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

                                   FORM 10-QSB/A
                                  Amendment No. 1

(Mark One)

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

               For the quarterly period ended September 30, 2004

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

               For the transition period from           to
                                             -----------   --------------

               Commission file number 000-50229

                            FALCON NATURAL GAS CORP.
        ------------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

          NEVADA                                     88-0471263
  (State or other jurisdiction of          (IRS Employer Identification No.)
   incorporation or organization)

     Westchase Center, 2500 City West Blvd, Suite 300, Houston, Texas 77042
     ----------------------------------------------------------------------
                    (Address of principal executive offices)

                                 (713) 267-2240
                                 --------------
                        (Registrant's telephone number)

                                      N/A
                                      ---
                            (Former name and address)
     Check whether the registrant (1) has 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 [ ]

As of December 28, 2004, 62,182,000 shares of Common Stock of the issuer were
outstanding.

<PAGE>

     This report on Form 10-QSB/A, Amendment No. 1 is being filed to correct The
Registrant's  financial  information  as  discussed  in  Note 10 in the Notes To
Financial  Statements,  and  to  update  the  disclosure  under  the  headings
"Management's  Discussion  and  Analysis  or  Plan  of  Operation",  "Changes in
Securities"  and  "Subsequent  Events".

                         PART I. FINANCIAL INFORMATION

ITEM  1.  FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

FALCON NATURAL GAS CORP.
(Formerly Countryside Review, Inc.)
(An Exploration Stage Company)
BALANCE SHEET
SEPTEMBER 30, 2004
(Unaudited and Restated)
--------------------------------------------------------------------------------------

ASSETS
<S>                                                                   <C>
  CURRENT ASSETS
    Cash and cash equivalents                                         $       480,283
                                                                      ----------------
      Total Current Assets                                                    480,283
                                                                      ----------------

  PROPERTY & EQUIPMENT
    Equipment                                                                   4,088
    Less Accumulated Depreciation                                                (207)
                                                                      ----------------
      Total Property & Equipment                                                3,881
                                                                      ----------------

  OTHER ASSETS
    Oil and gas leases                                                      1,295,515
    Rent deposit                                                                1,243
                                                                      ----------------
      Total Other Assets                                                    1,296,758
                                                                      ----------------

  TOTAL ASSETS                                                        $     1,780,922
                                                                      ================

LIABILITIES AND STOCKHOLDERS' EQUITY

  CURRENT LIABILITIES
    Accounts payable                                                  $       450,426
    Advance from shareholder                                                      100
    Note payable - related party                                                3,216
    Deposit - equity investment                                             1,000,000
                                                                      ----------------
      Total Current Liabilities                                             1,453,742
                                                                      ----------------

  COMMITMENTS AND CONTINGENCIES                                                     -
                                                                      ----------------

  STOCKHOLDERS' EQUITY
    Common stock, $0.00001 par value; 200,000,000 shares authorized,
      69,282,000 shares issued and outstanding, respectively                      692
    Additional paid-in capital                                              4,750,527
    Deficit accumulated during exploration stage                           (4,424,039)
                                                                      ----------------
      Total Stockholders' Equity                                              327,180
                                                                      ----------------

  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                          $     1,780,922
                                                                      ================

</TABLE>

The accompanying condensed notes are an integral part of these interim financial
                                  statements.
                                        1
<PAGE>

<TABLE>
<CAPTION>

FALCON NATURAL GAS CORP.
(Formerly Countryside Review, Inc.)
(An Exploration Stage Company)
STATEMENTS OF OPERATIONS
---------------------------------------------------------------------------------------------------

                                                                                  March 1, 2004
                                                Three Months Ending              (Inception) to
                                                   September 30,                  September 30,
                                                      2004                           2004
                                            (Unaudited and Restated)       (Unaudited and Restated)
                                      ---------------------------------  --------------------------
<S>                                                   <C>                                <C>
REVENUES                              $                             -    $                     -
                                      ---------------------------------  --------------------------

GENERAL AND ADMINISTRATIVE EXPENSES
  Depreciation                                                     207                         207
  Investor relations                                            22,913                      91,044
  Advisory services                                          4,041,395                   4,041,395
  Lease exploration                                                  -                      73,800
  Internet/webhosting                                               35                      20,119
  Officers & directors fees                                     67,500                      82,500
  Office and general expenses                                    6,509                       7,762
  Professional fees                                             20,209                      75,225
  Travel and entertainment                                      16,083                      16,083
  Rent and related expenses                                      7,438                      16,924
                                      ---------------------------------  --------------------------
     Total Expenses                                          4,182,289                   4,425,059
                                      ---------------------------------  --------------------------

OPERATING INCOME (LOSS)                                     (4,182,289)                 (4,425,059)
                                      ---------------------------------  --------------------------

OTHER INCOME (EXPENSES)
  Other Income                                                     248                         500
  Interest income                                                    -                         520
                                      ---------------------------------  --------------------------
     Total Other Income (Expenses)                                 248                       1,020
                                      ---------------------------------  --------------------------

LOSS BEFORE INCOME TAXES                                    (4,182,041)                 (4,424,039)

PROVISION FOR TAXES                                                  -                           -
                                      ---------------------------------  --------------------------

NET LOSS                                                    (4,182,041)                 (4,424,039)
                                      =================================  ==========================

NET LOSS PER COMMON SHARE,
  BASIC AND DILUTED                                              (0.06)                     (0.08)
                                      =================================  ==========================

WEIGHTED AVERAGE NUMBER
  OF COMMON SHARES OUTSTANDING,
  BASIC AND DILUTED                                         68,247,217                  58,470,685
                                      =================================  ==========================
</TABLE>

The accompanying condensed notes are an integral part of these interim financial
                                  statements.
                                        2

<PAGE>

<TABLE>
<CAPTION>

FALCON NATURAL GAS CORP.
(Formerly Countryside Review, Inc.)
(An Exploration Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
---------------------------------------------------------------------------------------------------------------------

                                                                                       Deficit
                                               Common Stock                          Accumulated
                                        --------------------------   Additional        During         Total
                                        Number of                      Paid-in       Exploration   Stockholders'
                                          Shares        Amount         Capital          Stage         Equity
                                        ----------  --------------  --------------  --------------  -----------
<S>                                         <C>            <C>             <C>             <C>           <C>
Stock issued for $0.001 per share
  for services on March 1, 2004         20,000,000   $     200      $     19,800    $          -    $    20,000

Shares issued for acquisition
  of leases at $0.25 per share             900,000           9           224,991               -        225,000

Reverse merger acquisition
  and recapitalization                  45,000,000         450            (4,671)              -         (4,221)

Shares issued for cash at $1.00
  per share net of expenses of $60         632,000           6           631,934               -        631,940

Shares issued for services at $1.25
  per share                                 50,000           -            62,500               -         62,500

Shares issued for services at $1.42
  per shares                             2,500,000          25         3,549,975               -      3,550,000

Shares issued for services at $1.34
  per shares                               100,000           1           133,999               -        134,000

Shares issued for services at $1.32
  per shares                               100,000           1           131,999               -        132,000

Net loss for period ending
  September 30, 2004                             -           -                 -       (4,424,039)   (4,424,039)
                                        ----------  --------------  --------------  --------------  -----------
BALANCE, September 30, 2004
  (unaudited and restated)              69,282,000   $     692      $  4,750,527    $  (4,424,039)  $   327,180
                                        ==========  ==============  ==============  ==============  ===========

</TABLE>

The accompanying condensed notes are an integral part of these interim financial
                                  statements.
                                        3
<PAGE>

<TABLE>
<CAPTION>

FALCON NATURAL GAS CORP.
(Formerly Countryside Review, Inc.)
(An Exploration Stage Company)
STATEMENTS OF CASH FLOWS
FROM MARCH 1, 2004 (INCEPTION) TO SEPTEMBER 30, 2004
(Unaudited and Restated)
---------------------------------------------------------------------------------

<S>                                                                       <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                               $            (4,424,039)
  Depreciation                                                               207
  Common stock issued for services                                     3,898,500

  Adjustments to reconcile net loss to net cash
     (used) by operating activities:

  Changes in assets and liabilities:
    Decrease (increase) in rent deposit                                   (1,243)
    Increase (decrease) in accounts payable                              446,739
    Increase (decrease) in equity deposit                              1,000,000
    Increase (decrease) in advance from shareholder                          100
                                                         ------------------------
          Net cash provided by operating activities                      920,264

