 2008 was due to the transaction for the sale of 90% ownership
of LNG BC on November 30, 2007, the retirement of the convertible notes payable
to Macquarie on November 14, 2007 and the sale of our 10% investment in LNG BC
on November 25, 2008.

Consulting Fees and Director Fees

The decrease in consulting fees and director fees for our year
ended December 31, 2008 was due to a decrease in payments to the directors.
During the period ending December 31, 2008 there were only two directors that
recorded monthly fees and at a reduced amount.

Interest and Accretion

The decrease in interest and accretion for our year ended
December 31, 2008 was due to the transaction for the sale of 90% ownership of
LNG BC on November 30, 2007, the retirement of the convertible notes payable to
Macquarie on November 14, 2007 and the sale of our 10% investment in LNG BC on
November 25, 2008.

Foreign Exchange Gain (loss)

The decrease in foreign exchange gain for our year ended
December 31, 2008 was due to the transaction for the sale of 90% ownership in
LNG BC.

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Unrealized gains (loss) on warrants

The change in unrealized gains (loss) on the warrants for our
year ended December 31, 2008 was due to the shorter period of time when the
warrants expire, increase in the rate of volatility and the decrease in the
stock price.

Liquidity and Financial Condition

Working Capital

|                    |   | At           |   |   | At           |  
|------------------- | - | ------------ | - | - | ------------ | -
|                    |   | December 31, |   |   | December 31, |  
|                    |   | 2008         |   |   | 2007         |  
|                    |   |              |   |   | (Restated)   |  
|Current assets      | $ | 251,538      |   | $ | 2,267,650    |  
|Current liabilities |   | 390,803      |   |   | 2,796,455    |  
|Working capital     | $ | (139,265     | ) | $ | (528,805     | )

Cash Flows

|                                              |   | Year Ended   |  
|--------------------------------------------- | - | ------------ | -
|                                              |   | December 31, |  
|                                              |   | 2008         |  
|                                              |   |              |  
|                                              |   |              |  
|Cash flows used in operating activities       | $ | (248,504     | )
|                                              |   |              |  
|Cash flows used in investing activities       |   | -            |  
|                                              |   |              |  
|Cash flows provided by financing activities   |   | 242,181      |  
|                                              |   |              |  
|Net increase (decrease) in cash during period | $ | (6,323       | )

Operating Activities

Net cash used in operating activities was $248,504 for our year
ended December 31, 2008 compared with cash used in operating activities of
$1,002,589 in the same period in 2007. The decrease of $754,085 in operating
activities is mainly attributable to the sale of 90% ownership of LNG BC, the
sale of the remaining 10% investment in LNG BC and, as a result, the scale of
the Companys operations, as well as costs associated with such operations, has
been significantly reduced.

Investing Activities

Net cash used in investing activities was $Nil for our year
ended December 31, 2008 compared to net cash used in investing activities of
$353,260 in the same period in 2007 was mainly attributable to the sale of 90%
ownership of LNG BC, the sale of the remaining 10% investment in LNG BC and, as
a result, the scale of the Companys operations, as well as costs associated
with such operations, has been significantly reduced.

Financing Activities

Net cash from financing activities was $242,181 for our year
ended December 31, 2008 compared to $1,281,022 in the same period in 2007 was
mainly attributable to the decrease of advanced received.

16

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Contractual Obligations

As a smaller reporting company, we are not required to
provide tabular disclosure obligations.

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 $1,617,668 for the year ended December 31, 2008 [2007 -
$7,711,586 (restated $7,861,586)] and at December 31, 2008 had a deficit
accumulated during the exploration stage of $15,853,033 [2007  $14,235,365].
The Company has not generated any revenue, has an accumulated deficit and
negative working capital of $139,265 as at December 31, 2008. 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.
The outcome of these matters cannot be predicted at this time.

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.

At this time, we cannot provide investors with any assurance
  that we will be able to raise sufficient funding from the sale of our common
  stock or through a loan from our directors to meet our obligations over the
  next twelve months. We do not have any arrangements in place for any future
  debt or equity financing.

Off-Balance Sheet Arrangements

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

Critical Accounting Policies

The discussion and analysis of our financial condition and results
  of operations are based upon our financial statements, which have been prepared
  in accordance with the accounting principles generally accepted in the United
  States of America. 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 financial
  statements.

Recent Accounting Pronouncements

In December 2007, the Financial Accounting Standards Board
issued SFAS No. 141 (revised 2007), Business Combinations (SFAS No. 141(R))
and SFAS No. 160, Noncontrolling Interest in Consolidated Financial Statements
(SFAS No. 160). These new standards represent the outcome of the FASBs joint
project with the International Accounting Standards Board and are intended to
improve, simplify and converge internationally the accounting for business
combinations and the reporting of noncontrolling interests in consolidated
financial statements.

SFAS No. 141(R) replaces SFAS No. 141, Business Combinations,
however, it retains the fundamental requirements of the former Statement that
the acquisition method of accounting (previously referred to as the purchase
method) be used for all business combinations and for an acquirer to be
identified for each business. This Statement defines the acquirer as the entity
that obtains control of one or more businesses in the business

17

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combination and establishes the acquisition date as the date
that the acquirer achieves control. The new standard requires the acquiring
entity in a business combination to recognize all (and only) the assets acquired
and liabilities assumed in the transaction; establishes the acquisition-date
fair value as the measurement objective for all assets acquired and liabilities
assumed; and requires the acquirer to disclose to investors and other users all
of the information they need to evaluate and understand the nature and financial
effect of the business combination.

SFAS No. 160 amends Accounting Research Bulletin No. 51,
Consolidated Financial Statements, to establish accounting and reporting
standards for the noncontrolling interest in a subsidiary and for the
deconsolidation of a subsidiary. This Statement clarifies that a noncontrolling
interest in a subsidiary is an ownership interest in the consolidated entity
that should be reported as equity in the consolidated financial statements. This
Statement changes the way the consolidated income statement is presented by
requiring net income to be reported at amounts that include the amounts
attributable to both the parent and the noncontrolling interest and to disclose
those amounts on the face of the income statement. It also aligns the reporting
of noncontrolling interest in subsidiaries with the requirements in
International Accounting Standard 27.

Both SFAS No. 141(R) and SFAS No. 160 are effective beginning
in our fiscal 2010. SFAS No. 141 (R) will be applied to business combinations
that are consummated beginning in fiscal 2010, and SFAS No. 160 will be applied
prospectively to all noncontrolling interests, including any that arose before
fiscal 2010. We are currently evaluating these Statements and have not yet
determined their effect on our consolidated financial statements.

In September 2006, the FASB issued SFAS No. 157, Fair Value
Measurements (SFAS 157) which addresses how companies should measure fair
value when they are required to use a fair value measure for recognition or
disclosure purposes under generally accepted accounting principles (GAAP). As
a result of SFAS 157 there is now a common definition of fair value to be used
throughout GAAP. The FASB believes that the new standard will make the
measurement of fair value more consistent and comparable and improve disclosures
about those measures. SFAS 157 will be effective for the Company for fiscal year
2009. Management is currently evaluating the impact of the statement on the
Company. Management does not believe the adoption of SFAS 157 will have a
material impact on its consolidated financial statements.

In March 2008, the FASB issued SFAS No. 161, Disclosures about
Derivative Instruments and Hedging Activities (SFAS 161). SFAS 161 requires
entities to provide enhanced disclosures about derivative instruments and
hedging activities. SFAS 161 is effective for financial statements issued for
fiscal years and interim periods beginning after November 15, 2008. The Company
does not currently have any derivative instruments or hedging activities.

Item 7A.   Quantitative and Qualitative
Disclosures About Market Risk

As a smaller reporting company, we are not required to
provide the information required by this Item.

Item 8.      Financial
Statements and Supplementary Data

18

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Financial Statements

Cheetah Oil & Gas Ltd.(an exploration stage enterprise)December 31,
2008 & 2007







19

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Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors
Cheetah Oil & Gas, Ltd. 
Nanaimo, BC, Canada

We have audited the financial statements of Cheetah Oil & Gas, Ltd., (the “Company”) (an exploration stage enterprise) as of December 31, 2008 and the related statements of operations, stockholders’ deficit, and cash flows for the year then ended. 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 audit. The financial statements of the Company as of December 31, 2007, were audited by other auditors whose report dated April 14, 2008, expressed an unqualified opinion on those financial statements. As discussed in Note 2 to the financial statements, the Company has adjusted its 2007 financial statements to retrospectively reclassify “shares to be issued” from the equity section of the balance sheet to “interest and penalties payable,” to correct a change in an estimate on a lawsuit settlement, and to restate the statements of operations and cash flows for discontinued operations. The other auditors reported on the financial statements before the retrospective adjustments.

We conducted our audit in accordance with the auditing standards of the Public Company Accounting Oversight Board (United States). Those standards required that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the 2008 financial statements referred to above present fairly, in all material respects, the financial position of Cheetah Oil & Gas, Ltd., at December 31, 2008, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

As described in Note 2, the financial statements as of December 31, 2007, and for the year then ended have been restated. We audited the adjustments described in Note 2 that were applied to restate the 2007 financial statements. In our opinion, such adjustments are appropriate and have been properly applied. We were not engaged to audit, review, or apply any procedures to the Company’s 2007 financial statements other than with respect to the adjustments and, accordingly, we do not express an opinion or any other form of assurance on the 2007 financial statements taken as a whole.

