UNITED STATESSECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year endedAugust 31, 2009

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

For the transition period from [ ] to [ ]

Commission file number 000-51866

GOLDEN ARIA CORP.(Exact name of registrant as specified in its charter)

|Nevada                                                         |  | 20-1970188                          
|-------------------------------------------------------------- |  | ------------------------------------
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

|                                                            |  |           
|----------------------------------------------------------- |  | ----------
|#950-1130 WEST PENDER STREET, 
VANCOUVER, BRITISH
COLUMBIA, |  |           
|CANADA                                                      |  | V6E 4A4   
|(Address of principal executive offices)                    |  | (Zip Code)

Registrant's telephone number, including area code:   604-602-1633

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

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

Securities registered pursuant to Section 12(g) of the Act: N/A(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 the Securities Act. Yes o  
No
    x

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

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Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required
to file such reports) and (2) has been subject to such filing requirements for the last 90 days.

Yes
    x   No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-K (§229.405 of this
chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes
    x    No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

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

|Large accelerated filer o | Accelerated filer o            
|------------------------- | -------------------------------
|Non-accelerated filer o   | Smaller reporting company
    x

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

The aggregate market value of Common Stock held by non-affiliates of the Registrant on November 27, 2009 was $304,451 based on a $0.031 closing price for the Common Stock on November 27, 2009. For purposes of this computation, all executive
officers and directors have been deemed to be affiliates. Such determination should not be deemed to be an admission that such executive officers and directors are, in fact, affiliates of the Registrant.

Indicate the number of shares outstanding of each of the registrants classes of common stock as of the latest practicable date.

14,652,740 common shares as of November 27, 2009

DOCUMENTS INCORPORATED BY REFERENCE

None.

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TABLE OF CONTENTS

|Item 1.  | Business                                                                                                           | 4 
|-------- | ------------------------------------------------------------------------------------------------------------------ | --
|Item 1A. | Risk Factors                                                                                                       | 9 
|Item 1B. | Unresolved Staff Comments                                                                                          | 14
|Item 2.  | Properties                                                                                                         | 14
|Item 3.  | Legal Proceedings                                                                                                  | 15
|Item 4.  | Submission of Matters to a Vote of
      Security Holders                                                          | 15
|Item 5.  | Market for Registrants Common Equity, Related
      Stockholder Matters and Issuer Purchases of Equity Securities | 15
|Item 6.  | Selected Financial Data                                                                                            | 17
|Item 7.  | Managements Discussion and Analysis of
      Financial Condition and Results of Operations                        | 17
|Item 7A. | Quantitative and Qualitative Disclosures
      About Market Risk                                                   | 23
|Item 8.  | Financial Statements and Supplementary
      Data                                                                  | 23
|Item 9.  | Changes in and Disagreements With
      Accountants on Accounting and Financial Disclosure                         | 42
|Item 9A. | Controls and Procedures                                                                                            | 42
|Item 9B. | Other Information                                                                                                  | 43
|Item 10. | Directors, Executive Officers and
      Corporate Governance                                                       | 43
|Item 11. | Executive Compensation                                                                                             | 47
|Item 12. | Security Ownership of Certain Beneficial Owners
      and Management and Related Stockholder Matters               | 50
|Item 13. | Certain Relationships and Related
      Transactions, and Director Independence                                    | 51
|Item 14. | Principal Accounting Fees and Services                                                                             | 51
|Item 15. | Exhibits, Financial Statement Schedules                                                                            | 53

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PART I

Item 1. Business

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

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

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

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

As used in this current report and unless otherwise indicated,
the terms "we", "us", "our" and "Golden Aria" mean Golden Aria Corp.

General Overview

We were incorporated in the State of Nevada on November 24,
2004. Since inception, we were a company primarily engaged in the acquisition
and exploration of mineral properties.

Golden Aria is an energy company with two separately focused
divisions: the first is exploring and developing conventional oil and gas
properties while the second is examining and developing opportunities in the
alternative energy sector. Management has made progress in both areas of
business.

Global economic events since 2007 have contributed to strong
gyrations in the prices of oil and natural gas, making it more difficult than
normal to raise capital or make reliable internal business projections related
to the exploration, development, or production of crude oil or natural gas. In
the medium term, management believes that its interests in, and continued
development of, opportunities in conventional oil and gas have a high
probability of building shareholder value. These opportunities and others that
the Company is evaluating from time to time, should provide opportunities for
growth.

Additional scalable medium and long term economic benefits to
shareholders are available through our alternative energy initiatives, that also
could act as a hedge against the volatility of wildly fluctuating energy prices.
We continue to pursue opportunities in the emerging clean energy sector.

The address of our principal executive office is Suite 950,
1130 West Pender Street, Vancouver, British Columbia V6E 4A4. Our telephone
number is (604) 602-1633. We have another office located in Kelowna. Our current
locations provide adequate office space for our purposes at this stage of our
development.

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

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Effective September 25, 2009, we effected a two (2) for one (1)
share consolidation of our authorized and issued and outstanding common stock.
As a result, our authorized capital decreased from 75,000,000 shares of common
stock with a par value of $0.001 to 37,500,000 shares of common stock with a par
value of $0.001 and our issued and outstanding shares decreased from 29,305,480
shares of common stock to 14,652,740 shares of common stock. The consolidation
became effective with the Over-the-Counter Bulletin Board at the opening for
trading on September 25, 2009 under the new stock symbol GLCP. Our new
CUSIP number is 38079Q207.

On October 9, 2009, we appointed Bal Bhullar as our chief
financial officer. Concurrent with the appointment of Ms. Bhullar, we entered
into an initial six-month management agreement, thereafter month to month, with
BKB Management Ltd., a consulting company controlled by Bal Bhullar.

On October 9, 2009, we entered into a month to month management
agreement with Mark Snyder, whereby Mark Snyder will act as the Chief Technical
Officer of the Company.

Overview of Business over the Last Five Years

On April 6, 2005 we entered into an Exploration Agreement with
Options for Joint Venture with Miranda U.S.A., Inc. We had the option of
acquiring an undivided 60% interest in Mirandas lease in sixty-four mineral
claims situated in Eureka County, Nevada. During the fiscal year ended August
31, 2007, we abandoned our option to acquire the 60% interest in the Eureka
County mineral lease claims.

As management of our company investigated opportunities and
challenges in the business of being a mineral property exploration company,
management realized that the business did not present the best opportunity for
our company to realize value for our shareholders. Accordingly, we abandoned our
previous business plan and focused on the exploration and development of natural
gas and oil properties.

On April 16, 2007, we acquired a 25% (net 15%) before payout
(BPO) (12.5% (net 7.5%) after payout (APO)) interest in Queensdale,
Saskatchewan Project from 0743608 B.C. Ltd. (Assignor), a company controlled by
a Director/CEO of our company, for a total cost of CAD$250,000 and 250,000
shares (post consolidation) of our common stock (known as the Queensdale
property).

On November 30, 2007, we completed the acquisition of all the
issued and outstanding common stock of Target Energy pursuant to a share
exchange agreement dated October 15, 2007 among our company, as purchaser, and
all of the shareholders of Target Energy, as vendors. In exchange for all of the
issued and outstanding shares of Target Energy, we issued to the shareholders of
Target Energy an aggregate of 6,905,000 shares (post consolidation) of our
common stock. Through our acquisition of Target Energy we acquired an 8% gross
interest before payout in the Queensdale, Queensdale West HZ 4A9-25/3A15-25-6-2
W2 well (known as the Queensdale West property). We also acquired a 3.75% net
interest in two wells located in Wordsworth, Saskatchewan (known as the
Wordsworth property).

On April 21, 2008, we acquired a passive minority interest in
Pro Eco Energy USA Ltd., a private corporation focused on the installation and
integration of alternative energy  mainly solar thermal  systems in Western
Canada.

On May 14, 2008, we acquired one land parcel of 160 acres in
the Glen Park area of central Alberta, Canada. We subsequently entered into a
50/50 Joint Venture with Vanguard Exploration to explore and develop the joint
lands on Alberta Petroleum and Natural Gas Lease No. 0408050364. The joint
venture owns the Petroleum and Natural Gas rights below the base of the
Mannville GRP to basement.

On June 11, 2008, we acquired two land parcels of 160 acres
each in the Glen Park area of central Alberta, Canada. These 320 acres are
believed to be prospective for reef development and the potential accumulation
of oil deposits. We own the Petroleum and Natural Gas rights below the base of
the Mannville GRP to basement as to 100%.

In November 2008, the Wordsworth property that had the second
well was drilled and completed as a successful oil well in December 2008.

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On December 8, 2008 Golden Aria and its partner were successful
in acquiring 800 acres of land in the Coteau Lake project area and the Company
now has a 50% gross and net interest in a total of 2,080 acres of land in this
area.

On July 31, 2009, the Company sold all its interests in the
Queensdale, West Queensdale, and the Wordsworth properties for an aggregate
amount of CAD$453,116.

Effective September 1, 2009, we entered into an assignment
agreement with Cheetah Oil & Gas Ltd. The assignment agreement dated August
28, 2009, provides for the purchase by our company of a revenue interest of
40.432% of an 8% share of Cheetahs net revenue after field operating expenses
from the Belmont Lake PP F-12-4 horizontal well, located in Belmont Lake Field,
Wilkinson County, Mississippi. As consideration, we have agreed to pay to
Cheetah 57.76% of Cheetahs costs currently budgeted at $77,905.36, subject to
revision and 57.76% of Cheetahs 8% share of PP F-12-4 well costs from time to
time for infrastructure, pipes, tanks, compressors, trucking, etc.

Effective September 1, 2009, we entered into an assignment
agreement with Lexaria Corp. The assignment agreement dated August 28, 2009,
provides for the purchase by our company of a revenue interest of 13.475% of a
32% share of Lexarias net revenue after field operating expenses from the
Belmont Lake PP F-12-4 horizontal well, located in Belmont Lake Field, Wilkinson
County, Mississippi. As consideration, we have agreed to pay to Lexaria 19.25%
of Lexarias costs currently budgeted at $311,621.44, subject to revision and
19.25% of Lexarias 32% share of PP F-12-4 well costs from time to time for
infrastructure, pipes, tanks, compressors, trucking, etc.

Our Current Business

Golden Aria is an energy company with two separately focused
divisions: the first is exploring and developing conventional oil and gas
properties while the second is examining and developing opportunities in the
alternative energy sector. Management has made progress in both areas of
business.

We are currently seeking opportunities to acquire prospective
or producing oil and gas properties or other oil and gas resource related
projects; and examining and developing opportunities in alternative energy.

We currently hold the following interests:

The Coteau Lake light oil exploration project, South Eastern
Saskatchewan, Canada

Coteau Lake is an exploration property and we have no producing
oil or gas wells on this property at this time. Coteau Lake covers 1,280 acres
of land. Golden Arias gross and net interest in this project is 50%. There has
been historic oil production on the Coteau Lake project lands. Our internal
geological and geophysical work to date indicates our lands could be prospective
for oil & gas accumulations to have taken place. Our current focus on this
project is the defining of our first exploration well location.

The Glen Park light oil exploration prospect, Central
Alberta, Canada

Glen Park prospect covers 160 acres that is believed to be
prospective for reef development and the potential accumulation of oil deposits.
Productive wells in the area have production rates in excess of 200 bop/d and in
some cases with little associated water. We currently have a 50% interest in the
Glen Park prospect and are actively looking at other prospects in the area.

Golden Aria expects to evaluate additional properties on an
ongoing basis and will acquire interests when believed to be in the company
interest.

Equity Investment in Pro Eco Energy, Inc.

On April 21, 2008 we announced that we had made an equity
investment in to Pro Eco Energy, Inc., a clean tech energy enterprise in
engineering, developing and installing solar energy solutions to commercial and
residential customers. We also welcomed the President of Pro Eco Energy,
Mr.Roger Huber, as the first member of our Clean Tech Advisory board. Mr. Huber has a long career in optimizing
energy solutions and his knowledge and wide industry contacts are expected to
help us develop our alternative energy solutions.

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Clean Tech Alliance with Snyder Electric.

On June 5, 2008, Mr. Mark Snyder, a long time clean energy
expert in California, also joined our Clean Tech Advisory board. Mr. Snyder is
an expert in alternative energy systems. Mr. Snyders focus is on complete net
zero home solutions  homes that generate through alternative energy systems
such as solar thermal, solar PV or other, as much energy as they consume.

Belmont Lake Field, Wilkinson County, Mississippi

Effective September 1, 2009, we entered into an assignment
agreement with Cheetah Oil & Gas Ltd. The assignment agreement dated August
28, 2009, provides for the purchase by our company of a revenue interest of
40.432% of an 8% share of Cheetahs net revenue after field operating expenses
from the Belmont Lake PP F-12-4 horizontal well, located in Belmont Lake Field,
Wilkinson County, Mississippi. As consideration, we have agreed to pay to
Cheetah 57.76% of Cheetahs costs currently budgeted at $77,905, subject to
revision and 57.76% of Cheetahs 8% share of PP F-12-4 well costs from time to
time for infrastructure, pipes, tanks, compressors, trucking, etc.

Effective September 1, 2009, we entered into an assignment
agreement with Lexaria Corp. The assignment agreement dated August 28, 2009,
provides for the purchase by our company of a revenue interest of 13.475% of a
32% share of Lexarias net revenue after field operating expenses from the
Belmont Lake PP F-12-4 horizontal well, located in Belmont Lake Field, Wilkinson
County, Mississippi. As consideration, we have agreed to pay to Lexaria 19.25%
of Lexarias costs currently budgeted at $311,621, subject to revision and
19.25% of Lexarias 32% share of PP F-12-4 well costs from time to time for
infrastructure, pipes, tanks, compressors, trucking, etc.

Through the acquisitions from Cheetah Oil & Gas Ltd. and
Lexaria Corp., we hold an aggregate 7.5376% net revenue interest after field
operating expenses in the Belmont Lake PP F-12-4 horizontal well.

On November 13, 2009, we announced that the Operator of the PP
F-12-4 horizontal well in Mississippi, Griffin & Griffin Exploration LLC,
has declared force majeure on the Belmont Lake offset wells at this time due to
the heavy flooding in the area. We expect that Griffin & Griffin we commence
drilling once the weather has subsided.

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

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

Competition

We are an exploration stage company engaged in the acquisition
and exploration of oil and gas properties. The petroleum industry is competitive
in all its phases. We compete with numerous other participants in the search for
and the acquisition of oil and natural gas properties, and in the marketing of
oil and natural gas. Our competitors include oil and natural gas companies that
have substantially greater financial resources, staff and facilities than ours.
Our ability to obtain or increase reserves in the future will depend not only on
our ability to explore and develop our present properties, but also on our
ability to select and acquire suitable producing properties or prospects for exploratory drilling. Competitive factors in the
distribution and marketing of oil and natural gas include price and methods and
reliability of delivery.

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The resource and alternative energy industries are competitive.
We compete with numerous companies, including many major resource companies,
which have substantially greater technical, financial and operational resources
and staff. Accordingly, there is a high degree of competition for commercially
viable properties and access to funds.

Compliance with Government Regulation

The exploration and development of oil and gas properties is
subject to various United States federal, state and local and foreign
governmental regulations. We may from time to time, be required to obtain
licenses and permits from various governmental authorities in regards to the
exploration of our property interests.

Employees

We primarily used the services of sub-contractors and
consultants for manual labour exploration work and drilling on our properties.
Our only technical employee is Mr. McAllister, our president and a director.

The Company had entered into a consulting agreement with Dr.
Gerald G. Carlsons company, KGE Management Ltd. from March 1, 2005 to November
30, 2007. During the term of this agreement, Dr. Carlson, provided geological
and corporate administration consulting services to our company, such duties and
responsibilities included the provision of geological consulting services,
strategic corporate and financial planning, management of the overall business
operations of our company, and the supervision of office staff and exploration
and mining consultants. Dr. Carlson, through KGE Management Ltd., was reimbursed
at the rate of $2,000 per month. This agreement was terminated on November 30,
2007, but Dr. Carlson does remain on the Board as a Director.

We entered into a consulting agreement with Mr. Robert
McAllister on December 1, 2007. During the term of this agreement, Mr.
McAllister is to provide corporate administration and oil & gas exploration
and production consulting services, such duties and responsibilities to include
provision of oil and gas industry consulting services, strategic corporate and
financial planning, management of the overall business operations of the
Company, and supervising office staff and exploration and oil & gas
consultants. Mr. McAllister is reimbursed at the rate of $2,000 per month. On
December 1, 2008, the consulting fee was increased to $5,000 per month. We may
terminate this agreement without prior notice based on a number of conditions.
Mr. McAllister may terminate the agreement at any time by giving 30 days written
notice of his intention to do so.

On March 2, 2008, the Company entered into a controller
agreement with CAB Financial Services, a corporation organized under the laws of
the Province of British Columbia. CAB Financial Services is a consulting company
controlled by the chairman of the board and chief executive officer of the
Company. Pursuant to the controller agreement, CAB Financial Services will
provide corporate accounting and controller services to the Company in
consideration for the payment of CAD$3,675 (including $175 GST) per month. This
agreement was terminated on October 9, 2009.

