AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION ON



### May 16, 2005



SECURITIES AND EXCHANGE
COMMISSIONWASHINGTON, D.C.  20549



### FORM 10-KSB

(Mark One)

[  X ]          ANNUAL REPORT UNDER
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934For the fiscal year ended:February
28, 2005



[   ]           TRANSITION REPORT UNDER
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934For the transition period
from_________________ to _________________________



Commission file number:333-91191



### INTERMOUNTAIN REFINING CO., INC.

(Name of small business issuer in its
charter)



|NEW MEXICO                                                     | 74-2329327                             
|-------------------------------------------------------------- | ---------------------------------------
|(State or other jurisdiction of incorporation
or organization) | (I.R.S. Employer Identification
Number)



1921 Bloomfield
BoulevardFarmington, New Mexico 
87401Telephone: (505)
326-2668(Address, including zip code, and
telephone number, including area code, of issuer's principal executive
offices)

Securities registered under Section 12(b) of the Exchange
Act: NoneSecurities registered under
Section 12(g) of the Exchange Act: None

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
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 .

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

-Continued-

10KSB 1<PAGE>

State issuer's revenues for its most recent fiscal year:
$866,636

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 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)  N/A as of April 30, 2005. There
presently is no market maker for the Registrant's common stock. As no public
trading market exists for the stock , bid and ask prices are not
available.Note: If determining whether a
person is an affiliate will involve an unreasonable effort and expense, the
issuer may calculate the aggregate market value of the common equity held by
non-affiliates on the basis of reasonable assumptions, if the assumptions are
stated.

(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)

Check whether the issuer has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes_____ No
_____

(APPLICABLE ONLY TO CORPORATE
REGISTRANTS)



State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date: 1,155,609 shares
of common stock, no par value, were outstanding on April 30,
2005.

DOCUMENTS INCORPORATED BY
REFERENCE

If the following documents are incorporated by reference,
briefly describe them and identify the part of the Form 10-KSB (e.g. Part I,
Part II, etc.) into which the document is incorporated: (1) any annual report to
security holders; (2) any proxy or information statement; and (3) any prospectus
filed pursuant to Rule 424(b) or (c) of the Securities Act of 1933 ("Securities
Act"). The list documents should be clearly described for identification
purposes (e.g. annual report to security holders for fiscal year ended December
24, 1990).

Certain exhibits required to be filed in Part IV of
this Form 10-KSB have been incorporated by reference to Intermountain's
registration statement on Form S-1 dated April 9, 2001. See exhibit index on
page 33 of this report.

Transitional Small Business Disclosure Format (check one)
Yes____ No _X_

10KSB 2<PAGE>

### Cross Reference Sheet



The Registrant has included all information required to be
provided in Parts I, II and III of Form 10-KSB in its Integrated Annual Report
to Shareholders as of February 28, 2005 as filed herein as part of this report.
The following table provides a cross reference to the specific pages and
sections of the Integrated Annual Report to Shareholders where the information
required by Form 10-KSB may be found:





|Item in Form 10-KSB                                                                          | Section in Integrated Annual Report to
Shareholders                                   | Page
|-------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------- | ----
|Part I                                                                                       |                                                                                       |     
|Item 1. Description of Business                                                              | Intermountain's Business Activities                                                   | 3   
|Item 2. Description of Property                                                              | Description of Properties                                                             | 5   
|Item 3. Legal Proceedings                                                                    | Legal Proceedings                                                                     | 6   
|Item 4. Submission of Matters to a Vote of Security
Holders                                  | Submission of Matters to a Vote of Security
Holders                                   | 6   
|Part II                                                                                      |                                                                                       |     
|Item 5. Market for Common Equity and Related Stockholder
Matters                             | Market for Common Equity and Related Shareholder
Matters                              | 6   
|Item 6. Management's Discussion and Analysis or Plan of
Operation                            | Management's Discussion and Analysis of Financial Condition
and Results of Operations | 7   
|Item 7. Financial Statements                                                                 | Financial Statements of Intermountain                                                 | 7   
|Item 8. Changes In and Disagreements with Accountants on
Accounting and Financial Disclosure | Changes in and Disagreements with Accountants                                         | 7   
|Item 8A. Controls and Procedures                                                             | Controls and Procedures                                                               | 15  
|Part III                                                                                     |                                                                                       |     
|Item 9. Directors, Executive Officers, Promoters and Control
Persons;                        | Directors and Executive Officers                                                      | 13  
|Compliance with Section 16(a) of the Exchange
Act                                            | Compliance with Section 16(a) of the Exchange
Act                                     | 15  
|Item 10. Executive Compensation                                                              | Compensation of Directors and Executive
Officers                                      | 13  
|Item 11. Security Ownership of Certain Beneficial Owners and
Management                      | Security Ownership of Certain Beneficial Owners and
Management                        | 14  
|Item 12. Certain Relationships and Related
Transactions                                      | Certain Relationships and Related Party
Transactions                                  | 15  
|Item 13. Exhibits                                                                            | See Page 33 of this Form 10-KSB                                                       | N/A 
|Reports on Form 8-K                                                                          | None                                                                                  | N/A 
|Item 16. Principal Accountant Fees and Services                                              | Principal Accountant Fees and Services                                                | 15  

10KSB 3<PAGE>

### Intermountain Refining Co., Inc.

### Integrated Annual Report to Shareholders

### February 28, 2005













































The information contained within this report is
intended to provide all information required to comply with the Securities
Exchange Act of 1934 disclosure requirements of Form 10-KSB except for required
exhibits and disclosure about reports filed on Form 8-K for which disclosure has
been included in our Form 10-KSB as filed with the Securities and Exchange
Commission on May 16, 2005. You may obtain a copy of our Form 10-KSB as filed by
submitting a written request to Intermountain Refining Co., Inc., PO Box 35,
Farmington, NM 87499 or you can access our public filings on the internet at
"www.sec.gov" by searching the Edgar Database on "Intermountain
Refining".10KSB
4                                                             
1<PAGE>

### Table Of Contents





|                                                                                     | Page
|------------------------------------------------------------------------------------ | ----
|Intermountain's Business Activities                                                  | 3   
|Natural Gas Production                                                               | 3   
|Crude Oil Production                                                                 | 3   
|Leasing of Asphalt Products Manufacturing and Storage
Facilities                     | 4   
|Other Business Activities                                                            | 4   
|Employees                                                                            | 4   
|Research and Development Activities                                                  | 4   
|Government Regulation, Environmental Laws and
Taxes                                  | 4   
|Competition                                                                          | 5   
|Seasonality                                                                          | 5   
|Description Of Properties                                                            | 5   
|Legal Proceedings                                                                    | 6   
|Submission of Matters to a Vote of Security
Holders                                  | 6   
|Market for Common Equity and Related Shareholder
Matters                             | 6   
|Market for Intermountain Common Stock                                                | 6   
|Shares Eligible for Future Sale                                                      | 6   
|Dividends                                                                            | 6   
|Financial Statements Of Intermountain                                                | 7   
|Changes In And Disagreements With Accountants                                        | 7   
|Managements Discussion And Analysis Of Financial Condition
And Results Of Operations | 7   
|Liquidity and Capital Resources                                                      | 7   
|Cash Requirements as of February 28, 2005                                            | 7   
|Results of Operations                                                                | 8   
|Changes in Accounting Principles                                                     | 12  
|Inflation, Deflation and Changing Prices                                             | 12  
|Directors And Executive Officers                                                     | 13  
|Compensation Of Directors And Executive
Officers                                     | 13  
|Security Ownership Of Certain Beneficial Owners And
Management                       | 14  
|Security Ownership of Certain Owners                                                 | 14  
|Security Ownership of Management                                                     | 14  
|Changes in Control                                                                   | 15  
|Compliance with Section 16(a) of the Exchange
Act                                    | 15  
|Certain Relationships And Related Party
Transactions                                 | 15  
|Controls and Procedures                                                              | 15  
|Principal Accountant Fees and Services                                               | 15  
|Index To Financial Statements                                                        | 16  

10KSB
5                                                             
2<PAGE>

### Intermountain's Business Activities

Intermountain was incorporated under the laws of the state of
New Mexico in January 1984 and conducts its business in the following
areas:

- Production of oil and natural gas
- Leasing of asphalt products manufacturing and storage
facilities
- Other business activities including providing management and
consulting services to others, and leasing unused space in Intermountain's
office building

### Natural Gas Production

We own working interests in and operate 19 natural gas
producing wells located in Southwestern Kansas. Natural gas and helium produced
is sold, under exclusive contract, to Oneok Field Services. Day to day
operation and maintenance of the wells is performed by an individual under
contract with Intermountain.  We have no current plans to drill additional wells
on the Kansas leases, but we are actively engaged in reviewing potential
acquisitions of oil and gas producing properties in other areas.

The exclusive contract with Oneok Field Services contains the
following material provisions:

- The original term of the agreement was for one year beginning
on December 1, 1994 and continued on a month-to-month basis until February 1,
2000 when the term was extended for five years until January 31, 2005. As
neither party terminated the agreement prior to January 31, 2005, the term of
the agreement will continue on a year-to-year basis unless terminated by either
party on sixty days notice prior to the end of any extended term. Oneok has the
option to terminate the agreement at any time on thirty days notice if Oneok
determines that the purchase of gas under the contract is
uneconomic.
- The monthly price paid to Intermountain for natural gas
produced and delivered to Oneok is based on the published first of month index
price for natural gas delivered to Panhandle Eastern Pipeline Co. in Texas and
Oklahoma, less $.15 per million Btu, less a minimum gathering fee of $.2029 per
million Btu and less 0.8% charge for fuel, loss and, unaccounted for gas. The
gathering fee is adjusted annually on January 1 based on the change in the gross
domestic product implicit price deflator for the prior 12 months.
- With the exception of small quantities of agricultural use
gas sold to several local land owners, we are committed to deliver our entire
deliverable capacity from all of our wells for purchase by Oneok at such times
and in such quantities as Oneok may request.
- Payments to Intermountain for gas purchased are due from
Oneok on the 30th day of the month following the month of delivery.
We do not require any collateral or other security for amounts receivable from
Oneok.
- We are responsible for the payment of all taxes, including
production, severance, excise, and property taxes, associated with the
production of natural gas. Oneok reports and pays monthly production and
severance taxes to the state of Kansas on our behalf and withholds such amounts
from payments made to us.

We depend on Oneok
for substantially all of our natural gas sales, which represents a significant
portion of our total revenues.

Effective as of August 1, 2004, we acquired an interest in
several natural gas producing properties located in San Juan County New Mexico
for a cash purchase price of $411,429. The purchase consisted of an estimated
12.48% net working interest (9.98% net revenue interest) in 15 natural gas wells
on 5,420 gross lease acres with estimated reserves of 380,000 Mcf, net to
Intermountain's interest. The properties are operated by an unrelated third
party. In addition to the cash purchase price of the properties, Intermountain
capitalized  $6,600 representing the present value of estimated future plugging
and abandonment costs associated with the properties.

### Crude Oil Production

We own a 90% working interest (72% net revenue interest) in
oil producing properties in Kimball County, Nebraska. The property consists of
approximately 640 gross acres with two producing wells, two water flood
injection wells, one fresh water well, equipment and contracts. We do not
presently operate the property but we have the option to do so at our sole
discretion.  This property does not currently provide a significant source of
revenues for Intermountain.

10KSB
6                                                             
3<PAGE>

### Leasing of Asphalt Products Manufacturing and Storage
Facilities

On January 1, 2002, Intermountain and Paramount Petroleum
Corporation entered into an agreement whereby Paramount leases a portion of our
asphalt facilities located in Fredonia, Arizona. Material provisions of the
agreement with Paramount include the following:

- Paramount is responsible for the operation and maintenance of
the asphalt storage and manufacturing facility and is obligated to reimburse
Intermountain for any direct costs that we may incur with respect to Paramount's
operation of the facility during the term of the agreement.
- The primary term of the agreement was for two years beginning
on January 1, 2002 and expired on December 31, 2003. The agreement was
automatically renewed on January 1, 2004 and will continue on a year to year
basis unless cancelled by either party upon 90 days advance notification prior
to the end of any extended term. As the agreement was not terminated prior to
December 31, 2004, the term of the agreement has been automatically extended to
December 31, 2005.
- Paramount pays $3,200 per month for rent of Intermountain's
asphalt products storage and manufacturing equipment.
- In addition to basic equipment rent, Paramount pays a fee of
$5.50 per ton for all asphalt products shipped from the facility. In the event
that total shipments of asphalt products exceeds 10,000 tons during a calendar
year, Paramount will pay a supplemental fee of $4.50 per ton applicable to all
volumes shipped during the year.