CASH FLOWS PROVIDED BY INVESTING ACTIVITIES:
    Purchase of equipment                                                 (4,088)
    Oil and gas lease                                                 (1,070,514)
    Cash received through recapitalization and acquisition                 2,681
                                                         ------------------------
         Net cash used by investing activities                        (1,071,921)

CASH FLOWS PROVIDED BY FINANCING ACTIVITIES:
    Issuance of common stock for cash                                    631,940
                                                         ------------------------

  Net increase (decrease) in cash and cash equivalents                   480,283

Cash and cash equivalents beginning of period                                  -
                                                         ------------------------

Cash and cash equivalents end of period                  $               480,283
                                                         ========================

SUPPLEMENTAL CASH FLOW DISCLOSURES:
  Income taxes paid                                                           -
                                                         ========================
  Interest paid                                                               -
                                                         ========================

NON-CASH INVESTING AND FINANCING TRANSACTIONS:
  Stock issued for acquisition of oil and gas lease      $               225,000
                                                         ========================
  Stock issued for services                              $             3,898,500
                                                         ========================

</TABLE>

The accompanying condensed notes are an integral part of these interim financial
                                  statements.
                                        4

<PAGE>

                            FALCON NATURAL GAS CORP.
                       (Formerly Countryside Review, Inc.)
                          (An Exploration Stage Company)
                     CONDENSED NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2004

NOTE  1  -  ORGANIZATION  AND  DESCRIPTION  OF  BUSINESS

Falcon  Natural Gas Corporation was incorporated on March 1, 2004.  On April 16,
2004,  Countryside  Review,  Inc.  entered  into  a  reverse  merger transaction
agreement  with  Falcon Natural Gas Corporation, which transaction was completed
on  May  6,  2004. In contemplation of this transaction and a change in business
focus,  Countryside  Review,  Inc.  changed its name to Falcon Natural Gas Corp.
("the  Company")  effective  April  12,  2004.  As a result of this transaction,
Falcon  Natural Gas Corporation became a wholly-owned subsidiary.  The Company's
operations  are  conducted  through such wholly-owned subsidiary.  The Company's
year-end  is  December  31.

The  Company  is  in  the exploration stage as a natural gas exploration company
and,  as  such,  has not realized any revenues from its planned operations.  The
Company's  principal  office  is  located  in  Houston,  Texas.

Basis  of  Presentation
-----------------------
The  foregoing  unaudited  interim  financial  statements  have been prepared in
accordance  with  generally accepted accounting principles for interim financial
information  and  with  the  instructions  to  Form 10-QSB and Regulation S-B as
promulgated  by  the  Securities  and Exchange Commission ("SEC").  Accordingly,
these  financial  statements  do  not include all of the disclosures required by
generally  accepted  accounting  principles  in the United States of America for
complete  financial  statements.  These  unaudited  interim financial statements
should  be  read  in conjunction with the Company's audited financial statements
for  the  year  ended  December  31,  2003.  In  the  opinion of management, the
unaudited interim financial statements furnished herein include all adjustments,
all of which are of a normal recurring nature, necessary for a fair statement of
the  results for the interim period presented.  Operating results for the period
ended  September 30, 2004 are not necessarily indicative of the results that may
be  expected  for  the  year  ending  December  31,  2004.

NOTE  2  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

This  summary  of  significant  accounting  policies  is  presented to assist in
understanding  the  Company's financial statements. The financial statements and
notes are representations of the Company's management, which are responsible for
their integrity and objectivity. These accounting policies conform to accounting
principles  generally  accepted  in  the  United States of America and have been
consistently  applied  in  the  preparation  of  the  financial  statements.

Recent  Accounting  Pronouncements
----------------------------------
In May 2003, the Financial Account Standards Board issued Statement of Financial
Accounting Standards No. 150, "Accounting for Certain Financial Instruments with
Characteristics  of  Both  Liabilities and Equity" (hereinafter "SFAS No. 150").
SFAS  No.  150  establishes  standards  for  classifying  and  measuring certain
financial  instruments  with  characteristics of both liabilities and equity and
requires  that  those  instruments be classified as liabilities in statements of
financial  position.  Previously,  many  of those instruments were classified as
equity.  SFAS  No.  150  is  effective for financial instruments entered into or
modified  after  May 31, 2003 and otherwise is effective at the beginning of the
first  interim period beginning after June 15, 2003.  The Company has determined
that  there  was  no  impact  from  the  adoption  of  the  statement.

                                        5

<PAGE>

                            FALCON NATURAL GAS CORP.
                       (Formerly Countryside Review, Inc.)
                          (An Exploration Stage Company)
                     CONDENSED NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2004

Concentration  of  Risk
-----------------------
The  Company  maintains a cash account in one commercial bank in Houston, Texas.
Although  the  financial  institution  is  considered  creditworthy  and has not
experienced  any  losses  on  its deposits, at September 30, 2004, the Company's
cash  balance  exceeded  Federal  Deposit Insurance Corporation (FDIC) limits by
$380,000.

Property  and  Equipment
------------------------
Property  and  equipment  are  stated  at  cost.  Depreciation  of  property and
equipment is calculated using the straight-line method over the estimated useful
lives  of  the  assets,  which  is  five  years.  See  Note  4.

Stock  Split
------------
In  April,  2004,  the  Company entered into a 5 for 1 forward stock split.  All
references  in  the  accompanying  financial  statements  have  been restated to
reflect  this  stock  split.  See  Note  3.

Going  Concern
--------------
The  accompanying  financial  statements  have  been  prepared assuming that the
Company  will  continue  as  a  going  concern.

As  shown in the accompanying financial statements, the Company has generated no
revenues  since  inception. For the period ended September 30, 2004, the Company
recorded losses of $4,4242,039 and had an accumulated deficit of $4,424,039. The
Company,  being  an  exploration  stage  enterprise, is currently implementing a
revised  business  plan  that  will,  if successful, mitigate these factors that
raise  substantial  doubt  about  the  Company's  ability to continue as a going
concern. The financial statements do not include any adjustments relating to the
recoverability  of  recorded  assets,  or  the  amounts  and  classification  of
liabilities  that might be necessary in the event the Company cannot continue in
existence.

NOTE  3  -  SHARE  EXCHANGE

On  May 6, 2004, the Company, Falcon Natural Gas Corporation (the "Corporation")
and  shareholders  of  the  Corporation  completed  a share exchange whereby the
Corporation  became a wholly owned subsidiary of Falcon Natural Gas Corp. Falcon
Natural  Gas  Corp.  issued  20,000,000  shares  of  its  common  stock  to  the
Corporation  shareholders  in  exchange  for  the services received. The Company
computed  the number of shares issued in this transaction based on the par value
of  the  Corporation's  common  stock  on the date of issuance and recognized an
expense of $20,000 for services. In addition, and 900,000 shares of common stock
were  issued  in  partial  payment  of  an oil and gas lease valued at $0.25 per
share,  or  $225,000.  Pursuant  to  the  share  exchange,  the  Company  issued
20,900,000  shares  of  its  common  stock  in exchange for 20,900,000 shares of
common  stock  of  the  Corporation  which represented 100% of the Corporation's
issued  and outstanding common stock. This acquisition is being accounted for as
a  reverse  merger  and  recapitalization  whereby the operating company, Falcon
Natural  Gas  Corporation, is the continuing entity for all accounting purposes.

                                        6

<PAGE>

                            FALCON NATURAL GAS CORP.
                       (Formerly Countryside Review, Inc.)
                          (An Exploration Stage Company)
                     CONDENSED NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2004

The recapitalization of the Company required the following accounting adjustment
in  order  to  properly  reflect  the  accumulated  deficit  in  the  financial
statements:

<TABLE>
<CAPTION>

                                                                       Additional
                                       Number of                        Paid-in          Deficit          Shareholders'
                                        Shares            Amount         Capital        Accumulated          Equity
                                     ------------      ------------    ------------    -------------      -------------
<S>                                       <C>               <C>             <C>             <C>                 <C>
Prior to recapitalization             45,000,000           $ 450         $ 99,550       $(104,221)           $(4,221)
Recapitalization adjustment
     to  close  deficit  accumulated       -                  -          (104,221)        104,221                -
                                     ------------      ------------    ------------    -------------      -------------
Total                                 45,000,000           $ 450         $ (4,671)      $    -               $(4,221)
                                     ============      ============    ============    =============      =============

</TABLE>

The  net  liabilities  assumed  represented  the  following  items:

          Cash  and  cash  equivalents                     $  2,681
          Less:  Accounts  payable                           (3,686)
                 Accounts payable shareholders               (3,216)
                                                           ----------

          Net  liabilities  assumed                        $ (4,221)
                                                           ==========

The  following  transactions  involved  the  majority shareholder of the Company
prior  to  the  share  exchange  with  Falcon  Natural  Gas  Corporation.

