U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                 FORM 10-QSB

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
             OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2005

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

                For the transition period   from     to

                        Commission File Number: 0-13597


                           AVALON GOLD CORPORATION
                     (Formerly Iceberg Brands Corporation)
            (Exact name of registrant as specified in its charter)
             NEVADA                                      88-0195105
  (State or other jurisdiction of
  incorporation or organization)          (I.R.S. Employer Identification No.)

1288 Alberni  Street, Suite 806, Vancouver, British Columbia, Canada   V6E 4N5
       (Address of registrant's principal executive offices)   (Zip Code)

                                  604.664.0499
              (Registrant's Telephone Number, Including Area Code)


APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practical date.  As of March 31, 2004 there were
31,853,493 shares of the issuer's $0.001 par value common stock issued and
outstanding.
===============================================================================

INDEX
                                                                       PAGE
Part I. FINANCIAL INFORMATION

Item 1.   Financial Statements.........................................F1-F-19

Item 2.   Management's Discussion and Analysis or Plan of Operation......2

Item 3.   Controls And Procedures........................................11

Part II. OTHER INFORMATION

Item 1.   Legal Proceedings..............................................11

Item 2.   Changes in Securities and Use of Proceeds......................12

Item 3.   Defaults Upon Senior Securities................................13

Item 4.   Submission of Matters to a Vote of Security Holders............13

Item 5.   Other Information..............................................14

Item 6.   Exhibits and Reports on Form 8-K...............................16

SIGNATURES...............................................................16

===============================================================================

ITEM 1. Financial Statements


                           AVALON ENERGY CORPORATION
                       (Formerly Avalon Gold Corporation)
                         (An Exploration Stage Company)

                          INTERIM FINANCIAL STATEMENTS
                                 MARCH 31, 2005
                                  (UNAUDITED)


BALANCE SHEETS..................................F-1

INTERIM STATEMENTS OF OPERATIONS................F-2

INTERIM STATEMENTS OF CASH FLOWS................F-3

NOTES TO INTERIM FINANCIAL STATEMENTS...........F-4

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


                           AVALON ENERGY CORPORATION
                       (Formerly Avalon Gold Corporation)
                         (An Exploration Stage Company)

                                 BALANCE SHEETS

<table>
<caption>

                                                        <c>                       <c>
                                                             March 31,        December 31,
                                                               2005               2003
                                 ASSETS                     -----------        ----------
                                                             (Unaudited
CURRENT ASSETS
  Cash                                                       $ 193,069          $       -
  Taxes recoverable                                                466                610
  Prepaid Expenses                                               3,688              4,018
                                                             ----------         ----------
                                                               197,223              4,628

AVAILABLE FOR SALE SECURITIES (Note 3)                          60,000            120,000
DUE FROM GOLDEN SPIRIT MINERALS LTD. (Note 9)                   75,311             45,812
INVESTMENT IN LEGACY MINING LTD (Note 4)                             1                  1
OIL AND GAS PROPERTIES (Note 6)                                971,536             50,002
                                                            ----------         ----------
                                                          $  1,304,071       $    220,443
                                                            ==========         ==========
                 LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Bank overdraft                                          $          -       $      2,187
  Accounts payable and accrued liabilities                      24,733             16,488
  Due to related parties (Note 9)                               34,487             27,058
                                                            ----------         ----------
                                                                59,220             45,733
                                                            ----------         ----------
CONTINGENCIES (Note 1 and 12)

STOCKHOLDERS' EQUITY (Note 8)
  Common stock, $.001 par value, 200,000,000
   shares authorized 31,853,493 (December 31, 2004-
   22,630,493) shares issued and outstanding                   71,568             62,346
   Additional paid-in capital                              20,973,996         19,231,419
  Deferred Compensation (Note 7)                             (192,541)          (193,462)
  Deficit accumulated during exploration stage            (19,538,172)       (18,906,705)
  Accumulated other comprehensive loss                        (70,000)           (10,000)
                                                            ----------         ----------
                                                            1,244,851            174,710
                                                            ----------         ----------
                                                          $ 1,304,071        $   220,443
                                                            ==========         ==========

The accompanying notes are an integral part of these financial statements
<page>F-1
</table>
                           AVALON ENERGY CORPORATION
                       (Formerly Avalon Gold Corporation)
                         (An Exploration Stage Company)

                            STATEMENT OF OPERATIONS
                                  (Unaudited)
<table>
<caption>