### Other Business Activities

On occasion, we have provided management and consulting
services to others. Fees charged for management and consulting services vary
depending on the services performed. Such services were performed for Red Hills
Manufacturing, Inc. during fiscal 2004 and 2005. Red Hills is a related party to
Intermountain. During 2004 and 2005, we provided management and accounting
services to Red Hills for a fee of $3,000 per month. Due to changes in the level
of services we provide to Red Hills, the monthly management fee was reduced to
$275 per month effective as of April 1 2005. While we may provide occasional
consulting services to others in the future, there can be no assurance that such
opportunities will be available or that we can maintain any significant level of
revenues from such activities.

We lease unused office space in our Farmington, New Mexico
office building to unrelated third parties and actively manage the building.
Revenues from office leasing varies between $13 and $25 per square foot annually
depending on the type of space rented and additional services provided to
tenants such as secretarial, phone answering, cleaning, and office machine use.
Leasing of office space should not be viewed as a material source of revenues
for Intermountain.

### Employees

We presently employ three people, including officers, who are
salaried and employed on a full time basis in our administrative offices in
Farmington, New Mexico. All full time employees are eligible to participate
in Intermountain's SIMPLE IRA Plan and a group medical insurance program. None
of our employees are represented by a union and management believes its employee
relations to be satisfactory.

### Research and Development Activities

We have not spent any material amount on research or
development activities since our inception.

### Government Regulations, Environmental Laws and Taxes

Our business is subject to certain national, state and local
laws and regulations relating to the production and transportation of oil,
natural gas and the processing of hydrocarbons, as well as environmental and
safety matters. Many of these laws and regulations have become more stringent in
recent years, imposing greater liability on a larger number of potentially
responsible parties. We believe we have complied in all material respects with
these laws and regulations. Because the requirements imposed by such laws and
regulations are frequently changed, we are unable to predict the ultimate cost
of compliance with these requirements or their effect on our
operations.

The operation of gas fields and the processing of hydrocarbons
inherently involve environmental risks. These risks can be minimized, but not
eliminated, through the use of various engineering and other technological
methods. We intend to employ such methods to industry standards.

Severance taxes on oil and natural gas production are
collected and paid by the first purchaser of the production.

10KSB
7                                                             
4<PAGE>

### Competition

The petroleum and natural gas industries are highly
competitive. We encounter competition from other oil and gas and petroleum
companies in all of our operations, including the acquisition of producing
properties, obtaining services, including oil field services, and the sale of
natural gas. Our competitors include integrated petroleum and natural gas
companies and numerous independent oil and gas companies, and individuals. Many
of these competitors are large and well established with substantially larger
operating staffs and greater capital resources and who, in many instances, have
been engaged in the energy business for a much longer time than Intermountain.
Such competitors may be able to develop better information and provide better
analysis of available information, to pay more for raw materials and productive
oil and natural gas properties and exploratory prospects and to define,
evaluate, bid for and purchase a greater number of properties and prospects than
our resources permit.

The market for the asphalt products produced at our asphalt
storage and manufacturing facility in Fredonia, Arizona is generally located in
northwestern Arizona and southwestern Utah. Paramount competes for market share
with various suppliers throughout this region. The long term success of our
equipment lease to Paramount is greatly dependent on Paramount's ability to
compete with the other suppliers in the region.

### Seasonality

Generally, our natural gas wells are produced at a rate
intended to maintain gathering system pressures within an operating range
established by the gathering system operator. Agricultural irrigation users who
are connected to the gathering system tend to have a greater demand for natural
gas during the summer months which in turn lowers gathering system pressures
allowing greater well production. During the winter months, local use is minimal
and the gathering system is operated at higher pressures, which lowers our
production capability. The amount of local rainfall can affect the demand for
natural gas by local agricultural irrigation users, which in turn can affect our
rate of production.

The use of asphalt products for highway construction, repair
and maintenance is usually restricted during winter months where cold weather,
rain and snow are factors. We expect that the majority of fees earned from the
shipment of asphalt products will occur during the months of May through October
and that the asphalt manufacturing facility will normally be idle during the
months of December through March.

### Description of Properties

Except for the mineral leases associated with our Kansas,
Nebraska, and New Mexico oil and gas properties, which are held by production,
all properties used in the conduct of our businesses are owned in fee. 
There are no outstanding mortgages on any our properties.

We own an average 98.4% working interest (average 79.7% net
revenue interest) in 19 producing natural gas wells on 10,601 gross lease acres
in Scott and Finney Counties in southwest Kansas.  As of February 28, 2005,
the proven producing reserves are estimated to be 2,290 million cubic feet net
to our interest.  For the year ended February 28, 2005, we produced 167
million cubic feet of natural gas net to our interest.

On March 1, 2003, we acquired a 90% working interest (72% net
revenue interest) in 2 producing oil wells on 640 gross lease acres in Kimball
County in southwest Nebraska. As of February 28, 2005, the proven producing
reserves are estimated to be 14,074 barrels net to our interest. For the year
ended February 28, 2005, we produced 788 barrels of oil net to our
interest.

On August 31, 2004, we acquired a 12.48% working interest
(9.98% net revenue interest) in 15 natural gas producing wells on 5,420 gross
acres in San Juan County, New Mexico. As of February 28, 2005, the proven
producing reserves are estimated to be 370 million cubic feet of natural gas net
to our interest. From the date of acquisition to end of the current fiscal year,
we produced 10 million cubic feet of natural gas net to our interest.

No reserve estimates on any of our oil and gas properties have
been filed with any Federal authorities or agencies.

Additional information relative to our oil and natural gas
reserves and activities is included in Note M of our February 28, 2005 financial
statements included on page 27 of this report. Estimates of reserves are based
on internal data prepared by us and should not be construed as exact quantities.
Estimates of reserves are subject to future changes based on numerous factors,
including, but not limited to, changes in future market prices, changes in
transportation and gathering system operating conditions and arrangements,
changes in operating and production costs, changes in production characteristics
of individual wells, and changes in regulatory requirements. Many of the factors
affecting changes in reserve estimates are unpredictable and beyond our
control.

10KSB
8                                                             
5<PAGE>Our asphalt
storage and manufacturing facility is situated on 20 acres of fee-owned land in
Fredonia, Arizona.  A portion of our asphalt storage and manufacturing
equipment is presently leased to Paramount and portions of the asphalt products
manufacturing equipment located at the facility are owned by Paramount.

We own a 7,000 square foot office building in Farmington, New
Mexico.  Approximately one half of the office building is used for our
corporate offices.  The remainder of the space is leased, or available for
lease, to several non-related tenants.

We own two Caterpillar Model 3606 diesel powered electric
generators each capable of producing up to 1.5 megawatts. The generator facility
is located at our facility in Fredonia Arizona. The generators were taken out of
service in January 1999 because we were no longer able to generate electricity
at competitive prices. The generators have been for sale since June 1999.

The electric generation equipment has a combined carrying
value of $270,000, net of impairment of $320,505. The impairment in value
reflects our estimate of the amount by which the original carrying value of the
equipment exceeded the estimated fair value of the equipment, less selling
costs. The actual amount that may be realized from the future sale of the
equipment may be different.

### Legal Proceedings

We are not aware of any pending or threatened legal
proceedings to which Intermountain is a party. We are not aware of any pending
or threatened legal proceedings to which any director, officer, affiliate of
Intermountain, or any owner of more than 5% of Intermountain's common stock, is
an adverse party to, or has a material interest adverse to,
Intermountain.

### Submission of Matters to a Vote of Security Holders

There have been no matters submitted to a vote of security
holders during the past year through the solicitation of proxies or
otherwise.

### Market for Common Equity and Related Shareholder Matters

### Market for Intermountain Common Stock

There is presently no public market for our common stock.
Accordingly, we are unable to provide any historical information regarding sales
prices for our common stock. No prediction can be made as to the effect, if any,
that the sale of shares, or the availability of shares for sale, will have on
the market price prevailing from time to time. Nevertheless, sales of
substantial amounts of the common stock in the public market could adversely
affect prevailing market prices and our ability to raise equity capital in the
future.

### Shares Eligible for Future Sale

There are 1,155,609 shares of Intermountain common stock
outstanding held by approximately 425 shareholders. Of the 1,155,609 shares
outstanding, 442,643 shares are freely tradable in the public market without
restriction, and 712,966 shares are subject to restrictions on future sales as
set forth in Rule 144 of the Securities Act of 1933.

Of the 712,966 restricted shares, 700,712 shares are held by
affiliates of Intermountain. In general, persons who are affiliates of
Intermountain are entitled to sell, within any three month period, a number of
shares that does not exceed the greater of the following:

- One percent of the then outstanding shares of common stock,
or
- The average weekly reported trading volume of the common
stock during the four calendar weeks immediately preceding the date on which
notice of such sale is filed with the Securities and Exchange Commission,
provided that manner of sale and notice requirements and requirements as to the
availability of current public information concerning Intermountain are
satisfied.

Mr. William N. Hagler and Mr. Rick
L. Hurt may be considered affiliates of Intermountain. See "Security Ownership
of Certain Beneficial Owners and Management".

### Dividends

Intermountain has never paid any dividends on its common stock
and while there are no restrictions on the payment of dividends, Intermountain
does not anticipate paying any dividends in the foreseeable future.

10KSB
9                                                             
6<PAGE>

### Financial Statements of Intermountain

The audited financial statements of Intermountain as of
February 28, 2005 and for each of the two years in the period ended February 28,
2005 are included beginning on page 16 of this report. Supplemental financial
information relative to Intermountain's natural gas reserves and activities is
included in Notes L and M to Intermountain's audited financial statements as of
February 28, 2005 beginning on page 26 of this report.

### Changes in and Disagreements with Accountants

There have been no disagreements between Intermountain and its
accountants regarding financial disclosure issues.

### Management's Discussion and Analysis of Financial Condition and Results of
Operations

The following discussion of our financial condition as of
February 28, 2005 and results of operations for the years ended February 29,
2004 and February 28, 2005, should be read in conjunction with our financial
statements, the notes related thereto, and the other financial data included
elsewhere in this report.

Some of the statements contained in this report relate to
future expectations, contain projections of results of operations or financial
condition or include other forward-looking information. When used in this
report, the words "estimate", "project", "anticipate", "intend", "believe",
"hope", "may" and similar expressions, as well as "will", "shall" and other
indications of future tense, are intended to identify forward-looking
statements. Those statements are subject to known and unknown risks,
uncertainties and other factors that could cause the actual results to differ
materially from those contemplated by the statements.  You are cautioned
not to place undue reliance on the forward-looking statements.

### Liquidity and Capital Resources

The following table presents selected financial data regarding
cash and working capital for each of the past two fiscal years:



|                                         | Fiscal Year Ended
|---------------------------------------- | -----------------
|                                         | February 29, 2004
|Cash and cash equivalents (unrestricted) | $     895,373    
|                                         |                  
|Working capital                          | $     926,435    
|                                         |                  

During the year ended February 28, 2005, we realized $340,000
of cash flow from operating activities. The positive cash flow was primarily the
result of profits realized from natural gas production and leasing of our
asphalt products manufacturing and storage facilities. There were no other
significant operating sources or uses of cash during the year. Significant
non-operating uses of cash during the year ended February 28, 2005 included
$411,000 for the acquisition of the natural gas producing properties in New
Mexico.

During the year ended February 29, 2004, we realized $333,000
of cash flow from operating activities. The positive cash flow was primarily the
result of profits realized from natural gas production and leasing of our
asphalt products manufacturing and storage facilities. There were no other
significant operating sources or uses of cash during the year. Significant
non-operating uses of cash during the year ended February 29, 2004 included
$50,000 for the acquisition of the oil producing properties in Nebraska.