On  March  22,  2004,  an investor acquired an aggregate of 20,000,000 shares of
common  stock  of  Countryside Review, Inc. in exchange for $500,000 pursuant to
three stock purchase agreements with three shareholders.  On March 23, 2004, the
investor returned  5,000,000 shares of common stock to Countryside Review, Inc.,
which shares were subsequently cancelled, returned to treasury, and then retired
and  restored  to  the  status of authorized and unissued.  As a result of these
transactions,  control  of  Countryside Review, Inc. shifted to the investor who
owned 15,000,000 shares or 33.3% of the common stock of Countryside Review, Inc.
prior  to  the  share  exchange  agreement  with Falcon Natural Gas Corporation.

Effective  April  12,  2004, Countryside Review, Inc. changed its name to Falcon
Natural Gas  Corp. and authorized a 5 to 1 forward stock split of the originally
issued  and  outstanding  Countryside Review Inc. shares.  All references in the
accompanying  financial  statements and notes to the common shares and per share
amounts have been restated to reflect the forward stock split.  The Company also
reauthorized two hundred million (200,000,000) shares of common stock with a par
value  of  $0.00001  per  share.

                                        7

<PAGE>

                            FALCON NATURAL GAS CORP.
                       (Formerly Countryside Review, Inc.)
                          (An Exploration Stage Company)
                     CONDENSED NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2004

NOTE  4  -  PROPERTY  AND  EQUIPMENT

Capital  assets  are  recorded  at  cost.  Depreciation  is calculated using the
straight-line  method  over five years.  The following is a summary of property,
equipment  and  accumulated  depreciation  at  September  30,  2004:

               Computer  Equipment                         $  4,088
               Less:  Accumulated  Depreciation                 207
                                                           --------

               Total  Property  &  Equipment               $  3,881
                                                           ========

NOTE  5  -  OIL  AND  GAS  LEASES

On  March  25,  2004,  the  Company  paid  cash and issued stock for oil and gas
leases.  The  leases,  assigned  from Argyle Energy Corp (hereinafter "Argyle"),
entitle the Company to a 100% working interest and 70% net revenue interest in 5
tracts  of  land  in  Starr  County,  Texas.

NOTE  6  -  COMMITMENTS  AND  CONTINGENCIES

On  June  14,  2004,  the Company entered into a contract for investor relations
services.  The terms of the contract include a retainer of $5,000 per month plus
any out-of-pocket expenses, and 50,000 restricted shares in the Company's common
stock.  See  Note  8.

On  August  2,  2004, the Company contracted with Argyle Energy, Inc. ("Argyle")
for  various  oil, gas and mineral leases located in St. Mary Parish, Louisiana.
The  contract  provides that the Company will receive a 100% working interest in
these  leases  in  exchange  for  two  cash  payments  to Argyle of $404,235 and
$454,235 by September 30, 2004.  As of this date, a cash payment of $404,235 was
made  and  an accrual for the remaining payment of $454,235 had been made to the
financial  statements.

On  August  2,  2004,  the Company entered into a business consultant agreement.
The  consultant  will  be paid $15,000 for work performed in accordance with the
agreement.  In  addition,  the Company agrees to pay the consultant 7.5% in cash
and  10% in warrants for any financing monies raised.  As of September 30, 2004,
no  financing  monies  had  been  raised  by  the  consultant.

On  August 9, 2004, the Company entered into an agreement for financial advisory
services.  The  terms  of  the  agreement include compensation of 2% cash and 2%
warrants on all monies raised by the financial advisory company and payment of a
retainer  in  the  amount of $5,000.  The agreement states a termination date of
January  1,  2005.  As  of  September  30, 2004, no funds had been raised by the
financial  advisory  company.

                                        8

<PAGE>

                            FALCON NATURAL GAS CORP.
                       (Formerly Countryside Review, Inc.)
                          (An Exploration Stage Company)
                     CONDENSED NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2004

NOTE  7  -  RELATED  PARTY  TRANSACTIONS

A shareholder advanced the Company $100 to open the Company's bank account.  The
funds  advanced  are  unsecured,  non-interest  bearing,  and  due  on  demand.

During  the period ending September 30, 2004, the Company borrowed $3,216 from a
related party.  The related note payable is unsecured, due on demand and accrues
interest  at  10%  per  annum.

NOTE  8  -  COMMON  STOCK

During the period ended September 30, 2004, the Company issued 20,000,000 shares
valued  at  $0.001  per  share  for  services  received.

During the period ended September 30, 2004, the Company issued 900,000 shares of
common stock in partial payment of an oil and gas lease.  The shares were valued
at  $0.25  per  share,  or  $225,000.

During  the period ended September 30, 2004, the Company issued for cash 632,000
shares  of  common  stock at $1.00 per share, less expenses of $60, for a net of
$631,940.

On  June  14,  2004, the Company issued 50,000 restricted shares valued at $1.25
per  share  as  part  of  an  investor  relations  contract.  See  Note  6.

On August 2, 2004, the Company issued 2,500,000 shares valued at $1.42 per share
for services as part of the Argyle Energy, Inc. lease contract.  See Note 6
and 10.

On August 27, 2004, the Company issued 100,000 shares valued at $1.32 per share
to an independent consultant for advisory services.  See Note 10.

On September 7, 2004, the Company issued 100,000 shares valued at $1.34 per
share to an independent consultant for advisory services.  See Note 10.

During  the period ending September 30, 2004, the Company received $1,000,000 in
cash as a deposit for purchase of 1,000,000 shares for $1,000,000 cash. The cash
received  has been determined to be a cash deposit for equity investment and has
been  properly  allocated  in the financial statements. The agreement underlying
this  deposit  was  completed  on  October  8,  2004  See  Note  9  and  10.

                                        9

<PAGE>

                            FALCON NATURAL GAS CORP.
                       (Formerly Countryside Review, Inc.)
                          (An Exploration Stage Company)
                     CONDENSED NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2004

NOTE  9  -  SUBSEQUENT  EVENT

On  October  8,  2004, the Company entered into an agreement with Lucerne Energy
Holding  AG for the sale of 1,500,000 shares of common stock valued at $1.00 per
share.  $1,000,000  of  the  $1,500,000  sale  was  accounted  for  as an equity
investment  deposit.

During  the  month  of  October,  2004, the president/CEO of the Company and the
director  of the Company entered into a mutual agreement for the cancellation of
9,000,000  shares  of  common  stock in consideration for the resignation of the
president/CEO  of  the  Company.  The  president/CEO  of  the  Company  retained
1,000,000  shares  of  common  stock.


NOTE 10 - CORRECTION OF AN ERROR

Subsequent  to  the issuance of the original financial statements for the period
ended  September  30,  2004,  management  discovered  that  certain  accounting
positions  and  information  were  not  correct.

During  the  period  ending  September  30,  2004,  the  Company determined that
1,000,000  shares  of  the  1,500,000 shares sold for $1.00 per share to Lucerne
Energy Holding AG were not issued when cash was received and the transaction was
determined  to  be  a  deposit for equity investment. Management determined that
this error had the effect of overstating common stock by $15, additional paid in
capital  by $1,499,985, and subscription receivable by $500,000 and understating
deposit  -  equity investment by $1,000,000. Management has determined that this
transaction  had  no  effect  on  net  loss  for  the  period.

On  August  2,  2004,  the  Company  entered into an agreement with an entity to
provide  services in exchange for 2,500,000 common shares. Management determined
that  this  transaction had not been recorded and had the effect of understating
the net loss by $3,550,000 for the period and understatement of common shares by
$25  and  additional  paid  in  capital  by  $3,549,975.

On  August 27, 2004 and September 7, 2004, the Company entered into two separate
agreements  with  two  individuals to provide services on the Company's advisory
board  in  exchange  for  100,000 common shares each (or an aggregate of 200,000
common  shares).  Management  determined  that  this  transaction  had  not been
recorded  and  had  the  effect  of  understating the net loss for the period by
$266,000 and understatement of common stock by $2 and additional paid in capital
by  $265,998.

