UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB


(Mark One)
[X]      QUARTERLY  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
         ACT OF 1934 For the quarterly period ended: February 28, 2006

[  ]     TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE EXCHANGE ACT
         For the transition period from _________________ to _________________


                         Commission file number 0-28627


                            PATCH INTERNATIONAL INC.
        (Exact name of small business issuer as specified in its charter)


               NEVADA                                  87-0393257
  (State or other jurisdiction of           (IRS Employer Identification No.)
   incorporation or organization)


      1220 - 666 BURRARD STREET, VANCOUVER, BRITISH COLUMBIA V6C 2X8 CANADA
                    (Address of principal executive offices)

                                 (604) 688-2790
                           (Issuer's telephone number)

                                 NOT APPLICABLE
              (Former name, former address and former fiscal year,
                         if changed since last report)

     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 [ ]


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

    State the number of shares outstanding of each of the issuer's classes of
               common equity, as of the latest practicable date:
           14,988,090 SHARES OF COMMON STOCK, $.001 PAR VALUE, AS OF
                                 APRIL 12, 2006


 Transitional Small Business Disclosure Format (check one);  Yes [  ] No [X]


<PAGE>


PATCH INTERNATIONAL INC.
February 28, 2006
(unaudited)
                                                                            Page

Consolidated Balance Sheets                                                  3

Consolidated Statements of Operations                                        4

Consolidated Statements of Cash Flows                                        5

Notes to the Consolidated Financial Statements                               6


















                                       2
<PAGE>

PATCH INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEETS
(Stated in U.S. Dollars)
(unaudited)

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
                                                                                       FEBRUARY 28,           MAY 31,
                                                                                           2006                2005
------------------------------------------------------------------------------------------------------------------------
<S>                                                                                <C>                 <C>
ASSETS

Current Assets
     Cash and cash equivalents                                                     $      4,549,925    $        128,872
     Accounts receivable                                                                     45,117              21,754
     Prepaid expenses and other                                                               1,760               1,230
------------------------------------------------------------------------------------------------------------------------

Total Current Assets                                                                      4,596,802             151,856
Property and equipment, net                                                                   1,588               2,074
Oil and gas interests (successful efforts method) (Note 4)                                  921,363             198,284
Available-for-sale securities (Note 3)                                                    7,729,000           6,007,000
------------------------------------------------------------------------------------------------------------------------

Total Assets                                                                       $     13,248,753    $      6,359,214
========================================================================================================================

LIABILITIES & STOCKHOLDERS' EQUITY

Current Liabilities
     Accounts payable and accrued liabilities                                      $        252,442    $        250,592
     Income taxes payable                                                                 1,885,000                   -
     Due to related parties (Note 5)                                                         86,656             342,813
------------------------------------------------------------------------------------------------------------------------

Total Current Liabilities                                                                 2,224,098             593,405
------------------------------------------------------------------------------------------------------------------------

Commitments (Note 8)

STOCKHOLDERS' EQUITY

Preferred stock:
1,000,000 preferred shares authorized with par value of $0.01 per share;
none issued and outstanding                                                                       -                   -

Common stock:
25,000,000 common shares authorized with par value of $0.001 per share;
14,136,398 shares issued and 13,950,148 outstanding
(May 31, 2005 - 12,753,341 shares issued and outstanding)                                    14,136              12,753

Additional paid-in capital                                                                2,399,283           1,410,837

Stock subscriptions receivable                                                               (4,000)             (4,000)

Accumulated other comprehensive income (Note 7)                                           7,728,999           6,006,999

Retained Earnings (Deficit)                                                                 976,796          (1,660,780)

Less 186,250 common shares held in treasury, at cost                                        (90,559)                  -
------------------------------------------------------------------------------------------------------------------------

Total Stockholders' Equity                                                               11,024,655           5,765,809
------------------------------------------------------------------------------------------------------------------------

Total Liabilities and Stockholders' Equity                                         $     13,248,753    $      6,359,214
========================================================================================================================
</TABLE>


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


                                       3
<PAGE>
PATCH INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Stated in U.S. Dollars)
(unaudited)

<TABLE>
<CAPTION>
                                                     FOR THE THREE    FOR THE THREE    FOR THE NINE     FOR THE NINE
                                                      MONTHS ENDED     MONTHS ENDED    MONTHS ENDED     MONTHS ENDED
                                                      FEBRUARY 28,     FEBRUARY 28,    FEBRUARY 28,     FEBRUARY 28,
                                                          2006             2005             2006            2005
------------------------------------------------------------------------------------------------------------------------
<S>                                                   <C>               <C>             <C>              <C>
Revenue
     Oil and gas                                      $     58,345      $     26,081    $    142,427     $     69,867
------------------------------------------------------------------------------------------------------------------------

Expenses
     Consulting                                            365,919            75,555         795,348          306,663
     Depletion, depreciation and impairment                 55,640             3,708          90,265           52,769
     Investor relations                                    105,822            71,720         197,288          148,823
     Gain on relinquishment of oil and gas                       -           (10,996)              -          (10,996)
     properties
     General and administrative                             84,070            28,133         157,618           83,243
     Foreign exchange loss (gain)                          (21,186)              528         (20,381)             838
     Oil and gas production, royalties and other           118,663             9,414         156,081           26,690
     Professional fees                                      51,185            22,957         145,673           63,141
     Related party administration                           48,880            33,250         144,906           99,750
     Loss on write-off of proposed acquisition                   -                 -               -           21,000
     Loss on sale of trading securities                          -                 -               -           15,930
------------------------------------------------------------------------------------------------------------------------
Total Operating Expenses                                   808,993           234,269       1,666,798          807,851
------------------------------------------------------------------------------------------------------------------------
Operating Loss                                            (750,648)         (208,188)     (1,524,371)        (737,984)
------------------------------------------------------------------------------------------------------------------------
Other Revenue
     Interest                                               42,635                 -          44,060                -
     Gain on sale of available-for-sale securities         275,129                 -       6,228,130                -
------------------------------------------------------------------------------------------------------------------------
Total Other Revenue                                        317,764                 -       6,272,190                -
------------------------------------------------------------------------------------------------------------------------
Income (Loss) Before Income Taxes                         (432,884)         (208,188)      4,747,819         (737,984)

Provisions For Income Taxes                                (10,243)                -      (2,110,243)               -
------------------------------------------------------------------------------------------------------------------------
Net Income (Loss)                                     $   (443,127)     $   (208,188)   $  2,637,576     $   (737,984)
========================================================================================================================
Net Income (Loss) Per Share
     Basic                                            $      (0.03)     $      (0.02)   $       0.20     $      (0.07)
     Diluted                                          $      (0.03)     $      (0.02)   $       0.19     $      (0.07)

Weighted Average Number Of Common Stock
Outstanding
     Basic                                              13,775,000        11,298,000      13,457,000       10,762,000
     Diluted                                            14,383,000        11,298,000      13,729,000       10,762,000

</TABLE>


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

                                       4
<PAGE>

PATCH INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Stated in U.S. Dollars)
(unaudited)

