UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 WASHINGTON,
D.C.20549
  
  ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d)
 OF
THE SECURITIES EXCHANGE ACT OF 1934
  FOR
FISCAL YEAR ENDED DECEMBER 31, 2007.
  000-131224
 Commission
File Number
  DYNAMIC
NATURAL RESOURCES, INC.
 (Name of
small business issuer in its charter)
  Nevada
              20-4028175(State
      or other jurisdiction of incorporation)
              (IRS
      Employer Identification No.)
  78
South Street
 Wrentham,
MA 02093
 508
463 6290
 (Address
and telephone number of principal executive offices)
  Securities
registered under Section 12(b) of the Exchange Act: None.
  Securities
registered under Section 12(g) of the Exchange Act: Common Stock, par value
$0.0001
  Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act, during the past 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes x No o
  Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X].
  The
registrant's revenues for the year ended December 31, 2007 were
$2,013.
  The
aggregate market value of the voting and nonvoting common equity held by
non-affiliates of the Registrant, computed by reference to the closing sale
price of such common equity as quoted on the Over the Counter Electronic
Bulletin Board of $0.06 per share as of December 31, 2006 was
$785,695.00.
  As of
February 15, 2008, the registrant had 25,790,477 shares of common stock, par
value $0.0001 per share, outstanding.
  -1-
  DYNAMIC
NATURAL RESOURCES, INC.
 FORM
10-KSB REPORT INDEX
  Page
      No.Part IItem 1. Description of Business
              3Item 2. Description of Property
              12Item 3. Legal Proceedings
              12Item 4. Submission of Matters to a Vote of Securities
      Holders
              12Part II.Item 5. Market for Common Equity and Related Stockholder
      Matters
              13Item 6. Management’s Discussion and Analysis of Financial
      Condition and Results of Operations
              13Item 7. Financial Statements
              17Item 8. Changes in and Disagreements with Accountants on
      Accounting and Financial Disclosures
              29Item 8A. Controls and Procedures
              29Part III.Item 9. Directors, Executive Officers, Promoters, Control
      Persons and Corporate Governance; Compliance with Section 16(a) of
      the Exchange Act
              30Item 10.Executive Compensation
              32Item 11. Security Ownership of Certain Beneficial Owners and
      Management
              33Item
      12. Certain Relationships and Related Transactions, and Director
      IndependenceItem 13. Exhibits
              35Item 14. Principal Accountant Fees and
      Services
              35Signatures
              36Index to Exhibits
              37
   -2-
 
 PART I
  Forward Looking
Statements. Certain of the statements included in this annual report on
Form 10-KSB, including those regarding future financial performance or results
or that are not historical facts, are “forward-looking” statements as that term
is defined in Section 21E of the Securities Exchange Act of 1934, as
amended, and Section 27A of the Securities Act of 1933, as amended. The
words “expect,” “plan,” “believe,” “anticipate,” “project,” “estimate,” and
similar expressions are intended to identify forward-looking statement. .Dynamic
Natural Resources, Inc. (referred to herein, with its predecessors and
subsidiaries, as “Dynamic”, “we”, “us”, and “our”) cautions readers that these
statements are not guarantees of future performance or events and such
statements involve risks and uncertainties that may cause actual results and
outcomes to differ materially from those indicated in forward-looking
statements. Some of the important factors, risks and uncertainties that could
cause actual results to vary from forward-looking statements
include:
  •
              the
      level of utilization of our pipelines;•
              availability
      and cost of capital;•
              actions
      or inactions of third party operators for properties where we have an
      interest;•
              the
      risks associated with exploration;•
              the
      level of production from oil and gas properties that we have interests
      in;•
              gas
      and oil price volatility;•
              uncertainties
      in the estimation of proved reserves, in the projection of future rates of
      production, the timing of development expenditures and the amount and
      timing of property abandonment;•
              regulatory
      developments; and•
              general
      economic conditions.
  Additional
factors that could cause actual results to differ materially from those
indicated in the forward-looking statements are discussed under the caption
“Risk Factors”. Readers are cautioned not to place undue reliance on these
forward-looking statements which speak only as of the date hereof. We undertake
no duty to update these forward-looking statements. Readers are urged to
carefully review and consider the various disclosures made by us which attempt
to advise interested parties of the additional factors which may affect our
business, including the disclosures made under the caption “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” in
this report.
  Item 1.
DescriptionofBusiness
  The
Company
  Dynamic
Natural Resources, Inc. was incorporated in the State of Nevada on November 29,
2005. Formerly Value Consulting, Inc., the Company changed its name to Dynamic
Natural Resources in September, 2007. Dynamic Natural Resources was created to
pursue an interest in the burgeoning oil and gas market.  Dynamic
Natural Resources Inc. is pursuing oil producing assets in the Illinois
basin.
  Our
principal executive office is located at 78 South Street Wrentham, Ma 02093, and
our telephone number is 508 463 6290. We currently have two employees, both
officers of the Company, and work primarily through independent contractors to
operate and manage our lease interests. Our common stock is traded on the OTCBB
under the ticker symbol “DYNI”. Our website address is
www.dynamicnaturalresources.com.
  Certain
terms that are commonly used in the oil and gas industry, including terms that
define our rights and obligations with respect to our properties, are defined in
the “Glossary of Certain Oil and Gas Terms” of this Form 10-KSB.
  Company
Strategy
  At the
present time, we do not plan to finance our oil and gas acquisitions and
drilling activities solely through our own resources. Consequently, we identify
prospects or production to acquire and drill prospects, and seek other industry
investors who are willing to participate in these activities with us. We
frequently retain a promotional interest in these prospects, but generally we
finance a portion (and sometimes a significant portion) of the acquisition and
drilling costs.
  -3-
 
  Where we
acquire an interest in acreage on which exploration or development drilling is
planned, we will seldom assume the entire risk of acquisition or drilling.
Rather, we prefer to assess the relative potential and risks of each prospect
and determine the degree to which we will participate in the exploration or
development drilling. Generally, we have determined that it is more beneficial
to invite industry participants to share the risk and the reward of the prospect
by financing some or all of the costs of drilling contemplated wells. In such
cases, we may retain a carried working interest, a reversionary interest, or may
be required to finance all or a portion of our proportional interest in the
prospect. Although this approach reduces our potential return should the
drilling operations prove successful, it also reduces our risk and financial
commitment to a particular prospect.
  Conversely,
we may from time to time participate in drilling prospects offered by other
persons if we believe that the potential benefit from the drilling operations
outweighs the risk and the cost of the proposed operations. This approach allows
us to diversify into a larger number of prospects at a lower cost per prospect,
but these operations are generally more expensive than operations where we offer
the participation to others.
 
 Dynamic Natural Resources is
identifying acquisition targets in the well service arena that produce
significant gross margin while expanding our ability to develop and maintain our
leaseholds.
 
 Recent
Developments
 
 In
October 2007 the Company entered in a Letter of Intent with a well service
company for the purchase of its assets.
 
 In
November of 2007 the Company retained the investment banking firm Wilshire
Capital to procure financing for its growth
 
 In
November of 2007 the company began negotiations with a second target that has
oil producing assets, drilling capabilities, well service, and distribution
components.  Our investment banking firm has been advised to act on
this matter.
  Oil
and Gas Exploration and Production Activities
  We began
focusing our efforts on the oil and gas market in 2006. Although we have not
produced significant revenues, we have begun to acquire properties. We have
continued to seek oil and gas exploration and production activities, which
include the exploration, acquisition, development, operation and, when
appropriate, disposition of oil and gas properties.
  The
leasehold interests we hold in properties are subject to royalty, overriding
royalty and interests of others. In the future, our properties may become
subject to burdens and encumbrances typical to oil and gas operators, such as
liens incident to operating agreements and current taxes, development
obligations under oil and gas leases and other encumbrances.   -4-
  The
following is a description of our oil and gas exploration and production assets
and activities:
  The Earhart Lease —In September of 2007 the company acquired a 97% working interest in an
oil lease located in Illinois. The lease, called the “Earhardt Lease” is
situated on 80 acres of land, located in Edwards County. There are currently 2
wells on the lease. These wells will be put back online by reworking as
necessary, and installing pumping units on the existing wells. No production has
been generated by the lease to date.
 
 The White Lease —In
July of 2007 the company acquired a 37% working interest in an oil lease located
in Illinois. The lease, called the “White Lease” is situated on 40 acres of
land, located in Edwards County. There is currently 1 well on the lease. This
well was put back online by reworking the well as necessary, and rehabbing the
pumping unit. The well produced about 120 barrels of oil when a subsequent
problem shut the well down. In the near the well will return to
production.
 
 The Kelsey Pierce, School
and Weber Leases —In August of 2007 the company acquired working
interests in other oil leases located in Illinois. The leases, called the
“Kelsey Pierce Lease”, “Weber Lease” and the “School Lease” are in Edwards
County. There are currently 7 wells on the leases. Three of the wells have been
put back online by reworking the wells as necessary, and rehabbing the pumping
units as needed.
 
 The
Hinderlighter lease-In December of 2007 the
Company acquired 100 percent working interest in the Hinderliter lease. This
lease has two wells located on it that were drilled in the early 1990’s. The
lease consists of 80 acres located in Edwards County, IL. The operator controls
1/8 carried interest, and the landowner hold 3/16 carried
interest.
 