On December 1, 2008, the Company entered into a consulting
agreement with CAB Financial Services, a corporation organized under the laws of
the Province of British Columbia. CAB Financial Services is a consulting company
controlled by the chairman of the board and the chief executive officer of the
Company. A fee of $5,000 per month is accrued. We may terminate this agreement
without prior notice based on a number of conditions. CAB Financial Services
Ltd. may terminate the agreement at any time by giving 30 days written notice of
his intention to do so.

On October 9, 2009, the Company entered into a consulting
agreement with BKB Management Ltd, a corporation organized under the laws of the
Province of British Columbia. BKB Management controlled by the chief financial
officer of the Company. A fee of CAD$4,675 including GST is paid per month. We
may terminate this agreement without prior notice based on a number of
conditions. BKB Management Ltd. may terminate the agreement at any time by
giving 30 days written notice of his intention to do so.

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On October 9, 2009, the Company entered into a consulting
agreement with Mark Snyder as the Chief Technical Officer. A fee of $1,000 is
paid per month.

Research and Development

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

Item 1A. Risk Factors

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

We have a limited operating history and as a result there is
no assurance we can operate on a profitable basis.

We have a limited operating history and must be considered in
the exploration stage. Our company's operations will be subject to all the risks
inherent in the establishment of an exploration stage enterprise and the
uncertainties arising from the absence of a significant operating history.
Potential investors should be aware of the difficulties normally encountered by
resource exploration companies and the high rate of failure of such enterprises.
The likelihood of success must be considered in light of the problems, expenses,
difficulties, complications and delays encountered in connection with the
exploration of the properties that we plan to undertake. These potential
problems include, but are not limited to, unanticipated problems relating to
exploration, and additional costs and expenses that may exceed current
estimates. The expenditures to be made by us in the exploration of our
properties may not result in the discovery of reserves. Problems such as unusual
or unexpected formations of rock or land and other conditions are involved in
resource exploration and often result in unsuccessful exploration efforts. If
the results of our exploration do not reveal viable commercial reserves, we may
decide to abandon our claims and acquire new claims for new exploration or cease
operations. The acquisition of additional claims will be dependent upon us
possessing capital resources at the time in order to purchase such claims. If no
funding is available, we may be forced to abandon our operations. There can be
no assurance that we will be able to operate on a profitable basis.

If we do not obtain additional financing, our business will
fail and our investors could lose their investment.

We had cash in the amount of $282,948 and working capital of
$165,813 as of our year ended August 31, 2009. We currently do not generate
significant revenues from our operations. Any direct acquisition of a claim
under lease or option is subject to our ability to obtain the financing
necessary for us to fund and carry out exploration programs on potential
properties. The requirements are substantial. Obtaining additional financing
would be subject to a number of factors, including market prices for resources,
investor acceptance of our properties and investor sentiment. These factors may
negatively affect the timing, amount, terms or conditions of any additional
financing available to us. The most likely source of future funds presently
available to us is through the sale of equity capital and loans. Any sale of
share capital will result in dilution to existing shareholders.

Because there is no assurance that we will generate material
revenues, we face a high risk of business failure.

As of the date of this annual report, we have earned revenues
of $374,088 since the inception. On July 1, 2009, we sold our 7.5% net working
interest in a oil well at Queensdale West in Saskatchewan, Canada. Through our
subsidiary, Target, on July 1, 2009, we sold our 3.75% net working interest in
Wordsworth, Saskatchewan. The Company also sold its 8% (BPO) 4% net interest in
an oil well at Queensdale West in Saskatchewan, Canada. We were incorporated in
November 2004 and to date have been involved in limited exploration activities.
Before we are able to generate more significant revenue, we will incur
substantial operating and exploration expenditures. We therefore expect to incur
significant losses into the foreseeable future. We have limited operating
history upon which an evaluation of our future success or failure can be made.
Our net loss from inception to August 31, 2009 is $1,263,473. We recognize that
if we are unable to generate significant revenues from our activities, we will
not be able to earn profits or continue operations. We cannot guarantee that we
will be successful in raising capital to fund these operating losses or generate
revenues in the future. We can provide investors with no assurance that we will generate any operating revenues or ever achieve profitable
operations. If we are unsuccessful in addressing these risks, our business will
most likely fail and our investors could lose their investment.

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

The oil and natural gas industry is intensely competitive.
Although we do not compete with other oil and gas companies for the sale of any
oil and gas that we may produce, as there is sufficient demand in the world
market for these products, we compete with numerous individuals and companies,
including many major oil and natural gas companies which have substantially
greater technical, financial and operational resources and staff. Accordingly,
there is a high degree of competition for desirable oil and natural gas leases,
suitable properties for drilling operations and necessary drilling equipment, as
well as for access to funds. We cannot predict if the necessary funds can be
raised or that any projected work will be completed.

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

The oil and natural gas industry is intensely competitive.
Although we do not compete with other oil and gas companies for the sale of any
oil and gas that we may produce, as there is sufficient demand in the world
market for these products, we compete with numerous individuals and companies,
including many major oil and natural gas companies which have substantially
greater technical, financial and operational resources and staff. Accordingly,
there is a high degree of competition for desirable oil and natural gas leases,
suitable properties for drilling operations and necessary drilling equipment, as
well as for access to funds. We cannot predict if the necessary funds can be
raised or that any projected work will be completed.

There can be no assurance that we will discover oil or
natural gas in any commercial quantity on our properties.

Exploration for economic reserves of oil and natural gas is
subject to a number of risks. There is competition for the acquisition of
available oil and natural gas properties. Few properties that are explored are
ultimately developed into producing oil and/or natural gas wells. If we cannot
discover oil or natural gas in any commercial quantity thereon, our business
will fail.

Even if we acquire an oil and natural gas exploration
property and establish that it contains oil or natural gas in commercially
exploitable quantities, the potential profitability of oil and natural gas
ventures depends upon factors beyond the control of our company.

The potential profitability of oil and natural gas properties
is dependent upon many factors beyond our control. For instance, world prices
and markets for oil and natural gas are unpredictable, highly volatile,
potentially subject to governmental fixing, pegging, controls or any combination
of these and other factors, and respond to changes in domestic, international,
political, social and economic environments. Additionally, due to worldwide
economic uncertainty, the availability and cost of funds for production and
other expenses have become increasingly difficult, if not impossible, to
project. In addition, adverse weather conditions can hinder drilling operations.
These changes and events may materially affect our future financial performance.
These factors cannot be accurately predicted and the combination of these
factors may result in our company not receiving an adequate return on invested
capital.

In addition, a productive well may become uneconomic in the
event water or other deleterious substances are encountered which impair or
prevent the production of oil and/or natural gas from the well. Production from
any well may be unmarketable if it is impregnated with water or other
deleterious substances. Also, the marketability of oil and natural gas which may
be acquired or discovered will be affected by numerous related factors,
including the proximity and capacity of oil and natural gas pipelines and
processing equipment, market fluctuations of prices, taxes, royalties, land
tenure, allowable production and environmental protection, all of which could
result in greater expenses than revenue generated by the well.

10

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The marketability of natural resources will be affected by
numerous factors beyond our control which may result in us not receiving an
adequate return on invested capital to be profitable or viable.

The marketability of natural resources which may be acquired or
discovered by us will be affected by numerous factors beyond our control. These
factors include market fluctuations in oil and natural gas pricing and demand,
the proximity and capacity of natural resource markets and processing equipment,
governmental regulations, land tenure, land use, regulation concerning the
importing and exporting of oil and natural gas and environmental protection
regulations. The exact effect of these factors cannot be accurately predicted,
but the combination of these factors may result in us not receiving an adequate
return on invested capital to be profitable or viable.

Oil and natural gas operations are subject to comprehensive
regulation which may cause substantial delays or require capital outlays in
excess of those anticipated causing an adverse effect on our company.

Oil and natural gas operations are subject to federal, state,
and local laws relating to the protection of the environment, including laws
regulating removal of natural resources from the ground and the discharge of
materials into the environment. Oil and natural gas operations are also subject
to federal, state, and local laws and regulations which seek to maintain health
and safety standards by regulating the design and use of drilling methods and
equipment. Various permits from government bodies are required for drilling
operations to be conducted; no assurance can be given that standards imposed by
federal, provincial, or local authorities may be changed and any such changes
may have material adverse effects on our activities. Moreover, compliance with
such laws may cause substantial delays or require capital outlays in excess of
those anticipated, thus causing an adverse effect on us. Additionally, we may be
subject to liability for pollution or other environmental damages. To date, we
have not been required to spend any material amount on compliance with
environmental regulations. However, we may be required to do so in the future
and this may affect our ability to expand or maintain our operations.

Exploration and production activities are subject to certain
environmental regulations which may prevent or delay the commencement or
continuation of our operations.

In general, our exploration and production activities are
subject to certain federal, state and local laws and regulations relating to
environmental quality and pollution control. Such laws and regulations increase
the costs of these activities and may prevent or delay the commencement or
continuation of a given operation. Specifically, we may be subject to
legislation regarding emissions into the environment, water discharges and
storage and disposition of hazardous wastes. In addition, legislation has been
enacted which requires well and facility sites to be abandoned and reclaimed to
the satisfaction of state authorities. However, such laws and regulations are
frequently changed and we are unable to predict the ultimate cost of compliance.
Generally, environmental requirements do not appear to affect us any differently
or to any greater or lesser extent than other companies in the industry.

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

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

The alternative energy or clean energy industry is
competitive and filled with difficult to ascertain risks as it is a developing
business sector.

The business of designing, installing and maintaining
alternative energy systems is a relatively new business sector that contains a
number of risks such as the risk of existing government tax subsidies or other
government support being revoked, uneconomic clean energy generation costs,
business competition from new competitors attracted to the sector, lack of
control over costs of materials, and of normal business operations risks such as
escalating labour costs etc. Any of these and other undefined risks could
severely impact our ability to enter this business sector or to operate
profitably within it.

11

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Any change to government regulation/administrative practices
may have a negative impact on our ability to operate and our profitability.

The business of oil and natural gas exploration and development
is subject to substantial regulation under various countries laws relating to
the exploration for, and the development, upgrading, marketing, pricing,
taxation, and transportation of oil and natural gas and related products and
other matters. Amendments to current laws and regulations governing operations
and activities of oil and natural gas exploration and development operations
could have a material adverse impact on our business. In addition, there can be
no assurance that income tax laws, royalty regulations and government incentive
programs related to the properties subject to our farm-out agreements and the
oil and natural gas industry generally will not be changed in a manner which may
adversely affect our progress and cause delays, inability to explore and develop
or abandonment of these interests.

Permits, leases, licenses, and approvals are required from a
variety of regulatory authorities at various stages of exploration and
development. There can be no assurance that the various government permits,
leases, licenses and approvals sought will be granted in respect of our
activities or, if granted, will not be cancelled or will be renewed upon expiry.
There is no assurance that such permits, leases, licenses, and approvals will
not contain terms and provisions which may adversely affect our exploration and
development activities.

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

Our success is largely dependent on our ability to hire highly
qualified personnel. This is particularly true in highly technical businesses
such as resource exploration. These individuals are in high demand and we may
not be able to attract the personnel we need. In addition, we may not be able to
afford the high salaries and fees demanded by qualified personnel, or may lose
such employees after they are hired. Failure to hire key personnel when needed,
or on acceptable terms, would have a significant negative effect on our
business.

Our independent certified public accounting firm, in the
notes to the audited consolidated financial statements for the year ended August
31, 2009 states that there is a substantial doubt that we will be able to
continue as a going concern.

As at August 31, 2009, we have experienced significant losses
since inception. Failure to arrange adequate financing on acceptable terms and
to achieve profitability would have an adverse effect on our financial position,
results of operations, cash flows and prospects. Accordingly, there is
substantial doubt that we will be able to continue as a going concern.

Risks Associated with Our Common Stock

Trading on the OTC Bulletin Board may be volatile and
sporadic, which could depress the market price of our common stock and make it
difficult for our stockholders to resell their shares.

Our common stock is quoted on the OTC Bulletin Board service of
the Financial Industry Regulatory Authority. Trading in stock quoted on the OTC
Bulletin Board is often thin and characterized by wide fluctuations in trading
prices, due to many factors that may have little to do with our operations or
business prospects. This volatility could depress the market price of our common
stock for reasons unrelated to operating performance. Moreover, the OTC Bulletin
Board is not a stock exchange, and trading of securities on the OTC Bulletin
Board is often more sporadic than the trading of securities listed on a
quotation system like Nasdaq or a stock exchange like Amex. Accordingly,
shareholders may have difficulty reselling any of the shares.

12

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

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

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

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

Other Risks

Because all of our officers and directors are located in
non-U.S. jurisdictions, you may have no effective recourse against them for
misconduct and you may not be able to enforce judgment and civil liabilities
against our officers, directors, experts and agents.

All of our directors and officers are nationals and/or
residents of countries other than the United States and all or a substantial
portion of their assets are located outside the United States. As a result, it
may be difficult for investors to enforce within the United States any judgments
obtained against our officers or directors, including judgments predicated upon
the civil liability provisions of the securities laws of the United States or
any state thereof.

Trends, Risks and Uncertainties

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

13

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Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

Executive Offices

The address of our principal executive office is Suite 950,
1130 West Pender Street, Vancouver, British Columbia, V6E 4A4, for which we
share 250 square feet of office space, which includes one executive office. Our
telephone number is (604) 602-1633. We have another office located in Kelowna,
which is rented from CAB Financial Services Ltd. on a month-to-month basis and
our monthly rental is CAD$500 plus GST, for which we share 1,500 square feet of
office space, which includes two executive offices. Our current locations
provide adequate office space for our purposes at this stage of our
development.

Resource Properties

Coteau Lake, Saskatchewan

In connection with the acquisition of Target, we acquired
certain working interest in Coteau Lake, Saskatchewan.

Coteau Lake is an exploration property and we have no producing
oil or gas wells on this land at this time. The Coteau Lake exploration project
covers 1,280 acres of land. Our gross and net interest in this project is 50%.
There has been historic oil production on the Coteau Lake project lands.

On November 7, 2007, our subsidiary Target entered into a
Letter of Intent (the LOI) with Primrose Drilling Ventures Ltd. (Primrose),
a body corporate, having an office in the city of Calgary, in the Province of
Alberta. Pursuant to the LOI, our subsidiary Target is the interest title holder
of Saskatchewan Crown Land parcels 124, 125 and 126.

Primrose elected to proceed with a 50/50 joint venture with
Target by reimbursing Target for 50% of its land cost on parcels 124, 125 and
126 for CAD$26,590 which was paid within 15 days of signing the LOI. Primrose
would become operator of the project upon its acceptance of such appointment and
agreement to assume the duties, obligations and rights of the operator. A formal
Participation Agreement (Agreement) which included the provisions of LOI has
been entered between Target and Primrose. Included in the Participation
Agreement would be the Area of Mutual Interest (AMI) which would govern future
land acquisitions and timeline set out in the LOI. On December 31, 2008, an
additional CAD$22,270 was spent on land acquisitions with Primrose Drilling
Ventures. As at August 31, 2009, the Company was still in the process of
defining the first exploration well location.

Glen Park, Alberta

On May 14, 2008, we were successful in acquiring one land
parcel of 160 acres in the Glen Park area of central Alberta, Canada. We
subsequently created a 50/50 Joint Venture with Vanguard Exploration to explore
and develop the joint lands on Alberta Petroleum and Natural Gas Lease No.
0408050364. The joint venture owns the Petroleum and Natural Gas rights below
the base of the Mannville GRP to basement.

On June 11, 2008, we were successful in acquiring two land
parcels of 160 acres each in the Glen Park area of central Alberta, Canada.
These 320 acres are believed to be prospective for reef development and the
potential accumulation of oil deposits. We own the Petroleum and Natural Gas
rights below the base of the Mannville GRP to basement 100%. We currently have a
100% interest in these two prospects. We will continue to evaluate other
opportunities in this and other areas.

14

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Belmont Lake

On August 28, 2009 and effective on September 1, 2009, the
Company entered into two assignment agreements to participate in a well program
in Jackson, Mississippi with two public companies. The Company agreed to pay
$45,000 to acquire a 40.432 percent interest from Cheetah Oil and Gas Ltd's 8
percent gross interest in the Belmont Lake 12-4 well by paying 57.76 percent of
the drilling, completion and tie in costs. The Company also agreed to pay
$59,987 to acquire a 13.475 percent interest from Lexaria Corp's 32 percent
gross interest in the Belmont Lake 12-4 well by paying 19.25 percent of the
drilling, completion and tie in costs. Both public companies have a managerial
relationship with the Company. As at August 31, 2009, the Company has made
$59,987 in connection with the assignment agreement and the amount have been
included in unproved property.

Item 3. Legal Proceedings

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

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

None.