                                        10

<PAGE>

                            FALCON NATURAL GAS CORP.
                       (Formerly Countryside Review, Inc.)
                          (An Exploration Stage Company)
                     CONDENSED NOTES TO FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2004


                                                       September 30, 2004
                                                   ----------------------------
                                                     Originally
Financial Position:                                   Reported       Restated
                                                   -------------   -------------
         Deposit - equity investment                $       -      $  1,000,000
         Common stock                               $       680    $        692
         Additional paid in capital                 $ 2,434,539    $  4,750,527
         Accumulated deficit                        $  (608,040)   $ (4,424,039)

Results of Operations:
         Operating expenses                         $ (609,060)    $ (4,425,059)
         Net Loss                                   $ (608,040)    $ (4,424,039)

Net Loss per Share                                  $    (0.01)    $      (0.08)

                                        11

<PAGE>

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

     THIS  REPORT  CONTAINS  FORWARD  LOOKING  STATEMENTS  WITHIN THE MEANING OF
SECTION  27A  OF  THE  SECURITIES ACT OF 1933, AS AMENDED AND SECTION 21E OF THE
SECURITIES  EXCHANGE ACT OF 1934, AS AMENDED. THE COMPANY'S ACTUAL RESULTS COULD
DIFFER  MATERIALLY  FROM  THOSE SET FORTH ON THE FORWARD LOOKING STATEMENTS AS A
RESULT  OF  THE RISKS SET FORTH IN THE COMPANY'S FILINGS WITH THE SECURITIES AND
EXCHANGE  COMMISSION  (the  "Commission"  or  the  "SEC"),  GENERAL  ECONOMIC
CONDITIONS,  AND  CHANGES IN THE ASSUMPTIONS USED IN MAKING SUCH FORWARD LOOKING
STATEMENTS.

OVERVIEW

     Falcon  Natural  Gas  Corp.  ("the Company") was incorporated in Nevada as
Countryside  Review  Inc.  ("Countryside")  on  December  7, 2001. The Company's
business  plan  was  to develop an on-line equestrian lifestyle magazine for the
amateur  rider  and  horse  owner  by  filling  the  gap  between horse care and
lifestyle  considerations.  As a result of the acquisition of Falcon Natural Gas
Corporation  ("Falcon"),  as  discussed  below, the Company changed its business
focus  and  changed  its name from Countryside Review Inc. to Falcon Natural Gas
Corp.  The  Company  is now engaged in natural gas exploration activities in St.
Mary  Parish,  Louisiana  and  the  State  of  Texas.

     On March 22, 2004, Massimiliano Pozzoni acquired an aggregate of 20,000,000
shares of common stock of the Company in exchange for $500,000 pursuant to three
Stock  Purchase  Agreements  with the following former directors and officers of
the Company: Doug Berry, Bernadette Berry and Lisa Zumpano. On the next day, Mr.
Pozzoni  returned  5,000,000  shares  of  the common stock to the Company, which
shares  were  subsequently  cancelled, returned to treasury and then retired and
restored  to  the  status  of  authorized  and  unissued.  As  a result of these
transactions, control of the Company shifted to Mr. Pozzoni who owned 15,000,000
shares  (or  33.3%)  of  common  stock  of  the  Company immediately thereafter.

     On  April  12,  2004,  the Company completed a 5:1 forward stock split (the
"Forward  Split")  of its issued and outstanding common stock. The effect of the
stock  split  has  been  retroactively reflected in this report unless otherwise
stated.

     On  May  6,  2004,  the Company acquired 100% of the issued and outstanding
shares of Falcon in exchange for 20,900,000 shares of the Company's common stock
(the  "Exchange"  or  "Acquisition").  The  Exchange is being accounted for as a
reverse  merger. Prior to the Exchange, Falcon acquired from Argyle Energy, Inc.
("Argyle")  a  100%  working  interest and a 70% net revenue interest in several
tracts  of  land of approximately 4000 acres located in Starr County, Texas (the
"Starr County Property"). The Starr County Property is in close proximity to the
Bob  West  gas field located in the Southeastern part of the State of Texas. The
Company  has acquired mineral rights leases to approximately 3,700 acres, and is
also  in  the  process  of  acquiring mineral rights leases to approximately 700
acres,  of  additional  land  in  Starr  County.  The Company paid approximately
$350,000  to  acquire  the  additional  leases  and expects to pay approximately
$400,000  (which  payment  is  contingent  on receiving additional financing) to
acquire  the  remaining  leases.

<PAGE>

     The Company is a holding company for Falcon. The business operations of the
Company  discussed  herein  were  conducted  by  Falcon unless otherwise stated.
Hereinafter,  a  reference  to  the  Company  includes a reference to Falcon and
vice-versa  unless  otherwise  stated.

     After  the acquisition of Falcon, Mr. Pozzoni owned approximately 22.8% and
continued to exercise significant influence over the Company. Mr. Pozzoni served
as  the  sole Director and the President, Secretary and Treasurer of the Company
from  March  2004  to  June  2004.  On  June  1,  2004,  Mr. Pozzoni transferred
10,000,000 shares of common stock to Alan Aitchison. Mr. Pozzoni transferred the
shares  of  common  stock  to Mr. Aitchison as an incentive for Mr. Aitchison to
take  Mr.  Pozzoni's  place as the President, Chief Executive Officer, Secretary
and  Treasurer  of the Company. Mr. Aitchison took over these positions and also
became  a  director  of  the  Company on June 1, 2004. On October 25, 2004, Alan
Aitchison  resigned as a Director of the Company and as the Company's President,
Chief  Executive  Officer,  Secretary  and  Treasurer.  Mr.  Aitchison  canceled
9,000,000  of  the  10,000,000  shares  of  common  stock  that  Mr.  Aitchison
beneficially  owns.  As  a  result  of  these transactions, Mr. Pozzoni who owns
5,000,000  shares (or 8.0%) of the Company's issued and outstanding common stock
is the Company's largest shareholder. The Company's Board of Directors appointed
Fred  B.  Zaziski  as  President and Chief Executive Officer and reappointed Mr.
Pozzoni  as  Secretary  and  Treasurer.

     On  June  14,  2004,  the  Company  entered  into  a  contract for investor
relations  services.  The terms of the contract include a retainer of $5,000 per
month  plus  any  out-of-pocket  expenses,  and  50,000 restricted shares in the
Company's  common  stock.

     On  August  9,  2004,  the  Company entered into an agreement for financial
advisory services that terminates on January 1, 2005. The terms of the agreement
include  compensation  of  2%  cash  and 2% warrants on all monies raised by the
financial  advisory  company  and payment of a retainer in the amount of $5,000.

     On  October 1, 2004, the Company acquired a 100% working interest and a 70%
net revenue interest in oil, gas and mineral leases on approximately 4,000 acres
of  land  located  in  St. Mary Parish, Louisiana (the "Wyandotte Property"). To
acquire  the Wyandotte Property, the Company made an initial payment of $204,655
on  August  2,  2004, made two (2) additional payments of $404,235 and $454,235,
respectively,  and  issued  2,500,000  restricted shares of the Company's common
stock  to  an  entity  in  connection with the purchase. The Company also has an
option  to  acquire  oil, gas and mineral leases on an additional 4,000 acres of
land  in the same area for $1 million. The option on the additional acreage runs
until  January  2005.  The  Company intends to make a decision whether or not to
exercise  the  option  shortly before it expires. The Company will have to raise
additional  financing  to  exercise  the  option.

<PAGE>

     The  Star  County  Property  and  the  Wyandotte  Property are collectively
referred  to  as  the  "Leased  Property."

PLAN OF OPERATIONS

     The  Company  operates  through  its  wholly  owned  subsidiary Falcon. The
Company is in the exploration stage as a natural gas exploration company and, as
such,  has not realized any revenues from its planned operations. The Company is
engaged  in natural gas exploration activities in St. Mary Parish, Louisiana and
the  Wilcox,  Lower  Lopeno  sands  in  Starr  County,  Texas.

     The  Company  recently  raised  $1.5  million  from the sale of 1.5 million
restricted  shares  of  common  stock to a foreign private investment group. The
Company  received  $1  million from the sale during September 2004, and $500,000
subsequent  to  the  period  covered by this report. The Company can satisfy its
cash  requirements  for  the  next  twelve  (12) months which does not take into
account  the  costs,  discussed below, for re-entry into an existing well on the
Wyandotte  Property,  drilling of wells, acquiring additional leases, or further
exploration  work  on  the  Leased  Property.