### Cash requirements as of February 28,
2005

Estimated cash requirements for the next twelve months
include:

- $23,000 per month for normal general and administrative
costs, including costs to operate our Farmington office building
- $2,500 per month estimated costs associated with the
ownership and maintenance of Intermountain's asphalt products manufacturing and
storage facility
- $65,000 to $80,000, net of scrap metal sales, associated with
the demolition and removal of unused refining equipment at our Fredonia facility
as discussed below

10KSB
10                                                             
7<PAGE>

In March 2005, subsequent
to year end, we entered into an agreement with a company to dismantle, for
scrap, specific portions of the idle equipment located at our Fredonia facility.
The equipment to be removed is not currently being used, nor expected to be used
in the future. The agreement provides for the demolition company to pay
Intermountain $30 per ton for all scrap steel removed. Our initial estimates
indicate that we should receive between $20,000 and $35,000 for the removed
metals. The equipment being removed presently has a $0 book value as we had
previously provided a $97,907 impairment of the entire carrying value of
equipment. While the demolition company is responsible for all costs associated
with dismantling and removing the equipment, we preliminarily estimate that we
will incur approximately $100,000 in costs associated with the demolition and
removal of non-metallic structures and debris and the abatement of asbestos that
has been identified to be present in portions of the equipment. The estimated
amount of our costs could change upon completion of our evaluations and receipt
of contractor bids.

In its efforts to develop additional sources of revenues,
Intermountain may incur some project development costs. We are unable to predict
the level of costs that may be incurred for such additional projects during the
next year.

Expected sources of cash during the next twelve months consist
of cash flows from operating activities estimated as follows:

- $34,000 per month (net of production costs) from estimated
oil and natural gas operations based on results of operations during the year
ended February 28, 2005 and projected natural gas prices over the next 12
months
- $2,000 per month from Farmington office space
rental
- $900 per month interest earned on cash balances
- $3,200 per month from the rental of our asphalt storage and
manufacturing facility to Paramount, plus an estimated average $12,500 per month
in throughput fees based on annual asphalt product shipments of 15,000 tons
during the coming paving season

Estimates of
future sources and uses of cash presented herein are based on our assumptions
and expectations that our operations will continue at current levels without
material interruption and that collection of accounts will occur under agreed
terms. Actual results may be materially different.

The major components of the electric generation facility are
presently available for sale but there is no assurance that the equipment will
be sold within a reasonable period of time.

It is presently our intent to seek other opportunities to
improve cash flows and operating resources including, but not limited to, the
following:

- the acquisition of one or more producing oil and natural gas
properties
- the sale of all or major portions of our electric generation
equipment
- the participation in, or operating of, petroleum processing
related projects owned by others
- the participation in an industry related merger or
acquisition

There are presently no formal
plans or agreements in place involving any of these generally defined
opportunities and there is no assurance that Intermountain will enter into any
formal agreements in the near future that would have a significant impact on
Intermountain's financial condition.

### Results of Operations

The following table summarizes the results of Intermountain's
operations for each of the past two fiscal years. All percentage amounts were
calculated using the underlying data.



|                                                                           | Fiscal Year Ended
|-------------------------------------------------------------------------- | -----------------
|                                                                           | February 29, 2004
|Revenues                                                                   | $    818,732     
|Costs and Expenses                                                         | 758,137          
|Net income before taxes                                                    | 60,595           
|Income taxes                                                               | 149              
|Net income before cumulative effect of change in accounting
principle      | 60,446           
|Cumulative effect of change in accounting for asset
retirement obligations | (18,593)         
|Net income                                                                 | $  41,853        

10KSB
11                                                            
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#### Revenues

The following table presents a summary of our revenues for the
periods indicated. All percentage amounts were calculated using the underlying
data.



|                                  | February 29, 2004 | % Change | February 28, 2005
|--------------------------------- | ----------------- | -------- | -----------------
|Oil and gas production            | $    584,997      | 5%       | $     616,812    
|Asphalt equipment rental and fees | 172,233           | 10%      | 189,254          
|Real estate rental                | 25,502            | (4)%     | 24,570           
|Consulting fees                   | 36,000            | 0%       | 36,000           
|Total Revenues                    | $   818,732       | 6%       | $     866,636    



Changes in individual components of revenues are discussed
below:

##### Oil and natural gas revenues

The following table contains oil and gas production volume,
net to our interest, and average sales prices received for the periods
indicated:





|                                | For the year ended
|------------------------------- | ------------------
|                                | February 29, 2004 
|Natural gas produced, net (Mcf) | 183,380           
|Average selling price ($/Mcf)   | $2.99             
|Crude oil produced, net (Bbls)  | 539               
|Average selling price ($/Bbl)   | $26.70            

The increase in oil and natural gas revenues for the year
ended February 28, 2005 as compared to the year ended February 29, 2004
consisted of a $51,000 increase associated with the addition of the New Mexico
gas properties in August 2004, and a $14,000 increase in Nebraska crude oil
sales, offset by a $33,000 decrease in Kansas natural gas sales. The decrease in
Kansas natural gas revenues consisted of a $22,000 decrease associated with the
prior year one time resolution of a previously disputed payment along with a
16,000 Mcf (9%) reduction in natural gas produced offset by a $0.23 per MCF (8%)
increase in natural gas sales prices. The increase in Nebraska crude oil
revenues consisted of a 249 Bbl increase in crude oil sold along with an $8.99
per Bbl (34%) increase in crude oil sales prices. Revenues associated with the
New Mexico natural gas properties consisted of production from August 2004
through December 2004 of 9,900 Mcf with an average sales price of $5.19 per Mcf.
Due to the complexity of the economic factors affecting energy prices, we are
unable to predict the direction or magnitude of future price changes. It is
expected that our natural gas production in Kansas will decline slightly over
the next twelve months consistent with observed decline rates, but will be
offset to an extent by the addition of full production associated with the newly
acquired New Mexico properties.

The increase in oil and natural gas revenues for the year
ended February 29, 2004 as compared to the year ended February 28, 2003
consisted of a $192,000 increase in natural gas revenues in Kansas and the
addition of $14,000 from oil production in Nebraska that was acquired in March,
2003. The $192,000 increase in natural gas revenues included a one time
recognition of  $22,000 from the resolution of a previously disputed payment.
The remaining $172,000 increase consisted of an $0.88 per Mcf (42%) increase in
the average natural gas price received along with a 4,000 Mcf (2%) increase in
natural gas produced.  The oil producing properties in Nebraska were acquired on
March 1, 2003. Accordingly, there are no comparable operations for this activity
during the year ended February 28, 2003.

##### Leasing of asphalt products manufacturing and storage
facilities

The agreement with Paramount provides for Intermountain to
receive $3,200 per month in basic rent for Intermountain's asphalt storage and
manufacturing facility. In addition, Intermountain receives a basic $5.50 per
ton fee for all asphalt products shipped from the facility plus a supplemental
fee of $4.50 per ton, applied retroactively to all tons shipped during the year,
in the event that annual shipments from the facility exceed 10,000
tons.

10KSB
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9<PAGE>

The increase in asphalt equipment rental fees during the year
ended February 28, 2005 as compared to the year ended February 29, 2004 was
attributed to a slight increase in product shipments from the facility. Basic
equipment rental revenues remained the same during the two periods. Fees
received for products shipped increased by $17,000 (13%) during the year ended
February 28, 2005 as compared to the year ended February 29, 2004. While the
initial term of the agreement with Paramount expired on December 31, 2003, the
term of the agreement has now been extended to December 31, 2005 under the
automatic extension provisions of the agreement. Paramount has not expressed any
intention to cancel or renegotiate the agreement at the end of the current term.
However, there is no assurance that the current agreement will be continued
beyond its current term. Revenues associated with this activity are expected to
remain level over the next year.

The increase in asphalt equipment rental fees during the year
ended February 29, 2004 as compared to the year ended February 28, 2003 was
attributed to a slight increase in product shipments from the facility. Basic
rental revenues remained the same during the two periods. Fees received for
products shipped increased by $17,000 (15%) during the year ended February 29,
2004 as compared to the year ended February 28, 2003.

##### Real estate rental

Real estate rental revenues declined by an average $78 per
month for the year ended February 28, 2005 as compared to the year ended
February 29, 2004 due to a slight decrease in occupancy. As of February 28,
2005, there were two vacant office spaces available for rent in our Farmington
office building. Rental income is not expected to change significantly over the
coming year.

Real estate rental revenues increased by an average $189 per
month for the year ended February 29, 2004 as compared to the year ended
February 28, 2003 due to an increase in average occupancy plus a slight increase
in some rental rates for space in our Farmington office building.

##### Consulting fee revenues

There was no change in consulting fee revenue during the year
ended February 28, 2005 as compared to the year ended February 29, 2004. Due to
a decrease in the level of management and accounting services provided to Red
Hills, effective as of April 1, 2005, the monthly consulting fee charged to Red
Hills was decreased from $3,000 to $275. With the exception of Red Hills, we
currently do not have any plans or agreements to provide consulting services to
others during the next twelve months. Accordingly, consulting fee revenues
during the coming year are not expected to be significant.

There was no change in consulting fee revenue during the year
ended February 29, 2004 as compared to the year ended February 28, 2003.

#### Costs and Expenses

The following table presents a summary of  our costs and
expenses for the last two fiscal years:



|                                                      | Fiscal Year Ended
|----------------------------------------------------- | -----------------
|                                                      | February 29, 2004
|Cost of sales                                         | $    191,173     
|General and administrative costs                      | 269,107          
|Depletion, depreciation and amortization              | 60,821           
|Loss on impairment of equipment                       | 245,000          
|Accretion of discount on asset retirement
obligations | 2,846            
|Loss on settlement of asset retirement
obligations    | -                
|Interest and investment (income) expense, net         | (10,810)         
|Total costs and expenses                              | $  758,137       
|                                                      |                  

Changes in individual components of costs and expenses are
discussed below.

##### Cost of sales

Cost of sales includes costs incurred in the production of oil
and natural gas, and costs of maintaining the asphalt facility.

The increase in cost of sales during the year ended February
28, 2005 compared to the year ended February 29, 2004 consisted of a $65,000
increase in oil and natural gas production costs along with a $22,000 increase
in asphalt facility maintenance costs. The increase in oil and natural gas
production costs consisted of a $28,000 increase in Kansas production costs, a
$5,000 increase in Nebraska production costs, and the addition of $32,000 of
production costs associated with the newly acquired New Mexico gas properties.
Significant changes in Kansas production costs included a $14,000 increase in
property taxes and a $14,000 increase in equipment repair costs. The increase in
Nebraska production costs was substantially attributed to equipment repair
costs. Well pump, production tubing, surface equipment, and well casing failures
occur randomly and the timing and cost of repairs cannot be accurately
predicted. In addition, future repair costs may be material and become a
critical factor in the assessing the economic viability of individual wells. The
increase in asphalt facility maintenance costs was primarily attributed to an
increase in environmental permitting and compliance costs associated with soil
testing and closure of our old process water collection and evaporation systems.
Activities associated with the closure are nearly complete and future costs
associated with this activity are not expected to be significant.

10KSB
13                                                             
10<PAGE>

The decrease in cost of sales during the year ended February
29, 2004 compared to the year ended February 28, 2003 consisted of a $49,000
reduction in oil and natural gas production costs offset by a $6,000 increase in
asphalt facility maintenance costs. The reduction in oil and natural gas
production costs included a $66,000 reduction in production costs associated
with the Kansas natural gas properties offset by the addition of $18,000 in
production costs associated with the newly acquired Nebraska oil properties.
Significant changes in Kansas production costs  included a $49,000 reduction in
well equipment repairs, a $12,000 reduction in property taxes and a $4,000
reduction in salt water disposal costs. Significant oil production costs, net to
our interest, associated with the newly acquired Nebraska properties included
$7,000 for ongoing utility and pumping services, and $9,000 for equipment
repairs. Ongoing costs associated with the asphalt facility mainly consist of
property taxes, facility insurance, and environmental compliance costs including
annual permit renewals. The increase in asphalt facility maintenance costs
consisted mainly of a $5,000 increase in costs associated our aquifer protection
permit.

##### General and administrative expenses

General and administrative expenses include the cost of our
officers and administrative employees, costs incurred to operate and maintain
our Farmington office building, and all items of general overhead required to
manage and administer our corporate affairs.

