**UNITED
      STATES**




**SECURITIES
      AND EXCHANGE COMMISSION**





Washington,
      D.C. 20549







**AMENDMENT
      NO 1**




**TO**




**FORM
      10-KSB**







(Mark
      One)




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




For
      the
      fiscal year ended **May
      31, 2005**




o
              TRANSITION
                  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                  OF 1934
  For
        the
        transition period from [ ] to [ ]
  Commission
        file number **000-50450**
  **OPEN
        ENERGY CORPORATION**





(Name
      of
      small business issuer in its charter)





**Nevada**
            
            **98-0370750**(State
                or other jurisdiction of incorporation or organization)
            
            (I.R.S.
                Employer Identification No.)









**514
                Via de la Valle, Suite 200****Solana
                Beach, CA**
            
            **92075**(Address
                of principal executive offices)
            
            (Zip
                Code)




Issuer’s
      telephone number **(858)
      794-8800**





-1-




Securities
      registered pursuant to Section 12(b) of the Exchange Act: N/A




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





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




Check
      whether the issuer is not required to file reports pursuant to Section 13 or
      15(d) of the Exchange Act. o




Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 12 months (or for such shorter period
      that the registrant was required to file such reports), and (2) has been subject
      to such filing requirements for the past 90 days. *





Yes x
      No o





*Excludes
      filings on Form 8-K as provided in Rule 144(c)(i) under the Securities Act
      of
      1933, as amended.




Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, and no disclosure will be contained,
      to
      the best of registrant’s knowledge, in definitive proxy or information
      statements incorporated by reference in Part III of this Form 10-KSB or any
      amendment to this Form 10-KSB. o




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




Yes o
      No x




State
      issuer’s revenues for its most recent fiscal year. $0




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




42,825,000
      common shares @ $1.04 (1) =
      $44,538,000





(1) Average
      of bid and ask prices on August 15, 2005.




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




46,668,750
      common shares issued and outstanding as of August 15, 2005.





Transitional
      Small Business Disclosure Format (Check one): Yes o No x


-2-


**Explanatory
      Note: This Amendment No. 1 to Annual Report on Form 10-KSB for the fiscal year
      ended May 31, 2005, is being filed solely (1) to make changes in Part I, Item
      2
      (Description of Property), to the description of the Bow Island Formation and
      the Sawtooth "A" Formation, and (2) to include updated certifications pursuant
      to Section 302 of the Sarbanes-Oxley Act of 2002, and to reflect such new
      certifications in the exhibit list in Part III, Item 13 (Exhibits). Other than
      as provided above, in order to preserve the nature and character of the
      disclosures set forth in the Form 10-KSB, this Amendment No. 1 does not reflect
      events occurring after the filing of the original Form 10-KSB on September
      12,
      2005, or the Financial Statements included therein and related notes. Note
      that
      the name of the small business issuer was changed from Barnabus Energy, Inc.
      to
      Open Energy Corporation on April 21, 2006.**




**PART
      I**




**ITEM
                1.**
            **DESCRIPTION
                OF BUSINESS.**





*Forward
      Looking Statements*




This
      annual report contains forward-looking statements as that term is defined in
      the
      Private Securities Litigation Reform Act of 1995. 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”, “will”,
“should”, “intends”, “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”, which may cause our or our industry’s actual
      results, levels of activity or performance to be materially different from
      any
      future results, levels of activity or performance 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 or
      performance. 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.




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. Our financial statements are prepared in accordance
      with United States generally accepted accounting principles.




As
      used
      in this annual report and unless otherwise indicated, the terms “we”, “us” and
“our” refer to Barnabus Energy, Inc. and our wholly-owned
      subsidiary.




*Corporate
      History*




We
      were
      incorporated under the laws of the State of Nevada under the name “Barnabus
      Enterprises Ltd.” on April 11, 2002. On May 4, 2005, we changed our name to
“Barnabus Energy, Inc.” Our company’s offices are located in Vancouver, British
      Columbia.




Pursuant
      to a purchase agreement dated April 11, 2002, as amended on October 1, 2002,
      our
      company acquired an undivided 100% interest of one mineral claim in the Liard
      Mining Division in the Toodoggone area of North-Central British Columbia,
      Canada, referred to as Mount Claim.




There
      is
      no assurance that a mineral deposit exists on the mineral claim until
      appropriate geological exploration is done and a final comprehensive evaluation
      is concluded. There are no mineral reserves on the mineral claim and our present
      plan of operation does not include the exploration of this property.
      Consequently, our company is currently considering options to dispose of this
      property. Since our last quarter of our 2005 fiscal year ended May 31, 2005,
      our
      principal area of interest is the exploration and development of energy
      resources.




*Entry
      into Asset Purchase Agreement with Goldstar Gas Corp.*




On
      March
      3, 2005, we entered into an Oil & Gas Asset Sale Agreement among our
      company, Barnabus Energy Inc., our wholly-owned subsidiary under its former
      name
      Sapphire Energy Inc., and Goldstar Gas Corp. Pursuant to the terms of the asset
      agreement, we agreed to acquire a 90% interest in a bare trust from Goldstar
      Gas. The bare trust is administered by MB Gas Inc., as bare trustee, who holds
      legal title to certain petroleum and natural gas assets on behalf of Goldstar
      Gas as set out in the asset agreement. Our company agreed to acquire the
      beneficial interest in consideration for the issuance by our company of
      2,000,000 shares of our common stock to Goldstar Gas, a cash payment of
      CDN$125,000 and the assumption of Goldstar Gas’ debt amounting to CDN$785,000.
      In addition to the issuance of shares to Goldstar Gas, our company agreed to
      issue 250,000 shares of our common stock to Scott Marshall in consideration
      for
      his services as agent to our company in connection with the asset
      agreement.




-3-




The
      closing of the asset agreement is subject to the satisfaction of conditions
      precedent to closing as set out in the asset agreement, including our company
      delivering a share certificate to Scott Marshall in the amount of 250,000 shares
      of our common stock and delivering three share certificates to Goldstar Gas
      in
      the aggregate amount of 2,000,000 shares of our common stock.




Upon
      the
      closing of the asset agreement, our company will own a controlling interest
      in
      the bare trust that holds the legal interest in the Manyberries Gas Project,
      a
      sweet and sour gas processing and compression facility. In contemplation of
      the
      close of the asset agreement, Goldstar Gas has agreed to permit our company
      to
      hold the 90% interest in the bare trust as of December 15, 2004. From this
      date,
      our company has made advances to and incurred expenses from MB Gas as operator
      of the assets and trustee of the trust.




Due
      to
      the conditions precedent to closing of the asset agreement, and the risk that
      the conditions precedent will not be satisfied, there is no assurance that
      our
      company will complete the purchase of the trust interest and the indirect
      acquisition of the assets as contemplated in the asset agreement.




*Proposed
      Acquisition of Certain Petroleum and Natural Gas Assets*




Upon
      the
      closing of the asset agreement, our company will acquire beneficial title to
      a
      90% interest in the bare trust, administered by MB Gas as bare trustee of the
      Manyberries Gas Project located in the South-eastern region of Alberta, Canada.
      MB Gas holds legal title to the Manyberries Gas Project as bare trustee for
      Goldstar Gas, who holds all of the beneficial interest under the bare trust.
      Pursuant to the terms of the asset agreement and the sub-agreements attached
      thereto and upon the close of the asset agreement, Goldstar Gas will transfer
      its beneficial interest in the bare trust to our company. Upon the closing
      of
      the asset agreement, our company will indirectly obtain a controlling interest
      in the sweet and sour gas processing and compression facility which is part
      of
      the Manyberries Gas Project. Although beneficial title of the Manyberries Gas
      Project will transfer to our company upon the close of the asset agreement,
      Goldstar Gas has permitted our company to hold the 90% interest as of December
      15, 2004. As of this date, our company has made advances to and incurred
      expenses from MB Gas’ operation of the Manyberries Gas Project.




The
      Manyberries Gas Project facility is connected to five gathering lines from
      local
      wells: three for natural gas, one for produced water and one for fuel gas.
      MB
      Gas will continue to act as the operator and trustee of the facility and the
      wells, and where necessary, act as general contractor for additional
      construction in connection with the Manyberries Gas Project.