 Employees
  We
currently have two employees, both officers of the Company, and work primarily
through independent contractors to operate and manage our lease
interests.
  Customers
  Once
producing, we will sell oil and gas to various customers at the market
price.
  Our
current revenue stream is paid to us by our operator, therefore, we currently
have no customers exceeding 10% of revenues.
  Competition
  All
segments of our business are highly competitive. Vigorous competition occurs
among oil, gas and other energy sources, and between producers, transporters,
and distributors of oil and gas. Our oil and natural gas business competes for
the acquisition of oil and natural gas properties with numerous entities,
including major oil companies, independent oil and natural gas concerns and
individual producers and operators, primarily on the basis of the price to be
paid for such properties. Many of these competitors are large, well-established
companies and have financial and other resources substantially greater than
ours, which give them an advantage over us in evaluating and obtaining
properties and prospects. Our ability to acquire additional pipelines and oil
and natural gas properties and to discover reserves in the future will depend
upon our ability to evaluate and select suitable properties and consummate
transactions in a highly competitive environment. There is also competition for
the hiring of experienced personnel to manage and operate our assets. Several
highly competitive alternative transportation and delivery options exist for
current and potential customers of our traditional gas and oil gathering and
transportation business. Competition also exists with other industries in
supplying the energy and fuel needs of consumers.
  -5-
  Markets
  The
availability of a ready market for oil and natural gas, and the prices of oil
and natural gas, depend upon a number of factors, which are beyond our control.
These include, among other things:
  •
              the
      level of domestic production;•
              actions
      taken by foreign oil and gas producing nations;•
              the
      availability of pipelines with adequate capacity;•
              lightering,
      transshipment and other means of transportation;•
              the
      availability and marketing of other competitive fuels;•
              fluctuating
      and seasonal demand for oil, natural gas and refined products;
      and•
              the
      extent of governmental regulation and taxation (under both present and
      future legislation) of the production, importation, refining,
      transportation, pricing, use and allocation of oil, gas, refined products
      and alternative fuels.
  In view
of the many uncertainties affecting the supply and demand for crude oil, natural
gas and refined petroleum products, it is not possible to predict accurately the
prices or marketability of the oil and natural gas produced for sale or prices
chargeable for transportation and storage services, which we provide. Our sale
of natural gas is generally made at the market prices at the time of sale.
Therefore, even though we sell natural gas to major purchasers, we believe other
purchasers would be willing to buy our natural gas at comparable market
prices.
  Governmental
Regulation
  The
production, processing, marketing, and transportation of oil and gas by us are
subject to federal, state and local regulations which can have a significant
impact upon our operations.
  Our
activities with respect to exploration, development and production of oil and
natural gas and storage of oil and natural gas are subject to stringent
environmental regulation by local, state and federal authorities, including the
U.S. Environmental Protection Agency (“EPA”). Such regulation has increased the
cost of planning, designing, drilling, operating and in some instances,
abandoning wells and related equipment. Similarly, such regulation has also
increased the cost of design, construction, and operation of crude oil and
natural gas pipelines and processing facilities. Although we believe that
compliance with existing environmental regulations will not have a material
adverse affect on operations or earnings, there can be no assurance that
significant costs and liabilities, including civil and criminal penalties, will
not be incurred. Moreover, future developments, such as stricter environmental
laws and regulations or claims for personal injury or property damage resulting
from our operations, could result in substantial costs and liabilities. It is
not anticipated that, in response to such regulation, we will be required in the
near future to expend amounts that are material relative to our total capital
structure.
  The
Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”)
imposes liability, without regard to fault or the legality of the original
conduct, on responsible parties with respect to the release or threatened
release of a “hazardous substance” into the environment. Responsible parties,
which include the present owner or operator of a site where the release
occurred, the owner or operator of the site at the time of disposal of the
hazardous substance, and persons that disposed or arranged for the disposal of a
hazardous substance at the site, are liable for response and remediation costs
and for damages to natural resources. Petroleum and natural gas are excluded
from the definition of “hazardous substances”; however, this exclusion does not
apply to all materials used in our operations. At this time, neither we nor any
of our predecessors have been designated as a potentially responsible party
under CERCLA.
  The
federal Resource Conservation and Recovery Act (“RCRA”) and its state
counterparts regulate solid and hazardous wastes and impose civil and criminal
penalties for improper handling and disposal of such wastes. EPA and various
state agencies have promulgated regulations that limit the disposal options for
such wastes. Certain wastes generated by our oil and gas operations are
currently exempt from regulation as “hazardous wastes,” but in the future could
be designated as “hazardous wastes” under RCRA or other applicable statutes and
therefore may become subject to more rigorous and costly
requirements.
  We
currently own or lease, or have in the past owned or leased, various properties
used for the exploration and production of oil and gas or used to store and
maintain equipment regularly used in these operations. Although our past
operating and disposal practices at these properties were standard for the
industry at the time, hydrocarbons or other substances may have been disposed of
or released on or under these properties or on or under other locations. In
addition, many of these properties have been operated by third parties whose
waste handling activities were not under our control. These properties and any
waste disposed of thereon may be subject to CERCLA, RCRA, and state laws which
could require us to remove or remediate wastes and other contamination or to
perform remedial plugging operations to prevent future
contamination.
 -6-
  In
addition, various federal, state and local laws and regulations covering the
discharge of materials into the environment, occupational health and safety
issues, or otherwise relating to the protection of public health and the
environment, may affect our operations, expenses and costs. The trend in such
regulation has been to place more restrictions and limitations on activities
that may impact the general or work environment, such as emissions of
pollutants, generation and disposal of wastes, and use and handling of chemical
substances. It is not anticipated that, in response to such regulation, we will
be required in the near future to expend amounts that are material relative to
our total capital structure. However, it is possible that the costs of
compliance with environmental and health and safety laws and regulations will
continue to increase. Given the frequent changes made to environmental and
health and safety regulations and laws, we are unable to predict the ultimate
cost of compliance.
  Risk
Factors
  We
are primarily dependent on revenues from our working interests in three oil and
gas producing properties.
  We have
yet to produce revenues and currently hold an interest in three oil and gas
properties, which did not generate revenues in 2006.
  The
geographic concentration of our assets may have a greater effect on us as
compared to other companies.
  All of
our assets are located in the Illinois basin because our assets are not as
diversified geographically, as many of our competitors, our business is subject
to local conditions more than other, more geographically diversified companies.
Any regional event, including price fluctuations, natural disasters and
restrictive regulations that increase costs may adversely impact our business
more than if our assets were geographically diversified.
  If
we are not able to generate sufficient funds from our operations and other
financing sources, we may not be able to finance our operations.
  We have
historically needed substantial amounts of cash to fund our working capital
requirements. Low commodity prices, production problems, declines in production,
disappointing drilling results and other factors beyond our control could reduce
our funds from operations. As a result we may have to seek debt and equity
financing to meet our working capital requirements. Furthermore, we have
incurred losses in the past that may affect our ability to obtain financing. In
addition, financing may not be available to us in the future on acceptable terms
or at all. In the event additional capital is not available, we may be forced to
sell some of our assets on unfavorable terms or on an untimely
basis.
  We
face strong competition from larger companies that may negatively affect our
ability to carry on operations.
  We
operate in a highly competitive industry. Our competitors include major
integrated oil companies, substantial independent energy companies, affiliates
of major interstate and intrastate pipelines and national and local gas
gatherers, many of which possess greater financial and other resources than we
do. Our ability to successfully compete in the marketplace is affected by many
factors including:
  •
              
              most
      of our competitors have greater financial resources than we do, which
      gives them better access to capital to acquire assets;
  and•
              
              we
      often establish a higher standard for the minimum projected rate of return
      on invested capital than some of our competitors since we cannot afford to
      absorb certain risks. We believe this puts us at a competitive
      disadvantage in acquiring oil and gas
  properties.
  Oil
and gas prices are volatile and a substantial and extended decline in the price
of oil and gas would have a material adverse effect on us.
  The
tightening of natural gas supply and demand fundamentals has resulted in higher,
but extremely volatile natural gas prices, and this volatility in natural gas
prices is expected to continue. Our revenues, profitability, operating cash flow
and our potential for growth are largely dependent on prevailing oil and natural
gas prices. Prices for oil and natural gas are subject to large fluctuations in
response to relatively minor changes in the supply and demand for oil and
natural gas, uncertainties within the market and a variety of other factors
beyond our control. These factors include:
  •
              
              weather
      conditions in the United States;•
              
              the
      condition of the United States economy;•
              
              the
      actions of the Organization of Petroleum Exporting
    Countries;•
              
              governmental
      regulation;•
              
              political
      stability in the Middle East, South America and
  elsewhere;•
              
              the
      foreign supply of oil and natural gas;•
              
              the
      price of foreign imports; and•
              
              the
      availability of alternate fuel
sources.
 -7-
  In
addition, low or declining oil and natural gas prices could have collateral
effects that could adversely affect us, including the following:
  •
              
              reducing
      the exploration for and development of oil and gas
    reserves;•
              
              increasing
      our dependence on external sources of capital to meet our cash needs;
      and•
              
              generally
      impairing our ability to obtain needed
capital.
  Reserve
estimates depend on many assumptions that may prove to be inaccurate. Any
material inaccuracies in our reserve estimates or underlying assumptions could
cause the quantities and net present value of our reserves to be
overstated.
  Estimating
reserves of oil and gas is complex. The process relies on interpretations of
available geologic, geophysical, engineering and production data. The extent,
quality and reliability of this data can vary. The process also requires certain
economic assumptions, some of which are mandated by the SEC regarding oil and
natural gas prices, drilling and operating expenses, capital expenditures, taxes
and availability of funds. The accuracy of a reserve estimate is a function
of:
  •
              
              the
      quality and quantity of available data;•
              
              the
      interpretation of that data;•
              
              the
      accuracy of various mandated economic assumptions; and•
              
              the
      judgment of the persons preparing the
estimate.
  The
proved reserve information set forth in this report is based on estimates we
prepared. Estimates prepared by others might differ materially from our
estimates.
  Actual
quantities of recoverable oil and gas reserves, future production, oil and gas
prices, taxes, development expenditures and operating expenses most likely will
vary from our estimates. Any significant variance could materially affect the
quantities and net present value of our reserves. In addition, we may adjust
estimates of proved reserves to reflect production history, results of
exploration and development and prevailing oil and gas prices. Our reserves also
may be susceptible to drainage by operators on adjacent properties.
  The
present value of future net cash flows will most likely not equate to the
current market value of our estimated proved oil and gas reserves. In accordance
with SEC requirements, we base the estimated discounted future net cash flows
from proved reserves on prices and costs in effect at December 31. Actual
future prices and costs may be materially higher or lower than the prices and
costs we used.
  We
cannot control the activities on properties we do not operate.
  Currently,
other companies operate or control the development of the oil and gas properties
in which we have an interest. As a result, we depend on the operator of the
wells or leases to properly conduct lease acquisition, drilling, completion and
production operations. The failure of an operator, or the drilling contractors
and other service providers selected by the operator to properly perform
services, or an operator’s failure to act in ways that are in our best interest,
could adversely affect us, including the amount and timing of revenues, if any,
we receive from our interests.
  We may
own substantially less than a 50% working interest in our prospects and
will therefore engage in joint operations with other working interest owners.
Since we own or control less than a majority of the working interest in a
prospect, decisions affecting the prospect could be made by the owners of a
majority of the working interest. For instance, if we are unwilling or unable to
participate in the costs of operations approved by a majority of the working
interests in a well, our working interest in the well (and possibly other wells
on the prospect) will likely be subject to contractual “non-consent penalties.”
These penalties may include, for example, full or partial forfeiture of our
interest in the well or a relinquishment of our interest in production from the
well in favor of the participating working interest owners until the
participating working interest owners have recovered a multiple of the costs
which would have been borne by us if we had elected to participate, which often
ranges from 400% to 600% of such costs.
  We
have pursued, and intend to continue to pursue, acquisitions. Our business may
be adversely affected if we cannot effectively integrate acquired
operations.
  One of
our business strategies has been to acquire operations and assets that are
complementary to our existing businesses. Acquiring operations and assets
involves financial, operational and legal risks. These risks
include:
  •
              