The increase in general and administrative expenses during the
year ended February 28, 2005 compared to the year ended February 29, 2004
consisted mainly of a $5,000 increase in professional accounting and auditing
services and a small net increase in all other general and administrative cost
classifications. Normal ongoing general and administrative costs are expected to
remain relatively unchanged over the next twelve months.

The decrease in general and administrative expenses during the
year ended February 29, 2004 compared to the year ended February 28, 2003
consisted mainly of an $11,000 reduction in officer life insurance expense. All
other cost items within the general and administrative cost classification
remained relatively unchanged from those from the prior year. The reduction in
officer life insurance expense was related to the August 2002 surrender and
cancellation of an officer life insurance policy that had a base annual premium
of $24,000.

##### Depletion, depreciation and
amortization

The decrease in depletion and depreciation for the year ended
February 28, 2005 compared to the year ended February 29, 2004 consisted of a
$1,000 increase in depletion on oil and natural gas production offset by a
$4,000 decrease in depreciation on asphalt facility assets. The increase in
depletion on oil and natural gas production consisted of an $11,000 decrease in
Kansas depletion offset by a $1,000 increase in Nebraska depletion along with
the addition of $11,000 from the newly acquired New Mexico properties. The
decrease in Kansas depletion was attributed to a reduction in gas production
along with a reduction in the depletion rate associated with an increase in our
Kansas reserve estimates during the prior year.

The increase in depletion and depreciation for the year ended
February 29, 2004 compared to the year ended February 28, 2003 consisted of a
$1,000 increase in depletion on Kansas natural gas production associated with a
slight increase in production over the prior year and the addition of $2,000 in
depletion on Nebraska oil production acquired in March 2003. Depreciation
expense on all other property and equipment was relatively unchanged from the
prior year. It should be noted that there was slight increase in depletion
expense associated with the change in accounting for asset retirement
obligations, specifically future well plugging costs, that was implemented
effective as of March 1, 2003.

##### Accretion of discount and loss on settlement of asset
retirement obligations:

Accretion of discount on asset retirement obligations consists
of changes in the present value of future asset retirement obligations with the
passage of time. Gains or losses on the settlement of asset retirement
obligations arise from the difference between actual asset retirement costs
incurred and the present value, at the time of retirement, of the previously
estimated retirement cost.

10KSB
14                                                             
11<PAGE>

The loss on settlement of asset retirement obligations during
the year ended February 28, 2005, consisted of an $8,200 loss from plugging one
Kansas gas well offset by a $200 gain on plugging two Nebraska wells. The Kansas
well failed prematurely due to an irreparable casing failure that occurred in
November 2003. The plugging costs incurred during the year ended February 28,
2005 exceeded the value of the previously estimated retirement cost due to the
premature failure of the well and abnormal plugging costs experienced due to the
complex nature of the casing failure. The two wells plugged in Nebraska were not
producing when the property was purchased in March 2003 and plugging proceeded,
as scheduled, during the year ended February 28, 2005.

We did not incur any gains or losses on asset retirement
obligations during the year ended February 29, 2004.

##### Loss on impairment of equipment

In the opinion our management, during the year ended February
28, 2005, there are no significant changes in the valuation of our assets that
would require the recognition of any additional impairment reserves.

As of February 29, 2004, we recognized an additional $245,000
impairment in value of our electric generation equipment that is currently for
sale.

##### Net interest and investment income
(expense)

Interest and investment income includes earnings on cash
balances and net earnings on investments, less interest expense
incurred.

Net interest and investment income during the year ended
February 28, 2005 of $11,000 consisted mainly of interest earned on cash
balances and dividends and royalties earned on investments in publicly traded
equity securities and royalty trusts. During the year ended February 28, 2005,
we sold all of our investments in mutual funds and realized a loss of $900. The
proceeds from the sale of the mutual funds were reinvested in publicly traded
oil and gas royalty trusts. We did not incur any interest expense during the
year. Interest and investment income is expected to remain relatively unchanged
over the next twelve months.

Net interest and investment income during the year ended
February 29, 2004 of $11,000 consisted entirely of interest and dividends earned
on cash balances and investments in mutual funds. Other than the automatic
dividend reinvestments, there were no significant investment purchase or sale
transactions during the year. We did not incur any interest expense during the
year.

### Changes in Accounting Principles

During the year ended February 28, 2005, the Financial
Accounting Standards Board did not issue any new statements that required any
changes in our accounting principles.

Effective as of March 1, 2003, we implemented the provisions
of Financial Accounting Standards Board Statement No. 143 "Accounting for Asset
Retirement Obligations". The Statement addresses financial accounting and
reporting for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. The Statement is applicable to
all entities that have legal obligations to settle costs associated with the
future retirement of such assets. The operation of oil and gas wells is governed
by state regulations that include a requirement to properly plug a well when it
becomes no longer capable of economic production. Accordingly, we are obligated
to incur costs in the future to plug and abandon our gas wells in Kansas, New
Mexico and our oil wells in Nebraska.

Statement No. 143, as it applies to our future oil and gas
well plugging obligations, requires the amount of future plugging costs to be
estimated and recorded, at its present value as of the date of acquisition, as a
liability in our balance sheet with a corresponding increase in the capitalized
cost of the oil and gas assets.  Subsequently, the additional capitalized cost
of the oil and gas assets is amortized to expense using the units of production
method, and the discount on the present value of the liability is amortized to
accretion expense based on the increase in the present value of the obligation
over time. Actual costs incurred for plugging and abandonment activities are
charged against the liability instead of being charged directly to results of
operations, as was the case before implementation of the change.

As we acquired our Kansas natural gas assets prior to March 1,
2003, it was necessary to recognize the cumulative effect of the accounting
change as it related to those assets as if the new accounting principle had been
in effect when the assets were originally acquired. The cumulative effect of the
change resulted in an $18,593 charge to results of operations for the year ended
February 29, 2004.

Additional discussion of this change in accounting principle
is contained in our financial statements beginning on page 16 of this
report.

### Inflation, Deflation and Changing Prices

The results of operations and capital expenditures will
continue to be affected by inflation, deflation and changing prices.  A
decline in the price of natural gas could have an adverse effect on
Intermountain's operations.  Management is unable to determine the full
impact of inflation, deflation and changing prices on the results of operations
or working capital.

10KSB
15                                                             
12<PAGE>

### Directors and Executive Officers



|Name and Address                                                  | Age | Position                                      | Held Since
|----------------------------------------------------------------- | --- | --------------------------------------------- | ----------
|William N. Hagler4421 Bella
Vista Cr.Farmington, New Mexico 87401 | 72  | President and Director                        | 1984      
|                                                                  |     |                                               |           
|Rick L. Hurt5701 Tee
Dr.Farmington, New Mexico 87402              | 52  | Controller, Secretary, Treasurer and Director | 1985      

Background information concerning the Officers and
Directors is as follows:

William N. Hagler has been the President and a Director
of Intermountain since 1984. Mr. Hagler received a B.S. degree in Industrial
Engineering from North Carolina State University in 1955.  From 1955 to
1968, he was employed by Esso Standard Oil, Cities Service Oil Co. and Riffe
Petroleum Co. in various phases of the petroleum refining and marketing
industry.  In July 1968, he became assistant to the president and later
vice president of Plateau, Inc., Farmington, New Mexico, a regional refining and
marketing firm.  His responsibilities have included refinery management,
marketing, corporate development, economics and planning, crude oil supply,
negotiation and administration of processing arrangements, labor relations,
coordination of refinery acquisition and expansion programs, and relations with
state and federal regulatory bodies.  In 1979, Mr. Hagler organized Unico,
Inc., the former parent company of Intermountain, and served as its President
and as a Director from its inception until June 1998 when he resigned both
positions. In April 1993, Mr. Hagler accepted an appointment as a Director of
Saba Petroleum and from October 1998 until December 1998 also served as its
Management Committee Chairman. He resigned from all Saba Petroleum positions in
March 1999. During 1999, Mr. Hagler accepted an appointment as Chairman of the
Board of Directors of Petrominerals Corporation. Mr. Hagler resigned his
position with Petrominerals during 2002. Mr. Hagler is also a member of the
Farmington, New Mexico Public Utilities Commission.

Rick L. Hurt has been the Secretary, Treasurer and a
Director of Intermountain since 1985. Mr. Hurt received a BBA degree in
Accounting from the University of New Mexico in 1979.  From 1979 to 1982,
he was employed as a staff accountant and later as a senior accountant by the
accounting firm of Fox & Company in its Albuquerque, New Mexico
offices.  From 1982 until March 1985, he was employed as chief accountant
for the law firm of Davis and Davis in Austin, Texas.  Mr. Hurt is
certified as a public accountant in the states of New Mexico and Texas;
although, he has not maintained his licenses to practice public accounting in
those states.  Mr. Hurt joined Unico, Inc., the former parent company of
Intermountain, as Assistant Controller in March 1985, and became its Controller,
Secretary, Treasurer, and a Director in May 1985. Mr. Hurt resigned from these
positions in June 1998.

Both Mr. Hagler and Mr. Hurt may be deemed a parent or
promoter of Intermountain as those terms are defined in the rules and
regulations promulgated under the Securities Act of 1933.

No family relationship exists between any officer or director
of Intermountain and no officer or director of Intermountain has been subject,
during the preceding 5 years, to any of the events set forth in paragraph (d) of
Item 401 of Regulation S-B.

### Compensation of Directors and Executive Officers

The following table will inform you about the compensation
earned by all of our executive officers for services rendered during the last
three fiscal years:



|Name and Principal
Positions                       | Year         | Salary                   | Bonus       | Other Annual Compensation | Long-Term Compensation Awards - Restricted
Stock Awards | All Other Compensation             
|-------------------------------------------------- | ------------ | ------------------------ | ----------- | ------------------------- | ------------------------------------------------------- | -----------------------------------
|                                                   |              | ($)                      | ($)         | ($)                       | (#)                                                     | ($)                                
|William N. Hagler                                  | 2005         | $101,164                 | $  0        | $  0                      | 0                                                       | $2,500     (1)                     
|Chief Executive Officer and Director               | 20042003     | $101,164$101,164         | $  0$
0     | $  0$
0                   | 00                                                      | $3,035
(1)$3,035     (1)           
|                                                   |              |                          |             |                           |                                                         |                                    
|Rick L. Hurt                                       | 2005         | $ 54,889                 | $  0        | $  0                      | 0                                                       | $1,647    (1)                      
|Secretary, Treasurer, and Director                 | 20042003     | $ 54,889$
54,889         | $  0$
0     | $  0$
0                   | 00                                                      | $1,647    (1)$1,647
(1)            
|                                                   |              |                          |             |                           |                                                         |                                    
|All officers and directors as a group ( 2
persons) | 200520042003 | $156,053$156,053$156,053 | $  0$
0$  0 | $  0$
0$  0               | 000                                                     | $4,147    (1)$4,682
(1)$4,682   (1)

10KSB
16                                                            
13<PAGE>

(1) Consists of SIMPLE IRA employer matching contributions
amounting to the lesser of employee elective deferrals or 3% of salary.

Our employees, including officers, may receive such bonuses
and salary increases as the Board of Directors, in its sole discretion, may
award from time to time. We have not increased officers salaries since April,
1997 at which time a 2.5% cost of living adjustment was awarded.

We provide health insurance benefits to the officers and all
other full time employees.

We maintain a SIMPLE IRA plan for our officers and all of our
full time employees. Participation in the plan is voluntary and employee
contributions are limited by regulations established annually by the Internal
Revenue Service. We are required to match employee contributions up to the
lesser of 3% of salary or the amount of employee contributions.

No director has been compensated for attending meetings of the
Board of Directors. However, by resolution of the Board of Directors, a fixed
sum and expenses of attendance, if any, may be allowed for attendance at each
regular and special meeting of the Board of Directors.

We do not currently maintain director and officer liability
insurance.

We have no employment contracts with any of our employees. All
employees can terminate employment at will.