PART II

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

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

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

|Quarter
      Ended(1) |   | High |  |   | Low  | 
|---------------------- | - | ---- |  | - | ---- | 
|August 2009            | $ | 0.20 |  | $ | 0.12 | 
|May 2009               | $ | 0.18 |  | $ | 0.18 | 
|February 2009          | $ | 0.10 |  | $ | 0.10 | 
|November
      2008    | $ | 0.10 |  | $ | 0.10 | 
|August 2008            | $ | 0.20 |  | $ | 0.20 | 
|May 2008               | $ | 0.25 |  | $ | 0.25 | 
|February 2008          | $ | 0.20 |  | $ | 0.20 | 
|November
      2007    | $ | 0.40 |  | $ | 0.40 | 
|August 2007            | $ | 0.35 |  | $ | 0.20 | 
|May 2007               | $ | 1.25 |  | $ | 0.55 | 
|February 2007          | $ | 0.55 |  | $ | 0.55 | 
|November
      2006    | $ | 1.01 |  | $ | 0.25 | 
|August 2006            | $ | 0.25 |  | $ | 0.20 | 
|May 2006               |   | N/A  |  |   | N/A  | 

|February 2006       |  | N/A |  |  | N/A | 
|------------------- |  | --- |  |  | --- | 
|November
      2005 |  | N/A |  |  | N/A | 
|August 2005         |  | N/A |  |  | N/A | 

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

15

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On November 5, 2009, the last closing price for one share of
our common stock as reported by the OTC Bulletin Board was $0.06. This closing
price reflects an inter-dealer price, without retail mark-up, mark-down or
commission, and may not represent an actual transaction.

As of November 5, 2009, there were 101 holders of record of our
common stock. As of such date, 14,652,740 common shares were issued and
outstanding.

Our common shares are issued in registered form. Nevada Agency
and Trust Company, 50 West Liberty Street, Suite 880, Reno, Nevada 89501
(Telephone: 775.322.0626; Facsimile: 775.322.5623) is the registrar and transfer
agent for our common shares.

Dividend Policy

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

Recent Sales of Unregistered Securities

We did not sell any equity securities which were not registered
under the Securities Act during the year ended August 31, 2009 that were not
otherwise disclosed on our quarterly reports on Form 10-Q or our current reports
on Form 8-K filed during the year ended August 31, 2009.

Equity Compensation Plan Information

We have no long-term incentive plans other than the stock
option plan described below:

Stock Option Plan

On December 14, 2007, our board of directors approved our 2008
Stock Option Plan. Under the 2008 Stock Option Plan, options may be granted to
our directors, officers, employees and consultants as determined by our board of
directors. Pursuant to the Plan, we reserved for issuance 1,400,000 post share
consolidation shares of our common stock (2,800,000 pre-consolidation shares).

On December 14, 2007, we granted 892,500 post share
consolidation stock options to directors, officers, and consultants of our
company exercisable at a price of $0.70 per share for a period of 5 years. On
October 22, 2009, we modified the exercise price of these stock options to $0.20
per share. The vesting dates of the options are as below:

|Vesting Dates           | Percentage of options granted
|----------------------- | -----------------------------
|                        |                              
|December 14, 2007       | 25%                          
|December
      14, 2008 | 25%                          
|December 14, 2009       | 25%                          
|December
      14, 2010 | 25%                          

16

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On October 22, 2009, we granted an additional 500,000 stock
options to our directors and consultants. The exercise price of the stock
options is $0.10 per share, which are vested immediately and expire October 22,
2014.

As at the date of the annual report, there was nil stock
options exercised

|Equity Compensation Plan Information                      
|----------------------------------------------------------
|                                                          
|                                                          
|                                                          
|                                                          
|                                                          
|                                                          
|                                                          
|Plan
      category                                       
|Equity compensation plans approved by security holders    
|Equity compensation plans not approved by security holders
|Total                                                     

| | (1) | These figures do not include the 500,000 stock options that were
      granted to directors and consultants on October 22, 2009.
| | --- | --------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                 
| | (2) | On October 22, 2009, the exercise price of the stock options were
      repriced to $0.20 per share.                            

Purchases of Equity Securities by the Issuer and Affiliated
Purchasers

We did not purchase any of our shares of common stock or other
securities during our fiscal year ended August 31, 2009.

Item 6. Selected Financial Data

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

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

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

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

Results of Operations for our Years Ended August 31, 2009
and 2008

Our net loss and comprehensive loss for our year ended August
31, 2009, for our year ended August 31, 2008 and the changes between those
periods for the respective items are summarized as follows:

17

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|                                                             |  |            |   |  |            |   |  | Change Between  |  
|------------------------------------------------------------ |  | ---------- | - |  | ---------- | - |  | --------------- | -
|                                                             |  |            |   |  |            |   |  | Year Ended      |  
|                                                             |  | Year Ended |   |  | Year Ended |   |  | August 31, 2009 |  
|                                                             |  | August 31, |   |  | August 31, |   |  | and Year Ended  |  
|                                                             |  | 2009       |   |  | 2008       |   |  | August 31, 2008 |  
|                                                             |  | **$**      |   |  | **$**      |   |  | **$**           |  
|Revenue                                                      |  | 97,417     |   |  | 194,465    |   |  | (97,048         | )
|Other (income)expenses                                       |  | (425,900   | ) |  | (1,192     | ) |  | (424,708        | )
|General and
      administrative                             |  | 275,950    |   |  | 318,540    |   |  | (42,590         | )
|Interest expense                                             |  | 10,486     |   |  | 7,551      |   |  | 2,935           |  
|Write down in carrying
      value of oil and gas properties |  | 31,786     |   |  | 45,352     |   |  | (13,566         | )
|Consulting fees                                              |  | 177,328    |   |  | 153,403    |   |  | 23,925          |  
|Oil and gas operating
      expenses                         |  | 131,348    |   |  | 204,300    |   |  | (72,952         | )
|Professional Fees                                            |  | 38,132     |   |  | 83,549     |   |  | (45,417         | )
|Net Income (loss)                                            |  | 84,233     |   |  | (372,535   | ) |  | 456,768         |  

Revenue

The decrease in our oil and gas revenues for our year ended
August 31, 2009 was largely due to lower production volumes and to lower prices
received for oil and gas sales.

Other Income

The large increase in other income for our year ended August
31, 2009, is due to the sale of the Queensdale properties and Wordsworth for
US$421,545. The Company also recorded its first clean energy-originating revenue
of $26,524 for the year ended August 31, 2009.

General and Administrative

The decrease in our general and administrative expenses for our
year ended August 31, 2009 was due to a substantial reduction in our
professional fees.

18

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Professional Fees

There was a decrease in accounting, audit and legal fees for
our year ended August 31, 2009. In the year ended August 31, 2008 the fees were
higher due to the Target acquisition and the setting up of the stock option
plan.

Interest Expense

The increase in interest expense for our year ended August 31,
2009 was due to a loan made to the Company by a related party that was paid back
in full by mid August 2009.

Oil and Gas Operating Expenses

The decrease in oil and gas operating expenses for our year
ended August 31, 2009 was due to the lower production volumes for oil and gas.

Liquidity and Financial Condition

|Working Capital                                   |   | At         |   |   | At         |  
|------------------------------------------------- | - | ---------- | - | - | ---------- | -
|                                                  |   | August 31, |   |   | August 31, |  
|                                                  |   | 2009       |   |   | 2008       |  
|Current assets                                    | $ | 295,333    |   | $ | 145,772    |  
|Current liabilities                               |   | 129,520    |   |   | 139,028    |  
|Working capital                                   | $ | 165,813    |   | $ | 6,744      |  
|                                                  |   |            |   |   |            |  
|                                                  |   |            |   |   |            |  
|Cash Flows                                        |   | Year Ended |  
|                                                  |   | August 31, |   |   | August 31  |  
|                                                  |   | 2009       |   |   | 2008       |  
|Cash flows (used in) operating
      activities   | $ | (162,778   | ) | $ | (153,470   | )
|Cash flows (used in) investing activities         |   | 321,332    |   |   | (23,715    | )
|Cash flows provided by financing
      activities |   | -          |   |   | -          |  
|Net increase (decrease) in cash during year       | $ | 158,554    |   | $ | (177,185   | )

Operating Activities

Net cash used in operating activities was $162,778 for our year
ended August 31, 2009 compared with cash used in operating activities of
$153,470 in the same period in 2008. The increase in net cash used in operating
activities is due to the Company paid off accounts payable and accrued
liabilities.

Investing Activities

Net cash provided in investing activities was $321,332 for our
year ended August 31, 2009 compared to net cash used in investing activities of
$23,715 in the same period in 2008 was mainly attributable to the sale of the
Queensdale properties and the Wordsworth property.

Financing Activities

Net cash from financing activities was $Nil for our year ended
August 31, 2009 compared to $Nil in the same period in 2008.

19

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Contractual Obligations

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

Going Concern

The financial statements have been prepared in accordance with
accounting principles generally accepted in the United States applicable to a
going concern, which contemplates the realization of assets and the satisfaction
of liabilities and commitments in the normal course of business. The Company has
earned a net income of $84,233 for the year ended August 31, 2009 [2008  net
loss of $372,535] and at August 31, 2009 had a deficit accumulated during the
exploration stage of $1,263,473 [2008  $1,347,706]. The Company generated
revenue of $97,417 for the year ended August 31, 2009 [2008 - $194,465]. The
Company has working capital of $165,813 as at August 31, 2009. The Company
requires additional funds to maintain its existing operations and to acquire new
business assets. These conditions raise substantial doubt about the Companys
ability to continue as a going concern. Managements plans in this regard are to
raise equity and debt financing as required, but there is no certainty that such
financing will be available or that it will be available at acceptable terms.
The outcome of these matters cannot be predicted at this time.

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

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

Off-Balance Sheet Arrangements

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

Critical Accounting Policies

The discussion and analysis of our financial condition and
results of operations are based upon our financial statements, which have been
prepared in accordance with the accounting principles generally accepted in the
United States of America. Preparing financial statements requires management to
make estimates and assumptions that affect the reported amounts of assets,
liabilities, revenue, and expenses. These estimates and assumptions are affected
by managements application of accounting policies. We believe that
understanding the basis and nature of the estimates and assumptions involved
with the following aspects of our financial statements is critical to an
understanding of our financial statements.

Recent Accounting Pronouncements

In December 2007, the Financial Accounting Standards Board
(FASB) issued SFAS No. 141,(revised 2007), Business Combinations. SFAS 141
(R) applies the acquisition method of accounting for business combinations
established in SFAS 141 to all acquisitions where the acquirer gains a
controlling interest, regardless of whether consideration was exchanged.
Consistent with SFAS 141, SFAS 141 (R) requires the acquirer to fair value the
assets and liabilities of the acquiree and record goodwill on bargain purchases,
with main difference the application to all acquisitions where control is
achieved. SFAS 141 (R) is effective for financial statements issued for fiscal
years beginning after December 15, 2008. The adoption of this statement is not
expected to have a material effect on the Company's future financial position or
results of operations.

20

---

In December 2007, the Financial Accounting Standards Board
(FASB) issued SFAS No. 160, Non controlling Interests in Consolidated
Financial Statements - An amendment of ARB No. 51.SFAS 160 requires companies
with non controlling interests to disclose such interests clearly as a portion
of equity but separate from the parents equity. The non controlling interests
portion of net income must also be clearly presented on the Income Statement.
SFAS 160 is effective for financial statements issued for fiscal years beginning
after December 15, 2008. The adoption of this statement is not expected to have
a material effect on the Company's future financial position or results of
operations.

In March 2008, the FASB issued FASB Statement No. 161 ("SFAS
161"), "Disclosures about Derivative Instruments and Hedging Activities". SFAS
161 requires companies with derivative instruments to disclose information that
should enable financial-statement users to understand how and why a company uses
derivative instruments, how derivative instruments and related hedged items are
accounted for under FASB Statement No. 133 "Accounting for Derivative
Instruments and Hedging Activities" and how derivative instruments and related
hedged items affect a company's financial position, financial performance and
cash flows. SFAS 161 is effective for financial statements issued for fiscal
years and interim periods beginning after November 15, 2008. The adoption of
this statement is not expected to have a material effect on the Company's future
financial position or results of operations.

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of
Generally Accepted Accounting Principles. SFAS 162 identifies the sources of
accounting principles and the framework for selecting the principles to be used
in the preparation of financial statements of non-governmental entities that are
presented in conformity with generally accepted accounting principles in the
United States. It is effective 60 days following the SECs approval of the
Public Company Accounting Oversight Board amendments to AU Section 411, The
Meaning of Present Fairly in Conformity With Generally Accepted Accounting
Principles. The adoption of this statement is not expected to have a material
effect on the Companys financial statements.

In April 2008, the FASB issued FSP No. 142-3, Determination of
the Useful Life of Intangible Assets (FSP 142-3). FSP 142-3 amends the
factors an entity should consider in developing renewal or extension assumptions
used in determining the useful life of recognized intangible assets under FASB
Statement No. 142, Goodwill and Other Intangible Assets. This new guidance
applies prospectively to intangible assets that are acquired individually or
with a group of other assets in business combinations and asset acquisitions.
FSP 142-3 is effective for financial statements issued for fiscal years and
interim periods beginning after December 15, 2008. Early adoption is prohibited.
The adoption of this statement is not expected to have a material effect on the
Companys financial statements.

In May 2008, FASB issued FASB Staff Position (FSP) APB 14-1,
Accounting for Convertible Debt Instruments That May Be Settled in Cash upon
Conversion (Including Partial Cash Settlement) (FSP APB 14-1). FSP APB 14-1
clarifies that convertible debt instruments that may be settled in cash upon
either mandatory or optional conversion (including partial cash settlement) are
not addressed by paragraph 12 of APB Opinion No. 14, Accounting for Convertible
Debt and Debt issued with Stock Purchase Warrants. Additionally, FSP APB 14-1
specifies that issuers of such instruments should separately account for the
liability and equity components in a manner that will reflect the entitys
nonconvertible debt borrowing rate when interest cost is recognized in
subsequent periods. FSP APB 14-1 is effective for financial statements issued
for fiscal years beginning after December 15, 2008, and interim periods within
those fiscal years. We will adopt FSP APB 14-1 beginning in the first quarter of
2010, and this standard must be applied on a retrospective basis. The adoption
of this statement is not expected to have a material effect on the Companys
financial statements.

In April, 2009, the FASB issued FASB Staff Position No. FAS
157-4 ("FSP FAS 157-4"), "Determining Fair Value When the Volume and Level of
Activity for the Asset or Liability Have Significantly Decreased and Identifying
Transactions That Are Not Orderly". The FSP provides additional guidance for
estimating fair value in accordance with FASB Statement No. 157, Fair Value
Measurements, when the volume and level of activity for the asset or liability have significantly decreased. This FSP also includes
guidance on identifying circumstances that indicate a transaction is not
orderly. The adoption of this FSP does not believe to have a material impact on
the Companys financial statements.

21

---

In April, 2009, the FASB issued FASB Staff Position No. FAS
107-1 and APB 28-1 ("FSP FAS 107-1 and APB 28-1"), Interim Disclosures about
Fair Value of Financial Instruments. The FSP amends SFAS 107, Disclosure about
Fair Value of Financial Instruments, and Accounting Principles Board Opinion No.
28, Interim Financial Reporting, to require disclosures about fair value of
financial instruments for interim reporting periods of publicly traded companies
as well as in annual financial statements. Adoption of this FSP does not believe
to have a material impact on the Companys financial statements.

On April 1, 2009, the FASB issued FASB Staff Position No. FSP
FAS 115-2 and FAS 124-2 ("FSP FAS 115-2 and FAS 124-2"), Recognition and
Presentation of Other-Than-Temporary Impairments. The FSP amends the
other-than-temporary impairment guidance in U.S. GAAP for debt securities to
make the guidance more operational and to improve the presentation and
disclosure of other-than-temporary impairments on debt and equity securities in
the financial statements. This FSP does not amend existing recognition and
measurement guidance related to other-than-temporary impairments of equity
securities. The adoption of this FSP does not believe to have a material impact
on the Companys financial statements.

In June 2009, the FASB issued FASB No. 168 The FASB Accounting
Standards Codification and the Hierarchy of Generally Accepted Accounting
Principles - a replacement of FASB Statement No. 162 (SFAS 168). SFAS 168
establishes the FASB Accounting Standards Codification as the source of
authoritative accounting principles recognized by the FASB to be applied by
non-governmental entities in the preparation of financial statements in
conformity with GAAP in the United States. SFAS 168 is effective for financial
statements issued for interim and annual periods ending after September 15,
2009.

In June 2009, the FASB issued FASB No. 166, Accounting for
Transfers of Financial Assets - an amendment of FASB Statement No. 140 (SFAS
166). SFAS 166 requires additional disclosures about the transfer and
derecognition of financial assets and eliminates the concept of qualifying
special-purpose entities under SFAS 140. SFAS 166 is effective for fiscal years
beginning after November 15, 2009.

