UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-K


(Mark
One)





T           
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934


FOR THE
FISCAL YEAR ENDED DECEMBER 31, 2008





 ̈            TRANSITION
REPORT UNDER SECTION13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934


FOR THE
TRANSITION PERIOD FROM __________ TO __________


COMMISSION
FILE NUMBER: 000-51837







ADVENTURE ENERGY,
INC.


(Name of
registrant in its charter)





Florida
                (State
      or other jurisdiction of incorporation or organization)
              26-2317506
                (I.R.S.
      Employer Identification No.)





33 6th Street South, Suite
600, St Petersburg, FL 33701


(Address
of principal executive offices) (Zip Code)





Issuer’s
telephone Number: (727)
482-1505





Securities
registered under Section 12(b) of the Exchange Act: None.





Securities
registered under Section 12(g) of the Exchange Act: None.





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




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





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




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




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





Large
accelerated filer o                                                                              
Accelerated filero


Non-accelerated
filero                                                                             Smaller
reporting company x





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




The
aggregate market value of the common stock held by non-affiliates of the
registrant, based upon the last sale price of the common stock on June
30, 2008 was $3,500,000.




The
number of shares of registrant’s common stock outstanding, as of March 24, 2009
was 12,731,949




DOCUMENTS
INCORPORATED BY REFERENCE




None.





1







TABLE
OF CONTENTS







PagePART IItem
      1.       Description of
      Business
                                        3Item
      1A.    Risk Factors
                                        9Item
      2.       Properties
                                        14Item
      3.       Legal
    Proceedings
                                        16Item
      4.       Submission of Matters to a
      Vote of Security Holders
                                        16PART IIItem
      5.       Market for Registrant’s Common
      Equity, Related Stockholder Matters and Issuer Purchases of Equity
      Securities
                                        17Item
      6.       Selected Financial
      Data
                                        19Item
      7.       Management’s Discussion and
      Analysis of Financial Condition and Results of Operations
                                        19Item
      7A.    Quantitative and Qualitative Disclosures about
      Market Risks
                                        21Item
      8.       Financial Statements and
      Supplementary Data
                                        23Item
      9.       Changes In and Disagreements
      with Accountants on Accounting and Financial Disclosure
                                        23Item
      9A.    Controls and Procedures
                                        23Item
      9B.    Other Information.
                                        24PART IIIItem
      10.     Directors, Executive Officers and
      Corporate Governance;
                                        24Item
      11.     Executive Compensation
                                        25Item
      12.     Security Ownership of Certain Beneficial
      Owners and Management and Related Stockholder Matters
                                        26Item
      13.     Certain Relationship and Related
      Transactions, and Director Independence
                                        26Item
      14.     Principal Accountant Fees and
      Services
                                        27Item
      15.     Exhibits
                                        27SIGNATURES
                                        28





2





PART
I





ITEM
1.     DESCRIPTION OF BUSINESS.





Overview




Adventure
Energy, Inc. (“Adventure Energy”, the “Company”, “we”, “us”, or “our”) was
organized as a Florida Corporation on March 28, 2008. As discussed further
below, Adventure Energy is in the oil and natural gas industry and is engaged in
exploration, development and production activities in the Appalachian Basin,
particularly in Kentucky and West Virginia.  Our business activities
focus primarily on the drilling and acquisition of proven developed and
underdeveloped proprieties and on the enhancement and development of these
properties.




We
presently operate oil and gas leaseholds in which we own a majority of the
working interest and own and operate a gas gathering system in Morgan County,
Kentucky which gathers natural gas from its wells.   In Morgan
County, Kentucky we initiated a four well “Drilling Program” called the “West
Liberty Quad” Drilling Program to explore and produce natural gas from our
leasehold acreage.. Our company has selectively leased acreage in Kentucky for
future drilling, and continues to acquire adjacent leaseholds to further our
exploration and development in the area.





Recent
Developments





In
Metcalfe County, Kentucky, we have initiated a 10 well oil drilling program. The
Company recently leased 160 acres of mineral rights in Metcalfe County on a
one-year term. We have entered into a contract with an independent drilling
company based in central Kentucky for the drilling of all 10 wells.. Engineering
work has been completed for the initial five (5) wells and drilling permits have
been submitted to the State of Kentucky. The Company anticipates that land
development and drilling will begin within the first two weeks on April 2009
with the first production being delivered by the end of May 2009.





Well
Names


J.L.
Blaydes Well #1


J.L.
Blaydes Well #2


J.L.
Blaydes Well #3


J.L.
Blaydes Well #4


J.L.
Blaydes Well #5





In
addition, the Company leased 71 acres of mineral rights in Wayne County, West
Virginia. The terms of this lease are for 3 years or as long as held by
production. The Company will continue to lease adjoining acreage in Wayne
County, West Virginia.




Area
of Operations




Appalachia
is surrounded by major natural gas markets in the northeastern United States.
This proximity to a substantial number of large commercial and industrial gas
markets, including natural gas powered electricity plants, coupled with the
relatively stable nature of Appalachian production and the availability of
transportation facilities has resulted in generally higher wellhead prices for
Appalachian natural gas than those prices available in the Gulf Coast and
Mid-continent regions of the United States. Appalachia includes portions of
Ohio, Pennsylvania, New York, West Virginia, Kentucky and Tennessee. Although
Appalachia has sedimentary formations indicating the potential for deposits of
gas and oil reserves to depths of 30,000 feet or more, most production in the
Basin has been from wells drilled to a number of relatively shallow blanket
formations at depths of 1,000 to 7,500 feet. These formations are generally
characterized by long-lived reserves that produce for more than 20 years. The
drilling success rates of other operators drilling to these formations
historically have exceeded 90%.




3




Long
production life and high drilling success rates to these shallow formations has
resulted in a highly fragmented, extensively drilled, low technology operating
environment in Appalachia. As a result, there has been limited testing or
development of productive and potentially productive formations at deeper
depths. Although our management believes that significant exploration and
development opportunities may exist in these deeper, less developed formations
for those operators with the capital and technical expertise, we will not engage
in drilling to such depths unless as part of a program in which investors put up
substantially all the funds needed.





Cash
Requirements





The
capital raised from the completed private placements during
2008  satisfied our  capital requirements through years
end.  To initiate and complete our 4-well drilling program in Morgan
County, KY,as well as our 10 well oil drilling program in Metcalfe County,
Kentucky we will enter into partnerships or joint ventures with accredited
investors.





We will
require additional funds to drill wells on the leasehold property over the next
12 months. We anticipate that we will require up to approximately $2,000,000 to
fund continued operations for the next twelve months, depending on revenue, if
any, from operations. Additional capital will be required to effectively support
the operations and to otherwise implement overall business strategy. We
currently do not have any contracts or commitments for additional financing.
There can be no assurance that financing will be available in amounts or on
terms acceptable to us, if at all. The inability to obtain additional capital
will restrict the ability to grow and may reduce the ability to continue to
conduct business operations. If we are unable to obtain additional financing, we
will likely be required to curtail drilling and development plans and possibly
cease operations. Any additional equity financing may involve substantial
dilution to then existing shareholders.




Discussion
of our business





Our
business strategy is to economically increase reserves,  production,
and the sale of natural gas and oil from existing and acquired properties in the
Appalachian Basin and elsewhere, in order to maximize shareholders' return over
the long term. Our strategic location in Kentucky enables us to actively pursue
the acquisition and development of producing properties in that area that will
enhance our revenue base without proportional increases in overhead
costs.





We expect
to generate long-term reserve and production growth through drilling activities
and further acquisitions. We believe that our management’s experience and
expertise will enable us to identify, evaluate, and develop natural gas
projects.    The Company’s leasehold is directly adjacent to
producing wells. The Eastern Kentucky acreage is located in the middle of
several ongoing aggressive drilling projects by several mid-major energy
companies.  One well on the approximately 1,500 acres in Eastern
Kentucky is currently shut-in. We have entered negotiations with a regional
purchaser of natural gas for our 5-well “White Oak Quad” drilling program. If an
agreement is consummated, we anticipate that after minor maintenance the well’s
gas line will be turned on for the delivery of gas.





We have
acquired and intend to acquire additional producing oil and gas property rights
where we believe significant additional value can be created. Our Management is
primarily interested in developmental properties where some combination of these
factors exist: (1) opportunities for long production life with stable
production levels; (2) geological formations with multiple producing
horizons; (3) substantial exploitation potential; and (4) relatively
low capital investment production costs.





Licenses





We hold
licenses to operate in the states of Kentucky and West Virginia.  We
also hold a Gathering Line Operators License in the state of
Kentucky.  We received approval from the Kentucky Department of Energy
Development and Independence Division of Oil and Gas Resources to control the
oil well we acquired from Tackett & Sons Drilling Contractors,
Inc.




4





Research
& Development





For 2008
fiscal year, we spent approximately $7,500 for research and development, most of
which was spent for Fracture Maps and Topographic Maps.  Since our
inception, we have not drilled any new wells. Our expenditures have primarily
related to the acquisition of the one producing well and the acquisition of new
leases.





Compliance
Expenses





Our
company incurs annual expenses to comply with state and federal licensing
requirements.  We estimate these costs to be under $2,000 per
year.  Once we begin our “turnkey” drilling, we anticipate annual
expenditures of approximately $12,000 per well related to environmental costs
including water drainage and land development.  It is difficult to
estimate these environmental expenses while we are still a development state
company as they are largely dependent on many factors for each drilled
well.  See “Government Regulation” and “Environmental Regulation”
below.





Natural
Gas Demand




According
to the United States Department of Energy InfoCard for 2007, the United States
is currently dependent on natural gas for approximately 23% of its total
primary energy requirements.  1
  With its large commitment to the use of natural gas, particularly in
the electricity sector, the U.S. now finds itself with a supply shortage at a
time of increased demand.  According to the US Annual Energy Outlook
2008, total natural gas consumption is expected to grow to a peak of 23.8
trillion cubic feet in 2016 from 21.7 trillion cubic feet in 2006.  2




Consumption
of natural gas in the residential, commercial, and industrial sectors is
influenced by general economic trends, not just fuel prices. Increased
consumption is projected across all natural gas sectors between the years 2006
and 2030.  3
  The industrial sector is projected to experience growth in
consumption, from 7.6 trillion cubic feet in 2006 to 8.1 trillion cubic feet in
2030.  4
  Growth is also predicted in the residential and commercial sectors,
from 7.2 trillion cubic feet in 2006 to 8.8 trillion cubic feet in 2030. 
5




The
demand for natural gas is influenced in part by economic
conditions.  According to AEO2008 projections, the largest variation
of demands for natural gas depends on the prices in the electric power
sector.  6  
  Under projections that assume electric sector prices remain high,
natural gas generated capacity will increase by 65.4 gigawatts between 2007 and
2030.  7 If
prices remain low, the capacity is expected to increase by 131.1 gigawatts
within that same period.  8





Natural
gas demand is also sensitive to prices of other fuels.  The electric
power sector can substitute consumption of gas for other fuels like coal when
prices of natural gas are high.  In contrast, the commercial,
residential, industrial and transportation sectors do not have the same ability
to easily switch fuel sources and are less sensitive to price
variation.





Natural
Gas Consumption




Total
natural gas consumption is projected to decline by 1.3 percent in 2009 and then
increase by 0.4 percent in 2010.   The outlook for continued economic
weakness in 2009 is expected to take its greatest toll on industrial sector
natural gas consumption, which is expected to decline by about 6 percent this
year, more than offsetting the small projected increases in other end-use
sectors.  Lower natural gas delivered prices compared with coal in some
markets, particularly in the Southeast, are expected to cause some electric
power generators to switch some generation from coal to natural gas. 
Natural gas consumption by the electric power sector is projected to grow by 0.4
percent in 2009.