In
      connection with the asset agreement, our company pays a monthly fee of
      CDN$20,000 to MB Gas as operator and trustee of the Manyberries project and
      will
      continue to do so until December 31, 2006. The terms of the agreement are set
      out in a Project Development and Project Management Agreement dated June 14,
      2005, as amended by an amendment agreement, both of which were entered into
      among our company, our wholly-owned subsidiary and MB Gas.




The
      Manyberries property is a prospective natural gas property which produces
      natural gas from three formations: from the deepest to the shallowest - Sawtooth
      formation, Bow Island formation and Pakowki formation. Upon the close of the
      asset agreement, we intend to hire and work with consultants to determine the
      best strategy for proceeding with the development of the property. This may
      include coming up-hole to further test both the Bow Island and Pakowki
      formations. Upon the closing of the asset agreement, we intend to focus on
      determining the productivity of the Sawtooth formation in the area from existing
      wells and new wells to be drilled. Should the Sawtooth formation prove to be
      uneconomical, our company intends to target up-hole potential from either or
      both the Bow Island and Pakowki formations sweet natural gas
      production.




The
      object for acquiring these assets is to increase shareholder value via the
      acquisition of oil and gas opportunities. In order to achieve this, our company
      intends to align ourself with key strategic alliances and partnerships including
      veteran, experienced oil and gas professionals with specific regional knowledge
      and specialized skills such as Hansen Energy Services to assist in realizing
      these goals from the outset.




*Additional
      Interest in the Manyberries Area*




Our
      company acquired additional petroleum and natural gas rights in the Manyberries
      area pursuant to an Agreement of Purchase and Sale dated June 17, 2005 between
      our company and MB Gas. The agreement is effective as of May 1, 2005 whereby
      our
      company acquired an entitlement to purchase by December 31, 2005 certain oil
      and
      gas property interests from MB Gas that are located in the Manyberries area
      of
      the Province of Alberta. These properties include interests in 12,672 acres
      of
      land (3,222 net acres) and in 8 wells (1.53 net wells) with equivalent
      participating interests in associated oilfield equipment and facilities. If
      our
      company elects to acquire title to these properties, MB Gas will retain
      participating interests in all properties and will remain operator under
      contract with our company in regards to our joint exploitation of any oil and
      gas reserves. Our company has paid $175,000 to acquire the petroleum and natural
      gas rights under the agreement and must pay the remaining $100,000 balance
      not
      later than December 31, 2005.




-4-




*Petroleum
      and Natural Gas License*




Pursuant
      to a verbal agreement with MB Gas, MB Gas has assigned 90% of the rights and
      interests in a petroleum and natural gas license to our company. The two year
      license relates to 1,536 hectares in the Manyberries area and grants the
      exclusive right to drill for and recover certain minerals within the territory
      and to remove such minerals from the territory for the duration of the license.
      Our company has incurred $44,755 in costs to MB Gas in respect of the
      acquisition of the rights under the license. Our company intends to reaffirm
      the
      verbal contract in writing during the first quarter of fiscal 2006.




*Solar
      Energy License Agreement*




On
      July
      21, 2005, our company entered into a licensing agreement with Dr. Melvin L.
      Prueitt concerning a technology, referred to as “Suncone”, which is intended to
      economically collect solar energy using a novel method of non-imaging optics.
      Pursuant to the terms of the licensing agreement, our company will obtain an
      exclusive license to apply the Suncone technology to distributed energy systems,
      electric power plants, saline water desalination systems and other applications.
      Our company will be responsible for the development and commercialisation
      efforts.




On
      July
      28, 2005, our company entered into a letter agreement with Solar Roofing Systems
      Inc., whereby the parties agreed to enter into a formal share purchase agreement
      upon successful completion of the parties respective due diligence of each
      other. Solar Roofing Systems develops and manufactures environmentally friendly
      energy products that utilize solar power to produce electricity.




COMPETITION




We
      are an
      exploration stage company engaged in the acquisition of a prospective oil and
      gas property and we have entered into a material agreement to acquire a
      beneficial interest in certain petroleum and natural gas assets, we currently
      do
      not own an interest in an operating 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 exploration 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.




GOVERNMENT
      REGULATION




The
      current and future operations of our company, including the proposed development
      and production activities on the Manyberries property may require that our
      company obtain permits from various federal, provincial, and local governmental
      authorities. Any such proposed development and production operations, if
      commenced, will be governed by laws and regulations governing prospecting,
      development, mining, production, exports, taxes, labor standards, occupational
      health, waste disposal, toxic substances, land use, environmental protection,
      safety and other matters.




Any
      oil
      and gas operations involving our company may be subject to environmental
      regulations promulgated by various government agencies from time to time.
      Environmental legislation often includes provisions relating to restrictions
      and
      prohibitions on spills, releases or emissions of various substances produced
      in
      association with oil and gas operations, which would result in environmental
      pollution. A breach of such legislation may result in imposition of fines and
      penalties. In addition, certain types of operations require the submission
      and
      approval of environmental impact assessments. Environmental legislation is
      evolving in a manner which means stricter standards and enforcement, and fines
      and penalties for non-compliance are more stringent. Environmental assessments
      of projects carry a heightened degree of responsibility for companies and
      directors, officers and employees. The cost of compliance with environmental
      legislation and changes in such legislation has a potential to reduce the
      profitability of operations below an acceptable level.




Stricter
      standards in environmental legislation may be imposed on the industry or our
      company in the future, which could materially and adversely affect our business
      or our ability to develop our properties on an economic basis. Even if the
      asset
      agreement closes and we acquire beneficial title to the assets relating to
      the
      Manyberries property, there can be no assurance that we will be able to obtain
      the necessary permits to commence the exploration, development and resource
      extraction on such properties.




-5-




EMPLOYEES




As
      of
      August 15, 2005, the sole employee of our company is Kerry Nagy as President
      of
      our company. We plan to hire additional employees as circumstances
      warrant.




SUBSIDIARIES




The
      name
      of our wholly-owned subsidiary, its date of incorporation and the jurisdiction
      in which it is incorporated is as follows:





**Name**
            
            **Jurisdiction**
            
            **Date
                Incorporated**Barnabus
                Energy Inc.
            
            Alberta,
                Canada
            
            March
                2, 2005




RISK
      FACTORS




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




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




RISKS
      RELATED TO OUR BUSINESS AND INDUSTRY




*Substantially
      our entire business plan, which consists of a beneficial interest in certain
      petroleum and natural gas rights, is conditional upon the closing of an asset
      agreement dated March 3, 2005 and if the asset agreement does not close for
      any
      reason, our company will lose all entitlement to acquire such an
      interest.*




Our
      company has entered into an Oil & Gas Asset Sale Agreement dated March 3,
      2005, between our company, our wholly-owned subsidiary and Goldstar Gas.
      Pursuant to the terms of the asset agreement, we agreed to acquire a beneficial
      interest in certain petroleum and natural gas rights from Goldstar Gas in
      consideration for the issuance by our company of 2,000,000 shares of our common
      stock to Goldstar, a cash payment of CDN$125,000 and the assumption of Goldstar
      Gas’ debt amounting to CDN$785,000. Our company has minimal assets and business
      prospects other than those that we anticipate to receive upon the closing of
      the
      asset agreement. Due to certain conditions precedent to closing, and the risk
      that the conditions precedent will not be satisfied, there can be no assurance
      that our company will complete the purchase of the assets as contemplated in
      the
      asset agreement. In the event that we do not acquire the beneficial interest
      in
      the assets under the asset agreement, our company must continue to search for
      an
      alternate business opportunity.




In
      contemplation of the closing of the asset agreement, Goldstar Gas has permitted
      our company to make advances and incur expenses in the operation of the bare
      trust as of December 15, 2004. In the event that the asset agreement does not
      close, our company may not be successful in collecting advances and expenses
      made by our company.