<TABLE>
<CAPTION>
                                                                                               FOR THE NINE      FOR THE NINE
                                                                                               MONTHS ENDED      MONTHS ENDED
                                                                                               FEBRUARY 28,      FEBRUARY 28,
                                                                                                   2006              2005
------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                         <C>               <C>
Operating Activities
     Net income (loss)                                                                      $     2,637,576   $     (737,984)
  Adjustments to reconcile net loss to net cash used
     by operating activities:
         Depletion, depreciation and impairment                                                      90,265           52,769
         Stock based compensation                                                                   490,079          192,274
         Loss on sale of trading securities                                                               -           15,930
         Gain on relinquishment of oil and gas                                                            -          (10,996)
         Write-off of proposed acquisition                                                                -           21,000
         Gain on sale of available-for-sale securities                                           (6,228,130)               -
         (Increase) decrease in accounts receivable                                                 (23,363)          14,165
         Decrease in prepaid expenses and other                                                        (530)          38,247
         Increase in accounts payable and accrued liabilities                                       (88,182)         131,937
         Increase in income taxes payable                                                         1,885,000                -
     (Decrease) increase in due to related parties                                                 (256,157)          92,562
-----------------------------------------------------------------------------------------------------------------------------
Net cash used in operating activities                                                            (1,493,442)        (190,096)
-----------------------------------------------------------------------------------------------------------------------------
Investing Activities
     Cash paid for proposed acquisition                                                                   -          (21,000)
     Oil and gas interests                                                                         (722,826)            (381)
     Acquisition of equipment                                                                             -           (2,592)
     Acquisition of trading securities                                                                    -           (1,655)
     Proceeds on sale of trading securities                                                               -           14,058
     Proceeds on sale of available-for-sale securities                                            6,228,130                -
-----------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) investing activities                                               5,505,304          (11,570)
-----------------------------------------------------------------------------------------------------------------------------
Financing Activities
     Common stock issued for cash                                                                   499,750          183,510
     Acquisition of treasury stock                                                                  (90,559)               -
-----------------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities                                                           409,191          183,510
-----------------------------------------------------------------------------------------------------------------------------
Change in cash and cash equivalents for the period                                                4,421,053          (18,156)

Cash and cash equivalents, beginning of period                                                      128,872           38,613
---------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of period                                                    $     4,549,925   $       20,457
=============================================================================================================================

NON-CASH FINANCING ITEMS
     Common stock issued for debt                                                           $             -   $       52,164
     Stock options exercised for debt                                                                     -          114,740

SUPPLEMENTAL CASH FLOW INFORMATION
     Taxes paid                                                                             $       225,243   $            -
     Interest paid                                                                                   36,451                -


</TABLE>


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

                                       5

<PAGE>

PATCH INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 2006
(Stated in U.S. Dollars)
(unaudited)

1.   BASIS OF PRESENTATION

     The unaudited  consolidated financial information furnished herein reflects
     all  adjustments,  which in the opinion of  management,  are  necessary  to
     fairly state the Company's  consolidated financial position and the results
     of its consolidated  operations for the periods  presented.  This report on
     Form 10-QSB should be read in conjunction  with the Company's  consolidated
     financial  statements  and notes  thereto  included in the  Company's  Form
     10-KSB for the fiscal year ended May 31, 2005. The Company assumes that the
     users of the interim financial  information herein have read or have access
     to the audited financial  statements for the preceding fiscal year and that
     the adequacy of additional disclosure needed for a fair presentation may be
     determined in that context.  Accordingly,  footnote disclosure, which would
     substantially  duplicate the  disclosure  contained in the  Company's  Form
     10-KSB  for the fiscal  year  ended May 31,  2005,  has been  omitted.  The
     results of operations for the nine-month period ended February 28, 2006 are
     not  necessarily  indicative of results that may be expected for the fiscal
     year ending May 31, 2006.

2.   RECENT PRONOUNCEMENTS
     In May 2005, the Financial  Accounting  Standards  Board (FASB) issued SFAS
     No. 154,  "ACCOUNTING  CHANGES AND ERROR CORRECTIONS - A REPLACEMENT OF APB
     OPINION NO. 20 AND SFAS NO. 3". SFAS 154 changes the  requirements  for the
     accounting  for and  reporting  of a change  in  accounting  principle  and
     applies to all voluntary changes in accounting  principle.  It also applies
     to changes required by an accounting  pronouncement in the unusual instance
     that the  pronouncement  does not include specific  transition  provisions.
     SFAS 154 requires  retrospective  application to prior  periods'  financial
     statements of changes in accounting  principle,  unless it is impracticable
     to determine either the period-specific effects or the cumulative effect of
     the change.  The  provisions of SFAS No. 154 are  effective for  accounting
     changes and  correction  of errors  made in fiscal  years  beginning  after
     December 15, 2005.  The adoption of this standard is not expected to have a
     material  effect  on the  Company's  results  of  operations  or  financial
     position.

     In December 2004,  the FASB issued SFAS No. 153,  "EXCHANGES OF NONMONETARY
     ASSETS - AN  AMENDMENT  OF APB OPINION NO. 29". The guidance in APB Opinion
     No.  29,  "ACCOUNTING  FOR  NONMONETARY  TRANSACTIONS",  is  based  on  the
     principle that exchanges of nonmonetary  assets should be measured based on
     the fair value of the  assets  exchanged.  The  guidance  in that  Opinion,
     however, included certain exceptions to that principle. SFAS No. 153 amends
     Opinion No. 29 to eliminate  the  exception  for  nonmonetary  exchanges of
     similar  productive  assets and  replaces it with a general  exception  for
     exchanges of nonmonetary  assets that do not have commercial  substance.  A
     nonmonetary  exchange has commercial  substance if the future cash flows of
     the  entity  are  expected  to  change  significantly  as a  result  of the
     exchange.  The  provisions of SFAS No. 153 are  effective  for  nonmonetary
     asset exchanges  occurring in fiscal periods beginning after June 15, 2005.
     The  adoption  of this  standard  did not  have a  material  effect  on the
     Company's results of operations or financial position.

     In  December  2004,  the FASB  issued  Statement  of  Financial  Accounting
     Standard (SFAS) No. 123R, "SHARE BASED PAYMENT". SFAS 123R is a revision of
     SFAS No. 123 "ACCOUNTING FOR STOCK-BASED COMPENSATION",  and supersedes APB
     Opinion No. 25,  "ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES" and its related
     implementation guidance. SFAS 123R establishes standards for the accounting
     for  transactions in which an entity  exchanges its equity  instruments for
     goods or services. It also addresses transactions in which an entity incurs
     liabilities  in exchange  for goods or services  that are based on the fair
     value of the  entity's  equity  instruments  or that may be  settled by the
     issuance  of those  equity  instruments.  SFAS 123R  focuses  primarily  on
     accounting for transactions in which an entity obtains employee services in
     share-based  payment  transactions.  SFAS 123R  requires a public entity to
     measure the cost of employee  services received in exchange for an award of
     equity  instruments  based on the grant-date  fair value of the award (with
     limited  exceptions).  That cost will be recognized  over the period during
     which an employee is required to provide  service in exchange for the award
     - the requisite  service  period  (usually the vesting  period).  SFAS 123R
     requires  that  the  compensation  cost  relating  to  share-based  payment
     transactions  be  recognized  in  financial  statements.  That cost will be
     measured  based on the fair  value of the equity or  liability  instruments
     issued.