The pace
and extent of economic recovery in 2010 are the primary factors influencing the
natural gas consumption forecast next year, particularly for industrial
users.  Based on the current economic assumptions for 2010, slight growth
in the industrial sector and 2-percent growth in the electric power sector are
balanced by declines in the residential and commercial sectors because of
projected milder winter temperatures.12




5




Natural
Gas Supply





On
February 27, 2009, working natural gas in storage was 1,793 Bcf.  Current
inventories are now 218 Bcf above the 5-year average (2003–2007) and 270 Bcf
above the level during the corresponding week last year.  Storage
inventories at the end of March 2009 are expected at about 1.6 trillion cubic
feet (Tcf), roughly 200 Bcf above the previous 5-year average for that
time.12





According
to US Government statistics provided to the Energy Information Administration,
the US natural gas production is increasing at a rapid pace.  After 9
years without net growth in this sector, there was a 3 percent increase in
production between the first quarter of 2006 and the first quarter of 2007, and
a 9 percent increase between the first quarter of 2007 and the first quarter of
2008.   Contributing to this increase is a growth in supplies
across the lower 48 states.  Improved technology now allows for the
horizontal drilling of wells, a method of “unconventional” drilling, instead of
the traditional vertical wells, and this allows companies to tap supplies in
geographic formations like shale.  AEO2008 data anticipates an
increase in “unconventional” production from 8.5 trillion cubic feet in 2006 to
9.5 trillion cubic feet in 2030 .  9  
  The same report also predicts a decrease in conventional natural gas
production from 6.6 trillion cubic feet in 2006 to 4.4 trillion cubic feet in
2030 . 10





The Henry
Hub spot price averaged $4.65 per Mcf in February 2009, $0.75 per Mcf below the
average spot price in January.  Prices continue to reflect demand
reductions brought about by the current economic downturn.  As the year
progresses, it is expected that average spot prices will remain near $4 per
Mcf.  If prices fall further than currently forecast, natural gas will
become increasingly competitive with coal for base load power generation in some
regions.  On the supply side, the current drilling pullback could
contribute to higher-than-expected prices if the economy begins to recover
earlier than expected and production is slow to react.  The Henry Hub spot
price is expected to average $4.67 per Mcf in 2009 and $5.87 per Mcf in
2010.12





Natural
gas prices are expected to rise through 2030.  According to the
E.I.A., in  2006, natural gas prices were an average of $6.40 per
thousand cubic feet and in 2007, the average was $6.30. Adjusting for inflation,
prices are projected to rise to $5.32 per thousand cubic feet in 2016 and rise
to $6.63 per thousand cubic feet in 2030 .  11  
  The reason for the decline in prices before 2016 is the increased
development without a projected matching increase in consumption.





The US
relies primarily on the natural gas it produces domestically, but also imports a
smaller percentage from other countries.   In 2007, the U.S.
consumed 23,057,589 million cubic feet of natural gas. In that year, the U.S.
imported 4,602,035 million cubic feet of natural gas, and 3,777,161 million
cubic feet was from Canada.





Labor
and Other Supplies





We
contract all labor for the development of leasehold acreage in preparation for
drilling, as well as the drilling and completion crews. We purchase all
supplies, including but not limited to the steel casing for each well, valves,
regulators, 1”, 2”, 3” gathering lines, and all other supplies from local
distributors. In times of heavy demand, such as when many other local natural
gas producers are drilling, we may have difficulty obtaining supplies in a
timely fashion. Also during times of heavy demand, prices for our drilling
supplies are escalated, therefore affecting our profit margins.





Commodity
Price Volatility




Oil and
natural gas prices are volatile and subject to a number of external factors.
Prices are cyclical and fluctuate as a result of shifts in the balance between
supply and demand for oil and natural gas, world and North American market
forces, conflicts in Middle Eastern countries, inventory and storage levels,
OPEC policy, weather patterns and other factors. OPEC supply curtailment,
tensions in the Middle East, increased demand in China and low North American
crude stocks have kept crude oil prices high. Natural gas prices are greatly
influenced by market forces in North America since the primary source of supply
is contained within the continent.




6




Market
forces include the industry’s ability to find new production and reserves to
offset declining production, economic factors influencing industrial demand,
weather patterns affecting heating demand and the price of oil for fuel
switching.





Seasonality





The
exploration for oil and natural gas reserves depends on access to areas where
operations are to be conducted. Seasonal weather variations, including freeze-up
and break-up affect access in certain circumstances. According to the
American Petroleum Institute, more than 60 million U.S. households use
natural gas for water heating, space heating, or cooking. In total, natural gas
accounts for more than 50 percent of the fuel used to heat U.S.
homes. Residential and commercial heating demand for natural gas is highly
weather-sensitive, making weather the biggest driver of natural gas demand in
the short term. As a result, natural gas demand is highly “seasonal” in nature,
with significant “peaks” in the winter heating season.





Seasonality
and the natural gas in storage also play a prominent role in natural gas prices.
Because natural gas consumption is seasonal but production is not, natural gas
inventories are built during the summer for use in the winter. This seasonality
leads to higher winter prices and lower summer prices. In addition, inventories
above the seasonal average depress prices, and inventories below the seasonal
average boost prices.




Governmental
Regulation





Operations
are or will be subject to various types of regulation at the federal, state and
local levels. Such regulation includes requiring permits for the drilling of
wells; maintaining bonding requirements in order to drill or operate wells;
implementing spill prevention plans; submitting notification and receiving
permits relating to the presence, use and release of certain materials
incidental to oil and gas operations; and regulating the location of wells, the
method of drilling and casing wells, the use, transportation, storage and
disposal of fluids and materials used in connection with drilling and production
activities, surface usage and the restoration of properties upon which wells
have been drilled, the plugging and abandoning of wells and the transporting of
production. Operations are or will also be subject to various conservation
matters, including the regulation of the size of drilling and spacing units or
proration units, the number of wells which may be drilled in a unit, and the
unitization or pooling of oil and gas properties. In this regard, some states
allow the forced pooling or integration of tracts to facilitate exploration
while other states rely on voluntary pooling of lands and leases, which may make
it more difficult to develop oil and gas properties. In addition, state
conservation laws establish maximum rates of production from oil and gas wells,
generally limit the venting or flaring of gas, and impose certain requirements
regarding the ratable purchase of production. The effect of these regulations is
to limit the amounts of oil and gas we may be able to produce from the wells and
to limit the number of wells or the locations at which we may be able to
drill.





_________________________________________________________________




1
 The United States Department of Energy InfoCard for 2007 is available on
the internet at http://www.eia.doe.gov/neic/brochure/infocard01.htm
  .


2 The US Annual Energy
Outlook 2008 is available at http://www.eia.doe.gov/oiaf/aeo /.


3
 This information is from the US Energy Outlook 2008 with Projections to
2030 at http://www.eia.doe.gov/oiaf/aeo/gas.html


4
Id.


5
Id.


6
Id.


7
Id.


8
Id.


9
Id.


10
Id.


11
Id.


12 The
Energy Information Administration Short Term Energy Outlook released March 10,
2009 can be found at http://www.eia.doe.gov/steo#Natural_Gas_Markets




7





Business
is affected by numerous laws and regulations, including energy, environmental,
conservation, tax and other laws and regulations relating to the oil and gas
industry. We plan to develop internal procedures and policies to ensure that
operations are conducted in full and substantial environmental regulatory
compliance.





Failure
to comply with any laws and regulations may result in the assessment of
administrative, civil and criminal penalties, the imposition of injunctive
relief or both. Moreover, changes in any of these laws and regulations could
have a material adverse effect on business. In view of the many uncertainties
with respect to current and future laws and regulations, including their
applicability to us, we cannot predict the overall effect of such laws and
regulations on future operations.





We
believe that operations comply in all material respects with applicable laws and
regulations and that the existence and enforcement of such laws and regulations
have no more restrictive an effect on operations than on other similar companies
in the energy industry. We do not anticipate any material capital expenditures
to comply with federal and state environmental requirements.





Environmental
Regulation





The oil
and gas industry is extensively regulated by federal, state and local
authorities.  The scope and applicability of legislation is constantly
monitored for change and expansion.  Numerous agencies, both federal
and state, have issued rules and regulations binding on the oil and gas industry
and its individual members, some of which carry substantial penalties for
noncompliance. To date, these mandates have had no material effect on our
capital expenditures, earnings or competitive position.




Legislation
and implementing regulations adopted or proposed to be adopted by the
Environmental Protection Agency and by comparable state agencies, directly and
indirectly, affect our operations. We are required to operate in compliance with
certain air quality standards, water pollution limitations, solid waste
regulations and other controls related to the discharging of materials into, and
otherwise protecting the environment. These regulations also relate to the
rights of adjoining property owners and to the drilling and production
operations and activities in connection with the storage and transportation of
natural gas and oil.




We may be
required to prepare and present to federal, state or local authorities data
pertaining to the effect or impact that any proposed operations may have upon
the environment. Requirements imposed by such authorities could be costly,
time-consuming and could delay continuation of production or exploration
activities. Further, the cooperation of other persons or entities may be
required for us to comply with all environmental regulations. It is conceivable
that future legislation or regulations may significantly increase environmental
protection requirements and, as a consequence, our activities may be more
closely regulated which could significantly increase operating costs. However,
management is unable to predict the cost of future compliance with environmental
legislation. As of the date hereof, management believes that we are in
compliance with all present environmental regulations. Further, we believe that
our oil and gas explorations do not pose a threat of introducing hazardous
substances into the environment. If such event should occur, we could be liable
under certain environmental protection statutes and laws. We presently carry
insurance for environmental liability




Our
exploration and development operations are subject to various types of
regulation at the federal, state and local levels.  Such
regulation includes the  requirement  of permits for the
drilling of wells,  the  regulation  of the
location  and  density of
wells,  limitations  on the  methods of
casing  wells, requirements  for surface use and restoration
of properties upon which wells are drilled,  and governing the
abandonment  and plugging of wells.  Exploration and
production  are also  subject to property  rights
and other laws  governing  the correlative rights of surface
and subsurface owners.




We are
subject to the requirements of the Occupational Safety and Health Act, as well
as other state and local labor laws, rules and regulations. The cost of
compliance with the health and safety requirements is not expected to have a
material impact on our aggregate production expenses. Nevertheless, we are
unable to predict the ultimate cost of compliance.




8





Competition





We are in
direct competition with numerous oil and natural gas companies, drilling and
income programs and partnerships exploring various areas of the Appalachian
Basin and elsewhere competing for customers. Several of our competitors are
large, well-known oil and gas and/or energy companies, but no single entity
dominates the industry. Many of our competitors possess greater financial and
personnel resources, sometimes enabling them to identify and acquire more
economically desirable energy producing properties and drilling prospects than
us. We are more of a regional operator, and have the traditional competitive
strengths of one, including recently established contacts and in-depth knowledge
of the local geography.  Additionally, there is increasing competition
from other fuel choices to supply the energy needs of consumers and
industry.  Management believes  that there  exists
a viable  market  place
for  smaller  producers  of natural  gas
and oil and
for  operators  of  smaller  natural  gas  transmission
systems.




Employees





As of the
date of this Report, we had two full time employees, including President, and
Vice President. We plan to expand our management team within the next 6-12
months to include a Chief Operations Officer, Field Operations Supervisor, and
Administration officer. We currently utilize several outside firms to locate
mineral rights for possible leaseholds, as well as for potential acquisition
targets. We use independent  consultants who
provide  us,  among  other  things,  with  technical  support  and  accounting
services. We consider our relations with our employees to be
good.