     The  Company  completed  two-dimensional  geophysical  studies of the Starr
County  Property  and  three-dimensional  geophysical  seismic  studies  on  the
Wyandotte  Property. The Company intends to focus its resources on the Wyandotte
Property  that  will  include  re-entry  into the existing well and drilling two
additional  wells. Prior to re-entering the existing well or drilling additional
wells,  the  Company  plans  to perform certain engineering work to evaluate the
costs  and  needs  associated  with such re-entry and drilling. The Company will
need  to  raise approximately $5 million of additional financing to re-enter the
well on the Wyandotte Property. If the Company discovers reserves of natural gas
on  the  Wyandotte  Property or the Starr County Property, the Company will need
approximately  $7,000,000  of additional financing for each subsequent well that
is  desires  to  drill.  The  Company  has  contracted with a financial advisory
company  (discussed  above)  to  help  the  Company  raise additional financing.
Alternatively,  the Company may seek a partner to fund further exploration or to
purchase  potential  reserves.  The  Company  does  not  have any commitments or
identified  sources  of  additional  capital  from  third  parties  or  from its
officers,  directors  or  majority  shareholders.  There  is  no  assurance that
additional  financing  will  be  available on favorable terms, if at all. If the
Company  is unable to raise the capital necessary for re-entry into the existing
well  on the Wyandotte Property, the Company may be forced to abandon or curtail
its  business  plan. If the Company can re-enter the well, but is unable to fund
its operating activities from production of natural gas, or the Company does not
discover  reserves  of  natural  gas  on  the  Leased  Property, it would have a
materially  adverse  effect  upon  the  Company's  ability  to  conduct  future
exploration  on  the  Leased  Property  or  any other property and the Company's
business  could  fail.

     The  Company  does  not expect to purchase or sell any plant or significant
equipment  during  the  next  twelve  months.

     The  Company  has two (2) full-time employees. The Company will use several
subcontractors  on  an  as-needed  basis  to conduct its exploration activities.
Additionally,  the  Company  has formed an advisory board with three experienced
members,  one  of  which is Alan Aitchison, the Company's former Chief Executive
Officer.

<PAGE>

RESULTS OF OPERATIONS

     The  Company  is  in  its  exploration  stage  as  it has not generated any
revenues from its planned natural gas exploration operations. As a result of the
Acquisition  of  Falcon  on May 6, 2004, the Company changed its business focus.
Prior  to the Acquisition, the Company's business plan was to develop an on-line
equestrian  lifestyle  magazine for the amateur rider and horse owner by filling
the  gap  between horse care and lifestyle considerations. The Company has since
discontinued  the  online  publishing  operations.  The  Acquisition  is  being
accounted  for  as  a  reverse  merger  and recapitalization whereby Falcon, the
operating  company  which  was  incorporated on March 1, 2004, is the continuing
entity  for  all  accounting  purposes.

THREE MONTHS ENDED SEPTEMBER 30, 2004

     The  Company had an operating loss of $4,182,289 for the three months ended
September  30,  2004, consisting of advisory services of $4,041,395, officer and
director  fees  of  $67,500, investor relations expense of $22,913, professional
fees  of $20,209, travel and entertainment of $16,083, rent and related expenses
of  $7,438,  office  and  general  expenses of $6,509, depreciation of $207, and
Internet/webhosting  expense  of  $35.

     Other  income  for  the  three  months  ended  September 30, 2004 was $248.

     The Company had a net loss of $4,182,041 (or a basic and diluted net loss
per share  of  $0.06)  for  the  three  months  ended  September  30,  2004.

MARCH 1, 2004 (INCEPTION) TO SEPTEMBER 30, 2004

     The  Company  had an operating loss of $4,425,059 for the period from March
1,  2004  to  September 30, 2004, consisting of advisory services of $4,041,395,
lease  exploration  expense  of  $73,800, investor relations expense of $91,044,
officer  and  director  fees of $82,500, professional fees of $75,225, Internet/
webhosting  expense of $20,119, rent and related expenses of $16,924, travel and
entertainment  of  $16,083,  office  and  general  expenses  of  $7,762,  and
depreciation  of  $207.

     Total  other income for the period from March 1, 2004 to September 30, 2004
was  $1,020  consisting  of  other  income  of $500 and interest income of $520.

     The Company had a net loss of $4,424,039 (or a basic and diluted net loss
per share  of  $0.08)  for  the  period  from  March  1, 2004 to September 30,
2004.

LIQUIDITY AND CAPITAL RESOURCES

     As  of September 30, 2004, the Company had total current assets of $480,283
consisting  solely  of  cash  and cash equivalents. The Company used $454,235 of
this  cash  on  October  1,  2004,  to complete the acquisition of the Wyandotte
Property.

     As  of  September  30,  2004,  the Company had total current liabilities of
$1,453,742,  consisting of deposit for equity investment of $1,000,000, accounts
payable  of  $450,426, an advance from shareholder of $100 and a note payable to
related  party  of  $3,216.

     The  Company had a net working capital deficit of $973,459 at September 30,
2004,  resulting  from  its  obligation  to  issue shares of its common stock in
consideration  for  the  receipt  of  $1,000,000  of  equity  financing.

<PAGE>

     Net  cash provided by operating activities was $920,264 for the period from
March  1,  2004  to September 30, 2004, primarily due to common stock issued for
services  of  $3,898,500,  an  increase  in equity deposit of $1,000,000, and an
increase  in  accounts payable of $450,426 that were offset by the Company's net
loss  of  $4,424,039.

     Net  cash  used  by investing activities was $1,071,921 for the period from
March  1,  2004  to  September  30,  2004, due to the acquisition of oil and gas
leases of $1,070,514 and the purchase of equipment of $4,088 that were offset by
cash  received  through  recapitalization  and  acquisition  of  $2,681.

     Cash  flows  provided  by  financing activities was $631,940 for the period
from  March  1,  2004 to September 30, 2004, due to the issuance of common stock
for  cash.

     The  Company  recently  raised  $1.5  million  from the sale of 1.5 million
restricted  shares  of  common  stock to a foreign private investment group. The
Company  received  $1  million from the sale during September 2004, and $500,000
subsequent  to  the  period  covered by this report. The Company can satisfy its
cash  requirements  for  the  next  twelve  (12) months which does not take into
account  the costs for re-entry into an existing well on the Wyandotte Property,
drilling  of  additional  wells,  acquisition  of additional leases, and further
exploration  work.  On August 2, 2004, the Company paid $204,655 to enter into a
contract  to  acquire  the  Wyandotte  Property.  The  Company  completed  the
acquisition  by  paying $404,235 in August 2004 and $454,235 in October 2004, to
Argyle,  along with the issuance of 2,500,000 restricted shares of the Company's
common  stock  to a separate entity in connection with the contract. The Company
will  need  to  raise  $5  million  of additional financing to begin exploration
activities  on  the  Wyandotte  Property  which  will  include re-entry into the
existing well. The Company will need approximately $7 million for any wells that
it  decides to drill on the Leased Property. The Company has engaged a financial
advisory  company  to  assist  the  Company in raising additional financing. The
Company  may seek a partner to fund further exploration or to purchase potential
reserves.  The  Company  does  not have any commitments or identified sources of
additional  capital  from  third  parties  or  from  its  officers, directors or
majority  shareholders. The Company has not identified a partner to fund further
exploration  or  to  purchase  potential  reserves.  There  is no assurance that
additional  financing  will  be available on favorable terms, if at all, or that
the  Company  can  find  a partner. If the Company is unable to raise additional
financing  or  find a partner to provide financing, the Company will not be able
to  continue  as  a  going  concern  for  more  than twelve (12) months or begin
exploration  activities,  and  the  Company's  business  could  fail

RISK FACTORS

     NEED  FOR ADDITIONAL FINANCING. We have received approximately $3.2 million
of  financing.  We will need to raise approximately $5,000,000 more for re-entry
into  the  existing  well  on the Wyandotte Property. If we discover reserves of
natural  gas  on  the  Wyandotte  Property  or we discover reserves on the Starr
County  Property, we will need approximately $7,000,000 for each subsequent well
that we desire to drill. We have engaged financial advisory company to assist us
in  raising  additional financing. Alternatively, the Company may seek a partner
to  fund further exploration or to purchase potential reserves. The Company does
not  have any commitments or identified sources of additional capital from third
parties  or  from  its officers, directors or majority shareholders. There is no
assurance  that additional financing will be available on favorable terms, if at
all.  If  we  are  unable  to  raise the capital necessary for re-entry into the
Wyandotte  well, we may be forced to abandon or curtail our business plan. If at
the  completion  of  the exploration program, we have not discovered reserves of
natural  gas  on  the Leased Property, it would have a materially adverse effect
upon  our  ability  to  conduct future exploration on the Leased Property or any
other  property  and  our  business  could  fail.