22

---

Item 7A. Quantitative and Qualitative Disclosures About
Market Risk

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

Item 8. Financial Statements and Supplementary Data

23

---

|***Chang Lee
      LLP***       |                             
|------------------------------- | ----------------------------
|***Chartered
    Accountants*** |                             
|                                | 606  815 Hornby Street     
|                                | Vancouver, B.C, V6Z 2E6     
|                                | Tel: 604-687-3776           
|                                | Fax: 604-688-3373           
|                                | E-mail: info@changleellp.com

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

GOLDEN ARIA CORP.(An exploration stage company)

We have audited the consolidated balance sheets of Golden Aria
Corp. (the Company) (an exploration stage company) as at August 31, 2009 and
2008 and the related consolidated statements of stockholders equity, operations
and cash flows for the years then ended and for the period cumulative from
inception November 24, 2004 (inception) to August 31, 2009. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform an audit to obtain reasonable assurance 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 consolidated financial statements referred
to above present fairly, in all material respects, the financial position of the
Company as at August 31, 2009 and 2008 and the results of their operations and
their cash flows for the years then ended and for the period cumulative from
inception November 24, 2004 (inception) to August 31, 2009 in conformity with
generally accepted accounting principles in the United States of America.

The accompanying consolidated financial statements refer to
above have been prepared assuming that the Company will continue as a going
concern. As discussed in Note 2 to the consolidated financial statements, the
Company has incurred losses from inception and further losses are anticipated.
These factors raise substantial doubt about its ability to continue as a going
concern. Managements plans in regard to these matters are also described in
Note 2. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

|Vancouver, Canada | /s/ Chang Lee
      LLP
|----------------- | -----------------------
|November 27, 2009 | Chartered Accountants  

24

---

GOLDEN ARIA CORP.(An Exploration Stage Company)
CONSOLIDATE BALANCE SHEETS(Expressed in U.S. Dollars)

|                                                                    |   | August 31, |   |   | August 31, |  
|------------------------------------------------------------------- | - | ---------- | - | - | ---------- | -
|                                                                    |   | 2009       |   |   | 2008       |  
|ASSETS                                                              |   |            |   |   |            |  
|                                                                    |   |            |   |   |            |  
|Current                                                             |   |            |   |   |            |  
|Cash and cash equivalents                                           | $ | 282,948    |   | $ | 124,394    |  
|Accounts
      receivable                                           |   | 9,608      |   |   | 21,378     |  
|Prepaid expenses and
      deposit                                  |   | 2,777      |   |   | -          |  
|Total current assets                                                |   | 295,333    |   |   | 145,772    |  
|                                                                    |   |            |   |   |            |  
|Non-Current                                                         |   |            |   |   |            |  
|Long term investment -
      Pro Eco (Note 4)                       |   | 35,821     |   |   | 40,927     |  
|Proven -
      Oil and gas properties (Note 5)                      |   | -          |   |   | 126,941    |  
|Unproven - Oil and gas
      properties (Note 5)                    |   | 3,621,617  |   |   | 3,524,216  |  
|Total Assets                                                        | $ | 3,952,771  |   | $ | 3,837,856  |  
|                                                                    |   |            |   |   |            |  
|LIABILITIES AND STOCKHOLDERS'
      EQUITY                          |   |            |   |   |            |  
|                                                                    |   |            |   |   |            |  
|LIABILITIES                                                         |   |            |   |   |            |  
|                                                                    |   |            |   |   |            |  
|Current                                                             |   |            |   |   |            |  
|Accounts payable                                                    | $ | -          |   | $ | 7,775      |  
|Due to
      related parties (Note 7)                               |   | 129,520    |   |   | 131,253    |  
|Total Current Liabilities                                           |   | 129,520    |   |   | 139,028    |  
|                                                                    |   |            |   |   |            |  
|Deferred tax liability                                              |   | 762,704    |   |   | 762,704    |  
|                                                                    |   | 892,224    |   |   | 901,732    |  
|STOCKHOLDERS' EQUITY                                                |   |            |   |   |            |  
|                                                                    |   |            |   |   |            |  
|Share capital                                                       |   |            |   |   |            |  
|Authorized:                                                         |   |            |   |   |            |  
|37,500,000 common shares with a par value of
      $0.001 per share |   |            |   |  
|Issued
      and outstanding:                                       |   |            |   |   |            |  
|14,652,740 common shares at August 31, 2009 and 2008                |   | 14,653     |   |   | 14,653     |  
|Additional paid-in capital                                          |   | 4,309,367  |   |   | 4,269,177  |  
|                                                                    |   |            |   |   |            |  
|Deficit accumulated during the
      exploration stage              |   | (1,263,473 | ) |   | (1,347,706 | )
|Total Stockholders' Equity                                          |   | 3,060,547  |   |   | 2,936,124  |  
|Total Liabilities and
      Stockholders' Equity                    | $ | 3,952,771  |   | $ | 3,837,856  |  

The accompanying notes are an integral part of these
consolidated financial statements

25

---

GOLDEN ARIA CORP.(An Exploration Stage
Company)CONSOLIDATED STATEMENTS OF OPERATIONS (Expressed in U.S.
Dollars)

|                                                                               |   |            |   |   |            |   |   | CUMULATIVE        |  
|------------------------------------------------------------------------------ | - | ---------- | - | - | ---------- | - | - | ----------------- | -
|                                                                               |   |            |   |   |            |   |   | PERIOD FROM       |  
|                                                                               |   |            |   |   |            |   |   | INCEPTION         |  
|                                                                               |   |            |   |   |            |   |   | NOVEMBER 24, 2004 |  
|                                                                               |   | YEAR ENDED |   |   | TO         |  
|                                                                               |   | August 31, |   |   | August 31, |   |   | August 31,        |  
|                                                                               |   | 2009       |   |   | 2008       |   |   | 2009              |  
|                                                                               |   |            |   |   |            |   |   |                   |  
|Revenue                                                                        |   |            |   |   |            |   |   |                   |  
|Natural gas and oil revenue                                                    | $ | 97,417     |   | $ | 194,465    |   | $ | 374,088           |  
|                                                                               |   |            |   |   |            |   |   |                   |  
|Cost of revenue                                                                |   |            |   |   |            |   |   |                   |  
|Natural gas and
      oil operating costs and royalties                        |   | 50,547     |   |   | 62,704     |   |   | 141,197           |  
|Depletion                                                                      |   | 80,801     |   |   | 141,596    |   |   | 298,489           |  
|Write down in
      carrying value of oil and gas property                     |   | 31,786     |   |   | 45,352     |   |   | 293,436           |  
|                                                                               |   |            |   |   |            |   |   |                   |  
|                                                                               |   | 163,134    |   |   | 249,652    |   |   | 733,122           |  
|                                                                               |   |            |   |   |            |   |   |                   |  
|Gross Profit                                                                   |   | (65,717    | ) |   | (55,187    | ) |   | (359,034          | )
|                                                                               |   |            |   |   |            |   |   |                   |  
|Expenses                                                                       |   |            |   |   |            |   |   |                   |  
|Accounting and audit                                                           |   | 32,451     |   |   | 51,497     |   |   | 193,846           |  
|Advertising
      & Promotions                                                 |   | 1,996      |   |   | 12,362     |   |   | 14,358            |  
|Bank charges and interest
      expense                                        |   | 10,486     |   |   | 7,551      |   |   | 22,399            |  
|Consulting                                                                     |   | 177,328    |   |   | 153,403    |   |   | 507,836           |  
|Exploration costs and option
      payment                                     |   | -          |   |   | -          |   |   | 318,292           |  
|Fees and dues                                                                  |   | 12,712     |   |   | 5,105      |   |   | 25,563            |  
|Insurance                                                                      |   | 5,397      |   |   | 9,807      |   |   | 15,204            |  
|Investor
      relations                                                       |   | 1,360      |   |   | 8,852      |   |   | 13,165            |  
|Legal and professional                                                         |   | 5,681      |   |   | 32,052     |   |   | 111,715           |  
|Office and
      miscellaneous                                                 |   | 9,530      |   |   | 13,809     |   |   | 40,258            |  
|Rent                                                                           |   | 5,401      |   |   | 11,052     |   |   | 43,033            |  
|Telephone                                                                      |   | 3,151      |   |   | 1,759      |   |   | 4,910             |  
|Training & Conferences                                                         |   | 685        |   |   | 3,889      |   |   | 4,574             |  
|Travel                                                                         |   | 9,772      |   |   | 7,402      |   |   | 20,442            |  
|                                                                               |   |            |   |   |            |   |   |                   |  
|Total expenses                                                                 |   | 275,950    |   |   | 318,540    |   |   | 1,335,595         |  
|                                                                               |   |            |   |   |            |   |   |                   |  
|(Loss) for the period before
      other income                                |   | (341,667   | ) |   | (373,727   | ) |   | (1,694,629        | )
|                                                                               |   |            |   |   |            |   |   |                   |  
|Other income (expense)                                                         |   |            |   |   |            |   |   |                   |  
|Interest income                                                                |   | 103        |   |   | 5,265      |   |   | 9,433             |  
|Other income                                                                   |   | 26,524     |   |   | -          |   |   | 26,524            |  
|Equity interest pick up                                                        |   | (5,106     | ) |   | (4,073     | ) |   | (9,179            | )
|Gain on
      disposition of oil and gas interests                             |   | 404,379    |   |   | -          |   |   | 404,379           |  
|Write off of mineral property                                                  |   | -          |   |   | -          |   |   | (1                | )
|                                                                               |   |            |   |   |            |   |   |                   |  
|Net Income (loss) for the period                                               | $ | 84,233     |   | $ | (372,535   | ) | $ | (1,263,473        | )
|                                                                               |   |            |   |   |            |   |   |                   |  
|Basic and diluted income (loss) per share                                      | $ | 0.01       |   | $ | (0.03      | ) |   |                   |  
|                                                                               |   |            |   |   |            |   |   |                   |  
|Weighted average number of common shares
      outstanding - basic and diluted |   | 14,652,740 |   |   | 12,935,923 |   |   |                   |  

The accompanying notes are an integral part of these
consolidated financial statements

26

---

GOLDEN ARIA CORP.(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS(Expressed in U.S. Dollars)

|                                                                             |   |            |   |   |                   |   |   | CUMULATIVE    |  
|---------------------------------------------------------------------------- | - | ---------- | - | - | ----------------- | - | - | ------------- | -
|                                                                             |   |            |   |   |                   |   |   | PERIOD FROM   |  
|                                                                             |   |            |   |   |                   |   |   | INCEPTION     |  
|                                                                             |   | YEAR ENDED |   |   | November 24, 2004 |  
|                                                                             |   | August 31, |   |   | August 31,        |   |   | TO August 31, |  
|                                                                             |   | 2009       |   |   | 2008              |   |   | 2009          |  
|                                                                             |   |            |   |   |                   |   |   |               |  
|Cash flows used in operating
      activities                                |   |            |   |   |                   |   |   |               |  
|Net Income (loss)                                                            | $ | 84,233     |   | $ | (372,535          | ) | $ | (1,263,473    | )
|                                                                             |   |            |   |   |                   |   |   |               |  
|Changes to reconcile
      net loss to net cash used in operating activities |   |            |   |   |                   |   |   |               |  
|Consulting - Stock based compensation                                        |   | 35,780     |   |   | 104,257           |   |   | 256,996       |  
|Depletion                                                                    |   | 80,801     |   |   | 141,596           |   |   | 298,489       |  
|Write down in carrying value of oil and gas properties                       |   | 31,786     |   |   | 45,352            |   |   | 293,437       |  
|Stock issued for mineral resource and oil and gas property                   |   | -          |   |   | -                 |   |   | 37,500        |  
|Write off of mineral property                                                |   | -          |   |   | -                 |   |   | 1             |  
|Gain
      on disposition of property                                        |   | (404,379   | ) |   | -                 |   |   | (404,379      | )
|Equity pick-up                                                               |   | 5,106      |   |   | 4,073             |   |   | 9,179         |  
|Imputed interest                                                             |   | 4,410      |   |   | 7,139             |   |   | 14,954        |  
|                                                                             |   |            |   |   |                   |   |   |               |  
|Change in non-cash
      working capital items:                              |   |            |   |   |                   |   |   |               |  
|Accounts receivable                                                          |   | 11,770     |   |   | 4,190             |   |   | 1,100         |  
|Prepaid expenses and deposit                                                 |   | (2,777     | ) |   | 24,284            |   |   | 21,507        |  
|Accounts payable and accrued liabilities                                     |   | (7,775     | ) |   | (36,208           | ) |   | (27,920       | )
|Due
      to related parties                                                 |   | (1,733     | ) |   | (75,618           | ) |   | (73,536       | )
|                                                                             |   |            |   |   |                   |   |   |               |  
|Net cash (used in) operating activities                                      |   | (162,778   | ) |   | (153,470          | ) |   | (836,145      | )
|                                                                             |   |            |   |   |                   |   |   |               |  
|Cash flows from (used in) investing
      activities                         |   |            |   |   |                   |   |   |               |  
|                                                                             |   |            |   |   |                   |   |   |               |  
|Oil and gas properties
      acquisition                                     |   | (100,213   | ) |   | (179,743          | ) |   | (297,949      | )
|Proceeds
      from sale of oil and gas interests                            |   | 421,545    |   |   | -                 |   |   | 421,545       |  
|Mineral resource
      properties acquisition                                |   | -          |   |   | -                 |   |   | (1            | )
|Investment in Pro Eco                                                        |   | -          |   |   | (45,000           | ) |   | (45,000       | )
|Cash provided in
      connection with business acquisition                  |   | -          |   |   | 201,028           |   |   | 201,028       |  
|                                                                             |   |            |   |   |                   |   |   |               |  
|Net cash from (used in) investing activities                                 |   | 321,332    |   |   | (23,715           | ) |   | 279,623       |  
|                                                                             |   |            |   |   |                   |   |   |               |  
|Cash flows from financing activities                                         |   |            |   |   |                   |   |   |               |  
|Proceeds
      from issuance of common stock                                 |   | -          |   |   | -                 |   |   | 839,470       |  
|                                                                             |   |            |   |   |                   |   |   |               |  
|Net cash from financing
      activities                                     |   | -          |   |   | -                 |   |   | 839,470       |  
|                                                                             |   |            |   |   |                   |   |   |               |  
|Increase (Decrease) in cash and
      cash equivalents                       |   | 158,554    |   |   | (177,185          | ) |   | 282,948       |  
|                                                                             |   |            |   |   |                   |   |   |               |  
|Cash
      and cash equivalents, beginning of period                         |   | 124,394    |   |   | 301,579           |   |   | -             |  
|                                                                             |   |            |   |   |                   |   |   |               |  
|Cash and cash equivalents, end of
      period                               | $ | 282,948    |   | $ | 124,394           |   | $ | 282,948       |  
|Supplemental information of cash flows                                       |   |            |   |   |                   |   |   |               |  
|Interest
      paid in cash                                                  | $ | -          |   | $ | -                 |   | $ | -             |  
|Income taxes paid in cash                                                    | $ | -          |   | $ | -                 |   | $ | -             |  

The accompanying notes are an integral part of these
consolidated financial statements

27

---

GOLDENARIACORP.(AnExplorationStageCompany)CONSOLIDATEDSTATEMENTSOFSTOCKHOLDERS'EQUITYNOVEMBER24, 2004(inception)TOAUGUST31, 2009(Expressedin U.S.Dollars)