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 accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/Killman, Murrell & Company, P.C.
  Killman, Murrell & Company, P.C.
  Odessa, Texas
March 17, 2009

20

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

21

---

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 |   |  | December 31 |  
|---------------------------------------------------------------------- |  | ----------- | - |  | ----------- | -
|                                                                       |  | 2008        |   |  | 2007        |  
|                                                                       |  | $           |   |  | $           |  
|                                                                       |  |             |   |  | Restated    |  
|ASSETS                                                                 |  |             |   |  |             |  
|Current                                                                |  |             |   |  |             |  
|Cash and cash equivalents                                              |  | 1,538       |   |  | 7,861       |  
|Receivables [note 6]                                                   |  | 250,000     |   |  | 2,259,343   |  
|Prepaid expenses                                                       |  | -           |   |  | 446         |  
|                                                                       |  | 251,538     |   |  | 2,267,650   |  
|                                                                       |  |             |   |  |             |  
|Investment in Cheetah Oil & Gas (B.C.) Ltd. [note 5]                   |  | -           |   |  | 1,521,329   |  
|Equipment [note 8]                                                     |  | 2,091       |   |  | 2,614       |  
|                                                                       |  | 253,629     |   |  | 3,791,593   |  
|                                                                       |  |             |   |  |             |  
|LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)                         |  |             |   |  |             |  
|Current                                                                |  |             |   |  |             |  
|Accounts payable and accrued liabilities                               |  | 390,803     |   |  | 2,457,332   |  
|Advances payable [note 10]                                             |  | -           |   |  | -           |  
|Interest and penalties payable [note 9]                                |  | -           |   |  | 323,123     |  
|Fair value of warrants [note 4]                                        |  | -           |   |  | 16,000      |  
|                                                                       |  | 390,803     |   |  | 2,796,455   |  
|                                                                       |  |             |   |  |             |  
|Contingencies [note 14]                                                |  |             |   |  |             |  
|                                                                       |  |             |   |  |             |  
|Stockholders equity (deficit)                                         |  |             |   |  |             |  
|Common stock [note 11]                                                 |  |             |   |  |             |  
|Preferred stock,
      $0.00l par value, authorized 100,000,000 shares |  |             |   |  |             |  
|Common
      stock, $0.001 par value, authorized 500,000,000 shares    |  |             |   |  |             |  
|issued and outstanding:
      40,086,740 shares                        |  |             |   |  |             |  
|[December
      31, 2007  37,934,991 shares]                          |  | 40,087      |   |  | 37,935      |  
|Additional paid in capital                                             |  | 15,675,772  |   |  | 15,192,568  |  
|Deficit accumulated during the exploration
      stage                 |  | (15,853,033 | ) |  | (14,235,365 | )
|                                                                       |  | (137,174    | ) |  | 995,138     |  
|                                                                       |  | 253,629     |   |  | 3,791,593   |  

See accompanying notes

22

---

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]

|                                                      |   |              |   |   |              |   |  | Cumulative   |  
|----------------------------------------------------- | - | ------------ | - | - | ------------ | - |  | ------------ | -
|                                                      |   | Twelve       |   |   | Twelve       |   |  | from         |  
|                                                      |   | months ended |   |   | months ended |   |  | January 28,  |  
|                                                      |   | December 31, |   |   | December 31, |   |  | 2003 to      |  
|                                                      |   | 2008         |   |   | 2007         |   |  | Dec 31, 2008 |  
|                                                      |   | $            |   |   | $            |   |  | $            |  
|                                                      |   |              |   |   | Restated     |   |  | Restated     |  
|                                                      |   |              |   |   |              |   |  |              |  
|General and administrative expenses                   |   |              |   |   |              |   |  |              |  
|Liquidated damages fees                               |   | (85,000      | ) |   | 1,031,246    |   |  | 1,634,579    |  
|Accounting, audit and legal                           |   | 114,216      |   |   | 439,793      |   |  | 989,098      |  
|Amortization of deferred charges                      |   | -            |   |   | 50,147       |   |  | 464,327      |  
|Depreciation                                          |   | 523          |   |   | 653          |   |  | 3,535        |  
|Interest                                              |   | 22,320       |   |   | 2,494,397    |   |  | 3,037,863    |  
|Interest - long-term debt                             |   | -            |   |   | 58,252       |   |  | 89,649       |  
|Application fees and permits                          |   | 627          |   |   | 2,255        |   |  | 6,081        |  
|Accretion of debt discount on
      convertible notes |   | -            |   |   | 13,544       |   |  | 2,300,000    |  
|Directors fees                                       |   | -            |   |   | 426,873      |   |  | 426,873      |  
|Consulting fees                                       |   | 130,783      |   |   | 331,040      |   |  | 640,854      |  
|Office and miscellaneous                              |   | 8,535        |   |   | 66,216       |   |  | 107,537      |  
|Investor relations and
      shareholder information  |   | 5,400        |   |   | 5,724        |   |  | 181,097      |  
|Insurance (recovery)                                  |   | -            |   |   | (21,520      | ) |  | 90,353       |  
|Rental and communication                              |   | 6,762        |   |   | 11,177       |   |  | 79,362       |  
|Salaries and benefits                                 |   | -            |   |   | -            |   |  | -            |  
|Travel                                                |   | 1,154        |   |   | 87,905       |   |  | 114,114      |  
|Stock-based compensation                              |   | 85,833       |   |   | -            |   |  | 1,992,488    |  
|Provisions for uncollectable funds                    |   | 28,438       |   |   | -            |   |  | 28,438       |  
|                                                      |   | 319,591      |   |   | 4,997,702    |   |  | 12,186,248   |  
|                                                      |   |              |   |   |              |   |  |              |  
|Loss before other income (expense)                    |   | (319,591     | ) |   | (4,997,702   | ) |  | (12,186,248  | )
|Foreign exchange gain (loss)                          |   | 43,676       |   |   | 157,185      |   |  | 167,681      |  
|Unrealized gains (losses) on warrants                 |   | 13,000       |   |   | 65,041       |   |  | 2,297,000    |  
|Other income                                          |   | -            |   |   | 4,000        |   |  | (20,876      | )
|Net loss from
      continuing operations             |   | (262,915     | ) |   | (4,771,476   | ) |  | (9,742,443   | )
|Discontinued operations                               |   | (1,354,753   | ) |   | (3,090,110   | ) |  | (6,110,590   | )
|Net Loss                                              |   | (1,617,668   | ) |   | (7,861,586   | ) |  | (15,853,033  | )
|Loss per share  basic and diluted                    |   |              |   |   |              |   |  |              |  
|Loss from continuing operations                       | $ | (0.01        | ) | $ | (0.13        | ) |  |              |  
|Loss from discontinued
      operations               |   | (0.03        | ) |   | (0.08        | ) |  |              |  
|Net Loss                                              |   | (0.04        | ) |   | (0.21        | ) |  |              |  
|                                                      |   |              |   |   |              |   |  |              |  
|Weighted average number of common stock               |   |              |   |   |              |   |  |              |  
|outstanding - basic and diluted                       |   | 39,018,351   |   |   | 36,889,306   |   |  |              |  

See accompanying notes

23

---

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]

|                                                                         |  |              |   |  |              |   |  | Cumulative   |  
|------------------------------------------------------------------------ |  | ------------ | - |  | ------------ | - |  | ------------ | -
|                                                                         |  |              |   |  |              |   |  | from         |  
|                                                                         |  | Year ended   |   |  | Year ended   |   |  | January 28,  |  
|                                                                         |  | December 31, |   |  | December 31, |   |  | 2003 to      |  
|                                                                         |  | 2008         |   |  | 2007         |   |  | Dec 31, 2008 |  
|                                                                         |  | $            |   |  | $            |   |  | $            |  
|OPERATING ACTIVITIES                                                     |  |              |   |  | Restated     |   |  | Restated     |  
|Net loss for the period                                                  |  | (1,617,668   | ) |  | (7,861,586   | ) |  | (15,853,033  | )
|Less loss from discontinued operations                                   |  | 1,354,753    |   |  | 3,090,110    |   |  | 6,110,590    |  
|Net loss from continuing
      operations                                |  | (262,915     | ) |  | (4,771,476   | ) |  | (9,742,443   | )
|Adjustments to reconcile net loss to net cash provided by                |  |              |   |  |              |   |  |              |  
|operating activities:                                                    |  |              |   |  |              |   |  |              |  
|Amortization of deferred charges                                         |  | -            |   |  | -            |   |  | 414,180      |  
|Depreciation                                                             |  | 523          |   |  | 653          |   |  | 3,535        |  
|Unrealized gain on warrants                                              |  | (13,000      | ) |  | (65,041      | ) |  | (2,297,000   | )
|Foreign exchange                                                         |  | -            |   |  | -            |   |  | 182,267      |  
|Non-cash directors fees                                                 |  | -            |   |  | 426,873      |   |  | 426,873      |  
|Non-cash
      interest fees                                             |  | 8,000        |   |  | -            |   |  | 8,000        |  
|Stock-based compensation                                                 |  | 85,833       |   |  | -            |   |  | 1,992,487    |  
|Gain on disposal
      of equipment                                      |  | -            |   |  | (4,000       | ) |  | (8,311       | )
|Accretion of debt discount on
      convertible notes                    |  | -            |   |  | 13,544       |   |  | 2,300,000    |  
|Change in other assets and liabilities:                                  |  |              |   |  |              |   |  |              |  
|Prepaids and deposits                                                    |  | 446          |   |  | 59,492       |   |  | 210,655      |  
|Accounts
      receivable                                                |  | 19,343       |   |  | (16,994      | ) |  | (111,662     | )
|Accounts payable and accrued
      liabilities                           |  | (86,734      | ) |  | 1,449,311    |   |  | 3,991,880    |  
|Interest &
      penalties payable                                       |  | -            |   |  | 2,547,205    |   |  | 2,547,205    |  
|Cash provided by continuing
      activities                             |  | (248,504     | ) |  | (360,433     | ) |  | (82,334      | )
|Cash provided by
      (used in) discontinued activities                 |  | -            |   |  | (642,156     | ) |  | (2,453,400   | )
|Net cash used
      in operating activities                              |  | (248,504     | ) |  | (1,002,589   | ) |  | (2,535,734   | )
|FINANCING ACTIVITIES                                                     |  |              |   |  |              |   |  |              |  
|Proceeds on issuance of common shares,
      net of share issuance costs |  | -            |   |  | -            |   |  | 5,922,500    |  
|Proceeds on exercise of
      warrants                                   |  | -            |   |  | -            |   |  | 416,000      |  
|Proceeds from convertible note
      financing                           |  | -            |   |  | -            |   |  | 5,000,000    |  
|Net issuance costs paid
      relating to note financing                 |  | -            |   |  | -            |   |  | (464,328     | )
|Proceeds from capital loan                                               |  | -            |   |  | -            |   |  | 750,000      |  
|Net loan proceeds                                                        |  | 242,181      |   |  | -            |   |  | 242,181      |  
|Subscriptions received                                                   |  | -            |   |  | -            |   |  | 750,288      |  
|Repayment of capital
      lease                                         |  | -            |   |  | (8,021       | ) |  | (23,681      | )
|Repayment of advances payable to
      related parties                   |  | -            |   |  | -            |   |  | (1,174       | )
|Advances payable                                                         |  | -            |   |  | 1,289,043    |   |  | 1,999,864    |  
|Cash provided by continuing
      activities                             |  | 242,181      |   |  | 1,281,022    |   |  | 14,591,650   |  
|Cash provided by
      (used in) discontinued activities                 |  | -            |   |  | -            |   |  | -            |  
|Net cash from
      financing activities                                 |  | 242,181      |   |  | 1,281,022    |   |  | 14,591,650   |  
|INVESTING ACTIVITIES                                                     |  |              |   |  |              |   |  |              |  
|Purchase of equipment                                                    |  | -            |   |  | (6,630       | ) |  | (125,400     | )
|Proceeds on disposal of
      equipment                                  |  | -            |   |  | 8,318        |   |  | 25,733       |  
|Cash provided by (used in)
      continuing activities                   |  | -            |   |  | 1,688        |   |  | (99,667      | )
|Cash provided by
      (used in) discontinued activities                 |  | -            |   |  | (354,948     | ) |  | (11,954,787  | )
|Net cash used
      in investing activities                              |  | -            |   |  | (353,260     | ) |  | (12,054,454  | )
|Increase (decrease)  in cash and cash equivalents                        |  | (6,323       | ) |  | (74,827      | ) |  | 1,462        |  
|Cash and cash
      equivalents, beginning of period                     |  | 7,861        |   |  | 82,688       |   |  | 76           |  
|Cash and cash equivalents, end of period                                 |  | 1,538        |   |  | 7,861        |   |  | 1,538        |  