<PAGE>

     RELIANCE  ON  KEY  MANAGEMENT  AND  CONTRACTORS. The success of the Company
depends  upon  the personal efforts and abilities of Fred B. Zaziski, a Director
of  the  Company  and  the  Company's President and Chief Executive Officer, and
Massimiliano Pozzoni, a Director of the Company and the Company's Vice President
of  Business  Development,  Secretary  and  Treasurer.  The Company's ability to
operate  and  implement  its  exploration activities is heavily dependent on the
continued  service  of Messrs. Zaziski and Pozzoni, and the Company's ability to
attract qualified contractors on an as-needed basis. The Company faces continued
competition  for Messrs. Zaziski and Pozzoni (or other key management should the
Company  desire  to attain the same) and such contractors. The Company cannot be
certain that it will be able to retain Messrs. Zaziski or Pozzoni or attract and
retain such contractors. The loss of Mr. Zaziski or Mr. Pozzoni or the Company's
inability  to  attract  and  retain  qualified contractors on an as-needed basis
could  have  a material adverse effect on the Company's business and operations.

     BECAUSE  MR.  POZZONI  HAS  OTHER BUSINESS INTERESTS, HE MAY NOT BE ABLE OR
WILLING  TO  DEVOTE  A  SUFFICIENT  AMOUNT  OF  TIME TO OUR BUSINESS OPERATIONS.
Massimiliano  Pozzoni  is  the  Chief  Executive Officer and a Director of Otish
Mountain  Diamond  Company,  a  publicly  traded  company  in the U.S. While Mr.
Pozzoni  presently  possesses  adequate  time  to attend to our interests, it is
possible  that  the  demands  on  Mr.  Pozzoni  from his other obligations could
increase with the result that he may no longer be able to devote sufficient time
as  a  Director  of  our  Company.  In  addition,  Mr.  Pozzoni  may not possess
sufficient  time  to  serve as a Director of our Company if the demands increase
substantially  beyond  current  levels.

     MASSIMILIANO  POZZONI  OWNS  APPROXIMATELY  8.0%  OF OUR OUTSTANDING COMMON
STOCK, AND MAY HAVE A SIGNIFICANT INFLUENCE OVER CORPORATE DECISIONS THAT MAY BE
ADVERSE  TO OTHER MINORITY SHAREHOLDERS. Massimiliano Pozzoni, a director of the
Company  and the Company's Vice President of Business development, Secretary and
Treasurer,  owns  approximately  8.0%  of  the  outstanding shares of our common
stock.  Accordingly,  he  will  have  a significant influence in determining the
outcome  of  all  corporate  transactions  or  other matters, including mergers,
consolidations  and the sale of all or substantially all of our assets, and also
the  power to prevent or cause a change in control. The interests of Mr. Pozzoni
may  differ  from  the  interests  of  the other stockholders and thus result in
corporate  decisions  that  are  adverse  to  other  shareholders.

     OUR  AUDITORS  HAVE  EXPRESSED  AN  OPINION THAT THERE IS SUBSTANTIAL DOUBT
ABOUT  OUR  ABILITY TO CONTINUE AS A GOING CONCERN. In its report dated July 19,
2004,  Williams  & Webster, P.S. ("Williams") expressed an opinion that there is
substantial doubt about our ability to continue as a going concern. We have been
in  the  exploration  stage  and  have  had no revenues since inception. We have
recorded  a loss and accumulated deficit of $4,424,039 for the period from March
1,  2004  ("Inception")  to  September  30,  2004.  The  accompanying  financial
statements have been prepared assuming that the Company will continue as a going
concern. The financial statements do not include any adjustments relating to the
recoverability  of  recorded  assets,  or  the  amounts  and  classification  of
liabilities  that might be necessary in the event the Company cannot continue in
existence.  Our continuation as a going concern is dependent upon future events,
including  the  acquisition  of  $5  million  of additional financing (discussed
above) to re-enter the existing well on the Wyandotte Property. If we are unable
to  continue  as  a  going  concern,  you  will  lose  your  entire  investment.

<PAGE>

     BECAUSE  WE  HAVE NOT COMMENCED BUSINESS OPERATIONS, WE FACE A HIGH RISK OF
BUSINESS  FAILURE. We have begun the initial stages of exploration on the Leased
Property.  We  have  completed  two-dimensional  geological studies on our Starr
County  Property  as  well  as  three-dimensional  geophysical  studies  on  the
Wyandotte Property. You should be aware of the difficulties normally encountered
by  new  natural gas exploration companies similarly situated to us and the high
rate of failure of such enterprises. The Company's likelihood of success must be
considered  in  light of the problems, expenses, difficulties, complications and
delays  encountered  in  connection  with the exploration of the Leased Property
that we plan to undertake. These potential problems include, but are not limited
to,  unanticipated  problems  relating  to exploration, and additional costs and
expenses  that  may  exceed  current  estimates.

     BECAUSE  OF  THE  SPECULATIVE  NATURE  OF NATURAL GAS EXPLORATION, THERE IS
SUBSTANTIAL  RISK THAT NO COMMERCIALLY EXPLOITABLE NATURAL GAS WILL BE FOUND AND
THAT  THIS  BUSINESS  WILL FAIL. The search for commercial quantities of natural
gas  as  a  business  is  extremely  risky. We cannot provide investors with any
assurance  that the Leased Property contains commercially exploitable quantities
of  natural gas. The exploration expenditures to be made by us may not result in
the  discovery of commercial quantities of natural gas. Problems such as unusual
or  unexpected  formations  and  other  conditions  are  involved in natural gas
exploration  and  often  result  in  unsuccessful exploration efforts. In such a
case,  we  would  be  unable  to  complete  our  business  plan.

     BECAUSE  OF THE INHERENT DANGERS INVOLVED IN NATURAL GAS EXPLORATION, THERE
IS A RISK THAT WE MAY INCUR LIABILITY OR DAMAGES AS WE CONDUCT OUR BUSINESS. The
search  for  valuable  minerals  involves  numerous hazards. As a result, we may
become  subject  to  liability for such hazards, including pollution, explosions
and  other  hazards against which we cannot insure or against which we may elect
not  to insure. In addition, we may be subject to certain liability with respect
to certain federal and state environmental laws. The payment of such liabilities
may  have  a  material  adverse  effect  on  our  financial  position.

     FUTURE CAPITAL NEEDS. Our growth and continued operations could be impaired
by  limitations  on our access to capital markets. If the market for the natural
gas industry were to weaken for an extended period of time, our ability to raise
capital  would  be substantially reduced. There can be no assurance that capital
from  outside sources will be available, or that if such financing is available,
it  may  involve  issuing  securities  senior  to  the  Common  Stock  or equity
financings  which  will  be  dilutive  to  holders  of  Common  Stock.

<PAGE>

     EVEN  IF  WE  DISCOVER  COMMERCIAL  QUANTITIES OF NATURAL GAS ON THE LEASED
PROPERTY,  WE  MAY  NOT BE ABLE TO SUCCESSFULLY OBTAIN COMMERCIAL PRODUCTION. We
have  not  discovered  any  proven  natural gas reserves on the Leased Property.
However,  if  our exploration programs are successful in establishing commercial
quantities  of  natural  gas, we will require additional funds in order to place
the  Leased  Property  into production. At this time we cannot provide investors
with  any  assurance that we would be able to obtain such financing if required.

     INTENSE  COMPETITION.  The  market  for natural gas exploration services is
highly  competitive. The Company expects competition to intensify in the future.
Numerous  well-established  companies  are  focusing  significant  resources  on
exploration  and  are  competing  with  the  Company's services. There can be no
assurance  that  the  Company  will  be  able  to  compete  successfully or that
competitive  pressures  will  not  adversely  affect  its  business,  results of
operations  and  financial  condition.

     MANAGEMENT  OF  GROWTH.  The  Company's  growth  is  expected  to  place  a
significant  strain  on  the  Company's  managerial,  operational  and financial
resources. Further, as the Company enters into additional contracts, the Company
will  be  required  to  manage multiple relationships with various customers and
other  third  parties.  These  requirements  will be exacerbated in the event of
further growth of the Company or in the number of its contracts. There can be no
assurance that the Company's systems, procedures or controls will be adequate to
support  the  Company's operations or that the Company's management will be able
to  achieve the rapid execution necessary to successfully implement its business
plan.  If  the  Company  is  unable  to manage growth effectively, the Company's
business,  results  of  operations  and  financial  condition  will be adversely
affected.