|                                                                                                                            |  |              |  |   |            |  |   |           |  |   |        |   |   | DEFICIT     |   |   |               |  
|--------------------------------------------------------------------------------------------------------------------------- |  | ------------ |  | - | ---------- |  | - | --------- |  | - | ------ | - | - | ----------- | - | - | ------------- | -
|                                                                                                                            |  |              |  |   |            |  |   |           |  |   |        |   |   | ACCUMULATED |   |   |               |  
|                                                                                                                            |  | COMMON STOCK |  |   | ADDITIONAL |  |   | STOCK     |  |   | DURING |   |   | TOTAL       |  
|                                                                                                                            |  |              |  |   |            |  |   | PAID-IN   |  |   | TO BE  |   |   | EXPLORATION |   |   | STOCKHOLDERS' |  
|                                                                                                                            |  | SHARES       |  |   | AMOUNT     |  |   | CAPITAL   |  |   | ISSUED |   |   | STAGE       |   |   | EQUITY        |  
|                                                                                                                            |  |              |  |   |            |  |   |           |  |   |        |   |   |             |   |   |               |  
|Balance November 24,
      2004 (Inception)                                                                                 |  | -            |  | $ | -          |  | $ | -         |  | $ | -      |   | $ | -           |   | $ | -             |  
|                                                                                                                            |  |              |  |   |            |  |   |           |  |   |        |   |   |             |   |   |               |  
|Issuance of common stock for
      cash at $0.02 per share on March 22, 2005                                                |  | 5,467,500    |  |   | 5,468      |  |   | 103,882   |  |   | -      |   |   | -           |   |   | 109,350       |  
|                                                                                                                            |  |              |  |   |            |  |   |           |  |   |        |   |   |             |   |   |               |  
|Issuance of common stock for
      cash at $0.30 per share on April 6, 2005                                                 |  | 1,112,500    |  |   | 1,112      |  |   | 332,638   |  |   | -      |   |   | -           |   |   | 333,750       |  
|                                                                                                                            |  |              |  |   |            |  |   |           |  |   |        |   |   |             |   |   |               |  
|Stock to be issued                                                                                                          |  | 125,000      |  |   | -          |  |   | 37,375    |  |   | 125    |   |   | -           |   |   | 37,500        |  
|                                                                                                                            |  |              |  |   |            |  |   |           |  |   |        |   |   |             |   |   |               |  
|Comprehensive income
      (loss):                                                                                          |  |              |  |   |            |  |   |           |  |   |        |   |   |             |   |   |               |  
|(Loss) for the
      period                                                                                                 |  | -            |  |   | -          |  |   | -         |  |   | -      |   |   | (167,683    | ) |   | (167,683      | )
|                                                                                                                            |  |              |  |   |            |  |   |           |  |   |        |   |   |             |   |   |               |  
|Balance, August 31, 2005                                                                                                    |  | 6,705,000    |  |   | 6,580      |  |   | 473,895   |  |   | 125    |   |   | (167,683    | ) |   | 312,917       |  
|                                                                                                                            |  |              |  |   |            |  |   |           |  |   |        |   |   |             |   |   |               |  
|Stock issued on September 29, 2005                                                                                          |  | -            |  |   | 125        |  |   | -         |  |   | (125   | ) |   | -           |   |   | -             |  
|                                                                                                                            |  |              |  |   |            |  |   |           |  |   |        |   |   |             |   |   |               |  
|Comprehensive income (loss):                                                                                                |  |              |  |   |            |  |   |           |  |   |        |   |   |             |   |   |               |  
|(Loss) for the year                                                                                                         |  | -            |  |   | -          |  |   | -         |  |   | -      |   |   | (200,091    | ) |   | (200,091      | )
|Balance, August 31, 2006                                                                                                    |  | 6,705,000    |  |   | 6,705      |  |   | 473,895   |  |   | -      |   |   | (367,774    | ) |   | 112,826       |  
|                                                                                                                            |  |              |  |   |            |  |   |           |  |   |        |   |   |             |   |   |               |  
|Units issued for cash at $0.50 per unit to related parties on March 6, 2007 (included stock based compensation of $116,959) |  | 92,740       |  |   | 93         |  |   | 163,236   |  |   |        |   |   |             |   |   | 163,329       |  
|Stock issued for
      property on April 18, 2007                                                                           |  | 250,000      |  |   | 250        |  |   | 274,750   |  |   | -      |   |   | -           |   |   | 275,000       |  
|Units issued for cash at $0.50
    per unit on April 19, 2007                                                               |  | 100,000      |  |   | 100        |  |   | 49,900    |  |   | -      |   |   | -           |   |   | 50,000        |  
|Units issued for cash at $0.50
      per unit on August 31, 2007                                                            |  | 600,000      |  |   | 600        |  |   | 299,400   |  |   | -      |   |   | -           |   |   | 300,000       |  
|Imputed interest from non-interest
      bearing loan                                                                       |  | -            |  |   | -          |  |   | 3,405     |  |   | -      |   |   | -           |   |   | 3,405         |  
|Comprehensive income
      (loss):                                                                                          |  |              |  |   |            |  |   |           |  |   |        |   |   |             |   |   |               |  
|(Loss) for the year                                                                                                         |  | -            |  |   | -          |  |   | -         |  |   | -      |   |   | (607,397    | ) |   | (607,397      | )
|Balance, August 31,
      2007                                                                                              |  | 7,747,740    |  | $ | 7,748      |  | $ | 1,264,586 |  | $ | -      |   | $ | (975,171    | ) | $ | 297,163       |  
|Units issued for acquisition at $0.42 per unit on November 30, 2007                                                         |  | 6,905,000    |  |   | 6,905      |  |   | 2,893,195 |  |   | -      |   |   | -           |   |   | 2,900,100     |  
|Imputed interest from
      non-interest bearing loan                                                                       |  | -            |  |   | -          |  |   | 7,139     |  |   | -      |   |   | -           |   |   | 7,139         |  
|Stock-based compensation on 1,785,000
      options granted                                                                 |  | -            |  |   | -          |  |   | 104,257   |  |   | -      |   |   | -           |   |   | 104,257       |  
|Comprehensive income
      (loss):                                                                                          |  |              |  |   |            |  |   |           |  |   |        |   |   |             |   |   |               |  
|(Loss) for the year                                                                                                         |  | -            |  |   | -          |  |   | -         |  |   | -      |   |   | (372,535    | ) |   | (372,535      | )
|Balance, August 31,
      2008                                                                                              |  | 14,652,740   |  | $ | 14,653     |  | $ | 4,269,177 |  | $ | -      |   | $ | (1,347,706  | ) | $ | 2,936,124     |  
|Imputed interest for non-interest
      bearing loan                                                                        |  | -            |  |   | -          |  |   | 4,410     |  |   | -      |   |   | -           |   |   | 4,410         |  
|Stock-based
      compensation                                                                                              |  | -            |  |   | -          |  |   | 35,780    |  |   | -      |   |   | -           |   |   | 35,780        |  
|Comprehensive income (loss):                                                                                                |  |              |  |   |            |  |   |           |  |   |        |   |   |             |   |   |               |  
|(Loss) for the year                                                                                                         |  | -            |  |   | -          |  |   | -         |  |   | -      |   |   | 84,233      |   |   | 84,233        |  
|Balance, August 31, 2009                                                                                                    |  | 14,652,740   |  | $ | 14,653     |  | $ | 4,309,367 |  | $ | -      |   | $ | (1,263,473  | ) | $ | 3,060,547     |  

The accompanying notes are an integral part of these
consolidated financial statements

28

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GOLDEN ARIA CORP. (An Exploration Stage Company)NOTES TO CONSOLIDATED FINANCIAL STATEMENTS August 31, 2009
(Expressed in U.S. Dollars)

|1. | ORGANIZATION
|-- | ------------

The Company was formed of November 24,
2004 under the laws of the State of Nevada and commenced operations on November
24, 2004. The Company is an independent natural gas and oil company engaged in
the exploration, development and acquisition of natural gas and oil properties
in the United States and Canada. The Company is considered as an exploration
stage company as the revenue generated from the oil and gas properties was not
substantial in terms of the Companys intended overall operations. The Company
has offices in Vancouver and Kelowna, B.C., Canada.

On September 15, 2009, the Company
effected two for one stock consolidation and the consolidated financial
statements of the Company have been restated to reflect the stock consolidation.

|2. | GOING CONCERN UNCERTAINTY
|-- | -------------------------

The accompanying consolidated financial
statements have been prepared on a going concern basis which contemplates the
realization of assets and the satisfaction of liabilities and commitments in the
normal course of business for the foreseeable future. The Company earned a net
income of $84,233 for the year ended August 31, 2009 as the result of disposing
its proven oil and gas interests [incurred net loss of $372,535 for the year
ended August 31, 2008]. The Company currently has no proven producing oil and
gas property and as at August 31, 2009, the Company has incurred cumulative
losses of $1,263,473 that raise substantial doubt about its ability to continue
as a going concern. Management has been able, thus far, to finance the
operations through equity financing and cash on hand. There is no assurance that
the Company will be able to continue to finance the Company on this basis.

In view of these conditions, the
ability of the Company to continue as a going concern is in substantial doubt
and dependant upon its ability to generate sufficient cash flow to meet its
obligations on a timely basis, to obtain additional financing as may be
required, to receive the continued support of the Companys shareholders, and
ultimately to obtain successful operations. These consolidated financial
statements do not give effect to any adjustments which would be necessary should
the Company be unable to continue as a going concern and therefore be required
to realize its assets and discharge its liabilities in other than the normal
course of business and at amounts different from those reflected in the
accompanying financial statements.

|3. | SIGNIFICANT ACCOUNTING POLICIES
|-- | -------------------------------

| | a) | Basis of Consolidation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    | The consolidated financial statements include the
      accounts of the Company and its wholly-owned subsidiary, Target Energy,
      Inc., and its equity interest of Pro Eco Energy Inc. All significant
      inter- company balances and transactions have been eliminated.                                                                                                                                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | b) | Revenue Recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    | The Company uses the sales method of accounting for
      natural gas and oil revenues. Under this method, revenues are recognized
      upon the passage of title, net of royalties. Revenues from natural gas
      production are recorded using the sales method. When sales volumes exceed
      the Companys entitled share, an overproduced imbalance occurs. To the
      extent the overproduced imbalance exceeds the Companys share of the
      remaining estimated proved natural gas reserves for a given property, the
      Company records a liability. At August 31, 2009, the Company had no
      overproduced imbalances.

29

---

| | c) | Cash and Cash Equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | Cash equivalents comprise certain highly liquid
      instruments with a maturity of three months or less when purchased. As of
      August 31, 2009, cash and cash equivalents consist of cash only.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | d) | Oil and Gas Properties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | The Company utilizes the full cost method to account for
      its investment in oil and gas properties. Accordingly, all costs
      associated with acquisition, exploration and development of oil and gas
      reserves, including such costs as leasehold acquisition costs, capitalized
      interest costs relating to unproved properties, geological expenditures,
      tangible and intangible development costs including direct internal costs
      are capitalized to the full cost pool. When the Company obtains proven oil
      and gas reserves, capitalized costs, including estimated future costs to
      develop the reserves and estimated abandonment costs, net of salvage, will
      be depleted on the units-of-production method using estimates of proved
      reserves.                                                                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | Investments in unproved properties are not depleted
      pending determination of the existence of proved reserves. Unproved
      properties are assessed periodically to ascertain whether impairment has
      occurred. Unproved properties whose costs are individually significant are
      assessed individually by considering the primary lease terms of the
      properties, the holding period of the properties, and geographic and
      geologic data obtained relating to the properties. Where it is not
      practicable to assess individually the amount of impairment of properties
      for which costs are not individually significant, such properties are
      grouped for purposes of assessing impairment. The amount of impairment
      assessed is added to the costs to be amortized, or is reported as a period
      expense, as appropriate.                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | Pursuant to full cost accounting rules, the Company must
      perform a ceiling test periodically on its proved oil and gas assets. The
      ceiling test provides that capitalized costs less related accumulated
      depletion and deferred income taxes for each cost center may not exceed
      the sum of (1) the present value of future net revenue from estimated
      production of proved oil and gas reserves using current prices, excluding
      the future cash outflows associated with settling asset retirement
      obligations that have been accrued on the balance sheet, at a discount
      factor of 10%; plus (2) the cost of properties not being amortized, if
      any; plus (3) the lower of cost or estimated fair value of unproved
      properties included in the costs being amortized, if any; less (4) income
      tax effects related to differences in the book and tax basis of oil and
      gas properties. Should the net capitalized costs for a cost center exceed
      the sum of the components noted above, an impairment charge would be
      recognized to the extent of the excess capitalized costs.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | Sales of proved and unproved properties are accounted for
      as adjustments of capitalized costs with no gain or loss recognized,
      unless such adjustments would significantly alter the relationship between
      capitalized costs and proved reserves of oil and gas, in which case the
      gain or loss is recognized in the statement of operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | Exploration activities conducted jointly with others are
      reflected at the Companys proportionate interest in such activities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | Cost related to site restoration programs are accrued
      over the life of the project.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | e) | Stock-Based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | The Company adopted SFAS No. 123(revised), "Share-Based
      Payment", to account for its stock options and similar equity instruments
      issued. Accordingly, compensation costs attributable to stock options or
      similar equity instruments granted are measured at the fair value at the
      grant date, and expensed over the expected vesting period. SFAS No.
      123(revised) requires excess tax benefits be reported as a financing cash
      inflow rather than as a reduction of taxes paid.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

30

---

| | f) | Accounting Estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | The preparation of financial statements in conformity
      with generally accepted accounting principles requires management to make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities and disclosure of contingent assets and liabilities at the
      date of the financial statements and the reported amounts of revenues and
      expenses during the reporting period. Actual results could differ from
      those estimates and assumptions.                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | g) | Loss Per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | Loss per share is computed using the weighted average
      number of shares outstanding during the period. The Company has adopted
      SFAS No.128 Earnings Per Share. Diluted loss per share is
      equivalent to basic loss per share because the potential exercise of the
      equity-based financial instruments was anti- dilutive.                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | h) | Foreign Currency Translations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | The Companys operations are located in the United States
      of America and Canada, and it has an office in Canada. The Company
      maintains its accounting records in U.S. Dollars, as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | At the transaction date, each asset, liability, revenue
      and expense that was acquired or incurred in a foreign currency is
      translated into U.S. dollars by the using of the exchange rate in effect
      at that date. At the period end, monetary assets and liabilities are
      translated at the exchange rate in effect at that date. The resulting
      foreign exchange gains and losses are included in operations.                                                                                                                                                                                                         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | i) | Financial Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | SFAS No. 157 Fair Value Measurements requires an
      entity to maximize the use of observable inputs and minimize the use of
      unobservable inputs when measuring fair value. SFAS No. 157 establishes a
      fair value hierarchy based on the level of independent, objective evidence
      surrounding the inputs used to measure fair value. A financial
      instruments categorization within the fair value hierarchy is based upon
      the lowest level of input that is significant to the fair value
      measurement. SFAS No. 157 prioritizes the inputs into three levels that
      may be used to measure fair value:
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | Level 1 - Quoted prices in active markets for identical
      assets or liabilities;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | Level 2 - Inputs other than quoted prices included within
      Level 1 that are either directly or indirectly observable; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | Level 3 - Unobservable inputs that are supported by
      little or no market activity, therefore requiring an entity to develop its
      own assumptions about the assumptions that market participants would use
      in pricing.                                                                                                                                                                                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | The Companys financial instruments consist principally
      of cash and cash equivalents, accounts receivable, accounts payable and
      accrued liabilities and due to related parties. Pursuant to SFAS No. 157,
      the fair value of our cash and cash equivalents is determined based on
      Level 1 inputs, which consist of quoted prices in active markets for
      identical assets. The Company believes that the recorded values of all of
      the other financial instruments approximate their current fair values
      because of their nature and respective maturity dates or durations.                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | The Companys operations are in Canada, which results in
      exposure to market risks from changes in foreign currency rates. The
      financial risk is the risk to the Companys operations that arise from
      fluctuations in foreign exchange rates and the degree of volatility of
      these rates. Currently, the Company does not use derivative instruments to
      reduce its exposure to foreign currency risk.                                                                                                                                                                                                                 

31

---

| | j) | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | The Company has adopted statement of Financial Accounting
      Standards No. 109 (SFAS 109), Accounting for Income Taxes, which
      requires the Company to recognize deferred tax liabilities and assets for
      the expected future tax consequences of events that have been recognized
      in the Companys financial statements or tax returns using the liability
      method. Under this method, deferred tax liabilities and assets are
      determined based on the temporary differences between the financial
      statement and tax bases of assets and liabilities using enacted tax rates
      in effect in the year in which the differences are expected to reverse.                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | k) | Long-Lived Assets Impairment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | Long-term assets of the Company are reviewed for
      impairment when circumstances indicate the carrying value may not be
      recoverable in accordance with the guidance established in Statement of
      Financial Accounting Standards No. 144 (SFAS 144), Accounting for the
      impairment or Disposal of Long-Lived Assets. For assets that are to be
      held and used, an impairment loss is recognized when the estimated
      undiscounted cash flows associated with the asset or group of assets is
      less than their carrying value. If impairment exists, an adjustment is
      made to write the asset down to its fair value. Fair values are determined
      based on discounted cash flows or internal and external appraisals, as
      applicable. Assets to be disposed of are carried at the lower of carrying
      value or estimated net realizable value.                                                         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | l) | Asset Retirement Obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | The Company accounts for asset retirement obligations in
      accordance with the provisions of SFAS 143 Accounting for Asset
      Retirement Obligations. SFAS 143 requires the Company to record the
      fair value of an asset retirement obligation as a liability in the period
      in which it incurs a legal obligation associated with the retirement of
      tangible long-lived assets that result from the acquisition, construction,
      development and/or normal use of the assets. The management of the Company
      had estimated the asset retirement obligation to be immaterial and
      therefore was not reflected on the financial statements as of August 31,
      2009.                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | m) | Comprehensive Income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | The Company has adopted Statement of Financial Accounting
      Standards No. 130 (SFAS 130), Reporting Comprehensive Income, which
      establishes standards for reporting and display of comprehensive income,
      its components and accumulated balances. The Company is disclosing this
      information on its Statement of Stockholders Equity. Comprehensive income
      comprises equity except those transactions resulting from investments by
      owners and distributions to owners.                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | n) Concentration of credit risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | The Company places its cash and cash equivalent with high
      credit quality financial institution. As of August 31, 2009, the Company
      had approximately $181,295 in a bank beyond insured limit (August 31,
      2008: $74,574).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | o) | New Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | In December 2007, the Financial Accounting Standards
      Board (FASB) issued SFAS No. 141, (revised 2007), Business
      Combinations. SFAS 141 (R) applies the acquisition method of accounting
      for business combinations established in SFAS 141 to all acquisitions
      where the acquirer gains a controlling interest, regardless of whether
      consideration was exchanged. Consistent with SFAS 141, SFAS 141 (R)
      requires the acquirer to fair value the assets and liabilities of the
      acquiree and record goodwill on bargain purchases, with main difference
      the application to all acquisitions where control is achieved. SFAS 141
      (R) is effective for financial statements issued for fiscal years
      beginning after December 15, 2008. The adoption of this statement is not
      expected to have a material effect on the Company's future financial
      position or results of operations

32

---

In December 2007, the Financial
Accounting Standards Board (FASB) issued SFAS No. 160, Non controlling
Interests in Consolidated Financial Statements - An amendment of ARB No.
51.SFAS 160 requires companies with non controlling interests to disclose such
interests clearly as a portion of equity but separate from the parents equity.
The non controlling interests portion of net income must also be clearly
presented on the Income Statement. SFAS 160 is effective for financial
statements issued for fiscal years beginning after December 15, 2008. The
adoption of this statement is not expected to have a material effect on the
Company's future financial position or results of operations.