*Even
      if we close the asset agreement, we may not be able to obtain the financial
      resources to complete our planned development programs, which may require our
      company to dilute our interest in such assets.*




Even
      if
      we close the asset agreement and acquire beneficial title to the petroleum
      and
      natural gas assets of the Manyberries Gas Project, we do not believe that we
      presently have sufficient financial resources to undertake all of the
      development required to develop the property into commercial production, nor
      have we determined what those financial resources would be. As of May 31, 2005,
      we had a working capital deficiency of approximately $1,146,700, which is not
      anticipated to be sufficient to fund our exploration budget and working capital
      requirements for our fiscal year ending May 31, 2006. We may accelerate our
      exploration programs, depending on the results of our current undertakings,
      or
      acquire additional properties, which would require us to obtain additional
      financing. Our ability to complete the exploration of our properties, if
      acquired, depends on our ability to obtain additional financing through joint
      ventures, debt financing, equity financing or other means.




There
      is
      no assurance that we will obtain necessary additional financing to complete
      the
      exploration of any of our current or future properties. Our failure to obtain
      additional financing on a timely basis or on terms favorable to us could result
      in the loss or substantial dilution of our interests in any current or future
      acquired property.




*We
      have a limited operating experience and a history of losses, which may affect
      our ability to obtain future financing.*




-6-




Our
      company has historically incurred losses from our operations and has a limited
      history in the petroleum and natural gas business. As at May 31, 2005, our
      company had a cumulative deficit of approximately $728,000. We cannot assure
      you
      that we will successfully implement our business plan or achieve profitability
      in the future. We have recently entered into an asset agreement to acquire
      certain petroleum and natural gas rights, but even if such agreement closes
      and
      we obtain such assets, such properties are not yet producing petroleum and
      natural gas.




*We
      compete with large and small competitors to acquire oil and gas properties,
      enter into joint venture arrangements, hire and retain qualified personnel
      and
      service providers and obtain financing for our exploration programs, which
      may
      affect our ability to achieve commercial profitability.*




Oil
      and
      gas exploration is intensely competitive and involves a high degree of risk.
      We
      cannot assure you that we will close the asset agreement and develop any such
      properties and interests set out in the asset agreement into properties that
      produce sufficient quantities of oil and gas in a profitable manner. In our
      effort to acquire properties, we compete with other companies that have greater
      resources than our company. Many of these companies not only explore for and
      produce oil and gas, but also conduct refining and petroleum marketing
      operations on a world-wide basis.




Competition
      for producing properties, our ability to retain qualified personnel and our
      ability to complete our exploration programs will be affected by the amount
      of
      funds available to us, our ability to successfully identify oil and gas
      reserves, if any, and the actions of our competitors. We also may experience
      competition from the development of alternative fuel sources.




*Oil
      and gas exploration involves risks, which could adversely affect our
      profitability.*




We
      cannot
      assure you that, upon obtaining any oil and gas property or interest, commercial
      quantities of hydrocarbons will be recovered by us or that our exploration
      programs will lead to the discovery of any commercially viable reserves. The
      marketability of any oil and gas acquired or discovered will be affected by
      numerous factors beyond our control, which include oil and gas price
      fluctuations, proximity and capacity of oil and gas pipelines and processing
      equipment and government regulations (including regulations relating to
      royalties, allowable production, importing and exporting of oil and gas, and
      environmental protection). In addition, hazards such as unusual or unexpected
      formations, pressures or other conditions are involved in drilling and operating
      wells. Our general policy is to purchase insurance in such amounts, as we
      consider adequate for our projects; however, we may be subject to liability
      for
      pollution, blow-outs or other hazards which we cannot insure against or which
      we
      may elect not to insure against because of high premium costs or other reasons.
      The payment of uninsured liabilities would reduce the funds available for
      drilling and production activities or could result in the loss of
      property.




*The
      expiration of licenses and leases could cause us to lose any future interests
      in
      mineral or oil and gas properties that we may acquire in the
      future.*




The
      properties and interests that we anticipate acquiring upon the closing of the
      asset agreement are held in the form of working interests in licenses and
      leases. If we, or the holder of the license or lease, fails to meet the specific
      requirements of each license or lease, the license or lease may terminate or
      expire. We cannot assure you that any of the obligations required to maintain
      each license or lease will be met. The termination or expiration of any future
      licenses or leases or the working interests relating to our licenses or leases
      that we may acquire may have a material adverse effect on our results of
      operation and business.




*Potential
      conflicts of interest may divert the attention of our directors, officers and/or
      contractors from our business or affect their ability to dedicate their full
      attention to our business and exploration program.*




Certain
      of our directors and officers are also directors, officers, contractors and/or
      employees of other companies engaged in oil and gas exploration. To the extent
      that such other companies may participate in ventures in which we may
      participate, our directors may have a conflict of interest in negotiating and
      concluding terms respecting the extent of such participation. In the event
      that
      such a conflict of interest arises at a meeting of our directors, a director
      who
      has such a conflict will abstain from voting for or against the approval of
      such
      participation or such terms. In appropriate cases, we will establish a special
      committee of independent directors to review a matter in which several
      directors, or management, may have a conflict. From time to time several
      companies may participate in the acquisition or exploration of oil and gas
      properties thereby allowing for their participation in larger programs,
      permitting involvement in a greater number of programs and reducing financial
      exposure in respect of any one program. A particular company may assign all
      or a
      portion of its interest in a particular program to another of these companies
      due to the financial position of the company making the assignment.




*Our
      principal offices are located in British Columbia, and our directors are
      non-United States residents, which may affect your ability to bring an action
      against us in the United States.*




Our
      offices are located in the Province of British Columbia, Canada and our
      directors are residents of Canada. Consequently, it may be difficult for United
      States investors to effect service of process within the United States upon
      us
      or upon these directors, or to realize in the United States upon judgments
      of
      United States courts predicated upon civil liabilities under the United States
      Securities Exchange Act of 1934, as amended. A judgment of a United States
      court
      predicated solely upon such civil liabilities would probably be enforceable
      in
      Canada by a Canadian court if the United States court in which the judgment
      was
      obtained had jurisdiction, as determined by the Canadian court, in the matter.
      There is substantial doubt whether an original action could be brought
      successfully in Canada against any of such persons or us predicated solely
      upon
      such civil liabilities.




-7-




*Environmental
      regulation may increase the costs of production from our properties, which
      would
      affect our ability to earn a profit.*




Our
      company may encounter adverse incidents in connection with the exploration
      of
      oil and gas properties such as accidental spills or leakage of petroleum liquids
      and other unforeseen conditions. We may be subject to liability for pollution
      and other damages due to hazards which cannot be insured against due to
      prohibitive premium costs or for other reasons. Governmental regulations
      relating to environmental matters are subject to constant change and could
      increase the cost of exploration or require alteration or cessation of future
      operations in certain areas.




Existing
      and possible future environmental legislation, regulations and actions could
      give rise to additional expense, capital expenditures, restrictions and delays
      in our activities, the extent of which cannot be predicted. Regulatory
      requirements and environmental standards are subject to constant evaluation
      and
      may be significantly increased, which could materially and adversely affect
      our
      business or our ability to develop and produce our properties on an economically
      feasible basis. The cost of compliance with changes in governmental regulations
      has the potential to reduce the profitability of operations.




*Fluctuation
      and volatility of oil and gas prices may affect the commercial feasibility
      of
      any future oil and gas properties that we may acquire and may affect our ability
      to raise future financing on acceptable terms.*




As
      with
      most other companies involved in resource exploration, we may be adversely
      affected by future increases in the costs of conducting exploration, development
      and resource extraction that may not be fully offset by increases in the price
      received on the sale of petroleum or natural gas.




Our
      revenues, profitability and future growth, if any, and the value of any future
      oil and gas properties or interests that we may acquire are substantially
      dependent on prevailing prices of oil and gas. Our ability to borrow and to
      obtain additional capital on attractive terms is also substantially dependent
      upon oil and gas prices. Prices for oil and gas are subject to large
      fluctuations in response to relatively minor changes in the supply of and demand
      for oil and gas, market uncertainty and a variety of additional factors beyond
      our control. These factors include economic conditions in the United States
      and
      in Canada, the actions of the Organization of Petroleum Exporting Countries,
      governmental regulation, political stability in the Middle East and elsewhere,
      the foreign supply of oil and gas, the price of foreign imports and the
      availability of alternate fuel sources. Any substantial and extended decline
      in
      the price of oil and gas would have an adverse effect on the value of our
      properties, borrowing capacity, revenues, profitability and cash flows from
      operations.