### Security Ownership of Certain Beneficial Owners and Management

### Security Ownership of Certain Owners

The following table lists the only persons known to us who
beneficially own five percent (5%) or more of the issued and outstanding
Intermountain common stock, its only voting security:



|Title of Class | Name and address of Beneficial
owner | Amount and nature of Beneficial
ownership | Percent of Class
|-------------- | ------------------------------------ | ----------------------------------------- | ----------------
|Common stock,  | William N. Hagler                    | 693,808 shares of                         | 60.04%          
|no par value   | 4421 Bella Vista Cr.                 | record and beneficially                   |                 
|               | Farmington, NM 87401                 |                                           |                 

### Security Ownership of Management

The following table lists the ownership of Intermountain
common stock by the management:





|Title of Class | Name and address of Beneficial
owner | Amount and nature of Beneficial
ownership | Percent of Class
|-------------- | ------------------------------------ | ----------------------------------------- | ----------------
|Common stock,  | William N. Hagler                    | 693,808 shares of                         | 60.04%          
|no par value   | 4421 Bella Vista Cr.                 | record and beneficially                   |                 
|               | Farmington, NM 87401                 |                                           |                 
|               |                                      |                                           |                 
|Common stock,  | Rick L. Hurt                         | 6,904 shares of                           | 0.60%           
|no par value   | 5701 Tee Dr.                         | record and beneficially                   |                 
|               | Farmington, NM 87402                 |                                           |                 
|               |                                      |                                           |                 
|Common stock,  | All officers and directors           | 700,712 shares of                         | 60.64%          
|no par value   | (2 people) as a group                | record and beneficially                   |                 
|               |                                      |                                           |                 

10KSB
 17                                                           
 14<PAGE>

### Changes in Control

In February 2005, William N Hagler, our chairman of the board
of directors and president, purchased 133,400 shares of our common stock from
another shareholder in a private transaction. The purchase resulted in Mr.
Hagler's ownership of our outstanding common stock to increase from 48.50% to
60.04%.

### Compliance with Section 16(a) of the Exchange Act

In accordance with Section 16(a) of the Securities Exchange
Act of 1934, any person who, at any time during the last fiscal year, was an
officer, director, or beneficial owner of more than 10% of any securities of an
issuer that have been registered pursuant to Section 12 of the Exchange Act, is
required to file periodic reports with the Securities and Exchange Commission
and provide copies of the reports to the registered issuer. In accordance with
item 405 of Regulation S-B, we are required to report information regarding
untimely or delinquent filings by such individuals. We are not aware of any
untimely or delinquent filing of periodic reports of individuals during the year
ended February 28, 2005.

### Certain Relationships and Related Party Transactions

Information relative to certain relationships and related
party transactions is contained in Note H to Intermountain's financial
statements as of February 28, 2005 beginning on page 25 of this
report.

### Controls and Procedures

### Evaluation of Disclosure Controls and
Procedures:

Disclosure controls and procedures are designed and
implemented to insure that all material information relating to a company is
made known to its chief operating officer, chief financial officer, and such
other persons who are responsible for preparing and filing periodic reports with
the Securities and Exchange Commission. On April 18, 2005, William N. Hagler and
Rick L. Hurt, representing all of the officers and directors of Intermountain,
updated their evaluation of our disclosure controls and procedures and concluded
that such controls were adequate as of that date.

### Changes in Internal Controls:

There have been no significant changes in our internal
controls or in other factors that could significantly affect these controls
subsequent to the date of Management's last evaluation, including any corrective
actions with regard to significant deficiencies and material
weaknesses.

### Principal Accountant Fees and Services

Information regarding services and the related fees billed by
our principal accountants during the periods indicated is as follows:



|                                                                                                                                                                                                       | For the years ended
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -------------------
|                                                                                                                                                                                                       | February 29,       
|                                                                                                                                                                                                       | 2004               
|Audit fees: Includes audit and review services applicable to
Intermountain’s annual financial statements, Forms 10-KSB and 10-QSB, and
other filings made with the Securities and Exchange Commission. | $   19,215         
|Audit related fees                                                                                                                                                                                     | 0                  
|Tax fees                                                                                                                                                                                               | 0                  
|All other fees                                                                                                                                                                                         | 0                  
|Total fees billed by principal accountants                                                                                                                                                             | $   19,215         

We, due to our small size, do not have an audit committee. All
functions and procedures that would traditionally be performed by an audit
committee are performed by our board of directors.  Our board of directors
pre-approves all engagements for services performed by our principal
accountants.  Generally, we do not engage our principal accountants for services
other than those related to auditing and reviewing of financial statements
included in statutory filings with the Securities and Exchange
Commission.

10KSB
18                                                            
15<PAGE>

### Index to Financial Statements



|                                                                           | Page
|-------------------------------------------------------------------------- | ----
|Report of Independent Registered
Public Accounting Firm, February 28, 2005 | 20  
|                                                                           |     
|Balance Sheet as of February 28,
2005                                      | 17  
|                                                                           |     
|Statements of Income and
Comprehensive Income  for the years ended         |     
|February 29, 2004
and February 28, 2005                                    | 18  
|                                                                           |     
|Statements of Cash Flows for the
years ended                               |     
|February 29, 2004
and February 28, 2005                                    | 19  
|                                                                           |     
|Statements of Changes in
Stockholders' Equity                              |     
|for the
years ended February 29, 2004 and February 28, 2005                | 20  
|                                                                           |     
|Notes to financial
statements                                              | 21  
|                                                                           |     

10KSB
19                                                            
16<PAGE>



|Intermountain Refining Co., Inc.                                           |  |            
|-------------------------------------------------------------------------- |  | -----------
|Balance Sheet                                                              |  |            
|February 28, 2005                                                          |  |            
|                                                                           |  |            
|Assets                                                                     |  |            
|Current Assets                                                             |  |            
|Cash and cash equivalents - Note
A                                         |  | $   803,175
|Accounts receivable - Note B                                               |  | 62,025     
|Inventories – Note F                                                       |  | 2,390      
|Prepaid expenses                                                           |  | 1,130      
|Total Current Assets                                                       |  | 868,720    
|Property, Plant and
Equipment, net                                         |  |            
|Land, buildings and
improvements                                           |  | 384,419    
|Equipment                                                                  |  | 45,990     
|Asphalt equipment – Note
A                                                 |  | 581,919    
|Oil and gas properties, (successful
efforts method) - Notes L, M and N     |  | 1,473,390  
|                                                                           |  | 2,485,718  
|Less accumulated depletion and
depreciation                                |  | (1,751,011)
|                                                                           |  | 734,707    
|Other Assets                                                               |  |            
|Electric generation equipment available for sale–
Note A                   |  | 270,000    
|Available-for-sale investments - Note
E                                    |  | 106,884    
|Other assets - Note C                                                      |  | 37,063     
|                                                                           |  | 413,947    
|Total Assets                                                               |  | $ 2,017,374
|Liabilities and Stockholders' Equity                                       |  |            
|Current Liabilities                                                        |  |            
|Accounts payable                                                           |  | $    49,987
|Taxes other than income
taxes                                              |  | 2,761      
|Income taxes payable - Note
G                                              |  | 430        
|Total Current
Liabilities                                                  |  | 53,178     
|Deferred Taxes -
Note G                                                    |  | 13,388     
|Asset Retirement Obligations - Notes A and
N                               |  | 38,638     
|Commitments and
Contingencies - Note I                                     |  | -          
|Stockholders' Equity                                                       |  |            
|Common stock, no par value, authorized
10,000,000 shares,                  |  |            
|issued and outstanding 1,155,609 shares                                    |  | 1,455,314  
|Preferred stock, $0.01 par value, authorized 5,000,000
shares,             |  |            
|no shares issued and outstanding.                                          |  | -          
|Retained earnings                                                          |  | 431,993    
|Accumulated other comprehensive income - Note
E                            |  | 24,863     
|                                                                           |  | 1,912,170  
|Total Liabilities and Stockholders'
Equity                                 |  | $ 2,017,374
|                                                                           |  |            
|The accompanying notes are an integral part of these
financial statements. |  |            

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|Intermountain Refining Co., Inc.                                                                                                                                    |                     |              
|------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------- | -------------
|Statements of Income and Comprehensive Income                                                                                                                       |                     |              
|                                                                                                                                                                    | For the years ended
|                                                                                                                                                                    | February  29,       | February  28,
|                                                                                                                                                                    | 2004                | 2005         
|Revenues                                                                                                                                                            |                     |              
|Oil and natural gas production revenues, net of
gathering fees and production and                                                                                   |                     |              
|severance taxes - Note L                                                                                                                                            | $   584,997         | $   616,812  
|Asphalt equipment rental and throughput
fees - Note D                                                                                                               | 172,233             | 189,254      
|Real estate rental income                                                                                                                                           | 25,502              | 24,570       
|Consulting fees - Note H                                                                                                                                            | 36,000              | 36,000       
|                                                                                                                                                                    | 818,732             | 866,636      
|Costs and Expenses                                                                                                                                                  |                     |              
|Cost of sales                                                                                                                                                       | 191,173             | 278,200      
|General and administrative                                                                                                                                          | 269,107             | 277,961      
|Depletion, depreciation and
amortization                                                                                                                            | 60,821              | 58,124       
|Loss on impairment of equipment – Note
A                                                                                                                            | 245,000             | -            
|Accretion of discount on asset retirement obligations -
Note N                                                                                                      | 2,846               | 3,417        
|Loss on settlement of asset retirement obligations -
Note N                                                                                                         | -                   | 7,977        
|Interest and investment expense/(income),
net                                                                                                                       | (10,810)            | (10,750)     
|                                                                                                                                                                    | 758,137             | 614,929      
|Income From Operations Before Income
Taxes                                                                                                                          | 60,595              | 251,707      
|Provision (benefit) for income taxes -
Note G                                                                                                                       |                     |              
|Current                                                                                                                                                             | 149                 | 489          
|Deferred                                                                                                                                                            | -                   | -            
|                                                                                                                                                                    | 149                 | 489          
|                                                                                                                                                                    |                     |              
|Income Before Cumulative Effect of Change in Accounting
Principle - Note A                                                                                          | 60,446              | 251,218      
|Cumulative effect on prior years of change in accounting for
asset retirement obligations - Note N                                                                  | (18,593)            | -            
|Net Income                                                                                                                                                          | 41,853              | 251,218      
|                                                                                                                                                                    |                     |              
|Other Comprehensive Income (Loss), net of
tax:                                                                                                                      |                     |              
|Unrealized holding gains/(losses) on investments available
for sale (net of income tax benefit/(expense) of  $(1,458) in 2004 and $(10,614)
in 2005)- Notes E and G | 2,708               | 19,713       
|Reclassification adjustment for realized loss on sale of
investments available for sale net of deferred tax of $316 in 2005- Notes E and
G                          | -                   | 585          
|Comprehensive Income                                                                                                                                                | $    44,561         | $    271,516 
|                                                                                                                                                                    | =========           | =========    
|Weighted Average Number of Shares
Outstanding                                                                                                                       | 1,155,609           | 1,155,609    
|Basic and Fully Diluted Earnings Per
Share                                                                                                                          |                     |              
|Income before cumulative effect of change
in accounting principle                                                                                                   | $      
0.05        | $      
0.22 
|Cumulative effect of change in accounting for asset
retirement obligations                                                                                          | (0.02)              | 0.00         
|                                                                                                                                                                    | $      
0.03        | $      
0.22 
|                                                                                                                                                                    | ========            | ========     
|                                                                                                                                                                    |                     |              
|                                                                                                                                                                    |                     |              
|The accompanying notes are an integral part of these
financial statements.                                                                                          |                     |              