                                       6
<PAGE>
PATCH INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 2006
(Stated in U.S. Dollars)
(unaudited)

2.   RECENT PRONOUNCEMENTS (CONTINUED)

     Public  entities  that file as small  business  issuers will be required to
     apply SFAS 123R in the first interim or annual reporting period that begins
     after  December 15, 2005.  The adoption of this standard is not expected to
     have a material effect on the Company's  results of operations or financial
     position.

     In March 2005, the SEC staff issued Staff Accounting Bulletin No. 107 ("SAB
     107") to give guidance on the implementation of SFAS 123R. The Company will
     consider SAB 107 during implementation of SFAS 123R.

3.   AVAILABLE-FOR-SALE SECURITIES

     At  February  28,  2006,  the  Company  owned  7,291,937  (May  31,  2005 -
     11,200,000) ordinary shares of Pharmaxis Ltd. ("Pharmaxis"),  an Australian
     company  listed  on the  Australian  Stock  Exchange,  which  is an  equity
     interest of  approximately  4%. The Company  records the ordinary shares of
     Pharmaxis at fair value. At February 28, 2006, the market value is recorded
     at $7,729,000, net of tax of $3,312,000, resulting in an unrealized gain of
     $7,728,999,  which is recorded as other  comprehensive  income,  a separate
     component of stockholders' equity.

     During the period  ended  February 28,  2006,  the Company  sold  3,908,063
     Pharmaxis  shares for gross proceeds of $6,228,130,  and realized a gain of
     $6,228,130, before applicable taxes.

                                                                February 28,
                                                                    2006
                                                              -----------------

     7,291,937 ordinary shares                                  $ 7,729,000
                                                              =================


                                                                   May 31,
                                                                    2005
                                                              -----------------

     11,200,000 ordinary shares                                 $ 6,007,000
                                                              =================

4.   OIL AND GAS INTERESTS

<TABLE>
<CAPTION>
                                                                      February 28,           May 31,
                                                                         2006                 2005
                                                                     -------------------------------------
<S>                                                                  <C>                <C>
     Proved oil and gas properties and related equipment
     - California, USA
                                                                     $           -      $     15,638
     - Saskatchewan, Canada                                                212,113           212,113
     - McLeod project, Alberta, Canada                                      89,079            68,155
                                                                     -------------------------------------

                                                                           301,192           295,906
     Non-producing oil and gas properties
     - Alberta, Canada
       - Bear Canyon project                                                24,195                 -
       - Peace River arch project                                          722,826                 -
     - Texas, USA                                                           34,385            34,385
                                                                     -------------------------------------
                                                                         1,082,598           330,291
     Accumulated depletion and impairment                                 (161,235)         (132,007)
                                                                     -------------------------------------

     Balance, end of period                                          $     921,363      $    198,284
                                                                     =====================================

</TABLE>

                                       7
<PAGE>
PATCH INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 2006
(Stated in U.S. Dollars)
(unaudited)


4.   OIL AND GAS INTERESTS (CONTINUED)

     a)  Saskatchewan, Canada

         On May 1, 2002,  the Company  acquired a 12.5% working  interest in ten
         test wells located in Saskatchewan  by incurring  15.625% of the costs.
         The  Company  participated  in a  second  set of  nine  test  wells  in
         Saskatchewan, Canada, by agreeing to incur 15.625% of the costs to earn
         a 12.5% working interest.

         The Company entered into a  participation  agreement with Micron Enviro
         Systems Inc. ("Micron") dated March 27, 2003 where Micron earned a 3.5%
         working  interest by incurring 5% of the associated  costs. The Company
         also entered into a  participation  agreement  with Butler  Development
         Corporation  ("Butler") dated April 28, 2003 where Butler earned a 3.5%
         working  interest by incurring 5% of the associated costs and by paying
         the Company CAD$15,000.

         On November 14, 2003, the Company  acquired a 12.5% working interest in
         a test well  located in  Saskatchewan  and 6.25% in the  balance of the
         farmout lands,  by incurring  12.5% of the costs. A total of $nil (2004
         -$1,324) in costs related to this well has been charged to  operations,
         as the well was shut-in.

     b)  Alberta, Canada

         (i)  By a  Participation  Agreement  dated March 10, 2005,  the Company
              acquired a 25% working  interest  in the Bear Canyon gas  project.
              During the period ended  February  28, 2006,  the well was drilled
              and shut-in and the Company  recognized  an  impairment  charge of
              $24,195.

         (ii) On May 30, 2005, the Company  acquired a 10% working interest in a
              test well (the "McLeod"  project)  located in Alberta by incurring
              10% of the costs.  The well was drilled in June 2005 and commenced
              operations  in  November  2005.  A second test well was drilled in
              December 2005 and was shut-in January 2006and an impairment charge
              of $44,913 has been taken.

         (iii) The Company  entered into  Agreements  dated November 8, 2005, to
              acquire  a  working  interest  in three  projects  located  in the
              Lloydminster, Elnora and Atlee-Buffalo areas of Alberta. Under the
              terms of each of these Agreements, a test well is to be spudded on
              each  property no later than  December 31,  2005,  now extended to
              June  30,  2006  due to poor  weather  and rig  availability.  The
              Company  will earn a 50%  interest in each test well subject to an
              overriding   royalty   convertible  after  pay-out  such  that  if
              converted the Company would revert to a 30% working interest and a
              30% interest in the balance of the farmout lands.

         (iv) The Company  entered into an Agreement  dated  January 4, 2006, to
              acquire a 100%  working  interest  in a test well  located  in the
              Halkirk  area of Alberta.  Under the terms of the  Agreement,  the
              test well is to be  spudded no later than  August  30,  2006.  The
              Company will then earn a 100%  interest in the test wells  subject
              to an overriding  royalty such that if converted after pay-out the
              Company would revert to a 50% working  interest and a 50% interest
              in the balance of the farmout lands.

         (v)  The Company  entered into an Agreement  dated January 19, 2006, to
              acquire a 90% working  interest  in two test wells  located in the
              Peace  River  arch  area  of  Alberta.  Under  the  terms  of  the
              Agreement, the Company made a payment of $678,943 (CDN$779,495) to
              the title holder of the farmout lands  together with two cash call
              payments totalling $43,883 (CDN$50,400); the two test wells are to
              be spudded no later than  February 1, 2007.  The Company will then
              earn a 90%  interest  in the test wells and a 54%  interest in the
              balance of the farmout lands.
     c)  California, USA

         The  Company has 0.75 of 1% of an interest in four test wells in Tehama
         County, California. The Company relinquished its interest in these test
         wells in fiscal 2005.