Over
      the
      last 10 years, oil and gas prices have fluctuated significantly. In the long
      term, we expect oil prices to increase with inflation, as well as with economic
      recovery in Asia and other parts of the world.




Volatile
      oil and gas prices make it difficult to estimate the value of producing
      properties for acquisition and often cause disruption in the market for oil
      and
      gas producing properties, as buyers and sellers have difficulty agreeing on
      such
      value. Price volatility also makes it difficult to budget for and project the
      return on acquisitions and development and exploration projects.




Local,
      national and international economic conditions are beyond our control and may
      have a substantial adverse affect on our efforts. We cannot guard against the
      effects of these potential adverse conditions.




*Resource
      properties are subject to risks, which may require us to defend, enforce or
      undertake certain curative work to perfect rights in any future properties
      we
      may acquire.*




It
      is our
      practice in acquiring oil and gas leases or interests in oil and gas leases
      to
      undergo the expense of retaining lawyers to examine the title to the interest
      to
      be placed under lease or already placed under lease as title opinions are the
      requirement of our lenders in property acquisitions.




Prior
      to
      drilling a well for oil and gas, it is the normal practice of the oil and gas
      industry for the person or company acting as the operator of the well to hire
      a
      lawyer to examine the title to the spacing unit within which the proposed oil
      and gas well is to be drilled. Frequently, as a result of such examination,
      certain curative work must be done to correct deficiencies in the marketability
      of the title, and the curative work entails expense. The work might include
      obtaining affidavits of heirship or causing an estate to be administered.




*We
      depend on key personnel for our commercial success and the loss of any such
      individuals may have a material adverse effect on our company.*




-8-




We
      depend
      on the expertise of our directors and sole officer, and the loss of one or
      more
      of these individuals could have a material adverse effect on our business.
      Mr.
      Nagy provides his services to our company as a consultant pursuant to a verbal
      consulting agreement. We do not maintain key-person insurance policies on any
      of
      our executive officers.




*Title
      to any oil and gas properties that our company may obtain in the future may
      be
      subject to unknown interests and if any such unknown interest is determined
      to
      be legal and valid, our company may not be able to realize on the full benefit
      of such properties.*




Our
      company has taken and will continue to take all reasonable steps, in accordance
      with the laws and regulations of the jurisdictions in which any future acquired
      property is located, to ensure proper title of the property is acquired, either
      at the time of acquisition or prior to any major expenditures thereon. This,
      however, should not be construed as a guarantee of title. There are no
      assurances that our company will obtain title. Any presently owned interests
      and
      after-acquired properties may be subject to prior unregistered agreements,
      transfers, land claims or other claims or interests and title may be affected
      by
      undetected defects. Our company will attempt to obtain clear title and obtain
      legal opinions commensurate to the intended level of expenditures required
      on
      areas that show promise. There can be no assurance, however, that our company
      will be successful in doing so.




*Any
      oil and gas property or interest that we currently hold or may acquire in the
      future is subject to government regulation and any change in such regulations
      may have a material adverse effect on our company.*




The
      current and future operations of our company, including development activities
      and the commencement of production on any properties our company may acquire,
      will require permits from various federal, provincial, and local governmental
      authorities and such operations are and will be governed by laws and regulations
      governing prospecting, development, mining, production, exports, taxes, labor
      standards, occupational health, waste disposal, toxic substances, land use,
      environmental protection, safety and other matters.







Any
      oil
      and gas operations involving our company may be subject to environmental
      regulations promulgated by government agencies from time to time. Environmental
      legislation often includes provisions relating to restrictions and prohibitions
      on spills, releases or emissions of various substances produced in association
      with oil and gas operations, which would result in environmental pollution.
      A
      breach of such legislation may result in imposition of fines and penalties.
      In
      addition, certain types of operations require the submission and approval of
      environmental impact assessments. Environmental legislation is evolving in
      a
      manner which means stricter standards and enforcement, and fines and penalties
      for non-compliance are more stringent. Environmental assessments of proposed
      projects carry a heightened degree of responsibility for companies and
      directors, officers and employees. The cost of compliance with environmental
      legislation and changes in such legislation has the potential to reduce the
      profitability of operations below an acceptable level.




Stricter
      standards in environmental legislation may be imposed on the industry or our
      company in the future, which could materially and adversely affect the business
      of our company or our ability to develop our properties on an economic
      basis.




*Our
      company may incur significant costs against certain uninsurable risks, an event
      of which would constitute a material adverse effect on our
      company.*




In
      the
      course of exploration, development and production of oil and gas properties,
      certain risks, and in particular, unexpected or unusual geological operating
      conditions including blow-outs, cave-ins, fires, flooding and earthquakes may
      occur. It is not always possible to fully insure against such risks and our
      company may decide not to take out insurance against such risks as a result
      of
      high premiums or other reasons. Should such liabilities arise, they could reduce
      or eliminate any future profitability and result in increasing costs and a
      decline in the value of the securities of our company.




RISKS
      RELATED TO OUR COMMON STOCK




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




A
      prolonged decline in the price of our common stock could result in a reduction
      in the liquidity of our common stock and a reduction in our ability to raise
      capital. Because our operations have been primarily financed through the sale
      of
      equity securities, a decline in the price of our common stock could be
      especially detrimental to our liquidity and our continued operations. Any
      reduction in our ability to raise equity capital in the future would force
      us to
      reallocate funds from other planned uses and would have a significant negative
      effect on our business plans and operations, including our ability to explore
      and develop any future acquired properties or interests. If our stock price
      declines, there can be no assurance that we can raise additional capital or
      generate funds from operations sufficient to meet our obligations. We believe
      the following factors could cause the market price of our common stock to
      continue to fluctuate widely and could cause our common stock to trade at a
      price below the price at which you purchase your shares:




-
      actual
      or anticipated variations in our quarterly operating results,




-9-




-
      announcements of new explorations, developments, acquisitions or strategic
      relationships by us or our competitors,




-
      trends
      or conditions in the oil and gas industry,




-
      changes
      in accounting treatments or principles,




-
      changes
      in earnings estimates by securities analysts and in analyst
      recommendations,




-
      changes
      in market valuations of other oil and gas companies, and




-
      general
      political, economic and market conditions.




The
      market price for our common stock may also be affected by our ability to meet
      or
      exceed expectations of analysts or investors. Any failure to meet these
      expectations, even if minor, could have a material adverse effect upon the
      market price of our common stock.




*If
      we
      issue additional shares in the future, it will result in the dilution of our
      existing stockholders.*




Our
      board
      of directors has the authority to issue additional shares up to the authorized
      capital stated in our certificate of incorporation. Our board of directors
      may
      choose to issue some or all of such shares to acquire one or more businesses
      or
      to provide additional financing in the future. The issuance of any such shares
      will result in a reduction of the book value or market price of the outstanding
      shares of our common stock. If we do issue any such additional shares, such
      issuance will also cause a reduction in the proportionate ownership and voting
      power of all other stockholders. Further, any such issuance may result in a
      change of control of our corporation.




*If
      a
      market for our common stock does not develop, stockholders may be unable to
      sell
      their shares.*




There
      is
      currently a limited market for our common stock, which trades through the
      Over-the-Counter Bulletin Board quotation system. Trading of stock through
      the
      Over-the-Counter Bulletin Board is frequently thin and highly volatile. There
      is
      no assurance that a sufficient market will develop in the stock, in which case
      it could be difficult for stockholders to sell their stock.




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




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.