     IF  THERE'S A MARKET FOR OUR COMMON STOCK, OUR STOCK PRICE MAY BE VOLATILE.
If  there's  a market for our common stock, we anticipate that such market would
be  subject  to wide fluctuations in response to several factors, including, but
not  limited  to:

     (1)     actual or anticipated variations in our results of operations;
     (2)     our ability or inability to generate new revenues;
     (3)     increased competition; and
     (4)     conditions and trends in the natural gas industry.

Our  common  stock  is  traded on the over-the-counter Bulletin Board. In recent
years  the  stock  market  in general has experienced extreme price fluctuations
that  have  oftentimes  have  been unrelated to the operating performance of the
affected  companies.  Similarly,  the  market  price  of  our  common  stock may
fluctuate  significantly based upon factors unrelated or disproportionate to our
operating  performance. For example, the fifty-two (52) week high for our Common
Stock  was $2.02 on September 21, 2004, as compared to the fifty-two (52) low of
$0.06  on  February  6,  2004.  These  market  fluctuations,  as well as general
economic, political and market conditions, such as recessions, interest rates or
international currency fluctuations may adversely affect the market price of our
common  stock.

<PAGE>

     WE HAVE NOT CREATED A MARKET TO SUSTAIN THE SIGNIFICANT AMOUNT OF SHARES IN
OUR  PUBLIC FLOAT. We have a significant number of shares of common stock in our
public  float  that were issued prior to the Exchange and change in our business
focus.  We  have not, however, created a market for our common stock. We may not
have  adequate  time  to create such a market prior to the time our shareholders
resell  their  shares.  If  our  shareholders  resell their shares before we can
create  a  market,  it  may  exert  downward pressure on the price of our common
stock.

     WE  DO  NOT EXPECT TO PAY DIVIDENDS FOR THE FORESEEABLE FUTURE. We have not
declared  or  paid, and do not anticipate declaring or paying in the foreseeable
future,  any cash dividends on our common stock. Our ability to pay dividends is
dependent  upon, among other things, our future earnings, if any, as well as our
operating  and  financial  condition,  capital  requirements,  general  business
conditions and other pertinent factors. Furthermore, any payment of dividends by
us is subject to the discretion of our board of directors. Accordingly, there is
no  assurance  that  any  dividends  will  ever  be  paid  on  our common stock.

CRITICAL ACCOUNTING ESTIMATES

     Our  discussion  and  analysis  of  our  financial condition and results of
operations  is  based upon our financial statements, which have been prepared in
accordance  with  accounting principals generally accepted in the United States.
The  preparation of these financial statements requires us to make estimates and
judgments  that affect the reported amounts of assets, liabilities, revenues (if
any)  and  expenses,  and  related  disclosure  of  any  contingent  assets  and
liabilities.  On  an  on-going  basis,  we  evaluate  our estimates. We base our
estimates  on  various  assumptions  that  we believe to be reasonable under the
circumstances,  the  results  of which form the basis for making judgments about
carrying  values  of  assets  and liabilities that are not readily apparent from
other  sources.  Actual  results may differ from these estimates under different
assumptions  or  conditions.

     We  believe  the  following  critical  accounting  policy  affects our more
significant  judgments  and  estimates  used in the preparation of our financial
statements:

Going  Concern.  The  Company  is  in its exploration stage. The Company has not
generated  any  revenues from its planned operations. The Company has recorded a
loss  of $4,424,039 for the period from March 1, 2004 to September 30, 2004. The
Company  is in need of $5 million of additional financing to fully implement its
planned exploration. These factors among others indicate that the Company may be
unable  to continue as a going concern, particularly in the event that it cannot
obtain  additional  financing.  The  accompanying  financial  statements  do not
include  any  adjustments  relating to the recoverability of recorded assets, or
the  amounts  and  classification  of liabilities that might be necessary in the
event  that  the  Company  cannot  continue  in  existence.

<PAGE>

ITEM 3.   CONTROLS AND PROCEDURES

     (a)  Evaluation  of disclosure controls and procedures. Our Chief Executive
Officer  and  Principal Financial Officer, after evaluating the effectiveness of
the Company's "disclosure controls and procedures" (as defined in the Securities
Exchange  Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period
covered by this quarterly report (the "Evaluation Date"), have concluded that as
of the Evaluation Date, our disclosure controls and procedures were adequate and
designed  to  ensure  that  material information required to be disclosed by the
Company  in  the reports that it files or submits under the Exchange Act of 1934
is  1)  recorded,  processed,  summarized  and reported, within the time periods
specified  in  the  Commission's  rules  and  forms;  and  2)  accumulated  and
communicated to them as appropriate to allow timely decisions regarding required
disclosure.

     (b)  Changes  in  internal  control over financial reporting. There were no
significant  changes in our internal control over financial reporting during our
most  recent  fiscal quarter that materially affected, or were reasonably likely
to  materially  affect,  our  internal  control  over  financial  reporting.

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

     On October 8, 2004, Landmark Graphics Corporation, Halliburton Company, and
Halliburton  Energy  Services,  Inc.  (collectively  "Landmark") filed a lawsuit
against  Falcon  Natural  Gas  Corporation in the 125th District Court of Harris
County,  Texas.  The  case  is styled Landmark Graphics Corporation, Halliburton
Company,  and  Halliburton  Energy  Services,  Inc.  v.  Falcon  Natural  Gas
Corporation,  Cause  Number, 2004-56842. Landmark claims that Falcon Natural Gas
Corporation  was  responsible  for  certain  press  releases  in violation of an
agreement  between  Landmark  and the Company. The Company alleges that a third-
party not related to the Company was responsible for the press release, and that
the  Company  did  not  have  any involvement in the matter. Landmark is seeking
unspecified  damages  and  injunctive relief. Landmark has agreed that if, after
discovery,  it finds that the Company was not responsible for the press release,
Landmark  will  dismiss  the  lawsuit  against  Falcon  Natural Gas Corporation.

     Falcon  Gas Storage Company, Inc., a company unaffiliated with the Company,
has  threatened  litigation by letter dated October 11, 2004, over the Company's
use  of  the  words "Falcon Gas" in the Company's name, which Falcon Gas Storage
Company,  Inc.  claims  infringes on its trade name and good will. Our attorneys
have  exchanged  voicemail  messages  with  the attorneys for Falcon Gas Storage
Company,  Inc.,  however,  no  resolution  has  been  reached  on  the  matter.

ITEM 2.  CHANGES IN SECURITIES

     (c) On July 23, 2004, the Company issued 632,000 shares of its common stock
which  were  not registered under the Act to an unrelated entity in exchange for
$632,000  (less  $60  of  expenses)  pursuant  to  a subscription agreement. The
Company  claims  an  exemption from registration afforded by Section 4(2) of the
Act  since  the  foregoing  issuance  did  not  involve  a  public offering, the
recipient  had  access  to  information that would be included in a registration
statement,  took  the  shares for investment and not resale and the Company took
appropriate  measures to restrict transfer. The Company also claims an exemption
from  registration  afforded  by  Regulation  S  of  the  Act.

     On August 18, 2004, the Company issued 2,500,000 shares of its common stock
which were not registered under the Act to an entity in connection with services
provided  for  the  Company's  purchase of Argyle Energy, Inc.'s interest in the
Wyandotte  Property.  The Company claims an exemption from registration afforded
by Section 4(2) of the Act since the foregoing issuance did not involve a public
offering,  the  recipient  had access to information that would be included in a
registration  statement,  took  the shares for investment and not resale and the
Company  took  appropriate  measures  to  restrict  transfer.

     On  August  31, 2004, the Company issued 100,000 shares of its common stock
which  were  not  registered under the Act to an individual in consideration for
services  to  the Company's advisory board. The Company claims an exemption from
registration  afforded  by  Section 4(2) of the Act since the foregoing issuance
did  not involve a public offering, the recipient had access to information that
would  be  included  in a registration statement, took the shares for investment
and  not  resale and the Company took appropriate measures to restrict transfer.

     On  September  20,  2004,  the  Company issued 100,000 shares of its common
stock  which were not registered under the Act to an individual in consideration
for  services  to  the Company's advisory board. The Company claims an exemption
from  registration  afforded  by  Section  4(2)  of  the Act since the foregoing
issuance  did  not  involve  a  public  offering,  the  recipient  had access to
information  that would be included in a registration statement, took the shares
for  investment  and  not  resale  and  the Company took appropriate measures to
restrict  transfer.