In March 2008, the FASB issued FASB
Statement No. 161 ("SFAS 161"), "Disclosures about Derivative Instruments and
Hedging Activities". SFAS 161 requires companies with derivative instruments to
disclose information that should enable financial-statement users to understand
how and why a company uses derivative instruments, how derivative instruments
and related hedged items are accounted for under FASB Statement No. 133
"Accounting for Derivative Instruments and Hedging Activities" and how
derivative instruments and related hedged items affect a company's financial
position, financial performance and cash flows. SFAS 161 is effective for
financial statements issued for fiscal years and interim periods beginning after
November 15, 2008. The adoption of this statement is not expected to have a
material effect on the Company's future financial position or results of
operations.

In May 2008, the FASB issued SFAS No.
162, The Hierarchy of Generally Accepted Accounting Principles. SFAS 162
identifies the sources of accounting principles and the framework for selecting
the principles to be used in the preparation of financial statements of
non-governmental entities that are presented in conformity with generally
accepted accounting principles in the United States. It is effective 60 days
following the SECs approval of the Public Company Accounting Oversight Board
amendments to AU Section 411, The Meaning of Present Fairly in Conformity With
Generally Accepted Accounting Principles. The adoption of this statement is not
expected to have a material effect on the Companys financial statements.

In April 2008, the FASB issued FSP No.
142-3, Determination of the Useful Life of Intangible Assets (FSP 142-3).
FSP 142-3 amends the factors an entity should consider in developing renewal or
extension assumptions used in determining the useful life of recognized
intangible assets under FASB Statement No. 142, Goodwill and Other Intangible
Assets. This new guidance applies prospectively to intangible assets that are
acquired individually or with a group of other assets in business combinations
and asset acquisitions. FSP 142-3 is effective for financial statements issued
for fiscal years and interim periods beginning after December 15, 2008. Early
adoption is prohibited. The adoption of this statement is not expected to have a
material effect on the Companys financial statements.

In May 2008, FASB issued FASB Staff
Position (FSP) APB 14-1, Accounting for Convertible Debt Instruments That May
Be Settled in Cash upon Conversion (Including Partial Cash Settlement) (FSP
APB 14-1). FSP APB 14-1 clarifies that convertible debt instruments that may be
settled in cash upon either mandatory or optional conversion (including partial
cash settlement) are not addressed by paragraph 12 of APB Opinion No. 14,
Accounting for Convertible Debt and Debt issued with Stock Purchase Warrants.
Additionally, FSP APB 14-1 specifies that issuers of such instruments should
separately account for the liability and equity components in a manner that will
reflect the entitys nonconvertible debt borrowing rate when interest cost is
recognized in subsequent periods. FSP APB 14-1 is effective for financial
statements issued for fiscal years beginning after December 15, 2008, and
interim periods within those fiscal years. We will adopt FSP APB 14-1 beginning
in the first quarter of 2010, and this standard must be applied on a
retrospective basis. The adoption of this statement is not expected to have a
material effect on the Companys financial statements.

In April, 2009, the FASB issued FASB
Staff Position No. FAS 157-4 ("FSP FAS 157-4"), "Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are Not Orderly". The FSP provides
additional guidance for estimating fair value in accordance with FASB Statement
No. 157, Fair Value Measurements, when the volume and level of activity for the
asset or liability have significantly decreased. This FSP also includes guidance
on identifying circumstances that indicate
a transaction is not orderly. The adoption of this FSP does not believe to have
a material impact on the Companys financial statements.

33

---

In April, 2009, the FASB issued FASB
Staff Position No. FAS 107-1 and APB 28-1 ("FSP FAS 107-1 and APB 28-1"),
Interim Disclosures about Fair Value of Financial Instruments. The FSP amends
SFAS 107, Disclosure about Fair Value of Financial Instruments, and Accounting
Principles Board Opinion No. 28, Interim Financial Reporting, to require
disclosures about fair value of financial instruments for interim reporting
periods of publicly traded companies as well as in annual financial statements.
Adoption of this FSP does not believe to have a material impact on the Companys
financial statements.

On April 1, 2009, the FASB issued FASB
Staff Position No. FSP FAS 115-2 and FAS 124-2 ("FSP FAS 115-2 and FAS 124-2"),
Recognition and Presentation of Other-Than-Temporary Impairments. The FSP amends
the other-than-temporary impairment guidance in U.S. GAAP for debt securities to
make the guidance more operational and to improve the presentation and
disclosure of other-than-temporary impairments on debt and equity securities in
the financial statements. This FSP does not amend existing recognition and
measurement guidance related to other-than-temporary impairments of equity
securities. The adoption of this FSP does not believe to have a material impact
on the Companys financial statements.

In June 2009, the FASB issued FASB No.
168 The FASB Accounting Standards Codification and the Hierarchy of Generally
Accepted Accounting Principles - a replacement of FASB Statement No. 162 (SFAS
168). SFAS 168 establishes the FASB Accounting Standards Codification as the
source of authoritative accounting principles recognized by the FASB to be
applied by non-governmental entities in the preparation of financial statements
in conformity with GAAP in the United States. SFAS 168 is effective for
financial statements issued for interim and annual periods ending after
September 15, 2009.

In June 2009, the FASB issued FASB No.
166, Accounting for Transfers of Financial Assets - an amendment of FASB
Statement No. 140 (SFAS 166). SFAS 166 requires additional disclosures about
the transfer and derecognition of financial assets and eliminates the concept of
qualifying special-purpose entities under SFAS 140. SFAS 166 is effective for
fiscal years beginning after November 15, 2009.

Other accounting standards that have
been issued or proposed by the FASB or other standards-setting bodies that do
not require adoption until a future date are not expected to have a material
impact on the Companys financial statements upon adoption.

|4. | LONG TERM INVESTMENT
|-- | --------------------

On April 21, 2008, the Company
purchased 900,000 shares for $45,000 in Pro Eco Energy USA Ltd (Pro Eco
Energy) which represented 8.25% ownership. The Chairman of the Company is a
Director in Pro Eco Energy which established the existence of significant
influence in Pro Eco Energy and accordingly the equity method of accounting is
adopted for the investment.

During the year ended August 31, 2009,
the Company recorded an equity loss of $5,106 (2008 - $4,073), which resulted in
a net investment of $35,821 (2008 - $40,927).

34

---

|5. | OIL AND GAS PROPERTIES
|-- | ----------------------

| | (a) | Proved property
| | --- | ---------------

| | Property              |   | August 31,2008 |  |   | Addition |  |   | Depletion forthe period |   |   | Write downin carryingvalue |   |   | Disposition |   |   | August31, 2009 | 
| | --------------------- | - | -------------- |  | - | -------- |  | - | ----------------------- | - | - | -------------------------- | - | - | ----------- | - | - | -------------- | 
| |                       |   |                |  |   |          |  |   |                         |   |   |                            |   |   |             |   |   |                | 
| | Canada-Provedproperty | $ | 126,941        |  | $ | 2,813    |  | $ | (80,801                 | ) | $ | (31,786                    | ) | $ | (14,345     | ) | $ | -              | 

Queensdale, Saskatchewan (1A9-25)

On April 16, 2007, the Company acquired
a 25% (net 15%) before payout (BPO) (12.5% (net 7.5%) after payout (APO))
interest in Queensdale, Saskatchewan Project from 0743608 B.C. Ltd. (Assignor),
a company controlled by a Director/CEO of the Company, for a total cost of
CAD$250,000 and 250,000 shares of the Companys common stock. The Participation
Agreement consists specifically of all (100%) of the Assignors interest in the
Queensdale 1A9-25/4A2-25-6-2 W2M well; none (0%) of the Assignors interest in
the Queensdale 4A9-25 / 2D15-25-6-2 W2M well; and one-half (50%) interest in the
Farmout Land and the Option Land.

On April 18, 2007, 250,000 shares were
issued at market value $1.10 per share giving a total of $275,000.

The Company agrees to pay to the
Assignor on monthly basis and within 5 business days of receiving the payment
from net generated oil and gas revenue, a minimum of 80% of the payments
received from net generated oil and gas revenue attributable to the Queensdale
1A9-25 / 4A2-25-6-2 W2M well, until such time as the full CAD$250,000 has been
paid to the Assignor.

The total cost capitalized cost
incurred for the oil and gas property was $487,097 which was attributed to the
acquisition cost of the oil and gas property. The Company applied the full cost
method to account for this property.

On July 1, 2009, the Company sold all
its interests in the related well for CAD$45,450.

West Queensdale, Saskatchewan (HZ
4A9-25/3A15-25-6-2 W2)

Through the Companys subsidiary,
Target, the Company owns another producing well at Queensdale, Queensdale West
HZ 4A9-25/3A15-25-6-2 W2. The well was drilled in February 2007 and was placed
in production on May 15, 2007. The Company has an 8% Gross Interest before
payout (BPO) and 4% net interest after payout in this well.

On July 1, 2009, the Company sold all
its interests for CAD$42,666.

Wordsworth, Saskatchewan

Through the Companys subsidiary,
Target, the Company owns a well working interest in Wordsworth, Saskatchewan,
The Wordsworth property has two producing oil well which was drilled in May,
2006, and in which the Company has a 3.75% net interest. This is a horizontal
well called the Wordsworth East HZ 2A2-23/3A11-14-7-3 W2, and was considered a
new pool discovery. A second well on this property, the Wordsworth E. HZ
3B9-23/3A11-23-7-3 W2 located on the north side of the Wordsworth prospect.

35

---

On July 1, 2009, the Company sold all
its interests for CAD$365,000.

| | (b) | Unproved property
| | --- | -----------------

| | Property |   | August 31, 2008 |  |   | Addition |  |   | Cost added tocapitalizedcost |  |   | August 31,2009 | 
| | -------- | - | --------------- |  | - | -------- |  | - | ---------------------------- |  | - | -------------- | 
| |          |   |                 |  |   |          |  |   |                              |  |   |                | 
| | Canada   | $ | 3,524,217       |  | $ | 37,413   |  | $ | -                            |  | $ | 3,561,630      | 
| | U. S.    |   |                 |  |   | 59,987   |  |   | -                            |  |   | 59,987         | 
| |          | $ | 3,524,217       |  | $ | 97,400   |  | $ | -                            |  | $ | 3,621,617      | 

Coteau Lake, Saskatchewan

Through the Companys subsidiary,
Target, the Company owns certain working interest in Coteau Lake, Saskatchewan.

Coteau Lake is an exploration property
and the Company has no producing oil or gas wells on this land at this time. The
Coteau Lake exploration project covers 1,280 acres of land. The Companys gross
and net interest in this project is 50%. There has been historic oil production
on the Coteau Lake project lands.

On November 7, 2007, the Companys
subsidiary Target entered into a Letter of Intent (the LOI) with Primrose
Drilling Ventures Ltd. (Primrose), a body corporate, having an office in the
city of Calgary, in the Province of Alberta. Pursuant to the LOI, the Target is
the interest title holder of Saskatchewan Crown Land parcels 124, 125 and 126.

Primrose elected to proceed with a
50/50 joint venture with Target by reimbursing Target for 50% of its land cost
on parcels 124, 125 and 126 for CDN$26,590 which is payable on signing within 15
days of the LOI. Primrose would become operator of the project upon its
acceptance of such appointment and agreement to assume the duties, obligations
and rights of the operator. A formal Participation Agreement (Agreement) which
included the provisions of LOI has been entered between Target and Primrose.
Included in the Participation Agreement would be the Area of Mutual Interest
(AMI) which would govern future land acquisitions and timeline set out in the
LOI. On December 31, 2008, an additional $22,270 was spent on land acquisitions
with Primrose Drilling Ventures. As at August 31, 2009, the Company was still in
the process of defining the first well exploration location.

Glen Park, Alberta

On May 14, 2008 the Company was
successful in acquiring one land parcel of 160 acres in the Glen Park area of
central Alberta, Canada. The Company subsequently created a 50/50 Joint Venture
with Vanguard Exploration to explore and develop the joint lands on Alberta
Petroleum and Natural Gas Lease No. 0408050364. The joint venture owns the
Petroleum and Natural Gas rights below the base of the Mannville GRP to
basement.

On June 11, 2008 the Company was
successful in acquiring two land parcels of 160 acres each in the Glen Park area
of central Alberta, Canada. These 320 acres are believed to be prospective for
reef development and the potential accumulation of oil deposits. Productive
wells in the area have had production rates in excess of 200 bop/d and in some cases
with little associated water. We currently have a 100% interest in these two
prospects. The Company continues to evaluate other opportunities in this and
other areas.

36

---

Belmont Lake

On August 28, 2009 and effective on
September 1, 2009, the Company entered into two assignment agreements to
participate in a well program in Jackson, Mississippi with two public companies.
The Company agreed to pay $45,000 to acquire a 40.432 percent interest from
Cheetah Oil and Gas Ltd's 8 percent gross interest in the Belmont Lake 12-4 well
by paying 57.76 percent of the drilling, completion and tie in costs. The
Company also agreed to pay $59,987 to acquire a 13.475 percent interest from
Lexaria Corp's 32 percent gross interest in the Belmont Lake 12-4 well by paying
19.25 percent of the drilling, completion and tie in costs. Both public
companies have a managerial relationship with the Company. As at August 31,
2009, the Company has made a payment of $59,987 in connection with the
assignment agreement and the amount have been included in unproved property.

|6. | NOTES PAYABLE  RELATED PARTY
|-- | -----------------------------

On November 27, 2008 the Company
entered into a Purchase Agreement with 0743608 BC Ltd. (Purchaser) for
aggregate amount of CAD $50,000, under which the Purchaser agrees to purchase
non-secured 18% interest bearing Promissory Note of the Company subject to and
upon the terms and conditions of the Purchase Agreement.

As long as the Promissory Note is
outstanding, the Purchaser may voluntarily convert the Promissory Note to Common
Shares at the conversion price of $0.25 per share of Common Stock.

The Company did not incur beneficial
conversion charge as the conversion price is greater than the fair value of the
Companys equity.

The Company paid in full the Purchaser
CAD$50,000 on August 15, 2009.

|7. | RELATED PARTIES TRANSACTION
|-- | ---------------------------

For the year ended August 31, 2009, the
Company engaged following related party transactions:

- Paid / accrued $52,200 (August 31, 2008: $24,360) to the President of the
  Company in consulting fees.
- Paid / accrued 82,207 (August 31, 2008: $20,762) and $5,401 (August 31,
  2008: $1,590); of consulting fees and office rent, respectively, to a company
  controlled by a Director/CEO of the Company.
- Included in due to related parties, $77,309 (August 31, 2008: $126,195)
  was owed to a company controlled by a Director/CEO of the Company for
  acquiring working interest in Queensdale, Saskatchewan Project.

The related party transactions are
recorded at the exchange amount established and agreed to between the related
parties. Amount due to related parties are unsecured, non-interest bearing and
due on demand.

For the year ended August 31, 2009, the
Company recorded imputed interest of $4,410 in connection with the amount owed
to a related party.

|8. | COMMON STOCK AND WARRANTS
|-- | -------------------------

Common Stock

On March 6, 2007, the Company issued
total of 92,740 units at $0.50 per unit to directors of the Company. Each unit
consists of one common share and one share purchase warrant with exercise price
of $0.80 per share, expires on December 1, 2008. Units
issued were revalued to their fair market value of common shares and share
purchase warrants. The fair value of warrants has been estimated as of the date
of issue using the Black-Scholes option pricing model with expected volatility:
104.11%, risk-free interest rate: 3.77%, expected life: 1.75 years and dividend
yield: 0.00% . The fair value of each warrant has been estimated at $0.66 per
warrant. For the year ended August 31, 2007, the Company recorded a total of
$116,959 for stock based compensation expenses in connection with the
revaluation of the units issued.

37

---

On April 18, 2007, pursuant to an
Assignment Agreement, the Company issued 250,000 shares to a director of the
Company at market value $1.10 per share for a total value of $275,000.

On April 19, 2007, the Company issued
total of 100,000 units at $0.50 per unit to an arms length party. Each unit
consists of one common share and one share purchase warrant with exercise price
of $0.80 per share, expires on December 1, 2008.

On August 31, 2007, the Company issued
total of 600,000 units at $0.50 per unit for total proceeds of $300,000. Each
unit is comprised of one restricted common share and one warrant to purchase one
additional share of common stock at a price of $0.80, exercisable for a period
of two years from the closing of this offering.

On October 15, 2007, the Company
entered into a share exchange agreement with Target Energy (Target), a private
Nevada corporation, and the former shareholders of Target. The closing of the
transactions contemplated in the share exchange agreement and the acquisition of
all of the issued and outstanding common stock in the capital of Target occurred
on November 30, 2007. The Company issued 6,905,000 shares of its common stock to
the shareholders of Target and in so doing acquired 100% of all issued Target
shares from those shareholders who had owned 13,810,000 shares of Target.