See accompanying notes

24

---

CheetahOil & Gas Ltd.(an exploration
stage enterprise)

STATEMENTSOFSTOCKHOLDERSEQUITY(DEFICIT)(expressed in U.S. dollars)

|                                                                                              |              |   |  |         |   |  |                    |   |  |               |  |  | Deficit accumulated |   |  | Total stock- |  
|--------------------------------------------------------------------------------------------- | ------------ | - |  | ------- | - |  | ------------------ | - |  | ------------- |  |  | ------------------- | - |  | ------------ | -
|                                                                                              |              |   |  |         |   |  | Additional paid in |   |  | Subscriptions |  |  | during exploration  |   |  | holders     |  
|                                                                                              | Common stock |   |  | capital |   |  | received           |   |  | stage         |  |  | equity              |  
|                                                                                              | Shares       |   |  | $       |   |  | $                  |   |  | $             |  |  | $                   |   |  | $            |  
|                                                                                              |              |   |  |         |   |  |                    |   |  |               |  |  |                     |   |  |              |  
|Shares issued by Cheetah BC                                                                   | 100          |   |  | 76      |   |  |                   |   |  |              |  |  |                    |   |  | 76           |  
|10,000,000 shares allotted for services in connection with
      the application for          |              |   |  |         |   |  |                    |   |  |               |  |  |                     |   |  |              |  
|petroleum prospecting licences                                                                |             |   |  |        |   |  | 1,000,000          |   |  |              |  |  |                    |   |  | 1,000,000    |  
|Net loss for the period                                                                       |             |   |  |        |   |  |                   |   |  |              |  |  | (812                | ) |  | (812         | )
|Balance, January 31, 2004                                                                     | 100          |   |  | 76      |   |  | 1,000,000          |   |  |              |  |  | (812                | ) |  | 999,264      |  
|Initial capitalization as a result of reverse acquisition [note
      1]                      | 25,000,000   |   |  | 25,000  |   |  | (24,924            | ) |  |              |  |  |                    |   |  | 76           |  
|Elimination of Cheetah BC common stock in recognition
      of reverse takeover [note 1]      | (100         | ) |  | (76     | ) |  |                   |   |  |              |  |  |                    |   |  | (76          | )
|Recapitalization to effect the acquisition of Cheetah Nevada
      [note 1]                   | 19,682       |   |  | 20      |   |  | (15,778            | ) |  |              |  |  |                    |   |  | (15,758      | )
|Shares issued for services in connection with
      the application for petroleum prospecting |              |   |  |         |   |  |                    |   |  |               |  |  |                     |   |  |              |  
|licences                                                                                      | 10,000,000   |   |  | 10,000  |   |  | (10,000            | ) |  |              |  |  |                    |   |  |             |  
|Contribution received from a shareholder of
      the company in connection with the          |              |   |  |         |   |  |                    |   |  |               |  |  |                     |   |  |              |  
|acquisition of Scotia                                                                         |             |   |  |        |   |  | 1,817,273          |   |  |              |  |  |                    |   |  | 1,817,273    |  
|Debt settlement                                                                               |             |   |  |        |   |  | 357,378            |   |  |              |  |  |                    |   |  | 357,378      |  
|Subscriptions received for April 2004 private placement                                       |             |   |  |        |   |  | 207,460            |   |  | 542,828       |  |  |                    |   |  | 750,288      |  
|Proceeds received upon exercise of April 2004
      stock warrants                            |             |   |  |        |   |  |                   |   |  | 416,000       |  |  |                    |   |  | 416,000      |  
|Stock-based compensation                                                                      |             |   |  |        |   |  | 22,064             |   |  |              |  |  |                    |   |  | 22,064       |  
|Net loss for the year                                                                         |             |   |  |        |   |  |                   |   |  |              |  |  | (604,369            | ) |  | (604,369     | )
|Balance, December
      31, 2004                                                              | 35,019,682   |   |  | 35,020  |   |  | 3,353,473          |   |  | 958,828       |  |  | (605,181            | ) |  | 3,742,140    |  

Seeaccompanyingnotes

25

---

CheetahOil & Gas Ltd.(an exploration
stage enterprise)

STATEMENTSOFSTOCKHOLDERSEQUITY(DEFICIT)(contd.)(expressed in U.S. dollars)

|                                                                                                |              |  |  |            |  |  |                 |   |  |              |   |  | Deficit accumulated |   |  | Total stock- |  
|----------------------------------------------------------------------------------------------- | ------------ |  |  | ---------- |  |  | --------------- | - |  | ------------ | - |  | ------------------- | - |  | ------------ | -
|                                                                                                |              |  |  |            |  |  | Additional paid |   |  | Shares to be |   |  | during exploration  |   |  | holders     |  
|                                                                                                | Common stock |  |  | in 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 as restated                                                          | 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    |  
|Directors fees                                                                                 | 1,255,510    |  |  | 1,255      |  |  | 425,618         |   |  |             |   |  |                    |   |  | 426,873      |  
|Net loss for the
      year                                                                     |             |  |  |           |  |  |                |   |  |             |   |  | (7,861,586          | ) |  | (7,861,586   | )
|Balance, December 31, 2007 as restated                                                          | 37,934,991   |  |  | 37,935     |  |  | 15,192,568      |   |  |             |   |  | (14,235,365         | ) |  | 995,138      |  
|Shares issued for loan fees                                                                     | 100,000      |  |  | 100        |  |  | 7,900           |   |  |             |   |  |                    |   |  | 8,000        |  
|Shares issued for interest owing                                                                | 1,196,749    |  |  | 1,197      |  |  | 321,926         |   |  |             |   |  |                    |   |  | 323,123      |  
|Settled minority S/H of Scotia Petroleum [notes 11 &
      14]                                  | 855,000      |  |  | 855        |  |  | 67,545          |   |  |             |   |  |                    |   |  | 68,400       |  
|Stock-based compensation                                                                        |             |  |  |           |  |  | 85,833          |   |  |             |   |  |                    |   |  | 85,833       |  
|Net loss for the
      year                                                                     |             |  |  |           |  |  |                |   |  |             |   |  | (1,617,668          | ) |  | (1,617,668   | )
|Balance, December 31, 2008                                                                      | 40,086,740   |  |  | 40,087     |  |  | 15,675,772      |   |  |             |   |  | (15,853,033         | ) |  | (137,174     | )

Seeaccompanyingnotes

26

---

Cheetah Oil & Gas Ltd.(an exploration stage
enterprise)

NOTES TO FINANCIAL STATEMENTS DEFICIENCY(expressed in U.S. dollars)

December 31, 2008

1. INCORPORATION AND NATURE OF OPERATIONS

Cheetah Oil & Gas Ltd. (Cheetah Nevada of the Company)
was incorporated in May 1992 under the laws of the State of Nevada, U.S.A. It
has not conducted any business operations since May 2000 and changed its name
from Bio-American Capital Corporation to Cheetah Oil & Gas Ltd. effective
May 26, 2004.

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.

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.

On November 30, 2007 the Company closed on the sale of 90%
interest in Cheetah BC, a wholly owned subsidiary of the Company which through
ownership of other subsidiaries had title to the Companys Petroleum Prospecting
Licences and the Petroleum Retention Licence. The Company received a non-cash
consideration of $13,691,278. Effective December 1, 2007 the financial
statements of the Company ceased to be consolidated with those 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). Commencing December 1, 2007, the Company recorded its residual 10%
equity investment in Cheetah BC at a cost of $1,521,329 [note 5].

On September 11, 2008 the Company received notification from
LNG Energy Ltd. giving notice for all funds to be paid on the demand loan
advanced on March 12, 2008. The Company had 90 days from receipt of the demand
letter to pay LNG Energy all funds owing plus interest due on the loan.

27

---

Cheetah Oil & Gas Ltd.(an exploration stage enterprise)

NOTES TO FINANCIAL STATEMENTS DEFICIENCY(expressed in U.S. dollars)

December 31, 2008

1. INCORPORATION AND NATURE OF OPERATIONS   contd

On November 25, 2008 the Company entered into a share purchase
agreement with LNG Energy Ltd.(LNG) and LNG Energy (BC) Ltd.,(LNG BC
formerly Cheetah BC) wherein LNG agreed to purchase our remaining 10%
investment in LNG BC for the purchase price of $250,000.

2. BASIS OF PRESENTATION AND GOING CONCERN UNCERTAINTY

The balance sheet presented is that of the Company for the year
ended December 31, 2008. The statements of operations, cash flows and
shareholders 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, 2008.

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 of America. 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.

