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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-K/A(Amendment No. 2)

(Mark One)

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

For the fiscal year ended October 31, 2010

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

For the transition period from [   ] to [  
]

Commission file number 000-52138

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

|Nevada                                                                     | 20-2000871                                
|-------------------------------------------------------------------------- | ------------------------------------------
|(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:  604-602-1675         

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:

Common Stock, Par Value $0.001(Title of class)

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

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

1

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

Indicate by check mark 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 [   ]     No [   ]

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

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

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

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

The aggregate market value of Common Stock held by
non-affiliates of the Registrant on April 30, 2010 was $761,735 based on the
average of the high and low bid and asked price of the Registrants shares of
common stock on the OTC Bulletin Board or $0.10 on April 30, 2010. 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.

13,033,409 common shares as of January 28, 2011

DOCUMENTS INCORPORATED BY REFERENCE

None.

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EXPLANATORY NOTE

This Amendment No. 2 to the Form 10-K for the period ended October
31, 2010 is being filed solely to include Exhibit 23.1 (Consent of Independent
Registered Public Accounting Firm).

Aside from the inclusion of this Exhibit, there have been no other
changes to the content of the Form 10-K.

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TABLE OF CONTENTS

|Item
      1.  | Business                                                                                                                 | 4 
|-------------- | ------------------------------------------------------------------------------------------------------------------------ | --
|               |                                                                                                                          |   
|Item
      1A. | Risk
      Factors                                                                                                       | 8 
|               |                                                                                                                          |   
|Item
      1B. | Unresolved
      Staff Comments                                                                                          | 13
|               |                                                                                                                          |   
|Item
      2.  | Properties                                                                                                               | 13
|               |                                                                                                                          |   
|Item
      3.  | Legal
      Proceedings                                                                                                  | 23
|               |                                                                                                                          |   
|Item
      4.  | Removed
      and Reserved                                                                                               | 23
|               |                                                                                                                          |   
|Item
      5.  | Market
      for Registrants Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities | 23
|               |                                                                                                                          |   
|Item
      6.  | Selected
      Financial Data                                                                                            | 25
|               |                                                                                                                          |   
|Item
      7.  | Managements
      Discussion and Analysis of Financial Condition and Results of Operations                              | 26
|               |                                                                                                                          |   
|Item
      7A. | Quantitative
      and Qualitative Disclosures About Market Risk                                                         | 31
|               |                                                                                                                          |   
|Item
      8.  | Financial
      Statements and Supplementary Data                                                                        | 31
|               |                                                                                                                          |   
|Item
      9.  | Changes
      in and Disagreements With Accountants on Accounting and Financial
      Disclosure                         | 60
|               |                                                                                                                          |   
|Item
      9A. | Controls
      and Procedures                                                                                            | 60
|               |                                                                                                                          |   
|Item
      9B. | Other
      Information                                                                                                  | 61
|               |                                                                                                                          |   
|Item
      10. | Directors,
      Executive Officers and Corporate Governance                                                             | 61
|               |                                                                                                                          |   
|Item
      11. | Executive
      Compensation                                                                                             | 65
|               |                                                                                                                          |   
|Item
      12. | Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters               | 68
|               |                                                                                                                          |   
|Item
      13. | Certain
      Relationships and Related Transactions, and Director Independence                                          | 69
|               |                                                                                                                          |   
|Item
      14. | Principal
      Accounting Fees and Services                                                                             | 69
|               |                                                                                                                          |   
|Item
      15. | Exhibits,
      Financial Statement Schedules                                                                            | 71

3

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PART I

Item 1.    Business

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

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

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

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

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

General Overview

We were incorporated in the State of Nevada on December 9,
2004. We are an exploration and development oil and gas company currently
engaged in the exploration for and development of petroleum and natural gas in
North America. We maintain our registered agent's office and our U.S. business
office at Nevada Agency and Transfer Company, 50 West Liberty, Suite 880, Reno,
Nevada 89501. Our telephone number is (755) 322-0626.

The address of our principal executive office is Suite 950,
1130 West Pender Street, Vancouver, British Columbia V6E 4A4. Our telephone
number is (604) 602-1675. We have another office located in Kelowna. Our current
locations provide adequate office space for our purposes at this stage of our
development.

Our common stock is quoted on the OTC Bulletin Board under the
symbol "LXRP" and on the Canadian National Stock Exchange under the symbol LXX

Lexaria is an oil and gas company engaged in the exploration
for oil and natural gas in Canada and the United States. The Company is
currently generating revenues from its business operations in Mississippi. The
Companys business plan is to focus on development of the Belmont Lake oil
field, in which it has working interests, in order to maximize cash flow and use
excess cash flow to pay debt and conduct additional development well drilling.
Eventually, if cash flows are strong enough, the Company will once again be able
to explore for additional oil and gas by way of its existing 60% interest option
to drill 38 exploratory wells (see Oil & Gas Properties - Mississippi and
Louisiana: Frio-Wilcox Project). To accomplish this, the Company intends to
focus on development drilling first. Eventually the Company will seek a balance
between exploration, development and exploitation drilling. To achieve sustainable and profitable growth, the Company intends
to control the timing and costs of its projects wherever possible. The Company
is not currently the operator of any of its properties and will consider
becoming the operator only when its financial conditions have improved
sufficiently.

4

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Overview of Business over the Last Five Years

Since we began operations in 2005, the Company has been focused
  exclusively on the exploration for and development of oil and gas assets located
  in North America. We participated in the drilling of a single well in Strachan
  Hills Alberta and eventually wrote down the value of that well to $nil. We participated
  in the drilling of wells in Oklahoma where we successfully produced and sold
  oil and gas prior to selling our interest in the Oklahoma properties. We have
  participated in the drilling of oil and gas wells in Mississippi and remain
  focused there as our key area of interest with all our current assets within
  Amite and Wilkinson Counties, Mississippi.

On June 21, 2007, we acquired an assignment of a 10% gross
working interest in an Area of Mutual Interest (AMI) formerly held by Brinx
Resources Ltd, a non-related company, in up to 50 oil & gas wells to be
drilled, and any future development prospects thereof associated, located in
Mississippi, USA. Interests in seven wells previously drilled under the
conditions of the AMI remain the property of Brinx Resources Ltd. and we are not
a party to Brinxs interest in these wells, while the right to assume the 10%
gross working interest in the remaining 43 wells and any future development
prospects thereof, now belongs to our company. Because we already had a 40%
gross working interest in this AMI, as a result of this transaction, we have a
50% gross working interest in the AMI.

On June 23, 2007, we acquired an assignment of a 10% gross
working interest in 12 previously drilled oil & gas wells and any future
development prospects thereof, formerly held by 0743868 BC Ltd, a non-related
company. Since we had a 20% gross working interest in these same 12 oil and gas
wells and development prospects, as a result of this transaction we obtained a
30% gross working interest in the 12 oil & gas wells and development
prospects. We were obligated to make cash payments of US$520,000 over
approximately a one-year period to complete this transaction ($200,000 paid as
of October 31, 2007). The Company had made total of $350,000 repayment and
accrued $18,016 interest expense since June 23, 2007 with ending balance of
$169,938 as at April 30, 2008.

On May 13, 2008 the Company entered into an Assignment of Debt
between 0743868 BC Ltd. (the Assignor) and the President and shareholder of
the Company (collectively the Assignees). The Assignor agreed to accept
US$46,000 from the Company in satisfaction of the outstanding amount and agreed
to assign the Assignees all of the Assignors right, title and interest in and
to the US$124,000 balance of the outstanding amount. As a result, the Assignor
no longer has any claim against the Company.

On May 14, 2008 the Company entered into an unsecured Loan
Agreement with each of the President and a shareholder of the Company for
$62,000. The purpose of this Loan Agreement was to set out terms of the
arrangement by which the Company agreed to make a Loan of US$124,000 at an
interest rate of 16.8% and no set principal payments for one year available to
the Company. The purpose of the Loan Agreement was to provide the Company with
capital funds for oil and gas exploration and/or general corporate purposes. On
October 27, 2008, the loan from the President in the amount of US$62,000 was
terminated in favour of an updated debt agreement.

On August 29, 2008, the Company sold all of its working
interests in its Owl Creek Project, located in Garvin County, Oklahoma, to an
unrelated third party for net proceeds of $206,021. The property sold included
the Companys 7.5% working interest in Isbill #2.

5

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On October 27, 2008, the Company entered into a Purchase
Agreement with CAB Financial Services Ltd., Chris Bunka, and another
shareholders of the Company (Purchasers) for an aggregate amount of nine
hundred thousand (cdn) dollars (CDN $900,000). The Purchasers agreed to purchase
an 18% interest bearing Promissory Note of the Company subject to and upon the
terms and conditions of the Purchase Agreement.

The Companys obligations to repay the Promissory Note are
secured by certain specified assets of the Company pursuant to a Security
Agreement. Also, as long as the Promissory Note is outstanding, the Purchasers
may voluntarily convert the Promissory Note to Common Shares at the conversion
price of $0.45 per share of Common Stock. Additionally, in consideration for the
Purchasers agreeing to purchase the Promissory Notes, the Company agrees to
issue Warrants to the Purchasers.

The share purchase Warrants entitles the Purchaser to acquire
Shares of the Companys common stock, and the number of Series A and B Warrants
issuable shall be determined by the Purchase Amount divided by $0.45, which
Warrants shall have the following terms:

| | 1. | each Series A Warrant entitling the holder to purchase
      one-half of one Warrant Share for a term of one year from issuance and an
      exercise price of US $0.45 per whole Warrant Share (the exercise price is
      subject to adjustment pursuant to the loan agreement);  
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                      
| | 2. | each Series B Warrant entitling the holder to purchase
      one-half of one Warrant Share for a term of two years from issuance and
      exercise price of US $0.90 per whole Warrant Share (the exercise price is
      subject to adjustment pursuant to the loan agreement); and
| |    |                                                                                                                                                                                                                                                                                      
| | 3. | Mandatory conversion of the Warrants at the option of the
      Company upon the Companys Common Stock closing at 200% of the applicable
      exercise price for twenty consecutive Trading Days.                                                                                  
| |    |                                                                                                                                                                                                                                                                                      
| | 4. | Two whole Warrants and the exercise price are required to
      purchase one share of the Company.                                                                                                                                                                                   

The issuance of the Promissory Notes and Warrants were issued
to 3 non-US persons pursuant to the exemption from registration provided by
Regulation S promulgated under the United States Securities Act of 1933, as
amended. The Company and Purchases agreed that all previous Loan Agreements are
terminated and any amounts due and owing there under are replaced and superseded
by the Promissory Notes issued by the Company pursuant to the Purchase
Agreement.

On April 3, 2009, the Company entered into an Asset Purchase
Agreementwith Delta Oil & Gas, Inc. and The Stallion Groupto
acquire additional interests in its existing core producing Mississippi oil and
gas properties. The Company paid $40,073.39 to acquire an additional two percent
(2%) working interest in the proven Belmont Lake oil and gas field and an
additional 10% working interest in potential nearby exploration wells,bringing its total gross working interest in the Belmont Lake oil and gas
field to 32% and bringing its total gross working interest to 60% in the 38
wells that remain to be drilled of this original 50-well option with Griffin
& Griffin Exploration in over 140,000 acres surrounding Belmont Lake in all
directions.

On August 28, 2009, the Company entered into four separate
assignment agreements with Enertopia Corp., 0743608 BC Ltd., David DeMartini,
and Murrayfield Ltd.three of which were with people or companies with related
management. The Company received from these four parties proceeds of $371,608.57
to fund additional interests in this well. As a result, the Company has a 25.84%
perpetual gross interest in the well (18.0% net revenue interest); as well as a
5.2% net revenue interest in the non-consent interest. The non-consent interest
remains valid until such time as the well produces 500% of all costs and
expenses back to the participants in the form of revenue, at which time the
non-consent interest ends. Enertopia Corp, a company with related management,
has acquired from Lexaria a 6.16% perpetual gross interest in the 12-4 well;
David DeMartini, a director of Lexaria, has acquired from Lexaria a 5% gross interest in the non-consent interest in the 12-4
well; and 0743608 BC Ltd. a company owned by the President of the Company, has
acquired from Lexaria a 11.6% gross interest in the non-consent interest in the
12-4 well. Effective June 23, 2009, the Company amended its Articles of
Incorporation to undertake a one (1) for four (4) share consolidation of its
authorized and issued and outstanding common stock. As a result, the Companys
authorized capital decreased from 75,000,000 shares of common stock with a par
value of $0.001 to 18,750,000 shares of common stock with a par value of $0.001
and its issued and outstanding shares decreased from 24,369,500 shares of common
stock to 6,092,370 shares of common stock.

6

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Effective July 22, 2009 the Company completed an equity
financing from the sale of 4,545,000 units at a price of $0.05 per unit for net
proceeds of $182,250. The equity financing was comprised of a partial debt
settlement of $45,000 and an equity financing of $182,250. Each unit consisted
of one common share and one warrant. Each warrant entitles the holder to
purchase one additional common share of the Company for a period two years from
the date of the closing of the financing at an exercise price of $0.20 per
share.

On September 9, 2009, Dr. David DeMartini was appointed as
Director for the Company. Dr. DeMartini is a recognized expert in several
geophysical fields including seismic bright spot data analysis. He held
various senior positions at the Shell Bellaire Research Center in Houston, Texas
from 1980 through 1998. Dr. DeMartini was inducted to the Offshore Energy Center
Hall of Fame as a Technology Pioneer last year and was for several years a
member of the Deans Advisory Council for the College of Mathematical and
Physical Sciences at The Ohio State University from which he received a PHD in
Physics following his B.S. in Physics cum laude from the University of Notre
Dame.

Effective October 21, 2009, 191,000 warrants were exercised for
95,500 common shares of the Company at a price of US$0.05 per share for net
proceeds of $4,775. Effective October 21, 2009, the Company had 10,732,870
shares of common stock issued and outstanding.

On October 28, 2009, the Company announced that effective at
the open of market, the Companys shares began trading on Canadian National
Stock Exchange (CNSX) with the trading symbol LXX.

Our Current Business

The Company is an oil and gas company engaged in the
exploration for oil and natural gas in Canada and the United States. The Company
is currently generating revenues from its business operations in
Mississippi.

We have acquired working interests in various oil and gas
properties in Mississippi USA. All of our current oil and gas assets are located
in Wilkinson and Amite counties, Mississippi, where we have between 32% gross
working interest and 60% gross working interests in producing oil and/or gas
wells and in exploration wells yet to be drilled. Our Belmont Lake oil field
discovered in December 2006 is located within the Palmetto Point area of
Wilkinson county, Mississippi. We previously had an interest in oil and gas
wells located in Oklahoma but those assets were sold in August 2008. We have a
nominal interest in a non-commercial well located in Strachan Alberta which
expired in fiscal year 2010.

The Companys business plan is to focus on development of the
Belmont Lake oil field, in which it has working interests, in order to maximize
cash flow and use excess cash flow to pay debt and conduct additional
development well drilling. Eventually, if cash flows are strong enough, the
Company expects to explore for additional oil and gas by way of its existing 60%
interest option to drill 38 exploratory wells (see Oil & Gas Properties -
Mississippi and Louisiana: Frio-Wilcox Project). To accomplish this, the
Company intends to focus on development drilling first. Eventually the Company
will seek a balance between exploration, development and exploitation drilling.
To achieve sustainable and profitable growth, the Company intends to control the
timing and costs of its projects wherever possible. The Company is not currently the operator of
any of its properties and will consider becoming the operator only when its
financial conditions have improved sufficiently.

7

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During the past fiscal year we experienced the following
significant corporate developments:

| | 1. | On November 13, 2009, the Company announced that its
      Operator in Mississippi, Griffin & Griffin Exploration LLC, has
      declared force majeure on the Belmont Lake offset wells.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | 2. | On December 21, 2009, our Board of Directors amended and
      restated our bylaws. The amendment and restatement of the bylaws was for
      the purpose of, among other things, removing certain outdated and
      redundant provisions that existed in our prior bylaws with respect to
      corporate governance, shareholder and director meeting procedures, and
      indemnification procedures. The changes to our prior bylaws include: (i)
      expanding certain provisions with respect to shareholders meetings
      including change of quorum requirements; (ii) amending certain provisions
      respecting appointment of directors, corporate governance and committees,
      and directors meetings; (iii) expanding certain provisions with respect
      to officers and their duties; (iv) changing certain provisions with
      respect to share certificates; and (vi) adding certain indemnification
      provisions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | 3. | During the first quarter of its 2010 fiscal year the
      Company completed an equity financing from the sale of 1,617,752 units at
      a price of CAD$0.12 per unit for net proceeds of CAD$194,130. Each unit
      consisted of one common share and a half warrant. Two half warrants
      entitled the holder to purchase an additional common share of the Company
      for a period of one year from the date of closing of the financing at an
      exercise price of CAD$0.22. Effective December 27, 2009, the Company had
      12,350,622 shares of common stock issued and outstanding.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | 4. | On March 17, 2010, the Company had increased its
      authorized share capital from 18,750,000 common shares to 200,000,000
      common shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | 5. | On May 31, 2010, the Company issued 499,893 units at at a
      price of $0.12 per for a Settlement Agreement valued at $59,987.24. Each
      unit consist one common share and one share purchase warrant at $0.20 per
      share for a period of two years. All shares and warrants issued were
      restricted under applicable securities rules. Effective May 31, 2010, the
      Company had 12,850,515 shares of common stock issued and
    outstanding.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | 6. | On July 29, 2010, the Company had agreed with its
      Operators at Belmont Lake not to proceed to drill a horizontal 12-4 well.
      Rather, two of the three proposed vertical wells 12-2, 12-4, or 12-5 were
      proposed to be drilled in August 2010. To take best advantage of this
      opportunity, the Company cancelled all previous agreements with respect to
      the Belmont Lake horizontal well 12-4 and entered into three separate
      assignment agreements, of which all three were with people or companies
      with related management. The Company received total proceeds of
      $324,677.12 to fund additional interests in these wells. As a result, the
      Company has a 32% perpetual gross interest in the wells (24.0% net revenue
      interest); as well as a 8% gross interest (6% net revenue interest) in the
      non-consent interest. The non-consent interest remains valid until such
      time as the well produces 500% of all costs and expenses back to the
      participants in the form of revenue, at which time the non-consent
      interest ends. Emerald Atlantic LLC, a company owned by a director of
      Lexaria, has acquired from Lexaria a 8.74% gross interest in the
      non-consent interest in two of the three vertical wells; and 0743608 BC
      Ltd. a company owned by the President of the Company, has acquired from
      Lexaria a 20.79% gross interest in the non-consent interest in the two of
      the three vertical wells; an advisor to the Company has acquired from
      Lexaria 2.46% gross interest in the non-consent interest in two of the
      three vertical wells.