Warrants

A summary of the changes in share
purchase warrants for the period ended August 31, 2009 is presented below:

| |                          |  | Warrants Outstanding |  
| | ------------------------ |  | -------------------- | -
| |                          |  |                      |  
| |                          |  | Number of Shares     |  
| | Balance, August 31, 2008 |  | 792,740              |  
| | Expired                  |  | (792,740             | )
| | Balance, August 31, 2009 |  | -                    |  

|9. | STOCK OPTIONS
|-- | -------------

On December 14, 2007, the Company
granted 892,500 stock options to directors, Officers, and consultants of the
Company with exercise prices of $0.70 per share, expires over 5 years. The
vesting dates of options are as below:

| | Vesting
      Dates | Percentage of options granted
| | ------------------- | -----------------------------
| | December 14, 2007   | 25%                          
| | December 14, 2008   | 25%                          
| | December 14, 2009   | 25%                          
| | December 14, 2010   | 25%                          

38

---

For the year ended August 31, 2009, the
Company recorded $35,780 (2008 - $104,257) for stock based compensation expenses
which has been included in consulting fees.

A summary of the changes in stock
options for the year ended August 31, 2009 is presented below:

| |                          |  |                  |  |   | Options Outstanding | 
| | ------------------------ |  | ---------------- |  | - | ------------------- | 
| |                          |  |                  |  |   | Weighted            | 
| |                          |  |                  |  |   | Average             | 
| |                          |  | Number of Shares |  |   | Exercise Price      | 
| | Balance, August 31, 2008 |  | 892,500          |  | $ | 0.70                | 
| | Granted                  |  | -                |  |   | -                   | 
| | Balance, August 31, 2009 |  | 892,500          |  | $ | 0.70                | 

The fair value of each option granted
and unvested option granted to the consultants of the Company has been estimated
using the Black-Scholes option pricing model with the following assumptions:

| |                         |  | Year ended August 31, 2009 |  |  | Year ended August 31, 2008 | 
| | ----------------------- |  | -------------------------- |  |  | -------------------------- | 
| | Expected volatility     |  | 87.80%                     |  |  | 84.67%                     | 
| | Risk-free interest rate |  | 2.29%                      |  |  | 3.98%                      | 
| | Expected life           |  | 3.29 years                 |  |  | 5.00 years                 | 
| | Dividend
      yield    |  | 0.0%                       |  |  | 0.0%                       | 

The weighted average fair value of
unvested stock options granted to the consultants of the Company, which has been
revalued on August 31, 2009 was $0.086. The weighted average fair value of
option granted during the year ended August 31, 2008 is as follows:

| |                                                                   |   | Weighted |  |   | Weighted | 
| | ----------------------------------------------------------------- | - | -------- |  | - | -------- | 
| |                                                                   |   | Average  |  |   | Average  | 
| |                                                                   |   | Exercise |  |   | Fair     | 
| |                                                                   |   | Price    |  |   | Value    | 
| | Exercise price is more than the market price at grant
      date: | $ | 0.70     |  | $ | 0.24     | 

The Company has the following options
outstanding and exercisable.

| | August 31, 2009   | Options
      outstanding | Options
      exercisable |         
| | ----------------- | ------------------------- | ------------------------- | --------
| | Range of exercise | Number                    | Weighted                  | Weighted
| | prices            | of shares                 | average                   | average 
| |                   |                           | remaining                 | exercise
| |                   |                           | contractual life          | price   
| | $ 0.70            | 892,500                   | 3.29 years                | $ 0.70  

|10. | COMMITMENTS - OTHER
|--- | -------------------

| | (a) | The Company has entered into a month-to-month rental arrangement with
      a company controlled by a director of the Company for office space in
      Kelowna, British Columbia, Canada for CAD$525 (including CAD$25 GST) per
      month.                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (b) | On March 2, 2008, the Company entered into a controller agreement with
      CAB Financial Services, a corporation organized under the laws of the
      Province of British Columbia. CAB Financial Services is a consulting
      company controlled by the chairman of the board and chief executive
      officer of the Company. Pursuant to the controller agreement, CAB
      Financial Services will provide corporate accounting and controller
      services to the Company in consideration for the payment of CAD$3,675
      (including $175 GST) per month, together with reimbursement for all travel
      and other expenses incurred by it. This agreement was terminated on October 9, 2009.

39

---

| | (c) | On December 1, 2008 the Company entered into a consulting agreement
      with CAB Financial Services, a corporation organized under the laws of the
      Province of British Columbia. CAB Financial Services Ltd. is a consulting
      company controlled by the chairman of the board and chief executive
      officer of the Company. CAB Financial Services Ltd. is to provide
      management consulting services for $5,000 per month plus GST on a
      continuing basis.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (d) | On December 1, 2008 the Company entered into a consulting agreement
      with the President of the Company for corporate administration and oil and
      gas exploration and production consulting services for $5,000 per month
      plus GST on a continuing basis. This agreement replaces the December 1,
      2007 agreement.                                                                                                                                                

|11. | DEFERRED INCOME TAX
|--- | -------------------

The Companys provision for income
taxes is comprised of the following:

| |                        |   | 2009 |  |   | 2008 | 
| | ---------------------- | - | ---- |  | - | ---- | 
| |                        |   |      |  |   |      | 
| | Current Tax Provision  | $ | Nil  |  | $ | Nil  | 
| | Deferred Tax Provision | $ | Nil  |  | $ | Nil  | 
| | Tax Expense            | $ | Nil  |  | $ | Nil  | 

Rate Reconciliation

Income taxes vary from the amount that
would be computed by applying the statutory federal income tax rate of 34% for
the following reasons:

| |                                                                   |   | 2009    |   |   | 2008    |  
| | ----------------------------------------------------------------- | - | ------- | - | - | ------- | -
| |                                                                   |   |         |   |   |         |  
| | Income tax recovery (expense) - U.S.
      Federal Statutory Rate | $ | (28,600 | ) | $ | 126,700 |  
| | Non-deductible items                                              |   | (19,500 | ) |   | (36,800 | )
| | Utilization of loss carry forward                                 |   | 71,900  |   |   | -       |  
| | Changes in Valuation Allowance                                    |   | (23,800 | ) |   | (89,900 | )
| |                                                                   |   |         |   |   |         |  
| | Tax Expenses                                                      | $ | -       |   | $ | -       |  

The tax effects of temporary
differences that give rise to the Companys deferred tax asset (liability) are
as follows:

| |                                                                       |   | 2009     |   |   | 2008     |  
| | --------------------------------------------------------------------- | - | -------- | - | - | -------- | -
| |                                                                       |   |          |   |   |          |  
| | Net Operating Loss Carryforward                                       | $ | 353,000  |   | $ | 348,000  |  
| | Tax Basis Less Than Accounting Basis For Oil and Gas
      Properties |   | (762,704 | ) |   | (762,704 | )
| | Long term Investment                                                  |   | 3,100    |   |   | 1,400    |  
| | Valuation Allowance                                                   |   | (356,100 | ) |   | (349,400 | )
| |                                                                       |   |          |   |   |          |  
| | Deferred Tax Assets                                                   | $ | (762,704 | ) | $ | (762,704 | )

For tax purpose, as of August 31, 2009
the Company has operating loss carry forwards of approximately $1,033,000which
expire in 2025 through 2029 as follows:

40

---

| |                          |   | Amount    |  |  | Expiration Date | 
| | ------------------------ | - | --------- |  |  | --------------- | 
| | 2009                     | $ | 70,000    |  |  | 2029            | 
| | 2008                     |   | 459,000   |  |  | 2028            | 
| | 2007                     |   | 329,000   |  |  | 2027            | 
| | 2006                     |   | 114,000   |  |  | 2026            | 
| | 2005                     |   | 61,000    |  |  | 2025            | 
| |                          |   |           |  |  |                 | 
| | Total loss carry forward | $ | 1,033,000 |  |  |                 | 

|12. | SEGMENTED INFORMATION
|--- | ---------------------

The Companys business is considered as
operating under one segment based upon the Companys organizational structure,
the way in which the operation is managed and evaluated, the availability of
separate financial results and materiality considerations. In terms of
geographical information, the Company had all of its operations in Canada during
fiscal year 2009 and had assets of $3,892,784 and $59,987 located in Canada and
United States of America as at August 31, 2009, respectively. In 2008, the
Company operated and had all of its assets located in Canada.

|13. | COMPARATIVE FIGURES
|--- | -------------------

Certain 2008 comparative figures have
been reclassified to conform with the financial statements presentation adopted
for 2009.

|14. | SUBSEQUENT EVENTS
|--- | -----------------

| | (a) | On October 9, 2009, the Company entered into a consulting agreement
      with the CFO of the Company for a term of 6 months and CAD$4,500 per month
      plus GST.                                                                                                                        
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                             
| | (b) | On October 22, 2009 the Company re-priced the original Stock Options
      issued on December 14, 2007 to $0.20.                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                             
| | (c) | On October 22, 2009 the Company issued 500,000 Stock Options to the
      Officers and the Board with an exercise price of $0.10.                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                             
| | (d) | In accordance with SFAS No. 165 Subsequent Events, the Company
      evaluated subsequent events through November 27, 2009, the date of
      issuance of the audited financial statements. During this period the
      Company did not have any material recognizable subsequent events.
| |     |                                                                                                                                                                                                                                                                                             
| | (e) | See Note 1.                                                                                                                                                                                                                                                                                 

41

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

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

Item 9A(T). Controls and Procedures

Managements Report on Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our president and chief executive officer (also our principal
executive officer) and our chief financial officer (also our principal financial and accounting officer) to allow for timely decisions regarding required disclosure.

As of August 31, 2009, the end of our fiscal year covered by this report, we carried out an evaluation, under the supervision and with the participation of our president and chief executive officer (also our principal executive officer) and our
chief financial officer (also our principal financial and accounting officer), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president and chief executive officer (also our
principal executive officer) and our chief financial officer (also our principal financial and accounting officer) concluded that our disclosure controls and procedures were effective as of the end of the period covered by this annual report.

Managements Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of control
procedures. The objectives of internal control include providing management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance
with managements authorization and recorded properly to permit the preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States. Our management assessed the effectiveness of
our internal control over financial reporting as of August 31, 2009. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal
Control-Integrated Framework. Our management has concluded that, as of August 31, 2009, our internal control over financial reporting is effective in providing reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with US generally accepted accounting principles. Our management reviewed the results of their assessment with our Board of Directors.

This annual report does not include an attestation report of our Companys registered public accounting firm regarding internal control over financial reporting. Managements report was not subject to attestation by our Companys
registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit our Company to provide only managements report in this annual report.

Inherent limitations on effectiveness of controls

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

42

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Changes in Internal Control over Financial
Reporting

There have been no changes in our internal controls over
financial reporting that occurred during the year ended August 31, 2009 that
have materially or are reasonably likely to materially affect, our internal
controls over financial reporting.

Item 9B. Other Information

None.

PART III

Item 10. Directors, Executive Officers and Corporate
Governance

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

|                     |                                        |     | Date First Elected
|-------------------- | -------------------------------------- | --- | ------------------
|Name                 | Position Held with our Company         | Age | Or Appointed      
|Robert McAllister    | President                              | 49  | November 2007     
|                     | and                                    |     |                   
|                     | Director                               |     | April 14, 2008    
|Gerald
      Carlson | Director                               | 61  | March 2005        
|Chris Bunka          | Chairman, Director and Chief Executive | 48  | November 2004     
|                     | Officer                                |     |                   
|Bal Bhullar          | Chief Financial Officer                | 40  | October 9, 2009   
|Mark Snyder          | Chief Technical Officer                | 56  | October 9, 2009   

Business Experience

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

Mr. Robert McAllister, President, Director

Mr. McAllister was appointed as president in November 2007 and
director in April 2008.

Mr. McAllister has devoted approximately 50% of his
professional time to the business and intends to continue to devote this amount
of time in the future, or more as required.

43

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

Dr. Gerald Carlson, Director

Dr. Gerald Carlson has served as one of our directors since March 2005. Dr. Carlson had devoted some of his professional time to the business of our company and will continue on a as needed basis will provide some of time in the future by corporate
events.

From March 1999 to present, Dr. Carlson has been the president and co founder of Copper Ridge Explorations Inc., a publicly listed company located in Vancouver, British Columbia and a junior explorer with exploration projects in Alaska, Yukon,
British Columbia and Mexico. Copper Ridge is currently focusing on iron oxide copper-gold targets in Yukon.

From February 1999 to December 2007, Dr. Carlson had been the chairman of IMA Exploration Inc., a publicly listed junior exploration company headquartered in Vancouver, British Columbia. IMA has active exploration projects in Argentina and Peru.

From February 2000 to October 2004, Dr. Carlson was the president of Nevada Star Resource Corp., a publicly listed company located in Vancouver, British Columbia, exploring for nickel-copper-PGEs (platinum group metals) in Alaska.

Dr. Carlson received his Ph.D. through Dartmouth College in 1978, a M.Sc. from Michigan Technological University in 1974 and a B.Sc. from the University of Toronto in 1969, majoring in Geological Engineering.

Chris Bunka, Chief Executive Officer, Chairman and Director

Mr. Chris Bunka has served as one of our directors since November 2004. Mr. Bunka has devoted approximately 15% of his professional time to the business and intends to continue to devote this amount of time in the future, or more as required.

Since 1988, Mr. Bunka has been the CEO of CAB Financial Services Ltd., a private holding company located in Kelowna, Canada. He is a venture capitalist and corporate consultant. He is also a business commentator and has provided business updates to
Vancouver radio station, CKWX, from 1998 to present. He has also written business and investment articles published in various North American publications.

From 1999 to 2002, Mr. Bunka was the President and CEO of Secure Enterprise Solutions (symbol SETP-OTC) (formerly Newsgurus.com, symbol NGUR-OTC). The company subsequently changed its name to Edgetech Services and trades on the OTC with the symbol
EDGH. Newsgurus.com was a web-based media company. Secure Enterprise Solutions moved into Internet-based computer security products and services and was subsequently purchased by Edgetech Services. Mr Bunka is also Chairman and CEO of Lexaria Corp,
(symbol LXRA-OTC) an oil & gas exploration and production company. Mr. Bunka is a director of Defiance Capital Corp., a Canadian company.

Bal Bhullar, Chief Financial Officer

Ms. Bhullar brings over 18 years of diversified financial and risk management experience in both private and public companies, in the industries of high-tech, film, mining, marine, oil & gas, energy, transport, and spa industries. Among some of
the areas of experience, Ms. Bhullar brings expertise in financial & strategic planning, operational & risk management, regulatory compliance reporting, business expansion, startup operations, financial modeling, program development,
corporate financing, and corporate governance/internal controls. Previously, Ms. Bhullar has held various positions as President of BC Risk Management Association of BC, and served as Director
and CFO of private and public companies. Currently, Ms. Bhullar serves as a Director and CFO for Bare Elegance Medspa, a CFO for ISEE3D Inc., and is CFO and a Director of Lexaria Corp.

44

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Ms. Bhullar is a Certified General Accountant and as well holds a CRM designation from Simon Fraser University and a diploma in Financial Management from British Columbia Institute of Technology.

Mark Snyder, Chief Technical Officer

In 1985 Mark Snyder developed one of Californias first large scale bio energy conversion projects where a significant client was enabled to produce electric power from agricultural waste and heat 20 acres of greenhouses for agriculture. Mark
was selected by the Clinton Administration to serve on a White House Council addressing the needs of our National Electrical Infrastructure in anticipation of the Y2K Conversion.

Co-founded Clean Air USAand has partnered with Willie Nelson Biodiesel to bring clean alternative fuels to California. Mark helped champion Solar Rights in California. Using the appeal of the Green Ribbon Home and Californias
Solar Rights Law, Mark has had success in changing the electric metering in parks to net metering, which has opened up the solar power market to millions of Californians that currently reside in master metered dwellings.

Family Relationships

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

Involvement in Certain Legal Proceedings

None of our directors, executive officers, promoters or control persons has been involved in any of the following events during the past five years:

|1. | any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;                                                                                                 
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                       
|2. | any conviction in a criminal proceeding or being subject to a pending criminal proceeding, excluding traffic violations and other minor offences;                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                       
|3. | being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of
business, securities or banking activities; or
|   |                                                                                                                                                                                                                                                                                                       
|4. | being found by a court of competent jurisdiction in a civil action, the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated federal or state securities or commodities law, and the judgment has not been
reversed, suspended, or vacated.                

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

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

Based solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we believe that during fiscal year ended August 31, 2009, all filing requirements applicable to our officers, directors and greater than 10% percent beneficial
owners were complied with, with the exception of the following:

45

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|                  |                | Number of            |                
|----------------- | -------------- | -------------------- | ---------------
|                  |                | Transactions Not     |                
|                  | Number of Late | Reported on a Timely | Failure to File
|Name              | Reports        | Basis                | Requested Forms
|Gerald Carlson    | 1              | 1                    | Nil            
|Chris Bunka       | 1              | 1                    | Nil            
|Robert McAllister | 1              | 1                    | Nil            

Code of Ethics

We adopted a Code of Ethics applicable to our senior financial
officers and certain other finance executives, which is a "code of ethics" as
defined by applicable rules of the SEC. Our Code of Ethics is attached as an
exhibit to our Annual Report on Form 10-KSB filed on November 29, 2007. If we
make any amendments to our Code of Ethics other than technical, administrative,
or other non-substantive amendments, or grant any waivers, including implicit
waivers, from a provision of our Code of Ethics to our chief executive officer,
chief financial officer, or certain other finance executives, we will disclose
the nature of the amendment or waiver, its effective date and to whom it applies
in a Current Report on Form 8-K filed with the SEC.