ITEM
1A.  RISK FACTORS





You should carefully consider the risks described below as
well as other information provided to you in this document, including
information in the section of this document entitled “Forward Looking
Statements.” The risks and uncertainties described below are not the only ones
facing the Company. Additional risks and uncertainties not presently known to
the Company or that the Company currently believes are immaterial may also
impair the Company’s business operations. If any of the following risks actually
occur, the Company’s business, financial condition or results of operations
could be materially adversely affected, the value of the Company common stock
could decline, and you may lose all or part of your investment.




RISKS
RELATED TO THE BUSINESS AND FINANCIAL CONDITION





We
have a limited operating history and if we are not successful in continuing to
grow our business, then we may have to scale back or even cease ongoing
business operations.





We are in
the “developmental” stage of business and have yet to commence any substantive
commercial operations. We have no history of revenues from operations. We have
yet to generate positive earnings and there can be no assurance that we will
ever operate profitably. We have a limited operating history and must
be considered in the developmental stage. Success is significantly
dependent on a successful drilling, completion and production program.
Operations will be subject to all the risks inherent in the establishment of a
developing enterprise and the uncertainties arising from the absence of a
significant operating history. We may be unable to locate recoverable reserves
or operate on a profitable basis. We are in the developmental stage and
potential investors should be aware of the difficulties normally encountered by
enterprises in this stage. If the business plan is not successful, and we
are not able to operate profitably, investors may lose some or all of their
investment in the company .





As
properties are in the exploration stage, there can be no assurance that we will
establish commercial discoveries on the properties.




Exploration
for economic reserves of oil and gas is subject to a number of risk factors. Few
properties that are explored are ultimately developed into producing oil and/or
gas wells. Our properties are in the exploration stage only and with the
exception of one currently drilled and producing well on our property, we have
not yet begun production. We may not establish commercial discoveries on any of
the properties.  Failure to make commercial discoveries on any of
these properties would prevent our company from earning revenue and could lead
to the failure of our business.




9




We
rely on highly skilled personnel and, if we are unable to retain or motivate key
personnel or hire qualified personnel, we may not be able to grow
effectively.




Our
performance largely depends on the talents and efforts of highly skilled
individuals. Our future success depends on our continuing ability to identify,
hire, develop, motivate and retain highly skilled personnel for all areas of our
organization. Our continued ability to compete effectively depends on our
ability to attract new technology developers and to retain and motivate our
existing contractors.  Failure to attract and retain qualified
personnel could result in a slower and less efficient development of our
company.





We will
need significant additional capital, which we may be unable to
obtain.





Our
capital requirements will be significant. We cannot assure you that our business
will generate sufficient cash flow from operations or that future borrowings
will be available to us in an amount sufficient to enable us to continue our
operations, and there can be no assurance that financing will be available in
amounts or on terms acceptable to us, if at all. If we are unable to obtain
additional financing, our exploration activities will be curtailed. To date, the
majority of expenses have been paid directly by the President or Vice-President.
If either party elects to cease paying operating expenses, and the Company is
unsuccessful in obtaining outside financing, the Company may not be able to
continue its existence.




Our
independent auditors have expressed doubt about our ability to continue as a
going concern, and the amounts recorded in our financial statements may require
adjustments if the assumption that the entity is a going concern proves untrue,
which may hinder our ability to obtain future financing.





Our
independent auditors stated that our financial statements were prepared assuming
that we would continue as a going concern. As a result of the going concern
qualification, we may find it much more difficult to obtain financing in the
future, if required.  Further, any financing we do obtain may be on
less favorable terms.  Moreover, if the Company should fail to
continue as a going concern, there is a risk of total loss of any monies
invested in the Company, and it is also possible that, in such event, our
shares would be of little or no value.




Failure
to properly manage our potential growth would be detrimental to our business.





Any
growth in our operations will place a significant strain on our resources and
increase demands on our management and on our operational and administrative
systems, controls and other resources. There can be no assurance that our
existing personnel, systems, procedures or controls will be adequate to support
our operations in the future or that we will be able to successfully implement
appropriate measures consistent with our growth strategy. As part of this
growth, we may have to implement new operational and financial systems,
procedures and controls to expand, train and manage our employee base and
maintain close coordination among our staff. We cannot guarantee that we will be
able to do so, or that if we are able to do so, we will be able to effectively
integrate them into our existing staff and systems. We may fail to adequately
manage our anticipated future growth. We will also need to continue to attract,
retain and integrate personnel in all aspects of our operations. Failure to
manage our growth effectively could hurt our business.





We
are a new entrant into the oil and gas exploration and development industry
without profitable operating history.





Since
inception, activities have been limited to organizational efforts, obtaining
working capital and acquiring and developing a very limited number of
properties. As a result, there is limited information regarding property related
production potential or revenue generation potential. As a result, future
revenues may be limited or non-existent.




10





The
business of oil and gas exploration and development is subject to many risks.
The potential profitability of oil and natural gas properties if economic
quantities are found is dependent upon many factors and risks beyond our
control, including, but not limited to: (i) unanticipated ground conditions;
(ii) geological problems; (iii) drilling and other processing problems; (iv) the
occurrence of unusual weather or operating conditions and other force majeure
events; (v) lower than expected reserve quantities; (vi) accidents; (vii) delays
in the receipt of or failure to receive necessary government permits; (viii)
delays in transportation; (ix) labor disputes; (x) government permit
restrictions and regulation restrictions; (xi) unavailability of materials and
equipment; and (xii) the failure of equipment or drilling to operate in
accordance with specifications or expectations.





Drilling
operations may not be successful which would harm our ability to
operate.





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





Production
initiatives may not prove successful which could have a material adverse
effect upon our operations.





The
shales from which we intend to produce natural gas frequently contain water,
which may hamper the ability to produce gas in commercial quantities. The amount
of natural gas that can be commercially produced depends upon the rock and shale
formation quality, the original free gas content of the shales, the thickness of
the shales, the reservoir pressure, the rate at which gas is released from the
shales, and the existence of any natural fractures through which the gas can
flow to the well bore. However, shale rock formations frequently contain water
that must be removed in order for the gas to detach from the shales and flow to
the well bore. The ability to remove and dispose of sufficient quantities of
water from the shales will determine whether or not we can produce gas in
commercial quantities.





There is
no guarantee that the potential drilling locations we have or acquire in the
future will ever produce natural gas, which could have a material adverse effect
upon the results of operations.




Prospects that we
decide to drill may not yield natural gas or oil in commercially viable
quantities which could have a material adverse effect upon our
operations.




Prospects
are in various stages of preliminary evaluation and assessment and we have not
reached the point where we will decide to drill at all on the subject prospects.
The use of seismic data, historical drilling logs, offsetting well information,
and other technologies and the study of producing fields in the same area will
not enable us to know conclusively prior to drilling and testing whether natural
gas will be present or, if present, whether natural gas or oil will be present
in sufficient quantities or quality to recover drilling or completion costs or
to be economically viable. In sum, the cost of drilling, completing and
operating any wells is often uncertain and new wells may not be
productive.





If
production results from operations, we are dependent upon transportation and
storage services provided by third parties.





We will
be dependent on the transportation and storage services offered by various
interstate and intrastate pipeline companies for the delivery and sale of gas
supplies. Both the performance of transportation and storage services by
interstate pipelines and the rates charged for such services are subject to the
jurisdiction of the Federal Energy Regulatory Commission or state regulatory
agencies. An inability to obtain transportation and/or storage services at
competitive rates could hinder processing and marketing operations and/or affect
sales margins.




11





The
potential profitability of oil and gas ventures depends upon factors beyond the
control of our company.





The
potential profitability of oil and gas properties is dependent upon many factors
beyond our control. For instance, world prices and markets for oil and gas are
unpredictable, highly volatile, potentially subject to governmental fixing,
pegging, controls, or any combination of these and other factors, and respond to
changes in domestic, international, political, social, and economic
environments. Additionally, due to worldwide economic uncertainty, the
availability and cost of funds for production and other expenses have become
increasingly difficult, if not impossible, to project. These changes and events
may materially affect financial performance.





Adverse
weather conditions can also hinder drilling operations. A productive well may
become uneconomic in the event that water or other deleterious substances are
encountered which impair or prevent the production of oil and/or gas from the
well. The marketability of oil and gas which may be acquired or discovered will
be affected by numerous factors beyond our control. These factors include the
proximity and capacity of oil and gas pipelines and processing equipment, market
fluctuations of prices, taxes, royalties, land tenure, allowable production and
environmental regulations. These factors cannot be accurately predicted and the
combination of these factors may result in our company not receiving an adequate
return on invested capital.





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





The oil
and gas industry is intensely competitive. We compete with numerous individuals
and companies, including many major oil and gas companies, which have
substantially greater technical, financial and operational resources and staffs.
Accordingly, there is a high degree of competition for desirable oil and gas
leases, suitable properties for drilling operations and necessary drilling
equipment, as well as for access to funds. We cannot predict if the necessary
funds can be raised or that any projected work will be completed. With the
increased competition for mineral rights leases, we cannot say with certainty
that we will be able to expand beyond the current 1500 acres we currently hold.
If we are unable to acquire further leaseholds, our drilling activities will be
restricted to the acreage we currently maintain, which will in turn limit our
growth and revenue.





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





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




Exploration
activities are subject to certain environmental regulations which may prevent or
delay the commencement or continuance of operations.





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





We
believe that our operations comply, in all material respects, with all
applicable environmental regulations. Our operating partners maintain insurance
coverage customary to the industry; however, we are not fully insured against
all possible environmental risks.





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





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




12





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




The laws,
regulations, policies or current administrative practices of any government
body, organization or regulatory agency in the United States or any other
jurisdiction, may be changed, applied or interpreted in a manner which will
fundamentally alter the ability of our company to carry on our
business.





The
actions, policies or regulations, or changes thereto, of any government body or
regulatory agency, or other special interest groups, may have a detrimental
effect on us. Any or all of these situations may have a negative impact on our
ability to operate profitably.





RISKS
RELATED TO COMMON STOCK





There
is currently no active trading market for our common stock, and liquidity of
shares of our common stock is limited.





Our
common stock is currently listed on the Over-the-Counter Bulletin Board.
However, there is currently no regular market or trading in our common stock,
and there can be no assurance that an active trading market will
develop.


Failure
to develop or maintain a trading market could negatively affect its value and
make it difficult or impossible for you to sell your shares. Even if a market
for our common stock does develop, the market price of our common stock may be
highly volatile. In addition to the uncertainties relating to future operating
performance and the profitability of operations, factors such as variations in
interim financial results or various, as yet unpredictable, factors, many of
which are beyond our control, may have a negative effect on the market price of
our common stock.





If
we fail to remain current on our reporting requirements, we could be removed
form the OTC Bulletin Board which would limit the ability of broker-dealers to
sell our securities in the secondary market.





Companies
listed on the Over the Counter Bulletin Board, such as us, must be reporting
issuers under Section 12 of the Securities Exchange Act of 1934, as amended, and
must be current in their reports under Section 13, in order to maintain price
quotation privileges on the OTC Bulletin Board.  As a result, the
market liquidity for our securities could be severely adversely affected by
limiting the ability of broker-dealers to sell our securities and the ability of
stockholders to sell their securities in the secondary market.  In
addition, we may be unable to get relisted on the OTC Bulletin Board, which may
have an adverse material effect on the Company.




13




We
do not expect to pay dividends in the future; any return on investment may be
limited to the value of our common stock.