8

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| | 7.  | On September 13, 2010, Lexaria Corp. (the Company)
      entered into three separate assignment agreements with 0743608 BC Limited,
      solely owned by a Director/Officer of the Company; Emerald Atlantic LLC,
      solely owned by a Director of the Company, and the Senior VP Business
      Development. (the Assignees), whereby the Assignees have paid a fee of
      US$408,116.48 to earn a 24% share of the Companys gross non- perpetual
      32% interest in the three oil wells being drilled in Wilkinson County,
      Mississippi. This agreement replaces the one signed on August 28, 2009. As
      a result of the three assignment agreements, Lexaria receives at no cash
      cost to the company, a carried interest of 8% in these same rights and
      benefits. The Company assigns, transfers and sets over to the Assignees,
      all proportionate rights, interest and benefits in the Assigned Non
      Perpetual Interest held by or granted to the Assignor in and to the
      Participation Agreement between the Company and Griffin but limited to a
      gross 500% revenue payout based on the total amount paid under the Initial
      Consideration and the Subsequent Consideration after which all rights,
      interests and benefits cease.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | 8.  | On October 21, 2010, the Company settled a portion of the
      debt, namely US$1,625 with CAB Financial Services by converting 65,000
      warrants into 32,500 common shares of the Company as per Purchase
      Agreement dated October 27, 2008 at a price of $0.05 per share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | 9.  | On October 21, 2010, the Company settled a portion of the
      debt, namely US$2,166.65 with Christopher Bunka by converting 86,667
      warrants into 43,333 common shares of the Company as per Purchase
      Agreement dated October 27, 2008 at a price of $0.05 per share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | 10. | In September and October, 2010, new wells were drilled at
      the Belmont Lake oil field, namely wells 12-2; 12-4 and
  12-5.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

The Company plans to continue its current business of acquiring
interests in potentially high-impact oil and gas property interests that offer a
high probability of being able to drill without significant time delays. The
Company also tries to choose North American properties where, if drilling is
successful, the wells could be quickly connected to infrastructure and thus,
with success, brought into production and able to generate cash flow as quickly
as possible.

The Companys business plan does not anticipate that it will
hire a large number of employees or that it will require extensive office space.
The Company has, to date, and plans to continue to acquire most of the industry
and geological expertise it requires through third party contractual
relationships with consulting experts and with operating companies which will
act as operators of the Companys various interests. Although this exposes the
Company to certain risks on behalf of those operators, it also allows the
Company to participate in the often unique experience and knowledge that local
persons have related to certain properties. This strategy allows the Company to
participate in a wider variety of oil and gas opportunities than if all of its
geological expertise were in-house and confined to a single geographical area.
From a business operations perspective, this strategy also enables the Company
to minimize its ongoing fixed in-house costs for geological or geophysical
analytical expenses while still allowing it to contract for that expertise when
and as needed. This business strategy has been successful during a time of
declining oil and gas prices, when many companies with high internal overheads
and cost structures due to large numbers of highly expensive in-house
professionals cannot be sustained due to declining revenues. The Company will
hire third-party consulting geophysicists and geologists on an as-needed basis
to evaluate oil and gas properties that may be of interest, and to reinforce and
double-check the technical work and abilities of its third-party operators. This
provides the Company with the required expertise it needs, when its needed,
whilst avoiding high fixed long-term costs.

9

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The Company relies on the business experience of its existing
management, on the technical abilities of consulting experts, and on the
technical and operational abilities of its operating partner companies to
evaluate business opportunities.

Competition

We are in the business of 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.

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 Director, Mr. David DeMartini is our technical advisor.

On September 1, 2008, the Company entered into a Controller
Agreement with CAB Financial Services Ltd. for accounting and controller
services of CAB on a continuing basis for a consideration of CAD$4,500 per month
plus GST. This agreement was terminated on May 11, 2009.

On May 12, 2009 the Company entered into a six month consulting
agreement with BKB Management Ltd., a corporation organized under the laws of
the Province in British Columbia. BKB Management Ltd. is a consulting company
controlled by the chief financial officer and director for a consideration of
CAD $4,500 per month plus GST. This agreement replaces the September 1, 2008,
Controller Agreement with CAB Financial Services Ltd.

On November 27, 2008, the Company entered into a consulting
agreement with CAB Financial Services Ltd., 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. The consulting services provided by CAB Financial Services is on
a continuing basis for a consideration of $8,000 per month plus GST. CAB
Financial Services Ltd. may terminate the agreement at any time by giving 30
days written notice of his intention to do so.

On September 9, 2009, the Company appointed Mr. David DeMartini
to the Board of Directors.

On August 5, 2010 we entered into a three-month Management
agreement with Tom Irkhe, whereby Mr. Irkhe will act as the Senior
Vice-President, Business Development for the Company for consideration of
US$3,125 per month and has signed a revised agreement to continue the Management
relationship on a continuing month to month basis.

10

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Research and Development

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

Item 1A.   Risk Factors

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

We have 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. Our company's operations
will be subject to all 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 $62,989 and working capital
deficiency of $909,441 as of our year ended October 31, 2010. 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.

For the fiscal year 2010, we have earned revenues of $362,471.
We currently have only modest oil or gas reserves that are deemed proved,
probable or possible pursuant to American standards of disclosure for oil and
gas activities. All of our existing wells are in Mississippi, USA.

There can be no assurance that our current or future drilling
activities will be successful, and we cannot be sure that our overall drilling
success rate or our production operations within a particular area will ever
come to fruition, and if they do, will not decline over time. We may not recover
all or any portion of our capital investment in the wells or the underlying
leaseholds. Unsuccessful drilling activities would have a material adverse
effect upon our results of operations and financial condition. The cost of
drilling, completing and operating wells is often uncertain, and a number of
factors can delay or prevent drilling operations, including: (i) unexpected
drilling conditions; (ii) pressure or irregularities in geological formation;
(iii) equipment failures or accidents; (iv) adverse weather conditions; and (v)
shortages or delays in the availability of drilling rigs and the delivery of
equipment.

In addition, our exploration and development plans may be
curtailed, delayed or cancelled as a result of lack of adequate capital and
other factors, such as weather, compliance with governmental regulations,
current and forecasted prices for oil and changes in the estimates of costs to
complete the projects. We will continue to gather information about our
exploration projects, and it is possible that additional information may cause
our company to alter our schedule or determine that a project should not be
pursued at all. You should understand that our plans regarding our projects are
subject to change.

11

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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.

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.

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.

12

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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.

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.

13

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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.

We are not the "operator" of any of our oil and gas exploration
  interests, and so we are exposed to the risks of ourthird-party operators.

We rely on the expertise of our contracted third-party oil and
gas exploration and development operators and third-party consultants for their
judgment, experience and advice. We can give no assurance that these third party
operators or consultants will always act in our best interests, and we are
exposed as a third party to their operations and actions and advice in those
properties and activities in which we are contractually bound.

Our management has limited experience and training in the
oil and gas industry and could make uninformed decisions that negatively impact
our oil and gas operations.

Because our management has limited experience and training in
  the oil and gas industry, we may not have sufficient expertise to make informed
  best practices decisions regarding oil and gas operations. We do not have a
  petroleum engineer on staff to provide internal oversight. It is possible that,
  due to our limited knowledge, we might elect to complete a well and incur financial
  burdens that a more experienced petroleum team might elect not to complete.
  Our ability to internally evaluate oil and gas operations and opportunities
  could be less thorough than that of a more highly trained management team.

Our independent certified public accounting firm, in the
notes to the audited financial statements for the year ended October 31, 2010
states that there is a substantial doubt that we will be able to continue as a
going concern.

As at October 31, 2010, 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.

14

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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 majority 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 except for one are nationals
and/or residents of countries other than the United States and all or a
substantial portion of their assets are located in 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.

15

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Item 1B.   Unresolved Staff Comments

Not Applicable.

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 for a
monthly rental of CAD$1,337. Our telephone number is (604) 602-1675. We have
another office located in Kelowna, 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

As at October 31, 2010, the Company currently owns a 32% gross
working interest in 13 wells and with the exception of a 40% working interest in
wells PP F-12-4 and PP F-12-5; a 45% gross working interest in 7 wells; and a
60% gross working interest in 43 wells (of which 38 remain to be drilled); all
located in Mississippi under various agreements with Griffin and Griffin
Exploration, L.L.C. The most significant of these wells are the producing oil
wells PP F-12-1, PP F-12-3, PP F-12-4, and PP F-12-5 located within the Belmont
Lake oil field which is itself located in the Palmetto Point region. The Belmont
Lake oil field is onshore, as are all of the Companys wells, but located in a
flood plain of the Mississippi River which forces seasonal constraints on
certain field activities. The Company has an interest in one producing gas well,
the PP F-29, but because the gas from this well is consumed by field operations
it is deemed to be of no commercial value. Except for this and the four oil
wells noted immediately above, the Company has no other producing wells.
Additional details of these interests are noted below and not all of these wells
were successful.

A description of the Companys Palmetto Point Project and
Frio-Wilcox Project follow. For a description of the Companys other properties,
please see the section titled Significant Acquisitions and Dispositions.

Mississippi: Palmetto Point Project

On December 21, 2005, the Company agreed to purchase a 20%
gross working and revenue interest in a 10 well drilling program in Palmetto
Point, Mississippi owned by Griffin & Griffin Exploration (Griffin) for
cash payments of $700,000, comprised of $220,000 paid upon entering the
Agreement and the remaining balance of $480,000 paid on January 17, 2006. The
Company applied the full cost method to account for its oil and gas properties
and as of July 31, 2009, seven wells were found to be proved wells, and three
wells were found impaired. One of the wells was impaired due to uneconomic life,
and the other two wells were abandoned due to no apparent gas or oil shows
present. The costs of impaired properties were added to the capitalized cost in
determination of the depletion expense. Palmetto Point is approximately 150
miles southwest of Jackson, Mississippi and approximately 50 miles
north/northwest of Baton Rouge, Louisiana. It is 30 miles west of Woodville,
Mississippi off of State Highway 33 and is entirely within Wilkinson County.

There were no further costs to the Company in earning its
interest in the 10 well drilling program, including well development costs or
pipeline connections. Griffin has agreed that the leases held by it covering any
mineral estate underlying the applicable well site acreage shall not provide for
more than twenty-five (25%) percent royalty and overriding royalty interest. The
Companys net interest in any oil and gas produced is calculated by subtracting
the applicable royalties from its 20% gross interest. Consequently, its original
net working interest in the drilling program was a minimum fifteen (15%) percent net working
interest. Griffin conducted the Drilling Program in its capacity as Operator and
receives a 15% carried interest.

16

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One of these original 10 wells was the PP F-12-1 well, which
was the discovery well of a field now known as the Belmont Lake field. All of
these original 10 wells were targeting the Frio geological formation of the
Cenozoic era and Oligocene series, which is characterized in this region as a
generally shallow, sandstone-rich layer. In this area of Mississippi, the Frio
geologic formation is generally found between 2,000 and 4,500 foot depth from
surface.

On September 22, 2006, the Company elected to participate in an
additional two-well program in Palmetto Point, Mississippi owned by Griffin by
paying an additional $140,000 (paid). The Company earned the same 20% gross
interest in the two (2) additional wells (12 wells total and all drilled) and
subsequently increased its gross interest to 32% in these 12 wells, or a net
revenue interest of 20.802815%. As of July 31, 2009, the two wells were found
to be proved wells.

On June 23, 2007, the Company acquired an assignment of a 10%
gross working interest in the Palmetto Point wells described above from a third
party for $520,000 which was payable by a secured loan. The $520,000 loan was
valued at a Net Present Value of $501,922, which is the capitalized amount. The
Company calculated the net present value of the secured loan payable by applying
8% interest rate, which was based on a T-bill rate of 4.28% plus a risk premium.

On October 4, 2007, the Company elected to participate in the
drilling of the PP F-12-3 well in Palmetto Point, Mississippi which was
conducted by Griffin. This well was the second well drilled in the Belmont Lake
oil field. The Company had a 30% gross working interest and paid $266,348. On
July 31, 2008, the Company accrued and paid an additional cost of $127,707 for
the workovers of wells PP F-12 and PP F-12-3. PP F-12 has had intermittent
production from October 2007, and PP F-12-3 has had intermittent production from
November 2007.

On April 3, 2009, the Company entered into an Asset Purchase
Agreementwith Delta Oil & Gas, Inc., and The Stallion Group to
acquire additional interests in its existing core producing Mississippi oil and
gas properties. The Company paid $40,073.39 to acquire an additional two percent
(2%) working interest in the proven Belmont Lake oil and gas field and an
additional 10% working interest in potential nearby exploration wells.

The Company had a short-lived opportunity to acquire additional
fractional interests in the upcoming Belmont Lake 12-4 well which was expected
to be a horizontal well. An unrelated third party did not participate in its
right to participate in the 12-4 well, and therefore
a share of its interest (a non consent interest) was made available to the
other participating parties including Lexaria. On August 28, 2009 and effective
on September 1, 2009, to take best advantage of this opportunity, the Company
entered into four separate assignment agreements, three of which were with
people or companies with related management. The Company received from these
four parties proceeds of $371,608.57 to fund additional interests in this well.
As a result, the Company has a 25.84% perpetual gross interest in the well
(18.0% net revenue interest); as well as a 5.2% net revenue interest in the
non-consent interest. The non-consent interest remains valid until such time as
the well produces 500% of all costs and expenses back to the participants in the
form of revenue, at which time the non-consent interest ends. Enertopia, a
company with related management, had acquired from Lexaria a 6.16% perpetual
gross interest in the 12-4 well; David DeMartini, a director of Lexaria, had
acquired from Lexaria a 5% gross interest in the non-consent interest in the
12-4 well; and 0743608 BC Ltd. a company owned by the President of the Company,
had acquired from Lexaria a 11.60% gross interest in the non-consent interest in
the 12-4 well.

On May 31, 2010, the Company signed a Settlement Agreement with
Enertopia Corp., whereby the Company issued 499,893 units at $0.12 per unit and
each unit consists of one restricted common share and one share purchase warrant
at $0.20 per share for a period of two years in exchange for the working
interest initially assigned on August 28, 2009.

17

---

On June 16, 2010, the Company signed a Settlement Agreement
with a third party, who had originally participated in the August 28, 2009,
opportunity in the non-consent interest for Belmont Lake 12-4. The Company
returned back $144,063.46 to the third party and cancelled its participation.

On July 29, 2010, the Company had agreed with its Operators at
Belmont Lake not to proceed to drill a horizontal 12-4 well. Rather, two of the
three proposed vertical wells 12-2, 12-4, or 12-5 are proposed to be drilled in
August 2010. To take best advantage of this opportunity, the Company cancelled
all previous agreements relating to August 28, 2009 with respect to Belmont Lake
horizontal well 12-4 and entered into three separate assignment agreements, of
which all three were with people or companies with related management. The
Company received total proceeds of $324,677.12 to fund additional interests in
these wells. As a result, the Company has a 32% perpetual gross interest in the
wells (24.0% net revenue interest); as well as a 8% gross interest (6% net
revenue interest) in the non-consent interest. The non-consent interest remains
valid until such time as the well produces 500% of all costs and expenses back
to the participants in the form of revenue, at which time the non-consent
interest ends. Emerald Atlantic LLC, a company owned by a director of Lexaria,
has acquired from Lexaria a 8.74% gross interest in the non-consent interest in
two of the three vertical wells; and 0743608 BC Ltd. a company owned by the
President of the Company, has acquired from Lexaria a 20.79% gross interest in
the non-consent interest in the two of the three vertical wells; an advisor to
the Company has acquired from Lexaria 2.46% gross interest in the non-consent
interest in two of the three vertical wells.

On September 13, 2010, Lexaria Corp. (the Company) entered
into three separate assignment agreements with 0743608 BC Limited, solely owned
by Director/Officer of the Company; Emerald Atlantic LLC, solely owned by a
Director of the Company, and the Senior VP Business Development. (the
Assignees), whereby the Assignees have paid a fee of US$408,116.48 to earn a
24% share of the Companys gross non-perpetual 32% interest in the three oil
wells being drilled in Wilkinson County, Mississippi. This agreement replaces
the one signed on August 28, 2009. As a result of the three assignment
agreements, Lexaria receives at no cost to the company, a carried interest of 8%
in these same rights and benefits. The Company assigns, transfers and sets over
to the Assignees, all proportionate rights, interest and benefits in the
Assigned Non Perpetual Interest held by or granted to the Assignor in and to the
Participation Agreement between the Company and Griffin but limited to a gross
500% revenue payout based on the total amount paid under the Initial
Consideration and the Subsequent Consideration after which all rights, interests
and benefits cease.

Total working interest for Belmont Lake as of October 31, 2010
is 32%, with the exception of a 40% interest in wells PP F-12-4 and PP F-12-5;
and total working interest in the exploration wells on approximately 130,000
acres surrounding Belmont Lake in all directions as of October 31, 2010, is 60%.

As of October 31, 2010, there were additional well interest
changes or workovers pending of wells PP F-12, PP F12-3, PP F12-4, PP F12-5 and
PP F-29 in the amount of $397,983.21.

As of December 29, 2010, the status of the Palmetto Point,
Mississippi wells is as follows:

Well Name
      Spud/Start
      Complete
      Results
      Depth
      StatusPP F-40
    May 11/06
    May 16/06
    Frio Gas; 12 ft.
    3850
    Shut-inPP F-118
    May 18/06
    May 22/06
    Frio Gas; 14 ft.
    3808
    Shut-inPP F-121
    May 24/06
    May 29/06
    Dry
    3850
    Plug & abandon


18

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PP F-7
    May 31/06
    June 4/06
    Dry
    3800
    Plug & abandonPP F-39
    June 10/06
    June 16/06
    Frio Gas/Oil; 12 ft.
    3900
    Shut-inPP F-42
    June 18/06
    June 21/06
    Frio Gas/Oil; 10 ft.
    3170
    Shut-inPP F-36-2
    June 23/06
    July 2/06
    Frio Gas; 8 ft.
    3450
    Shut-inPP F-4
    Oct 31/06
    Nov. 5/06
    Frio Gas; 8 ft.
    4200
    Shut-inPP F- 29
    Nov 11/06
    Nov. 14/06
    Frio Gas; 37 ft.
    4100
    ProducingPP F-12-1
    Dec 18/06
    Dec. 24/06
    Frio Gas; 3 ft. Frio Oil, 26 ft.
    4016
    ProducingPP F-6B
    
    July 27/06
    Frio Gas
    
    Shut-inPP F-52A
    
    July 27/06
    Frio Gas
    
    Shut-inPP F-12-3
    Oct/07
    Oct/07
    Frio Oil
    3150
    ProducingPP F-12-4
    Aug/10
    Oct/10
    Frio Oil
    3150
    Producing


Mississippi and Louisiana: Frio-Wilcox Project

After participating in the Palmetto Point project, the Company
entered into a separate agreement that expanded both its percentage interest in
future wells, and also expanded the geographical area on which those wells could
be drilled.

On August 3, 2006, the Company entered into a Phase II
agreement with Griffin, to acquire a working interest in multiple zones of
potential oil and gas production in Mississippi and Louisiana. This agreement
contemplates up to a 50 well drill program, which are exclusive to the
participants, for Wilcox and Frio wells, at the Companys option, within the
defined area of mutual interest (AMI). From these 50 prospects, Griffin and
the participants will select all drill locations with the expectation that the
wells will be drilled to depths sufficient to test prospectively for producible
hydrocarbons from the top of the Frio Formation to the bottom of the Wilcox
Formation.

These 50 wells are in addition to all wells drilled under the
original 10-well agreement and also in addition to any development wells to be
drilled at the Belmont Lake oil field discovery. The AMI originally included
over 200,000 gross acres located non-contiguously between Southwest Mississippi
and North East Louisiana which include the approximately 32,000 acres of the
Palmetto Point area but also include other areas.

The Company had contracted to assume a 40% gross interest in
this AMI, meaning it was obligated to pay 40% of costs related to licensing,
permitting, drilling, completion and all other related costs. Upon payment of
40% of the costs, the Company earned a net 32% of all production from all
producible zones to the base of the Frio formation (Frio Targets); and, 30% of
all production to the base of the Wilcox formation (Wilcox Targets). All working
interests are to be registered in the name of the Company. This 50-well AMI was
intended to be drilled in several stages.