*The
      National Association of Securities Dealers Inc., or NASD, has adopted sales
      practice requirements, which may limit a stockholder’s ability to buy and sell
      our shares.*




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





-10-





**ITEM
                2.**
            **DESCRIPTION
                OF PROPERTY.**




1.a.i.A
      Our company’s principal executive offices are located at 674 Granville Street,
      P.O. Box 54035, Vancouver, B.C., Canada. The office space serves as the base
      of
      operations for our corporate, managerial, accounting, financial and
      administrative functions. We share office space with unrelated companies
      pursuant to a verbal agreement at no cost. We intend to find an alternate
      executive office during the first six months of our 2006 fiscal year. Pursuant
      to the terms of the asset agreement, our company agreed to acquire a 90%
      interest in a bare trust that holds legal title to the property interests set
      out below. Our company anticipates acquiring the interest upon the closing
      of
      the asset agreement. Due to conditions precedent to closing, however, and the
      risk that the conditions precedent will not be satisfied, there is no assurance
      that our company will complete the acquisition of the beneficial interest as
      contemplated in the asset agreement, including those property interests set
      forth below.





*.1.a.i.B*
            *Manyberries
                Project*





Upon
      the
      close of the asset agreement, our company will hold a 90% interest in a bare
      trust that holds legal title to the Manyberries gas project, located in South
      Eastern Alberta, which encompasses properties prospective of natural gas
      production from three formations. The Manyberries project includes a sweet
      and
      sour gas processing and compression facility. This facility is connected to
      five
      gathering lines from local wells: three for natural gas, one for produced water
      and one for fuel gas. Upon acquisition of such properties, our company intends
      to operate such facilities and develop potential local natural gas reserves
      as
      additional feedstock for generating processing fees at these properties. MB
      Gas,
      as bare trustee of the properties, will continue to act as operator and act
      as
      our company’s general contractor for further construction in regards to the
      properties.





*.1.a.i.B.I*
            *Regional
                Geological Setting*




The
      Manyberries property is prospective of natural gas production from three
      formations: from the deepest to the shallowest - Sawtooth formation, Bow Island
      formation and Pakowki formation. Upon acquiring the beneficial interest in
      the
      property upon the closing of the asset agreement, we intend to retain
      professionals to determine the best strategy for proceeding; which strategically
      may include coming up-hole to further test both the Bow Island and Pakowki
      formations. If drilling operations recommence, our company plans to determine
      the productivity of the Sawtooth formation in the area from existing and new
      wells to be drilled. Should the Sawtooth formation prove to be uneconomical,
      our
      company will next target up-hole potential from either or both the Bow Island
      and Pakowki formations sweet natural gas production.





*.1.a.i.B.II*
            *Drilling
                and Completion Techniques*




Our
      company has formed a verbal relationship with Hansen Energy Services to minimize
      costs associated with drilling and completion activities. Hansen Energy Services
      has extensive experience in the Manyberries Area, and uses low water loss mud
      techniques and great care in cementing, which are keys to the success in this
      area. Minimum disturbance techniques and remote sumps have all proven to lower
      overall drilling costs. Our company plans to utilize new fracture stimulation
      techniques, especially in the tighter part of the play, that have yielded very
      encouraging results from focused tubing conveyed fractures.





*.1.a.i.B.III*
            *Gas
                Marketing*




A
      main
      6-inch pipeline is the primary means whereby gas sales are shipped from the
      local gas plant. Upon the closing of the asset agreement, our company will
      control a 90% majority working interest in this plant, which connects to the
      CMG
      Pendant D’oreille Plant owned by EnCana Corporation. This system of delivery
      gives the owner direct access to sell its natural gas into the United States
      system, therefore realizing a higher profit per thousand British Thermal Unit
      (MMBtu) sold than what other regional producers are receiving by selling into
      the Alberta Energy Company **** system
      in
      Alberta.





*.1.a.i.B.IV*
            *Capital
                Expenditures*




Provided
      that the asset agreement closes, our company plans to invest CDN $3 to $4
      million on capital expenditures during our 2006 fiscal year, with approximately
      one third of this capital budget for exploration. We intend to develop
      exploration wells in connection with the Manyberries Project. It is anticipated
      that the remaining capital budget will be allocated towards developmental
      drilling and additional pipeline infrastructure.




Upon
      the
      close of the asset agreement, our company intends to carry out development
      drilling for three to four zones with additional development drilling locations
      in the Manyberries Project planned for 2007. Our company intends to focus on
      acquiring additional interests in existing and new lands in the Manyberries
      area, in addition to looking into acquiring assets and other working interest
      partners in nearby projects. Existing infrastructure and facilities are jointly
      owned and have sufficient capacity to process the gas from these
      wells.





-11-





*.1.a.i.B.V*
            *Targeted
                Areas: Pakowki Formation*




The
      Pakowki formation sits on top of the Milk River formation of Southeastern
      Alberta, which area actively produces gas, both from the sand-rich portions
      of
      the basin and from the fine, grained siltstone facies of extreme southeastern
      Alberta and Southwestern Saskatchewan.




Many
      of
      the deeper wells in the South Manyberries area have surface casing set below
      the
      base of the Pakowki formation, therefore, there is a limited number of logs
      conducted over the Pakowki formation and our company will be relying on seismic,
      aeromagnetic and gravitometry data to determine the ideal target
      areas.




Our
      company has determined that there are several wells in this area where the
      surface casing has been set shallow enough to show gas both in thin and thicker
      channel deposits. In one well, our company has determined that there are two
      6-foot intervals of gas sands; and in another well there exists a neutron
      density log crossover in a 10 foot sand interval between 35 and 38 meters below
      surface. Depending on depth, our company’s management would expect these sands
      to have between 50 and 175 pounds per square inch (psi) reservoir pressure
      of
      natural gas.




Empirically,
      the Pakowki formation sand with 10 feet of pay zone, 30% porosity and 100 psi
      reservoir pressure would be expected to have 0.75 billion cubic feet (Bcf)
      risked reserve of producible natural gas per section.




Structural
      targets are abundant throughout the block. The Tertiary uplift associated with
      the Cypress Hills to the west created a complex series of faults providing
      Pakowki, Milk River, Bow Island, and Sawtooth closures on both the up thrown
      portion, commonly called pop-up traps and the down thrown block, commonly called
      footwall traps on both sides of the faults. Pop up features tend to be smaller
      in area but with higher deliverability from induced fractures. Footwall traps
      tend to be larger areas but with slightly lower flow rates. These targets can
      be
      delineated by the combination of high-resolution surface gravitometry surveys
      and 2-D seismic. Surface terrain, rolling to flat grassland, provides excellent
      quality geophysical data and exceptional prospect definition. Gravity reveals
      leads for very low cost and with less obtrusive surface concerns. These leads
      will be followed up with existing 2-D seismic and possibly new 2-D seismic
      to
      precisely define drill sites.




*Bow
      Island Formation*




Our
      company has determined that wells in the Bow Island formation “A”, “B”, and “C”
sands have tested natural gas at 427 thousand cubic feet per day (Mcf per day)
      from 3 feet of pay zone with net porosity in the Bow Island “B” sand. Our
      company’s geologists have recommended that a follow-up well be drilled to
      facilitate the potential production from that pool.




Our
      company has mapped a second potential area that is a Bow Island sand bar nearly
      two sections wide. Our management believes that there is a stratigraphic
      pinch-out. During our 2006 fiscal year, we intend to acquire the lands over
      the
      pinch-out, and management is confident that the area will hold gas reserves
      above the water leg and where the gas should be trapped
      stratigraphically.




*Sawtooth
      “A” Formation*




Our
      company has produced a Sawtooth “A” formation sand isopach and structure map for
      the Manyberries area. This map shows that the potential of gas accumulation
      is
      centered on a certain well. We have studied this and two other potential gas
      accumulations and identified target zones for gas on local highs that are
      associated with a regional up-dip stratigraphic sand pinch-outs located 1⁄2 to one
      mile west of the wells. Wells already drilled through the target formations
      for
      these locations flowed at 2 to 3 million cubic feet per day (Mcf per day) on
      drill stem tests from sands that showed a 24% average porosity. Our company
      believes that with proper production practices, rapid coning of formation water
      to the well bores can be managed to maximize production and cumulative
      production.