              inadvertently
      becoming subject to liabilities of the acquired company that were unknown
      to us at the time of the acquisition, such as later asserted litigation
      matters or tax liabilities;•
              
              the
      difficulty of assimilating operations, systems and personnel of the
      acquired businesses; and•
              
              maintaining
      uniform standards, controls, procedures and
  policies.
  -8-
  Competition
from other potential buyers could cause us to pay a higher price than we
otherwise might have to pay and reduce our acquisition opportunities. We are
often out-bid by larger, better capitalized companies for acquisition
opportunities we pursue. Moreover, our past success in making acquisitions and
in integrating acquired businesses does not necessarily mean we will be
successful in making acquisitions and integrating businesses in the
future.
  Operating
hazards, including those peculiar to the marine environment, may adversely
affect our ability to conduct business.
  Our
operations are subject to inherent risks normally associated with those
operations, such as:
  •
              
              pipeline
      ruptures;•
              
              sudden
      violent expulsions of oil, gas and mud while drilling a well, commonly
      referred to as a blowout;•
              
              a
      cave in and collapse of the earth’s structure surrounding a well, commonly
      referred to as cratering;•
              
              explosions;•
              
              fires;•
              
              pollution;
      and•
              
              Other
      environmental risks.
  If any of
these events were to occur, we could suffer substantial losses from injury and
loss of life, damage to and destruction of property and equipment, pollution and
other environmental damage and suspension of operations. Our offshore operations
are also subject to a variety of operating risks peculiar to the marine
environment, such as hurricanes or other adverse weather conditions and more
extensive governmental regulation. These regulations may, in certain
circumstances, impose strict liability for pollution damage or result in the
interruption or termination of operations.
  Compliance
with environmental and other government regulations could be costly and could
negatively impact our operations.
  Our
operations are subject to numerous laws and regulations governing the discharge
of materials into the environment or otherwise relating to environmental
protection. These laws and regulations may:
  •
              
              require
      the acquisition of a permit before operations can be
      commenced;•
              
              restrict
      the types, quantities and concentration of various substances that can be
      released into the environment from drilling and production
      activities;•
              
              limit
      or prohibit drilling and pipeline activities on certain lands lying within
      wilderness, wetlands and other protected areas;•
              
              require
      remedial measures to mitigate pollution from former operations, such as
      plugging abandoned wells and abandoning pipelines; and•
              
              impose
      substantial liabilities for pollution resulting from our
      operations.
  The
recent trend toward stricter standards in environmental legislation and
regulation is likely to continue. The enactment of stricter legislation or the
adoption of stricter regulations could have a significant impact on our
operating costs, as well as on the oil and gas industry in general.
  Our
operations could result in liability for personal injuries, property damage, oil
spills, discharge of hazardous materials, remediation and clean-up costs and
other environmental damages. We could also be liable for environmental damages
caused by previous property owners. As a result, substantial liabilities to
third parties or governmental entities may be incurred which could have a
material adverse effect on our financial condition and results of operations. We
maintain insurance coverage for our operations, including limited coverage for
sudden and accidental environmental damages, but we do not believe that
insurance coverage for all environmental damages that occur over time or
complete coverage for sudden and accidental environmental damages is available
at a reasonable cost. Accordingly, we may be subject to liability or may lose
the privilege to continue to operate on substantial portions of our properties
if certain environmental damages occur.
  The OPA
imposes a variety of regulations on “responsible parties” related to the
prevention of oil spills. The implementation of new, or the modification of
existing, environmental laws or regulations, including regulations promulgated
pursuant to the OPA, could have a material adverse impact on us.
  We
Lost Money in 2007
  We have
incurred net losses from operations in 2007. Our net loss for the fiscal year
ended December 31, 2007 was $554,527 and as of December 31, 2007 we had an
accumulated deficit of $608,751. While we expect to become profitable in 2008,
we can not guarantee profitability. We expect our operating expenses to continue
to increase as we attempt to build our brand, expand our customer base and make
acquisitions. While we expect to be profitable in 2008, to become profitable, we
must increase revenue substantially and achieve and maintain positive gross
margins. We may not be able to increase revenue and gross margins sufficiently
to achieve profitability.
 
 -9-
  We
Require Additional Capital to Fund Our Current Operations and to Make
Acquisitions. We May Have to Curtail Our Business if we Cannot Find Adequate
Funding
  The
expansion and development of our business will require significant additional
capital, which we may be unable to obtain on suitable terms, or at all. We
currently have no legally binding commitments with any third parties to obtain
any material amount of additional equity or debt financing. If we are unable to
obtain adequate funding on suitable terms, or at all, we may have to delay,
reduce or eliminate some or all of our advertising, marketing, acquisition
activity, general operations or any other initiatives.
  Our
Principal Stockholders, Officers and Directors Own a Controlling Interest in Our
Voting Stock and Investors Will Not Have Voice in Our Management
  Our
officers, directors and stockholders with greater than 5% holdings will, in the
aggregate, beneficially own approximately 52% of our outstanding common stock.
As a result, these stockholders, acting together, will have the ability to
control substantially all matters submitted to our stockholders for approval,
including:
 •
                
                election
      of our board of directors;•
                
                removal
      of any of our directors;•
                
                amendment
      of our certificate of incorporation or bylaws; and•
                
                adoption
      of measures that could delay or prevent a change in control or impede a
      merger, takeover or other business combination involving
    us.
  As a
result of their ownership and positions, our directors and executive officers
collectively are able to influence all matters requiring stockholder approval,
including the election of directors and approval of significant corporate
transactions. In addition, sales of significant amounts of shares held by our
directors and executive officers, or the prospect of these sales, could
adversely affect the market price of our common stock. Management's stock
ownership may discourage a potential acquirer from making a tender offer or
otherwise attempting to obtain control of us, which in turn could reduce our
stock price or prevent our stockholders from realizing a premium over our stock
price.
  The
Application of the “Penny Stock Regulation” Could Harm the Market Price of Our
Common Stock
  Our
securities may be deemed a penny stock. Penny stocks generally are equity
securities with a price of less than $5.00 per share other than securities
registered on certain national securities exchanges or quoted on the NASDAQ
Stock Market, provided that current price and volume information with respect to
transactions in such securities is provided by the exchange or system. Our
securities may be subject to "penny stock rules" that impose additional sales
practice requirements on broker−dealers who sell such securities to persons
other than established customers and accredited investors (generally those with
assets in excess of $1,000,000 or annual income exceeding $200,000 or $300,000
together with their spouse). For transactions covered by these rules, the
broker−dealer must make a special suitability determination for the purchase of
such securities and have received the purchaser's written consent to the
transaction prior to the purchase. Additionally, for any transaction involving a
penny stock, unless exempt, the "penny stock rules" require the delivery, prior
to the transaction, of a disclosure schedule prescribed by the Commission
relating to the penny stock market. The broker−dealer also must disclose the
commissions payable to both the broker−dealer and the registered representative
and current quotations for the securities. Finally, monthly statements must be
sent disclosing recent price information on the limited market in penny stocks.
Consequently, the "penny stock rules" may restrict the ability of broker−dealers
to sell our securities and may have the effect of reducing the level of trading
activity and price of our common stock in the secondary market.
  Because
we do not intend to pay any cash dividends on our common stock, our Shareholders
will not be able to receive a return on their shares unless they sell
them.
  We intend
to retain any future earnings to finance the development and expansion of our
business. We do not anticipate paying any cash dividends on our Common Stock in
the foreseeable future. Unless we pay dividends, our Shareholders will not be
able to receive a return on their shares unless they sell them. There is no
assurance that Shareholders will be able to sell shares when desired or that
when they chose to do so, that they will receive a return on their investment in
the Common Stock.
 -10-
  As
a public company, our administrative costs will be significantly higher than
they are now, which will make it more difficult for us to be profitable and cash
flow positive. Difficulties in complying with the Sarbanes-Oxley Act and other
legal and accounting requirements applicable to public companies could affect
our market value.
  As a
public company, we incur significant legal, accounting and other expenses that
we did not incur as a private company. In addition, the Sarbanes-Oxley Act of
2002, as well as new rules subsequently implemented by the Commission, have
imposed various new requirements on public companies, including requiring
changes in corporate governance practices. Our management and other personnel
will need to devote a substantial amount of time to these compliance
requirements. Moreover, these rules and regulations will increase our legal and
financial compliance costs and will make some activities more time-consuming and
costly. Expenses as a result of our being a public company include additional
amounts for legal and accounting services, transfer agent fees, additional
insurance costs, printing and filing fees and fees for investor and public
relations.
  We
may, in the future, issue additional common shares, which would reduce
investors' percent of ownership and may dilute our share value.
  Our
corporate charter authorizes the issuance of 100,000,000 shares of Common Stock.
The future issuance of Common Stock may result in substantial dilution in the
percentage of our Common Stock held by our then existing shareholders. We may
value any Common Stock issued in the future on an arbitrary basis. The issuance
of Common Stock for future services or acquisitions or other corporate actions
may have the effect of diluting the value of the shares held by our investors,
and might have an adverse effect on any trading market for our Common
Stock.
  Glossary
of Certain Oil and Gas Terms
  The
following are abbreviations and definitions of certain terms commonly used in
the oil and gas industry.
  Back-in After Payout Interest.A contractual right of a non-participating partner to participate in a
well or wells after the wells have produced enough for the participating
partners to recover their capital costs of drilling, completing, and operating
the wells.
  Bbl.One stock tank barrel, or
42 U.S. gallons liquid volume, used in reference to oil or other liquid
hydrocarbons.
  Bcf.One billion cubic feet of
gas.
  Btu or British Thermal Unit.The quantity of heat required to raise the temperature of one pound of
water by one degree Fahrenheit.
  Condensate.Liquid
hydrocarbons associated with the production of a primarily gas
reserve.
  Development Well.A well
drilled within the proved area of a gas or oil reservoir to the depth of a
stratigraphic horizon known to be productive.
  Exploratory Well.A well
drilled to find and produce gas or oil in an unproved area, to find a new
reservoir in a field previously found to be productive of gas or oil in another
reservoir or to extend a known reservoir.
  Field.An area consisting of a
single reservoir or multiple reservoirs all grouped on or related to the same
individual geological structural feature and/or stratigraphic
condition.
  Leasehold Interest.The
interest of a lessee under an oil and gas lease.
  Mbbls.One thousand barrels of
oil or other liquid hydrocarbons.
  Mcf.One thousand cubic feet
of gas.
  Mcfe.One thousand cubic feet
equivalent, determined using the ratio of six Mcf of gas to one barrel of oil,
condensate or gas liquids.
  MMbtu.One million British
Thermal Units.
  MMcf.One million cubic feet
of gas.
  MMcfe.One million cubic feet
equivalent, determined using the ratio of six Mcf of gas to one Bbl of oil,
condensate or gas liquids.
  Net Revenue Interest.The
percentage of production to which the owner of a working interest is
entitled.
 -11-
  Nonoperating Working Interest.A working interest, or a fraction of a working interest, in a lease where
the owner is not the operator of the lease.
  Overriding Royalty.An
interest in oil and gas produced at the surface, free of the expense of
production that is in addition to the usual royalty interest reserved to the
lessor in an oil and gas lease.
  Prospect.A specific
geographic area which, based on supporting geological, geophysical or other data
and also preliminary economic analysis using reasonably anticipated prices and
costs, is deemed to have potential for the discovery of oil, gas or
both.
  Proved Developed Reserves.Reserves that can be expected to be recovered through existing wells with
existing equipment and operating methods. Proved developed reserves are further
categorized into two sub-categories, proved developed producing reserves and
proved developed non-producing reserves.
  Proved Developed Producing.Reserves sub-categorized as producing are expected to be recovered from
completion intervals which are open and producing at the time of the
estimate.
  Proved Developed Non-producing.Reserves sub-categorized as non-producing include shut-in and behind pipe
reserves. Shut-in reserves are expected to be recovered from (1) completion
intervals which are open at the time of the estimate but which have not started
producing, (2) wells which were shut-in awaiting pipeline connections or as
a result of a market interruption, or (3) wells not capable of producing
for mechanical reasons.
  Proved Reserves.The estimated
quantities of oil, gas and condensate that geological and engineering data
demonstrate with reasonable certainty to be recoverable in future years from
known reservoirs under existing economic and operating conditions.
  Proved Undeveloped Reserves.Reserves that are expected to be recovered from new wells or from
existing wells where a relatively major expenditure is required for
recompletion.
  Reversionary Interest.A form
of ownership interest in property that reverts back to the transferor after
expiration of an intervening income interest or the occurrence of another
triggering event.
  Royalty Interest.An interest
in a gas and oil property entitling the owner to a share of gas and oil
production free of costs of production.
  Undivided Interest.A form of
ownership interest in which more than one person concurrently owns an interest
in the same oil and gas lease or pipeline.
  Working interest.The
operating interest that gives the owner the right to drill, produce and conduct
operating activities on the property and receive a share of
production.
  Item 2.
Description of Property
  Information
appearing in Item 1 describing our oil and gas properties, pipelines and
other assets under the caption “Description of Business” is incorporated herein
by reference.
  Our
executive office is located in Howell, Michigan. We currently have no operating
for this facility.
  Item 3.
Legal Proceedings
  We are a
party to litigation that is incidental to our business and neither we nor any of
our property is subject to any material pending legal proceedings.
  Item
4. Submission of Mattersto a Vote of Securities
Holders
  None
 -12-
 PARTII
  Item 5.
Market for Common Equity and Related Stockholder MattersMarket Price for Common
Stock
  Our
common stock is quoted on the OTCBB under the ticker symbol “SOGN”. As of April
1, 2007, there were an estimated 200 stockholders of record our common stock.
OTCBB quotations reflect inter-dealer prices, without adjustment for retail
mark-ups, markdowns or commissions and may not represent actual transactions.
The following table sets forth, for the periods indicated, the high and low
closing bid price for our common stock as reported by the
OTCBB.
 