19

---

The Companys pro rate share of the first stage had a total
cost $1.6 million. As of October 31 2007, the Company had placed $1,600,000 in
trust to completely fund this initial commitment. During the drill program, an
unrelated third party participant elected not to continue their participation in
the program, and we assumed our pro-rata portion of their 10% gross working
interest as our own, at no additional cost, bringing our total gross working
interest in the seven (7) wells and their leases (Initial AMI Drilling Program),
to 45%.

On June 21, 2007, the Company acquired an additional 10% from a
third party for all rights, title and benefits excluding the seven wells
drilled under the AMI Agreement between August 3, 2006 and June 19, 2007,
specifically wells CMR-USA-39-14, Dixon #1, Faust #1 TEC F-1, CMR/BR F-14, RB
F-1 Red Bug #2, BR F-33, and Randall #1 F-4, and any offset wells that could be
drilled to any of these specified wells (Subsequent AMI Drilling Program). This
brought our interest in the remaining 43 wells to 50% and we drilled 5 wells
under this arrangement.

On April 3, 2009, the Company acquired an additional 10%
working interest in the 38 exploration wells remaining to be drilled, bringing
its total gross working interest to 60% in the 38 wells that remain to be
drilled of this original 50-well option in over 140,000 acres surrounding
Belmont Lake in all directions.

Initial AMI Drilling Program

The Companys pro rate share of the first stage had a total
cost $1.6 million. As of October 31 2007, the Company had placed $1,600,000 in
trust to completely fund this initial commitment. During the drill program, an
unrelated third party participant elected not to continue their participation in
the program, and we assumed our pro-rata portion of their 10% gross working
interest as our own, at no additional cost, bringing our total gross working
interest in these seven (7) drilled wells and their leases, to 45%.

The Company successfully drilled and completed seven (7) wells
under this drilling program. Certain wells were placed into production.

Details of the drill program are outlined below:

In December 2006, the first well CMR-US 39-14 was found to have
sufficient hydrocarbons to become economic. USA 1-37 and BR F-33 had started
intermittent production from November 2007. The Company applied the full cost
method to account for its oil and gas properties.

As at January 31, 2007, the Company abandoned Dixon #1 due to
no economic hydrocarbons being present and $162,420 of drilling costs was added
to the capitalized costs. The Dixon #1 was the only Wilcox well the Company has
drilled to date. Every other well it has participated in located in Mississippi
and Louisiana is a Frio well. Slightly deeper than the Frio targets, but also of
the Cenozoic era, the Wilcox geologic formation is of the Eocene series,
generally found at depths of less than 8,000 feet.

On June 2, 2007, the Company abandoned Randall #1 and $107,672
drilling costs were added to the capitalized costs in determination of depletion
expense.

During August to October 2007, three additional wells, PP F-90,
PP F-100, and PP F-111 were drilled in the area. These Frio wells were abandoned
due to modest gas shows and a total of $306,562 drilling costs was added to the
capitalized costs in determination of depletion expense.

During December 2007, two additional wells, PP F-6A and PP
F-83, were drilled and were plugged and abandoned due to non-economic gas shows.
A total of $247,086 drilling costs were added to the capitalized costs in
determination of depletion expense.

20

---

The results of the initial drill program are as follows:

Well Name
      Spud/Start
      Complete
      Results
      Depth
      StatusCMR-USA-39- 14 RB F-3
    Sept. 8/06
    Sept. 12/06
    Frio Gas 14 ft.
    3,200
    Shut-inDixon #1
    Jan. 03/07
    Jan. 20/07
    Wilcox Target; Dry
    8,650
    Plug & abandonFaust #1, TEC F-1
    Feb. 05/07
    Feb. 11/07
    Frio Gas 9 ft
    5,350
    Shut-inCMR/BR F-24
    Feb. 20/07
    Feb. 24/07
    Frio Gas
    3,250
    Shut-inRB F-1 Red Bug #2
    May 08/07
    May 13/07
    Frio Gas 10 ft
    3,180
    Shut-inBR F-33
    May 20/07
    May 24/07
    Frio Gas 12 ft
    3,837
    Shut-inRandall #1 Closure F-4
    May 27/07
    June 03/07
    Frio Target: Dry
    5,100
    Plug & abandon


Subsequent AMI Drilling Program

As of April 30, 2008, five additional wells were drilled under
the 50-well AMI. Each of these wells encountered non commercial quantities of
hydrocarbons and were plugged and abandoned.

Significant Acquisitions and Dispositions

Alberta, Canada: Strachan Leduc Reef

On September 23, 2005, the Company entered into an agreement to
participate in the Strachan Leduc Reef Farm-In in Alberta, Canada. The Company
made a payment of $218,739. (CDN $253,977) for a 4% participation in the costs
of Strachan Leduc Reef Farm-In. In addition, the Company incurred $186,668 for
required supplemental funds due to well hole problems. The Company will earn on
completion, capped or abandoned with respect to the well to be drilled at 14 of
9-38-9-W5M the following:

| | 1. | In the Spacing Unit for the Earning Well:                                                                                 
| | -- | --------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                           
| |    | a.                                                                                                                        
| |    |                                                                                                                           
| |    | b.                                                                                                                        
| |    |                                                                                                                           
| | 2. | A 1.600% interest in the rights below the base of the
      Shunda formation in Section 10, Township 38, Range 9W5M;
  and

21

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| | 3. | A 1.289% interest in the rights below the base of the
      Shunda formation in Sections 15 and 16, Township 38, Range 9W5M down to
      the base as shown in the schedule attached to the agreement dated
      September 23, 2005.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Company wrote down the cost of the property to a nominal
value of $1 as the future realization of the property is uncertain.

As at October 31, 2010, the Companys working interest in
Strachan Leduc Reef property has expired.

Production and Prices

The following table sets forth information regarding net
production of oil and natural gas, and certain price and cost information for
fiscal years ended October 31, 2010, 2009 and 2008.

For the fiscal year ended
      October 31, 2010
    For the fiscal year ended
      October 31, 2009
    For the fiscal year ended
      October 31, 2008Production Data:Natural gas (Mcf)
    360
    13,138
    58,791Oil (Bbls)
    4,641
    7,461
    5,522Average Prices:Natural gas (per Mcf)
    $4.50
    $3.77
    $8.52Oil (per Bbl)
    $81.47
    $50.00
    $101.28Production Costs:Natural gas (per Mcf)
    $15.72
    $9.43
    $3.71Oil (per Bbl)
    $17.43
    $11.00
    $23.70


Productive Wells

The following table summarizes information at October 31, 2010,
relating to the productive wells in which we owned a working interest as of that
date. Productive wells consist of producing wells and wells capable of
production, but specifically exclude wells drilled and cased during the fiscal
year that have yet to be tested for completion (e.g., all of the operated wells
drilled by the Company during this year have been cased in preparation for
completion, but no operations have been initiated that would allow these wells
to be productive). Gross wells are the total number of producing wells in which
we have an interest, and net wells are the sum of our fractional working
interests in the gross wells.

22

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Gross
      
      NetLocation
      Oil
      
      Gas
      
      Total
      
      Oil
      
      Gas
      
      TotalMississippi
      4
      
      5
      
      9
      
      0.21355
      
      0.27
      
      0.48355Total
      4
      
      5
      
      9
      
      0.21355
      
      .27
      
      0.48355


Unaudited Oil and Gas Reserve Quantities

The unaudited reserve estimates for Mississippi, as of October
31, 2010, were prepared by Veazey & Associates, an independent petroleum
engineering firm.

The estimated proved reserves prepared by Veazey and Associates
are summarized in the table below, in accordance with definitions and pricing
requirements as prescribed by the Securities and Exchange Commission (the
SEC). Prices paid for oil and natural gas vary widely depending upon the
quality such as the Btu content of the natural gas, gravity of the oil, sulfur
content and location of the production related to the refinery or pipelines.

There are many uncertainties inherent in estimating proved
reserve quantities and in projecting future production rates and the timing of
development expenditures. In addition, reserve estimates of new discoveries that
have little production history are more imprecise than those of properties with
more production history. Accordingly, these estimates are expected to change as
future information becomes available.

Proved oil and gas reserves are the estimated quantities of
crude oil and natural gas which geological and engineering data demonstrate with
reasonable certainty to be recoverable in future years from known reservoirs
under existing economic and operating conditions.

Proved developed oil and gas reserves are those reserves
expected to be recovered through existing wells with existing equipment and
operating methods.

Unaudited net quantities of proved developed and undeveloped
reserves of crude oil and natural gas (all located within United States) are as
follows:

The standardized measure of discounted future net cash flows
relating to proved natural gas and oil reserves is as follows:

USD$Future cash inflows
    
    10,235,672Future production costs
    
    (2,111,745
    )Future development costs
    
    (848,227
    )Future net cash flows - undiscounted
    
    7,275,70010% annual discount for estimated timing of
      cash flows
    
    (893,508
    )Standardized measure of discounted future net cash flows
    
    6,382,192


23

---

Year-end price per Mcf of natural gas used in making
standardized measure determinations as of October 31, 2010 was $4.50. Year-end
price per Bbl of oil used in making these same calculations was $81.47.

Estimated Net quantities of Natural Gas and Oil
Reserves:

The following table sets forth our proved reserves, including
changes, and proved developed reserves at the end of October 31, 2010.

| |                                  |  |           |   |  | Natural |   |  | Crude Oil   |  
| | -------------------------------- |  | --------- | - |  | ------- | - |  | ----------- | -
| |                                  |  | Crude Oil |   |  | Gas     |   |  | Equivalents |  
| |                                  |  | (MBbls)   |   |  | (MMcf)  |   |  | (MBbls)     |  
| | Proved reserves:                 |  |           |   |  |         |   |  |             |  
| | Beginning of the year reserve    |  | 77.18     |   |  | 20.80   |   |  | 80.65       |  
| | Adjustments of reserves in place |  | 53.10     |   |  | (20.20  | ) |  | 49.73       |  
| | Productions                      |  | (4.64     | ) |  | (0.60   | ) |  | (4.74       | )
| | End of year reserves             |  | 125.64    |   |  | 0       |   |  | 125.64      |  
| |                                  |  |           |   |  |         |   |  |             |  
| | Proved developed reserves:       |  |           |   |  |         |   |  |             |  
| | Beginning of the year reserve    |  | 26.63     |   |  | 20.80   |   |  | 30.10       |  
| | End of year reserves             |  | 57.33     |   |  | 0       |   |  | 57.33       |  

Oil and Gas Acreage

The following table sets forth the undeveloped and developed
acreage, by area, held by us as of October 31, 2010. Undeveloped acres are acres
on which wells have not been drilled or completed to a point that would permit
the production of commercial quantities of oil and gas, regardless of whether or
not such acreage contains proved reserves. Developed acres are acres, which are
spaced or assignable to productive wells. Gross acres are the total number of
acres in which we have a working interest. Net acreage is obtained by
multiplying gross acreage by our working interest percentage in the properties.
The table does not include acreage in which we have a contractual right to
acquire or to earn through drilling projects, or any other acreage for which we
have not yet received leasehold assignments.

24

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Undeveloped Acres
      
      Developed AcresGross
      Net
      
      Gross
      NetMississippi
      220
      132
      
      1,160
      241.31Total
      220
      132
      
      1,160
      241.31


Drilling Activity

The following table sets forth our
drilling activity during the years ended October 31, 2010, 2009 and 2008.

2010
      2009
      2008Gross
      Net
      Gross
      Net
      Gross
      NetExploratory wells:ProductiveDry
      
      
      
      
      2
      .72Development wells:Productive
      2
      1.28Dry
      1
      .64Total wells
      3
      1.92
      2
      .72
      2
      .72


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.

25

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Item 4.     (Reserved and Removed)

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

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

|National
      Association of Securities Dealers OTC BulletinBoard(1)                                                                                                     
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Quarter
      Ended                                                                                                                                                       
|January 31, 2008                                                                                                                                                          
|April 30, 2008                                                                                                                                                            
|July 31, 2008                                                                                                                                                             
|October 31, 2008                                                                                                                                                          
|January 31, 2009                                                                                                                                                          
|April 30, 2009                                                                                                                                                            
|July 31, 2009                                                                                                                                                             
|October 31, 2009                                                                                                                                                          
|January 31, 2010                                                                                                                                                          
|April 30, 2010                                                                                                                                                            
|July 31, 2010                                                                                                                                                             
|October 31, 2010                                                                                                                                                          
|(1)Over-the-counter market quotations reflect
      inter-dealer prices without retail mark- up, mark-down or commission, and
      may not represent actual transactions.
|(2)No high or low bid prices for our common
      stock were recorded for the period indicated.                                                                           

On January 5, 2011, the last closing price for one share of our
common stock as reported by the OTC Bulletin Board was $0.31. 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 January 20, 2011, there were 33 holders of record of our
common stock. As of such date, 13,033,409 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.

26

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Recent Sales of Unregistered Securities

We did not sell any equity securities which were not registered
under the Securities Act during the year ended October 31, 2010 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 October 31, 2010.

Equity Compensation Plan Information

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

2007 Equity Plan

Our current stock option plan, entitled the 2007 Equity
Incentive Stock Option Plan was approved by our shareholders on April 25, 2007
and filed Form S-8 on May 7, 2009.

Discretionary Options granted to the Key Participants
hereunder, the Board, on the recommendation of the Committee, may at any time
authorize the granting of Options to such Eligible Employees and Eligible
Directors as it may select for the number of Shares that it shall designate,
subject to the provisions of the Plan. When the grant is authorized, the Board,
on the recommendation of the Committee, shall specify the date of grant.

Each Option granted to an Eligible Employee or to an Eligible
Director shall be evidenced by an option agreement with terms and conditions
consistent with the Plan and as approved by the Board on the recommendation of
the Committee, which terms and conditions need not be the same in each case and
may be changed from time to time.

Discretionary Options to be vested immediately pursuant to
grant hereunder, the Option Period for the Options remaining under the Plan
shall be four years from the date of grant thereof or such greater or lesser
duration as the Board, on the recommendation of the Committee, may determine at
the date of grant thereof, and may thereafter be reduced with respect to any
Option as provided in Section 2.8 hereof covering termination of employment or
death of the Optionee.

In addition, unless otherwise determined from time to time by
the Board, on the recommendation of the Committee, the Options remaining under
the Plan may be exercised (in each case to the nearest full Share) during the
Option Period as follows:

| | (a) | at any time during the first year of the Option Period,
      the Optionee may purchase up to 25% of the total number of Shares reserved
      for issuance pursuant to his or her Option; and                                                                                                                                                                                                
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                               
| | (b) | at any time during each additional year of the Option
      period the Optionee may purchase an additional 25% of the total number of
      Shares reserved for issuance pursuant to his or her Option plus any Shares
      not purchased in accordance with the preceding subsection (a) until, in
      the fourth year of the Option Period, 100% of the Option will be
      exercisable.

Except as set forth in Section 2.8 hereof, no Option may be
exercised unless the Optionee is at the time of such exercise:

| | (c) | in the case of an Eligible Employee, in the employ of the
      Company or an Affiliate and shall have been continuously so employed since
      the grant of his Option, but absence on leave, having the approval of
      the Company or such Affiliate, shall not be considered an
      interruption of employment for any purpose of the Plan; or
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

27

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| | (d) | in the case of an Eligible Director, a director of the
      Company or an Affiliate and shall have been such a director continuously
      since the grant of his Option.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Subject to Section 2.6 hereof, the exercise of any Option will
be contingent upon the Optionee having entered into an option agreement with the
Company on such terms and conditions as have been approved by the Board, on the
recommendation of the Committee, and which incorporates by reference the terms
of the Plan. The exercise of any Option will also be contingent upon receipt by
the Company of cash payment of the full purchase price of the Shares being
purchased. No Optionee or his legal representatives or legatees will be, or will
be deemed to be, a holder of any Shares subject to an Option, unless and until
certificates for such Shares are issued to him or them under the terms of the
Plan.

On July 23, 2009 the Company had a 1 for 4 share consolidation.
The 2,000,000 maximum granting of stock options has now been reduced to 500,000
stock options.

2010 Equity Compensation Plan

On February 26, 2010, the Companys shareholders approved and
adopted the Companys 2010 equity incentive plan (the 2010 Plan). The purpose
of the 2010 Plan is to enhance the long-term stockholder value of the Company by
offering opportunities to our directors, officers, employees and eligible
consultants (Participants) to acquire and maintain stock ownership in the
Company in order to give these persons the opportunity to participate in our
growth and success, and to encourage them to remain in our service.

The 2010 Plan is required to be administered by our Board of
Directors or a committee appointed by, and consisting of two or more members of
our Board of Directors (the Plan Administrator). The Plan Administrator has
the exclusive authority, in its discretion, to determine all matters relating to
any option granted (Awards) under the 2010 Plan including: (i) the selection
of individuals to be granted Awards; (ii) the type of Awards; (iii) the number
of shares of Common Stock subject to an Award; (iv) all terms, conditions,
restrictions and limitations, if any, of an Award; and (v) the terms of any
instrument that evidences the Award.

The Plan Administrator also has exclusive authority to
interpret the 2010 Plan and the terms of any instrument evidencing the Award and
may from time to time adopt and change rules and regulations of general
application for the 2010 Plans administration. The Plan Administrators
interpretation of the 2010 Plan and its rules and regulations is conclusive and
binding on all parties involved or affected.

Options that are eligible for grant under the 2010 Plan to
Participants include: (a) incentive stock options, whereby we will grant options
to purchase shares of our common stock to Participants with the intention that
the options qualify as "incentive stock options" as that term is defined in
Section 422 of the Internal Revenue Code; (b) non-incentive stock options,
whereby we will grant options to purchase shares of our common stock to
Participants that do not qualify as "incentive stock options" under the Internal
Revenue Code; (c) stock appreciation rights; and (d) restricted shares. The 2010
Plan provides that a maximum of Two Million (2,000,000) shares of common stock
are available for granting of awards under the 2010 Plan.

The Plan Administrator has the authority in its sole discretion
to grant Awards to participants as incentive stock options or as non-qualified
stock options, as appropriate. Unless an earlier termination date is set by the
Plan Administrator, Awards under the 2010 Plan will terminate at the earliest of
the following:

28

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| | (a) | Ten (10) years after the Award is granted;                                                                                                                                                                                                                                                                                                                                                                 
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                            
| | (b) | The date the stock option expires in accordance with its
      terms;                                                                                                                                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                            
| | (c) | Ninety (90) days after the Participants employment
      terminates (or ceases to provide services to the Company if the grantee is
      a non-employee director or a consultant) (the Employment Termination
      Date), if the Participant's Employment Termination Date occurs by reason
      of retirement, resignation or for any other reasons other than for cause,
      disability or death;
| |     |                                                                                                                                                                                                                                                                                                                                                                                                            
| | (d) | Twelve (12) months after the Employment Termination Date,
      if the termination or cessation of services is a result of death or
      disability; and                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                            
| | (e) | Five (5) years after the Incentive Stock Option is
      granted for holders of 10% or more of the Companys common
  stock.                                                                                                                                                                                                                                                                               

To the extent that the right to purchase shares under an Award
has vested, in order to exercise the Award the participant must execute and
deliver to the Company a written stock option exercise agreement or notice in a
form and in accordance with procedures established by the Plan Administrator. In
addition, the full exercise price of the Option Award must be delivered to the
Company and must be paid in a form acceptable to the Plan Administrator.