                                       8
<PAGE>
PATCH INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 2006
(Stated in U.S. Dollars)
(unaudited)


     d)  Texas, USA

         The Company entered into a participation  agreement dated September 30,
         2003 with PB Energy USA Inc. ("PB"),  where the Company was granted the
         right  to earn a 3.75%  working  interest  in a Test  Well  and a 3.75%
         working  interest in 3 tracts of land  totalling 856 acres lying within
         the Goliad  County of Texas,  USA (the  "Program  Lands")  known as the
         Manahuilla  Creek  Project,  by paying 5% of the  Prospect  Acquisition
         Costs (being  US$15,000  (paid)),  5% of the Test Well  Operations  and
         3.75% of the costs of Development  of Program Lands.  The test well has
         been shut-in.

     e)  Ukraine

         The Company does not intend to proceed at this time with drilling wells
         identified in a signed  Memorandum of  Understanding  with Firma HAS in
         the  oil  and  gas  fields  of  Chernigivska,  Sumska,  Poltavaska  and
         Kharkivska  regions  of  Ukraine,  which  have  been  approved  by  the
         Ukrainian government.

     f)  Bolivia

         The Company has decided not to proceed with an  agreement  entered into
         dated November 1, 2005, to acquire a 30% working interest in the Warnes
         Field project, Santa Cruz, Bolivia.


5.   DUE TO RELATED PARTIES

     a)  Related  parties  include  directors  and officers and  companies  with
         common  management  and  directorships.   Related  party  accounts  are
         unsecured with no fixed terms of interest or repayment. At February 28,
         2006,  amounts  owing of $86,656 (May 31, 2005 - $342,813)  were due to
         related parties.

     b)  On May 1, 2005,  the Company  entered into a management  agreement with
         the  President  of the Company  for a term of 5 years with  payments of
         $175,000 per annum.  During the nine months  ending  February 28, 2006,
         the  Company  paid   $131,250   (2004  -  $36,000)  in  related   party
         administration fees.

     c)  During the nine months  ending  February 28, 2006,  the Company paid to
         Officers  of the  Company  $13,656  (2004  -  $nil)  in  related  party
         administration fees.


6.   COMMON STOCK

     On July 25, 2005,  the Company  effected a reverse stock split on the basis
     of the issue of one new common share for the  cancellation of 10 old common
     shares. All share amounts have been retroactively  adjusted for all periods
     presented.

     On March 27, 2006, the Company  effected a forward stock split on the basis
     of the issue of two and one-half new common shares for the  cancellation of
     1 old common share. All share amounts have been retroactively  adjusted for
     all periods presented.

     The Company is proposing the  distribution of a cash dividend on a pro-rata
     basis of 50% of the net proceeds of the sale of its investment in Pharmaxis
     Ltd. Net proceeds  includes the costs related to the sale of the shares and
     related  taxes.  The directors have fixed July 30, 2004 as the record date.
     Each  shareholder of record will receive the equivalent net proceeds of the
     sale of one Pharmaxis share for each 2.998 of pre-reverse and forward stock
     split Patch  International  Inc. shares owned. The  distribution  will take
     place  after the  Company  has  completed  the final sale of its  Pharmaxis
     investment and is subject to the Company receiving all required  regulatory
     approvals.


                                       9
<PAGE>
PATCH INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 2006
(Stated in U.S. Dollars)
(unaudited)


6.   COMMON STOCK (CONTINUED)

     Effective  September 22, 2005,  the Company  filed a form S-8  Registration
     Statement  in  connection  with a 2005 Stock  Option Plan  allowing for the
     granting  of  options to  acquire  shares up to a total of  900,000  shares
     (2,250,000 after reflecting reverse split).


     A summary of the Company's stock option activity is as follows:

                                               February 28,
                                                   2006
                                      ----------------------------------
                                                               Weighted
                                                  Number        Average
                                                      of       Exercise
                                                 Options          Price
                                      ----------------------------------

    Balance, beginning of period               1,370,000          $0.28
    Granted                                    2,175,000          $0.58
    Exercised                                 (1,157,500)         $0.34
                                      ----------------------------------

    Balance, end of period                     2,387,500          $0.53
                                      ===================-==============

    As at February 28, 2006, the following options are outstanding:

<TABLE>
<CAPTION>
                                                               OUTSTANDING                               EXERCISABLE
                        ---------------------------------------------------     -------------------------------------
                                               Weighted                                                     Weighted
                                                Average           Weighted                                   Average
                                 Number       Remaining            Average                 Number           Exercise
              Exercise               of     Contractual           Exercise                     Of              Price
                 Price           Shares    Life (years)              Price                 Shares           Weighted
    -----------------------------------------------------------------------     ------------------------------------
<S>                           <C>                  <C>               <C>                <C>                    <C>
      $    0.26 - 0.80        2,387,500            2.40              $0.53              2,387,500              $0.53
                        ---------------------------------------------------     ------------------------------------

                              2,387,500            2.40              $0.53              2,387,500              $0.53
                        ===================================================     ====================================
</TABLE>


     The Company  accounts for stock based  employee  and director  compensation
     arrangements in accordance with provisions of Accounting  Principles  Board
     ("APB")  Opinion No. 25 - "ACCOUNTING  FOR STOCK ISSUED TO EMPLOYEES",  and
     related  interpretations,  and complies with the  disclosure  provisions of
     SFAS No. 123 - "ACCOUNTING FOR STOCK BASED COMPENSATION". Under APB No. 25,
     compensation  expense is based on the  difference,  if any, on the date the
     number of shares receivable is determined, between the estimated fair value
     of the Company's  stock and the exercise  price of options to purchase that
     stock.  Stock based  compensation  arrangements  for others are recorded at
     their fair value as the services are provided and the compensation  earned.
     During the nine months ended  February 28, 2006,  stock-based  compensation
     for consultants amounting to $490,079 was recorded on 250,000 stock options
     priced at $0.40 per share, 250,000 stock options priced at $0.48 per share,
     562,500 stock options priced at $0.56 per share,  and 512,500 stock options
     priced at $0.80 per share and is included in consulting expenses.


                                       10
<PAGE>
PATCH INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 2006
(Stated in U.S. Dollars)
(unaudited)


6.   COMMON STOCK (CONTINUED)

     Had compensation cost been recognized on the basis of fair value,  pursuant
     to SFAS No. 123, net loss and loss per share would have been as follows:

<TABLE>
<CAPTION>
                                                          Three Months Ended               Nine Months Ended
                                                             February 28,                    February 28,
                                                         2006            2005            2006            2005
                                                     ------------------------------------------------------------
<S>                                                  <C>             <C>           <C>              <C>

     Net income (loss) - as reported                 $ (443,127)     $ (208,188)   $  2,637,576     $  (737,984)
        Add: Stock-based compensation expense
        included in net loss - as reported              248,950          47,875         490,079         192,274
        Deduct: Stock-based compensation expense
        determined under fair value method             (292,832)        (47,875)       (755,711)       (226,169)
                                                     ------------------------------------------------------------

     Net income (loss) - Pro-Forma                   $ (487,009)     $ (208,188)   $  2,371,944     $  (771,879)
                                                     ============================================================

     Basic net income (loss) per share -             $    (0.03)     $    (0.02)   $       0.20     $     (0.07)
     as reported
     Diluted net income (loss) per share -
     as reported                                     $    (0.03)     $    (0.02)   $       0.19     $     (0.07)

     Basic net income (loss) per share -
     Pro-Forma                                       $    (0.04)     $    (0.02)   $       0.17     $     (0.07)
     Diluted net income (loss) per share -
     Pro-Forma                                       $    (0.03)     $    (0.02)   $       0.17     $     (0.07)
</TABLE>

     The fair value of each option granted  during the nine months  February 28,
     2006 was estimated using the Black-Scholes  option pricing model assuming a
     dividend  yield of 0.0%,  expected  volatility of 156%,  risk free interest
     rate of 3.93%, and weighted average expected option terms of 1.6 years.