 Quarter
      Ended
              
              High
              
              
              LowDecember
      31, 2007
              
              $
              0.06
              
              
              $
              0.06September
      28, 2007
              
              $
              0.13
              
              
              $
              0.13June
      30, 2007
              
              $
              0.17
              
              
              $
              0.17March
      30, 2007*
              
              $
              0.20
              
              
              $
              0.19
 
 Dividend
Policy
  We have
not declared or paid any dividends on our common stock since our incorporation.
We currently intend to retain earnings for our capital needs and expansion of
our business and do not anticipate paying cash dividends on the common stock in
the foreseeable future. We expect that any loan agreements we enter into in the
future will likely contain restrictions on the payment of dividends on our
common stock. Future policy with respect to dividends will be determined by our
Board of Directors based upon our earnings and financial condition, capital
requirements and other considerations.
  Recent
Sales of Unregistered Securities
  We had no
sales of unregistered securities.
  In April,
2006, we completed a registered public placement with certain accredited
investors of 6,130,000 shares of our common stock. The net proceeds from the
offering after the payment of commissions and expenses were approximately
$610,000.
  Purchases
of Equity Securities
  We made
no purchases of our common stock. During 2006, certain officers and shareholders
did retire 71,400,000 shares of our common stock.
  Equity
Compensation Plan Information
  We
currently have no Stock Incentive Plan.
  Item 6.
Management’s Discussion and Analysis of FinancialCondition and
Results of Operations
  The
following is a review of certain aspects of our financial condition and results
of operations and should be read in conjunction with the Notes to Consolidated
Financial Statements in Item 7 and Description of Business in
Item 1.
  Smarts
Oil and Gas, Inc. was incorporated in the State of Nevada on November 29, 2005.
Formerly Value Consulting, Inc., the Company changed its name to Smart Oil and
Gas in August, 2006., and Dynamic Natural Resouces in September of 2007. Dynamic
Natural Resources was created to pursue an interest in the burgeoning oil and
gas market.  Dynamic Natural Resources has also acquired leases in the
Illinois basin and continues to pursue any opportunity to acquire other
attractive oil and gas areas that can add value to the Company and its
shareholders. The company will focus on properties with proven oil reserves and
high potential for large profit margins.
  At the
present time, we do not plan to finance our oil and gas acquisitions and
drilling activities solely through our own resources. Consequently, we identify
prospects or production to acquire and drill prospects, and seek other industry
investors who are willing to participate in these activities with us. We
frequently retain a promotional interest in these prospects, but generally we
finance a portion (and sometimes a significant portion) of the acquisition and
drilling costs.
 -13-
  Where we
acquire an interest in acreage on which exploration or development drilling is
planned, we will seldom assume the entire risk of acquisition or drilling.
Rather, we prefer to assess the relative potential and risks of each prospect
and determine the degree to which we will participate in the exploration or
development drilling. Generally, we have determined that it is more beneficial
to invite industry participants to share the risk and the reward of the prospect
by financing some or all of the costs of drilling contemplated wells. In such
cases, we may retain a carried working interest, a reversionary interest, or may
be required to finance all or a portion of our proportional interest in the
prospect. Although this approach reduces our potential return should the
drilling operations prove successful, it also reduces our risk and financial
commitment to a particular prospect.
  Conversly,
we may from time to time participate in drilling prospects offered by other
persons if we believe that the potential benefit from the drilling operations
outweighs the risk and the cost of the proposed operations. This approach allows
us to diversify into a larger number of prospects at a lower cost per prospect,
but these operations are generally more expensive than operations where we offer
the participation to others.
  Recent
Developments
  In
October of  2007Dynamic announced the signing of a
letter of intent to purchase the assets of a well service company in
Illinois.
 
 In
December of 2007 Dynamic retained Wilshire Capital Group, Inc. of Dallas to help
assist the company with its investment banking needs. Wilshire Capital Group
will assist Dynamic in raising funds to build a dominant Well Services Division
& Production Division.  In December of 2007 the companies lease
rights expired on the Oather Strader lease in Kentucky, this was in keeping with
the  strategic review that was ongoing at the time.
 
 In
January of 2007 Dynamic completed a strategic review that resulted in the
affirmation of our focus in the Illinois basin, Mr. Bruce Scambler was elected
President of the company, and Floyd Keefer was appointed  VP of Field
Operations
 
 Oil and Gas Exploration and
Production Activities:
  We began
focusing our efforts on the oil and gas market in 2006. We have continued to
seek oil and gas exploration and production activities, which include the
exploration, acquisition, development, operation and, when appropriate,
disposition of oil and gas properties.
  The
leasehold interests we hold in properties are subject to royalty, overriding
royalty and interests of others. In the future, our properties may become
subject to burdens and encumbrances typical to oil and gas operators, such as
liens incident to operating agreements and current taxes, development
obligations under oil and gas leases and other encumbrances.
  -14-
 