The exact terms of the option granted are contained in an
option agreement between us and the person to whom such option is granted.
Eligible employees are not required to pay anything to receive options. The
exercise price for incentive stock options must be no less than: 100% of the
fair market value of the common stock on the date of grant for Participants that
hold less than 10% of the Companys outstanding common stock; and 110% of the
fair market value of the common stock on the date of grant for Participants that
hold 10% or more of the Companys outstanding common stock. The exercise price
for nonqualified stock options is determined by the Plan Administrator in its
sole and complete discretion. An option holder may exercise options from time to
time, subject to vesting. Options will vest immediately upon death or disability
of a participant and upon certain change of control events.

Options will become exercisable by the participants in such
amounts and at such times as shall be determined by the Plan Administrator in
each individual grant. Options are not transferable except by will or by the
laws of descent and distribution. Options granted under the 2010 Plan will
become exercisable in the manner at the times and in the amounts determined by
the Plan Administrator. Participants may exercise options by delivery to the
Company of a written stock option exercise agreement or notice, in a form and in
accordance with procedures established by the Plan Administrator, setting forth
the number of shares purchased under such exercise agreement, accompanied by
payment in full in the form of a check or bank draft or other method of payment
or some combination thereof as may be acceptable to the Plan Administrator. All
incentive stock options granted under the 2010 Plan must comply with Section 422
of the Code.

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

29

---

Equity Compensation Plan InformationPlan category
      Number of securities
        to be issued upon exercise of outstanding
        options, warrants and rights
      Weighted-average
        exercise price of outstanding options, warrants
        and rights
      Number of securities remaining
        available for future issuance under equity
        compensation plans (excluding securities reflected in column (a))Equity compensation 
        plans approved by 
        security holders
      Nil
      Nil
      Nil2007 Equity compensation 
        plans not approved by 
        security holders
      400,000
      $0.20
      100,0002010 Equity compensation 
        plans not approved by 
        security holders
      1,125,000
      $0.20
      875,000Total
      1,525,000
      0.20
      975,000


As at the date of the annual report, there were no stock
options exercised.

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 October 31, 2010.

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 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 October 31,
2010 and 2009

Our net loss and comprehensive loss for our year ended October
31, 2010, for our year ended October 31, 2009 and the changes between those
periods for the respective items are summarized as follows:

30

---

Year Ended October
      31, 2010 $
    
    Year Ended October
      31, 2009 $
    
    Change Between Year Ended
      October 31, 2010 and Year Ended October 31,
      2009 $Revenue
      $
      362,471
      $
      421,955
      $
      (59,484)Other (income)expenses
      
      Nil
      
      (94)
      
      94General and administrative
      
      641,318
      
      627,300
      
      14,018Interest expense
    
    167,322
    
    160,121
    
    7,201Write down in carrying value of oil and gas properties
      
    1
      
    Nil
      
    1Consulting fees
      
      168,512
      
      165,959
      
      2,553Oil and gas operating expenses
      
    152,479
      
    207,447
      
    (54,968)Professional Fees
      
      50,562
      
      69,928
      
      (19,366)Net Income (loss)
    
    (552,462)
    
    (753,573)
    
    201,111


Revenue

The decrease in our oil and gas revenues for our year ended
October 31, 2010 was largely due to lower production volumes for oil wells PP
F-12-1 and PP F-12-3.

General and Administrative

The increase in our general and administrative expenses for our
year ended October 31, 2010 was due to increased stock based compensation.

Professional Fees

There was a decrease in accounting, audit and legal fees for
our year ended October 31, 2010. In the year ended October 31, 2009 the fees
were higher due to the Canadian stock exchange listing.

Interest Expense

The increase in interest expense for our year ended October 31,
2010 is due to the outstanding loan made to the Company.

31

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Oil and Gas Operating Expenses

The decrease in oil and gas operating expenses for our year
ended October 31, 2010 was due to the lower production volumes for oil and gas.

Liquidity and Financial Condition

|Working Capital              |   | At          |   |   | At          |  
|---------------------------- | - | ----------- | - | - | ----------- | -
|                             |   | October 31, |   |   | October 31, |  
|                             |   | 2010        |   |   | 2009        |  
|Current assets 3             | $ | 140,206     |   | $ | 372,362     |  
|Current liabilities          |   | 1,049,647   |   |   | 1,031,547   |  
|                             |   |             |   |   |             |  
|Working capital (deficiency) | $ | (909,441    | ) | $ | (659,185    | )

|Cash Flows                                           |   | Year Ended  |   |  |            |  
|---------------------------------------------------- | - | ----------- | - |  | ---------- | -
|                                                     |   | October 31, |   |  | October 31 |  
|                                                     |   | 2010        |   |  | 2009       |  
|Cash flows from (used in) operating
      activities | $ | (330,336    | ) |  | (36,402    | )
|Cash flows (used in) investing activities            |   | (285,242    | ) |  | (223,826   | )
|Cash flows from (used in) financing
      activities |   | 348,400     |   |  | (79,238    | )
|Net increase (decrease) in cash during year          | $ | (267,178    | ) |  | (339,466   | )

Operating Activities

Net cash used in operating activities was $330,336 for our year
ended October 31, 2010 compared with cash used in operating activities of
$36,402 in the same period in 2009. This difference was largely due to the
payments made in accounts payable and an increase in accounts receivable.

Investing Activities

Net cash used in investing activities was $285,242 for our year
ended October 31, 2010 compared to net cash used in investing activities of
$223,826 in the same period in 2009 was mainly attributable to the oil and gas
costs for Belmont Lake.

Financing Activities

Net cash provided in financing activities was $348,400 for our
year ended October 31, 2010 compared to net cash used of $79,238 in the same
period in 2009. This was largely from the proceeds of a private placement in
2010 and proceeds from a loan payable.

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 of America
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 a net loss of $552,462 for the year ended October 31, 2010 [2009  net loss
of $753,573] and at October 31, 2010 had a deficit accumulated during the
exploration stage of $3,924,392 [2009  $3,371,930]. The Company generated
revenue of $362,471 for the year ended October 31, 2010 [2009 - $421,955]. The
Company has working capital deficiency of $909,441 as at October 31, 2010. 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.

32

---

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 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 are critical to an understanding of our financial
  statements.

Recent Accounting Pronouncements

In June 2009, the FASB issued ASC 860, Transfers and
Servicing. This Standard eliminates the concept of a qualifying special
purpose entity ("QSPE") and modifies the de-recognition provisions in Statement
of Financial Accounting Standards No. 140. This statement is effective for
financial asset transfers occurring after the beginning of an entity's first
fiscal year that begins after November 15, 2009. Early application is
prohibited. The Company does not anticipate any significant financial impact
from adoption of ASC 860.

In October 2009, the Financial Accounting Standards Board
(FASB) issued an Accounting Standards Update (ASU) regarding accounting for
own-share lending arrangements in contemplation of convertible debt issuance or
other financing. This ASU requires that at the date of issuance of the shares in
a share-lending arrangement entered into in contemplation of a convertible debt
offering or other financing, the shares issued shall be measured at fair value
and be recognized as an issuance cost, with an offset to additional paid-in
capital. Further, loaned shares are excluded from basic and diluted earnings per
share unless default of the share-lending arrangement occurs, at which time the
loaned shares would be included in the basic and diluted earnings-per-share
calculation. This ASU is effective for fiscal years beginning on or after
December 15, 2009, and interim periods within those fiscal years for
arrangements outstanding as of the beginning of those fiscal years. The adoption
of this ASU did not have a material impact on the Companys financial statements.

33

---

In January 2010, the FASB issued an update to the Fair Value
topic. This update requires new disclosures for (1) transfers in and out of
levels 1 and 2, and (2) activity in level 3, by requiring the reconciliation to
present separate information about purchases, sales, issuance, and settlements.
Also, this update clarifies the disclosures related to the fair value of each
class of assets and liabilities and the input and valuation techniques for both
recurring and nonrecurring fair value measurements in levels 2 and 3. the
effective date for the disclosures and clarifications is for the interim and
annual reporting periods beginning after December 15, 2009 except for the
disclosures about purchases, sales, issuances and settlements, which is
effective for fiscal years beginning after December 15, 2010. This update is not
expected to have a material impact on the Companys financial statements.

In January 2010, the FASB issued Accounting Standards Update
2010-01, Equity (Topic 505): Accounting for Distributions to
Shareholders with Components of Stock and Cash (A Consensus of the FASB
Emerging Issues Task Force). This amendment to Topic 505 clarifies the stock
portion of a distribution to shareholders that allows them to elect to receive
cash or stock with a limit on the amount of cash that will be distributed is not
a stock dividend for purposes of applying Topics 505 and 260. Effective for
interim and annual periods ending on or after December 15, 2009, and would be
applied on a retrospective basis. The Company does not expect the provisions of
ASU 2010-01 to have a material effect on the financial position, results of
operations or cash flows of the Company.

In January 2010, the FASB issued Accounting Standards Update
2010-02, Consolidation (Topic 810): Accounting and Reporting for
Decreases in Ownership of a Subsidiary. This amendment to Topic 810
clarifies, but does not change, the scope of current US GAAP. It clarifies the
decrease in ownership provisions of Subtopic 810-10 and removes the potential
conflict between guidance in that Subtopic and asset de-recognition and gain or
loss recognition guidance that may exist in other US GAAP. An entity will be
required to follow the amended guidance beginning in the period that it first
adopts FAS 160 (now included in Subtopic 810-10). For those entities that have
already adopted FAS 160, the amendments are effective at the beginning of the
first interim or annual reporting period ending on or after December 15, 2009.
The amendments should be applied retrospectively to the first period that an
entity adopted FAS 160. The Company does not expect the provisions of ASU
2010-02 to have a material effect on the financial position, results of
operations or cash flows of the Company.

In January 2010, the FASB issued ASU No. 2010-06 Fair Value
Measurements and Disclosures Topic 820 Improving Disclosures about Fair Value
Measurements. This ASU requires certain new disclosures and clarifies existing
disclosure requirements about fair value measurement as set forth in
Codification Subtopic 820-10. The FASBs objective is to improve these
disclosures and, thus, increase the transparency in financial reporting. This
ASU is effective for fiscal years beginning on or after December 15, 2009, and
interim periods within those fiscal years. The adoption of this ASU did not have
a material impact on the Companys financial statements.

In February 2010, the FASB issued ASC No. 2010-09,
Amendments to Certain Recognition and Disclosure Requirements, which
eliminates the requirement for SEC filers to disclose the date through which an
entity has evaluated subsequent events. ASC No. 2010-09 is effective for its
fiscal quarter beginning after 15 December 2010. The adoption of ASC No. 2010-09
is not expected to have a material impact on the Companys financial statements.

On March 5, 2010, the FASB issued ASU No. 2010-11 Derivatives
and Hedging Topic 815 Scope Exception Related to Embedded Credit Derivatives.
This ASU clarifies the guidance within the derivative literature that exempts
certain credit related features from analysis as potential embedded derivatives
requiring separate accounting. The ASU specifies that an embedded credit
derivative feature related to the transfer of credit risk that is only in the
form of subordination of one financial instrument to another is not subject to
bifurcation from a host contract under ASC 815-15-25, Derivatives and Hedging 
Embedded Derivatives  Recognition. All other embedded credit derivative
features should be analyzed to determine whether their economic characteristics
and risks are clearly and closely related to the economic characteristics and
risks of the host contract and whether bifurcation is required. The adoption of this ASU did not have
a material impact on the Companys financial statements.

34

---

In April 2010, the FASB issued ASU 2010-13, CompensationStock
Compensation (Topic 718): Effect of Denominating the Exercise Price of a
Share-Based Payment Award in the Currency of the Market in Which the Underlying
Equity Security Trades, or ASU 2010-13. This ASU provides amendments to Topic
718 to clarify that an employee share-based payment award with an exercise price
denominated in currency of a market in which a substantial portion of the
entitys equity securities trades should not be considered to contain a
condition that is not a market, performance, or service condition. Therefore, an
entity would not classify such an award as a liability if it otherwise qualifies
as equity. The amendments in this ASU are effective for fiscal years, and
interim periods within those fiscal years, beginning on or after December 15,
2010. The Company does not expect the adoption of ASU 2010-13 to have a
significant impact on its financial statements.

In April 2010, the FASB codified the consensus reached in
Emerging Issues Task Force Issue No. 08-09, Milestone Method of Revenue
Recognition. FASB ASU No. 2010-17 Revenue Recognition  Milestone Method
(Topic 605) provides guidance on defining a milestone and determining when it
may be appropriate to apply the milestone method of revenue recognition for
research and development transactions. FASB ASU No. 2010  17 is effective for
fiscal years beginning on or after June 15, 2010, and is effective on a
prospective basis for milestones achieved after the adoption date. The Company
does not expect this ASU will have a material impact on its financial position
or results of operations.

In May 2010, the FASB issued Accounting Standards Update
2010-19 (ASU 2010-19), Foreign Currency (Topic 830): Foreign Currency Issues:
Multiple Foreign Currency Exchange Rates. The amendments in this Update are
effective as of the announcement date of March 18, 2010. The Company does not
expect the provisions of ASU 2010-19 to have a material effect on the Company's
financial position, results of operations or cash flows of the Company.

35

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Item 7A.   Quantitative and Qualitative
Disclosures About Market Risk

Not Applicable.

Item 8.      Financial Statements
and Supplementary Data

36

---



***Chang Lee LLP******Chartered Accountants***606  815 Hornby StreetVancouver, B.C, V6Z 2E6Tel: 604-687-3776Fax: 604-688-3373E-mail: info@changleellp.com


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM

To the Board of Directors and Stockholders of

LEXARIA CORP.

We have audited the balance sheets of LEXARIA Corp. (the
  Company) as at October 31, 2010 and 2009 and the related statements of
  stockholders equity, operations and comprehensive loss and cash flows
  for the years then ended. These financial statements are the responsibility
  of the Company's management. Our responsibility is to express an opinion on
  these financial statements based on our 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 financial statements referred to above present
  fairly, in all material respects, the financial position of the Company as at
  October31, 2010 and 2009 and the results of its operations and its cash flows
  for the years then ended in conformity with generally accepted accounting principles
  in the United States of America.

The accompanying financial statements refer to above have been
prepared assuming that the Company will continue as a going concern. As
discussed in Note 1 to the financial statements, the Company had recurring
losses and requires additional funds to maintain its planned operations. 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 1. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

|Vancouver, Canada |                      
|----------------- | ---------------------
|January 21, 2011  | Chartered Accountants

37

---

LEXARIA CORP.BALANCE SHEETS(Expressed in U.S. Dollars)

|                                                                                                                                                                                                                                                               |   | October 31 |   |   | October 31 |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ---------- | - | - | ---------- | -
|                                                                                                                                                                                                                                                               |   | 2010       |   |   | 2009       |  
|                                                                                                                                                                                                                                                               |   |            |   |   |            |  
|ASSETS                                                                                                                                                                                                                                                         |   |            |   |   |            |  
|                                                                                                                                                                                                                                                               |   |            |   |   |            |  
|Current                                                                                                                                                                                                                                                        |   |            |   |   |            |  
|Cash and cash equivalents                                                                                                                                                                                                                                      | $ | 62,989     |   | $ | 330,167    |  
|Accounts
      receivable                                                                                                                                                                                                                                      |   | 74,879     |   |   | 42,195     |  
|Prepaid expenses                                                                                                                                                                                                                                               |   | 2,338      |   |   | -          |  
|                                                                                                                                                                                                                                                               |   |            |   |   |            |  
|Total Current Assets                                                                                                                                                                                                                                           |   | 140,206    |   |   | 372,362    |  
|                                                                                                                                                                                                                                                               |   |            |   |   |            |  
|Capital assets, net                                                                                                                                                                                                                                            |   | 425        |   |   | 1,445      |  
|                                                                                                                                                                                                                                                               |   |            |   |   |            |  
|Oil and gas properties (Note 5)                                                                                                                                                                                                                                |   |            |   |   |            |  
|Proved property                                                                                                                                                                                                                                                |   | 3,118,376  |   |   | 2,823,277  |  
|Unproved properties                                                                                                                                                                                                                                            |   | 19,293     |   |   | 132,034    |  
|                                                                                                                                                                                                                                                               |   |            |   |   |            |  
|                                                                                                                                                                                                                                                               |   | 3,137,669  |   |   | 2,955,311  |  
|                                                                                                                                                                                                                                                               |   |            |   |   |            |  
|TOTAL ASSETS                                                                                                                                                                                                                                                   | $ | 3,278,300  |   | $ | 3,329,118  |  
|                                                                                                                                                                                                                                                               |   |            |   |   |            |  
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                                                                                                                           |   |            |   |   |            |  
|                                                                                                                                                                                                                                                               |   |            |   |   |            |  
|LIABILITIES                                                                                                                                                                                                                                                    |   |            |   |   |            |  
|                                                                                                                                                                                                                                                               |   |            |   |   |            |  
|Current                                                                                                                                                                                                                                                        |   |            |   |   |            |  
|Accounts
      payable and accrued liabilities                                                                                                                                                                                                                 | $ | 137,437    |   | $ | 240,983    |  
|Loan payable (Note 7,8)                                                                                                                                                                                                                                        |   | 910,441    |   |   | 788,795    |  
|Due to a
      related party                                                                                                                                                                                                                                   |   | 1,769      |   |   | 1,769      |  
|                                                                                                                                                                                                                                                               |   |            |   |   |            |  
|Total Current Liabilities                                                                                                                                                                                                                                      |   | 1,049,647  |   |   | 1,031,547  |  
|                                                                                                                                                                                                                                                               |   |            |   |   |            |  
|Loan Payable (Note 6)                                                                                                                                                                                                                                          |   | 75,000     |   |   | -          |  
|                                                                                                                                                                                                                                                               |   |            |   |   |            |  
|TOTAL LIABILITIES                                                                                                                                                                                                                                              |   | 1,124,647  |   |   | 1,031,547  |  
|                                                                                                                                                                                                                                                               |   |            |   |   |            |  
|STOCKHOLDERS' EQUITY                                                                                                                                                                                                                                           |   |            |   |   |            |  
|                                                                                                                                                                                                                                                               |   |            |   |   |            |  
|Share Capital                                                                                                                                                                                                                                                  |   |            |   |   |            |  
|Authorized:          200,000,000
      common voting shares with a par value of $0.001 per
      share          Issued
      and outstanding: 12,926,348 common shares at October 31,
      2010          (10,732,870
      common shares at October 31, 2009) |   | 12,926     |   |   | 10,733     |  
|                                                                                                                                                                                                                                                               |   |            |   |   |            |  
|Additional paid-in capital                                                                                                                                                                                                                                     |   | 6,065,119  |   |   | 5,658,768  |  
|                                                                                                                                                                                                                                                               |   |            |   |   |            |  
|Deficit                                                                                                                                                                                                                                                        |   | (3,924,392 | ) |   | (3,371,930 | )
|                                                                                                                                                                                                                                                               |   |            |   |   |            |  
|Total Stockholders' Equity                                                                                                                                                                                                                                     |   | 2,153,653  |   |   | 2,297,571  |  
|                                                                                                                                                                                                                                                               |   |            |   |   |            |  
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                                                                                                                     | $ | 3,278,300  |   | $ | 3,329,118  |  