*Sawtooth
      “B” Formation*




Our
      company has concluded that natural gas is present in the Sawtooth “B” Formation
      sand in thin accumulations on local stratigraphic highs. Our consultants
      postulate that the operators of the current wells in this area (which have
      been
      drilled to test this target formation), have been perforated at too thick an
      interval. Our consultants have recommended that a packer be set in each well
      to
      reduce the perforated intervals, thereby facilitating production only from
      the
      uppermost one foot of porosity in the natural gas reservoir. Our consultants
      further suggest that such operations coupled with procedures to minimize the
      gas
      production rate to the order of 500 Mcf per day would markedly delay water
      encroachment/coning, thereby permitting such an operator to allow a maximum
      volume of gas to be produced before the wells would water-out.




Our
      consultants have further suggested that where the production casing in these
      wells has been cemented from the production interval to the surface, natural
      gas
      might be producible also from the shallower, Pakowki formation coals and gas
      sands. Our company believes that by utilizing Diplone Sonic Neutron logs, it
      will be possible to determine where these coals and gas sands are
      located.




-12-




*Additional
      Interest in Manyberries Area*




Our
      company acquired additional petroleum and natural gas rights in the Manyberries
      area pursuant to an Agreement of Purchase and Sale dated June 17, 2005 between
      our company and MB Gas. The agreement is effective as of May 1, 2005 whereby
      our
      company acquired an entitlement to purchase by December 31, 2005 certain oil
      and
      gas property interests from MB Gas that are located in the Manyberries area
      of
      the Province of Alberta. These properties include interests in 12,672 acres
      of
      land (3,222 net acres) and in 8 wells (1.53 net wells) with equivalent
      participating interests in associated oilfield equipment and facilities. If
      our
      company elects to acquire title to these properties, MB Gas will retain
      participating interests in all properties and will remain operator under
      contract with our company in regards to our joint exploitation of any oil and
      gas reserves. Our company has paid $175,000 to acquire the petroleum and natural
      gas rights under the agreement and must pay the remaining $100,000 balance
      not
      later than December 31, 2005.




*Petroleum
      and Natural Gas License*




Pursuant
      to a verbal agreement with MB Gas, MB Gas has assigned 90% of the rights and
      interests in a petroleum and natural gas license to our company. The two year
      license relates to 1,536 hectares in the Manyberries area and grants the
      exclusive right to drill for and recover certain minerals within the territory
      and to remove such minerals from the territory for the duration of the license.
      Our company has incurred $44,755 in costs to MB Gas in respect of the
      acquisition of the rights under the license. Our company intends to reaffirm
      the
      verbal contract in writing during the first quarter of fiscal 2006.





**ITEM
                3.**
            **LEGAL
                PROCEEDINGS.**




During
      our 2005 fiscal year, a company related to our sole executive officer advanced
      CDN$159,172 to the officer who, in turn, advanced the amount to our company.
      The
      related company claims that the original advance was intended to be used for
      a
      private placement to purchase 400,000 shares of our common stock and 400,000
      warrants to purchase additional shares of our common stock. The related company
      has demanded that the shares be issued. Our company intends to repay the advance
      and does not anticipate that any further costs will be incurred in connection
      with this matter.




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





**ITEM
                4.**
            **SUBMISSIONS
                OF MATTERS TO A VOTE OF SECURITY HOLDERS.**




None.


-13-




**PART
      III**




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





*Directors
      and Executive Officers, Promoters and Control Persons*





All
      directors of our company hold office until the next annual meeting of the
      stockholders or until their successors have been elected and qualified. The
      executive 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, as well as the positions held, age and duration of
      appointment for such persons are as follows:




**Name**
              
              **Position
                  Held with our Company**
              
              **Age**Kerry
                Nagy
              
              President,
                  Secretary and Director
              
              33David
                Saltman
              
              Director
              
              51Tedman
                M. Williams
              
              Director
              
              47




*Business
      Experience*





The
      following is a brief account of the education and business experience of each
      director and executive officer during at least the past five years, indicating
      each person’s principal occupation during the period, and the name and principal
      business of the organization by which he or she was employed.





KERRY
      NAGY





President,
      Secretary and Director. Mr. Nagy has been President of our company since October
      28, 2004 and a director and Secretary since April 11, 2002. From July 1999
      to
      the present, Mr. Nagy has been an Insurance Underwriter for St. Paul Guarantee
      Insurance Company located in Vancouver, British Columbia. From February 1998
      to
      July 1999, Mr. Nagy was a Financial Services Officer and Loans Officer with
      Surrey Metro Savings Credit Union, New Westminster, British Columbia. In August
      1995, Mr. Nagy received a Bachelor Degree of Economics from the University
      of
      Saskatchewan, Canada majoring in Finance.





DAVID
      SALTMAN





Director
      and Advisory Committee Chair. Mr. Saltman, a senior executive of BioComposites
      International, a company producing natural fiber reinforced plastics for the
      automobile, building materials and consumer products industries and is
      knowledgeable in regards to renewable energy solutions. He has participated
      in
      the President’s advisory council that created environmental purchasing
      guidelines for the federal government, and is the recipient of several awards
      from the American Marketing Association for his work on sustainable
      technologies. Prior to his efforts in this sector, Mr. Saltman enjoyed a
      successful career in the entertainment industry, including being a founder
      of
      the “E!” Entertainment Network. He is a native Californian residing just outside
      of San Diego and is a graduate of UCLA’s Annenberg School of Communication.





TEDMAN
      M.
      WILLIAMS





Director.
      Mr. Williams has been a Consulting Chief Financial Officer of BOTB Corporation,
      a private Canadian holding company that is an information technology and support
      services provider located in Calgary, Canada that provides information
      technology services to public companies.   From October 2003 to
      January 2004, Mr. Williams was a Consulting Chief Financial Officer of Rare
      Method Capital, a Canadian corporation that is located in Calgary, Canada and
      is
      publicly traded on the TSX.  From August 1998 to September 2003, Mr.
      Williams was the Chief Financial Officer of Impact Blue, Inc., an interactive
      web-advertising agency located in Calgary, Canada.  In 1983, Mr. Williams
      received a Chartered Accountant designation in Alberta, Canada.   In
      May 1980, Mr. Williams received a Bachelor of Commerce Degree from the
      University of Alberta in Edmonton.





*Family
      Relationships*





There
      are
      no family relationships among our directors or officers.





*Involvement
      in Certain Legal Proceedings*





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





-14-






1.
            any
                bankruptcy petition filed by or against any business of which such
                person
                was a general partner or executive officer either at the time of
                the
                bankruptcy or within two years prior to that
                time;





2.
            any
                conviction in a criminal proceeding or being subject to a pending
                criminal
                proceeding (excluding traffic violations and other minor
                offences);





3.
            being
                subject to any order, judgment, or decree, not subsequently reversed,
                suspended or vacated, of any court of competent jurisdiction, permanently
                or temporarily enjoining, barring, suspending or otherwise limiting
                his
                involvement in any type of business, securities or banking activities;
                or





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




*Audit
      Committee Financial Expert and Audit Committee*





Our
      board
      of directors currently acts as our audit committee. Our board of directors
      has
      not yet determined whether we have a member who qualifies as an “audit committee
      financial expert” as defined in Item 401(e) of Regulation S-B, and is
“independent” as the term is used in Tem 7(d)(3)(iv) of Schedule 14A under the
      Securities Exchange Act of 1934, as amended.





At
      the
      present time, we believe that the members of our board of directors are
      collectively capable of analyzing and evaluating our financial statements and
      understanding internal controls and procedures for financial reporting. Our
      board of directors believes that an audit committee represents an unwarranted
      expense at this time due to the fact that our company has not generated any
      revenues to date. Our company, however, recognizes the importance of good
      corporate governance and intends to appoint an audit committee comprised
      entirely of independent directors, including at least one financial expert,
      within a reasonable amount of time following the closing of the asset
      agreement.





*Code
      of Ethics*


Effective
      August 30, 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
      and Chief Executive Officer as well as the individuals performing the functions
      of our Chief Financial Officer, Secretary and Controller. 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 personnel shall be accorded full access to our President and Chief
      Executive Officer with respect to any matter which may arise relating to the
      Code of Business Conduct and Ethics. Further, all of our company’s personnel are
      to be accorded full access to our company’s board of directors if any such
      matter involves an alleged breach of the Code of Business Conduct and Ethics
      by
      our President and Chief Executive Officer.