  Liquidity
and Capital Resources
  We ended
2007 with working capital of approximately $8,998. At the end of 2006, our
working capital was approximately $63,680. The decrease in working capital from
year-end 2006 was primarily the result of our use of capital for targeting and
acquiring acquisitions.
  Results
of Operations 2007 to 2006
  For the
year ended December 31, 2007, we reported net loss of $554,527, compared to
net loss of $36,724 for the year ended December 31, 2006. We were
incorporated in December 2005 and have yet to generate significant
revenue.
  Our
operating expenses increased from $38,503 in 2006 to $96,030 in 2007. This
increase is attributable to our marketing efforts and pursuit of oil and gas
properties. We were incorporated in December 2005 and 2007 was our second full
year of operation.
  Income
decreased from $1,779 in 2006 to $1,092 in 2007.
  Critical
Accounting Policies
  The
selection and application of accounting policies is an important process that
has developed as our business activities have evolved and as the accounting
rules have developed. Accounting rules generally do not involve a selection
among alternatives, but involve an implementation and interpretation of existing
rules, and the use of judgment, to the specific set of circumstances existing in
our business. We make every effort to properly comply with all applicable rules
at or before their adoption, and believe the proper implementation and
consistent application of the accounting rules is critical. However, not all
situations are specifically addressed in the accounting literature. In these
cases, we must use our best judgment to adopt a policy for accounting for these
situations. We accomplish this by comparatively analyzing similar situations and
reviewing the accounting guidance governing them, and may consult with our
independent accountants about the appropriate interpretation and application of
these policies.
 -15-
 Recently
Issued Accounting Pronouncements and Accounting Developments
  In
February 2007, FASB issued FASB Statement No. 159, The Fair Value Option for Financial
Assets and Financial Liabilities – Including an Amendment of FASB Statement
No. 115(“SFAS 159”). This standard permits an entity to choose to
measure many financial instruments and certain other items at fair value. This
option is available to all entities, including not-for-profit organizations.
Most of the provisions in SFAS 159 are elective; however, the amendment to FASB
Statement No. 115, Accounting for Certain Investments
in Debt and Equity Securities, applies to all entities with
available-for-sale and trading securities. Some requirements apply differently
to entities that do not report net income. The FASB’s stated objective in
issuing this standard is as follows: “to improve financial reporting by
providing entities with the opportunity to mitigate volatility in reported
earnings caused by measuring related assets and liabilities differently without
having to apply complex hedge accounting provisions.”
  The fair
value option established by SFAS 159 permits all entities to choose to measure
eligible items at fair value at specified election dates. A business entity will
report unrealized gains and losses on items for which the fair value option has
been elected in earnings (or another performance indicator if the business
entity does not report earnings) at each subsequent reporting date. A
not-for-profit organization will report unrealized gains and losses in its
statement of activities or similar statement. The fair value option:
(i) may be applied instrument by instrument, with a few exceptions, such as
investments otherwise accounted  for by the equity method; (ii) is
irrevocable (unless a new election date occurs); and (iii) is applied only
to instruments and not to portions of instruments.
  SFAS 159
is effective as of the beginning of an entity’s first fiscal year that begins
after November 15, 2007. Early adoption is permitted as of the beginning of
the previous fiscal year provided that the entity makes that choice in the first
120 days of that fiscal year and also elects to apply the provisions of
FASB Statement No. 157, Fair Value Measurements(“SFAS 157”). We are currently assessing the impact of SFAS 159 on our
consolidated financial statements.
  In
September 2006, SFAS 157 was issued by the FASB. This new standard provides
guidance for using fair value to measure assets and liabilities. The FASB
believes the standard also responds to investors’ requests for expanded
information about the extent to which companies measure assets and liabilities
at fair value, the information used to measure fair value and the effect of fair
value measurements on earnings. SFAS 157 applies whenever other standards
require (or permit) assets or liabilities to be measured at fair value but does
not expand the use of fair value in any new circumstances.
  Currently,
over 40 accounting standards within GAAP require (or permit) entities to measure
assets and liabilities at fair value. Prior to SFAS 157, the methods for
measuring fair value were diverse and inconsistent, especially for items that
are not actively traded. The standard clarifies that for items that are not
actively traded, such as certain kinds of derivatives, fair value should reflect
the price in a transaction with a market participant, including an adjustment
for risk, not just the company’s mark-to-model value. SFAS 157 also requires
expanded disclosure of the effect on earnings for items measured using
unobservable data.
  Under
SFAS 157, fair value refers to the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between market
participants in the market in which the reporting entity transacts. In this
standard, FASB clarifies the principle that fair value should be based on the
assumptions market participants would use when pricing the asset or liability.
In support of this principle, SFAS 157 establishes a fair value hierarchy that
prioritizes the information used to develop those assumptions. The fair value
hierarchy gives the highest priority to quoted prices in active markets and the
lowest priority to unobservable data, for example, the reporting entity’s own
data. Under the standard, fair value measurements would be separately disclosed
by level within the fair value hierarchy.
  The
provisions of SFAS 157 are effective for financial statements issued for fiscal
years beginning after November 15, 2007, and interim periods within those
fiscal years. Earlier application is encouraged, provided that the reporting
entity has not yet issued financial statements for that fiscal year, including
any financial statements for an interim period within that fiscal year. We are
currently assessing the impact of SFAS 157 on our financial
statements.
  In
July 2006, FASB Interpretation No. 48, Accounting for Uncertainty in Income
Taxes-An Interpretation of FASB Statement No. 109(“FIN 48”), was
issued. FIN 48 clarifies the accounting for uncertainty in income taxes
recognized in an enterprise’s financial statements in accordance with FASB
Statement No. 109, Accounting for Income Taxes.
FIN 48 also prescribes a recognition threshold and measurement attribute for the
financial statement recognition and measurement of a tax position taken or
expected to be taken in a tax return. The new FASB standard also provides
guidance on derecognition, classification, interest and penalties, accounting in
interim periods, disclosure, and transition.
  The
evaluation of a tax position in accordance with FIN 48 is a two-step process.
The first step is a recognition process whereby the enterprise determines
whether it is more likely than not that a tax position will be sustained upon
examination, including resolution of any related appeals or litigation
processes, based on the technical merits of the position. In evaluating whether
a tax position has met the more-likely-than-not recognition threshold, the
enterprise should presume that the position will be examined by the appropriate
taxing authority that has full knowledge of all relevant information. The second
step is a measurement process whereby a tax position that meets the
more-likely-than-not recognition threshold is  calculated to determine the
amount of benefit to recognize in the financial statements. The tax position is
measured at the largest amount of benefit that is greater than 50% likely of
being realized upon ultimate settlement.
 -16-
  The
provisions of FIN 48 are effective for fiscal years beginning after
December 15, 2006. Earlier application is permitted as long as the
enterprise has not yet issued financial statements, including interim financial
statements, in the period of adoption. The provisions of FIN 48 are to be
applied to all tax positions upon initial adoption of this standard. Only tax
positions that meet the more-likely-than-not recognition threshold at the
effective date may be recognized or continue to be recognized upon adoption of
FIN 48. The cumulative effect of applying the provisions of FIN 48 should be
reported as an adjustment to the opening balance of retained earnings (or other
appropriate components of equity or net assets in the statement of financial
position) for that fiscal year. We are currently assessing the impact on our
consolidated financial statements of FIN 48.
  On
September 13, 2006, the SEC staff issued Staff Accounting Bulletin
No. 108, which adds Section N to Topic 1, Financial Statements–
Considering the Effects of
Prior Year Misstatements when Quantifying Misstatements in Current Year
Financial Statements(“SAB 108”). The SEC staff provides guidance on how
prior year misstatements should be taken into consideration when quantifying
misstatements in current year financial statements for the purposes of
determining whether the current year’s financial statements are materially
misstated. In providing this guidance, the SEC staff references both the “iron
curtain” and “rollover” approaches to quantifying a current year misstatement
for purposes of determining its materiality. The iron curtain approach focuses
on how the current year’s balance sheet would be affected in correcting a
misstatement without considering the year(s) in which the misstatement
originated. The rollover approach focuses on the amount of the misstatement that
originated in the current year’s income statement. The SEC staff indicates in
SAB 108 that “registrants must quantify the impact of correcting all
misstatements, including both the carryover and reversing effects of prior year
misstatements, on the current year financial statements.” In other words, both
the iron curtain approach and rollover approach should be used in assessing the
materiality of a current year misstatement. SAB 108 provides that once a current
year misstatement has been quantified, the guidance in Staff Accounting Bulletin
No. 99, Section M, Topic 1, Financial Statements–
Materiality(“SAB 99”),
should be applied to determine whether the misstatement is material and should
result in an adjustment to the financial statements.
  If
correcting a misstatement in the current year would materially misstate the
current year’s income statement, the SEC staff indicates that the prior year
financial statements should be adjusted. In addition, adjusting for one
misstatement in the current year may alter the amount of the misstatement
attributable to prior years that exists in the current year’s financial
statements. If adjusting for the resultant misstatement is material to the
current year’s financial statements, the SEC staff again indicates that the
prior year financial statements should be adjusted. These adjustments to prior
year financial statements are necessary even though such adjustments were
appropriately viewed as immaterial in the prior year. In making these
adjustments, previously filed reports do not need to be amended.
  Instead,
the adjustments should be reflected the next time the registrant would otherwise
be filing those prior year financial statements. It should be noted that if, in
the current year, a registrant identifies a misstatement in the prior year
financial statements and determines that the misstatement is material to those
prior year financial statements, the registrant would be required to restate for
the material misstatement in accordance with FASB Statement No. 154, Accounting Changes and Error
Corrections(“SFAS 154”).
  If a
registrant has historically been using either the iron curtain approach or the
rollover approach and, upon application of the guidance of SAB 108, determines
that there is a material misstatement in its financial statements, the SEC staff
will not require the registrant to restate its prior year financial statements
provided that: (a) management properly applied the approach it previously
used as its accounting policy and (b) management considered all relevant
qualitative factors in its materiality assessment. If the registrant does not
elect to restate its financial statements for the material misstatements that
arise in connection with application of the guidance in SAB 108, then for fiscal
years ending after November 15, 2006, it must recognize the cumulative
effect of applying SAB 108 in the current year beginning balances of the
affected assets and liabilities with a corresponding adjustment to the current
year opening balance in retained earnings. Certain disclosures are required in
this situation. SAB 108 provides additional transition guidance if it is adopted
early in an interim period. The adoption of SAB 108 did not have a material
effect on our consolidated financial statements.
  Item 7.
Financial Statements
  PageReport of Independent Registered Public Accounting
      Firm
              F-1Balance Sheet at December 31, 2007 and 2006
              F-2Statement of Income Years Ended December 31, 2007 and
      2006
              F-3Statement of Stockholders’ Equity Years Ended December 31, 2007
      and 2006
              F-4Statement of Cash Flows Years Ended December 31, 2007 and
      2006
              F-5Notes to financial Statements
              F-6
 -17-
 
 Report
of Independent Registered PublicAccounting Firm
  The Board
of Directors of
 Dynamic
Natural Resources, Inc.
 Howell,
Michigan
  We have
audited the accompanying balance sheet of Dynamic Natural Resources, Inc. (the
“Company”) as of December 31, 2007 and 2006, and the related statements of
income, stockholders’ equity and cash flows for the years ended
December 31, 2007 and 2006. These financial statements are the
responsibility of the Company’s management. Our responsibility is to express an
opinion on these consolidated 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 the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide 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 Dynamic Natural Resources, Inc. as
of December 31, 2007 and 2006, and the results of their operations and
their cash flows for the years ended December 31, 2007 and 2006 in
conformity with accounting principles generally accepted in the United States of
America.
  The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern, as discussed in Note A to the financial
statements, the company has not generated revenues since inception, has incurred
losses in developing its business, and further losses are anticipated. The
Company requires additional funds to meet it obligations and the cost of its
operations. These factors raise substantial doubt about the Company’s ability to
continue as a going concern. Management’s plans in this regard are described in
Note 1. The financial statements do not include any adjustments that might
result from the out come of this uncertainty.
 