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

38

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LEXARIA CORP.STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSSFor the year ended October 31,
2010(Expressed in U.S. Dollars)

|                                                     |  | Year ended |  
|---------------------------------------------------- |  | ---------- | -
|                                                     |  | October 31 |  
|                                                     |  | 2010       |  
|                                                     |  | $          |  
|Revenue                                              |  |            |  
|Natural gas and oil revenue                          |  | 362,471    |  
|                                                     |  |            |  
|Cost of revenue                                      |  |            |  
|Natural gas and
      oil operating costs            |  | 152,479    |  
|Depletion                                            |  | 121,136    |  
|                                                     |  | 273,615    |  
|                                                     |  |            |  
|Gross profit (loss)                                  |  | 88,856     |  
|                                                     |  |            |  
|Expenses                                             |  |            |  
|Accounting and audit                                 |  | 27,547     |  
|Insurance                                            |  | 7,014      |  
|Advertising and promotions                           |  | 559        |  
|Bank charges and
      exchange loss                 |  | 26,832     |  
|Stock Based Compensation                             |  | 161,366    |  
|Consulting (note
      9)                            |  | 168,512    |  
|Depreciation                                         |  | 1,021      |  
|Fees and Dues                                        |  | 26,567     |  
|Interest expense from loan payable
      (note 6,7)  |  | 167,322    |  
|Investor relation                                    |  | 1,943      |  
|Legal and professional                               |  | 23,015     |  
|Office and miscellaneous                             |  | 1,213      |  
|Rent                                                 |  | 15,404     |  
|Telephone                                            |  | 2,917      |  
|Taxes                                                |  | 5,745      |  
|Training                                             |  | -          |  
|Travel                                               |  | 4,340      |  
|Write down of oil
      and gas property             |  | 1          |  
|                                                     |  |            |  
|                                                     |  | 641,318    |  
|                                                     |  |            |  
|(Loss) for the period before other income            |  | (552,462   | )
|                                                     |  |            |  
|Other Income                                         |  |            |  
|Interest income                                      |  | -          |  
|                                                     |  |            |  
|Net (loss) and comprehensive (loss) for the year     |  | (552,462   | )
|                                                     |  |            |  
|Basic and diluted (loss) per share                   |  | (0.04      | )
|                                                     |  |            |  
|Weighted average number of common shares outstanding |  |            |  
|- Basic and diluted                                  |  | 12,325,675 |  

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

39

---

LEXARIA CORP.STATEMENT OF CASH FLOWSFor
the year ended October 31, 2010(Expressed in U.S. Dollars)

|                                                                                  |  | Year ended |  
|--------------------------------------------------------------------------------- |  | ---------- | -
|                                                                                  |  | October 31 |  
|                                                                                  |  | 2010       |  
|                                                                                  |  | $          |  
|Cash flows used in operating activities                                           |  |            |  
|                                                                                  |  |            |  
|Net (loss)                                                                        |  | (552,462   | )
|                                                                                  |  |            |  
|Adjustments to
      reconcile net loss to net cash used in operating activities: |  |            |  
|Consulting
      - Stock based compensation                                       |  | 161,366    |  
|Depreciation                                                                      |  | 1,021      |  
|Depletion                                                                         |  | 121,136    |  
|Impairment of oil and gas acquisition cost                                        |  | 1          |  
|Foreign
      exchange gain / loss                                                |  | 23,765     |  
|Accredited interest on loan payable                                               |  | 11,672     |  
|                                                                                  |  |            |  
|Change in operating
      assets and liabilities:                                 |  |            |  
|(Increase)/Decrease
      in accounts receivable                                  |  | (32,684    | )
|(Increase)/ Decrease in prepaid expenses and deposit                              |  | (2,338     | )
|Increase
      in accounts payable and accrued liabilities                        |  | (61,813    | )
|                                                                                  |  |            |  
|Net cash used in operating activities                                             |  | (330,336   | )
|                                                                                  |  |            |  
|Cash flows used in investing activities                                           |  |            |  
|                                                                                  |  |            |  
|Oil and gas property acquisition
      and exploration costs                      |  | (285,242   | )
|                                                                                  |  |            |  
|Net cash used in investing activities                                             |  | (285,242   | )
|                                                                                  |  |            |  
|Cash flows from financing activities                                              |  |            |  
|                                                                                  |  |            |  
|Proceeds (payments) of loan payable                                               |  | 165,000    |  
|Proceeds from private
      placement                                             |  | 183,400    |  
|Warrant Conversion                                                                |  | -          |  
|                                                                                  |  |            |  
|Net cash from (used in) financing Activities                                      |  | 348,400    |  
|                                                                                  |  |            |  
|Increase (Decrease) in cash and cash equivalents                                  |  | (267,178   | )
|                                                                                  |  |            |  
|Cash and cash equivalents, beginning
      of year                                |  | 330,167    |  
|                                                                                  |  |            |  
|Cash and cash equivalents, end of year                                            |  | 62,989     |  

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

40

---

LEXARIACORP.STATEMENTSOFSTOCKHOLDERS'EQUITYFor the year endedOctober31, 2010 toOctober31, 2008(Expressedin U.S.Dollars)

|                                                                                        |  | COMMON
      STOCK |  |  |        |  |  |        |  |  |            | 
|--------------------------------------------------------------------------------------- |  | ------------------ |  |  | ------ |  |  | ------ |  |  | ---------- | 
|                                                                                        |  |                    |  |  |        |  |  |        |  |  |            | 
|                                                                                        |  |                    |  |  |        |  |  | STOCK  |  |  |            | 
|                                                                                        |  |                    |  |  |        |  |  | TO BE  |  |  | ADDITIONAL | 
|                                                                                        |  |                    |  |  |        |  |  | ISSUED |  |  | PAID-IN    | 
|                                                                                        |  | SHARES             |  |  | AMOUNT |  |  | AMOUNT |  |  | CAPITAL    | 
|                                                                                        |  |                    |  |  |        |  |  |        |  |  |            | 
|                                                                                        |  |                    |  |  |        |  |  |        |  |  |            | 
|Balance, October 31, 2008                                                               |  | 6,092,370          |  |  | 6,092  |  |  | -      |  |  | 5,374,472  | 
|                                                                                        |  |                    |  |  |        |  |  |        |  |  |            | 
|Granted Stock Options at $0.48 per share                                                |  |                    |  |  |        |  |  |        |  |  | 20,194     | 
|                                                                                        |  |                    |  |  |        |  |  |        |  |  |            | 
|Stock options revalued and issued at $0.20
        
        per share                   |  |                    |  |  |        |  |  |        |  |  | 36,718     | 
|                                                                                        |  |                    |  |  |        |  |  |        |  |  |            | 
|Issuance of common stock per Subscription
        
        Agreement at $0.05 per share |  | 4,545,000          |  |  | 4,545  |  |  |        |  |  | 222,705    | 
|                                                                                        |  |                    |  |  |        |  |  |        |  |  |            | 
|Warrant exercise per Loan Agreement at
        
        $0.05 per share                 |  | 95,500             |  |  | 96     |  |  |        |  |  | 4,679      | 
|                                                                                        |  |                    |  |  |        |  |  |        |  |  |            | 
|Comprehensive income (loss):                                                            |  |                    |  |  |        |  |  |        |  |  |            | 
|(Loss) for the year                                                                     |  |                    |  |  |        |  |  |        |  |  |            | 
|                                                                                        |  |                    |  |  |        |  |  |        |  |  |            | 
|Balance, October 31, 2009                                                               |  | 10,732,870         |  |  | 10,733 |  |  | -      |  |  | 5,658,768  | 

41

---

|Granted Stock Options at $0.20 per share                                       |  |            |  |   |        |  |   |   |  |   | 139,050   |  |   |            |   |   | 139,050   |  
|------------------------------------------------------------------------------ |  | ---------- |  | - | ------ |  | - | - |  | - | --------- |  | - | ---------- | - | - | --------- | -
|                                                                               |  |            |  |   |        |  |   |   |  |   |           |  |   |            |   |   |           |  
|Issuance of common stock per Subscription
      Agreement at $0.1143 per share |  | 1,617,752  |  |   | 1,618  |  |   |   |  |   | 181,782   |  |   |            |   |   | 183,400   |  
|                                                                               |  |            |  |   |        |  |   |   |  |   |           |  |   |            |   |   |           |  
|Issuance of common stock per Settlement
      Agreement at $0.12 per share     |  | 499,893    |  |   | 500    |  |   |   |  |   | 59,487    |  |   |            |   |   | 59,987    |  
|                                                                               |  |            |  |   |        |  |   |   |  |   |           |  |   |            |   |   |           |  
|Granted Stock Options at $0.20 per share                                       |  |            |  |   |        |  |   |   |  |   | 22,316    |  |   |            |   |   | 22,316    |  
|                                                                               |  |            |  |   |        |  |   |   |  |   |           |  |   |            |   |   |           |  
|Warrant exercise pursuant to loan agreement
      at $0.05 per share           |  | 75,833     |  |   | 75     |  |   |   |  |   | 3,716     |  |   |            |   |   | 3,791     |  
|                                                                               |  |            |  |   |        |  |   |   |  |   |           |  |   |            |   |   |           |  
|Comprehensive income (loss):                                                   |  |            |  |   |        |  |   |   |  |   |           |  |   |            |   |   |           |  
|(Loss) for the year                                                            |  |            |  |   |        |  |   |   |  |   |           |  |   | (552,462   | ) |   | (552,462  | )
|                                                                               |  |            |  |   |        |  |   |   |  |   |           |  |   |            |   |   |           |  
|Balance, October 31, 2010                                                      |  | 12,926,348 |  | $ | 12,926 |  | $ | - |  | $ | 6,065,119 |  | $ | (3,924,392 | ) | $ | 2,153,653 |  

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

42

---

|LEXARIA CORP.                                                         
|----------------------------------------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS                                     
|October 31, 2010                                                      
|(Expressed in U.S. Dollars)                                           
|______________________________________________________________________

|1. | Organization and Business                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The Company was formed on December 9, 2004 under the laws
      of the State of Nevada and commenced operations on December 9, 2004. The
      Company is an independent natural gas and oil company engaged in the
      exploration, development and acquisition of oil and gas properties in the
      United States and Canada. The Companys entry into the oil and gas
      business began on February 3, 2005. The Company has offices in Vancouver
      and Kelowna, BC, Canada.                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | On March 17, 2010, the Company increased its authorized
      share capital to 200,000,000 common shares.                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | These financial statements have been prepared in
      accordance with generally accepted accounting principles applicable to a
      going concern, which contemplates the realization of assets and the
      satisfaction of liabilities and commitments in the normal course of
      business. The Company has incurred an operating loss and required
      additional funds to maintain its operations. Managements plans in this
      regard are to raise equity and/or debt financing as required.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | These conditions raise substantial doubt about the
      Companys ability to continue as a going concern. These financial
      statements do not include any adjustment that might result from this
      uncertainty.                                                                                                                                                                                                                                                                                     

|2. | Business Risk and Liquidity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The Company is subject to several categories of risk
      associated with its operating activities. Natural gas and oil exploration
      and production is a speculative business and involves a high degree of
      risk. Among the factors that have a direct bearing on the Companys
      prospects are uncertainties inherent in estimating natural gas and oil
      reserves, future hydrocarbon production and cash flows, particularly with
      respect to wells that have not been fully tested and with wells having
      limited production histories; access and cost of services and equipment;
      and the presence of competitors with greater financial resources and
      capacity.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|3. | Significant Accounting
Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

| | a) | Principles of Accounting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    | These financial statements are stated in U.S. dollars and
      have been prepared in accordance with U.S. generally accepted accounting
      principles.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | 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 October 31, 2010, the Company had no
      overproduced imbalances.

43

---

|3. | SIGNIFICANT ACCOUNTING POLICIES (contd)
|-- | ----------------------------------------
|   |                                         
|   | c)                                      
|   |                                         
|   |                                         
|   |                                         
|   | d)                                      
|   |                                         
|   |                                         
|   |                                         
|   |                                         
|   |                                         
|   |                                         
|   |                                         
|   |                                         
|   |                                         
|   |                                         
|   |                                         
|   |                                         
|   |                                         
|   | e)                                      
|   |                                         
|   |                                         

---

| | 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) | Capital Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    | The capital asset represents computer equipment which is
      carried at cost and is amortized over its estimated useful life of 3 years
      straight-line. Computer equipment is written down to its net realizable
      value if it is determined that its carrying value exceeds estimated future
      benefits to the Company.                                                                                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | h) | Loss Per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    | Loss per share is computed using the weighted average
      number of shares outstanding during the period. The Company has adopted
      ASC 220 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.                                                                                                                                                                                                                                                                                                         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | i) | Foreign Currency Translations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    | The Companys operations are located in the United States
      of America and Canada, and it has offices 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.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | j) | Financial Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    | ASC 820 Fair Value Measurements and Disclosures
      requires an entity to maximize the use of observable inputs and minimize
      the use of unobservable inputs when measuring fair value. ASC 820
      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. ASC 820 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 primarily of
      cash and cash equivalents , accounts receivable, accounts payable and
      accrued liabilities, loans payable and due to related parties. With the
      exception of non-current portion of loans payable, the carrying amounts of
      these financial instruments approximate their fair values due to their
      short maturities. The fair values of the non-current portion of loans
      payable are estimated using the discounted value of future cash
    flows.                                                                                                        

---

| |    | The Company is located 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.                                                                                                                                                                                                                                                                                                                                                                           
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | k) | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | The Company has adopted ASC 740, 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.                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | l) | 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 ASC 360,
      Property, Plant and Equipment. 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.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | m) | Asset Retirement Obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | The Company accounts for asset retirement obligations in
      accordance with the provisions of ASC 410, Asset Retirement and
      Environmental Obligations. ASC 410 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 October 31,
      2010 and 2009.                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | n) | Comprehensive Income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | The Company has adopted ASC 220, 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 changes except those transactions
      resulting from investments by owners and distributions to
owners.                                                                                                                                                                                                                                                                                                                                                          
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | o) | Concentration of credit risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | The Company places its cash and cash equivalent with high
      credit quality financial institution. As of October 31, 2010, the Company
      had approximately $62,989 in a bank beyond insured limit (October 31,
      2009: $330,167).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | p) | New Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

---

In June 2009, the FASB issued ASC 860,
Transfers and Servicing. This Standard eliminates the concept of a
qualifying special purpose entity ("QSPE") and modifies the de-recognition
provisions in Statement of Financial Accounting Standards No. 140. This
statement is effective for financial asset transfers occurring after the
beginning of an entity's first fiscal year that begins after November 15, 2009.
Early application is prohibited. The Company does not anticipate any significant
financial impact from adoption of ASC 860.

In October 2009, the Financial
Accounting Standards Board (FASB) issued an Accounting Standards Update
(ASU) regarding accounting for own-share lending arrangements in contemplation
of convertible debt issuance or other financing. This ASU requires that at the
date of issuance of the shares in a share-lending arrangement entered into in
contemplation of a convertible debt offering or other financing, the shares
issued shall be measured at fair value and be recognized as an issuance cost,
with an offset to additional paid-in capital. Further, loaned shares are
excluded from basic and diluted earnings per share unless default of the
share-lending arrangement occurs, at which time the loaned shares would be
included in the basic and diluted earnings-per-share calculation. This ASU is
effective for fiscal years beginning on or after December 15, 2009, and interim
periods within those fiscal years for arrangements outstanding as of the
beginning of those fiscal years. The adoption of this ASU did not have a
material impact on the Companys financial statements.

In January 2010, the FASB issued an
update to the Fair Value topic. This update requires new disclosures for (1)
transfers in and out of levels 1 and 2, and (2) activity in level 3, by
requiring the reconciliation to present separate information about purchases,
sales, issuance, and settlements. Also, this update clarifies the disclosures
related to the fair value of each class of assets and liabilities and the input
and valuation techniques for both recurring and nonrecurring fair value
measurements in levels 2 and 3. the effective date for the disclosures and
clarifications is for the interim and annual reporting periods beginning after
December 15, 2009 except for the disclosures about purchases, sales, issuances
and settlements, which is effective for fiscal years beginning after December
15, 2010. This update is not expected to have a material impact on the Companys
financial statements.

In January 2010, the FASB issued
Accounting Standards Update 2010-01, Equity (Topic 505): Accounting
for Distributions to Shareholders with Components of Stock and Cash (A
Consensus of the FASB Emerging Issues Task Force). This amendment to Topic 505
clarifies the stock portion of a distribution to shareholders that allows them
to elect to receive cash or stock with a limit on the amount of cash that will
be distributed is not a stock dividend for purposes of applying Topics 505 and
260. Effective for interim and annual periods ending on or after December 15,
2009, and would be applied on a retrospective basis. The Company does not expect
the provisions of ASU 2010-01 to have a material effect on the financial
position, results of operations or cash flows of the Company.

In January 2010, the FASB issued
Accounting Standards Update 2010-02, Consolidation (Topic 810):
Accounting and Reporting for Decreases in Ownership of a Subsidiary. This
amendment to Topic 810 clarifies, but does not change, the scope of current US
GAAP. It clarifies the decrease in ownership provisions of Subtopic 810-10 and
removes the potential conflict between guidance in that Subtopic and asset
de-recognition and gain or loss recognition guidance that may exist in other US
GAAP. An entity will be required to follow the amended guidance beginning in the
period that it first adopts FAS 160 (now included in Subtopic 810-10). For those
entities that have already adopted FAS 160, the amendments are effective at the
beginning of the first interim or annual reporting period ending on or after
December 15, 2009. The amendments should be applied retrospectively to the first
period that an entity adopted FAS 160. The Company does not expect the
provisions of ASU 2010-02 to have a material effect on the financial position,
results of operations or cash flows of the Company.

---

In January 2010, the FASB issued ASU
No. 2010-06 Fair Value Measurements and Disclosures Topic 820 Improving
Disclosures about Fair Value Measurements. This ASU requires certain new
disclosures and clarifies existing disclosure requirements about fair value
measurement as set forth in Codification Subtopic 820-10. The FASBs objective
is to improve these disclosures and, thus, increase the transparency in
financial reporting. This ASU is effective for fiscal years beginning on or
after December 15, 2009, and interim periods within those fiscal years. The
adoption of this ASU did not have a material impact on the Companys financial
statements.

In February 2010, the FASB issued ASC
No. 2010-09, Amendments to Certain Recognition and Disclosure
Requirements, which eliminates the requirement for SEC filers to disclose
the date through which an entity has evaluated subsequent events. ASC No.
2010-09 is effective for its fiscal quarter beginning after 15 December 2010.
The adoption of ASC No. 2010-09 is not expected to have a material impact on the
Companys financial statements.

On March 5, 2010, the FASB issued ASU
No. 2010-11 Derivatives and Hedging Topic 815 Scope Exception Related to
Embedded Credit Derivatives. This ASU clarifies the guidance within the
derivative literature that exempts certain credit related features from analysis
as potential embedded derivatives requiring separate accounting. The ASU
specifies that an embedded credit derivative feature related to the transfer of
credit risk that is only in the form of subordination of one financial
instrument to another is not subject to bifurcation from a host contract under
ASC 815-15-25, Derivatives and Hedging  Embedded Derivatives  Recognition.
All other embedded credit derivative features should be analyzed to determine
whether their economic characteristics and risks are clearly and closely
related to the economic characteristics and risks of the host contract and
whether bifurcation is required. The adoption of this ASU did not have a
material impact on the Companys financial statements.