7.   COMPREHENSIVE INCOME (LOSS)

     Components of comprehensive income (loss) are as follows:

<TABLE>
<CAPTION>
                                                        Three Months Ended              Nine Months Ended
                                                           February 28,                    February 28,
                                                         2006            2005           2006            2005
                                                     -----------------------------------------------------------
<S>                                                  <C>            <C>             <C>            <C>
     Net income (loss) for the period                $ (443,127)    $  (208,188)    $ 2,637,576    $  (737,984)
                                                     -----------------------------------------------------------

     Other comprehensive income (loss) arising
        during the period -

     Securities held-for-resale:
        Reclassification adjustment - realized
        gain  (loss)                                   (186,000)              -      (1,865,000)             -
        Holding gain (loss)                             500,000       1,912,000       3,587,000      4,191,000
                                                     -----------------------------------------------------------
     Net gain (loss) on securities held-for-resale      314,000       1,912,000       1,722,000      4,191,000
        recognized in other comprehensive income
                                                     -----------------------------------------------------------

     Comprehensive income (loss) for the period      $ (129,127)    $ 1,703,812     $ 4,359,576    $ 3,453,016
                                                     ===========================================================
</TABLE>

                                       11
<PAGE>
PATCH INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FEBRUARY 28, 2006
(Stated in U.S. Dollars)
(unaudited)


8.   COMMITMENTS

     a)  The Company entered into a  consulting  agreement dated May 1, 2005 for
         the provision of consulting services for a term of 5 years. The Company
         agreed to pay $75,000 per annum.

     b)  The Company entered into a consulting  agreement  effective October 15,
         2005,  for  the  provision  of  consulting  services  for a term of six
         months.  The  Company  agreed to pay $5,000 per month and issue  30,000
         restricted  shares of common  stock.  This  contract has been  extended
         effective  April 15, 2006 for an additional  twelve months at a rate of
         $10,000 per month.

    c)   The Company entered into a consulting  agreement  effective December 1,
         2005,  with a director of the Company for the  provision of  consulting
         services. The Company must pay $20,534 (CDN$24,000) per annum.

    d)   On February 3, 2006, the Company, through its subsidiary,  Patch Energy
         Inc. ("Energy"), incorporated a wholly-owned subsidiary, Patch Oilsands
         Ltd. ("Oilsands").  On February 27, 2006, the Company formed a Canadian
         Limited   Partnership,   Patch  Oilsands   Limited   Partnership   (the
         "Partnership"), of which Energy owns a 75% interest and Oilsands is the
         general  partner.  The  purpose  of the  Partnership  is to pursue  the
         acquisition,  exploration  and  development  of land or other  property
         interests  primarily  in the Alberta Oil Sands.  Under the terms of the
         Partnership Agreement, Energy can subscribe for units at a preferential
         rate to the current minority limited partners, Habanero Resources Inc.,
         which owns  20.8333%,  and Micron Enviro  Systems,  which owns 4.1667%.
         Habanero  and Micron  have to pay a multiple  of  1.285714  of the base
         subscription  price for all  subscription  funds  raised,  except  that
         portion  which  applies  to  cover  the  cost of the  Company's  shares
         purchased by the Partnership and used as  consideration in transactions
         undertaken  by  the   Partnership.   The  difference  in   preferential
         subscription   pricing   expires   at   the   earlier   of   $4,359,000
         (CD$5,000,000) in capital raised or the purchase of units directly from
         the  Partnership  by another  third party  company.  Since  quarter end
         February 28, 2006 Energy has  advanced  $1,611,807  (CDN$1,873,279)  in
         tranches   representing   its   share  of  the   initial   subscription
         contribution to the Partnership.

         On February 28, 2006, the Partnership entered into an agreement for the
         acquisition of an Alberta oil sands property located just south of Fort
         McMurray  in the area of  Leismer,  Alberta,  Canada.  The  property is
         divided into two half sections  called Block A and Block B. On March 2,
         2006, the Partnership  paid $703,359  (CDN$800,000)  and issued 175,000
         shares of the Company, subject to Section 144 trading restriction,  for
         a 40% working  interest  in Block A. On March 30, 2006 the  Partnership
         paid an additional $426,694 (CDN$500,000) to earn a further 40% working
         interest in Block A. The Partnership has the option,  exercisable on or
         before  April 1, 2007,  to acquire an 80%  interest  in Block B for the
         payment of $1,133,340  (CDN$1,300,000  and 100,000 additional shares of
         the Company. Both Block A and B are subject to a 5% overriding royalty.
         The  Partnership  must  fund 80% of the costs of a 3D  seismic  program
         covering  approximately  1.2 square  miles over the Block A and Block B
         lands on or before March 1, 2007. The Partnership must also fund a Test
         Well on the Block A lands which must be spud by March 1, 2007.

         On April 5,  2006,  Energy  acquired  three  crown  oil  sands  leases,
         comprising  four  sections  (1,024  hectares) at the Alberta  Crown Oil
         Sands sale for $421,672 (CDN$479,315).  The initial lease term is for 5
         years  with  annual  rental  payable  to the  Alberta  Crown  of  $3.05
         (CDN$3.50) per hectare.  On April 13, 2006 Energy entered into a Letter
         of Intent to  assign  these  leases  to the  Partnership  for  $653,937
         (CDN$750,000).


                                       12
<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following  discussion  of the financial  condition and results of operations
for the Company should be read in conjunction  with the  accompanying  financial
statements and related footnotes.

GENERAL

The Company's business originally was the development and  commercialization  of
non-prescription   therapeutics   and   nutraceuticals   designed   to   prevent
inflammation  and their  sequelae,  and the  development  of cosmetics  for skin
conditions.  The Company had not  generated  any revenues  from  product  sales,
royalties or license fees. Due to the inability of the Company to obtain funding
and/or partners to pursue its pharmaceutical  projects, it decided to seek other
business  opportunities.  As of March 15,  2004,  the  Company  consummated  the
Arrangement  Agreement with Patch Energy Inc. ("Energy") under which the Company
acquired Energy, a privately-held  oil and gas company  continued under the laws
of Canada,  in a  stock-for-stock  transaction.  As a result of the acquisition,
Energy is a wholly owned  subsidiary of the Company.  In the  arrangement,  each
issued common share of Energy was exchanged for one common share of the Company.
A total of 18,232,625 shares  (4,558,155  post-reverse and forward split shares)
were  issued,  bringing  the issued  and  outstanding  shares of the  Company to
38,224,372 at that time.