  Robert L.
White & Associates, Inc.
 
 /s/ Robert L White &
Associates, Inc.
 Robert L.
White & Associates, Inc.
 Cincinnati,
OH
 
 March 21,
2008
 
 F-1
 Dynamic
      Natural Resources, Inc.Balance
      SheetYears
      Ended December 31, 2007 and 20062007
              
              
              2006ASSETSCurrent
      Assets:Cash
              
              $
              31
              
              
              $
              44,149Accounts
      receivable
              
              
              -
              
              
              
              -Note
      Receivable - Related Party
              
              
              3,880
              
              
              
              19,531Other
      Current Assets
              
              
              905
              
              
              
              -Total
      Current Assets
              
              
              4,816
              
              
              
              63,680Property
      and Equipment, net
              
              
              8,998
              
              
              
              -Other
      Assets:Oil
      and gas Properties
              
              
              337,707
              
              
              
              545,596Total
      other assets
              
              
              337,707
              
              
              
              545,596Total
      Assets
              
              
              351,521
              
              
              
              609,276LIABILITIES
      AND STOCKHOLDERS' EQUITY (DEFICIT)Current
      Liabilities:Accounts
      payable
              
              
              12,169
              
              
              
              -Accrued
      liabilities
              
              
              -
              
              
              
              -Total
      Current Liabilities
              
              
              12,169
              
              
              
              -Long
      term Liabilities
              
              
              12,604
              
              
              
              -Total
      Liabilities:
              
              
              24,773
              
              
              
              -Stockholders'
      Equity (Deficit):Common
      stock at $0.0001 par value; 100,000,000 shares authorized; issued and
      outstanding: December 31, 2007 26,97,000 -; December 31, 2006 24,910,000 -
      shares
              
              
              2,649
              
              
              
              2.491Additional
      paid-in capital
              
              
              932,850
              
              
              
              661,009Accumulated
      deficit
              
              
              (608,751
              )
              
              
              (54,224
              )Stockholders’
      Equity
              
              
              326,748
              
              
              
              609,276Total
      Liabilities and Stockholders' Equity (Deficit)
              
              $
              351,521
              
              
              $
              609,276See
      accompanying notes
 F-2
 Dynamic
      NaturalResources, Inc.Statement
      of OperationFor
      the Years Ended December 31, 2007 and 20062007
              
              
              2006Revenue
              
              $
              2,013
              
              
              $
              -Cost
      of Revenue
              
              
              26,900
              
              
              
              -Gross
      Profit
              
              
              (24,887
              )
              
              
              -Operating
      Expenses:General
      and Administrative
              
              
              73,900
              
              
              
              28,181Professional
      Fees
              
              
              21,604
              
              
              
              9,090Miscellaneous
      Expense
              
              
              526
              
              
              
              1,232Total
      Operating Expenses
              
              
              96,030
              
              
              
              38,503Other
      (Expense), write off of expired oil & gas leases
              
              
              (433,610
              )Interest
      Income
              
              
              
              
              
              
              1,779Total
      Other (Expense)
              
              
              (433,610
              )
              
              
              1,779Net
      (Loss)
              
              $
              (554,527
              )
              
              $
              (36,724
              )Basic
      and diluted loss per share
              
              $
              (0.02
              )
              
              $
              (0.00
              )Weighted
      average number of common shares outstanding
              
              
              25,576,250
              
              
              
              67,950,972See
      accompanying notes
 F-3
 Dynamic
      Natural Resources, Inc.Statement
      of Changes in Stockholders' EquityFor
      the Years Ended December 31, 2007 and 2006Common
      StockShares
              
              
              Amount
              
              
              Paid-in
      Capital
              
              
              Accumulated
      Deficit
              
              
              TotalBalance,
      December 6, 2006
              
              
              90,000,000
              
              
              $
              9,000
              
              
              $
              23,500
              
              
              $
              (17,500
              )
              
              $
              15,000Sale
      of Common Stock
              
              
              6,310,000
              
              
              
              631
              
              
              
              630,369
              
              
              
              -
              
              
              
              631,000Retirement
      of Common Stock
              
              
              (71,400,000
              )
              
              
              (7140
              )
              
              
              7140
              
              
              
              -Net
      loss, year end December 31, 2006
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (36,724
              )
              
              
              (36,724
              )Balance,
      December 31, 2006
              
              
              24,910,000
              
              
              $
              2,491
              
              
              $
              661,009
              
              
              $
              (54,224
              )
              
              $
              609,276Sale
      of common stock
              
              
              1,587,000
              
              
              
              158
              
              
              
              271,841
              
              
              
              
              
              
              
              156,999Net
      Loss, year ended December 31,2007
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (554,527
              )
              
              
              (554,527
              )Balance,
      December 31, 2007
              
              
              26,497,000
              
              
              $
              2,649
              
              
              $
              932,850
              
              
              $
              (608,751
              )
              
              $
              326,748See
      accompanying notes
 F-4
 Dynamic
      Natural Resources, Inc.Statement
      of Cash FlowsYears
      ended December 31, 2007 and 20052007
              
              
              2006Cash
      Flows From Operating ActivitiesNet
      loss
              
              $
              (554,527
              )
              
              $
              (36,724
              )Adjustments
      to reconcile net loss to net cash flows from operating
      activities:Depreciation
              
              
              474
              
              
              
              -Write
      off of expired Oil and Gas leases
              
              
              433,610Changes
      in operating assets and liabilities:Prepaid
      and other assets
              
              
              (905
              )
              
              
              10,000Accounts
      Payable
              
              
              12,169Note
      receivable - related party
              
              
              15,651
              
              
              
              (19,531
              )Total
      adjustments
              
              
              462,809
              
              
              
              (9,531
              )Net
      cash flows from operating activities
              
              
              (93,528
              )
              
              
              (46,255
              )Cash
      Flows From Investing ActivitiesPurchases
      of property and equipment
              
              
              (9472
              )
              
              
              -Acquisition
      of Oil and Gas Properties
              
              
              (225,722
              )
              
              
              (545,596
              )Net
      cash flows from investing activities
              
              
              (235,194
              )
              
              
              (545,596
              )Cash
      Flows From Financing ActivitiesProceed
      from notes payable
              
              
              12,604Proceeds
      from sale of common stock
              
              
              272,000
              
              
              
              631,000-
              
              
              
              -Net
      cash provided by financing activities
              
              
              284,604
              
              
              
              631,000Net
      Change in Cash
              
              
              (44,118
              )
              
              
              39,149Cash,
      Beginning of the Period
              
              
              44,149
              
              
              
              5,000Cash,
      End of the Period
              
              $
              31
              
              
              $
              44,149See
      accompanying notes
 F-5
 Dynamic
Natural Resources, Inc.
 Notes
to Financial Statements
   Note
A. Nature and Continuance of Operations
  Nature of
Operations
  Dynamic
Natural Resources, Inc. was incorporated in the State of Nevada on November 29,
2005. Formerly Value Consulting, Inc., the Company changed its name to Smart Oil
and Gas in August, 2006. Smarts Oil & Gas was created to pursue an interest
in the burgeoning oil and gas market. Dynamic Natural Resources initial entry
into the market was the acquisition of several leases located in northern
Louisiana. Smarts Oil and Gas will continuously pursue any opportunity to
acquire other attractive oil and gas areas that can add value to the Company and
its shareholders. The company will focus on leases and properties with proven
oil reserves and high potential for large profit margins.
  The
financial statements are presented in US dollars and have been prepared by
management in accordance with generally accepted accounting principles in the
United States (“US GAAP”) on a going concern basis, which contemplates the
realization of assets and the discharge of liabilities in the normal course of
business for the foreseeable future.
 
 During
the year ended December 31, 2007, the Company incurred a loss of $554,527 and at
December 31, 2007 had an accumulated deficit of $608,751 and a working capital
deficit of $7,353. The ability of the Company to continue as a going concern is
uncertain and dependant upon achieving a profitable level of operations and on
the ability of the Company to obtain necessary capital and financing to fund
ongoing operations. The outcome of these matters cannot be predicted at this
time.
 
 These
financial statements do not give effect to any adjustments which would be
necessary should the Company be unable to continue as a going concern and
therefore be required to realize its assets and discharge its liabilities in
other than the normal course of business and the amounts different from those
reflected in the accompanying financial statements.
 
 Note
B – Significant Accounting Policies
 
 Use of
Estimates
 
 The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America 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.
 F-6
 Accounts
Receivable
  Dynamic
trade accounts receivable result from the sale of its services, and consist of
private and public companies. Smarts uses the allowance method to account for
uncollectible accounts. Bad debt expense for the years ended December 31, 2007
and 2006 was $0.
  Concentration of Credit
Risk
  Dynamic
Natural Resources trade accounts receivable result from the sale of oil and gas
to customers. In order to minimize the risk of loss from these companies, credit
limits, ongoing credit evaluation of its customers, and account monitoring
procedures are utilized. Collateral is not generally required. Management
analyzes historical bad debt, customer concentrations, customer
credit-worthiness, current economic trends, and changes in customer payment
tendencies, when evaluating the allowance for doubtful accounts. As of December
31, 2007 and 2006, Dynamic had no customers who accounted for 10% or more of
gross accounts receivable or 10% or more of the net sales.
  The
Company is obligated to pay the salaries, wages, related benefit costs, and
expenses of its employees and consultants. Accordingly, the Company's ability to
collect amounts due from customers could be affected by economic fluctuations in
its markets or these industries.
  Financial
Instruments
  Dynamic
Natural Resources estimates that the fair value of all financial instruments at
December 31, 2007 do not differ materially from the aggregate carrying value of
its financial instruments recorded in the accompanying balance
sheets.
  Property and
Equipment
  Property
and equipment are recorded at historical cost and include expenditures, which
substantially increase the useful lives of existing property and equipment.
Maintenance and repairs are charged to operations when incurred.
  Depreciation
of property and equipment is computed primarily using the straight-line method
based on estimated useful lives (furniture and fixtures, 6 to 7 years, office
equipment 5 to 7 years, and computers and software, 3 to 5 years). Depreciation
for income tax purposes is computed principally using the straight line method
and estimated useful lives.
  Oil and gas
properties
  The
Company follows the full cost method of accounting for its oil and gas
operations. Under this method, costs incurred in the acquisition, exploration
and development of oil and gas properties are capitalized in one cost center,
including certain internal costs directly associated with such activities.
Proceeds from the sale of oil and gas properties are credited to the cost center
with no gain or loss recognized unless such sale would significantly alter the
relationship between capitalized costs and proved oil and gas
reserves.
 F-7
 
  Note
A. Nature and Continuance of Operations (Continued)
  If
capitalized costs, less related accumulated amortization and deferred income
taxes, exceed the “full cost ceiling” the excess is expensed in the period such
excess occurs. The “full cost ceiling” is determined based on the present value
of estimated future net revenues attributable to proved reserves, using current
product prices and operating costs at the balance sheet date plus the lower of
cost and fair value of unproved properties within the cost center.
  Costs of
oil and gas properties are amortized using the unit-of-production method based
upon estimated proven oil and gas reserves starting when proved reserves have
been established. The significant unproven properties are excluded from the
costs subject to depletion.
  As of
December 31, 2007 and 2006 the Company proven reserves were valued at $337,707
and $547,596 respectively.
  Advertising
Cost
  Advertising
costs, except for costs associated with direct-response advertising, are charged
to operations when incurred. The costs of direct-response advertising are
capitalized and amortized over the period during which future benefits are
expected to be received. Smarts did not have direct-response advertising costs
during the years ended December 31, 2007 and 2006.
 