In
      addition, our Code of Business Conduct and Ethics emphasizes that all employees,
      and particularly managers and/or supervisors, have a responsibility for
      maintaining financial integrity within our company, consistent with generally
      accepted accounting principles, and federal, provincial and state securities
      laws. Any employee 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 his or her immediate supervisor
      or to our company’s President and Chief Executive Officer. If the incident
      involves an alleged breach of the Code of Business Conduct and Ethics by the
      President and Chief Executive Officer, the incident must be reported to any
      member of our board of directors. 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.




-15-




Our
      Code
      of Business Conduct and Ethics is filed as Exhibit 14.1 to this 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: Barnabus Energy, Inc.,
      674 Granville Street, P.O. Box 54035, Vancouver, B.C., Canada V6C
      3P4.





*Section
      16(a) Beneficial Ownership Compliance*





Section
      16(a) of the Securities Exchange Act of 1934, as amended, requires our executive
      officers and directors and persons who own more than 10% of our common stock,
      to
      file reports regarding ownership of, and transactions in, our securities with
      the Securities and Exchange Commission and to provide us with copies of those
      filings. Based solely on our review of Forms 3, 4 and 5 (and amendments thereto)
      furnished to us during or in respect of the fiscal year ended May 31, 2005,
      we
      are not aware of any director, executive officer or beneficial owner of more
      than 10% of the outstanding common stock who or which has not timely filed
      reports required by Section 16(a) of the Exchange Act during or in respect
      of
      such fiscal year except Statement of Changes in Beneficial Ownership of
      Securities on Form 4 that was filed on September 13, 2004 which incorrectly
      stated the number of shares held by Kerry Nagy, a director and executive officer
      of our company. The correct number of shares held by Mr. Nagy was disclosed
      on
      our proxy statement on Schedule 14A filed on March 29, 2005. Mr. Nagy intends
      to
      file a Form 4/A during the first quarter of fiscal 2006 to correct the omission
      in the Form 4 filed on September 13, 2004.





**ITEM
                10.**
            **EXECUTIVE
                COMPENSATION.**





The
      particulars of compensation paid to the following persons:




(a)
            our
                chief executive officer;




(b)
            each
                of our four most highly compensated executive officers who were serving
                as
                executive officers at the end of the most recently completed financial
                year ended May 31, 2005, and whose total salary and bonus exceeds
                $100,000
                per year; and





(c)
            any
                additional individuals for whom disclosure would have been provided
                under
                (b) but for the fact that the individual was not serving as an executive
                officer of our company at the end of the most recently completed
                financial
                year,


who
      we
      will collectively refer to as the named executive officers, of our three most
      recently completed fiscal years ended May 31, 2005, are set out in the following
      summary compensation table. Kerry Nagy is presently the sole executive officer
      of our company.








**SUMMARY
                COMPENSATION TABLE****Long
                Term Compensation****Awards**
            
            **Payouts****Name
                and****Position****of
                Principal**
            
            **Fiscal****Year****Ending**
            
            **Salary**
              **(U.S.
                $)**
            
            **Bonus**
              **(U.S.
                $)**
            
            **Other
                Annual Compensation**
              **(U.S.
                $)**
            
            **Securities
                Under Options**
              **Granted**
            
            **Restricted
                Shares or Restricted Share Units**
            
            **LTIP****Pay-****Outs**
            
            **All****Other**
              **Compen****sation**
              **(U.S.
                $)**Kerry
                Nagy**(1)**
            
            
            2005
            
            
            Nil
            
            
            Nil
            
            $
            7,500
            
            
            Nil
            
            
            Nil
            
            
            Nil
            
            
            NilPresident
                and
            
            
            2004
            
            
            Nil
            
            
            Nil
            
            
            Nil
            
            
            Nil
            
            
            Nil
            
            
            Nil
            
            
            NilSecretary
            
            
            2003
            
            
            N/A
            
            
            N/A
            
            
            N/A
            
            
            N/A
            
            
            N/A
            
            
            N/A
            
            
            N/AVictoria
                Chen
            
            
            2005
            
            
            N/A
            
            
            N/A
            
            
            N/A
            
            
            N/A
            
            
            N/A
            
            
            N/A
            
            
            N/APresident**(2)**
            
            
            2004
            
            
            Nil
            
            
            Nil
            
            
            Nil
            
            
            Nil
            
            
            Nil
            
            
            Nil
            
            
            Nil2003
            
            
            Nil
            
            
            Nil
            
            
            Nil
            
            
            Nil
            
            
            Nil
            
            
            Nil
            
            
            Nil




(1)
            Kerry
              Nagy was appointed President and Secretary on October 26,
              2004(2)
            Victoria
              Chen was appointed President in April 2002 and resigned on October
              26,
              2004




-16-




*Employment/Consulting
      Agreements*





Our
      compensation program for our executive officers is administered and reviewed
      by
      our board of directors. Historically, executive compensation consists of a
      combination of base salary and bonuses. Individual compensation levels are
      designed to reflect individual responsibilities, performance and experience,
      as
      well as the performance of our company. The determination of discretionary
      bonuses is based on various factors, including implementation of our business
      plan, acquisition of assets, development of corporate opportunities and
      completion of financing.





Our
      company has not entered into an employment contract with our sole executive
      officer. **** There
      were no compensatory plans or arrangements with any executive officer of our
      company or our subsidiary for payments to be made to an executive officer
      following the retirement, resignation or termination of any executive officer’s
      employment with our company or our subsidiary. As of the date of this annual
      report, we have no compensatory plan or arrangement with respect to any officer
      that results or will result in the payment of compensation in any form from
      the
      resignation, retirement or any other termination of employment of such officer’s
      employment with our company, from a change in control of our company or a change
      in such officer’s responsibilities following a change in control.





Our
      company has entered into a service agreement for the 2006 fiscal year whereby
      our company has agreed to pay Kerry Nagy, President and Secretary of our
      company, the aggregate amount of $30,000, pursuant to a month-to-month verbal
      consulting agreement. Pursuant to the terms and provisions of the consulting
      agreement: (i) Mr. Nagy agreed to provide financial and managerial consulting
      services to our company; and (ii) Mr. Nagy shall be paid a monthly fee of $2,500
      for a potential annual salary of $30,000, and reimbursement of
      expenses.





Our
      company has entered into a business consultant agreement dated March 1, 2005,
      between Beneficial Designs, Inc. and our company, whereby our company has agreed
      to pay $120,000 to Beneficial Designs as consultant, payable with a monthly
      fee
      of $10,000 plus reimbursement of reasonable expenses in exchange for marketing
      and investor relations services to our company.





*Stock
      Option Plan*





Currently,
      our company does not have a stock option plan in favor of any director, officer,
      consultant or employee of our company.





*Stock
      Options/SAR Grants*





There
      were no grants of stock options or stock appreciation rights during our fiscal
      year ended May 31, 2005.





*Aggregated
      Option Exercises in Last Fiscal Year and Fiscal Year-End
      Values*





There
      were no options exercised by any officer or director of our company during
      our
      fiscal year ended May 31, 2005.





*Long-Term
      Incentive Plan*





Currently,
      our company does not have a long-term incentive plan in favor of any director,
      officer, consultant or employee of our company.





*Directors
      Compensation*





Directors
      may be paid their expenses for attending each board of directors meeting and
      may
      be paid a fixed sum for attendance at each meeting of the directors or a stated
      salary as director. No payment precludes any director from serving our company
      in any other capacity and being compensated for the service. Members of special
      or standing committees may be allowed like reimbursement and compensation for
      attending committee meetings. During our fiscal year ended May 31, 2005, none
      of
      our directors were paid any funds to attend director meetings.





**ITEM
                11.**
            **SECURITY
                OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                MANAGEMENT.**





The
      following table sets forth, as of May 31, 2005, certain information with respect
      to the beneficial ownership of our company’s common stock by each stockholder
      known by us to be the beneficial owner of more than 5% of our common stock
      and
      by each of our current directors and executive officers and the directors and
      executive officers of our subsidiary. 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.