The  acquisition  has been treated for accounting  purposes as an acquisition by
Energy of the net assets  and  liabilities  of the  Company.  Because  Energy is
deemed to be the purchaser for accounting purposes,  the consolidated  financial
statements are presented as a continuation  of Energy and include the results of
operations of Energy since  incorporation  on February 11, 2002, and the results
of operations of the Company since the date of acquisition on March 15, 2004.

A 10:1 reverse split of the Company's stock was made effective on July 25, 2005.
A 2.5 forward split of the Company's stock was made effective on March 27, 2006.

On February 3, 2006 the Company, through Energy, formed a new subsidiary,  Patch
Oilsands Ltd.  ("Oilsands").  On February 27, 2006 the Company,  through Energy,
formed Patch Oilsands Limited  Partnership  ("Partnership") in which Energy owns
75% of the Limited  Partnership  units,  Habanero  Resources Inc.,  20.8333% and
Micron Enviro Systems Inc.,  4.1667%.  David Stadnyk, an officer and director of
the Company,  Energy and Oilsands at the time the Partnership was formed,  had a
finder's  agreement  with  Habanero  Resources and a consulting  agreement  with
Micron Enviro Systems.

Mr.  Stadnyk  has resigned all of his officer and  director  positions  with the
Company and Energy, except for Oilsands effective April 7, 2006 but remains as a
consultant to the Company.

Under the terms of the  Partnership  Agreement  Energy may  subscribe for units,
where unit  proceeds  are for other than the purchase of stock in the Company by
the Partnership for consideration in transactions undertaken by the Partnership,
at a preferential price to the two minority limited partners, such that they pay
a multiple  of 1.28571 of  Energy's  subscription  price,  up to the  earlier of
$4,359,000  (CDN$5,000,000)  in  capital  contribution  or the  introduction  of
another third party limited partner. Oilsands will manage the Partnership in its
capacity as General Partner.

ACCOUNTING POLICIES

The Company follows the successful  efforts method of accounting for its oil and
gas  producing  activities.   Under  this  method,  all  costs  associated  with
productive exploratory wells and productive or non-productive  development wells
are  capitalized  while  the  costs  of  non-productive  exploratory  wells  are
expensed. If an exploratory well finds oil and gas reserves, but a determination
that such  reserves  can be  classified  as  proved  is not made  after one year
following  completion  of  drilling,  the  costs  of  drilling  are  charged  to
operations.  Indirect exploratory expenditures,  including geophysical costs and
annual lease rentals, are expensed as incurred.  Unproved oil and gas properties
that are individually  significant are  periodically  assessed for impairment of
value,  and a loss is  recognized  at the time of  impairment  by  providing  an
impairment allowance.  Capitalized costs of producing oil and gas properties and
related  support  equipment,   after  considering


                                       13

<PAGE>

estimated  dismantlement and abandonment costs and estimated salvage values, are
depreciated and depleted by the unit-of-production method.

On the sale or retirement of a complete unit of a proved property,  the cost and
related  accumulated  depreciation,  depletion,  and amortization are eliminated
from the property accounts, and the resultant gain or loss is recognized. On the
retirement or sale of a partial unit of proved property,  the cost is charged to
accumulated  deprecation,  depletion,  and amortization with a resulting gain or
loss  recognized  in income.  On the sale of an entire  interest  in an unproved
property for cash or cash  equivalent,  gain or loss on the sale is  recognized,
taking into consideration the amount of any recorded  impairment if the property
had been assessed individually. If a partial interest in an unproved property is
sold, the amount  received is treated as a reduction of the cost of the interest
retained.  In joint ventured oil and gas exploration and production  activities,
the  accounts  reflect  only  the  Company's   proportionate  interest  in  such
activities.

RESULTS OF OPERATIONS

THREE MONTHS ENDED FEBRUARY 28, 2006. The Company  generated  $58,345 in oil and
gas  revenues for the three  months  ended  February  28,  2006,  an increase of
$32,264 or 123.7% from the  comparable  2005 period.  The increase was due to an
increase in the market price of oil, and some  increase in  production  due to a
new well. Oil and gas  production,  royalties and other expenses  increased from
$9,414 in 2005 to $118,663 in 2006,  making the Company's oil and gas operations
a loss of $60,318 in the February 28, 2006 quarter versus a profit of $16,667 in
the comparable 2005 period.

Expenses,  other than oil and gas  production  expenses,  were  $690,330 for the
quarter ended February 28, 2006, as compared to $224,855 for the comparable 2005
period,  an  increase  of  $465,475  or 207%.  The  increase  in non-oil and gas
expenses is  primarily  due to higher  consulting  expense,  which  increased by
$290,364 or 384% to $365,919 versus an expense of $75,555 in the comparable 2005
period.  Consulting  expense in the quarter  ended  February  28, 2006  included
$248,950  of  stock-based  compensation,  consisting  of stock  options,  versus
$47,875 in the comparable 2005 period, an increase of $201,075 or 420%.  General
and administrative,  depletion, depreciation and impairment, investor relations,
and professional expenses also increased significantly.  Depletion, depreciation
and impairment increased,  due to the write down of a shut-in well in the McLeod
region of Alberta,  Canada,  to $55,640  versus  $3,708 in the  comparable  2005
period,  an  increase  of $51,932 or  1,400%,.  The  increase in expenses in the
Company  reflects the greater  level of activity on the part of the Company with
regard to its oil and gas  operations,  as well as  operations  relating  to the
disposition of its position in Pharmaxis.

As a result of the increased  expenses for the quarter ended  February 28, 2006,
the  Company  incurred an  operating  loss of  $750,648  versus  $208,188 in the
comparable 2005 period, an increase in operating loss of $574,724 or 260%.

During the quarter  ended  February  28,  2006,  the Company  realized a gain of
$275,129  from  the sale of its  available  for sale  Pharmaxis  shares,  before
applicable taxes, and interest income of $42,635 versus $nil gain on the sale of
available  shares and interest income in the comparable  2005 period.  Provision
has been made for taxes of $10,243 in the quarter ended February 28, 2006 versus
nil in the comparable 2005 quarter.

The result is a net loss for the  quarter  ended  February  28, 2006 of $443,127
versus a net loss of $208,188 in the comparable 2005 period, an increase in loss
of $234,939 or 108%.

NINE MONTHS ENDED FEBRUARY 28, 2006. The Company  generated  $142,427 in oil and
gas revenues for the nine months ended February 28, 2006, an increase of $72,560
or 104% over the comparable 2005 period.  The increase was due to an increase in
the market price of oil and some increase in production. Oil and gas production,
royalties and other expenses increased from $26,690 in 2005 to $156,081 in 2006,
resulting in a loss of $13,654 in the Company's oil and gas operations  versus a
profit of $43,177 in the 2005 comparable period.