 Accounting for Stock-based
Compensation
 
 The
Company’s accounts for and reports its stock-based employee compensation
arrangements in accordance with the provisions of Financial Accounting Standards
N0, 123 (revised 2004) Share-Based Payment
("SFAS No. 123R") which requires the compensation cost related to share-based
payments, such as stock options and employee stock purchase plans, be recognized
in the financial statements based on the grant-date fair value of the award.
During 2007 or 2006, the Company did not grant any stock options which would
require a calculation as prescribed by SFAS No. 123R.
  Income
Taxes
  Smarts
records its federal and state income tax liability in accordance with Statement
of Financial Accounting Standards Statement No. 109 "Accounting for Income
Taxes". Deferred taxes are provided for differences between the basis of assets
and liabilities for financial statements and income tax purposes, using current
tax rates. Deferred tax assets represent the expected benefits from net
operating losses carried forward and general business credits that are available
to offset future income taxes.
  Loss Per
Share
 
 The
Company computes loss per chare in accordance with SFAS NO. 128 “Earnings per
Share” which requires presentation of bother basic and diluted earnings per
share on the face of the statement of operations. Basic loss per share is
computed by dividing net loss available to common shareholders by the weighted
average number of outstanding common shares during the period. Diluted loss per
share gives effect to all potentially dilutive common shares outstanding during
the period including, stock options and warrants, using the treasury method, and
preferred stock, using the if-converted method. Dilutive loss per share excludes
all potential common shares if their effect is anti dilutive. As the Company has
no potential dilutive securities, basic loss per share is equal to diluted loss
per share.   F-8
 Note
A. Nature of Operations and Basis of Presentation (Continued)
  Recent Accounting
Pronouncements
  In
February 2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid
Financial Instruments-an amendment of FASB Statements No. 133 and 140. This
statement resolves issues addressed in FAS No. 133 Implementation Issue No. D1,
Application of Statement 133 to Beneficial Interest in Securitized Financial
Assets. SFAS No. 155: (a) permits fair value remeasurement for any hybrid
financial instrument that contains an embedded derivative that otherwise would
require bifurcation; (b) clarifies which interest-only strips and principal-only
strips are not subject to the requirements of SFAS No. 133; (c) establishes a
requirement to evaluate beneficial interests in securitized financial assets to
identify interests that are freestanding derivatives or that are hybrid
financial instruments that contain an embedded derivative requiring bifurcation;
(d) clarifies that concentrations of credit risk in the form of subordination
are not embedded derivatives; and, (e) eliminates restrictions on a qualifying
special-purpose entity's ability to hold passive derivative financial
instruments that pertain to beneficial interests that are or contain a
derivative financial instrument. SFAS No. 155 also requires presentation within
the financial statements that identifies those hybrid financial instruments for
which the fair value election has been applied and information on the income
statement impact of the changes in fair value of those instruments. The Company
is required to apply SFAS No. 155 to all financial instruments acquired, issued
or subject to a remeasurement event beginning January 1, 2007. The Company does
not expect the adoption of SFAS No. 155 to have a material impact on the
Company's financial statements.
  Furthermore,
public entities are required to measure liabilities incurred to employees in
share-based payment transactions at fair value as well as estimate the number of
instruments for which the requisite service is expected to be rendered. Any
incremental compensation cost for a modification of the terms or conditions of
an award is measured by comparing the fair values before and after the
modification. The Company has yet to determine the effect SFAS No. 123R may have
on its financial statements, if any.
  Note
B - Income Taxes
  For
income tax purposes Dynamic Natural Resources had $608,751 of net operating
losses as of December 31, 2007, which can be used to offset future federal and
state taxable income. No income tax benefit has been recorded in the
accompanying financial statements since the recoverability of such assets is not
reasonably assured through known future revenue sources.
  Note
C- Related Party Transactions
  On
December 15, 2006, Dynamic Natural Resources, Inc. entered into a
short-term, month to month, loan with Dan Seifer, our Chairman for $20,000. AS
of December 31, 2007 the balance of the loan was $3,880.
 F-9
 Note
D - Cash Flow Supplemental Information
  Cash paid
for interest during the years ended December 31, 2007 and 2006 amounted to
$0.
  During
the year ended December 31, 2005, Smarts issued 90,000,000 shares of restricted
common stock, valued at $32,500, to various investors, including both of the
Company’s officers and directors.
  On May
15, 2006, Smarts issued 6,310,000 shares of common stock, value at $631,000. The
shares were issued pursuant to an SB-2 registration statement declared effective
by the SEC on April 14, 2006.
  On
various dates in 2006, certain individuals and officers of the Company retired
71,400,000 shares of common stock. No consideration was given to the
shareholders.
  Note
E - Other Assets
  Other
Assets consists of oil and gas properties purchased for an aggregate total of
$545,596. At December 31, 2007 the proven reserves were valued at
$337,707.
  Note
F - Stockholders’ Equity
  Issuance of Common
Stock
  On
December 6, 2005, the Board of Directors approved the issuance of 90,000,0000
restricted shares of the Company’s $.0001 par value common stock for a total
investment of $32,500.
  On
January 20, 2006, Smarts Oil and Gas filed an SB-2 registration statement with
the SEC. The Company registered an additional 10 million (10,000,000) shares to
be sold for an aggregate of $1 million ($1,000,000). On April 14, 2006 the SEC
declared the registration statement effective. On May 15, 2006, Smarts Oil and
Gas issued 6,310,000 shares of common stock for an aggregate of $631,000. On
June 9, 2006 Smarts removed the remaining 3,690,000 shares and closed the
registration.
  On August
7, 2006, Brian Ramsey, President and CEO, retired 55,000,000 shares of his
common stock, bringing the total common shares outstanding to
41,310,000.
  On
September 30, 2006, Dan Seifer, President and CEO, along with various other
shareholders, retired 16,400,000 shares of common stock, bringing the total
common shares outstanding to 24,910,000.   F-10
 Note F – Stockholders Equity
(Continued)
  Common Stock
Warrants
  As of
December 31, 2007and 2006 there were no stock warrants issued or
outstanding.
  Note
G - Commitments and Contingencies
  Operating
Leases
  Dynamic
Natural Resources currently has no lease obligations.
  Litigation
  As of
December 31, 2007, Dynamic Natural Resources did not have any outstanding legal
issues outside of the ordinary course of business.
  Note
H - Subsequent Events
 F-11
  Item 8.
Changes in and Disagreements with Accountants on Accounting and
Financial Disclosures
  None.
  Item 8A.
Controls and Procedures
  Evaluation
of Disclosure Controls and Procedures
  As of the
end of the year covered by this report, we carried out an evaluation under the
supervision and with the participation of our management, including our Chief
Executive Officer and Principal Accounting and Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange
Act. Based upon this evaluation, as of December 31, 2006, the Chief
Executive Officer and Principal Accounting and Financial Officer concluded that
our disclosure controls and procedures were effective to ensure that information
required to be disclosed by us in reports that we file or submit under the
Exchange Act, are recorded, processed, summarized and reported within the time
periods specified in the SEC’s rules and forms and that such information is
accumulated and communicated to our management, including the Chief Executive
Officer and Principal Accounting and Financial Officer, as appropriate to allow
timely decisions regarding required disclosure.
  Changes
in Internal Controls over Financial Reporting
  There
have been no changes made in our internal control over financial reporting that
materially affected, or is reasonably likely to materially affect, the internal
control over financial reporting, during the period covered by this
report.
 -29-
 PARTIII
  Item
9 Directors, Executive Officers, Promoters, Control Persons and Corporate
Governance; Compliance with Section 16(a) of the Exchange Act
  Additional
information required by this Item 9 concerning directors and executive officers
of the Company appears under the heading “Executive Officers of the Registrant”
in this report.
  Presently,
Smarts has a total of 6 officers and directors. The following table identifies,
as of  February 23,2008, each executive officer and director of the
Company.
 
 
 Name
              Age
              PositionDaniel
      Seifer
              31
              Chairman,DirectorScott
      R. Masse
              34
              Chief
      Executive Officer, DirectorEddie
      McGarraugh
              61
              DirectorGerald
      Schiano
              48
              Chief
      Financial Officer,DirectorBruce
      Scambler
              49
              PresidentFloyd
      Keefer
              57
              VP
      of Field Operations:
  Directors
serve until the next annual meeting and until their successors are elected and
qualified. Officers are appointed to serve for one year until the meeting of the
Board of Directors following the annual meeting of stockholders and until their
successors have been elected and qualified.
  Daniel Seifer: Mr. Seifer joined
Smarts as an officer onAugust 14, 2006. Mr. Seifer has spent the last 12
years working in the public markets. His experience includes investor
relations, consulting, raising capital, mergers and acquisitions, and public
relations. Mr. Seifer is currently active in the oil and gas industry,
personally owning ten oil wells in Northern Louisiana. Mr. Seifer graduated from
MichiganState with a degree in Engineering and a Business Minor.
  Scott R. Masse: Mr. Masse
Joined as CEO and President in August of 2007.
 An
accomplished entrepreneur and financial advisor with many years experience in
the oil industry. Scott began his career at Smith Barney in Boston after
graduating Boston College with a double concentration in finance and accounting.
He has also worked for Legg Mason, First Union, and Wachovia Securities
Financial Network leading to the establishment of Masse Wealth Management. Scott
has extensive experience in working with small capitalization securities.
 In the oil field, Scott has focused his efforts on building alliances with
key enhanced oil recovery companies and well stimulation companies.   -30-
 
 Eddie McGarraugh – Mr.
McGarraugh joined the board of directors in August, 2006. Mr. McGarraugh has
been an entrepreneur for over 40 years.  Mr. McGarraugh is a seasoned oil
and gas operator with knowledge of all phases of drilling and completing
wells. He worked in the oil and gas industry for 30 years, leasing,
drilling and completing wells in Texas, Oklahoma, and Colorado.
   Gerald Schiano: Mr. Schiano
Joined as CFO in August of 2007.
 After
graduating from Rhode Island College Gerald began his career as an accountant
for Gilbane Building Company.  The rigors of construction accounting
trained Gerald well for his next positions as cost accountant and then
controller in the high technology industry. Gerald later was hired as Chief
Financial Officer of a construction company involved in large public work
projects.  Gerald later ran his own construction company servicing large
public work projects.  Of late Gerald has been using his entrepreneurial
talent to develop interests in oil fields in the mid west.
 