We do not
currently anticipate paying cash dividends in the foreseeable
future.  The payment of dividends on our common stock will depend on
earnings, financial condition and other business and economic factors affecting
it at such time as the board of directors may consider relevant.  Our
current intention is to apply net earnings, if any, in the foreseeable future to
increasing our capital base and development and marketing
efforts.  There can be no assurance that the Company will ever have
sufficient earnings to declare and pay dividends to the holders of our common
stock, and in any event, a decision to declare and pay dividends is at the sole
discretion of our board of directors.  If we do not pay dividends, our
common stock may be less valuable because a return on your investment will only
occur if its stock price appreciates.





Authorization of preferred
stock.





Our
Certificate of Incorporation authorizes the issuance of up to 5,000,000 shares
of preferred stock with designations, rights and preferences determined from
time to time by its Board of Directors. Accordingly, our Board of Directors is
empowered, without stockholder approval, to issue preferred stock with dividend,
liquidation, conversion, voting, or other rights which could adversely affect
the voting power or other rights of the holders of the common stock. In the
event of issuance, the preferred stock could be utilized, under certain
circumstances, as a method of discouraging, delaying or preventing a change in
control of the Company. Although we have no present intention to issue any
shares of our authorized preferred stock, there can be no assurance that
the Company will not do so in the future.




Our
common stock is subject to the U.S. “Penny Stock” Rules and investors who
purchase our common stock may have difficulty re-selling their shares as the
liquidity of the market for our common stock may be adversely affected by the
impact of the “Penny Stock” Rules.





Our stock
is subject to U.S. “Penny Stock” rules, which may make the stock more difficult
to trade on the open market. Our common shares are currently listed on the OTCBB
but there is no current regular trading in our common stock. A “penny stock” is
generally defined by regulations of the U.S. Securities and Exchange Commission
(“SEC”) as an equity security with a market price of less than US$5.00 per
share. However, an equity security with a market price under US$5.00 will not be
considered a penny stock if it fits within any of the following
exceptions:





(i) the
equity security is listed on NASDAQ or a national securities
exchange;


(ii) the
issuer of the equity security has been in continuous operation for less than
three years, and either has (a) net tangible assets of at least
US$5,000,000, or (b) average annual revenue of at least US$6,000,000;
or


(iii) the
issuer of the equity security has been in continuous operation for more than
three years, and has net tangible assets of at least US$2,000,000.





Our
common stock does not currently fit into any of the above
exceptions.





If an
investor buys or sells a penny stock, SEC regulations require that the investor
receive, prior to the transaction, a disclosure explaining the penny stock
market and associated risks. Furthermore, trading in our common stock will be
subject to Rule 15g-9 of the Exchange Act, which relates to non-NASDAQ and
non-exchange listed securities. Under this rule, broker/dealers who recommend
our securities to persons other than established customers and accredited
investors must make a special written suitability determination for the
purchaser and receive the purchaser’s written agreement to a transaction prior
to sale. Securities are exempt from this rule if their market price is at least
$5.00 per share. Since our common stock is currently deemed penny stock
regulations, it may tend to reduce market liquidity of our common stock, because
they limit the broker/dealers’ ability to trade, and a purchaser’s ability to
sell, the stock in the secondary market




14


.


The low
price of our common stock has a negative effect on the amount and percentage of
transaction costs paid by individual shareholders. The low price of our common
stock also limits our ability to raise additional capital by issuing additional
shares. There are several reasons for these effects. First, the internal
policies of certain institutional investors prohibit the purchase of low-priced
stocks. Second, many brokerage houses do not permit low-priced stocks to be used
as collateral for margin accounts or to be purchased on margin. Third, some
brokerage house policies and practices tend to discourage individual brokers
from dealing in low-priced stocks. Finally, broker’s commissions on low-priced
stocks usually represent a higher percentage of the stock price than commissions
on higher priced stocks. As a result, the Company ’s shareholders may pay
transaction costs that are a higher percentage of their total share value than
if our share price were substantially higher.





ITEM
2.     DESCRIPTION OF PROPERTY





DESCRIPTION OF PROPERTY





Leases
for Company Headquarters





Our
corporate headquarters are located in leased office space at 6 th Street
S. Suite 600, St. Petersburg, Florida.  We entered into a three-year
lease for this property on February 1, 2008 and the term commenced on April
1, 2008.  The annual rent is $7,200.  The lease includes a
right to renew for one additional three-year period commending April 1, 2011,
upon the same terms adjusted for changes in the Consumer Price Index. We believe
that our existing facilities are suitable and adequate to meet our current
business requirements.




Leased
Acreage for Drilling Program




Our
exploration and development activities have primarily involved the acquisition
of proved developed and undeveloped gas properties and the drilling and
development of such properties.  In addition to leaseholds on
approximate 1800 acres, we have obtained the right of ways to initiate a four
well drilling program in the White Oak Quad in Morgan County.  We plan
to initiate drilling six to ten wells in the Caney Quad leasehold acreage in
Morgan County by years end. The following tables set forth information as of the
date of this Report regarding properties in which we have a working interest and
information about our developed and undeveloped natural gas
acreage.







#
      of Acres
                          
                          Farm
      Name
                          
                          MR
      Owner
                          
                          Date Acquired
                          
                          Quad115
                          
                          Troy
      Ison
                          
                          Troy
      Ison
                          
                          Mar-08
                          
                          White
      Oak50
                          
                          Brad
      Gevedon
                          
                          Brad
      Gevedon
                          
                          Mar-08
                          
                          West
      Liberty70
                          
                          Chad
      Gevedon
                          
                          Chad
      Gevedon
                          
                          Mar-08
                          
                          West
      Liberty75
                          
                          Nellie
      Johnson
                          
                          Nellie
      Johnson
                          
                          Mar-08
                          
                          West
      Liberty403
                          
                          Eva
      Bailey
                          
                          Eva
      Bailey
                          
                          Apr-08
                          
                          West
      Liberty10
                          
                          Robert
      Hopkins
                          
                          Robert
      Hopkins
                          
                          May-08
                          
                          West
      Liberty150
                          
                          Daniel
      Hager
                          
                          Daniel
      Hager
                          
                          Jun-08
                          
                          Caney400
                          
                          Jerry
      Eagle
                          
                          Jerry
      Eagle
                          
                          Jun-08
                          
                          Caney85
                          
                          Robert
      Niece
                          
                          Robert
      Niece
                          
                          Jul-08
                          
                          White
      Oak100
                          
                          Robert
      Niece
                          
                          Robert
      Niece
                          
                          Jul-08
                          
                          White
      Oak71
                          
                          Forsyth
      Farm
                          
                          Forsyth
      Family
                          
                          Dec-08
                          
                          No
      Quad160
                          
                          J.L.
      Blaydes Farm
                          
                          J.L.
      Blaydes
                          
                          Mar-09
                          
                          East
      Fork Quad




Total
      = 1689




15




(1)
 All of the above leases remain in effect for a three-year
term.  The majority of the leasors of the property are paid an initial
payment of $3.00 per acre for the first year.  If we do not explore
and develop the acreage, the leasor will be paid $1.00 per acre for each of the
second and third year of the lease.  If we do explore and develop at
least one producing well on the leased property, we will pay the leasor a 12.5
percent royalty fee for all marketed gas of the price received at the wellhead
or the meter station.  The Company has a 100 percent working interest
in the leases.




Rights of
Way to Access Leaseholds




#
      of Acres
                        
                        Farm
      Name
                        
                        Date
      Acquired
                        
                        County/Quad
                        
                        Payment150
                        
                        Jackie
      Lykins
                        
                        6/14/2008
                        
                        Morgan/White
      Oak
                        
                        $500.0075
                        
                        Charles
      Ray Bailey
                        
                        6/14/2008
                        
                        White
      Oak
                        
                        $1.00
      per ft100
                        
                        K.H.
      Risner
                        
                        6/14/2008
                        
                        White
      Oak
                        
                        $1.00
      per ft200
                        
                        Anthony
      Fredrick
                        
                        6/14/2008
                        
                        White
      Oak
                        
                        $1.00
      per ft200
                        
                        Jesse
      Reed
                        
                        7/1/2008
                        
                        White
      Oak
                        
                        $1.00
      per
ft





Wells




In March
2008, the Company acquired the Troy Ison #1 well located in the "White Oak Quad"
of Morgan County, Kentucky for $6,000.00. The Troy Ison #1 well was drilled and
completed in mid-2002. The well was completed down to the Coniferous formation
in Morgan County, Kentucky. Once the appropriate state license was approved for
Adventure Energy to act as an operator of wells, the well was transferred over
to Adventure Energy, Inc. The Company purchased a bond in the amount of $2,000
to cover the well. Once the company acquires or drills more wells within the
state of Kentucky, the company will purchase a Blanket Bond to insure against
the expenses the state may incur in plugging these wells in case of
abandonment.





ITEM
3.     LEGAL PROCEEDINGS





From time to time we may be a defendant and plaintiff in
various legal proceedings arising in the normal course of our business. We are
currently not a party to any material pending legal proceedings or government
actions, including any bankruptcy, receivership, or similar proceedings. In
addition, management is not aware of any known litigation or liabilities
involving the operators of our properties that could affect our operations.
Should any liabilities be incurred in the future, they will be accrued based on
management’s best estimate of the potential loss. As such, there is no adverse
effect on our consolidated financial position, results of operations or cash
flow at this time. Furthermore, management of the Company does not believe that
there are any proceedings to which any director, officer, or affiliate of the
Company, any owner of record of the beneficially or more than five percent of
the common stock of the Company, or any associate of any such director, officer,
affiliate of the Company, or security holder is a party adverse to the Company
or has a material interest adverse to the Company





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





No matter
was submitted to a vote of security holders during the fourth quarter of the
fiscal year covered by this report.





16




PART
II





ITEM
5.     MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES





OTC
Bulletin Board Considerations





On
February 17, 2009, our common stock became eligible for quotation on the NASD's
OTC Bulletin Board under the symbol "ADVE.OB". As of March 24, 2009, there has
been no reported trading in our common stock.




Holders





As of
  March 24, 2009, the approximate number of stockholders of record of the
Common Stock of the Company was 58.








DIVIDENDS





We have
not declared any dividends to date. We have no present intention of paying any
cash dividends on our common stock in the foreseeable future. The payment by us
of dividends, if any, in the future, rests within the discretion of our Board of
Directors and will depend, among other things, upon our earnings, our capital
requirements and our financial condition, as well as other relevant factors.
There are no restrictions in our articles of incorporation or bylaws that
restrict us from declaring dividends.





Equity
Compensation Plan Information





As of
December 31, 2008, we have no equity compensation plan.





RECENT
SALES OF UNREGISTERED SECURITIES




On March
28, 2008, the Company issued an aggregate of 10,000 shares of its common stock
to Around the Clock Partners, LP, Jim Anderson and Around the Clock Trading
& Capital Management at par value in exchange for an initial corporate
investment of $10,000.




In June
2008, the Company issued 42,857 shares of common stock to Valvasone Trust in
exchange for organizational planning and industry consulting
services.




In June
2008, the Company issued an aggregate of 900 shares of common stock to nine
landowners in exchange for six leases for mineral rights and two rights of way
for a pipeline.




In June
2008 the Company issued 1,412 shares of common stock to Clayton Norris as
compensation for consulting services.




In June
and July 2008, the Company issued an aggregate of 28,572 shares of common stock
at a price of $0.35 per share to four accredited investors through a private
placement investment.




In July
2008, the Company issued 1,250,000 shares of common stock to Sichenzia Ross
Friedman Ference LLP as compensation for legal services.




17




In July
2008, the Company issued 69,364 shares of common stock at a per share price of
$0.25 to Jim Anderson in exchange for a capital contribution and reimbursement
for expenses in the amount of $16,088.83.




The share issuance also included 5,000 shares issued as
compensation for services provided as a director of the
Company.