Board and Committee Meetings

Our board of directors held no formal meetings during the year
ended August 31, 2009. All proceedings of the board of directors were conducted
by resolutions consented to in writing by all the directors and filed with the
minutes of the proceedings of the directors. Such resolutions consented to in
writing by the directors entitled to vote on that resolution at a meeting of the
directors are, according to the Nevada General Corporate Law and our Bylaws, as
valid and effective as if they had been passed at a meeting of the directors
duly called and held.

Nomination Process

As of August 31, 2009, we did not effect any material changes
to the procedures by which our shareholders may recommend nominees to our board
of directors. Our board of directors does not have a policy with regards to the
consideration of any director candidates recommended by our shareholders. Our
board of directors has determined that it is in the best position to evaluate
our Companys requirements as well as the qualifications of each candidate when
the board considers a nominee for a position on our board of directors. If
shareholders wish to recommend candidates directly to our board, they may do so
by sending communications to the president of our Company at the address on the
cover of this annual report.

Audit Committee and Audit Committee Financial Expert

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

Our board of directors has determined that it does not have a
member of its board of directors (audit committee) that qualifies as an "audit
committee financial expert" as defined in Item 407(d)(5)(ii) of Regulation S-K,
and is "independent" as the term is used in Item 7(d)(3)(iv) of Schedule 14A
under the Securities Exchange Act of 1934, as amended.

We believe that the members of our board of directors are
collectively capable of analyzing and evaluating our financial statements and
understanding internal controls and procedures for financial reporting. We
believe that retaining an independent director who would qualify as an "audit
committee financial expert" would be overly costly and burdensome and is not warranted in our circumstances given
the early stages of our development and the fact that we have not generated any
material revenues to date. In addition, we currently do not have nominating,
compensation or audit committees or committees performing similar functions nor
do we have a written nominating, compensation or audit committee charter. Our
board of directors does not believe that it is necessary to have such committees
because it believes the functions of such committees can be adequately performed
by our board of directors.

46

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Item 11. Executive Compensation

The particulars of the compensation paid to the following
persons:

|(a) | our principal executive officer;                                                                                                                                                                                                               
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                
|(b) | each of our two most highly compensated executive officers who were
      serving as executive officers at the end of the years ended August 31,
      2009 and 2008; and                                                                      
|    |                                                                                                                                                                                                                                                
|(c) | up to two additional individuals for whom disclosure would have been
      provided under (b) but for the fact that the individual was not serving as
      our executive officer at the end of the years ended August 31, 2009 and
      2008,

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

|SUMMARY COMPENSATION TABLE
|--------------------------
|                          
|                          
|                          
|                          
|                          
|Name                      
|and Principal             
|Position                  
|                          
|Robert                    
|McAllister(1)             
|President and             
|Director                  
|                          
|Gerald                    
|Carlson(2)                
|*Director
    and*        
|Former                    
|President                 
|                          
|Chris Bunka               
|Chief Executive           
|Officer,                  
|Director and              
|Former Chief              
|Financial                 
|Officer                   

(1) On November 30, 2007, Mr. McAllister was appointed as our
President and on April 14, 2008 he was appointed as a director.

(2) On November 30, 2007, Mr. Carlson resigned as our President
but remained a director of our company.

(3) Salary compensation for Chris Bunka is accrued fees.

47

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Employment/Consulting Agreements

The Company had entered into a consulting agreement with Dr. Gerald G. Carlsons company, KGE Management Ltd. from March 1, 2005 to November 30, 2007. During the term of this agreement, Dr. Carlson, provided geological and corporate
administration consulting services to our company, such duties and responsibilities included the provision of geological consulting services, strategic corporate and financial planning, management of the overall business operations of our company,
and the supervision of office staff and exploration and mining consultants. Dr. Carlson, through KGE Management Ltd., was reimbursed at the rate of $2,000 per month. This agreement was terminated on November 30, 2007, but Dr. Carlson does remain
on the Board as a Director.

We entered into a consulting agreement with Mr. Robert McAllister on December 1, 2007. During the term of this agreement, Mr. McAllister is to provide corporate administration and oil & gas exploration and production consulting services, such
duties and responsibilities to include provision of oil and gas industry consulting services, strategic corporate and financial planning, management of the overall business operations of the Company, and supervising office staff and exploration and
oil & gas consultants.  Mr. McAllister is reimbursed at the rate of $2,000 per month. On December 1, 2008, the consulting fee was increased to $5,000 per month. We may terminate this agreement without prior notice based on a number of
conditions. Mr. McAllister may terminate the agreement at any time by giving 30 days written notice of his intention to do so.

On March 2, 2008, the Company entered into a controller agreement with CAB Financial Services, a corporation organized under the laws of the Province of British Columbia. CAB Financial Services is a consulting company controlled by the chairman of
the board and chief executive officer of the Company. Pursuant to the controller agreement, CAB Financial Services will provide corporate accounting and controller services to the Company in consideration for the payment of CAD$3,675 (including
$175 GST) per month. This agreement was terminated on October 9, 2009.

On December 1, 2008, the Company entered into a consulting agreement with CAB Financial Services, a corporation organized under the laws of the Province of British Columbia. CAB Financial Services is a consulting company controlled by the chairman
of the board and the chief executive officer of the Company. A fee of $5,000 per month is accrued. We may terminate this agreement without prior notice based on a number of conditions. CAB Financial Services Ltd. may terminate the agreement at
any time by giving 30 days written notice of his intention to do so.

On October 9, 2009, the Company entered into a consulting agreement with BKB Management Ltd, a corporation organized under the laws of the Province of British Columbia. BKB Management controlled by the chief financial officer of the Company. A fee
of CAD$4,675 including GST is paid per month. We may terminate this agreement without prior notice based on a number of conditions. BKB Management Ltd. may terminate the agreement at any time by giving 30 days written notice of his intention to
do so.

On October 9, 2009, the Company entered into a consulting agreement with Mark Snyder as the Chief Technical Officer. A fee of $1,000 paid per month.

Other than as set out in this annual report on Form 10-K we have not entered into any employment or consulting agreements with any of our current officers, directors or employees.

Grants of Plan-Based Awards Table

The Company did not grant any awards to our named executive officers in the during our fiscal year ended August 31, 2009.

48

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Outstanding Equity Awards at Fiscal Year End

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

|OUTSTANDING EQUITY AWARDS AT FISCAL
      YEAR-END
|--------------------------------------------------
|                                                  
|Name                                              
|(a)                                               
|                                                  
|                                                  
|                                                  
|                                                  
|                                                  
|                                                  
|                                                  
|                                                  
|                                                  
|                                                  
|                                                  
|                                                  
|                                                  
|                                                  
|Robert                                            
|McAllister                                        
|                                                  
|Gerald                                            
|Carlson                                           
|                                                  
|Chris                                             
|Bunka                                             

Option Exercises

During our fiscal year ended August 31, 2009 there were no
options exercised by our named officers.

Compensation of Directors

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

Pension, Retirement or Similar Benefit Plans

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

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

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

49

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

The following table sets forth, as of November 4, 2009, certain
information with respect to the beneficial ownership of our common shares by
each shareholder known by us to be the beneficial owner of more than 5% of our
common shares, as well as by each of our current directors and executive
officers as a group. Each person has sole voting and investment power with
respect to the shares of common stock, except as otherwise indicated. Beneficial
ownership consists of a direct interest in the shares of common stock, except as
otherwise indicated.

|                                            | Amount and Nature of | Percentage
|------------------------------------------- | -------------------- | ----------
|Name and Address of Beneficial Owner        | Beneficial Ownership | of Class  
|Gerald Carlson                              | 467,740(1)           | 2.92%     
|Vancouver, British Columbia, Canada         |                      |           
|Chris Bunka                                 | 2,551,500(2)         | 15.90%    
|Kelowna, British Columbia, Canada           |                      |           
|Robert McAllister                           | 2,287,500(3)         | 14.26%    
|Kelowna, British Columbia, Canada           |                      |           
|Bal Bhullar                                 | 100,000(4)           | 0.62%     
|Vancouver, British Columbia, Canada         |                      |           
|Mark Snyder                                 | 100,000(5)           | 0.62%     
|California, USA                             |                      |           
|Gladys Jenks                                | 1,268,750            | 7.91%     
|Gabriola, Island British Columbia           |                      |           
|Morgan Bunka                                | 1,050,000            | 6.54%     
|Kelowna, British Columbia                   |                      |           
|Britcliffe Financial Group Inc              | 1,000,000            | 6.23%     
|Panama City, Panama                         |                      |           
|Directors and Executive Officers as
      a | 5,506,740            | 34.32%    
|Group (5 people)(6)                         |                      |           

(1) Includes 25,000 and 100,000 options which are exercisable
at $0.20 and $0.10.

(2) Includes 1,526,500 shares held in the name of C.A.B.
Financial Services and 200,000 shares held in 0743608 BC Ltd for which Chris
Bunka is the sole beneficiary. Includes 75,000 and 100,000 options which are
exercisable at $0.20 and $0.10.

(3) Includes 75,000 and 100,000 options which are exercisable
at $0.20 and $0.10.

(4) Includes 100,000 options which are exercisable after
October 22, 2009.

(5) Includes 100,000 options which are exercisable after
October 22, 2009.

(6) Under Rule 13d-3, a beneficial owner of a security includes
any person who, directly or indirectly, through any contract, arrangement,
understanding, relationship, or otherwise has or shares: (i) voting power, which
includes the power to vote, or to direct the voting of shares; and (ii)
investment power, which includes the power to dispose or direct the disposition
of shares. Certain shares may be deemed to be beneficially owned by more than
one person (if, for example, persons share the power to vote or the power to
dispose of the shares). In addition, shares are deemed to be beneficially owned
by a person if the person has the right to acquire the shares (for example, upon
exercise of an option) within 60 days of the date as of which the information is
provided. In computing the percentage ownership of any person, the amount of
shares outstanding is deemed to include the amount of shares beneficially owned
by such person (and only such person) by reason of these acquisition rights. As
a result, the
percentage of outstanding shares of any person as shown in this table does not necessarily reflect the persons actual ownership or voting power with respect to the number of shares of common stock actually outstanding on November 4, 2009.  As
of November, 2009, there were 14,652,740 shares of our Companys common stock issued and outstanding.

50

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Changes in Control

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

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

Except as disclosed herein, no director, executive officer, shareholder holding at least 5% of shares of our common stock, or any family member thereof, had any material interest, direct or indirect, in any transaction, or proposed transaction since
the year ended August 31, 2009, in which the amount involved in the transaction exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at the year end for the last three completed fiscal years.

Director Independence

We currently act with two (3) directors, consisting of Christopher Bunka, Robert McAllister and Gerald Carlson. We have determined that none of our directors is an independent director as defined in NASDAQ Marketplace Rule
4200(a)(15).

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

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

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

We do not have a standing compensation or nominating committee, but our entire board of directors act in such capacity.  We believe that our directors are capable of analyzing and evaluating our financial statements and understanding internal
controls and procedures for financial reporting. Our directors do not believe that it is necessary to have an audit committee because we believe that the functions of an audit committee can be adequately performed by the board of directors. In
addition, we believe that retaining additional independent directors who would qualify as an audit committee financial expert would be overly costly and burdensome and is not warranted in our circumstances given the early stages of our
development.

Item 14. Principal Accounting Fees and Services

The aggregate fees billed for the most recently completed fiscal year ended August 31, 2009 and for fiscal year ended August 31, 2008 for professional services rendered by the principal accountant for the audit of our annual financial statements and
review of the financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:

51

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|                   |  | Year Ended      | 
|------------------ |  | --------------- | 
|                   |  | August 31, 2009 | 
|Audit Fees         |  | 17,350          | 
|Audit Related Fees |  | 12,650          | 
|Tax Fees           |  | Nil             | 
|All Other Fees     |  | Nil             | 
|Total              |  | 30,000          | 

Audit Fees. Audit fees consist of fees billed for
professional services rendered for the audits of our financial statements,
reviews of our interim financial statements included in quarterly reports,
services performed in connection with filings with the Securities and Exchange
Commission and related comfort letters and other services that are normally
provided by Chang Lee LLP for the fiscal years ended August 31, 2009 and August
31, 2008 in connection with statutory and regulatory filings or engagements.

Audit related Fees. There were $12,650 audit related
fees paid to Chang Lee LLP for the fiscal year ended August 31, 2009 and $13,440
for the fiscal year ended August 31, 2008.

Tax Fees. Tax fees consist of fees billed for
professional services for tax compliance, tax advice and tax planning. These
services include assistance regarding federal, state and local tax compliance
and consultation in connection with various transactions and acquisitions. For
the fiscal years ended August 31, 2009 and August 31, 2008, we did not use Chang
Lee LLP for non-audit professional services or preparation of corporate tax
returns.

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

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

- approved by our audit committee (which consists of our entire board of
  directors); or
- entered into pursuant to pre-approval policies and procedures established
  by the board of directors, provided the policies and procedures are detailed
  as to the particular service, the board of directors is informed of each
  service, and such policies and procedures do not include delegation of the
  board of directors' responsibilities to management.

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

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

52

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PART IV

|Item 15. | Exhibits, Financial Statement
      Schedules
|-------- | ---------------------------------------------

| | (a) | Financial Statements
| | --- | --------------------

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

| | (b) | Exhibits
| | --- | --------

|Exhibit | Description                                                                                                                                                                                                    
|------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|No.     |                                                                                                                                                                                                                
|        |                                                                                                                                                                                                                
|3.1     | Articles of Incorporation dated November 24,
      2004 (incorporated by reference on our Registration Statement on Form SB-2
      filed January 9, 2006)                                                     
|        |                                                                                                                                                                                                                
|3.2     | Bylaws (incorporated by reference on our
      Registration Statement on Form SB-2/A filed March 6, 2006)                                                                                                      
|        |                                                                                                                                                                                                                
|10.1    | Mining Lease between Nevada North Resources
      (U.S.A.), Inc. and Miranda U.S.A. Inc. (incorporated by reference on our
      Registration Statement on Form SB-2 filed January 9, 2006)                    
|        |                                                                                                                                                                                                                
|10.2    | Exploration Agreement with Options for Joint
      Venture between our company and Miranda U.S.A. Inc. (incorporated by
      reference on our Registration Statement on Form SB-2 filed January 9,
      2006)
|        |                                                                                                                                                                                                                
|10.3    | Amended Exploration Agreement between our
      company and Miranda U.S.A. Inc. (incorporated by reference on our
      Registration Statement on Form SB-2 filed January 9, 2006)                             
|        |                                                                                                                                                                                                                
|10.4    | Consulting Agreement between our company and
      KGE Management Ltd. (incorporated by reference on our Registration
      Statement on Form SB-2 filed January 9, 2006)                                      
|        |                                                                                                                                                                                                                
|10.5    | Assignment Agreement with 0743608 B.C. Ltd.
      (incorporated by reference on our Current Report on Form 8-K filed March
      19, 2007)                                                                     
|        |                                                                                                                                                                                                                
|10.6    | Consulting Agreement with Mr. Robert
      McAllister                                                                                                                                                          
|        |                                                                                                                                                                                                                
|14.1    | Code of Ethics (incorporated by reference by from our annual report on Form
      10-KSB filed on November 29, 2007).                                                                                          
|        |                                                                                                                                                                                                                
|31.1*   | Certification pursuant
      to Rule 13a-14 and Rule 15d-14(a), promulgated under the
      Securities and Exchange Act of 1934, as amended (Chief
      Executive Officer).                                   
|        |                                                                                                                                                                                                                
|31.2*   | Certification pursuant
      to Rule 13a-14 and Rule 15d-14(a), promulgated under the
      Securities and Exchange Act of 1934, as amended (Chief
      Financial Officer).                                   
|        |                                                                                                                                                                                                                
|32.1*   | Certification pursuant
      to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002 (Chief Executive
      Officer).                                            
|        |                                                                                                                                                                                                                
|32.2*   | Certification pursuant
      to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002 (Chief Financial
      Officer).                                            

* Filed herewith.

53

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SIGNATURES

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

GOLDEN ARIA CORP.

By: /s/ Robert
McAllisterRobert McAllister President and Director Principal Executive
Officer Date: November 27, 2009.

By: /s/ Bal
BhullarBal Bhullar Chief Financial Officer Principal Financial
Officer and Principal Accounting Officer Date: November 27, 2009.

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

By: /s/ Robert
McAllister Robert McAllister President and Director Principal
Executive Officer Date: November 27, 2009.

By: /s/ Bal
BhullarBal Bhullar Chief Financial Officer Principal Financial
Officer and Principal Accounting Officer Date: November 27, 2009.

54

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