 Bruce Scambler: Mr. Scambler
Joined as President in January of 2008.
 Mr
Scambler started with KPMG in 1980 and is a CPA, with over 30 years of business
experience, of which over ten years has been working in the Mid Continent oil
and gas industry. Mr Scambler has been an officer and director of public
companies in the United States and the United Kingdom including Chief Financial
Officer of Cotton Valley Resources and Aspen Energy. Mr Scambler has a proven
track record of successful financing, restructuring, and value added growth in
companies he has managed. His management has included prospect and company
acquisitions, mergers and realizations. The added experience of hands on field
operations, drilling, well work-overs, and production enhancement has proven
multiples of success. Bruce received a degree in law from Bristol University,
Bristol, England, and a MBA from Strathclyde Graduate Business School in
Glasgow, Scotland. Bruce served as a pilot officer in the Royal Air Force. Bruce
is a recognized speaker on COPAS/taxation and other oil and gas taxation
matters. His community involvement includes working as a Court Appointed Special
Advocate (CASA), Board Member Court Appointed Special Advocates, and is a Lay
Reader with All Souls Episcopal Church.
 
 Floyd Keefer: Mr. Keefer
Joined as Vice President  in January of 2008.
 Mr.
Keefer is a 3rd generation oilman from the state of Oklahoma. He has over 35
years of experience in the oil industry working in service, drilling and
completing of wells. Mr. Keefer has worked with many major oil companies
throughout his years including, Chevron, Exxon Mobil, Texaco, and Standard Oil.
Mr. Keefer brings Dynamic valuable experience that will benefit the company in
reaching aggressive goals for near term expansion. He works through an industry
network which brings integrated expertise including geology, geophysics,
petroleum engineering and all aspects of well drilling operations. Mr. Keefer
has conservatively overseen more than 500 domestic and foreign drilling
projects.
 -31-
 Item 10.
ExecutiveCompensation
  Executive
Compensation
  The
following Summary Compensation Table sets forth certain information regarding
the compensation of our officers as of December 31, 2007
  Summary Compensation
Table
  Annual
      Compensation
              Long
      Term Compensation AwardsYear
              Salary
              Bonus
              Securities
      Underlying Options
              All
      Other Compensation
              Total
      CompensationDaniel
      Seifer, COB
              2006
                2007
              -
              -
              -
              -
              -Scott
      R. Masse CEO
              2006
                2007
              -
                23,697
              -
              -
              -
              23,697Eddie
      McGarraug,DirectorGerald
      Schiano CFO
              2006
                2007
              11,950
              -
              -
              -
              11,950Bruce
      Scambler
                President
              2006
                2007
              
              -
              -
              -Floyd
      Keefer
                VP
      of Field Operations
              2006
                2007
  Option
Grants During Last Fiscal Year
  No
options, warrants or similar rights to purchase our Common Stock have been
granted to any officers or directors.
  Employment
Agreements
  There are
no employment agreements to date.
  Compensation
of Directors
  Our
directors receive no compensation as members of our board. Our directors are
reimbursed for travel and out-of-pocket expenses in connection with attendance
at board meetings. The following table summarizes compensation that our
directors earned during 2006 for services as members of our Board of Directors.   -32-
  Year
              
              Fees
      Earned or Paid in Cash
              
              
              Options
      Awarded
              
              
              All
      Other Compensation
              
              
              TotalDaniel
      Seifer
              2006
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -2007
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              --Scott
      R. Masse
              2006
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -2007
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              --Eddie
      McGarraugh
              2006
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -2007
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              --Gerald
      Schiano
              2006
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -2007
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
  Item 11.
Security Ownership of Certain Beneficial Owners and
Management
  As of
February 25, 2008, there were 26,889,857 shares of common stock, par value
$.0001 outstanding. The following table sets forth certain information regarding
the beneficial ownership of our common stock as of February 25,
2008:
  •
                
                all directors•
                
                each person who is known by us to
      be the beneficial owner of more than five percent (5%) of the outstanding
      common stock•
                
                each executive officer named in
      the Summary Compensation Table•
                
                all directors and executive
      officers as a group
  The
number of shares beneficially owned by each director or executive officer is
determined under rules of the SEC, and the information is not necessarily
indicative of beneficial ownership for any other purpose. Under the SEC rules,
beneficial ownership includes any shares as to which the individual has the sole
or shared voting power or investment power. In addition, beneficial ownership
includes any shares that the individual has the right to acquire within 60 days.
Unless otherwise indicated, each person listed below has sole investment and
voting power (or shares such powers with his or her spouse). In certain
instances, the number of shares listed includes (in addition to shares owned
directly), shares held by the spouse or children of the person, or by a trust or
estate of which the person is a trustee or an executor or in which the person
may have a beneficial interest.
   -33-
 Title
      of Class
              Name
      and Address of Beneficial Owner
              Amount
      of Beneficial Ownership
              Percent
      of ClassCommon
      Stock
              Daniel
      Seifer(1)
                Dynamic
      Natural Resources Inc.
                78
      South Street  Suite 202
                Wrentham,
      MA 02093
              10,402,700
              49.79%Common
      Stock
              Scott
      R. Masse
                Dynamic
      Natural Resources Inc.
                78
      South Street Suite 202
                Wrentham,
      MA 02093
              1,710,000
              1.60%Common
      Stock
              Eddie
      McGarraugh
                Dynamic
      Natural Resources Inc.
                78
      South Street Suite 202
                Wrentham,
      MA 02093
              -
              -%Common
      Stock
              Gerald
      Schiano
                Dynamic
      Natural Resources Inc.
                78
      South Street Suite 202
                Wrentham,
      MA 02093
              -
              -%Total
      as group
              
              12,112,700
              45%
 
 Stock
Option and Incentive Plans
  There are
no stock option or incentive plans.   -34-
 Item 13.
Exhibits
  No.
              Description3.1
              Articles
      of Incorporation (1)3.2
              Bylaws
      of the Company (2)4.1
              Specimen
      Stock Certificate (3)31.1
              Certification of Chief Executive Officer pursuant to Rule
      13a-14(a).31.2
              Certification of Chief Financial Officer pursuant to Rule
      13a-14(a).32.1
              Certification pursuant to 18 U.S.C. Section
      1350.32.2
              Certification pursuant to 18 U.S.C. Section
      1350.
  (1)
incorporated by reference to Exhibit 3.1 of the Current report on Form SB-2/A,
as filed with the SEC on March 2, 2006
 (2)
incorporated by reference to Exhibit 3.2 of the Current report on Form SB-2/A,
as filed with the SEC on March 2, 2006
 (3)
incorporated by reference to Exhibit 4.1 of the Current report on Form SB-2/A,
as filed with the SEC on March 2, 2006
   Item 14.
Principal Accountant Fees and Services
  The
following are the fees billed us by our auditors, Robert L. White and
Associates, Inc., for services rendered thereby during 2007 and
2006:
  2007
              
              
              2006Audit
      Fees
              
              $
              4,000
              
              
              $
              3,000Audited
      Related Fees
              
              
              -
              
              
              
              -Tax
      Fees
              
              
              -
              
              
              
              -Total
      Fees
              
              $
              4,000
              
              
              $
              3,000
  Audit Fees consist of the
aggregate fees billed for professional services rendered for the audit of our
annual financial statements and the reviews of the financial statements included
in our Forms 10-QSB and for any other services that were normally provided in
connection with our statutory and regulatory filings or
engagements.
  Audit Related Fees consist of
the aggregate fees billed for professional services rendered for assurance and
related services that were reasonably related to the performance of the audit or
review of our financial statements and were not otherwise included in Audit
Fees.
  Tax Fees consist of the
aggregate fees billed for professional services rendered for tax compliance, tax
advice and tax planning.  Included in such Tax Fees were fees for
preparation of our tax returns and consultancy and advice on other tax planning
matters.
 -35-
 SIGNATURES
  In
accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
  Dynamic Natural
      Resources, Inc., a Nevada CorporationDate:
      March 24, 2008
                By:
                /s/ Scott
      MasseScott
      MasseChief
      Executive Officer
   In
accordance with the Securities Exchange Act of 1934, this report has been signed
below by the following persons on behalf of the Registrant and in the capacities
and on the dates indicated.
  Signature
              Title
              Date/s/ Scott Masse
              
              March
      24, 2008Scott
      Masse
              Chief
      Executive Officer and Director/s/ Gerald Schiano
              
              March
      24, 2008Gerald
      Schiano
              Chief
      Financial Officer and Director
   -36-
 
 Exhibit Index
 No.
                Description3.1
                Articles
      of Incorporation (1)3.2
                Bylaws
      of the Company (2)4.1
                Specimen
      Stock Certificate (3)31.1
                Certification of Chief Executive Officer pursuant to Rule
      13a-14(a).31.2
                Certification of Chief Financial Officer pursuant to Rule
      13a-14(a).32.1
                Certification pursuant to 18 U.S.C. Section
      1350.32.2
                Certification pursuant to 18 U.S.C. Section
      1350.
 (1)
incorporated by reference to Exhibit 3.1 of the Current report on Form SB-2/A,
as filed with the SEC on March 2, 2006
 (2)
incorporated by reference to Exhibit 3.2 of the Current report on Form SB-2/A,
as filed with the SEC on March 2, 2006
 (3)
incorporated by reference to Exhibit 4.1 of the Current report on Form SB-2/A,
as filed with the SEC on March 2, 2006
 -37-