Prior period restatement

The Company has restated its financial statements as at and for
the 12 month period ended December 31, 2007. The effect of these changes is for
presentation only on the Companys balance sheet, statement of operations and
statement of cash flows. The following table sets forth the sections as reported
and reflects the adjustments to the previously reported amounts:

|Balance Sheet                      |  | Previously |  |  | As        |  |  | Increase/  |  
|---------------------------------- |  | ---------- |  |  | --------- |  |  | ---------- | -
|                                   |  | Reported   |  |  | Restated  |  |  | (decrease) |  
|                                   |  | $          |  |  | $         |  |  | $          |  
|                                   |  |            |  |  |           |  |  |            |  
|Interest and penalties payable [i] |  | -          |  |  | 323,123   |  |  | 323,123    |  
|Total liabilities                  |  | 2,473,332  |  |  | 2,796,455 |  |  | 323,123    |  
|                                   |  |            |  |  |           |  |  |            |  
|Shares to be
      issued [i]      |  | 323,123    |  |  | -         |  |  | (323,123   | )
|Shareholders' equity, end of year  |  | 1,318,261  |  |  | 995,138   |  |  | (323,123   | )

28

---

Cheetah Oil & Gas Ltd.(an exploration stage enterprise)

NOTES TO FINANCIAL STATEMENTS DEFICIENCY(expressed in U.S. dollars)

December 31, 2008

2. BASIS OF PRESENTATION AND GOING CONCERN UNCERTAINTY   cont
d

Statement of operations[ii]

|                             |  | Previously    |  |  | As            |  |  | Increase/     | 
|---------------------------- |  | ------------- |  |  | ------------- |  |  | ------------- | 
|                             |  | Reported      |  |  | Restated      |  |  | (decrease)    | 
|                             |  |               |  |  |               |  |  |               | 
|                             |  | Twelve months |  |  | Twelve months |  |  | Twelve months | 
|                             |  | ended         |  |  | ended         |  |  | ended         | 
|                             |  | December 31,  |  |  | December 31,  |  |  | December 31,  | 
|                             |  | 2007          |  |  | 2007          |  |  | 2007          | 
|                             |  | $             |  |  | $             |  |  | $             | 
|Liquidated damages fees [ii] |  | 881,246       |  |  | 1,031,246     |  |  | 150,000       | 

Statement of operations[iii]

|                                        |   | Previously    |   |   | As            |   |  | Increase/     |  
|--------------------------------------- | - | ------------- | - | - | ------------- | - |  | ------------- | -
|                                        |   | Reported      |   |   | Restated      |   |  | (decrease)    |  
|                                        |   |               |   |   |               |   |  |               |  
|                                        |   | Twelve months |   |   | Twelve months |   |  | Twelve months |  
|                                        |   | ended         |   |   | ended         |   |  | ended         |  
|                                        |   | December 31,  |   |   | December 31,  |   |  | December 31,  |  
|                                        |   | 2007          |   |   | 2007          |   |  | 2007          |  
|                                        |   | $             |   |   | $             |   |  | $             |  
|Net loss from continuing operations     |   | (7,711,586    | ) |   | (4,771,476    | ) |  | (2,940,110    | )
|Discontinued
      operations           |   | -             |   |   | (3,090,110    | ) |  | 3,090,110     |  
|Net loss                                |   | (7,711,586    | ) |   | (7,861,586    | ) |  | 150,000       |  
|                                        |   |               |   |   |               |   |  |               |  
|                                        |   |               |   |   |               |   |  |               |  
|Loss per share - basic and diluted      |   |               |   |   |               |   |  |               |  
|Loss from continuing
      operations   | $ | (0.21         | ) | $ | (0.13         | ) |  |               |  
|Loss from discontinued operations       |   | -             |   |   | (0.08         | ) |  |               |  
|                                        | $ | (0.21         | ) | $ | (0.21         | ) |  |               |  
|                                        |   |               |   |   |               |   |  |               |  
|Weighted average number of common stock |   |               |   |   |               |   |  |               |  
|Outstanding -
      basic and diluted   |   | 36,889,306    |   |   | 36,889,306    |   |  |               |  

29

---

Cheetah Oil & Gas Ltd.(an exploration stage enterprise)

NOTES TO FINANCIAL STATEMENTS DEFICIENCY(expressed in U.S. dollars)

December 31, 2008

2. BASIS OF PRESENTATION AND GOING CONCERN UNCERTAINTY 
contd

Statements of cash flows

Cumulative
      
    
    
      
    
    
      
    
    
      
    
    Cumulativefrom
      
    
    
      
    
    
      
    
    
      
    
    fromJanuary 28,
      
    
    
      
    
    
      
    
    
      
    
    January 28,2003 to
      
    
    
      
    
    
      
    
    
      
    
    2001 to31-Dec-06
      
    
    Adj
      
    
    Total
      
    
    31-Dec-07
      
    
    31-Dec-07$
      
    
    $
      
    
    $
      
    
    $
      
    
    $OPERATING ACTIVITIES
    
      
    
    
      
    
    
      
    
    Restated
      
    
    RestatedCash provided by
      continuing activities
    (1,284,641
      )
    
    1,811,244
      
    
    526,603
      
    
    (360,433
      )
    
    166,170Cash provided by (used in)
      discontinued activities
    -
      
    
    (1,811,244
      )
    
    (1,811,244
      )
    
    (642,156
      )
    
    (2,453,400
      )Net cash used in operating activities
    (1,284,641
      )
    
    -
      
    
    (1,284,641
      )
    
    (1,002,589
      )
    
    (2,287,230
      )FINANCING ACTIVITIESCash provided by
      (used in) continuing activities
    13,068,447
      
    
    -
      
    
    13,068,447
      
    
    1,281,022
      
    
    14,349,469Cash provided by discontinued
      activities
    -
      
    
    -
      
    
    -
      
    
    -
      
    
    -Net cash from financing activities
    13,068,447
      
    
    -
      
    
    13,068,447
      
    
    1,281,022
      
    
    14,349,469INVESTING ACTIVITIESCash provided by (used in) continuing
      activities
    (11,701,194
      )
    
    11,599,839
      
    
    (101,355
      )
    
    1,688
      
    
    (99,667
      )Cash provided by
      discontinued activities
    -
      
    
    (11,599,839
      )
    
    (11,599,839
      )
    
    (354,948
      )
    
    (11,954,787
      )Net cash used in investing activities
    (11,701,194
      )
    
    -
      
    
    (11,701,194
      )
    
    (353,260
      )
    
    (12,054,454
      )Increase in cash and cash equivalents
    82,612
      
    
    
      
    
    82,612
      
    
    (74,827
      )
    
    7,785Cash and cash equivalents, beginning of period
    76
      
    
    
      
    
    76
      
    
    82,688
      
    
    76Cash and cash equivalents, end of period
    82,688
      
    
    
      
    
    82,688
      
    
    7,861
      
    
    7,861


30

---

Cheetah Oil & Gas Ltd.(an exploration stage enterprise)

NOTES TO FINANCIAL STATEMENTS DEFICIENCY(expressed in U.S. dollars)

December 31, 2008

2. BASIS OF PRESENTATION AND GOING CONCERN UNCERTAINTY 
contd

|[i]   | The Company restated the balance sheet transferring
      $323,123 from shares to be issued in the equity section of the Balance
      Sheet to interest and penalties payable in current liabilities. In
      December 2007 the lenders agreed to accept shares for the interest
      payable, however the shares were not issued until 2008 and therefore funds
      remained a liability for the Company at the end of the reporting
      period.
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|[ii]  | The Company recorded the lawsuit settlement totaling
      $150,000 to the current year to correct reporting different amounts for
      the same measure covering the same period within the financial
      statement.                                                                                                                                                                                                                                    
|      |                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|[iii] | The Company has restated the statement of operations and
      cash flow statement recording the 90% sale of Cheetah BC as a discontinued
      operations rather than a dilution of Cheetah BC. The changes were in
      presentation only.                                                                                                                                                                                                               

The following summarizes the restated quarterly statements of
operations for the year ended December 31, 2007 recording the reclassification
for the discontinued operations and the correction of the $150,000 lawsuit
settlement:

|                                          |  | Quarter
      ended (unaudited) Restated |  
|----------------------------------------- |  | ---------------------------------------- | -
|                                          |  |                                          |  
|                                          |  | Mar.
      31, 2007                      |  
|                                          |  | $                                        |  
|Total general and administrative expenses |  | (1,733,774                               | )
|Other income (expenses)                   |  | (66,839                                  | )
|                                          |  |                                          |  
|Net loss from continuing operations       |  | (1,800,613                               | )
|                                          |  |                                          |  
|Discontinued operations                   |  | (42,548                                  | )
|                                          |  |                                          |  
|Net (loss) income                         |  | (1,843,161                               | )
|                                          |  |                                          |  
|                                          |  | (1)                                      |  
|Loss per share - basic and diluted        |  |                                          |  
|                                          |  |                                          |  
|(Loss) income from continuing operations  |  | (0.05                                    | )
|Loss from discontinued operations         |  | 0.00                                     |  
|                                          |  | (0.05                                    | )
|                                          |  |                                          |  
|Weighted average number of common         |  |                                          |  
|stock outstanding -                       |  |                                          |  
|basic and diluted                         |  | 36,679,481                               |  
|                                          |  |                                          |  
|                                          |  | (1)                                      |  

| | (1) | No change from amounts previously reported                          
| | --- | --------------------------------------------------------------------
| |     |                                                                     
| | (2) | Net loss declined by $150,000 from amounts previously
      reported

31

---

Cheetah Oil & Gas Ltd.(an exploration stage enterprise)

NOTES TO FINANCIAL STATEMENTS DEFICIENCY(expressed in U.S. dollars)

December 31, 2008

2. BASIS OF PRESENTATION AND GOING CONCERN UNCERTAINTY 
contd

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 $1,617,668 for the year ended December
31, 2008 [2007 - $7,711,586 (restated $7,861,586)] and at December 31, 2008 had
a deficit accumulated during the exploration stage of $15,853,033 [2007 
$14,235,365]. The Company has not generated any revenue, has an accumulated
deficit and negative working capital of $139,265 as at December 31, 2008. 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. The outcome of these matters cannot be predicted at this time.

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.

Accounting estimates

The preparation of financial statements in conformity with
generally accepted accounting principles of the United States of America
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.

32

---

Cheetah Oil & Gas Ltd.(an exploration stage enterprise)

NOTES TO FINANCIAL STATEMENTS DEFICIENCY(expressed in U.S. dollars)

December 31, 2008

3. SIGNIFICANT ACCOUNTING POLICIES – cont’d

3a. Accounting Policies  contd

Long term investment

The Company sold its long term investment of a 10% investment
in LNG BC (formerly Cheetah BC) on November 25, 2008.

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%
| | ------------------------------ | ---

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.

Earnings (loss) per share

Basic earnings (loss) per share are 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, 2008 and 2007 because common stock equivalents consisting of stock
purchase warrants of 1,221,429 [2007 - 4,221,429] and stock options of 2,000,000
[2007 - Nil] that were outstanding at December 31, 2008 and 2007 were
anti-dilutive.

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.

33

---

Cheetah Oil & Gas Ltd.(an exploration stage enterprise)

NOTES TO FINANCIAL STATEMENTS DEFICIENCY(expressed in U.S. dollars)

December 31, 2008

3. SIGNIFICANT ACCOUNTING POLICIES – cont’d

3a. Accounting Policies  contd

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.

3b. 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

34

---

Cheetah Oil & Gas Ltd.(an exploration stage enterprise)

NOTES TO FINANCIAL STATEMENTS DEFICIENCY(expressed in U.S. dollars)

December 31, 2008

3. SIGNIFICANT ACCOUNTING POLICIES – cont’d

3b. Changes in accounting policies  contd

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.