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|Intermountain Refining Co.,
Inc.Statements of Cash Flows                                                                                                                                                                                                                                                                                                                           
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                   
|Increase (Decrease) in Cash and Cash
Equivalents                                                                                                                                                                                                                                                                                                                                   
|Cash Flows From Operating Activities                                                                                                                                                                                                                                                                                                                                               
|Net income                                                                                                                                                                                                                                                                                                                                                                         
|Adjustments to reconcile net income to
net cash provided by operating activities:                                                                                                                                                                                                                                                                                                  
|Cumulative effect on prior years of change in accounting
for asset retirement obligations                                                                                                                                                                                                                                                                                          
|Depreciation, depletion and
amortization                                                                                                                                                                                                                                                                                                                                           
|Accretion of discount on asset retirement
obligations                                                                                                                                                                                                                                                                                                                              
|Loss on settlement of asset retirement
obligations                                                                                                                                                                                                                                                                                                                                 
|Realized loss on disposal of available for sale
investments                                                                                                                                                                                                                                                                                                                        
|Loss on impairment of assets                                                                                                                                                                                                                                                                                                                                                       
|Changes in operating assets and
liabilities:                                                                                                                                                                                                                                                                                                                                       
|(Increase) decrease in
accounts receivable                                                                                                                                                                                                                                                                                                                                         
|Increase in prepaid expenses                                                                                                                                                                                                                                                                                                                                                       
|Increase in accounts payable
and accrued expenses                                                                                                                                                                                                                                                                                                                                  
|Increase in income taxes
accrued                                                                                                                                                                                                                                                                                                                                                   
|Net Cash Flow Provided by Operating
Activities                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                   
|Cash Flows From Investing Activities                                                                                                                                                                                                                                                                                                                                               
|Purchases of available for sale mutual
funds                                                                                                                                                                                                                                                                                                                                       
|Proceeds from disposal of available for sale mutual
funds                                                                                                                                                                                                                                                                                                                          
|Increase in cash value of life insurance
polices                                                                                                                                                                                                                                                                                                                                   
|Purchase of oil and gas producing
properties                                                                                                                                                                                                                                                                                                                                       
|Settlement of asset retirement
obligations                                                                                                                                                                                                                                                                                                                                         
|Net Cash Flow Used by Investing Activities                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                   
|Increase (decrease) in Cash and Cash
Equivalents                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                   
|Cash and Cash Equivalents at Beginning of
Year                                                                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                   
|Cash and Cash Equivalents at End of Year                                                                                                                                                                                                                                                                                                                                           
|Supplemental Cash Flow
Disclosures                                                                                                                                                                                                                                                                                                                                                 
|Intermountain paid interest of  $0 in 2004 and $0 in
2005.                                                                                                                                                                                                                                                                                                                         
|Intermountain paid income taxes of  $100 in 2004 and $208 in
2005.                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                   
|Supplemental Schedule of Noncash Investing
Activities:                                                                                                                                                                                                                                                                                                                             
|During 2004, Intermountain's available for sale investments
increased in value by $2,708, net of deferred taxes of  $1,458.                                                                                                                                                                                                                                                        
|During 2005, Intermountain's available for sale investments
increased in value by $20,298, net of deferred taxes of $10,930.                                                                                                                                                                                                                                                       
|During 2004, as a result of a change in accounting for asset
retirement obligations, Intermountain recognized estimated asset retirement
obligations of $33,538 and increased its investment in oil and gas producing
properties by the present value (as of the date of acquisition) of the estimated
future obligations of $14,945, net of prior accumulated depletion of $4,580.
|During 2005, Intermountain recognized estimated asset
retirement obligations of $6,600 and increased its investment in oil and gas
producing properties by the same amount in conjunction with its purchase of gas
producing properties in New Mexico.                                                                                                                             
|During 2005, Intermountain wrote off, as abandoned, fully
depreciated equipment with an original cost of $118,940.                                                                                                                                                                                                                                                                 
|The accompanying notes are an integral part of these
financial statements.                                                                                                                                                                                                                                                                                                         

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|Intermountain Refining Co., Inc.                                          
|--------------------------------------------------------------------------
|Statements of Changes in Stockholders'
Equity                             
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Balance, February 28, 2003                                                
|                                                                          
|Holding gain on available for sale                                        
|investments - Notes E and G                                               
|                                                                          
|Net income                                                                
|                                                                          
|Balance, February 29, 2004                                                
|                                                                          
|Holding gain on available for sale                                        
|investments - Notes E and G                                               
|                                                                          
|Net income                                                                
|                                                                          
|Balance, February 28, 2005                                                
|                                                                          
|                                                                          
|The accompanying notes are an integral part of these
financial statements.

Report of Independent Registered Public Accounting
FirmStockholders and Board of
DirectorsIntermountain Refining Co., Inc.

We have audited the accompanying balance sheet of
Intermountain Refining Co., Inc. as of February 28, 2005, and the related
statements of income and comprehensive income, changes in stockholders' equity,
and cash flows for the years ended February 29, 2004 and February 28, 2005.
These financial statements are the responsibility of Intermountain's
management.  Our responsibility is to express an opinion on these financial
statements based on our audit.We conducted our
audit in accordance with the standards of the Public Company Accounting
Oversight Board (United States).  Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.   An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe that
our audit provides a reasonable basis for our opinion.In our opinion, the financial statements referred
to above present fairly, in all material respects, the financial position of
Intermountain Refining Co., Inc. as of February 28, 2005, and the results of
operations and cash flows for the years ended February 29, 2004 and February 28,
2005, in conformity with accounting principles generally accepted in the United
States of America.Richey, May & Co., LLPEnglewood, ColoradoApril 28,
2005

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20<PAGE>

### Intermountain Refining Co., Inc.

Notes to Financial Statements

February 28, 2005

### Note A - Summary of Significant Accounting Policies

Business Activity:  Intermountain owns a 98.4%
working interest (81.5% net revenue interest) in 19 natural gas producing wells
located in Southwestern Kansas and is the operator of the properties. 
Intermountain owns a 90% working interest (72% net revenue interest) in two oil
producing wells (operated by others) located in Kimball County, Nebraska. On
August 1, 2004, Intermountain acquired an approximate 12.48% working interest
(9.98% net revenue interest) in 15 natural gas producing wells (operated by
others) in San Juan County, New Mexico. Intermountain owns an asphalt products
manufacturing and storage facility in Fredonia, Arizona that is leased to others
on a fee basis.  Intermountain owns an office building in Farmington, New Mexico
that it uses for its corporate offices and leases unused space to others.

Intermountain's asphalt products storage facility has been
leased to Paramount Petroleum Corporation. Intermountain receives fixed monthly
lease payments and variable throughput fees for products shipped from the
facility.

Intermountain additionally owns two diesel powered electric
generators, and related equipment, located at its refinery facility in Fredonia,
Arizona. The electric generation equipment is not in operation and is currently
available and offered for sale to others.

Cash and Cash Equivalents:  For purposes of reporting
cash flows, cash and cash equivalents include cash on hand, cash in depository
institutions, and interest bearing over-night cash investments. 
Intermountain maintains its cash balances and certificates of deposit in various
local financial institutions.  The balances maintained are in excess of the
maximum insurance provided by the Federal Deposit Insurance Corporation.
Intermountain does not believe that it has any significant credit risk for
amounts in excess of the Federally insured amounts.

Inventories:Raw materials, refined products,
materials, and supplies inventories of Intermountain are stated at the lower of
cost (first-in, first-out) or market.

Property, Plant and Equipment:  Property, plant
and equipment is stated at cost. Depreciation of property and equipment is
provided on the straight-line method over the following useful lives:



|Buildings                                   | 15-20
|------------------------------------------- | -----
|Equipment                                   | 3-20 
|Asphalt manufacturing and storage
equipment | 5-20 
|                                            |      

Maintenance, repairs and renewals, which neither materially
add to the value of the property nor appreciably prolong its life, are charged
to expense as incurred. Gains or losses on disposition of property are included
in results of operations.

Long-lived assets to be held and used are reviewed for
impairment whenever events or changes in circumstances indicate that the related
carrying amount may not be recoverable. A review for impairment includes
comparing the current carrying amount of an asset to the estimated future cash
flows expected to result from the use of the asset and its eventual disposition.
If such future estimated cash flows are not sufficient to recover the carrying
cost, then an impairment loss is recognized. When required, impairment losses on
assets to be held are recognized based on the excess of the asset's carrying
amount over the fair value of the asset.

Asset Retirement Obligations: Financial Accounting
Standards Board Statement No. 143 requires the recognition of a liability for
legal obligations associated with the retirement of long-lived assets such as
plugging and abandonment costs on oil or natural gas wells. Under the provisions
of the statement, asset retirement obligations are recognized based on the
present value of the future retirement costs as of the date an asset is acquired
and capitalized as part of the cost of the asset. The capitalized cost is
amortized to expense and the discount on the future obligation is amortized to
accretion expense over the life of the asset. Actual costs associated with asset
retirement activities are charged against the asset retirement obligation. Gains
or losses on the ultimate settlement of asset retirement obligations are charged
to results of operations in the year of retirement. Effective as of March 1,
2003, Intermountain implemented the provisions of the statement. See Note
N

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21<PAGE>

### Intermountain Refining Co., Inc.

Notes to Financial Statements - Continued

Oil and Gas Properties:The successful efforts method
of accounting for the acquisition, exploration, development and production of
oil and gas properties is utilized. Costs of acquiring undeveloped oil and gas
leases are capitalized. All development costs of proved properties are
capitalized as incurred and all exploration costs are expensed. The capitalized
costs of oil and gas wells and related equipment are amortized by the
units-of-production method based on the estimated proved oil and gas reserves.

Electric Generation Equipment Held For Sale:  Due to
market limitations on the sale of electric power, Intermountain does not
anticipate that it will operate its electric generation equipment in the near
future and is actively seeking a buyer for the equipment. As of February 28,
2002, Intermountain reclassified the equipment, having a book value of $515,000
net of impairment of $75,505, from property, plant and equipment to electric
generation equipment held for sale. As of February 29, 2004, Intermountain
provided an additional impairment of $245,000 bringing the net carrying value of
the equipment to $270,000 as of that date. The total impairment of $320,505
represents the excess of the carrying value of the equipment over its estimated
fair value, net of selling costs. Actual proceeds from disposal of the equipment
may be materially different.

Revenue Recognition:Oil and natural gas production
revenues are recognized upon delivery. Real estate rental income, asphalt
equipment rental fees, and consulting fees are recognized on a monthly basis as
services are provided. Asphalt product throughput fees are recognized on a
monthly basis as asphalt products are shipped. The additional throughput fees
are recognized if and when annual calendar shipments exceed 10,000
tons.

Income Taxes:Deferred income tax expense and benefits
are provided on temporary differences arising from the timing of recognition of
income and expenses for financial reporting purposes and recognition for income
tax purposes. Items that give rise to deferred taxes include: differences
between straight line depreciation used for financial reporting purposes and
statutory depreciation used for tax purposes; financial statement recognition of
impairment losses on assets which are not deductible for income tax purposes
until such losses are actually realized; cost depletion used for financial
reporting purposes and statutory depletion used for tax purposes; and financial
statement recognition of operating and capital losses which are carried forward
to future years for income tax purposes. Deferred tax assets are limited to
amounts considered to be realizable in future periods.

Earnings Per Share:Income (loss) per share is based on
the weighted average number of common shares outstanding during each
period.

Estimates:  The preparation of financial
statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that effect certain reported
amounts and disclosures. Accordingly, actual results could differ from those
estimates.

Fair Value of Financial Instruments:  The carrying
amount of cash and cash equivalents, accounts receivable, accounts payable, and
accrued expenses approximate fair value because of the short maturity of these
amounts. None of Intermountain's financial instruments are held for trading
purposes.

Available for Sale Investments:Available for sale
investments include investments in publicly traded equity securities and oil and
gas royalty trusts, and brokerage money market accounts. The carrying amount of
Intermountain's available for sale investments is reflected at fair value.
Unrealized holding gains and losses in the market value of the investments are
reported as other comprehensive income (loss) and included in changes in equity.

Concentration of Credit Risk:Intermountain generates
substantially all of its natural gas revenues from one customer, Oneok Field
Services Company. Intermountain generates all of its asphalt manufacturing and
storage revenues from one customer, Paramount Petroleum Corporation.
Intermountain has not experienced any credit losses with respect to its natural
gas or asphalt manufacturing and storage receivables. Accordingly, no provision
for doubtful accounts on such receivables has been recorded by Intermountain.
Collateral is not required on oil and natural gas receivables or asphalt
manufacturing and storage receivables.

Other Comprehensive Gains and Losses: Other
comprehensive income includes unrealized gains and losses on changes in the
value of available for sale investments and is recorded as changes in equity.
Reclassification adjustments for realized gains and losses are reflected in
earnings on the statements of income.

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22<PAGE>

### Note B - Accounts Receivable

Accounts receivable consists of amounts due from customers for
sales of oil and natural gas, equipment rental, office space rental, and
services rendered.  Credit sales are generally made on terms of net 30 days
in accordance with normal industry practice.  Intermountain performs
periodic credit evaluations of its customers' financial condition and generally
does not require collateral.  The past due status of a receivable is
determined based on the timeliness of payments as based upon the agreed-upon
credit terms. Management does not believe that an allowance for bad debts on
accounts receivable is necessary.