Expenses,  other than oil and gas production  expenses,  were $1,510,717 for the
nine months ended February 28, 2006,  versus  $781,161 for the  comparable  2005
period,  an  increase  of  $729,556  or 93%.  The  increase  in  non-oil and gas
expenses is due primarily to an increase in  consulting,  professional,  general
and


                                       14
<PAGE>

administrative,  investor relations,  and related party administration expenses.
Consulting  expense in the nine months  ended  February  28,  2006 was  $795,348
versus $306,663 in the comparable 2005 period,  an increase of $488,685 or 159%.
Included in consulting expense in 2006 is $490,079 of stock-based  compensation,
consisting of stock options,  versus $192,274 in the comparable 2005 period,  an
increase in expense of $297,805 or 155%. The increase in expenses in the Company
reflects the greater level of activity on the part of the Company with regard to
its oil and gas operations, as well as operations relating to the disposition of
its position in Pharmaxis.

As a result of the  increased  expenses for the nine months  ended  February 28,
2006, the Company  incurred an operating loss of $1,524,371  versus  $737,984 in
the comparable 2005 period, an increase in operating loss of $786,387 or 107%.

During the nine months ended February 28, 2006,  the Company  realized a gain of
$6,228,130  from the sale of its available  for sale  Pharmaxis  shares,  before
applicable taxes, and interest income of $44,060 versus $nil gain on the sale of
available  shares and interest income in the comparable  2005 period.  Provision
has been made for taxes of $2,110,243 in the nine months ended February 28, 2006
versus $nil in the comparable 2005 quarter.

The  result is a net income  for the nine  months  ended  February  28,  2006 of
$2,637,576  versus a net loss of  $737,984 in the  comparable  2005  period,  an
increase in net income of $3,375,560 or 457%.

LIQUIDITY AND CAPITAL RESOURCES

For the nine months ended February 28, 2006, the Company used $1,493,442 for its
operations,  as compared to $190,096 for the 2005 period. This was primarily due
to the increased  operating loss generated in fiscal 2006. The Company's sale of
Pharmaxis  shares provided cash of $6,228,130  before taxes,  while $722,826 was
used for oil and gas interests,  resulting in net cash of $5,505,304 provided by
investing  activities  in 2006.  This  compared to using $11,570 in fiscal 2005.
Financing  activities provided $499,750 from the sale of stock less $90,559 used
in  acquiring  stock  under the  company's  stock  repurchase  plan for net cash
provided by financing  activities of $409,191 versus $183,510  provided from the
sale of stock in fiscal 2005.

At February 28, 2006, the Company had working capital of $2,372,704, as compared
to a deficit of $441,549 at May 31, 2005.

At February  28,  2006,  the Company owns  7,291,937  shares of  Pharmaxis  Ltd,
recorded at a market value of $7,729,000,  net of tax of $3,312,000.  At May 31,
2005, the market value was recorded at $6,007,000.

The Company  believes it has sufficient  working capital on hand,  together with
proceeds from its proposed sales of its Pharmaxis shares, and with proceeds from
sale of stock,  to fund its planned oil and gas  operations and expenses for the
next 12 months and its proposed dividend.

PLAN OF OPERATION

The Company is planning  to use a portion of the  proceeds  from the sale of its
Pharmaxis  shares  to  fund  the  acquisition  and  exploration  of oil  and gas
properties and to repurchase some of it shares.

The Company is proposing the distribution of a cash dividend on a pro-rata basis
of 50% of the net proceeds of the sale of its  investment in Pharmaxis  Ltd. Net
proceeds includes the costs related to the sale of the shares and related taxes.
The directors have fixed July 30, 2004 as the record date.  Each  shareholder of
record will receive the  equivalent  net  proceeds of the sale of one  Pharmaxis
share for each 2.998 of pre-reverse and forward stock split Patch  International
Inc.  shares  owned.  The  distribution  will take place  after the  Company has
completed  the final  sale of its  Pharmaxis  investment  and is  subject to the
Company receiving all required regulatory approvals.

The Company has decided not to proceed  with an  Agreement it entered into as of
November 1, 2005 to acquire a 30% working  interest in the Warnes Field project,
Santa Cruz, Bolivia.


                                       15
<PAGE>

The Company does not intend to proceed at this time with  drilling  wells in the
Ukraine as outlined in a Memorandum of Understanding with Firma HAS.

The Company  entered  into  agreements  in November 8, 2005 to acquire a working
interest in three projects located in the Lloydminster, Elnora and Atlee-Buffalo
areas of Alberta,  Canada.  Under the terms of each of these agreements,  a test
well is to be spudded no later than December 31, 2005,  now extended to June 30,
2006 because of weather and drill rig availability.  The Company will earn a 50%
interest in each test wells subject to a overriding  royalty  convertible  after
pay-out which would reduce the Company interest to 30% and a 30% interest in the
balance of the farm-out lands.

On January  4, 2006 the  Company  entered  into an  agreement  to acquire a 100%
working interest in a gas test well, in the Halkirk, area of Alberta, subject to
an overriding  royalty  convertible after pay-out which would reduce the Company
interest to 50% and a 50% working interest in the balance of farm-out lands.

On January 19, 2006 the Company  acquired a working  interest in a two test well
oil and gas project  located in the Peace River arch area of Alberta.  Under the
terms of the  Agreement  the  Company  will  fund 90% of the costs to earn a 54%
interest,  after  pay-out and  conversion of an  overriding  royalty,  and a 54%
interest in the balance of the  farm-out  lands.  To-date the Company has paid a
property  payment of $678,943 and has made cash calls on the two wells  totaling
$43,883.

On February  27, 2006 the Company  formed  Patch  Oilsands  Limited  Partnership
("Partnership")  in which it owns 75% of the Limited  Partnership  units.  Patch
Oilsands Ltd, a subsidiary formed by the Company on February 3, 2006 will manage
this Partnership.

On  February  28,  2006,  the  Partnership  entered  into an  agreement  for the
acquisition of an Alberta oil sands property located just south of Fort McMurray
in the area of Leismer,  Alberta,  Canada. The property is divided into two half
sections  called  Block A and Block B. On March 2, 2006,  the  Partnership  paid
$703,359  (CCDN$800,000)  and issued 175,000  shares of the Company,  subject to
Section 144 trading restriction, for a 40% working interest in Block A. On March
30, 2006, the Partnership  paid an additional  $426,694  (CDN$500,000) to earn a
further  40%  working  interest  in  Block A. The  Partnership  has the  option,
exercisable  on or before  April 1, 2007,  to acquire an 80% interest in Block B
for the payment of $1,133,340  (CDN$1,300,000  and 100,000  additional shares of
the  Company.  Both Block A and B are subject to a 5%  overriding  royalty.  The
Partnership  must  fund  80% of  the  costs  of a 3D  seismic  program  covering
approximately  1.2 square  miles over the Block A and Block B lands on or before
March 1, 2007. The  Partnership  must also fund a Test Well on the Block A lands
which must be spudded by March 1, 2007.

On April 5,  2006,  Energy  acquired  three oil sands  leases,  comprising  four
sections  (1,024  hectares),  at the Alberta  Crown Oil Sands sale for  $421,672
(CDN$479,315).  On April 13,  2006,  the Company  assigned  these  leases to the
Partnership for $653,937 (Cdn$750,000).