In July
2008, the Company issued 57,473 shares of common stock at a per share price of $
0.25 to Wayne Anderson in exchange for a capital contribution and reimbursement
for expenses in the amount of $13,118.46. The share issuance also included 5,000
shares issued as compensation for services provided as a director of the
Company.




In July
2008, the Company issued 2,500 shares of common stock to John Haugabook in
exchange for consulting services.




In July
2008, the Company issued 210,000 shares of common stock to White Oak Land and
Minerals Development, LLC in connection with a development agreement for
leaseholds in Kentucky and West Virginia.




In
October 2008, the Company issued an aggregate of 30,000 shares of common stock
at a price of $0.35 per share to three accredited investors through a private
placement investment.




In
October 2008, the Company issued 2,500 shares of common stock to B&S Land in
connection with a leasing and mineral rights agreement.




In
October 2008, the Company issued 110,000 shares of common stock to two
non-affiliated parties in exchange for transfer agent and consulting
services.




In
October 2008, the Company issued 5,000 shares to Jim Anderson and 5,000 shares
to Wayne Anderson as compensation for services provided as a director of the
Company during the third quarter.




In
November 2008, the Company issued 10,000 shares of common stock to Bothum Family
Trust as compensation for accounting services.




In
November 2008, the Company issued 25,000 shares of common stock to Valvasone
Trust in exchange for consulting services.




In
November 2008, the Company issued 10,000 shares of common stock to Casey Willis
as compensation for consulting services.




In
November 2008, the Company issued 200,000 shares of common stock to KOW Land
Development, LLC in exchange for geology reports for the Company’s Kentucky
leaseholds and acquisitions.




In
November 2008, the Company issued 1,500 shares of common stock to Howard Matheny
as compensation for consulting services.




In
November 2008, the Company issued 500 shares of common stock to Jeff Griffith as
compensation for accounting services.




In
November 2008, the Company issued 500 shares of common stock to Blair Scanlon as
compensation for services to the Company.




In
November 2008, the Company issued 100,000 shares of common stock to Outdoor
Assets, LLC in exchange for mineral rights research and
acquisitions.




18




In
November 2008, the Company issued 40,000 shares of common stock to Davis
Management Corp. in exchange for corporate development services.




In
December 2008, the Company issued 37,143 shares of common stock at a price of
$.35 per share to Randy and Wendy Hunt TRUSTS FBO CIRRUS LIVING REVOCABLE TRUST
UA 3/24/2006 through a private placement




All
of the above offerings and sales were deemed to be exempt under rule 506 of
Regulation D and Section 4(2) of the Securities Act of 1933, as amended. No
advertising or general solicitation was employed in offering the securities. The
offerings and sales were made to a limited number of persons, all of whom were
accredited investors, business associates of the Company or executive officers
of the Company, and transfer was restricted by the Company in accordance with
the requirements of the Securities Act of 1933. In addition to representations
by the above-referenced persons, we have made independent determinations that
all of the above-referenced persons were accredited or sophisticated investors,
and that they were capable of analyzing the merits and risks of their
investment, and that they understood the speculative nature of their investment.
Furthermore, all of the above-referenced persons were provided with access to
our Securities and Exchange Commission filings.





Issuer
Purchases of Equity Securities





None.





ITEM
6.     SELECTED FINANCIAL DATA





Not
applicable.




ITEM
7.     MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION.





The
following discussion should be read in conjunction with the consolidated
financial statements and the related notes that appear in this annual
report.




Overview




Adventure Energy, Inc.
(the “Company”) began operations on March 28, 2008 and is engaged in the natural
gas and oil industry focusing on production, exploration, and development.
The Company operates gas wells in which they own the
majority of the working interest and is presently constructing a gas gathering
system to gather natural gas from the wells for delivery to an end recipient.
The Company has a leasehold on approximately1,800 acres in addition to rights of
way and is presently expanding its land interests in Kentucky and into West
Virginia. We have not generated any income since inception, and for the period
from March 28, 2008 (inception) to December 31, 2008 we have incurred a net loss
of $760,684.




The Company expects to generate
long-term reserve and production growth through drilling activities and further
acquisitions. The Company believes that its management’s experience and
expertise will enable it to identify, evaluate, and develop its natural gas
projects. The Company has secured a 100% net revenue interest in a leasehold in
Eastern Kentucky covering 1500 acres targeting gas extraction from the Devonian
Shale. Approximately 20-30 drilling locations are on this lease and the wells
will be from 1,500-2,800 feet vertically. The leasehold is directly adjacent to
producing wells. In addition, the Company has leased 160 acres in central
Kentucky with a 100% net revenue interest. The Company anticipates that it can
drill 10 oil wells on this location varying from 800-1200 feet
vertically.




19




Devonian shales are formed from the mud
of shallow seas that existed about 350 million years ago (during the Devonian
period of the Paleozoic era). Shale is a very fine-grained sedimentary rock,
which is easily breakable into thin, parallel layers. It is a very soft rock,
but does not disintegrate when it becomes wet. These shales can contain natural
gas, usually when two thick, black shale deposits ’sandwich’ a thinner area of
shale. Because of some of the properties of these shales, the extraction of
natural gas from shale formations is more difficult (and thus expensive!) than
extraction of conventional natural gas. Most of the natural gas containing
Devonian shale in the U.S. is located around the Appalachian Basin. Although
estimates of the amount of natural gas contained in these shales are high, it is
expected that only about 10 percent of the gas is recoverable. However, their
potential as a natural gas supply is still very promising, given an adequate
technological and economic environment.




The upper Devonian shales of the
Appalachian Basin Appalachian Basin, which is known by different names in
different areas, have produced gas since the early 20th century. The main
producing area straddles the state lines of Virginia, West Virginia and
Kentucky but extends through central Ohio and along Lake Erie into the panhandle
of  Pennsylvania. More than 20,000 wells produce gas from Devonian shales
in the basin. The shale is most commonly produced is the Chattanooga Shale,
also called the Ohio Shale. The US Geological Survey estimated a total 
resource of 12.2 trillion cubic feet (350 km3) of natural gas in Devonian black
shales from Kentucky to New York.12




The Marcellus shale in West Virginia,
Pennsylvania, and New York, once thought to be “played out”, is now estimated to
hold 168-516 TCF still available with horizontal drilling.[13]It has been suggested that
the Marcellus shale and other Devonian shales of the Appalachian Basin, could
supply the northeast U.S. with natural gas.




We expect to generate long-term reserve
and production growth through drilling activities and further acquisitions. We
believe that our management’s experience and expertise will enable us to
identify, evaluate, and develop natural gas projects.




While we anticipate the majority of
future capital expenditures will be expended on the drilling of wells, we intend
to use our experience and regional expertise to add leasehold interests to the
inventory of leases for future drilling activities, as well as property
acquisitions.




Disciplined
Acquisition Strategy




We intend to acquire producing oil and
gas properties where we believe significant additional value can be created.
Management is primarily interested in developmental properties where some
combination of these factors exist: (1) opportunities for long production life
with stable production levels; (2) geological formations with multiple producing
horizons; (3) substantial exploitation potential; and (4) relatively low capital
investment production costs.




Leasehold
Expansion




We intend to acquire adjacent mineral
rights leaseholds to further expand our block of acreage for development. We
also intend to expand into Wayne County, West Virginia, to explore for
leaseholds. The current rate to acquire leaseholds in Eastern Kentucky ranges
from $10.00 -$50.00 per acre.




Exploitation
of Properties




We intend to maximize the value of
properties through a combination of successful drilling, increasing recoverable
reserves and reducing operating costs. We employ the latest technology such as
directional and horizontal drilling. These methods have historically produced
oil and gas at faster rates and with lower operating costs basis than
traditional vertical drilling.


_________________________________________________________________


12 Milici,
R.C., The U.S. Geological Survey Open File Report: Assessment of Undiscovered
Natural Gas Resources in Devonian Black Shales, Appalachian Basin, Eastern
U.S.A at http://pubs.usgs.gov/of/2005/1268 .
 13 Messer,
A’ndrea Elyse, Unconventional natural gas reservoir in Pennsylvania poised to
dramatically increase US Production at
http://www.eurekalert.org/pub_releases/2008-01/ps-ung011708.php
..




20




Experienced
and Dedicated Personnel




We intend to maintain a highly
competitive team of experienced and technically proficient employees and
motivate them through a positive work environment and stock ownership. We
believe that employee ownership, which may be encouraged through a stock option
plan, is essential for attracting, retaining and motivating qualified personnel
.. While we have not yet adopted a stock option plan, we intend to do so in the
near future.




Recent
Developments




We have recently staked out four
locations for the drilling of wells in the Upper Devonian Shale on our 1500 acre
leasehold in Morgan County, Kentucky. Recent data analysis has identified these
drilling prospects and we plan to drill these initial wells to a total depth of
up to 2,800 feet or to a depth sufficient to adequately test the base of the
Upper Devonian Shale formation.




We have entered into drilling
commitments with one drilling company for our four proposed initial development
wells. This operator is presently drilling wells in the nearby area and is
prepared to start drilling at our first locations as soon as we execute final
agreements with the operators, the necessary permits are submitted by an
engineering firm we have retained and the funds for drilling the wells become
available. This drilling company has committed to us to drill the initial four
wells and to continue to work with us through our development drilling of our
entire 1500 acre leasehold.




Additionally, we have entered
negotiations with one of the largest regional natural gas distributors in the
Appalachian Region. The distributor will purchase the production of gas from the
proposed wells to be located on our leasehold. The gas will be purchased on a
delivered basis into this distributor’s utility system or the pipeline system
that it manages. The distributor’s pipeline to which we will deliver our natural
gas produced is currently shut-in for maintenance and upgrades. The latest
update we received from the distributor gives an approximate operational date of
late April 2009. After we receive a confirmation of the operational date, we
will then begin drilling all wells as part of the “White Oak Quad” drilling
program.




We estimate the cost of drilling each
well, inclusive of land development, expansion of our gathering system, and
completion of each well to be $250,000. We will attempt to joint venture this
project with third parties which will pay all, or a significant portion of the
costs required to explore for natural gas.




Financing
Needs




In order to fund our current drilling
program, as well as future drilling programs, we rely upon partnerships and
joint ventures with accredited investors. Once the Company becomes profitable,
we intend to drill wells in which the Company will maintain 100% of the net
revenue.




Including the net proceeds from the
2008 stock offering, the Company only has sufficient funds to conduct its
operations for three to six months. There can be no assurance that additional
financing will be available in amounts or on terms acceptable to the Company, if
at all.




If we are not successful in generating
sufficient liquidity from Company operations or in raising sufficient capital
resources, on terms acceptable to us, this could have a material adverse effect
on the Company’s business, results of operations liquidity and financial
condition.




21




The Company presently does not have any
available credit, bank financing or other external sources of liquidity, other
than the net proceeds from the offering. Due to its brief history and historical
operating losses, the Company’s operations have not been a source of liquidity.
The Company will need to obtain additional capital in order to expand operations
and become profitable. In order to obtain capital, the Company may need to sell
additional shares of its common stock or borrow funds from private lenders.
There can be no assurance that the Company will be successful in obtaining
additional funding.




The Company will need additional
investments in order to continue operations. Additional investments are being
sought, but the Company cannot guarantee that it will be able to obtain such
investments. Financing transactions may include the issuance of equity or debt
securities, obtaining credit facilities, or other financing mechanisms. The
recent downturn in the U.S. stock and debt markets could make it more difficult
to obtain financing through the issuance of equity or debt securities. Even if
the Company is able to raise the funds required, it is possible that it could
incur unexpected costs and expenses, fail to collect significant amounts owed to
it, or experience unexpected cash requirements that would force it to seek
alternative financing. Further, if the Company issues additional equity or debt
securities, stockholders may experience additional dilution or the new equity
securities may have rights, preferences or privileges senior to those of
existing holders of the
Company’s common stock. If additional financing is not available or is not
available on acceptable terms, the Company will have to curtail its
operations.