### Intermountain Refining Co., Inc.

Notes to Financial Statements - Continued

### Note C - Other Assets

Other assets consist of the following as of February 28, 2005:



|Cash value of life insurance contracts | $  36,788
|-------------------------------------- | ---------
|Utility  deposits                      | 275      
|                                       | $  37,063

### Note D - Asphalt Product Storage
Services

Effective January 1, 2002, Intermountain leased its asphalt
storage and processing equipment to Paramount Petroleum Corporation for $3,200
per month plus a throughput fee of $5.50 per ton for asphalt products shipped
from the facility during the term of the agreement. In addition, if annual
product shipments from the facility exceed 10,000 tons, Paramount will pay an
additional throughput fee of $4.50 per ton, applicable to all tons shipped
during the year. The initial term of the agreement expired on January 1, 2003
but has been automatically extended on a year to year basis under the extension
terms of the agreement. For the year ended February 29, 2004, Intermountain
recognized equipment rental revenues of $38,400 and throughput fees of $133,833.
For the year ended February 28, 2005, Intermountain recognized equipment rental
revenues of $38,400 and throughput fees of $150,854.

### Note E - Available-For-Sale
Investments

Available-for-sale investments consist of the following at
February 28, 2005:



|Description                              | Cost        | Unrealized gain/(loss) | Estimated Fair Value
|---------------------------------------- | ----------- | ---------------------- | --------------------
|Investment in natural gas royalty trusts | $   49,333  | $  28,331              | $ 77,664            
|Investment in common stock equities      | 14,781      | 9,919                  | 24,700              
|Brokerage money market accounts          | 4,520       | 0                      | 4,520               
|Total investments available for sale     | $    68,634 | $    38,251            | $ 106,884           
|                                         |             |                        |                     

Investments in royalty trusts and common stock equities are
stated at their estimated fair value as of the balance sheet date presented.
Unrealized holding gains and losses in market value of investment securities are
classified as comprehensive gain and loss and included as an increase or
reduction of stockholders' equity. Unrealized holding gains in market value of
investment securities were $4,166 for the year ended February 29, 2004 and
$30,327 for the year ended February 28, 2005. During the year ended February 28,
2005, Intermountain sold its investments in mutual funds and recognized a loss
on the sale of $901. The sale resulted in a reclassification adjustment to
unrealized loss in market value of $585, net of deferred tax benefit of $316.

Gains and losses on the sale of investment securities (when
incurred) are determined using the first in-first out method. Given that the
investments are in royalty trusts and common stock equities, no contractual
maturities exist that would require separate disclosure. The fair market values
of the investments are subject to ongoing fluctuation. The amount ultimately
realized upon disposition will be different from the amounts reported in these
financial statements.

### Note F - Inventories

Inventories, stated at lower of cost or market value consist
solely of diesel fuel intended for use in maintaining the electric generation
equipment or for sale to others.

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23<PAGE>

### Intermountain Refining Co., Inc.

Notes to Financial Statements - Continued

### Note G - Income Taxes

Income tax expense (benefit) differs from income tax at the
statutory rate as follows:



|                                         | February 29, | February 28,
|---------------------------------------- | ------------ | ------------
|                                         | 2004         | 2005        
|Income at statutory rate                 | 34%          | 35%         
|State income taxes                       | -   %        | -   %       
|Expenses not deductible for tax purposes | 1%           | -   %       
|Change in valuation allowance            | -   %        | (33)%       
|Other (net)                              | (35)%        | (2)%        
|Income tax expense (benefit)             | -  %         | -  %        

Income tax expense (benefit) for the periods indicated
consists of the following:



|                              | For the years ended
|----------------------------- | -------------------
|                              | February 29,       
|                              | 2004               
|Current                       |                    
|Federal                       | $      -           
|State                         | 149                
|Deferred                      |                    
|Federal                       | 8,480              
|State                         | 2,560              
|Change in
valuation allowance | (11,040)           
|Total income taxes            | $        149       

As of February 28, 2005, Intermountain has net operating loss
carryforwards for Federal and state income tax purposes as shown in the
following table.  Operating losses can be carried forward generally for 20
years for Federal tax purposes and from 5 to 10 years for state tax purposes.
Intermountain has capital loss carryforwards for Federal and state income tax
purposes as shown in the following table. Capital losses can be carried forward
for 5 years for both Federal and state income tax purposes and can only be used
to offset capital gains. A valuation allowance has been provided on all of the
net operating loss and capital loss carryforwards as realization of the tax
benefit is uncertain.



|Year Generated | Net Operating Loss
Carryforward | Year Expires | Capital Loss Carryforward | Year Expires
|-------------- | ------------------------------- | ------------ | ------------------------- | ------------
|1999           | $   60,384                      | 2019         | $         -               |             
|2000           | 48,995                          | 2020         | -                         | -           
|2002           | 164,220                         | 2022         | 328,296                   | 2007        
|2003           | 83,006                          | 2023         | 21,139                    | 2008        
|Total          | $   356,605                     |              | $    349,435              |             
|               |                                 |              |                           |             

Deferred tax assets/(liabilities) as of February 28, 2005
consist of the following:



|Net deferred tax asset arising from book and tax basis
differences in depreciable assets                                     | $  17,685        
|---------------------------------------------------------------------------------------------------------------------------- | -----------------
|Deferred tax asset arising from statutory depletion
carryforwards                                                            | 45,000           
|Deferred tax asset arising from book accrual of asset
retirement obligations                                                 | 8,202            
|Deferred tax asset arising from net operating loss
carryforwards                                                             | 124,811          
|Deferred tax asset arising from capital loss
carryforwards                                                                   | 122,618          
|Deferred tax liability arising from deferral of gain on
receipt of stock from demutualization of a life insurance company    | (5,173)          
|Valuation allowance provided for net deferred tax
assets                                                                     | (313,143)        
|Deferred taxes receivable/(payable)                                                                                          | $        -       
|                                                                                                                             |                  
|                                                                                                                             |                  
|Deferred tax liability from unrealized holding gain on
available for sale investments recorded as other comprehensive
income | $       
(13,388)

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### Intermountain Refining Co., Inc.

Notes to Financial Statements - Continued

### Note H - Related Party Transactions

Following are descriptions of transactions involving
Intermountain and other related parties that occurred during the past two fiscal
years. In the opinion of management, the terms of the transactions discussed are
believed to be at least as favorable to Intermountain as those that could have
been secured in arm's length transactions.

Intermountain performs management and accounting services for
Red Hills Manufacturing, Inc. on an ongoing basis. Fees received from Red Hills
were $36,000 for the year ended February 29, 2004 and $36,000 for the year ended
February 28, 2005. Effective as of April 1, 2005, subsequent to the current year
end, the annual management fee charged to Red Hills was decreased to $3,000 to
reflect changes in the level of service provided.

### Note I - Commitments and Contingencies

Environmental Matters:  Intermountain has been
involved in the manufacture, storage, and sale of petroleum products since 1984,
which exposes Intermountain to potential claims for environmental remediation
costs, if any, of sites operated by Intermountain. Except as discussed below,
Intermountain is not aware of any claims pending for such sites.

In April, 2005, subsequent to year end, Intermountain began
the process of dismantling the portions of its refining equipment at its
Fredonia facility that are no longer used for ongoing operations and are not
expected to be used in the future. As part of the dismantling process,
Intermountain has identified the presence of asbestos insulating material in
portions of the equipment being dismantled. Intermountain has engaged a
consultant to evaluate the extent of asbestos present on the site and to prepare
a plan for the abatement and removal of the material. Upon completion of the
evaluation and plan, Intermountain will seek bids from licensed contractors for
abatement and removal costs. Implementation of the plan will require prior
approval of the Arizona Department of Environmental Quality. Preliminarily,
Intermountain estimates that the its cost to dismantle and remove the unused
equipment from the site, including asbestos abatement and removal, will be
between $65,000 and $80,000, net of amounts received from scrap metal sales.

### Note J - Simple IRA Plan

Intermountain maintains a SIMPLE IRA plan for the benefit of
all of its full time employees.  The plan provides for the elective
deferral of employee wages, subject to annual limits established by the Internal
Revenue Service, and provides a mandatory employer matching contribution. 
Mandatory matching contributions are the lesser of 3% of employee compensation
or the amount of elective deferrals.  Intermountain may elect to reduce the
matching percentage to 1% for two out of five consecutive calendar years. 
Intermountain made matching contributions of $5,385 in 2004 and $4,850 in 2005.

### Note K - Financial Information Relating to Industry
Segments

Intermountain's major industry segments are oil and natural
gas production and the leasing of asphalt product manufacturing and storage
facilities. Intermountain also rents office space in its Farmington, New Mexico
office building and, in addition to the overall management of Intermountain,
management occasionally performs management and consulting services for others.
All costs and expenses associated with the overall management of Intermountain
and other miscellaneous activities are included under "Other" in the following
segment information. Selected financial information relating to these segments,
is as follows:



|                                                                              | Years Ended   
|----------------------------------------------------------------------------- | --------------
|                                                                              | February 29,  
|                                                                              | 2004          
|Revenues                                                                      |               
|Asphalt product manufacturing and storage
facilities                          | $    172,233  
|Oil and natural gas
production                                                | 584,997       
|Other                                                                         | 61,502        
|                                                                              | $   818,732   
|10KSB
28                                                            
25<PAGE> |               
|Intermountain Refining Co., Inc.
Notes to Financial Statements - Continued    |               
|                                                                              | Year Ended    
|                                                                              | February 29,  
|                                                                              | 2004          
|Operating Profit (Loss)                                                       |               
|Asphalt product manufacturing and storage
facilities                          | $  123,733    
|Oil and natural gas
production                                                | 379,315       
|Electric generation                                                           | (245,000)     
|Other                                                                         | (197,453)     
|                                                                              | $   60,595    
|                                                                              |               
|Identifiable Assets                                                           |               
|Asphalt product manufacturing and storage
facilities                          | $       66,108
|Oil and natural gas
production                                                | 370,489       
|Electric generation equipment available for
sale                              | 270,000       
|Other                                                                         | 1,023,850     
|                                                                              | $  1,730,447  
|Depreciation and Depletion                                                    |               
|Asphalt product manufacturing and storage
facilities                          | $      29,684 
|Oil and natural gas
production                                                | 30,479        
|Electric generation                                                           | -             
|Other                                                                         | 658           
|                                                                              | $   
60,821   

Capital Expenditures - During the year ended February
29, 2004, Intermountain capitalized a total of $69,630 associated with its oil
and natural gas production assets which included $50,105 for the purchase of a
working interest in oil producing properties in Nebraska and the capitalization
of $19,525 associated with a change in accounting for future plugging and
abandonment costs for oil and gas properties. See Note N. During the year ended
February 2005, Intermountain capitalized a total of $418,029 for the purchase of
working interests in natural gas producing properties in New Mexico including
$6,600 for estimated future plugging and abandonment costs.

Major Customers - Intermountain sells substantially all
natural gas produced from the Kansas gas properties to one customer. Natural gas
sales to the customer, net to Intermountain's interest, were approximately
$576,000 for the year ended February 29, 2004, and $542,000 for the year ended
February 28, 2005. Intermountain leases its asphalt products manufacturing and
storage equipment to one customer. Equipment lease and fees revenues received
from the customer were approximately $172,000 for the year ended February 29,
2004 and $189,000 for the year ended February 28, 2005.