In April 2010, the FASB issued ASU
2010-13, CompensationStock Compensation (Topic 718): Effect of Denominating
the Exercise Price of a Share-Based Payment Award in the Currency of the Market
in Which the Underlying Equity Security Trades, or ASU 2010-13. This ASU
provides amendments to Topic 718 to clarify that an employee share-based payment
award with an exercise price denominated in currency of a market in which a
substantial portion of the entitys equity securities trades should not be
considered to contain a condition that is not a market, performance, or service
condition. Therefore, an entity would not classify such an award as a liability
if it otherwise qualifies as equity. The amendments in this ASU are effective
for fiscal years, and interim periods within those fiscal years, beginning on or
after December 15, 2010. The Company does not expect the adoption of ASU 2010-13
to have a significant impact on its financial statements.

In April 2010, the FASB codified the
consensus reached in Emerging Issues Task Force Issue No. 08-09, Milestone
Method of Revenue Recognition. FASB ASU No. 2010-17 Revenue Recognition 
Milestone Method (Topic 605) provides guidance on defining a milestone and
determining when it may be appropriate to apply the milestone method of revenue
recognition for research and development transactions. FASB ASU No. 2010  17 is
effective for fiscal years beginning on or after June 15, 2010, and is effective
on a prospective basis for milestones achieved after the adoption date. The
Company does not expect this ASU will have a material impact on its financial
position or results of operations.

In May 2010, the FASB issued
Accounting Standards Update 2010-19 (ASU 2010-19), Foreign Currency (Topic 830):
Foreign Currency Issues: Multiple Foreign Currency Exchange Rates. The
amendments in this Update are effective as of the announcement date of March 18,
2010. The Company does not expect the provisions of ASU 2010-19 to have a
material effect on the Company's financial position, results of operations or
cash flows of the Company.

---

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. | Capital Stock
|-- | -------------

Share Issuances

On June 23, 2009, the Company amended
its Articles of Incorporation to undertake a one (1) for four (4) share
consolidation of its authorized and issued and outstanding common stock. As a
result, the Companys authorized capital decreased from 75,000,000 shares of
common stock with a par value of $0.001 to 18,750,000 shares of common stock
with a par value of $0.001 and its issued and outstanding shares decreased from
24,369,500 shares of common stock to 6,092,370 shares of common stock.

On July 22, 2009, the Company completed
an equity financing and issued 4,545,000 unit at the price of $0.05 per unit and
each unit consists of one common shares and one share purchase warrant at $0.20
per share for a period of two years, so that effective July 22, 2009, the
Company had 10,637,370 shares of common stock issued and outstanding. All shares
and warrants issued were restricted under applicable securities rules.

On October 21, 2009, 191,000 warrants
were exercised for 95,500 common shares for total proceeds of $4,775.

On December 24, 2009, the Company
completed an equity financing and issued 1,617,752 units at the price of
CAD$0.12 per unit and each unit consists of one share purchase warrant which two
warrants entitle a holder to purchase one common share at CAD$0.20 per share for
a period of one year, so that effective December 24, 2009, the Company had
12,350,622 shares of common stock issued and outstanding. All shares and
warrants issued were restricted under applicable securities rules.

On March 17, 2010, the Company had
increased its authorized share capital from 18,750,000 common shares to
200,000,000 common shares.

On May 31, 2010, the Company issued
499,893 units at a price of $0.12 per unit for a Settlement Agreement valued at
$59,987. Each unit consists of one common share and one share purchase warrants
at $0.12 per share for a period of two years. All shares and warrants issued
were restricted under applicable securities rules.

On October 21, 2010, the Company
settled a portion of the debt, namely US$1,625 with CAB Financial Services by
converting 65,000 warrants into 32,500 common shares of the Company as per
Purchase Agreement dated October 27, 2008 at a price of $0.05 per share.

On October 21, 2010, the Company
settled a portion of the debt, namely US$2,166.65 with Christopher Bunka by
converting 86,667 warrants into 43,333 common shares of the Company as per
Purchase Agreement dated October 27, 2008 at a price of $0.05 per share.

As at October 31, 2010, Lexaria Corp.
has 12,926,348 shares issued and outstanding and 6,662,645 warrants issued and
outstanding.

A summary of warrants as at October 31,
2010 is as follows:

---

2010
    Number
      
    Exercise
      ExpiryType
    Outstanding
      
    Price
      DateWarrants
    499,893
      1
    $0.20
      May 31, 20124,545,000
      1
    $0.20
      July 10, 20111,617,752
      2
    CAD$0.22
      December 24, 2010*


|1. | Each warrant entitles a holder to purchase one common
      share.
|-- | ------------------------------------------------------------------
|2. | Two warrants entitle a holder to purchase one common
      share. 

* Subsequent to the year end, 132,600 warrants were exercise
and 66,300 common share were issued. The remaining warrants were expired
unexercised.

|5.  | **Oil and Gas Properties**
|--- | --------------------------
|    |                           
|(a) | **Proved properties**     
|    |                           
|    | (1)                       
|    |                           
|    |                           
|    |                           
|    |                           
|    |                           
|    |                           
|    |                           
|    |                           
|    |                           
|    |                           

---

The Company had a short-lived
opportunity to acquire additional fractional interests in the upcoming Belmont
Lake 12-4 well which is expected to be a horizontal well. An unrelated third
party did not participate in its right to participate
in the 12-4 well, and therefore a share of its interest (a non consent
interest) was made available to the other participating parties including
Lexaria. On August 28, 2009 and effective on September 1, 2009, to take best
advantage of this opportunity, the Company entered into four separate assignment
agreements, three of which were with people or companies with related
management. The Company received from these four parties proceeds of $371,608.57
to fund additional interests in this well. As a result, the Company has a 25.84%
perpetual gross interest in the well (18.0% net revenue interest); as well as a
5.2% net revenue interest in the non-consent interest. The non-consent interest
remains valid until such time as the well produces 500% of all costs and
expenses back to the participants in the form of revenue, at which time the
non-consent interest ends. Enertopia, a company with related management, has
acquired from Lexaria a 6.16% perpetual gross interest in the 12-4 well; David
DeMartini, a director of Lexaria, has acquired from Lexaria a 5% gross interest
in the non-consent interest in the 12-4 well; and 0743608 BC Ltd. a company
owned by the President of the Company, has acquired from Lexaria a 11.60% gross
interest in the non-consent interest in the 12-4 well.

On May 31, 2010, the Company signed a
Settlement Agreement with Enertopia Corp., whereby the Company issued 499,893
units at $0.12 per unit and each unit consists of one restricted common share
and one share purchase warrant at $0.20 per share for a period of two years in
exchange for the working interest initially assigned on August 28, 2009.

On June 16, 2010, the Company signed a
Settlement Agreement with a third party, who had originally participated in the
August 28, 2009, opportunity in the non-consent interest for Belmont Lake 12-4.
The Company returned back $144,063.46 to the third party and cancelled its
participation.

On July 29, 2010, the Company had
agreed with its Operators at Belmont Lake not to proceed to drill a horizontal
12-4 well. Rather, two of the three proposed vertical wells 12-2, 12-4, or 12-5
are proposed to be drilled in August 2010. To take best advantage of this
opportunity, the Company cancelled all previous agreements relating to August
28, 2009 with respect to Belmont Lake horizontal well 12-4 and entered into
three separate assignment agreements, of which all three were with people or
companies with related management. The Company received total proceeds of
$324,677.12 to fund additional interests in these wells. As a result, the
Company has a 32% perpetual gross interest in the wells (24.0% net revenue
interest); as well as a 8% gross interest (6% net revenue interest) in the
non-consent interest. The non-consent interest remains valid until such time as
the well produces 500% of all costs and expenses back to the participants in the
form of revenue, at which time the non-consent interest ends. Emerald Atlantic
LLC, a company owned by a director of Lexaria, has acquired from Lexaria a 8.74%
gross interest in the non-consent interest in two of the three vertical wells;
and 0743608 BC Ltd. a company owned by the President of the Company, has
acquired from Lexaria a 20.79% gross interest in the non-consent interest in the
two of the three vertical wells; an advisor to the Company has acquired from
Lexaria 2.46% gross interest in the non-consent interest in two of the three
vertical wells.

On September 13, 2010, Lexaria Corp.
(the Company) entered into three separate assignment agreements with 0743608
BC Ltd, solely owned by Director/Officer of the Company; Emerald Atlantic LLC,
solely owned by a Director of the Company, and the Senior VP Business
Development. (the Assignees), whereby the Assignees have paid a fee of
US$408,116.48 to earn a 24% share of the Companys gross non-perpetual 32%
interest in the three oil wells being drilled in Wilkinson County, Mississippi.
This agreement replaces the one signed on August 28, 2009. A balance of
$83,439.36, which is outstanding, will be received by the Company in the month
of September. As a result of the three assignment agreements, Lexaria receives
at no cost to the company, a carried interest of 8% in these

---

same rights and benefits. The Company
assigns, transfers and sets over to the Assignees, all proportionate rights,
interest and benefits in the Assigned Non Perpetual Interest held by or granted
to the Assignor in and to the Participation Agreement between the Company and
Griffin but limited to a gross 500% revenue payout based on the total amount
paid under the Initial Consideration and the Subsequent Consideration after
which all rights, interests and benefits cease.

As of October 31, 2010, there were
additional well interest changes or workovers pending of wells PP F-12, PP
F12-3, PP F12-4, PP F12-5 and PP F12-29.

(2) Mississippi and Louisiana, Frio-Wilcox
  Project

In December 2006, the first well CMR-US
39-14 was found to have sufficient hydrocarbons to become economic. USA 1-37 and
BR F-33 had started intermittent production from November 2007. The Company
applied the full cost method to account for its oil and gas properties.

As at January 31, 2007, the Company
abandoned Dixon #1 due to no economic hydrocarbons being present and $162,420 of
drilling costs was added to the capitalized costs. The Dixon #1 was the only
Wilcox well the Company has drilled to date. Every other well it has
participated in located in Mississippi and Louisiana is a Frio well.

On June 2, 2007, the Company abandoned
Randall #1 and $107,672 drilling costs was added to the capitalized costs in
determination of depletion expense.

During August to October 2007, three
additional wells, PP F-90, PP F-100, and PP F-111 were drilled in the area.
These Frio wells were abandoned due to modest gas shows and a total of $306,562
drilling costs was added to the capitalized costs in determination of depletion
expense.

During December 2007, two additional
wells, PP F-6A and PP F-83, were drilled and were plugged and abandoned due to
non-economic gas shows. A total of $247,086 drilling costs was added to the
capitalized costs in determination of depletion expense.

Properties
    
    October 31,
    
    
    Addition
    
    
    Depletion
    
    
    Write down
    
    
    October 31,2009
    
    
    
    
    
    for the
    
    
    in Carrying
    
    
    2010period
    
    
    ValueU.S.A. Proved property
    $
    2,823,277
    
    $
    416,235
    
    $
    (121,136
    )
    $
    -
    
    $
    3,118,376


Properties
    
    October 31,
    
    
    Addition
    
    
    Depletion
    
    
    Write down
    
    
    October 31,2008
    
    
    
    
    
    for the
    
    
    in Carrying
    
    
    2009period
    
    
    ValueU.S.A. Proved property
    $
    3,034,750
    
    $
    129,402
    
    $
    (340,875
    )
    $
    -
    
    $
    2,823,277


|(b) | Unproved
Properties
|--- | -------------------

---

**Cost added to****October 31,**
    
    
    **Addition**
    
    
    **capitalized**
    
    
    **October 31,****2008**
    
    
    
    
    
    cost/write down
    
    
    **2010**U.S.A.-Unprovedproperties
    $
    132,033
    
    $
    
    
    $
    (112,740
    )
    $
    19,293Canada-Unprovedproperties
    
    1
    
    
    -
    
    
    (1
    )
    
    0$
    132,034
    
    $
    
    
    $
    (112,741
    )
    $
    19,293


Properties
    
    October 31,
    
    
    Addition
    
    
    Cost added to
    
    
    October 31,2008
    
    
    
    
    
    capitalized
    
    
    2009cost/write downU.S.A.-Unprovedproperties
    $
    34,264
    
    $
    122,769
    
    $
    (25,000
    )
    $
    132,033Canada-Unprovedproperties
    
    1
    
    
    -
    
    
    -
    
    
    1$
    34,265
    
    $
    122,769
    
    $
    (25,000
    )
    $
    132,034


| | (1) | Strachan Leduc Reef, Alberta, Canada                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     | On September 23, 2005, the Company entered into an
      agreement to participate in the Strachan Leduc Reef Farm-In in Alberta,
      Canada. The Company made a payment of $218,739. (CDN $253,977) for a 4%
      participation in the costs of Strachan Leduc Reef Farm-In. In addition,
      the Company incurred $186,668 for required supplemental funds due to well
      hole problems. The Company will earn on completion, capped or abandoned
      with respect to the well to be drilled at 14 of 9-38-9-W5M the
      following:
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     | (iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     | The Company wrote down the cost of the property to a
      nominal value of $1 as the future realization of the property is uncertain
      in the fiscal year 2008.                                                                                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     | As at October 31, 2010, the Companys working interest in
      Strachan Leduc Reef property has expired and the nominal value of $1 has
      been written off.                                                                                                                                                                                                                                                                                                                                                                                

---

| | (2) | Mississippi and Louisiana, USA                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | The Company entered into an Agreement to acquire a
      working interest in multiple zones of potential oil and gas production in
      Mississippi and Louisiana. This Agreement contemplates up to a 50 well
      drill program for Wilcox and Frio wells, at the Companys option, within
      the defined area of mutual interest (AMI). The AMI includes over 200,000
      gross acres located non-contiguously between Southwest Mississippi and
      North East Louisiana.                                                                                                                                                                                                                                                                                    
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | The Company originally agreed to pay 40% of all prospect
      fees, mineral leases, surface leases, and drilling and completion costs to
      earn a net 32% of all production from all producible zones to the base of
      the Frio formation (Frio Targets); and, 30% of all production to the base
      of the Wilcox formation (Wilcox Targets). All working interests are to be
      registered in the name of Lexaria Corp.                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | The Joint Participation Agreement and Joint Lands
      Agreements are between Lexaria Corp. and Griffin & Griffin Exploration
      LLC (G&G) of Jackson, Mississippi.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | On June 21, 2007, the Company acquired an additional 10%
      from a third party for all rights, title and benefits excluding the seven
      wells drilled under the AMI Agreement between August 3, 2006 and June 19,
      2007, specifically wells CMR-USA-39-14, Dixon #1, Faust #1 TEC F-1, CMR/BR
      F-14, RB F-1 Red Bug #2, BR F-33, and Randall #1 F-4, and any offset wells
      that could be drilled to any of these specified wells.                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | On July 26, 2007, the Company acquired 5% from a third
      party for all rights, title and benefits in the seven wells drilled under
      the AMI Agreement between August 3, 2006 and June 19, 2007, specifically
      wells CMR-USA-39-14, Dixon #1, Faust #1 TEC F-1, CMR/BR F-14, RB F-1 Red
      Bug #2, BR F-33, and Randall #1 F-4, and any offset wells that could be
      drilled to any of these specified wells.                                                                                                                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     | On April 3, 2009, the Company entered into an Asset
      Purchase Agreement to acquire additional interests in its existing core
      producing Mississippi oil and gas properties. The Company paid $40,073.39
      to acquire an additional 2% working interest in the proven Belmont Lake
      oil and gas field, and an additional 10% working interest in potential
      nearby exploration wells. Further, the Company is required to pay $100 per
      month for a period of 4 years from the closing. Total working interest for
      Belmont Lake as of October 31, 2010 is 32%; and total working interest in
      the exploration wells on approximately 140,000 acres surrounding Belmont
      Lake in all directions as of October 31, 2010, is
60%.

|6. | Loan Payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | On April 1, 2010, we entered into a purchase agreement
      with CAB Financial Services Ltd., a company controlled by Chris Bunka, our
      President, Chief Executive Officer and Director, (Purchaser) for a non-
      secured promissory note in the amount of US$75,000 (the Promissory
      Note). The Purchaser agreed to purchase a non-secured 18% interest
      bearing Promissory Note of our company subject to and upon the terms and
      conditions of the Purchase Agreement. The Promissory Note is due and
      payable on April 1, 2012 or, if mutually agreed to by all parties then
      April 1, 2011. The Promissory Note may be prepaid in whole or in part at
      any time prior to April 1, 2012 by payment of 108% of the outstanding
      principal amount including accrued and unpaid interest.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | As long as the Promissory Note is outstanding, the
      Purchaser may voluntarily convert the Promissory Note including accrued
      and unpaid interest to common shares of our company at the conversion
      price of $0.30 per common share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

---

|   | The Company did not incur beneficiary conversion charges
      as the conversion price is great than the fair value of the Companys
      equity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|7. | (a) Secured loan payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | On October 27, 2008 the Company entered into a Purchase
      Agreement in the amount of CAD$900,000 of Notes being purchased by the
      President (CAD$400,000), the Presidents wholly-owned company
      (CAD$300,000) and a shareholder (CAD$200,000) of the Company
      (Purchasers). The Purchasers agreed to purchase an 18% interest bearing
      Promissory Note of the Company subject to and upon the terms and
      conditions of the Purchase Agreement. The Companys obligations to repay
      the Promissory Note will be secured by certain specified assets of the
      Company pursuant to a Security Agreement. As long as the Promissory Note
      is outstanding, the Purchasers may voluntarily convert the Promissory Note
      to Common Shares at the conversion price of $0.45 per share of Common
      Stock. The Promissory Note matures on October 27, 2010 or by mutual
      agreement by all parties on October 27, 2009.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | In connection with the Purchase Agreement, the Company
      issued a total of 390,000 (1,560,000 pre- consolidation) warrants which
      two warrants entitle a holder to purchase a common share of the Company of
      which 195,000 (780,000 pre-consolidation) warrants are eligible at $0.05
      (adjusted price) and 195,000 (780,000 pre-consolidation) warrants are
      eligible at $0.05 (adjusted price) per share and expire October 27, 2009
      and October 27, 2010, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | The Company did not incur beneficiary conversion charges
      as the conversion price is greater than the fair value of the Companys
      equity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | As at the date of the issuance of the above noted
      Promissory Note, the Company allocated CAD$21,321 and CAD$683,559 to
      warrants (additional paid-in capital) and Promissory Note based on their
      relative fair value. On October 31, 2008, the allocated Promissory Note
      was revalued as $723,857 based on the effective interest rate of 18% per
      annum and related foreign exchange rate.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | On July 10, 2009 the Purchasers converted $45,000 of the
      Promissory Note into equity at $0.05.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | On October 27, 2009, 191,000 warrants were exercised for
      95,500 common shares. As at October 31, 2009 the Promissory Note is valued
      at $788,795 based on the effective interest rate of 18% per annum and
      related foreign exchange rate.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | On October 21, 2010, the Company settled a portion of the
      debt, namely US$1,625 with CAB Financial Services by converting 65,000
      warrants into 32,500 common shares of the Company as per Purchase
      Agreement dated October 27, 2008 at a price of $0.05 per share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | On October 21, 2010, the Company settled a portion of the
      debt, namely US$2,166.65 with Christopher Bunka by converting 86,667
      warrants into 43,333 common shares of the Company as per Purchase
      Agreement dated October 27, 2008 at a price of $0.05 per share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | On October 21, 2010, the Company entered into an
      amendment with loan holders to extend the loan to be on a month-to-month
      basis with the same terms and conditions as pursuant to the amendment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | (b)    Unsecured Loan Payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | On September 13, 2010, we entered into a demand loan
      agreement and promissory note with CAB Financial Services Ltd. (the
      Lender), a company controlled by a director and officer of our company.
      The principal amount of the note is US$90,000. The loan agreement and
      promissory note provides that the debt be payable on demand. The note has
      an interest rate of 12% per annum.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

---

|8. | Related Party Transactions                                                                                                                                                                                                                                                   
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                              
|   | (a)                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                              
|   | (b)                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                              
|   | (c)                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                              
|   | (d)                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                              
|   | (e)                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                              
|   | (f)                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                              
|   | (g)                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                              
|9. | Stock Options                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                              
|   | On July 8, 2009, the Company granted 75,000 stock options
      to directors and consultants of the Company with exercise prices of $0.20,
      vested immediately, and re-priced 325,000 of the previously issued stock
      options to $0.20 that expire over 1.47 years.
|   |                                                                                                                                                                                                                                                                              
|   | On July 23, 2009, the Company had a 1 for 4 share
      consolidation. The 2,000,000 maximum granting of stock options was then
      reduced to 500,000 stock options.                                                                                                      
|   |                                                                                                                                                                                                                                                                              
|   | On January 20, 2010, the Company approved a new 2010
      Equity Compensation plan and granted 975,000 stock options to directors and
consultants of the Company with exercise prices of $0.20, vested immediately and
expiring on January 20, 2015.                        