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 Company measures it warrants at fair value in accordance
with SFAS 157. SFAS 157 specifies a valuation hierarchy based on whether the
inputs to those valuation techniques are observable or unobservable. Observable
inputs reflect market data obtained from independent sources, while unobservable
inputs reflect the Companys own assumptions. These two types of inputs have
created the following fair value hierarchy:

- Level 1  Quoted prices for identical instruments in active markets;
- Level 2  Quoted prices for similar instruments in active markets, quoted
  prices for identical or similar instruments in markets that are not active,
  and model-derived valuations in which all significant inputs and significant
  value drivers are observable in active markets; and
- Level 3  Valuations derived from valuation techniques in which one or more
  significant inputs or significant value drivers are unobservable.

This hierarchy requires the Company to minimize the use of
unobservable inputs and to use observable market data, if available, when
estimating fair value. The fair value of the warrants using a black-scholes
model [see note 4] using the following inputs at November 30, 2008 was as
follows:

Fair Value Measurements at Reporting Date Using

Quoted Prices inActive Markets
    
    
      Significant Other
    
    
      Significantfor Identical
    
    
      Observable
    
    
      UnobservableAssets
    
    
      Inputs
    
    
      InputsTotal
      
      (Level 1)
      
      
      (Level 2)
      
      
      (Level 3)$ 3,000
    $
      
    
    $
      3,000
    
    $
      


The provisions of SFAS 157 are effective for fair value
measurements made in fiscal years beginning after November 15, 2007.

35

---

Cheetah Oil & Gas Ltd.(an exploration stage enterprise)

NOTES TO FINANCIAL STATEMENTS DEFICIENCY(expressed in U.S. dollars)

December 31, 2008

3. SIGNIFICANT ACCOUNTING POLICIES – cont’d

3b. Changes in accounting policies  contd

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.

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 adoption of SFAS No. 159 did not have a material effect on its financial
statements.

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.
On November 14, 2007 the principal proceeds and all accrued interest was settled
in-full. [ note 5]

In conjunction with the Convertible Notes, the Company issued
3,000,000 share purchase warrants, of which 2,000,000 warrants were 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 were 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:

Nov 30, 2008
    Dec 31, 2007Risk free interest rate
    4.00%
    4.00%Expected life
    104 days
    1.2 yearsExpected volatility
    466%
    149%Dividend per share
    $Nil
    $Nil


36

---

Cheetah Oil & Gas Ltd.(an exploration stage enterprise)

NOTES TO FINANCIAL STATEMENTS DEFICIENCY(expressed in U.S. dollars)

December 31, 2008

4. CONVERTIBLE NOTES  contd

Convertible Notes Issued on March 14, 2006  contd

At November 30, 2008 the warrants were cancelled as part of the
sale of the 10% investment in LNG BC (formerly Cheetah BC). The fair value of
the warrants as at November 30, 2008, was $3,000 (2007 - $16,000 and fair value
upon issuance of convertible note on March 14, 2006 was $2,300,000). During the
year ended December 31, 2008 the movement in the fair value of the warrants was
recorded as income in the statement of operations of $13,000 (2007 - $65,041).

5. INVESTMENT IN CHEETAH OIL & GAS (B.C.) LIMITED

On November 30, 2007 the Company closed on the transaction with
Invicta resulting in the sale of 90% ownership of Cheetah Oil & Gas Ltd.
(Cheetah BC). The final consideration 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). Of the consideration agreed to be paid by Invicta to the
Companys creditors, a balance of $340,000 remained outstanding and was included
in the balance of receivables at December 31, 2007.

As a result of the Companys sale 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 sale.

On November 25, 2008 Cheetah closed on a share purchase
agreement with LNG Energy Ltd. (LNG) to sell the remaining 10% investment in
LNG BC (formerly Cheetah BC) to LNG. The terms and conditions of the purchase
and sale in this agreement are as follows:

- Cheetah would receive from LNG for the 10% Investment in Cheetah BC an
  aggregate purchase price of US $250,000.
- LNG hereby forgives all outstanding principal and interest amounts relating
  to the loan agreement dated March 12, 2008 between LNG and Cheetah totaling
  $253,576.
- Cheetah hereby forgives all outstanding accounts receivable between LNG and
  Cheetah in the amount of $340,000.
- Cheetah represents and warrants that LNG has no further obligation on any
  existing and future liabilities of Cheetah.
- Kepis & Pobe Investments Inc., (Kepis) the holder of 3,000,000 of the
  Companys common stock purchase warrants agrees to the cancellation of the
  warrants. The Kepis Warrants were acquired by Kepis from Macquarie Holdings
  (USA) Inc., all issued on March 14, 2006. [note 4]

37

---

Cheetah Oil & Gas Ltd.(an exploration stage enterprise)

NOTES TO FINANCIAL STATEMENTS DEFICIENCY(expressed in U.S. dollars)

December 31, 2008

6. RECEIVABLES

December 31,
    
    
      December 31,2008
    
    
      2007$
    
    
      $MacDonald Tuskey Law Firm
    
      187,500
    
    
      -Revenue Canada
    
      62,500
    
    
      -Due from LNG Energy (formerly Invicta)
    
      -
    
    
      2,240,000GST receivable
    
      -
    
    
      19,343250,000
    
    
      2,259,343


Of the $6,600,000 of consideration agreed to be paid by LNG 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 with the Companys creditors as required. The balance
remaining of $340,000 in accounts receivable was forgiven by the Company as part
of the transaction for the sale to LNG of its 10% investment in LNG BC

7. LOSS 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. | Retire the loan payable owing LNG resulting in the debt
      forgiveness by LNG in the amount of $253,576.                                                               
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                           
| | 2. | As part of the transaction, the Company agreed to forgive
      the accounts receivable owing by LNG resulting in a loss on settlement of
      debt of $340,000.         
| |    |                                                                                                                                                                           
| | 3. | As part of the transaction the, Kepis Warrants were
      cancelled. The liability for the FV of the warrants totaling $3,000 was
      cleared off to settlement of debt.

The above items have been included in discontinued operations.

8. EQUIPMENT

Accumulated
    
    
    Net
      bookCost
    
    
    depreciation
    
    
    value$
    
    
    $
    
    
    $2008Office equipment
    
    3,844
    
    
    1,753
    
    
    2,0912007Office equipment
    
    3,844
    
    
    1,230
    
    
    2,614


38

---

Cheetah Oil & Gas Ltd.(an exploration stage enterprise)

NOTES TO FINANCIAL STATEMENTS DEFICIENCY(expressed in U.S. dollars)

December 31, 2008

9. INTEREST AND PENALTIES PAYABLE

On December 7, 2007 the Company entered into agreements to
issue common stock to settle the accrued interest payable on the advances
totaling $323,123. 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 11]. The Company restated the
balance sheet [note 2] and recorded the interest payable in liabilities
at December 31, 2007. The shares were issued in 2008 to settle the interest
payable liability.

10. ADVANCES PAYABLE

|a) | In February 2008 $45,000 US and $5,000 Cdn. was advanced
      by two unrelated parties. The funds borrowed are repayable on August 31,
      2008 including interest calculated at 15% per annum compounded monthly.
      The advances were repaid in full when additional funds were borrowed from
      LNG.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|b) | On March 12, 2008 the Company entered into a demand loan
      agreement with LNG where LNG agreed to advance up to $500,000 due on
      demand in tranches to the Company by way of a working capital loan. The
      loan was secured against the Companys 10% equity investment in LNG BC
      (formerly Cheetah BC) and carried an interest rate of 8% per annum. An
      initial amount of $200,000 was advanced to the Company on April 2, 2008
      and a further advance of $100,000 was given on May 7, 2008. The Company
      issued 100,000 shares of common stock at a fair value of $0.08 per share
      to LNG as consideration for providing loans to the Company [note 11].Upon the sale of the 10% investment in LNG BC, as part of the
      transaction the demand loan was forgiven. [note
5]

11. COMMON STOCK

Common Stock

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 9 & 13]. All the shares
were issued during 2008.

On March 12, 2008, the Company agreed to issue 100,000 shares
of common stock at a fair value of $0.08 per share to LNG as consideration for
providing loans to the Company [note 10].

On July 11, 2008 the Company issued 855,000 shares of common
stock at a fair value of $0.08 per share to the dissenting minority shareholders
of Scotia [note 14].

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.

39

---

Cheetah Oil & Gas Ltd.(an exploration stage enterprise)

NOTES TO FINANCIAL STATEMENTS DEFICIENCY(expressed in U.S. dollars)

December 31, 2008

11. COMMON STOCK  contd

Stock Options contd

A summary of the status of the Companys stock option plan as
of December 31, 2008 and 2007 and changes during the years is presented below:

2008
      
      
      2007Weightedaverage
      
      
      
      
      
      WeightedNumber of
      
      
      exercise
      
      
      Number of
      
      
      averageshares
      
      
      price
      
      
      shares
      
      
      exercise price#
      
      
      $
      
      
      #
      
      
      $Outstanding at beginning of year
      
      
      
      
      
      
      
      865,000
      
      
      4.88Granted
      
      2,000,000
      
      
      .15
      
      
      Exercised
      
      
      
      
      
      
      
      
      
      
      Forfeited or cancelled
      
      
      
      
      
      
      
      (865,000
      )
      
      4.88Outstanding at end of year
      
      2,000,000
      
      
      .15
      
      
      
      
      
      Vested or expected to vest
      
      1,000,000
      
      
      .15
      
      
      
      
      
      Exercisable
      
      
      
      
      
      
      
      
      
      
      


During the year ended December 31, 2008, the Company recorded
total stock based compensation for directors of $85,833 (2007 - Nil).

Warrants

The following summarizes the stock purchase warrant
transactions for the year ended December 31, 2008 and 2007.

| |                                      |  |             |   |  | 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             |   |  |  | 
| | Warrants issued                      |  |            |   |  |                 |   |  |  | 
| | Warrants exercised                   |  |            |   |  |                 |   |  |  | 
| | Warrants forfeited/expired/cancelled |  | (3,000,000  | ) |  | 3.42             |   |  |  | 
| |                                      |  |             |   |  |                  |   |  |  | 
| | Outstanding, December 31, 2008       |  | 1,221,429   |   |  | 7.00             |   |  |  | 

40

---

Cheetah Oil & Gas Ltd.(an exploration stage enterprise)

NOTES TO FINANCIAL STATEMENTS DEFICIENCY(expressed in U.S. dollars)

December 31, 2008

12. 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, 2008, the Company incurred
consulting fees to three directors of the Company in the amount of $129,112
[2007 - $210,000]. Of this balance $121,250 remained unpaid as at December 31,
2008 and is included in accounts payable and accrued liabilities.

13. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

|                                                      |              |  |                        |  |                        |  | Cumulative from  | 
|----------------------------------------------------- | ------------ |  | ---------------------- |  | ---------------------- |  | ---------------- | 
|                                                      |              |  |                        |  |                        |  | January 28, 2003 | 
|                                                      | December 31, |  | **December
      31,** |  | **December
      31,** |  | to December 31,  | 
|                                                      | 2008         |  | 2007                   |  | 2006                   |  | 2007             | 
|                                                      | $            |  | $                      |  | $                      |  | $                | 
|                                                      |              |  |                        |  |                        |  |                  | 
|Cash paid during the year:                            |              |  |                        |  |                        |  |                  | 
|Interest                                              |             |  |                       |  | 12,857                 |  | 14,509           | 
|                                                      |              |  |                        |  |                        |  |                  | 
|Non-cash transactions:                                |              |  |                        |  |                        |  |                  | 
|Shares issued for acquisition of Scotia               |             |  |                       |  |                       |  | 1,000,000        | 
|Shares issued for settlement of Scotia
      Minority | 68,400       |  |                       |  |                       |  | 68,400           | 
|shareholders[note 14]                                 |              |  |                        |  |                        |  |                  | 
|Purchase of capital lease assets                      |             |  |                       |  |                       |  | 45,022           | 
|Share and warrants issued as share issue costs        |             |  |                       |  |                       |  | 71,429           | 
|Contribution received from a shareholder
      of the |             |  |                       |  |                       |  | 1,817,273        | 
|Company in connection with the
      acquisition      |              |  |                        |  |                        |  |                  | 
|of Scotia                                             |              |  |                        |  |                        |  |                  | 
|Debt settled for shares[notes 9 &
      11]           | 323,123      |  |                       |  |                       |  | 680,501          | 
|Accounts Receivable/Accounts Payable                  | 1,650,000    |  |                       |  |                       |  | 1,650,000        | 
|Shares issued for services                            |             |  | 426,873                |  |                       |  | 1,426,873        | 
|Investment in Cheetah Oil & Gas
      (B.C.) Ltd.     | 1,521,329    |  |                       |  |                       |  | 1,521,329        | 
|Oil and gas property costs not paid yet               |              |  | 1,539,766              |  | 3,027,396              |  | 5,513,629        | 
|Settlement of debt[note 5]                            |             |  | 13,691,278             |  |                       |  | 13,691,278       | 

41

---

Cheetah Oil & Gas Ltd.(an exploration stage enterprise)

NOTES TO FINANCIAL STATEMENTS DEFICIENCY(expressed in U.S. dollars)

December 31, 2008

14. CONTINGENCIES

On January 30, 2008, at a reconvened extraordinary meeting of
Scotia Petroleum Inc. (Scotia), a company controlled by Cheetah BC, the
majority shareholder of Scotia approved the sale of all the issued and
outstanding shares of Scotia to Cheetah Oil & Gas (PNG) Ltd. (Cheetah
(PNG) another company controlled by Cheetah BC. 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 an agreement that the Company
entered into resulting in the sale of 90% ownership of Cheetah BC 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. The Company 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. The Company accrued a further $8,400 for the liability in 2008.

On July 11, 2008 the Company issued 855,000 shares of
restricted stock to the minority shareholders of Scotia as consideration for the
outstanding shares of Scotia held by the Scotia Shareholders.

15. RECENT ACCOUNTING PRONOUNCEMENTS

In December 2007, the Financial Accounting Standards Board
issued SFAS No. 141 (revised 2007), Business Combinations (SFAS No. 141(R))
and SFAS No. 160, Noncontrolling Interest in Consolidated Financial Statements
(SFAS No. 160). These new standards represent the outcome of the FASBs joint
project with the International Accounting Standards Board and are intended to
improve, simplify and converge internationally the accounting for business
combinations and the reporting of noncontrolling interests in consolidated
financial statements.

SFAS No. 141(R) replaces SFAS No. 141, Business Combinations,
however, it retains the fundamental requirements of the former Statement that
the acquisition method of accounting (previously referred to as the purchase
method) be used for all business combinations and for an acquirer to be
identified for each business. This Statement defines the acquirer as the entity
that obtains control of one or more businesses in the business combination and
establishes the acquisition date as the date that the acquirer achieves control.
The new standard requires the acquiring entity in a business combination to
recognize all (and only) the assets acquired and liabilities assumed in the
transaction; establishes the acquisition-date fair value as the measurement
objective for all assets acquired and liabilities assumed; and requires the
acquirer to disclose to investors and other users all of the information they
need to evaluate and understand the nature and financial effect of the business
combination.

SFAS No. 160 amends Accounting Research Bulletin No. 51,
Consolidated Financial Statements, to establish accounting and reporting
standards for the noncontrolling interest in a subsidiary and for the
deconsolidation of a subsidiary. This Statement clarifies that a noncontrolling
interest in a subsidiary is an ownership interest in the consolidated entity
that should be reported as equity in the consolidated financial statements. This
Statement changes the way the consolidated income statement is presented by
requiring net income to be reported at amounts that include the amounts
attributable to both the parent and the noncontrolling interest and to disclose
those amounts on the face of the income statement. It also aligns the reporting
of noncontrolling interest in subsidiaries with the requirements in
International Accounting Standard 27.

42

---

Cheetah Oil & Gas Ltd.(an exploration stage enterprise)

NOTES TO FINANCIAL STATEMENTS DEFICIENCY(expressed in U.S. dollars)

December 31, 2008

15. RECENT ACCOUNTING PRONOUNCEMENTS  contd

Both SFAS No. 141(R) and SFAS No. 160 are effective beginning
in our fiscal 2010. SFAS No. 141 (R) will be applied to business combinations
that are consummated beginning in fiscal 2010, and SFAS No. 160 will be applied
prospectively to all noncontrolling interests, including any that arose before
fiscal 2010. We are currently evaluating these Statements and have not yet
determined their effect on our consolidated financial statements.

In September 2006, the FASB issued SFAS No. 157, Fair Value
Measurements (SFAS 157) which addresses how companies should measure fair
value when they are required to use a fair value measure for recognition or
disclosure purposes under generally accepted accounting principles (GAAP). As
a result of SFAS 157 there is now a common definition of fair value to be used
throughout GAAP. The FASB believes that the new standard will make the
measurement of fair value more consistent and comparable and improve disclosures
about those measures. SFAS 157 will be effective for the Company for fiscal year
2009. Management is currently evaluating the impact of the statement on the
Company. Management does not believe the adoption of SFAS 157 will have a
material impact on its consolidated financial statements.

In March 2008, the FASB issued SFAS No. 161, Disclosures about
Derivative Instruments and Hedging Activities (SFAS 161). SFAS 161 requires
entities to provide enhanced disclosures about derivative instruments and
hedging activities. SFAS 161 is effective for financial statements issued for
fiscal years and interim periods beginning after November 15, 2008. The Company
does not currently have any derivative instruments or hedging activities.

16. 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.

43

---

Cheetah Oil & Gas Ltd.(an exploration stage enterprise)

NOTES TO FINANCIAL STATEMENTS DEFICIENCY(expressed in U.S. dollars)

December 31, 2008

16. INCOME TAXES  contd

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   |  
|------------------------------------ |  | ------------ | - |  | ------------ | -
|                                     |  | December 31, |   |  | December 31, |  
|                                     |  | 2008         |   |  | 2007         |  
|                                     |  | $000         |   |  | $000         |  
|                                     |  |              |   |  |              |  
|Loss before discontinued operations  |  | 346          |   |  | (2,324       | )
|Income tax rate                      |  | 35%          |   |  | 35%          |  
|Income tax recovery                  |  | 121          |   |  | 810          |  
|Permanent differences                |  | (30          | ) |  | (149         | )
|Valuation allowance change           |  | (91          | ) |  | (661         | )
|Deferred
      income tax (recovery) |  |             |   |  |             |  

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:

|                                 |  | Year Ended   |   |  | Year Ended   |  
|-------------------------------- |  | ------------ | - |  | ------------ | -
|                                 |  | December 31, |   |  | December 31, |  
|                                 |  | 2008         |   |  | 2007         |  
|                                 |  | $000         |   |  | $000         |  
|                                 |  |              |   |  |              |  
|                                 |  |              |   |  |              |  
|Net operating loss carryforwards |  | 2,660        |   |  | 2,553        |  
|Warrants                         |  |             |   |  |             |  
|Stock based compensation         |  |             |   |  |             |  
|Other                            |  | 80           |   |  | 96           |  
|Total deferred tax assets        |  | 2,740        |   |  | 2,649        |  
|Valuation
      allowance        |  | (2,740       | ) |  | (2,649       | )
|                                 |  |              |   |  |              |  
|Net deferred tax
      assets    |  |             |   |  |             |  
|Deferred income tax (liability)  |  |             |   |  |             |  

44

---

Cheetah Oil & Gas Ltd.(an exploration stage enterprise)

NOTES TO FINANCIAL STATEMENTS DEFICIENCY(expressed in U.S. dollars)

December 31, 2008

16. INCOME TAXES  contd

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 $7,600,000 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.

Management has adopted FIN 48 effective January 1, 2007.
Management has determined that there is no material effect on the financial
statements as at and for the year ended December 31, 2008.

17. SUBSEQUENT EVENTS

On March 4, 2008 Cheetah settled outstanding liabilities with
two former directors. The Company paid $24,000 in the settlement of $40,250 in
consulting liabilities and the return to treasury of 3,000,000 issued and
outstanding shares in the Companys stock.

18. COMPARATIVE FIGURES

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

45

---

Item 9.      Changes in and
Disagreements With Accountants on Accounting and Financial Disclosure

There were no disagreements related to accounting principles or
practices, financial statement disclosure, internal controls or auditing scope
or procedure during the two fiscal years and interim periods, including the
interim period up through the date the relationship ended.

Item 9A(T).      Controls and
Procedures

Managements Report on Disclosure Controls and
Procedures

We maintain disclosure controls and procedures that are
designed to ensure that information required to be disclosed in our reports
filed under the Securities Exchange Act of 1934, as amended, is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms, and that such information
is accumulated and communicated to our management, including our president and
chief executive officer (also our principal executive officer) and our chief
financial officer (also our principal financial and accounting officer) to allow
for timely decisions regarding required disclosure. In designing and evaluating
our disclosure controls and procedures, our management recognizes that any
controls and procedures, no matter how well designed and operated, can provide
only reasonable assurance of achieving the desired control objectives, and our
management is required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures. Because of its inherent
limitations, internal control over financial reporting may not prevent or detect
misstatements. Therefore, even those systems determined to be effective can
provide only reasonable assurance with respect to financial statement
preparation and presentation. Projections of any evaluation of effectiveness to
future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.

As of December 31, 2008, the end of our fiscal year covered by
this report, we carried out an evaluation, under the supervision and with the
participation of our president and chief executive officer (also our principal
executive officer) and our chief financial officer (also our principal financial
and accounting officer), of the effectiveness of the design and operation of our
disclosure controls and procedures. Based on the foregoing, our president and
chief executive officer (also our principal executive officer) and our chief
financial officer (also our principal financial and accounting officer)
concluded that our disclosure controls and procedures were effective as of the
end of the period covered by this annual report in providing reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordances with US generally
accepted accounting principles.