### Note L - Oil and Gas Properties

Intermountain owns and operates certain proven and developed
natural gas reserves and related production equipment located in Southwestern
Kansas.  On August 1, 2004, Intermountain acquired working interests in certain
proven and developed natural gas reserves and related production equipment
located in Northwestern New Mexico. Intermountain owns a working interest in,
but does not operate, certain proven and developed oil reserves in Southwestern
Nebraska. Intermountain has no current plans to drill or complete any additional
wells on the Kansas, New Mexico or Nebraska leases or elsewhere.





|Capitalized Costs:  Capitalized costs relating
to oil and gas producing activities are as follows at February 28,
2005:                                                
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Proved oil and gas
properties                                                                                                                                          
|Unproved oil and gas
properties                                                                                                                                        
|Less accumulated depletion                                                                                                                                             
|Net capitalized costs                                                                                                                                                  
|10KSB
29                                                            
26<PAGE>
Intermountain Refining Co., Inc.
Notes to Financial Statements - Continued               
|Results of Operations:Results of operations of oil
and gas producing activities, excluding overhead and interest allocations, for
the periods indicated are as follows:
|                                                                                                                                                                       
|                                                                                                                                                                       
|                                                                                                                                                                       
|Revenues                                                                                                                                                               
|Oil and natural gas
sales                                                                                                                                              
|Gathering fees                                                                                                                                                         
|Production and severance taxes                                                                                                                                         
|Other                                                                                                                                                                  
|                                                                                                                                                                       
|Costs and Expenses                                                                                                                                                     
|Operating costs                                                                                                                                                        
|General and
administrative                                                                                                                                             
|Accretion of discount on future plugging and
abandonment costs                                                                                                         
|Loss on settlement of plugging and abandonment
costs                                                                                                                   
|Depletion, depreciation and
amortization                                                                                                                               
|                                                                                                                                                                       
|Income before taxes                                                                                                                                                    
|Deferred income tax expense                                                                                                                                            
|Net income before cumulative effect of change in
accounting principle                                                                                                  
|Cumulative effect on prior years of change in accounting
for asset retirement obligations, net of income tax benefit of
$6,508                                         
|Net income                                                                                                                                                             

### Note M - Oil and Gas Reserve Data and Supplemental Data
(Unaudited)

In accordance with Statement of Financial Accounting Standards
No. 69, the following unaudited information is presented with regard to
Intermountain's proved oil and gas reserves. Information for gas is presented in
million cubic feet (MMcf) except where otherwise indicated in thousand cubic
feet (Mcf). Information for oil is presented in barrels (Bbls).



|Production:  Intermountain's oil and natural gas
production, average sales price and production cost for the periods indicated
are as follows:                                                     
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                   
|                                                                                                                                                                                                   
|Net gas production (Mcf)                                                                                                                                                                           
|Average sales price ($/Mcf)                                                                                                                                                                        
|Average production cost
($/Mcf)                                                                                                                                                                    
|                                                                                                                                                                                                   
|Net oil production (Bbls)                                                                                                                                                                          
|Average sales price ($/Bbl)                                                                                                                                                                        
|Average production cost ($/Bbl)                                                                                                                                                                    
|                                                                                                                                                                                                   
|                                                                                                                                                                                                   
|                                                                                                                                                                                                   
|                                                                                                                                                                                                   
|Reserves:  Oil and natural gas reserves as of
February 28, 2005 are based on data developed internally by
Intermountain.                                                                           
|10KSB
 30                                                            
 27<PAGE>
Intermountain Refining Co., Inc.
Notes to Financial Statements - Continued                                         
|Estimated net quantities of proved developed and proved
undeveloped oil and gas reserves are as follows at February 28,
2005:                                                                      
|                                                                                                                                                                                                   
|                                                                                                                                                                                                   
|Proved developed                                                                                                                                                                                   
|Proved undeveloped                                                                                                                                                                                 
|                                                                                                                                                                                                   
|                                                                                                                                                                                                   
|Statement of Changes in Quantities of Proved Developed
and Undeveloped Oil and Gas Reserves for the years indicated are as
follows:                                                                
|                                                                                                                                                                                                   
|                                                                                                                                                                                                   
|                                                                                                                                                                                                   
|                                                                                                                                                                                                   
|Proved reserves - beginning of
year                                                                                                                                                                
|Acquisition of reserves                                                                                                                                                                            
|Adjustments to reserves                                                                                                                                                                            
|Production                                                                                                                                                                                         
|Proved reserves - end of period                                                                                                                                                                    
|                                                                                                                                                                                                   
|                                                                                                                                                                                                   
|The Standardized Measure of Discounted Future Net Cash
Flows relating to Proved Oil and Gas Reserves are as follows at February 28,
2005:                                                          
|                                                                                                                                                                                                   
|Future cash inflows                                                                                                                                                                                
|Future production costs                                                                                                                                                                            
|Future plugging and abandonment costs                                                                                                                                                              
|Future income tax expense                                                                                                                                                                          
|Future net cash flow                                                                                                                                                                               
|Ten percent discount factor                                                                                                                                                                        
|Standardized measure of discounted future
net cash flows                                                                                                                                           
|                                                                                                                                                                                                   
|                                                                                                                                                                                                   
|Changes in the Standardized Measure of Discounted Future Net
Cash Flows From Proved Oil and Gas Reserve Quantities for the periods indicated
are as follows:                                       
|                                                                                                                                                                                                   
|                                                                                                                                                                                                   
|                                                                                                                                                                                                   
|Standardized measure - beginning of
year                                                                                                                                                           
|Acquisition of reserves in place                                                                                                                                                                   
|Adjustment to reserves                                                                                                                                                                             
|Sales, net of production costs and income
taxes                                                                                                                                                    
|Changes in present value due to price and production
cost changes                                                                                                                                  
|(Including accretion of
discount)                                                                                                                                                                  
|Standardized measure - end of
period                                                                                                                                                               
|                                                                                                                                                                                                   
|10KSB
31                                                            
28<PAGE>                                                                                                                      
|Intermountain Refining Co., Inc.
Notes to Financial Statements - Continued                                                                                                                         
|                                                                                                                                                                                                   
|Developed and Undeveloped Acreage:  The
following summarizes Intermountain's gross and net undeveloped and developed
acreage at February 28, 2005:                                                 
|                                                                                                                                                                                                   
|Developed Acreage                                                                                                                                                                                  
|Kansas                                                                                                                                                                                             
|Nebraska                                                                                                                                                                                           
|New Mexico                                                                                                                                                                                         
|Undeveloped Acreage                                                                                                                                                                                
|                                                                                                                                                                                                   
|"Gross Acres" refers to the number of acres in which
Intermountain owns a working interest. "Net Acres" refers to the sum of the
fractional working interest owned by Intermountain in gross acres.
|                                                                                                                                                                                                   
|Other:  Intermountain held interests in the
following wells at February 29, 2004:                                                                                                                  
|                                                                                                                                                                                                   
|Producing gas wells                                                                                                                                                                                
|Producing oil wells                                                                                                                                                                                
|                                                                                                                                                                                                   



### Intermountain Refining Co., Inc.

Notes to Financial Statements - Continued



Note N - Asset Retirement Obligations

During the year ended February 29, 2004, Intermountain
implemented a change in accounting principle to comply with the Financial
Accounting Standards Board Statement No. 143 regarding accounting for legal
obligations associated with the retirement of long lived assets. Intermountain
has a legal obligation to incur plugging and abandonment costs associated with
its oil and gas operations in Kansas, New Mexico and Nebraska.

Changes in Intermountain's asset retirement obligations for
the periods indicated are as follows:



|                                                                        | For the years ended
|----------------------------------------------------------------------- | -------------------
|                                                                        | February 29, 2004  
|Asset retirement obligation - beginning
of year                         | $          
  -    
|Implementation of change in accounting for asset
retirement obligations | 20,616             
|Acquisition of oil and natural gas producing
properties                 | 12,922             
|Settlement of asset retirement obligations                              | -                  
|Loss on settlement of asset retirement
obligations                      | -                  
|Accretion of discount                                                   | 2,846              
|Asset retirement obligation - end of
period                             | $   36,384         
|                                                                        |                    

The cumulative effect on prior years of the change in
accounting for asset retirement obligations recognized as of March 1, 2003
consisted of the following:



|Prior depletion of capitalized asset
retirement obligations of $6,603 | $     4,580
|--------------------------------------------------------------------- | -----------
|Prior accretion of discount on future retirement
obligations          | 14,013     
|Cumulative effect on prior years                                      | $  18,593  

(End of Integrated Annual Report to
Shareholders)

10KSB
32                                                            
29<PAGE>

### Exhibits and Reports on Form 8-K

### Reports on Form 8-K:

There were no reports on Form 8-K filed by Intermountain
during the quarter ended February 28, 2005.

### Exhibits:

Except for exhibits 99.1 and 99.2, which are filed as part of
this report, all of the following exhibits are incorporated herein by reference
to Intermountain's registration statement filed on Form S-1 dated April, 9,
2001:

|Exhibit | Description                                                                          
|------- | -------------------------------------------------------------------------------------
|3.1     | Amended and Restated Articles of Incorporation                                       
|3.2     | Bylaws                                                                               
|10.4    | Oneok / Kinder Morgan / KN Energy Gas Sales
Agreement                                
|10.5    | Paramount Petroleum Agreement - November 1999                                        
|99.1    | Certification of  Chief Executive Officer under Sec.906 of
Sarbanes-Oxley Act of 2002
|99.2    | Certification of  Chief Financial Officer under Sec.906 of
Sarbanes-Oxley Act of 2002

### Signatures

Pursuant to the requirements of the Exchange Act, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Farmington, State of New
Mexico, on May 16, 2005.

Intermountain Refining Co., Inc.

By:/s/ William N.
HaglerWilliam N. Hagler, President

Pursuant to the requirements of the Exchange Act, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.

/s/ William N.
Hagler_________________   Date: May 16,
2005William N. Hagler, Chairman of the Board
ofDirectors, and
President/s/ Rick
L. Hurt _____________________    Date: May 16,
2005Rick L. Hurt, Secretary, Treasurer, Director10KSB 33<PAGE>

### Certifications

I, Rick L. Hurt, certify that:

1. I have reviewed this annual report on Form 10-KSB of
Intermountain Refining Co., Inc.;
2. Based on my knowledge, this annual report does not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period
covered by the report;
3. Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly present in all
material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this annual
report;
4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:
  designed such disclosure controls and procedures to ensure
that material information relating to the registrant is made known to us by
others, particularly during the period in which this annual report is being
prepared;
    evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and
    presented is this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. designed such disclosure controls and procedures to ensure
that material information relating to the registrant is made known to us by
others, particularly during the period in which this annual report is being
prepared;
6. evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and
7. presented is this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
8. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the registrant's
auditors:
  all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
    any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal
controls; and
9. all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
10. any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal
controls; and
11. The registrant's other certifying officers and I have
indicated in this annual report whether or not there were significant changes in
internal controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.



Date:____May 16,2005_________________

/s/__Rick L. Hurt____________________

Rick L. Hurt, Secretary, Treasurer, Director

10KSB 34<PAGE>

I, William N. Hagler, certify that:

1. I have reviewed this annual report on Form 10-KSB of
Intermountain Refining Co., Inc.;
2. Based on my knowledge, this annual report does not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period
covered by the report;
3. Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly present in all
material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this annual
report;
4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:
  designed such disclosure controls and procedures to ensure
that material information relating to the registrant is made known to us by
others, particularly during the period in which this annual report is being
prepared;
    evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and
    presented is this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. designed such disclosure controls and procedures to ensure
that material information relating to the registrant is made known to us by
others, particularly during the period in which this annual report is being
prepared;
6. evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and
7. presented is this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
8. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the registrant's
auditors:
  all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
    any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal
controls; and
9. all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
10. any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal
controls; and
11. The registrant's other certifying officers and I have
indicated in this annual report whether or not there were significant changes in
internal controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.



Date:____May 16, 2005_______________

/s/__William N. Hagler_______________

William N. Hagler, President, Director

10KSB 35<PAGE>

### EXHIBIT 99.1



### Certification of Chief Executive Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002





I, William N. Hagler, President and Chief Executive Officer of
Intermountain Refining Co., Inc. certify that:



1. I have reviewed the annual report on Form 10-KSB of
Intermountain Refining Co., Inc;
2. Based on my knowledge, this annual report does not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by
this annual report;
3. Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly present in all
material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this annual
report.





Date:   May 16, 2005

/s/ William N. Hagler

William N. Hagler

President and Chief Executive Officer

10KSB 36<PAGE>

### EXHIBIT 99.2





### Certification of Chief Financial Officer Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002





I, Rick L. Hurt, Treasurer and Chief Financial Officer of
Intermountain Refining Co., Inc. certify that



1. I have reviewed the annual report on Form 10-KSB of
Intermountain Refining Co., Inc;
2. Based on my knowledge, this annual report does not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by
this annual report;
3. Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly present in all
material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this annual
report.





Date: May 16, 2005

/s/ Rick L. Hurt

Rick L. Hurt

Treasurer and Chief Financial Officer

10KSB 37<PAGE>