---

On August 16, 2010, the Company granted
150,000 stock options to a consultant of the Company with an exercise price of
$0.20, vested 75,000 immediately and 75,000 on August 16, 2011 and expiring on
August 16, 2015.

For the year ended October 31, 2010,
the Company recorded a total of $161,366 (October 31, 2009 - $56,912) for stock
based compensation expenses.

A summary of the stock options for the
year ended October 31, 2010 is presented below:

| |                           |  | Options
      Outstanding |  
| | ------------------------- |  | ------------------------- | -
| |                           |  |                           |  
| |                           |  | Number of Shares          |  
| | Balance, October 31, 2008 |  | 325,000                   |  
| | Granted                   |  | 275,000                   |  
| | Expired                   |  | (100,000                  | )
| | Balance, October 31, 2009 |  | 500,000                   |  
| | Granted                   |  | 1,125,000                 |  
| | Expired                   |  | (100,000                  | )
| | Balance, October 31, 2010 |  | 1,525,000                 |  

*The exercise price is post re-priced.

The fair value of each option granted
has been estimated as of the date of the grant using the Black-Scholes option
pricing model with the following assumptions:

Period ended October 31, 2010
    Period ended October 31, 2009Expected volatility
    145.85%
    129.38%Risk-free interest rate
    2.46%
    1.48%Expected life
    5 years
    2.28 yearsDividend yield
    0.0%
    0.00%


A summary of weighted average fair
value of stock options granted during the year ended October 31, 2010 is as
follows:

| |                                                            |   | Weighted |  |   | Weighted | 
| | ---------------------------------------------------------- | - | -------- |  | - | -------- | 
| |                                                            |   | Average  |  |   | Average  | 
| |                                                            |   | Exercise |  |   | Fair     | 
| | Year ended October
      31, 2010                          |   | Price    |  |   | Value    | 
| |                                                            |   |          |  |   |          | 
| | Exercise price is greater than market price at grant date: | $ | 0.20     |  | $ | 0.14     | 

| |                                                            |   | Weighted |  |   | Weighted | 
| | ---------------------------------------------------------- | - | -------- |  | - | -------- | 
| |                                                            |   | Average  |  |   | Average  | 
| |                                                            |   | Exercise |  |   | Fair     | 
| | Year ended October
      31, 2009                          |   | Price    |  |   | Value    | 
| |                                                            |   |          |  |   |          | 
| | Exercise price is greater than market price at grant date: | $ | 0.20     |  | $ | 0.16     | 

---

The Company has the following options
outstanding and exercisable.

October 31, 2010
      Options outstanding
      Options exercisableWeighted
      Weighted
      
      Weightedaverage
      Average
      
      AverageRange of
      Number
      remaining
      Exercise
      Number
      ExerciseExercise prices
      of
        shares
      contractual life
      Price
      of
        shares
      Price$0.20
      150,000
      4.79 years
      $0.20
      75,000
      $0.20$0.20
      975,000
      4.22 years
      $0.20
      975,000
      $0.20$0.20
      75,000
      0.72 years
      $0.20
      75,000
      $0.20$0.20
      325,000
      0.64
        years
      $0.20
      325,000
      $0.20Total
      1,525,000
      3.34 years
      $0.20
      1,450,000
      $0.20


|10. | Commitments and Significant Contracts                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | On November 27, 2008, the Company entered into a
      Consulting Agreement with CAB Financial Services Ltd. for consulting
      services of CAB on a continuing basis for a consideration of US$8,000 per
      month plus GST.                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | On May 12, 2009 the Company entered into a consulting
      agreement with BKB Management Ltd. to act as the Chief Financial Officer
      and a Director for a period of six months for a consideration of CAD
      $4,500 per month plus GST. This agreement replaces the September 1, 2008,
      Controller Agreement with CAB Financial Services Ltd. Subsequent to
      October 31, 2010, effective January 1, 2011, the consideration was
      increased to CAD$5,500 per month plus GST/HST.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | On August 5, 2010 we entered into a three-month
      Management agreement with Tom Irkhe, whereby Mr. Irkhe will act as the
      Senior Vice-President, Business Development for the Company for
      consideration of US$3,125 per month and has signed a revised agreement to
      continue the Management relationship on a continuing month to month
      basis.                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | Note 5(2) 6, and 7.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|11. | Income Tax                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | The Company's provision for income taxes comprise of the
      following:                                                                                                                                                                                                                                                                                                                                                                                                                              

| |                        | 2010  | 2009 
| | ---------------------- | ----- | -----
| |                        |       |      
| | 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 35% for
the following reasons:

| |                             | 2010        | 2009       
| | --------------------------- | ----------- | -----------
| |                             |             |            
| | U.S. Federal Statutory Rate | $ (132,973) | $ (256,215)
| |                             |             |            
| | Tax Benefit Not Recognized  | $ 132,973   | $ 256,215  
| |                             |             |            
| | Tax Expenses                | $ Nil       | $ Nil      

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

| |                                        |   | 2010       |   |   | 2009       |  
| | -------------------------------------- | - | ---------- | - | - | ---------- | -
| | Deferred Tax Assets:                   |   |            |   |   |            |  
| | Net Operating Loss Carry
      forward | $ | 1,191,357  |   | $ | 1,039,371  |  
| | Valuation Allowance                    | $ | (1,191,357 | ) | $ | (1,039,371 | )
| | Net Deferred Tax Assets                | $ | Nil        |   | $ | Nil        |  

Changes in the valuation allowance
relate primarily to net operating losses, resources expenditures and others
which are not currently recognized. The Company has reviewed its net deferred
tax assets and has not recognized potential tax benefits arising there from
because at this time management believes it is more likely than not that the
benefits will not be realized in future year.

For tax purpose, as of October 31,
2010, the Company has operating loss carry forwards of approximately $3,045,000
which expire in 2025 through 2030 as follow:

---

Year
    
      Amount2025
    $
      76,0002026
    
      508,0002027
    
      1,056,0002028
    
      720,0002029
    
      753,0002030
    
      391,000Total
    $
      3,504,000


|12. | Segmented Information                                                                                                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                              
|    | The Companys business is considered as operating in one
      segment (United States) 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.
|    |                                                                                                                                                                                                                                                                                              
|13. | Comparative Figures                                                                                                                                                                                                                                                                          

|    | Certain 2009 comparative figures have been reclassified
      to conform with the financial statements presentation adopted for
    2010.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                          
|14. | Subsequent Events                                                                                                                        

On November 16, 2010, the Company
settled the debt incurred as a result of that consulting agreement, being
US$9,375, to Mr. Tom Ihrke by issuing 40,761 restricted common shares of the
Company at a price of $0.23 per share. (subsequently issued)

On November 30, 2010, we closed the
first tranche of a private placement offering of convertible debentures in the
aggregate amount of US$450,000. (subsequeint received) The convertible
debentures mature on November 30, 2012, subject to forced conversion as set out
in the convertible debenture certificate. The convertible debentures pay an
interest rate of 12% per annum (on a simple basis) and are convertible at
US$0.35 per unit. Each unit is comprised of one share of our common stock and
one share purchase warrant. Each warrant entitles the holder thereof to purchase
one share at a price of US$0.40 per share from the earlier of the maturity date
of the convertible debenture or one year from conversion of the convertible
debenture. We also entered into a general security agreement with the
subscribers, whereby the obligations to repay the convertible debenture are
secured by certain of our assets.

On December 2, 2010, the Company
entered into a month to month management agreement with Tom Ihrke, where by Mr.
Ihrke will continue to act as the Senior Vice-President Business Development for
the Company. The Company will pay a monthly consulting fee of $3,125.

On December 16, 2010, we closed the
second tranche of a private placement offering of convertible debentures in the
aggregate amount of US$170,000 (subsequently received). The convertible
debentures mature on November 30, 2012, subject to forced conversion as set out
in the convertible debenture certificate. The convertible debentures pay an
interest rate of 12% per annum (on a simple basis) and are convertible at
US$0.35 per unit. Each unit is comprised of one share of our common stock and
one share purchase warrant. Each warrant entitles the holder thereof to purchase
one share at a price of US$0.40 per share from the earlier of the maturity date
of the convertible debenture or one year from conversion of the convertible
debenture. We also entered into a general security agreement with the
subscribers, whereby the obligations to repay the convertible debenture are
secured by certain of our assets.

---

|    | On December 16, 2010, the Company entered into an
      assignment agreement with Emerald Atlantic LLC, solely owned by a Director
      of the Company (the Assignee), whereby the Assignee has paid a fee of
      US$30,075.95 to earn 18% of a 4.423% share of the Companys net revenue
      interest after field operating expenses for a well to be drilled in
      Wilkinson County.                                                                                                                                                  
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | On December 13, 2010, the Company entered into a 21 day
      investor relations agreement with Pentony Enterprise LLC for a total
      consideration of $6,000.                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | Effective January 1, 2011, the CFOs compensation was
      increased to CAD$5,500 per month plus HST/GST.                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | Subsequent to the year end, the Company issued 66,300
      common shares in pursuant to the exercise of warrants for a total proceeds
      of CAD$14,586.                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|15. | Supplemental Information On Natural Gas and Oil
      Exploration, Development and Production Activities
  (Unaudited):                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | Standardized measure of discounted future net cash
      flows relating to proved oil and gas reserve quantities:                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | The following summarizes the policies we used in the
      preparation of the accompanying natural gas and oil reserve disclosures,
      standardized measures of discounted future net cash flows from proved
      natural gas and oil reserves and the reconciliations of standardized
      measures from year to year. The information disclosed, as prescribed by
      the Statement of Financial Accounting Standards No. 69 (ASC 932), is an
      attempt to present the information in a manner comparable with industry
      peers.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | The information is based on estimates of proved reserves
      attributable to our interest in natural gas and oil properties as of
      October 31, 2010. These estimates were prepared by independent petroleum
      consultants. Proved reserves are estimated quantities of natural gas and
      crude oil which geological and engineering data demonstrate with
      reasonable certainty to be recoverable in future years from known
      reservoirs under existing economic and operating conditions.                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | The standardized measure of discounted future net cash
      flows from production of proved reserves was developed as
  follows:                                                                                                                                                                                                                                                                                                                                                                                                                

| | 1. | Estimates are made of quantities of proved reserves and
      future periods during which they are expected to be produced based on
      year-end economic conditions.                        
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                
| | 2. | The estimated future cash flows are compiled by applying
      year-end prices of natural gas and oil relating to our proved reserves to
      the year-end quantities of those reserves.      
| |    |                                                                                                                                                                                                
| | 3. | The future cash flows are reduced by estimated production
      costs, costs to develop and produce the proved reserves and abandonment
      costs, all based on year-end economic conditions.
| |    |                                                                                                                                                                                                
| | 4. | Future net cash flows are discounted to present value by
      applying a discount rate of 10%.                                                                                                

The standardized measure of discounted
future net cash flows does not purport, nor should it be interpreted, to present
the fair value of our natural gas and oil reserves. An estimate of fair value
would also take into account, among other things, the
recovery of reserves not presently classified as proved, anticipated future
changes in prices and costs, and a discount factor more representative of the
time value of money and the risks inherent in reserve estimates.

---

The standardized measure of discounted
future net cash flows relating to proved natural gas and oil reserves is as
follows:

| |                                                              |  | USD$       |  
| | ------------------------------------------------------------ |  | ---------- | -
| | Future cash inflows                                          |  | 10,235,672 |  
| | Future production costs                                      |  | (2,111,745 | )
| | Future development costs                                     |  | (848,227   | )
| | Future net cash flows - undiscounted                         |  | 7,275,700  |  
| | 10% annual discount for estimated timing of
      cash flows |  | (893,508   | )
| | Standardized measure of discounted future net cash flows     |  | 6,382,192  |  

Year-end price per Mcf of natural gas
used in making standardized measure determinations as of October 31, 2010 was
$4.50. Year-end price per Bbl of oil used in making these same calculations was
$81.47.

Estimated Net quantities of Natural
Gas and Oil Reserves:

The following table sets forth our
proved reserves, including changes, and proved developed reserves at the end of
October 31, 2010.

| |                                  |  |           |   |  | Natural |   |  | Crude Oil   |  
| | -------------------------------- |  | --------- | - |  | ------- | - |  | ----------- | -
| |                                  |  | Crude Oil |   |  | Gas     |   |  | Equivalents |  
| |                                  |  | (MBbls)   |   |  | (MMcf)  |   |  | (MBbls)     |  
| | Proved reserves:                 |  |           |   |  |         |   |  |             |  
| | Beginning of the year reserve    |  | 77.18     |   |  | 20.80   |   |  | 80.65       |  
| | Adjustments of reserves in place |  | 53.10     |   |  | (20.20  | ) |  | 49.73       |  
| | Productions                      |  | (4.64     | ) |  | (0.60   | ) |  | (4.74       | )
| | End of year reserves             |  | 125.64    |   |  | 0       |   |  | 125.64      |  
| |                                  |  |           |   |  |         |   |  |             |  
| | Proved developed reserves:       |  |           |   |  |         |   |  |             |  
| | Beginning of the year reserve    |  | 26.63     |   |  | 20.80   |   |  | 30.10       |  
| | End of year reserves             |  | 57.33     |   |  | 0       |   |  | 57.33       |  

---

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.   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 October 31, 2010, 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 October 31, 2010. 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
October 31, 2010, 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.

---

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 October 31, 2010 that
have materially or are reasonably likely to materially affect, our internal
controls over financial reporting.

Item 9B.   Other Information

None.

PART III

Item 10.   Directors, Executive Officers and
Corporate Governance

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

Name
      Position Held with our
      Company
      Age
      Date First Elected Or
      AppointedChris Bunka
    Chairman, Director and Chief
      Executive Officer
    49
    October 26, 2006 February 14, 2007Bal Bhullar
    Chief Financial Officer and
      Director
    41
    May 12, 2009David DeMartini
    Director
    68
    September 8, 2009Tom Ihrke
    Senior Vice-President, Business
      Development
    43
    August 5, 2010


Business Experience

The following is a brief account of the education and business
experience of each director and executive officer during 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. Christopher Bunka Chairman/CEO

Mr. Bunka has served as our director, chairman, president and
chief executive officer since October 26, 2006. From February 14, 2007 until May
12, 2009 he was the chief financial officer of our company. Since October 26,
2006 Mr. Bunka has successfully completed both equity and debt financings for
the Company, completed the acquisition of additional oil & gas assets,
disposed of other oil & gas assets, and restructured the Company. He has
refocused the Company from one of natural gas exploration to that of development
of existing oil reserves, and has engaged additional geophysical expertise in an
attempt to better understand its exploration and development opportunities. Mr.
Bunka has privately evaluated numerous oil and gas properties and investment
opportunities for his private investments during the past 10 years.

---

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.

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 traded 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/CEO of Enertopia Corp, (symbol ENRT-OTC) a clean energy company. Mr.
  Bunka is a director of Defiance Capital Corp., (symbol DEF-TSXV) a Canadian
  resource company.

Ms. Bal Bhullar, CFO and Director

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, start-up
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, CFO for public company Enertopia Corp (symbol
ENRT-OTC) and former CFO for ISEE3D Inc. (symbol ICT-TSXV).

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.

Mr. Tom Ihrke, Senior Vice-President, Business
Development

Tom Ihrke recently sold his General Partner interest in
Commissum Capital Management, a capital management and advisory firm which he
co-founded in 2001. During his tenure at Commissum, Tom served as portfolio
manager and trader of the firm's investment fund, while also being retained as a
consultant by several companies, including Lexaria, to advise on such matters as
capital structure, accessing the capital markets, and mergers and acquisitions.
Between 1993 and 2001 Tom worked for Morgan Keegan and Company as Senior
Investment Banker in the firm's Financial Institution's Group, and prior to that
as Senior Trader and Market Maker, overseeing the firm's proprietary trading of
financial and energy shares. From 1990 to 1991 Tom traded commodities for his
own account as a floor trader on the Chicago Board of Trade, owning a seat on
the Mid-America Commodities Exchange. Tom earned his Bachelor of Science at
Texas Christian University in 1989, and received his Masters of Business
Administration at the University of Tennessee in 1993.

Mr. David DeMartini, Director

Dr. DeMartini received a B.S. Physics cum laude at the
University of Notre Dame in 1963; and a PhD Physics at Ohio State University in
1969. He is the author of 19 public technical publications and 78 publications
that are proprietary to Shell Oil Company. He has served as a Research Advisor
at Shell Development Company at the Bellaire Research Center in Houston; a
Senior Staff Supervisor; and a Senior Staff Geophysicist. He has belonged to the
Society of Exploration Geophysicists from 1970 to present and was inducted to
the Offshore Energy Center Hall of Fame as a Technology Pioneer on September 30,
2006. He has made significant contributions in the fields of rock physics theory
and applications; seismic amplitude interpretation, borehole geophysics, and
more. Dr. DeMartini was professionally engaged by the Company in 2007 as a
consulting geophysicist to assist in interpretations of seismic data at its
Mississippi properties, and has been a director of the Company since September
9, 2009.