Managements Report on Internal Control over Financial
Reporting

Our management is responsible for establishing and maintaining
adequate internal control over financial reporting. Responsibility, estimates
and judgments by management are required to assess the expected benefits and
related costs of control procedures. The objectives of internal control include
providing management with reasonable, but not absolute, assurance that assets
are safeguarded against loss from unauthorized use or disposition, and that
transactions are executed in accordance with managements authorization and
recorded properly to permit the preparation of consolidated financial statements
in conformity with accounting principles generally accepted in the United
States. Our management assessed the effectiveness of our internal control over
financial reporting as of December 31, 2008. In making this assessment, our
management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) in Internal
Control-Integrated Framework. Our management has concluded that, as of
December 31, 2008, our internal control over financial reporting is effective in
providing reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with US generally accepted accounting principles. Our management reviewed the
results of their assessment with our Board of Directors.

This annual report does not include an attestation report of
our Companys registered public accounting firm regarding internal control over
financial reporting. Managements report was not subject to attestation by our

46

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Companys registered public accounting firm pursuant to
temporary rules of the Securities and Exchange Commission that permit our
Company to provide only managements report in this annual report.

Inherent limitations on effectiveness of controls

Internal control over financial reporting has inherent
limitations which include but is not limited to the use of independent
professionals for advice and guidance, interpretation of existing and/or
changing rules and principles, segregation of management duties, scale of
organization, and personnel factors. Internal control over financial reporting
is a process which involves human diligence and compliance and is subject to
lapses in judgment and breakdowns resulting from human failures. Internal
control over financial reporting also can be circumvented by collusion or
improper management override. Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements on a
timely basis, however these inherent limitations are known features of the
financial reporting process and it is possible to design into the process
safeguards to reduce, though not eliminate, this risk. Therefore, even those
systems determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation. Projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.

Changes in Internal Control over Financial
Reporting

There have been no significant changes in our internal controls
over financial reporting that occurred during the year ended December 31, 2008
that have materially or are reasonably likely to materially affect, our internal
controls over financial reporting.

Item 9B.     Other Information

None.

PART III

Item 10.     Directors, Executive
Officers and Corporate Governance

All directors of our Company hold office until the next annual
meeting of the security holders or until their successors have been elected and
qualified. The officers of our Company are appointed by our board of directors
and hold office until their death, resignation or removal from office. Our
directors and executive officers, their ages, positions held, and duration as
such, are as follows:

Name
      Position Held with the Company
      Age
      Date First Elected or AppointedRobert McAllister
    President, Chief Executive
      Officer and Director
    48
    July 29, 2008Georgina Martin
    Chief Financial Officer,
      Secretary, Treasurer and Director
    60
    July 29, 2008 March 5,
      2004


Business Experience

The following is a brief account of the education and business
experience during at least the past five years of each director, executive
officer and key employee of our Company, indicating the persons principal
occupation during that period, and the name and principal business of the
organization in which such occupation and employment were carried out.

47

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Robert McAllister  President, Chief Executive Officer and
Director

Mr. McAllister has been a corporate consultant since 2004. He
has also provided and written business and investment articles from 1996 to 2006
in various North American publications. Mr. McAllister is a resource investment
entrepreneur with over 20 years experience in resource sector evaluations and
commodity cycle analysis.

Mr. McAllister is the president and a director of Golden Aria
Corp.

Georgina Martin  Chief Financial Officer, Secretary,
Treasurer and Director

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
remanufacturing 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.

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. We do not view the
affiliation of Ms. Martin to KOKO Petroleum Inc. as creating any potential for
conflicts of interest with our Company.

Family Relationships

There are no family relationships between any of our directors,
executive officers and proposed directors or executive officers.

Involvement in Certain Legal Proceedings

None of our directors, executive officers, promoters or control
persons has 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

48

---

|4. | being found by a court of competent jurisdiction in a
      civil action, the Securities and Exchange Commission or the Commodity
      Futures Trading Commission to have violated federal or state securities or
      commodities law, and the judgment has not been reversed, suspended, or
      vacated.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Compliance with Section 16(a) of the Securities Exchange Act
of 1934

Section 16(a) of the Securities Exchange Act of 1934 requires
our executive officers and directors and persons who own more than 10% of our
common stock to file with the Securities and Exchange Commission initial
statements of beneficial ownership, reports of changes in ownership and annual
reports concerning their ownership of our common stock and other equity
securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and
greater than 10% shareholders are required by the SEC regulations to furnish us
with copies of all Section 16(a) reports that they file.

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, 2008, 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 Required
      FormsRobert McAllister
    3(1)
    3(1)
    NilGeorgina Martin
    1(1)
    1
    Nil


(1) The executive officer, director or
holder of 10% or more of our common stock filed a late Form 4  Statement of
Changes in 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.

49

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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.

Board and Committee Meetings

Our board of directors held no formal meetings during the year
ended December 31, 2008. All proceedings of the board of directors were
conducted by resolutions 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 our
Bylaws, 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, 2008 our only standing
committee of the board of directors was our audit committee.

Nomination Process

As of December 31, 2008, we did not effect any material changes
to the procedures by which our shareholders may recommend nominees to our board
of directors. Our board of directors does not have a policy with regards to the
consideration of any director candidates recommended by our shareholders. Our
board of directors has determined that it is in the best position to evaluate
our Companys requirements as well as the qualifications of each candidate when
the board considers a nominee for a position on our board of directors. If
shareholders wish to recommend candidates directly to our board, they may do so
by sending communications to the president of our Company at the address on the
cover of this annual report.

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 2008 aside from quarterly review teleconferences,
there were no meetings held by this committee. The business of the audit
committee was conducted though these teleconferences and by resolutions
consented to in writing by all the members and filed with the minutes of the
proceedings of the audit committee.

50

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Audit Committee Financial Expert

Our board of directors has determined that it does have a
member of its audit committee that qualifies as an "audit committee financial
expert" as defined in Item 407(d)(5)(ii) of Regulation S-K.

Item 11.     Executive Compensation

The particulars of the compensation paid to the following
persons:

| | (a) | our principal executive officer;                                                                                                                                                                                                                 
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                  
| | (b) | each of our two most highly compensated executive
      officers who were serving as executive officers at the end of the years
      ended December 31, 2008 and 2007; and                                                                      
| |     |                                                                                                                                                                                                                                                  
| | (c) | 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 years ended
      December 31, 2008 and 2007,

who we will collectively refer to as the named executive
officers of our Company, are set out in the following summary compensation
table, except that no disclosure is provided for any named executive officer,
other than our principal executive officers, whose total compensation did not
exceed $100,000 for the respective fiscal year:

Name 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)Former Chairman
      and Director; Former President, Chief Executive Officer
      and Director
    2008 2007
    Nil 84,000
    Nil Nil
    Nil 173,526
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil 257,526Isaac Moss(2)President, Chief
      Executive Officer and Chief Financial Officer; Former
      Senior Vice President
    2008 2007
    34,112 84,000
    Nil Nil
    Nil 173,526
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    34,112 257,526Georgina Martin(3)Chief Financial
      Officer, Secretary, Treasurer and Director
    2008 2007
    70,000 42,000
    Nil Nil
    Nil 79,822
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    70,000 121,822Robert McAllister(4)President, Chief
      Executive Officer and Director
    2008 2007
    25,000 N/A
    Nil N/A
    Nil N/A
    2,000,000 N/A
    Nil N/A
    Nil N/A
    Nil N/A
    25,000 N/A


51

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|(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. Mr. McKinnon
      resigned as our Chairman and director on July 29, 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. Mr. Moss resigned as our President, Chief
      Financial Officer and director on July 29, 2008.
|    |                                                                                                                                                                                                                                                                                                                                                       
|(3) | Ms. Martin became our Secretary, Treasurer and a director
      of our Company on March 5, 2004 and was appointed as our Chief Financial
      Officer on July 29, 2008.                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                       
|(4) | Mr. McAllister was appointed as the President Chief
      Executive Officer and director of our Company on July 29,
  2008.                                                                                                                                                                                                                           

On July 31, 2008, we entered into a consulting agreement with
Robert McAllister, our president, chief executive officer and director. We pay
remuneration for his services at five thousand United States Dollars (US$5,000)
per month beginning August 1, 2008, together with any such increments thereto as
the Board of Directors of our Company determine after six months from signing.
We also agreed to grant a stock option package of two million options
(2,000,000) exercisable at 15 cents per share and valid for five (5 yrs),
vesting at 500,000 upon signing of the agreement; 500,000  90 days after
signing the agreement; and 1,000,000  180 days after signing the agreement.

2008 Grants of Plan-Based Awards

The following table provides information about equity and
non-equity awards granted to the named executives in 2008:

GRANTS OF PLAN-BASED AWARDSName
      Grant 
        Date
      Estimated
        Future Payouts 
        Under Non-Equity Incentive 
        Plan Awards
      Estimated
        Future Payouts 
        Under Equity Incentive Plan 
        Awards
      All 
        Other 
        Stock 
        Awards:
        Number 
        of 
        Shares 
        of 
        Stocks 
        or Units 
        (#)
      All Other 
        Option 
        Awards: 
        Number of 
        Securities 
        Underlying 
        Options 
        (#)
      Exercise 
        or Base 
        Price of 
        Option 
        Awards 
        ($/Sh)
      Grant 
        Date 
        Fair 
        Value 
        of 
        Stock 
        and 
        Option 
        AwardsThreshold 
        ($)
      Target 
        ($)
      Maximum 
        ($)
      Threshold 
        ($)
      Target 
        ($)
      Maximum 
        ($)Ian
        McKinnon 
        Former
        Chairman
        and
        Director;
        Former
        President,
        Chief
        Executive
        Officer and
        Director
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil


52

---

GRANTS OF
        PLAN-BASED AWARDSName
      Grant 
        Date
      Estimated
        Future Payouts 
        Under Non-Equity Incentive 
        Plan Awards
      Estimated
        Future Payouts 
        Under Equity Incentive Plan 
        Awards
      All 
        Other 
        Stock 
        Awards:
        Number 
        of 
        Shares 
        of 
        Stocks 
        or Units 
        (#)
      All Other 
        Option 
        Awards: 
        Number of 
        Securities 
        Underlying 
        Options 
        (#)
      Exercise 
        or Base 
        Price of 
        Option 
        Awards 
        ($/Sh)
      Grant 
        Date 
        Fair 
        Value 
        of 
        Stock 
        and 
        Option 
        AwardsThreshold 
        ($)
      Target 
        ($)
      Maximum 
        ($)
      Threshold 
        ($)
      Target 
        ($)
      Maximum 
        ($)Isaac Moss 
        Former
        President,
        Chief
        Executive
        Officer and
        Chief 
        Financial
        Officer; 
        Former
        Senior Vice
        President
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      NilGeorgina MartinChief
        Financial
        Officer,
        Secretary,
        Treasurer
      and Director
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      NilRobert
        McAllister 
        President,
        Chief 
        Executive
        Officer and 
        Director
      July 31
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      2,000,000
      $0.15