<PAGE>

     In  October  2004,  the  Company  sold 1,500,000 shares of its common stock
which  were  not  registered under the Act to a foreign private investment group
for $1,500,000 (or $1 per share). The Company received $1 million of these funds
prior  to the period covered by this report. The amount recorded was recorded as
a  current  liability. The Company received the remaining $500,000 subsequent to
the  period  covered  by  this  report.  The  Company  claims  an exemption from
registration  afforded  by  Section 4(2) of the Act since the foregoing issuance
did  not involve a public offering, the recipient had access to information that
would  be  included  in a registration statement, took the shares for investment
and  not  resale and the Company took appropriate measures to restrict transfer.
The  Company also claims an exemption from registration afforded by Regulation S
under  the  Securities  Act.

     On  December 8, 2004, the Company issued 392,000 shares of its common stock
which  were  not  registered  under the Act to Cornell Capital Partners, LP as a
one-time  commitment  for entering into a Standby Equity Distribution Agreement.
The  Company  claims  an exemption from registration afforded by Section 4(2) of
the  Act  since  the  foregoing  issuance did not involve a public offering, the
recipient  had  access  to  information that would be included in a registration
statement,  took  the  shares for investment and not resale and the Company took
appropriate  measures  to  restrict  transfer.

     On  December  8,  2004, the Company issued 8,000 shares of its common stock
which  were  not  registered  under  the  Act  to an entity as consideration for
services.  The Company claims an exemption from registration afforded by Section
4(2)  of the Act since the foregoing issuance did not involve a public offering,
the recipient had access to information that would be included in a registration
statement,  took  the  shares for investment and not resale and the Company took
appropriate  measures  to  restrict  transfer.

     (d)  On  April  4, 2003, the Company raised $60,000 pursuant to a Form SB-2
Registration  Statement.  The  money  raised has been put to the following uses:

1.   Repayments of loans from shareholder of $12,000 at 10% interest in December
     2002  and  $3,500  in  March 2003 at 10% interest. These loans plus accrued
     interest of $437.40 were repaid during April 2003. These loans were made to
     pay for (a) legal expenses of $11,975 for the balance owing for preparation
     of  Form SB-2 Registration Statement, Escrow fee and preparation and filing
     of Form 10-QSB for period ending September 30, 2003. (b) accounting fees of
     $3,482.25  for  a  retainer  for December 2002 year end and preparation and
     filing  of  the  financial  statements  ending  March  31,  2003.
2.   Legal  expenses  of  $8,009.15.
3.   Accounting  fees  of  $14,949.50  and  bookkeeping  fees  of  $380.80.
4.   Rent  and  related  expenses  of  $15,000.
5.   Trust  company  fees  of  $1,615.
6.   Website  design.  $2,285.
7.   Office  expenses  of  $1,221.63.
8.   Bank  fees  of  $121.52.
9.   C.T.  Corporation  for  Annual  reporting  and  filing  fees  of  $480.

As of September 30, 2004, there was no money left from the money raised pursuant
to  the  Form  SB-2  Registration  Statement.

     (e) In November 2004, Alan Aitchison, the Company's former President, Chief
Executive  Officer,  Secretary, Treasurer and Director returned 9,000,000 shares
of  our  common  stock  for  cancellation  and  retained  1,000,000  shares.

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

     None.

<PAGE>

ITEM 5.  OTHER INFORMATION

Certain Transactions
--------------------

     A  shareholder  advanced the Company $100 to open a bank account. The funds
advanced  were  unsecured,  non-interest  bearing,  and  due  on  demand.

     During  the  period  ended  September 30, 2004, the Company borrowed $3,217
from a related party. The related party note payable is unsecured, due on demand
and  accrues  interest  at  10%  per  annum.

Subsequent Events
----------------

     On  October  8, 2004, the Company entered into an agreement for the sale of
1,500,000 shares of common stock valued at $1.00 per share. The Company received
$1  million  during  the  period  covered by this report, but had not issued the
shares.  Accordingly,  the  Company  recorded  an  equity  investment deposit of
$1,000,000  as  of  September  30,  2004.

     On  October  25, 2004, Alan Aitchison resigned as a Director of the Company
and  as  the  Company's  President,  Chief  Executive  Officer,  Secretary  and
Treasurer.  Mr.  Aitchison returned for cancellation 9,000,000 of the 10,000,000
shares  of  common  stock  that  he  beneficially  owned.

     On October 27, 2004, the Company's Board of Directors, via unanimous signed
written  consent, appointed Fred B. Zaziski as the Company's President and Chief
Executive  Officer,  and  Massimiliano  Pozzoni  as  the Company's Secretary and
Treasurer. The Company entered into a twelve-month employment agreement with Mr.
Zaziski  pursuant  to which Mr. Zaziski will receive $132,000 per year, five (5)
weeks of paid vacation, and up to an aggregate of 5,000,000 restricted shares of
the  Company's  common  stock. Specific details of the employment agreement with
Mr. Zaziski are disclosed under "ITEM 5.02" of the Company's Form 8-K filed with
the  Commission  on  November  8,  2004,  to  which  the employment agreement is
attached  as  Exhibit  10.1,  and  incorporated  herein  by  reference.

     On  November  19,  2004,  the  Company,  entered  into  a  Standby  Equity
Distribution  Agreement  with  Cornell  Capital  Partners,  LP.  Pursuant to the
Standby  Equity  Distribution  Agreement,  the  Company  may, at its discretion,
periodically  sell  to Cornell Capital Partners, LP shares of common stock for a
total  purchase  price  of  up  to $10.0 million. For each share of common stock
purchased  under  the  Standby  Equity  Distribution  Agreement, Cornell Capital
Partners  LP  will  pay  the  Company 100% of the lowest volume weighted average
price  of  the  Company's  common  stock  as  quoted  by  Bloomberg,  LP  on the
Over-the-Counter Bulletin Board or other principal market on which the Company's
common  stock  is  traded  for the 5 days immediately following the notice date.
Cornell  Capital  Partners,  LP  will  also  retain 5% of each advance under the
Standby  Equity  Distribution Agreement. Cornell Capital Partner's obligation to
purchase  shares  of  the  Company's  common  stock  under  the  Standby  Equity
Distribution  Agreement  is subject to certain conditions, including the Company
obtaining  an  effective  registration statement for shares of common stock sold
under  the  Standby Equity Distribution Agreement and is limited to $750,000 per
weekly  advance  and  $1,000,000  per  30  days.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     a)     Exhibits

     Exhibit No.        Description

     10.1               Employment  Agreement  with  Fred  B.  Zaziski     (1)

     31.1               Certificate of the Chief Executive
                        Officer pursuant to Section 302 of the
                        Sarbanes- Oxley Act of 2002                         *

     31.2               Certificate of the Principal Financial
                        Officer pursuant to Section 302 of the
                        Sarbanes-Oxley Act of 2002                          *

     32.1               Certificate of the Chief Executive
                        Officer and Principal Financial Officer
                        pursuant to Section 906 of the Sarbanes-
                        Oxley Act of 2002                                   *

     32.2               Certificate of the Principal Financial
                        Officer pursuant to Section 906 of the
                        Sarbanes- Oxley Act of 2002                         *

<PAGE>

(1)  Filed  as Exhibits 10.1 to the Company's Form 8-K filed with the Commission
     on  November  8,  2004,  and  incorporated  herein  by  reference.

* Filed Herein.

     b)     Reports on Form 8-K

     The  Company  filed one (1) report on Form 8-K during the quarter for which
this  report  is  filed:

     (1)  Form 8-K/A filed on August 3, 2004, to amend the Form 8-K filed on May
          7,  2004,  to  provide audited financial statements of Falcon, and pro
          forma  financial information of the Company due to the reverse merger.

     The  Company  filed the following three (3) reports on Form 8-K subsequent
to the  quarter  for  which  this  report  is  filed:

     (2)  Form 8-K filed on October 14, 2004, to report entering into a material
          definitive  agreement and the unregistered sale of 1,500,000 shares of
          common  stock  for  $1,500,000.

     (3)  Form  8-K  filed  on  November  8,  2004,  to  report entering into an
          employment  agreement  with  Fred B. Zaziski, a change in control, and
          the  resignation  and  appointment  of  officers  and  directors.

     (4)  Form 8-K filed on November 30, 2004, to report the entry into a
          material definitive agreement and unregistered sales of equity
          securities.

                                   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.

FALCON NATURAL GAS CORP.

DATE: January 7, 2005                 By: /s/ Fred B. Zaziski
                                          --------------------
                                          Fred B. Zaziski,
                                          Chief Executive Officer

<PAGE>