RESULTS
OF OPERATIONS




This
discussion should be read in conjunction with our financial statements included
elsewhere in this report.




FOR
THE PERIOD FROM MARCH 28, 2008 (INCEPTION) TO DECEMBER 31, 2008




Revenuesfor the period from March 28, 2008 (inception) to December 31, 2008 was
$0.  We are still a development stage company and do not expect
to generate revenue until we begin active drilling and mining.




Operating
Expensesfor the period
from March 28, 2008 (inception) to December 31, 2008 was $760,684, which
included $34,604 in selling, general, and administrative expenses incurred to
develop the company and its operations.




Net
Lossfor the period from
March 28, 2008 (inception) to December 31, 2008 was $760,684 and was
incurred because we
did not have any revenues as we devoted our resources to organizing the company,
entering leases, and preparing for active mining and drilling
activities.




Liquidity
and Capital Resources




As of December 31, 2008 we had cash in
the amount of $27,389.




For the period from March 28, 2008
(inception) to December 31, 2008, cash provided (used) by operating activities
was ($22,711). A total of $737,973 was received from the issuance of common
stock for services and leases for the period March 28, 2008 to December 31,
2008.




For the period from March 28, 2008
(inception) to December 31, 2008, the cash used by investing activities was
$6,000, which was primarily from the purchase of gas
properties.




For the period from March 28, 2008
(inception) to December 31, 2008, cash provided by financing activities was
$56,100, including $46,000 from the issuance of common stock and $10,100 from
loans.




22




Recent
Financings




Between June 2008 and March 24, 2009,
the Company raised $ 46,793 in private financing from accredited investors.
These funds were utilized for the daily operating activities of the company. The
investors purchased shares from the Company at $.35 per share. Since inception,
the President and Vice-President have funded the Company’s
operations.




Off
Balance Sheet Arrangements:




None.




Critical
Accounting Estimates




The preparation of financial statements
in conformity with accounting principles generally accepted in the United States
of America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.




Effect
of Recently Issued Accounting Pronouncements




Management
does not believe that any recently issued, but not yet effective, accounting
standards, if currently adopted, would have a material effect on the
accompanying financial statements.





ITEM
8.     FINANCIAL STATEMENTS.





All
financial information required by this Item is attached hereto at the end of
this report beginning on page F-1 and is hereby incorporated by
reference.




ITEM
9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.





None





ITEM
9A(T).   CONTROLS AND PROCEDURES.





(a) Evaluation of Disclosure Controls
and Procedures. Based on an evaluation of our disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the
Securities Exchange Act of 1934, as amended) required by paragraph (b) of
Rule 13a-15 or Rule 15d-15, as of December 31, 2008, our Chief
Executive Officer and Acting Chief Financial Officer has concluded that our
disclosure controls and procedures were effective in ensuring that information
required to be disclosed by us in the reports that we file or submit under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the Commission’s rules and forms. Our Chief Executive
Officer and Acting Chief Financial Officer also concluded that, as of December
31, 2008, our disclosure controls and procedures were effective in ensuring that
information required to be disclosed by us in the reports that we file or submit
under the Exchange Act is accumulated and communicated to our management,
including our Chief Executive Officer and Acting Chief Financial Officer, to
allow timely decisions regarding required disclosure.





(b) Changes in Internal Controls.
During the three months ended December 31, 2008, there were no changes in our
internal control over financial reporting identified in connection with the
evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 that has
materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting.




23





Management’s
Report on Internal Control over Financial Reporting.





This
annual report does not include a report of management’s assessment regarding
internal control over financial reporting or an attestation report of the
Company’s registered public accounting firm due to a transition period
established by rules of the Securities and Exchange Commission for newly public
companies.








ITEM
9B.  OTHER INFORMATION.





None.





PART
III





ITEM
10.   DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE
GOVERNANCE.





The
following table sets forth information about our executive officers, key
employees and directors as of March 25, 2009. The board of directors elects our
executive officers annually. A majority vote of the directors who are in office
is required to fill vacancies. Each director will serve until his or her
successor is elected and qualified, or until his or her earlier resignation or
removal.








Name
                      Age
                      Position
                      Date
      of Election
                        Or
      Appointment as a
                        DirectorWayne
      Anderson
                      43
                      President
      and Chairman
                      March
      2008Jim
      Anderson
                      69
                      Vice-President
      and Director
                      March
      2008




Wayne
Anderson       President and Chairman and
Acting Chief Financial Officer





Wayne
Anderson has served as the President and Chairman of the Board of Adventure
Energy since the incorporation of the company in March 2008.  Prior to
founding Adventure Energy, Wayne Anderson acted as the Managing Member and a
founding partner of Around the Clock Trading & Capital Management, LLC, an
investment management company, and the General Partner of Around the Clock
Partners, LP from January 2000 through 2008.  Through the fund Around
the Clock Partners, LP, Mr. Anderson has made significant key investments within
the natural resources sector. Mr. Anderson has been a vital source in
negotiating and executing financing transactions for several small to mid sized
companies. From June 1997 through December 1999, Mr. Anderson was a
proprietary equities trader. Mr. Anderson practiced as a Podiatric physician
from May 1993 through June 1997. Mr. Anderson studied biology at the University
of Georgia from 1984 to 1987 and then attended the Temple University School of
Podiatric Medicine (formerly the Pennsylvania College of Podiatric Medicine)
where he received a doctorate of podiatric medicine (DPM) in 1991





Jim
Anderson            Vice
President and Director





Jim
Anderson is the acting Vice President and serves as a Director of Adventure
Energy.  Jim Anderson has been involved in commercial and residential
real estate for more than 35 years. He brings a diversified business background
in mergers and acquisitions, site selection, project planning and business
strategy. From June 1991 through March of 2008, Mr. Anderson served as
the President of National Hotel Investment. He was responsible for negotiating
and acquiring properties in the hospitality industry. Prior to Mr.
Anderson’s commercial and residential real estate career, he worked at Ashland
Oil for 12 years. While at Ashland Oil, he was in charge of leaseholds, land
acquisitions, and site selection.  Mr. Anderson attended Middle
Georgia College for two quarters before leaving to serve in the US
Army.





24




COMMITTEES
OF THE BOARD OF DIRECTORS




We have
not established any committees, including an Audit Committee, a Compensation
Committee, a Nominating Committee, or any committee performing a similar
function. The functions of those committees are being undertaken by the entire
board as a whole.





FAMILY
RELATIONSHIPS




Wayne Anderson is the son of Jim
Anderson.




Code
of Business Conduct and Ethics




We have
adopted a code of business conduct and ethics, which is attached as an exhibit
to this Annual Report on Form 10-K.




ITEM
11.   EXECUTIVE COMPENSATION.





Executive Compensation




Our
executive officers have not received any compensation since the date of our
incorporation, and we did not accrue any compensation.




Equity
Compensation, Pension or Retirement Plans




No
retirement, pension, profit sharing, stock option or insurance programs or other
similar programs have been adopted by the Company for the benefit of its
employees.




Audit
Committee




Presently,
our Board of Directors is performing the duties that would normally be performed
by an audit committee. We intend to form a separate audit committee, and plan to
seek potential independent directors. In connection with our search, we plan to
appoint an individual qualified as an audit committee financial
expert.





Options/SARS
Grants During Last Fiscal Year





None.




Directors’
Compensation




The
Company ’s directors currently serve without cash
compensation.  Directors receive 5,000 shares of common stock for
their services per quarter.




25





Item
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS





The
following table sets forth certain information, as of March 24, 2009, with
respect to any person (including any “group”, as that term is used in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) who is known to us to be the beneficial owner of more than five
percent (5%) of any class of our voting securities, and as to those shares of
our equity securities beneficially owned by each of our directors and executive
officers and all of our directors and executive officers as a group. Unless
otherwise specified in the table below, such information, other than information
with respect to our directors and executive officers, is based on a review of
statements filed with the Securities and Exchange commission (the “Commission”)
pursuant to Sections 13 (d), 13 (f), and 13 (g) of the Exchange Act
with respect to our common stock. As of March 24, 2009, there were
12,731,949 shares of our common stock outstanding.





The
number of shares of common stock beneficially owned by each person is determined
under the rules of the Commission and the information is not necessarily
indicative of beneficial ownership for any other purpose. Under such rules,
beneficial ownership includes any shares as to which such person has sole or
shared voting power or investment power and also any shares which the individual
has the right to acquire within sixty (60) days after the date hereof,
through the exercise of any stock option, warrant or other right. Unless
otherwise indicated, each person has sole investment and voting power (or shares
such power with his or her spouse) with respect to the shares set forth in the
following table. The inclusion herein of any shares deemed beneficially owned
does not constitute an admission of beneficial ownership of those
shares.




The table
also shows the number of shares beneficially owned as of March 24, 2009 by each
of our individual directors and executive officers, by our nominee directors and
executive officers and by all our current directors and executive officers as a
group.




Name of Beneficial Owner
    (1)
                      
                      Common
      Stock Beneficially Owned
                      
                      
                      Percentage
      of Common StockWayne
      Anderson (2)(3)
                      
                      
                      5,324,091
                      
                      
                      
                      41.82
                      %Jim
      Anderson
                      
                      
                      3,123,084
                      
                      
                      
                      24.53
                      %Around
      the Clock Partners, LP (2)
                      
                      
                      3,053,465
                      
                      
                      
                      23.98
                      %Around
      the Clock Trading & Capital Management, LLC (3)
                      
                      
                      1,179,700
                      
                      
                      
                      9.27
                      %Officers
      and Directors as a Group (2 persons)
                      
                      
                      8,447,175
                      
                      
                      
                      66.35
                      %______________(1)
      Beneficial Ownership is determined in accordance with the rules of the
      Securities and Exchange Commission and generally includes voting or
      investment power with respect to securities. Shares of common stock
      subject to options, warrants, or convertible debt currently exercisable or
      convertible, or exercisable or convertible within 60 days of March 24,
      2009 are deemed outstanding for computing the percentage of the person
      holding such option or warrant but are not deemed outstanding for
      computing the percentage of any other person. Percentages are based on a
      total of shares of common stock outstanding on March 24, 2009, and
      the shares issuable upon the exercise of options, warrants exercisable,
      and debt convertible on or within 60 days of March 24,
    2009.(2)
      Wayne Anderson is a limited partner in Around the Clock Partners, LP and
      has sole discretion for its investment decisions and sole voting and
      dispositive power over shares. The General Partner of Around the
      Clock Partners, LP is Around the Clock Trading & Capital Management
      LLC. The shares included in Mr. Anderson’s beneficial ownership include
      shares include 3,053,465 shares held by Around the Clock Partners, LP,
      1,179,700 shares held by Around the Clock Trading & Capital
      Management, LLC, and 469,200 shares held by Mr. Anderson’s children, for
      which Mr. Anderson is the custodian.
                        (3)
      Wayne Anderson is the managing member and sole owner of Around the Clock
      Trading & Capital Management LLC and has voting and dispositive power
      over the shares.




ITEM
13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE.





We have
not entered into any transactions in which any of our directors, executive
officers, or affiliates, including any member of an immediate family, had or are
to have a direct or indirect material interest.





None of
our directors is independent as that term is defined under the Nasdaq
Marketplace Rules.




26





ITEM
14.   PRINCIPAL ACCOUNTANT FEES AND SERVICES.