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:

53

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Options
        Awards
      Stock
        AwardsName
      Number of Securities UnderlyingUnexercisedOptions (#) Exercisable
      Number of Securities **Underlying** **Unexercised** Options (#) **Unexercisable**
      Equity Incentive Plan Awards: Number of Securities **Underlying** **Unexercised** Unearned Options (#)
      Option Exercise Price ($)
      Option Expiration Date
      Number of Shares or Units of Stock That Have Not Vested (#)
      Market Value of Shares or Units of Stock That Have Not Vested ($)
      Equity Incentive Plan Awards: Number of UnearnedShares, Units or Other Rights
            That Have NotVested (#)
      Equity Incentive Plan Awards: Market or Payout Value of **Unearned** Shares, Units or Other Rights **That
            Have** Not Vested ($)Ian
        McKinnon 
        Former
        Chairman 
        and
        Director;
        Former
        President,
        Chief 
        Executive
        Officer and
        Director
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      NilIsaac Moss 
        Former
        President,
        Chief
        Executive
        Officer and
        Chief
        Financial
        Officer;
        Former
        Senior Vice
        President
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      NilGeorgina
        Martin 
        Chief
        Financial
        Officer,
        Secretary,
        Treasurer
        and Director
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      NilRobert
        McAllister 
        President,
        Chief
        Executive
        Officer and
        Director
      2,000,000
      Nil
      1,000,000
      $0.15
      2013
      Nil
      Nil
      Nil
      Nil


Option Exercises

During our Fiscal year ended December 31, 2008 there were no
  options exercised by our named officers.

54

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Compensation of Directors

We do not have any agreements for compensating our directors
for their services in their capacity as directors, although such directors are
expected in the future to receive stock options to purchase shares of our common
stock as awarded by our board of directors.

The following table sets forth a summary of the compensation
paid to our non-employee directors in 2008:

DIRECTOR
        COMPENSATIONName
      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 
        ($)David Martin
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      NilDean Swanberg
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil


Pension, Retirement or Similar Benefit Plans

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.

Indebtedness of Directors, Senior Officers, Executive
Officers and Other Management

None of our directors or executive officers or any associate
  or affiliate of our Company during the last two fiscal years is or has been
  indebted to our Company by way of guarantee, support agreement, letter of credit
  or other similar agreement or understanding currently outstanding.

Item 12.     Security Ownership of
Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth, as of March 17, 2009, certain
information with respect to the beneficial ownership of our common shares by
each shareholder known by us to be the beneficial owner of more than 5% of our
common shares, as well as by each of our current directors and executive
officers as a group. 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)Georgina Martin Box 172, Station A
      Nanaimo, BC V9R 5K9
    1,547,270
    4%


55

---

Name and Address of Beneficial Owner
      Amount and Nature of Beneficial
      Ownership
      Percentage of
      Class(1)Robert McAllister 483 Holbrook Rd E.
      Kelowna, BC V1X 7H9
    49,300
    0%Directors and Executive Officers as a
      Group(1)
    1,596,570
    4%


| | (1) | Under Rule 13d-3, a beneficial owner of a security includes
        any person who, directly or indirectly, through any contract, arrangement,
        understanding, relationship, or otherwise has or shares: (i) voting power,
        which includes the power to vote, or to direct the voting of shares; and
        (ii) investment power, which includes the power to dispose or direct the
        disposition of shares. Certain shares may be deemed to be beneficially
        owned by more than one person (if, for example, persons share the power
        to vote or the power to dispose of the shares). In addition, shares are
        deemed to be beneficially owned by a person if the person has the right
        to acquire the shares (for example, upon exercise of an option) within
        60 days of the date as of which the information is provided. In computing
        the percentage ownership of any person, the amount of shares outstanding
        is deemed to include the amount of shares beneficially owned by such person
        (and only such person) by reason of these acquisition rights. As a result,
        the percentage of outstanding shares of any person as shown in this table
        does not necessarily reflect the persons actual ownership or voting
        power with respect to the number of shares of common stock actually outstanding
        on March 17, 2009. As of March 17, 2009, there were 37,086,740 shares
        of our Companys common stock issued and outstanding
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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.

Item 13.     Certain Relationships and
Related Transactions, and Director Independence

Except as disclosed herein, no director, executive officer,
shareholder holding at least 5% of shares of our common stock, or any family
member thereof, had any material interest, direct or indirect, in any
transaction, or proposed transaction since the year ended December 31, 2008, 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.

Director Independence

We currently act with two (2) directors, consisting of Robert
McAllister and Georgina Martin. We have determined that none of our directors is
an independent director as defined in NASDAQ Marketplace Rule 4200(a)(15).

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.

Our board of directors has determined that it does not have a
member of its audit committee who qualifies as an audit committee financial
expert as defined in as defined in Item 407(d)(5)(ii) of Regulation S-K.

From inception to present date, we believe that the members of
our audit committee and the board of directors have been and are collectively
capable of analyzing and evaluating our financial statements and understanding
internal controls and procedures for financial reporting.

56

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Item 14.     Principal Accounting Fees
and Services

The aggregate fees billed for the most recently completed
fiscal year ended December 31, 2008 and for fiscal year ended December 31, 2007
for professional services rendered by the principal accountant for the audit of
our annual financial statements and review of the financial statements included
in our quarterly reports on Form 10-Q and services that are normally provided by
the accountant in connection with statutory and regulatory filings or
engagements for these fiscal periods were as follows:

Year
        EndedDecember 31, 2008
      December 31, 2007Audit Fees
      20,484
      167,760Audit Related Fees
      17,047
      23,613Tax Fees
      8,907
      -All Other Fees
      28,292
      67,184Total
      74,730
      258,557


Effective May 6, 2003, the Securities and Exchange Commission
adopted rules that require that before our independent auditors are 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 informed of each
  service, and such policies and procedures do not include delegation of the
  board of directors' responsibilities to management.

Our 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.

Our board of directors has considered the nature and amount of
fees billed by our independent auditors and believes that the provision of
services for activities unrelated to the audit is compatible with maintaining
our independent auditors independence.

PART IV

Item 15.     Exhibits, Financial
Statement Schedules

(a) Financial Statements

| | (1) | Financial statements for our Company are listed in the
      index under Item 8 of this document                                                                                          
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                           
| | (2) | All financial statement schedules are omitted because
      they are not applicable, not material or the required information is shown
      in the financial statements or notes thereto.

57

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(b) Exhibits

|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)                                                         
|        |                                                                                                                                                                                     
|(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    | A-1 Warrant with Macquarie Holdings (USA) Inc.
      (incorporated by reference from our Current Report on Form 8-K filed on
      March 17, 2006)                                  
|        |                                                                                                                                                                                     
|10.3    | A-2 Warrant with Macquarie Holdings (USA) Inc.
      (incorporated by reference from our Current Report on Form 8-K filed on
      March 17, 2006)                                  
|        |                                                                                                                                                                                     
|10.4    | B-1 Warrant with Macquarie Holdings (USA) Inc.
      (incorporated by reference from our Current Report on Form 8-K filed on
      March 17, 2006)                                  
|        |                                                                                                                                                                                     
|10.5    | B-2 Warrant with Macquarie Holdings (USA) Inc.
      (incorporated by reference from our Current Report on Form 8-K filed on
      March 17, 2006)                                  
|        |                                                                                                                                                                                     
|10.6    | Letter Agreement dated May 23, 2007 (incorporated by
      reference from our Current Report on Form 8-K filed on May 31, 2007)                                                     
|        |                                                                                                                                                                                     
|10.7    | 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)  
|        |                                                                                                                                                                                     
|10.8    | 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)
|        |                                                                                                                                                                                     
|10.9    | Loan Agreement dated March 12, 2008 with Invicta Oil
      & Gas Ltd. (incorporated by reference from our Current Report on Form
      8-K filed on March 20, 2008)                 

58

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|Exhibit |                                                                                                                                                                 
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                                                                                     
|        |                                                                                                                                                                 
|10.10   | Mutual Release
        (incorporated by reference from our Current Report on Form 8-K filed on
        July 15, 2008)                                           
|        |                                                                                                                                                                 
|10.11   | Share Purchase
        Agreement dated November 25, 2008 (incorporated by reference from our
        Current Report on Form 8-K filed on December 4, 2008)      
|        |                                                                                                                                                                 
|10.12   | Warrant Cancellation
        Agreement dated November 28, 2008 (incorporated by reference from our
        Current Report on Form 8-K filed on December 4, 2008)
|        |                                                                                                                                                                 
|(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)                                     
|        |                                                                                                                                                                 
|(31)    | Rule 13a-14(a)/15d-14(a)
        Certifications                                                                                                                 
|        |                                                                                                                                                                 
|31.1*   | Section
        302 Certification under Sarbanes-Oxley Act of 2002 of Robert McAllister                                                                         
|        |                                                                                                                                                                 
|31.2*   | Section
        302 Certification under Sarbanes-Oxley Act of 2002 of Georgina Martin                                                                           
|        |                                                                                                                                                                 
|(32)    | Section 1350
        Certifications                                                                                                                             
|        |                                                                                                                                                                 
|32.1*   | Section
        906 Certification under Sarbanes-Oxley Act of 2002 of Robert McAllister                                                                         
|        |                                                                                                                                                                 
|32.2*   | Section
        906 Certification under Sarbanes-Oxley Act of 2002 of Georgina Martin                                                                           

* Filed herewith.

59

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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/ Robert
      McAllisterRobert McAllister
President, Chief Executive Officer and Director (Principal Executive
Officer) 
Date: April 14, 2009

By: /s/ Georgina
      MartinGeorgina Martin
Chief Financial Officer, Secretary, Treasurer and Director (Principal
Financial Officer and Principal Accounting Officer) 
Date: April 14, 2009

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/ Robert
      McAllisterRobert
McAllister President, Chief Executive Officer and Director (Principal
Executive Officer) 
Date: April 14, 2009

By: /s/ Georgina
      MartinGeorgina Martin
Chief Financial Officer, Secretary, Treasurer and Director (Principal
Financial Officer and Principal Accounting Officer) 
Date: April 14, 2009

60

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