-17-


**Name
                  and Address of Beneficial Owner**
              
              **Position
                  Held**
              
              **Amount
                  and Nature of Beneficial Owner**
              
              **Percent
                  of Class****(1)**Kerry
                  Nagy
              
              President,
                  Secretary and Director
              
              3,843,750**(2)**
              
              8.2%David
                  Saltman
              
              Director
              
              Nil
              
              NilTedman
                  M. Williams
              
              Director
              
              Nil
              
              Nil*Directors
                  and Executive Officers as a Group (3**persons)*
              
              
              
              *3,843,750*
              
              *8.2%*





(1)
            Based
                on 46,668,750 shares of common stock issued and outstanding as of
                August
                15, 2005. Except as otherwise indicated, we believe that the beneficial
                owners of the common stock listed above, based on information furnished
                by
                such owners, have sole investment and voting power with respect to
                such
                shares, subject to community property laws where applicable. Beneficial
                ownership is determined in accordance with the rules of the Securities
                and
                Exchange Commission and generally includes voting or investment power
                with
                respect to securities. Shares of common stock subject to options
                or
                warrants currently exercisable or exercisable within 60 days are
                deemed
                outstanding for purposes of computing the percentage ownership of
                the
                person holding such options or warrants, but are not deemed outstanding
                for purposes of computing the percentage ownership of any other
                person.(2)
            Includes
                562,500 shares held by the wife of Kerry
                Nagy.





**ITEM
                12.**
            **CERTAIN
                RELATIONSHIPS AND RELATED
                TRANSACTIONS.**





Our
      company has not been a party to any transaction, proposed transaction, or series
      of transactions during the last two years in which the amount involved exceeds
      $60,000, and in which, to our knowledge, any of our directors, officers, five
      percent beneficial security holders, or any member of the immediate family
      of
      the foregoing persons has had or will have a direct or indirect material
      interest.


**ITEM
      13.** **EXHIBITS.**


Exhibit
                  Number
              Description**(2)**
              **Plan
                  of Purchase, Sale, Reorganization, Arrangement, Liquidation or
                  Succession**2.1(2)
              Oil
                  & Gas Asset Sale Agreement dated March 3, 2005, among Goldstar Gas
                  Corp., Barnabus Energy Inc. under its former name Sapphire Energy
                  Inc. and
                  our company in addition to the related agreements attached
                  thereto**(3)**
              **(i)
                  Articles of Incorporation; and (ii) Bylaws**3.1(1)
              Articles
                  of Incorporation3.2(1)
              Bylaws3.3**
              Certificate
                  of Amendment filed with the Secretary of State of Nevada on February
                  23,
                  20043.4(2)
              Certificate
                  of Amendment filed with the Secretary of State of Nevada on May
                  4,
                  2005**(10)**
              **Material
                  Contracts**10.1**
              Business
                  Consultant Agreement dated March 1, 2005, between Beneficial Designs,
                  Inc.
                  and our company10.2**
              Petroleum
                  and Natural Gas License dated March 24, 2005 issued by the Province
                  of
                  Alberta to MB Gas Inc.10.3**
              Project
                  Development and Project Management Agreement dated March 3, 2005,
                  among MB
                  Gas Inc., our company and Barnabus Energy Inc., our wholly-owned
                  subsidiary
  -18-
  10.4**
              Amendment
                  #1 To Project Development and Project Management Agreement 150
                  among MB
                  Gas Inc., our company and Barnabus Energy Inc., our wholly-owned
                  subsidiary10.5**
              Letter
                  of Intent dated July 14, 2005, between Solar Roofing Systems Inc.
                  and our
                  company10.6**
              Technology
                  Licensing Agreement (Suncone) dated July 21, 2005, between Dr.
                  Melvin L.
                  Prueitt and our company10.7**
              Agreement
                  of Purchase and Sale dated June 17, 2005, between our company and
                  MB Gas
                  Inc.**(14)**
              **Code
                  of Ethics**14.1**
              Code
                  of Ethics**(23)**
              **Consents
                  of Experts and Counsel**23.1*
              Consent
                  of Dale, Matheson Carr-Hilton LaBonte.**(31)**
              **Rule
                  13a-14(a)/15d-14(a) Certifications**31.1*
              Certification
                  of Principal Executive Officer filed pursuant to Section 302 of
                  the
                  Sarbanes-Oxley Act of 2002.31.2*
              Certification
                  of Principal Financial Officer filed pursuant to Section 302 of
                  the
                  Sarbanes-Oxley Act of 2002.**(32)**
              **Section
                  1350 Certifications**32.1**
              Certification
                  of Principal Executive Officer and Principal Financial Officer
                  pursuant to
                  18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.*
              Filed
                  Herewith**
              Previously
                  Filed
  (1)
              Incorporated
                  by reference from our Registration Statement on Form SB-2 filed
                  on August
                  1, 2002(2)
              Incorporated
                  by reference from our Current Report on Form 8-K filed on August
                  31,
                  2005




ITEM
        14.PRINCIPAL
        ACCOUNTANT FEES AND SERVICES


*Fees
        Paid to Independent Accountant*





Our
      company retained Dale, Matheson Carr-Hilton LaBonte, an independent registered
      public accounting firm, to provide audit services during the fiscal years ended
      May 31, 2005 and 2004. Our company paid the following fees


to
      our
      independent accountants during the fiscal years ended May 31, 2005 and
      2004:





**Fiscal
                  year ended May****31,****2005**
              
              **Fiscal
                  year ended**
                **May
                  31, 2004**Audit
                  Fees
              
              $
              16,000
              
              $
              8,250Audit
                  Related Services
              
              
              Nil
              
              
              NilTax
                  Fees
              
              
              Nil
              
              
              NilAll
                  Other Fees
              
              
              Nil
              
              
              NilTotal
              
              $
              16,000
              
              $
              8,250





*Audit
      Fees.* This
      category includes the fees for the examination of our consolidated financial
      statements and our quarterly reviews of interim financial statements. This
      category also includes advice on audit and accounting matters that arose during
      or as a result of the audit or the review of our interim financial statements,
      and the preparation of an annual “management letter” on internal control
      matters.




-19-




The
      aggregate fees billed by our independent accountants for professional services
      rendered for the audit of our annual financial statements for the fiscal year
      ended May 31, 2005 and 2004 were $16,000 and $8,250 respectively. For the fiscal
      year ended May 31, 2005, our independent accountants did not bill any
      fees to our company for assurance or services relating to our quarterly
      financial statements.





*Audit
      Related Services.* We
      did
      not incur any audit related services billed by our independent accountants
      during the fiscal years ended May 31, 2005 and 2004.





*Tax
      Fees.* We
      did
      not incur any tax fees billed by our independent accountants during the fiscal
      years ended May 31, 2005 and 2004.





*All
      Other Fees* .
      We did
      not incur any additional fees billed by our independent accountants other than
      the fees listed above during the fiscal years ended May 31, 2005 and
      2004.





Effective
      May 6, 2003, the Securities and Exchange Commission adopted rules that require
      that before our independent accountant is engaged by us or our subsidiary to
      render any auditing or permitted non-audit related services, the engagement
      be:





-
      approved by our audit committee; or





-
      entered
      into pursuant to pre-approval policies and procedures established by the audit
      committee, provided the policies and procedures are detailed as to the
      particular service, the audit committee is informed of each service, and such
      policies and procedures do not include delegation of the audit committee’s
      responsibilities to management.





Our
      board
      of directors, acting as our audit committee, pre-approves all services provided
      by our independent accountant. Our board of directors does not have records
      of
      what percentage of the above fees were pre-approved. All of the services and
      fees described above were reviewed and approved by our board of directors before
      or after the respective services were rendered.





Our
      board
      of directors has considered the nature and amount of the fees billed by Dale,
      Matheson Carr-Hilton LaBonte and believes that the provision of the services
      for
      activities unrelated to the audit is compatible with maintaining the
      independence of Dale, Matheson Carr-Hilton LaBonte.


-20-


**SIGNATURES**







Pursuant
      to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
      1934, the registrant has duly caused this report to be signed on its behalf
      by
      the undersigned, thereunto duly authorized.




May 12, 2006**BARNABUS
              ENERGY, INC.**By:
              /s/ David SaltmanDavid
              SaltmanPresident
              and
              Chief Executive Officer






-21-