Audit
Fees




The
aggregate fees billable to us by Drakeford & Drakeford, LLC from March 28,
2008 (Inception) through December 31, 2008 for the audits of our annual
financial statements for the fiscal year totaled approximately
$5,000.00





Audit-Related
Fees





We did
not incur any assurance and audit-related fees in connection with the audit of
the financial statements of the Company from March 28, 2008 (Inception) through
December 31, 2008, other than as set forth in “Audit Fees” above.




Tax
Fees




For the
period from March 28, 2008 (Inception) through December 31, 2008, we did not
incur any fees to Drakeford & Drakeford, LLC for services rendered to us for
tax compliance, tax advice, or tax planning.




All
Other Fees




There
were no fees billed to us by Drakeford & Drakeford, LLC for services
rendered to us during the period from March 28, 2008 (Inception) through
December 31, 2008, other than the services described above under “Audit Fees”
and “Audit-Related Fees.”




As of the
date of this filing, our current policy is to not engage Drakeford &
Drakeford, LLC to provide, among other things, bookkeeping services, appraisal
or valuation services, or international audit services. The policy provides that
we engage Drakeford & Drakeford, LLC to provide audit, tax, and other
assurance services, such as review of SEC reports or filings.





AUDIT
COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES





The board
of directors acts as the audit committee, and consults with respect to audit
policy, choice of auditors, and approval of out of the ordinary financial
transactions.




ITEM
15.   EXHIBITS.





Exhibits
required by Item 601 of Regulation
S-K





3.1
                                Articles
      of Incorporation (filed with Form S-1 (File No. 333-154799) on October 29,
      2008 and incorporated by reference)3.2
                                Articles
      of Incorporation (amended and restated) (filed with Form S-1/A (File No.
      333-154799) on December 9, 2008 and incorporated by
    reference)3.3
                                By-Laws
      (filed with Form S-1/A (File No. 333-154799) on December 9, 2008 and
      incorporated by reference)4.1
                                Specimen
      certificate of common stock (previously filed with Form S-1 (File No.
      333-154799) on October 29, 2008 and
                                  incorporated
      by refernece)10.1
                                Form
      of Right of Way Easement and Grant (previously filed with Form S-1 (File
      No. 333-154799) on October 29, 2008
                                  incorporated
      by reference)10.2
                                Form
      of Subscription Agreement for Well (previously filed with Form S-1 (File
      No. 333-154799) on October 29, 2008
                                  incorporated
      by reference)10.3
                                Form
      of Oil, Gas & Coalbed Methane Lease (previously filed with Form S-1
      (File No. 333-154799) on October 29, 2008)and
      incorporated by reference)10.4
                                Gathering
      Line Operators License dated April 28, 2008 (previously filed with Form
      S-1 (File No. 333-154799) on
      October 29, 2008 and incorporated by reference)10.5
                                Record
      of transfer of Troy Isom well dated July 2, 2008 (previously filed with
      Form S-1 (File No. 333-154799)  on October
      29, 2008 and incorporated by reference)10.6*
                                Adventure
      Energy-Rebell Turnkey Drilling Contract, dated March 10, 2009, by and
      between Adventure Energy, Inc. and Rebell Oil of Kentucky (Confidential
      treatment has been requested with respect to certain portions of this
      Exhibit. The omitted portions have been separately filed with the
      Securities and Exchange Commission)14*
                                Code
      of Ethics31.1*
                                Certification
      by Principal Executive Officer and Principal Financial Officer, required
      by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act32.1*
                                Certification
      by Principal Executive Officer and Principal Financial Officer, required
      by Rule 13a-14(b) or Rule 15d-14(b) of the Exchange Act and Section 1350
      of Chapter 63 of Title 18 of the United States
  Code





*Filed herewith




27




SIGNATURES





Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.


.


Adventure
      Energy, Inc.Date:
      March 27, 2009
              By:
              /s/ Wayne
      AndersonWayne
      AndersonPresident,
      Acting Chief Financial Officer and Director (Principal Executive Officer,
      Principal Financial Officer and Principal Accounting
    Officer)




Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed by the following persons in the capacities and on the date
indicated:




Signature
                  
                  Title
                  
                  Date/s/
      Wayne Anderson
                  
                  President,
      Acting Chief Financial Officer
      and Director(Principal
                  
                  March  27,
      2009Wayne
      Anderson
                  
                  Executive
      Officer, Principal Financial Officer and Principal Accounting
      Officer)/s/
      Jim Anderson
                  
                  Vice-President,
      and Director
                  
                  March
      27, 2009Jim
      Anderson





















28








INDEX
TO FINANCIAL STATEMENTS








Financial
      Statements
                                PageReport
      of Independent Registered Public Accounting Firm
                                F-2Balance
      Sheet as of  December 31, 2008
                                F-3Statement
      of Operations for the period March 28, 2008  (inception) to
      December 31, 2008
                                F-4Statement
      of Changes in Stockholders’ Equity for the period March 28, 2008
      (inception) to December 31, 2008
                                F-5Statement
      of Cash Flows for the period March 28, 2008 (inception) to December 31,
      2008
                                F-6Notes
      to Financial Statements
                                F-7
      -
F-13








F-1







REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM








Board of
Directors and Stockholders


ADVENTURE
ENERGY, INC.





We have
audited the balance sheet of ADVENTURE ENERGY, INC. (a development stage
company) as of December 31,2008, and the related statements of operations,
changes in stockholders’ equity, and  cash flows for the period from
March 28, 2008 (Date of Inception) to December 31, 2008. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.





We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion. Also, an audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.





In our
opinion, the  financial statements referred to above present fairly,
in all material respects, the financial position of ADVENTURE ENERGY, INC.,as of
December 31, 2008 and the results of its operations and its cash flows for the
period from March 28, 2008(Date of Inception) to December 31, 2008, in
conformity with accounting principles generally accepted in the United States of
America.





The
accompanying financial statements have been prepared assuming the Company will
continue as a going concern. As discussed in Note B to the financial statements,
the Company has incurred operating losses for the period March 28, 2008
(inception) to December 31, 2008, has no revenues and has not commenced planned
principal operations. These factors raise substantial doubt about the Company’s
ability to continue as a going concern. Management’s plans regarding those
matters are also described in Note B. The financial statements do not include
any adjustments that might result from the outcome of this
uncertainty.








/s/
Drakeford & Drakeford, LLC





Drakeford
& Drakeford, LLC


New York,
New York





March 26,
2009






F-2








ADVENTURE
ENERGY, INC.





(A
Development Stage Company)


BALANCE
SHEET




December
      31, 2008ASSETSCURRENT
      ASSETSCash
      and cash equivalents
                          
                          $
                          27,389PROPERTY
      AND EQUIPMENTGas
      properties
                          
                          
                          6,000TOTAL
      ASSETS
                          
                          $
                          33,389LIABILITIES
      AND STOCKHOLDERS’ EQUITYCURRENT
      LIABILITIES
                          
                          $
                          0LONG-TERM
      LIABILITIES
                          
                          
                          0STOCKHOLDERS’
      EQUITYPreferred
      stock authorized 5,000,000 shares, $.001 par valueeach.
      At  December  31, 2008, there are no shares issued and
      outstanding
                          
                          
                          0Common
      stock authorized 50,000,000 shares, $.001 par valueeach.
      At  December  31, 2008, there
      are  12,239,951 shares issuedoutstanding
                          
                          
                          12,239Additional
      paid in capital
                          
                          
                          781,734Deficit
      accumulated during the development stage
                          
                          
                          (760,684
                          )Total
      stockholders’ equity
                          
                          
                          33,289TOTAL
      LIABILITIES AND STOCKHOLDERS’ EQUITY
                          
                          $
                          33,289





The accompanying
notes are an integral part of these statements.




F-3




ADVENTURE
ENERGY, INC.





(A
Development Stage Company)


STATEMENTS
OF OPERATIONS




March
      28,2008,
      (inception)to
      December 30,2008Revenue
                          
                          $
                          0Operating
      ExpensesSelling,
      general and administrative
                          
                          
                          36,845Stock
      issued for legal fees
                          
                          
                          437,500Stock
      issued for consulting and other fees
                          
                          
                          271,080Research
      and development
                          
                          
                          7,500Organizational
      expense
                          
                          
                          10,000Total
      operating expenses
                          
                          
                          762,925Net
      loss from operations
                          
                          
                          (762,925
                          )Other
      income-investment stock gain
                          
                          
                          2,241Net
      loss
                          
                          $
                          (760,684
                          )Basic
      and diluted loss  per common share
                          
                          $
                          (.07
                          )Weighted
      average shares outstanding
                          
                          
                          11,174,225








The
accompanying notes are an integral part of these statements




F-4








ADVENTURE
ENERGY, INC.





(A
Development Stage Company)





STATEMENT OF STOCKHOLDERS’
EQUITY







Deficit
      AccumulatedCommon
      stock
                        
                        
                        Additional
                        
                        
                        During
      DevelopmentShares
                        
                        
                        Amount
                        
                        
                        Paid
      in Capital
                        
                        
                        Stage
                        
                        
                        TotalIssuance
      of common stock for cashon
      March 28, 2008 at par value
                        
                        
                        10,000,000
                        
                        
                        $
                        10,000
                        
                        
                        $
                        0
                        
                        
                        $
                        0
                        
                        
                        $
                        10,000(1,000:1
      forward stock split on April 1, 2008)Issuance
      of common stock for leases and right ofways
      at $.35 per share
                        
                        
                        3,400
                        
                        
                        
                        3
                        
                        
                        
                        1,187
                        
                        
                        
                        
                        
                        
                        
                        1,190Issuance
      of common stock for loan repaymentsand
      reimbursements at $.35 per share
                        
                        
                        83,981
                        
                        
                        
                        84
                        
                        
                        
                        29,309
                        
                        
                        
                        
                        
                        
                        
                        29,393Issuance
      of common stock for services at $.35per
      share
                        
                        
                        771,142
                        
                        
                        
                        771
                        
                        
                        
                        269,119
                        
                        
                        
                        
                        
                        
                        
                        269,890Issuance
      of common stock for legal fees at $.35per
      share
                        
                        
                        1,250,000
                        
                        
                        
                        1,250
                        
                        
                        
                        436,250
                        
                        
                        
                        
                        
                        
                        
                        437,500Issuance
      of common stock for cash at $.35 pershare
                        
                        
                        131,428
                        
                        
                        
                        131
                        
                        
                        
                        45,869
                        
                        
                        
                        
                        
                        
                        
                        46,000Net
      loss for the period March 28, 2008to  December  31,
      2008
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        (760,684
                        )
                        
                        
                        (760,684
                        )Balance
      at December 31, 2008
                        
                        
                        12,239,951
                        
                        
                        $
                        12,239
                        
                        
                        $
                        781,734
                        
                        
                        $
                        (760,684
                        )
                        
                        $
                        33,289




The
accompanying notes are an integral part of this statement.





F-5







ADVENTURE
ENERGY, INC.





( A
Development Stage Company)





STATEMENTS
OF CASH FLOWS





March
      28,2008,
      (inception)to
      December 31,2008OPERATING
      ACTIVITIESNet
      loss
                                  
                                  $
                                  (760,684
                                  )Adjustments
      to reconcile net loss to net cash provided byoperating
      activities:Issuance
      of common stock for services, leases, and reimbursements
                                  
                                  
                                  737,973Cash
      used by operating activities
                                  
                                  
                                  (22,711
                                  )INVESTING
      ACTIVITIES:Purchase
      of gas properties
                                  
                                  
                                  (6,000
                                  )Cash
      used by investing activities
                                  
                                  
                                  (6,000
                                  )FINANCING  ACTIVITIES:Issuance
      of common stock for cash
                                  
                                  
                                  46,000Proceeds
      from loans
                                  
                                  
                                  10,100Cash
      provided by financing activities
                                  
                                  
                                  56,100NET  INCREASE  IN
      CASH
                                  
                                  
                                  27,389CASH
      AND CASH EQUIVALENTS, BEGINNING OF PERIOD
                                  
                                  
                                  0CASH
      AND CASH EQUIVALENTS,  END OF PERIOD
                                  
                                  $
                                  27,389Supplemental
      Disclosures of Cash Flow Information:Interest
                                  
                                  $
                                  0Taxes
                                  
                                  $
                                  0





The
accompanying notes are an integral part of these statements





F-6




ADVENTURE
ENERGY, INC.