FORWARD-LOOKING STATEMENTS

Certain  statements  in this  Quarterly  Report on Form 10-QSB and the Company's
Annual  Report on Form 10-KSB for its fiscal year ended May 31, 2005, as well as
statements  made by the Company in periodic press  releases and oral  statements
made by the Company's  officials to analysts and  shareholders  in the course of
presentations about the Company, constitute  "forward-looking  statements." Such
forward-looking statements involve known and unknown risks,  uncertainties,  and
other factors that may cause the actual results,  performance or achievements of
the Company to be materially  different from any future results,  performance or
achievements  expressed  or  implied by the  forward  looking  statements.  Such
factors  include,   among  other  things,  (1)  general  economic  and  business
conditions;  (2) interest rate changes;  (3) the relative  stability of the debt
and equity markets;  (4) required accounting changes; and (5) other factors over
which the Company has little or no control.


                                       16
<PAGE>

ITEM 3.  CONTROLS AND PROCEDURES

Our principal  executive  officer and principal  financial officer evaluated our
disclosure  controls and  procedures as of the end of the period covered by this
report.  In his opinion,  the disclosure  controls and procedures are effective.
There have been no changes in our internal control over financial reporting that
occurred  during  our last  fiscal  quarter  that  materially  affected,  or are
reasonably  likely to materially  affect,  our internal  control over  financial
reporting.


                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

Not Applicable.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following is a summary of shares repurchased for cancellation by the Company
in the quarter ended  February 28, 2006 after allowing for the 2.5 forward split
in the Company.

<TABLE>
<CAPTION>
   PERIOD     (A) TOTAL NUMBER     (B) AVERAGE     (C) TOTAL NUMBER OF SHARES   (D) MAXIMUM NUMBER (OR APPROXIMATE
                OF SHARES (OR     PRICE PAID PER  (OR UNITS) PURCHASED AS PART  DOLLAR VALUE) OF SHARES (OR UNITS)
              UNITS) PURCHASED   SHARE (OR UNIT)   OF PUBLICLY ANNOUNCED PLANS    THAT MAY YET BE PURCHASED UNDER
                                                           OR PROGRAMS                 THE PLANS OR PROGRAMS
<S>           <C>                <C>               <C>                          <C>
-------------------------------------------------------------------------------------------------------------------
Dec 1, 2005        181,250            $0.49                  181,250                          496,250
 - Dec 31,
    2005
-------------------------------------------------------------------------------------------------------------------
Jan 1, 2006         5,000             $0.44                  186,250                          491,250
 - Jan 31,
    2006
-------------------------------------------------------------------------------------------------------------------
Feb 1, 2006           0                 0                    186,250                          491,250
 - Feb 28,
    2006
-------------------------------------------------------------------------------------------------------------------
   Total           186,250            $0.49                  186,250                          491,250
-------------------------------------------------------------------------------------------------------------------
</TABLE>

-----------------

1)   The share repurchase program was announced November 17, 2005 effective
     December 1, 2005
2)   677,500 post forward split shares were approved
3)   The repurchase program ends November 30, 2006

112,808  post forward  split  shares were  purchased in the quarter that did not
satisfy safe harbor requirements per Rule10b-18.


                                       17
<PAGE>

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

Not Applicable.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not Applicable.

ITEM 5.  OTHER INFORMATION

Not Applicable.

ITEM 6.  EXHIBITS

    REGULATION
    S-B NUMBER                                EXHIBIT

       2.1          Stock Exchange Agreement with Micronetics, Inc. (1)

       2.2          Arrangement Agreement made among Praxis Pharmaceuticals Inc.
                    and Patch Energy Inc. dated as of October 20, 2003 (2)

       2.3          Articles of Merger Merging Praxis Pharmaceuticals Inc., a
                    Utah Corporation, into Patch International Inc., a Nevada
                    Corporation (3)

       3.1          Articles of Incorporation, as amended (4)

       3.2          Bylaws (4)

       3.3          Certificate of Change Pursuant to NRS 78.209 (5)

       3.4          Certificate of Change Pursuant to NRS 78.209

       10.1         1999 Stock Option Plan (1)

       10.2         Shareholders Agreement dated August 23, 2002 among Praxis
                    Pharmaceuticals Inc., Perpetual Trustees Nominees Limited,
                    Rothschild Bioscience Managers Limited, CM Capital
                    Investments Pty Ltd, CIBC Australia VC Fund LLC, Mooroolbark
                    Technology Pty Ltd, The Australian National University and
                    Pharmaxis Pty Ltd, Dr. William Cowden and Dr. Brett Charlton
                    (6)

       10.3         Management services agreement between Patch Energy Inc. and
                    David Stadnyk dated February 11, 2002 (7)

       10.4         Letter agreement dated February 18, 2004 regarding
                    Termination Agreement with Fairchild International
                    Corporation (7)

       10.5         2004 Stock Option Plan (8)

       10.6         Assumption and Cancellation of Debt agreements with
                    Fairchild International Corporation dated April 15, 2005 (4)

       10.7         Management services agreement with David Stadnyk dated May
                    1, 2005 (4)

       10.8         Change of Control Agreement with David Stadnyk dated May 1,
                    2005 (4)

        21          Subsidiaries of the registrant (4)



                                       18
<PAGE>

    REGULATION
    S-B NUMBER                                EXHIBIT

       31.1         Rule 13a-14(a) Certification of Principal Executive and
                    Financial Officer

       32.1         Certification Pursuant to 18 U.S.C. Section 1350 as Adopted
                    Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
--------
(1)  Incorporated  by  reference  to the  exhibits  filed with the  Registration
     Statement on Form 10-SB, file no. 0-28627.
(2)  Incorporated  by  reference  to  the  exhibits filed  with the registrant's
     current report on Form 8-K dated March 15, 2004.
(3)  Incorporated  by  reference  to  the  exhibit filed  with the  registrant's
     current report on Form 8-K dated June 15, 2004.
(4)  Incorporated by reference to  the  exhibits  filed  with  the  registrant's
     annual report on Form 10-KSB for the fiscal year ended May 31, 2005.
(5)  Incorporated  by  reference  to  the  exhibit filed  with  the registrant's
     current report on Form 8-K dated July 8, 2005.
(6)  Incorporated  by  reference  to the  exhibits  filed  with the registrant's
     annual report on Form 10-KSB for the fiscal year ended May 31, 2002.
(7)  Incorporated  by  reference  to the  exhibits  filed with the  registrant's
     annual report on Form 10-KSB for the fiscal year ended May 31, 2004.
(8)  Incorporated  by  reference  to the  exhibits  filed with the  registrant's
     registration statement on Form S-8, file number 333-120277,  filed November
     8, 2004.
(9)  Incorporated  by  reference  to the  exhibit  filed  with the  registrant's
     current report on Form 8-K dated March 14, 2006.

                                   SIGNATURES

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.

                                  PATCH INTERNATIONAL INC.
                                  (REGISTRANT)

Date:  April 13, 2006             By: /s/ JOHN THORNTON
                                     -------------------------------------------
                                      John Thornton, Interim President
                                      (Principal financial officer)