---

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.    A petition under the Federal bankruptcy
laws or any state insolvency law was filed by or against, or a receiver, fiscal
agent or similar officer was appointed by a court for the business or property
of such person, or any partnership in which he was a general partner at or
within two years before the time of such filing, or any corporation or business
association of which he was an executive officer at or within two years before
the time of such filing;

2.    Such person was convicted in a criminal
proceeding or is a named subject of a pending criminal proceeding (excluding
traffic violations and other minor offenses);

3.    Such person was the subject of any order,
judgment, or decree, not subsequently reversed, suspended or vacated, of any
court of competent jurisdiction, permanently or temporarily enjoining him from,
or otherwise limiting, the following activities:

| | i.   | Acting as a futures commission merchant, introducing
      broker, commodity trading advisor, commodity pool operator, floor broker,
      leverage transaction merchant, any other person regulated by the Commodity
      Futures Trading Commission, or an associated person of any of the
      foregoing, or as an investment adviser, underwriter, broker or dealer in
      securities, or as an affiliated person, director or employee of any
      investment company, bank, savings and loan association or insurance
      company, or engaging in or continuing any conduct or practice in
      connection with such activity
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | ii.  | Engaging in any type of business practice; or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | iii. | Engaging in any activity in connection with the purchase
      or sale of any security or commodity or in connection with any violation
      of Federal or State securities laws or Federal commodities
  laws;                                                                                                                                                                                                                                                                                                                                                                                                                           

4.    Such person was the subject of any order,
judgment or decree, not subsequently reversed, suspended or vacated, of any
Federal or State authority barring, suspending or otherwise limiting for more
than 60 days the right of such person to engage in any activity described in
paragraph (f)(3)(i) of this section, or to be associated with persons engaged in
any such activity;

5.    Such person was found by a court of
competent jurisdiction in a civil action or by the Commission to have violated
any Federal or State securities law, and the judgment in such civil action or
finding by the Commission has not been subsequently reversed, suspended, or
vacated;

6.    Such person was found by a court of
competent jurisdiction in a civil action or by the Commodity Futures Trading
Commission to have violated any Federal commodities law, and the judgment in
such civil action or finding by the Commodity Futures Trading Commission has not
been subsequently reversed, suspended or vacated;

7.    Such person was the subject of, or a party
to, any Federal or State judicial or administrative order, judgment, decree, or
finding, not subsequently reversed, suspended or vacated, relating to an alleged
violation of:

| | i. | Any Federal or State securities or commodities law or
      regulation; or
| | -- | --------------------------------------------------------------------------

---

| | ii.  | Any law or regulation respecting financial institutions
      or insurance companies including, but not limited to, a temporary or
      permanent injunction, order of disgorgement or restitution, civil money
      penalty or temporary or permanent cease-and-desist order, or removal or
      prohibition order; or
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                                           
| | iii. | Any law or regulation prohibiting mail or wire fraud or
      fraud in connection with any business entity; or                                                                                                                                                                                                            

8.    Such person was the subject of, or a party
to, any sanction or order, not subsequently reversed, suspended or vacated, of
any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange
Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section
1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent
exchange, association, entity or organization that has disciplinary authority
over its members or persons associated with a member.

|1. | 
|-- | 
|   | 
|2. | 
|   | 
|3. | 
|   | 
|4. | 

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 October 31, 2010, all filing requirements
applicable to our officers, directors and greater than 10% percent beneficial
owners were complied with, with the exception of the following:

Name
      Number of Late
      Reports
      Number of Transactions Not
      Reported on a Timely Basis
      Failure to File
      Requested FormsChristopher Bunka
    Nil
    Nil
    NilBal Bhullar
    Nil
    Nil
    NilDavid DeMartini
    Nil
    Nil
    NilTom Ihrke
    Nil
    Nil
    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 Form SB-2 filed on September 20, 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 October 31, 2010. 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 October 31, 2010, 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.

---

Item 11.    Executive Compensation

The particulars of the compensation paid to the following
persons:

- our principal executive officer;
- each of our two most highly compensated executive officers who were serving
  as executive officers at the end of the years ended October 31, 2010 and 2009;
  and
- up to two additional individuals for whom disclosure would have been
  provided under (b) but for the fact that the individual was not serving as our
  executive officer at the end of the years ended October 31, 2010 and 2009,

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 TABLEName and
        Principal Position
      Year
      Salary ($)
      Bonus ($)
      Stock
        **Awards ($)**
      Option
        Awards ($)(4)
      Non- Equity
        IncentivePlan Compensa-tion
        ($)
      Nonqualified
        Deferred **Compensa** tion **Ea-rnings**($)
      All
        Other **Compensa** - tion ($)
      Total ($)Christopher 
        Bunka(1), 
        President, Chief 
        Executive 
        Officer, & 
        Former Chief 
        Financial 
        Officer 
        (Principal 
        Executive 
        Officer)
      2010 
        2009
      $97,200 
        $117,721
      Nil 
        Nil
      Nil 
        Nil
      $71,308 
        $12,394
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      $168,508 
        $130,115Bal Bhullar(2), 
        Chief Financial 
        Officer
      2010 
        2009
      $52,636 
        $26,204
      N/A 
        N/A
      Nil 
        Nil
      $42,785 
        $5,888
      N/A 
        N/A
      N/A 
        N/A
      N/A 
        N/A
      $95,421 
        $32,092Tom Ihrke(3)
        Sr. Vice 
        President, 
        Business 
        Development
      2010
      $8,557
      N/A
      Nil
      $25,881
      N/A
      N/A
      Nil
      $34,438


|(1) | Mr. Bunka was appointed president and chief executive
      officer on October 26, 2006, and was chief financial officer of our
      company from February 14, 2007 until May 12, 2009.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                         
|(2) | Ms. Bhullar was appointed Chief Financial Officer on May
      12, 2009                                                                                                                 

---

|(3) | Mr. Ihrke was appointed Senior Vice President, Business
      Development on August 5, 2010.                                                                                                                                                                    
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                 
|(4) | The fair value of the option award was estimated using
      the Black-Scholes pricing model with the following assumptions: expected
      volatility of 145.85%, riskfree interest rate of 2.46%, expected life of
      5 years, and dividend yield of 0.0%.

The Company is currently paying its President US$8,000 per
month as consulting fees and is paying its Chief Financial Officer CAD$4,500 per
month in consulting fees. Subsequent to year end, on January 1, 2011, the Chief
Financial Officers compensation increased to CAD$5,500 per month in consulting
fees.

Employment/Consulting Agreements

We have entered into a consulting agreement and a controller
agreement with CAB Financial Services Ltd., a company controlled by our
president, chief executive officer, Christopher Bunka on October 26, 2006,
wherein he is reimbursed at the rate of $2,500 per month for the consulting
agreement. Effective November 27, 2008 the rate has been changed to $8,000 per
month. Under this agreement, Mr. Bunka provides the services of chief executive
officer, chairman of the board, and president to our Company, such duties and
responsibilities to include the provision of management and consulting services,
strategic corporate and financial planning, management of the overall business
operations of our company, and the supervision of office staff and exploration
consultants.

The controller agreement was entered into on March 1, 2008
wherein he is reimbursed at the rate of $4,500 per month for accounting and
management services. This controller agreement was terminated on May 11, 2009.

On May 12, 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. Subsequent to year end,
on January 1, 2011, the Chief Financial Officers compensation increased to
CAD$5,500 per month plus HST/GST in consulting fees.

On August 5, 2010 we entered into a three-month Management
agreement with Tom Irkhe, whereby Mr. Irkhe will act as the Senior
Vice-President, Business Development for the Company for consideration of
US$3,125 per month and has signed a revised agreement to go on a continuing
basis.

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 October 31, 2010.

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-ENDOPTION AWARDS
      STOCK AWARDSName 
        (a)
      Number of 
        Securities 
        Underlying 
        Unexercised 
        Options 
        (#) 
        Exercisable 
        (b)
      Number of 
        Securities 
        Underlying 
        Unexercised 
        Options 
        (#) 
        Unexercisable
        (c)
      Equity 
        Incentive 
        Plan 
        Awards: 
        Number of 
        Securities 
        Underlying 
        Unexercised 
        Unearned 
        Options 
        (#) 
        (d)
      Option 
        Exercise 
        Price 
        ($) 
        (e)
      Option 
        Expiration 
        Date 
        (f)
      Number 
        of 
        Shares 
        or Units 
        of Stock 
        That 
        Have 
        Not 
        Vested 
        (#) 
        (g)
      Market 
        Value of 
        Shares 
        or Units 
        of Stock 
        That 
        Have 
        Not 
        Vested 
        ($) 
        (h)
      Equity 
        Incentive 
        Plan 
        Awards: 
        Number of 
        Unearned 
        Shares, 
        Units or 
        Other 
        Rights 
        That 
        Have Not 
        Vested 
        (#) 
        (i)
      Equity 
        Incentive 
        Plan 
        Awards: 
        Market or 
        Payout 
        Value of 
        Unearned 
        Shares, 
        Units or 
        Other Rights 
        That Have 
        Not Vested 
        (#) 
        (j)Christopher 
        Bunka
      100,000 
        100,000 
        18,750 
        500,000
      - 
        - 
        -
      
      $0.20 
        $0.20 
        $0.20 
        $0.20
      2011/04/26 
        2011/07/20 
        2011/07/20 
        2015/01/20Bal Bhullar
      12,500 
        37,500 
        300,000
      - 
        -
      
      $0.20 
        $0.20 
        $0.20
      2011/07/20 
        2011/07/20 
        2015/01/20David 
        DeMartini
      6,250 
        100,000
      - 
        -
      
      $0.20 
        $0.20
      2011/07/20 
        2015/01/20Tom Ihrke
      25,000 
        12,500 
        6,250 
        25,000 
        75,000
      - 
        - 
        - 
        75,000
      
      $0.20 
        $0.20 
        $0.20 
        $0.20 
        $0.20
      2011/06/18 
        2011/07/20 
        2011/07/20 
        2015/01/20 
        2015/08/16


Option Exercises

During our fiscal year ended October 31, 2010 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.

---

Compensation Committee Interlocks and Insider Participation

During 2010, we did not have a compensation committee or
another committee of the board of directors performing equivalent functions.
Instead the entire board of directors performed the function of compensation
committee. Our board of directors approved the executive compensation, however,
there were no deliberations relating to executive officer compensation during
2010.

Compensation Committee Report

None.

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

The following table sets forth, as of December 17, 2010,
certain information with respect to the beneficial ownership of our common
shares by each shareholder known by us to be the beneficial owner of more than
5% of our common shares, as well as by each of our current directors and
executive officers as a group. Each person has sole voting and investment power
with respect to the shares of common stock, except as otherwise indicated.
Beneficial ownership consists of a direct interest in the shares of common
stock, except as otherwise indicated.

Name and Address of Beneficial Owner
      Amount and Nature ofBeneficial
        Ownership
      Percentageof ClassChristopher Bunka 
        Kelowna BC Canada
      6,055,257 (1)
      28.7%Bal Bhullar 
        Vancouver, BC
      431,250 (2)
      0.3*David DeMartini, 
        Texas, Houston
      3,852,678(3)
      12.9%Tom Ihrke 
        South Carolina
      469,835(4)
      1.9%Directors and Executive Officers as a Group (3 persons)
        (4)
      4,744,606
      43.8%5% StockholdersChristopher Bunka 
        Kelowna BC Canada
      6,055,257 (1)
      28.7%David DeMartini, 
        Texas, Houston
      1,606,250(3)
      12.9%


*            
Less than 1%.

(1)         
Includes 2,478,521 shares held in the name of C.A.B. Financial Services and
1,257,986 shares held directly by Chris Bunka. Includes 1,600,000 warrants held
in the name of C.A.B. Financial Services. Includes 718,750 options which are
exercisable at $0.20 within 60 days of December 27, 2010.

(2)         
Includes 40,000 warrants held and 350,000 options which are exercisable at $0.20
within 60 days of December 27, 2010.

(3)         
Includes 1,500,000 warrants, 571,428 in convertible debt warrants and 106,250
options which are exercisable at $0.20 within 60 days of December 27, 2010.

(4)         
Includes 218,750 options of which 143,500 are exercisable at $0.20 within 60
days of December 27, 2010.

(5)          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 December 27,
2010. As of January 25, 2011, there were 13,033,409 shares of our Companys
common stock issued and outstanding.

---

Changes in Control

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

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

Except as disclosed herein, no director, executive officer,
shareholder holding at least 5% of shares of our common stock, or any family
member thereof, had any material interest, direct or indirect, in any
transaction, or proposed transaction since the year ended October 31, 2010, 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, Bal Bhullar and David DeMartini. 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 October 31, 2010 and for fiscal year ended October 31, 2009
for professional services rendered by the principal accountant for the audit of
our annual financial statements and review of the financial statements included
in our quarterly reports on Form 10-Q and services that are normally provided by
the accountant in connection with statutory and regulatory filings or
engagements for these fiscal periods were as follows:

---



Year EndedOctober 31, 2010
      October 31, 2009Audit Fees
      16,202
      16,275Audit Related Fees
      8,952
      16,867Tax Fees
      Nil
      NilAll Other Fees
      Nil
      NilTotal
      27,154
      33,142


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 October 31, 2010 and
October 31, 2009 in connection with statutory and regulatory filings or
engagements.

Audit related Fees. There were $16,202 audit related
fees paid to Chang Lee LLP for the fiscal year ended October 31, 2010 and
$16,275 for the fiscal year ended October 31, 2009.

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 October 31, 2010 and October 31, 2009, 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.

---

PART IV

Item 15.    Exhibits, Financial Statement
Schedules

|(a) | Financial Statements
|--- | --------------------
|    |                     
|    | (1)                 
|    |                     
|    | (2)                 
|    |                     
|(b) | Exhibits            

*        Filed herewith.

|Exhibit No. | Document Description                                                           
|----------- | -------------------------------------------------------------------------------
|            |                                                                                
|(3)         | Articles of
      Incorporation and By-laws                                    
|            |                                                                                
|3.1(1)      | Articles of
      Association                                                  
|            |                                                                                
|3.2(1)      | Bylaws                                                                         
|            |                                                                                
|3.3(9)      | Amendments to
      Articles of Incorporation                                  
|            |                                                                                
|3.4(10)     | Amended and
      restated Bylaws                                              
|            |                                                                                
|(4)         | Instruments
      defining the rights of security holders, including indentures
|            |                                                                                
|4.1(1)      | Specimen Stock
      Certificate                                               
|            |                                                                                
|4.2         | Form of Warrant
      dated July 10, 2009                                      
|            |                                                                                
|4.3         | Form of Warrant
      dated December 24, 2009                                  
|            |                                                                                
|(10)        | Material
      Contracts                                                       
|            |                                                                                
|10.1(1)     | Strachan
      Participation & Farmout Agreement                               
|            |                                                                                
|10.2(1)     | Griffin Model
      Form Operating Agreement                                   
|            |                                                                                
|10.3(1)     | Griffin Drilling
      Program Agreement                                       
|            |                                                                                
|10.4(2)     | Management
      Services Agreement with Leonard MacMillan                     
|            |                                                                                
|10.5(3)     | Consulting
      Agreement with CAB Financial Services Ltd.                    
|            |                                                                                
|10.6(4)     | Agreement with
      Brink Resources                                           
|            |                                                                                
|10.7(4)     | Agreement with
      0743608 BC Ltd.                                           
|            |                                                                                
|10.8(5)     | Amended Agreement
      and Promissory Notes                                   

---

|10.9(6)   | Consulting Agreement with CAB
      Financial Services Ltd.                           
|--------- | --------------------------------------------------------------------------------------
|          |                                                                                       
|10.10(7)  | Agreement with Delta Oil &
      Gas, Inc. and The Stallion Group                     
|          |                                                                                       
|10.11(8)  | Agreement with BKB Management
      Ltd.                                              
|          |                                                                                       
|10.12(11) | Equity Compensation Plan                                                              
|          |                                                                                       
|10.13(12) | Form of Stock Option Agreement                                                        
|          |                                                                                       
|10.14(13) | Form of Stock Option Agreement                                                        
|          |                                                                                       
|10.15     | Form of Private Placement Subscription
      Agreement dated July 10, 2009            
|          |                                                                                       
|10.16     | Form of Private Placement Subscription
      Agreement dated December 24, 2009        
|          |                                                                                       
|10.17(17) | Assignment Agreements and Loan
      Agreement                                        
|          |                                                                                       
|10.18(18) | Consulting Agreement with Tom
      Ihrke                                             
|          |                                                                                       
|10.19(19) | Equity Compensation Plan                                                              
|          |                                                                                       
|10.20(20) | Form of Convertible Debt                                                              
|          |                                                                                       
|(14)      | Code of Ethics                                                                        
|          |                                                                                       
|14.1(14)  | Code of Business Conduct and Ethics                                                   
|          |                                                                                       
|(23)      | Consents of experts and Counsel                                                       
|          |                                                                                       
|23.1      | Consent of Chang Lee LLP, Chartered
      Accountants                                 
|          |                                                                                       
|(31)      | Rule 13a-14(a)/15d-14(a)                                                              
|          |                                                                                       
|31.1*     | Section
      302 Certifications under Sarbanes-Oxley Act of 2002 of Christopher Bunka
|          |                                                                                       
|31.2*     | Section
      302 Certifications under Sarbanes-Oxley Act of 2002 of Bal Bhullar      
|          |                                                                                       
|(32)      | Section 1350 Certifications                                                           
|          |                                                                                       
|32.1*     | Section
      906 Certification under Sarbanes Oxley Act of 2002                      
|          |                                                                                       
|32.2*     | Section
      906 Certification under Sarbanes Oxley Act of 2002                      
|          |                                                                                       
|(99)      | Exhibit No.                                                                           
|          |                                                                                       
|99.1(15)  | Haas Reserve Reports                                                                  
|          |                                                                                       
|99.2(16)  | Veazey Reserve Report                                                                 

* Filed herewith.

---



|(1)  | Incorporated by reference from Form SB-2 Registration
      Statement filed on March 1, 2006.          
|---- | -------------------------------------------------------------------------------------------------------
|(2)  | Incorporated by reference from Form SB-2 Registration
      Statement filed on May 5, 2006.            
|(3)  | Incorporated by reference from our current report on Form
      8-K filed.                             
|(4)  | Incorporated by reference from our current report on Form
      8-K filed on June 21, 2007.            
|(5)  | Incorporated by reference from our current report on Form
      8-K filed on October 22, 2010.         
|(6)  | Incorporated by reference from our current report on Form
      8-K filed on December 1, 2008.         
|(7)  | Incorporated by reference from our current report on Form
      8-K filed on April 7, 2009.            
|(8)  | Incorporated by reference from our current report on Form
      8-K filed on May 19, 2009.             
|(9)  | Incorporated by reference from our current report on Form
      8-K filed on June 23, 2009.            
|(10) | Incorporated by reference from our current report on Form
      8-K filed on December 22, 2009.        
|(11) | Incorporated by reference from our current report on Form
      S8 filed on May 7, 2007.               
|(12) | Incorporated by reference from our current report on Form
      8-K filed on March 4, 2009.            
|(13) | Incorporated by reference from our current report on Form
      8-K filed on July 10, 2009.            
|(14) | Incorporated by reference from Form SB-2 Registration
      Statement filed on September 20, 2007.     
|(15) | Incorporated by reference from our current report on Form
      8-K filed on July 17, 2007.            
|(16) | Incorporated by reference from our current report on Form
      8-K filed on October 31, 2007.         
|(17) | Incorporated by reference from our current report on Form
      8-K filed on September 13, 2010.       
|(18) | Incorporated by reference from our current report on Form
      8-K filed on August 6, 2010.           
|(19) | Incorporated by reference from our current report on Form
      8-K filed on January 21, 2010.         
|(20) | Incorporated by reference from our current report on Form
      8-K filed on November December 1, 2010.

---

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.

LEXARIA CORP.

By: /s/ Christopher BunkaChristopher
BunkaPresident, Chief Executive Officer, Chairman and Director

Date: February 8, 2011

By: /s/ Bal BhullarBal BhullarChief Financial
Officer and Director

Date: February 8, 2011

In accordance with the Exchange Act, 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/ Christopher Bunka Christopher
BunkaPresident, Chief Executive Officer, Chairman and Director
(Principal Executive Officer)

Date: February 8, 2011

By: /s/ Bal BhullarBal BhullarChief Financial
Officer and Director(Principal Financial Officer and Principal Accounting
Officer)

Date: February 8, 2011

By: /s/ David DeMartiniDavid DeMartini

  Director

---