( A
Development Stage Company)




NOTES
TO FINANCIAL STATEMENTS





December
31, 2008




NOTE
A – BASIS OF PRESENTATION AND SUMMARY OF  SIGNIFICANT
ACCOUNTING POLICIES




Nature of
Operations




Adventure
Energy, Inc. (the “Company”) was incorporated in Florida on March 28, 2008. The
Company is an independent oil and natural gas company engaged in exploration,
development and production activities in the Appalachian Basin, particularly in
Kentucky and West Virginia. Our business strategy focuses primarily on the
drilling and acquisitions of proved developed and undeveloped properties and on
the enhancement and development of these properties.





Basis of
Presentation




The
financial statements have been prepared for purposes of registration with the
Securities and Exchange Commission ("SEC"), and have been prepared in in
accordance with auditing standards of the Public Company Accounting Oversight
Board (United States).




The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.




Cash and
Cash Equivalents





Investments
having an original maturity of 90 days or less that are readily convertible into
cash are considered to be cash equivalents.




Cash and
cash equivalents consisted of the following:




Cash
                    
                    $
                    1,148E*Trade
      Securities
                    
                    
                    26,241Total
                    
                    $
                    27,389




F-7





ADVENTURE
ENERGY, INC.





( A
Development Stage Company)





NOTES
TO FINANCIAL STATEMENTS (continued)





December
31, 2008


NOTE
A – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
(continued)




Recently
Enacted Accounting Standards





In
December 2007, the FASB issued SFAS No. 141(R), “Business
Combinations.”  It will require an acquirer to recognize, at the
acquisition date, the assets acquired, the liabilities assumed, and any
non-controlling interest in the acquiree at their full fair values as of that
date. In a business combination achieved in stages (step acquisitions), the
acquirer will be required to remeasure its previously held equity interest in
the acquiree at its acquisition-date fair value and recognize the resulting gain
or loss in earnings. The acquisition-related transaction and restructuring costs
will no longer be included as part of the capitalized cost of the acquired
entity but will be required to be accounted for separately in accordance with
applicable generally accepted accounting principles in the U.S. SFAS
No. 141(R) applies prospectively to business combinations for which the
acquisition date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2008.




In
December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in
Consolidated Financial Statements.” The statement clarifies the definition of a
non-controlling (or minority) interest and requires that non-controlling
interests in subsidiaries be reported as a component of equity in the
consolidated statement of financial position and requires that earnings
attributed to the non-controlling interests be reported as part of consolidated
earnings and not as a separate component of income or expense. However, it will
also require expanded disclosures of the attribution of consolidated earnings to
the controlling and non-controlling interests on the face of the consolidated
income statement. SFAS No. 160 will require that changes in a parent’s
controlling ownership interest, that do not result in a loss of control of the
subsidiary, are accounted for as equity transactions among shareholders in the
consolidated entity therefore resulting in no gain or loss recognition in the
income statement. Only when a subsidiary is deconsolidated will a parent
recognize a gain or loss in net income. SFAS No. 160 is effective for
fiscal years beginning on or after December 15, 2008, and will be applied
prospectively except for the presentation and disclosure requirements that will
be applied retrospectively for all periods presented. The Company is currently
evaluating the impact of SFAS No. 160 to its financial position and results
of operations.





F-8




ADVENTURE
ENERGY, INC.





(A
Development Stage Company)





NOTES
TO FINANCIAL STATEMENTS (continued)





December
31, 2008





NOTE
A – BASIS OF PRESENTATION AND SUMMARY OF  SIGNIFICANT
ACCOUNTING POLICIES
(continued)




Recently
Enacted Accounting Standards (continued)




In March
2008, the FASB issued Statement of Financial Accounting Standards No. 161,
“Disclosures about Derivative Instruments and Hedging Activities” (“SFAS
No. 161”). SFAS No. 161 is intended to improve financial reporting
about derivative instruments and hedging activities by requiring enhanced
disclosures to enable investors to better understand their effects on an
entity’s financial position, financial performance, and cash flows. The
provisions of SFAS No. 161 are effective for financial statements issued
for fiscal years and interim periods beginning after November 15, 2008,
with early application encouraged. The Company does not expect the
provisions of SFAS No. 161 to have a material impact on the financial
statements.




Use of
Estimates





The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.




Concentration
of Credit Risk





Financial  instruments  which  potentially  subject  the  Company  to
a concentration  of credit risk consists  primarily of
trade  accounts  receivable with
a  variety  of
local,  national,  and  international  oil
and  natural  gas companies.  Such credit risks
are  considered by management to be limited due to the financial
resources of the oil and natural gas companies.








F-9




ADVENTURE
ENERGY, INC.





(A
Development Stage Company)





NOTES
TO FINANCIAL STATEMENTS (continued)





December
31, 2008




NOTE
A – BASIS OF PRESENTATION AND SUMMARY OF  SIGNIFICANT
ACCOUNTING POLICIES
(continued)




Risk
Factors





The Company operates in an environment
with many financial  risks including, but not limited to, the ability
to acquire additional economically recoverable gas reserves, the continued
ability to market drilling programs, the inherent risks of the search for,
development of and production of  gas, the ability to sell natural gas
at prices which will provide attractive rates of return, the volatility and
seasonality of  gas production and prices, and the highly competitive
nature of the industry as well as worldwide economic conditions.




Fair
Value of Financial Instruments










Gas
Properties





The Company adopted the successful
efforts method of accounting for gas producing activities. Under
successful efforts, costs to acquire mineral interest in gas properties, to
drill and equip exploratory wells that find proved reserves, and to drill and
equip developmental wells are capitalized. Costs to drill exploratory wells that
do not find proved reserves, costs of developmental wells on properties the
Company has no
further interest in, geological and geophysical costs, and costs of carrying and
retaining unproved properties
are expensed. Unproved gas properties that are significant are periodically
assessed for impairment of value and a loss is recognized at the time of
impairment by providing an impairment allowance.
Other unproved properties are expensed when surrendered or expired.




F-10


ADVENTURE
ENERGY, INC.





( A
Development Stage Company)





NOTES
TO FINANCIAL STATEMENTS (continued)





December
31, 2008





NOTE
A – BASIS OF PRESENTATION AND SUMMARY OF  SIGNIFICANT ACCOUNTING POLICIES
(continued)




Gas
Properties (continued)




When a property is determined to
contain proved reserves, the capitalized costs of such properties are
transferred from unproved properties to proved properties and are amortized by
the unit-of-production method based upon estimated proved developed reserves. To
the extent that capitalized  costs of groups of proved properties
having similar characteristics exceed the estimated future net cash flows, the
excess capitalized costs are written down to the present value of such amounts.
Estimated future net cash flows are determined based primarily upon the
estimated future proved reserves related to the Company's current proved
properties and, to a lesser extent, certain future net cash flows related to
operating and related
fees due the Company related to its management of various partnerships. The
Company follows Statement of Financial Accounting  Standards ("SFAS")
No. 121 which requires a  review for impairment whenever
circumstances indicate that the carrying  amount of an asset may not
be recoverable. Impairment is recorded as impaired properties are
identified.




On sale
or abandonment of an entire interest in an unproved property, gain or loss is
recognized, taking into consideration the amount of any  recorded
impairment. 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.





Advertising
Cost





The
Company had no advertising cost for the period of March 28, 2008 (date of
inception) to December
31, 2008.




F-11




ADVENTURE
ENERGY, INC.





( A
Development Stage Company)




NOTES
TO FINANCIAL STATEMENTS (continued)





December
31, 2008





NOTE
B—GOING CONCERN





The Company is a development stage
Company and has not commenced planned principal operations. The Company had no
revenues and has incurred losses of $ 760,684 for the period March 28, 2008
(inception) to December 31, 2008. These factors raise substantial doubt about
the Company’s ability to continue as a going concern.




There can be no assurance that
sufficient funds required during the next year or thereafter will be generated
from operations or that funds will be available from external sources such as
debt or equity financings or other potential sources. The lack of additional
capital resulting from the inability to generate cash flow from operations or to
raise capital from external sources would force the Company to substantially
curtail or cease operations and would, therefore, have a material adverse effect
on its business. Furthermore, there can be no assurance that any such required
funds, if available, will be available on attractive terms or that they will not
have a significant dilutive effect on the Company’s existing
stockholders.




The accompanying financial statements
do not include any adjustments related to the recoverability of classification
of asset-carrying amounts or the amounts and classification of liabilities that
may result should the Company be unable to continue as a going
concern.




NOTE
C--LOSS PER SHARE




The
computation of loss per share is based on the weighted average number of common
shares outstanding during the period presented. Diluted loss per common share is
the same as basic loss per common share as there are no potentially dilutive
securities outstanding (options and warrants).




NOTE D - INCOME
TAXES




The
Company  accounts for income taxes using the asset and liability
method described in SFAS No. 109, “Accounting For Income Taxes”, the objective
of which is to establish deferred tax assets and liabilities for the temporary
differences between the financial reporting and the tax basis of the Company’s
assets and liabilities at the enacted tax rates expected to be in effect when
such amounts are realized or settled. A valuation allowance related to deferred
tax assets is recorded when it is more likely than not that some portion or all
of the deferred tax assets will not be realized. The Company recorded a deferred
income tax asset for the effect of net operating loss carryforwards. In
recognition of the uncertainty regarding the ultimate amount of income tax
benefits to be derived, the Company has recorded a full valuation allowance at
December 31, 2008.




F-12





ADVENTURE
ENERGY, INC.





( A
Development Stage Company)





NOTES
TO FINANCIAL STATEMENTS (continued)





December
31, 2008





NOTE
E – COMMON STOCK ISSUANCES/WARRANTS




On March
28, 2008 the Company issued 10,000 shares of its common stock to the founders of
the Company at par value. In April  2008, the Company amended it’s
certificate of
incorporation to increase the authorized number of shares to 50,000,000 shares
of common stock at $0.001 par value and 5,000,000 shares of preferred stock at
$0.001 par value andalso approved a 1,000:1 forward stock
split.




For the
period of inception (March 28, 2008) to December 31, 2008, the Company issued
common shares in the aggregates of 3,400 shares for leases and right of ways,
83,981 shares for loan repayments and reimbursements, 771,142 shares for
services, 1,250,000 shares for legal fees, and 131,428 shares for cash all in
the amounts of $.35 per share.




In
December 2008, warrants to purchase 5,000 shares of common stock at $.50 per
share for five


years
were issued to three individuals through a private placement.





NOTE F – COMMITMENTS AND
CONTINGENCIES




The
Company leases office premises in St. Petersburg, Florida at an annual rental of
$7,200, payable monthly. The three year lease was entered into on
February 1, 2008 and  commenced on April 1, 2008.  We
may renew for one more three year period commencing February 1, 2011, upon
the same terms adjusted for changes in the Consumer Price Index. For the period
April 1, 2008 thru December 31, 2008, rental payments aggregated $ 5,400. Future
minimum rental payments are $16,200.




There are
no employment contracts as of December 31, 2008.