                                                   <c>                 <c>          <c>
                                                                                      Cumulative
                                                     Three Months   Three Months    from January 1,
                                                        ended           ended       1996 to March, 31
                                                     March 31,2005   March 31 2004       2005
                                                      -----------     -----------     -----------
GENERAL AND ADMINISTRATIVE EXPENSES
 Litigation settlement                              $          -      $          -   $  2,291,070
 Management and consulting fees                          319,161           148,576      3,244,971
 Consulting fees - stock basedcompenstaion (Note 2)      250,560                 -      1,240,060
 Exploration Costs (Note 5)                                    -           112,500        112,678
 Loss on settlement of debt (Note 8)                           -            62,000        718,784
 General and administrative                               48,591            86,159      2,071,285
 Professional fees                                        83,579            23,829        808,017
 Interest expense                                         14,867                 -         98,282
 Software development costs                                    -                 -        737,300
                                                     -----------       -----------     -----------
LOSS BEFORE THE FOLLOWING                               (633,179)         (433,064)    11,337,314

Property option income                                         -                 -       (130,000)
Write-down of investment in Legacy Mining Ltd.                 -                 -        128,288
Write-down of  oil and gas properties                          -                 -      1,406,000
Write-down of interest in ACGT Corporation                     -                 -      2,250,937
Loss on Iceberg Drive Inn Investment                           -                 -         85,000
                                                     ------------      ------------   -------------
NET LOSS FOR THE PERIOD                              $  (663,179)      $  (433,064)  $(15,077,539)
						     ============      ============   =============


BASIC NET LOSS PER SHARE                            $      (0.02)      $     (0.03)
                                                      ===========      ============
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING  28,566,678        11,286,810
                                                      ===========      ============

The accompanying notes are an integral part of these financial statements
<page>F-2
</table>

                           AVALON ENERGY CORPORATION
                       (Formerly Avalon Gold Corporation)
                         (An Exploration Stage Company)
                            STATEMENTS OF CASH FLOWS
                                  (Unaudited)
<table>
<caption>

                                                       <c>                 <c>               <c>
                                                                                           Cumulative
                                                         Three Months    Three Months    from January 1,
                                                            Ended           Ended       1996 to March, 31
                                                          March 31,2005   March 31 2004       2005
                                                         -----------     --------------  ---------------
CASH FLOWS FROM OPERATING ACTIVITIES
 Net loss for the year	                                 $   (633,179)    $   (433,064)   $ (15,077,539)
 Adjustments to reconcile net loss to
  net cash from operating activities:
  - fees and services paid for with common shares              86,920	        212,333        2,966,712
  - stock based compensation	                              250,560	              -        1,240,060
  - interest paid for with common shares	                    -	              -           80,872
  - loss on settlement of debt	                                    -	         62,000          718,784
  - software development costs paid for with common shares	    -	              -          600,000
  - non cash exploration costs paid by shares                       -	        110,000          110,000
  - write-down of interest in oil and gas properties	            -	              -        2,250,937
  - write-down of investment in Legacy Mining                       -                 -          128,288
  - write-down of interest in ACGT Corporation	                    -	              -        1,406,000
  - loss on Iceberg Drive Inn investment	                    -	              -           85,000
  - non cash option income received in shares                       -                 -          (130,00)
 -  other non-cash expenses	                                    -	              -        2,557,382
	                                                 -------------        ----------      ------------
	                                                     (295,699)	        (48,731)      (3,063,504)
  - net changes in working capital items 	                8,719	       (134,979)         275,060
                                                         -------------        ----------      ------------
CASH FLOWS USED IN OPERATING ACTIVITIES	                     (286,980)	       (183,710)      (2,788,444)
			                                 -------------        ----------      ------------

CASH FLOWS FROM INVESTING ACTIVITIES
 Investment in Iceberg Acquisition Corporation	                    -	              -         (120,000)
 Interest in oil and gas properties	                     (657,534)	              -       (1,392,468)
                                                         -------------        ----------      ------------
CASH FLOWS USED IN INVESTING ACTIVITIES	                     (657,534)	              -       (1,512,468)
			                                 -------------        ----------      ------------
CASH FLOWS FROM FINANCING ACTIVITIES
 Bank overdraft	                                               (2,187)	              -                -
 Net proceeds on sale of common stock	                    1,161,840	              -        2,711,580
 Net proceeds (receivable) from common stock subscriptions	    -	              -          633,000
 Net advances (to) from related parties	                      (22,070)	              -          729,401
 Advances receivable	                                            -	              -          420,000
                                                         -------------         ----------     -------------
CASH FLOWS FROM FINANCING ACTIVITIES	                    1,137,583	        183,073        4,493,981
			                                 -------------         ----------     -------------
INCREASE (DECREASE) IN CASH	                              193,069	           (637)         193,069

CASH, BEGINNING OF PERIOD                                           -	          2,262                -
		                                         -------------         -----------    -------------
CASH, END OF PERIOD	                                $     193,069	       $  1,625       $  193,069
                                                         =============         ===========    =============

Supplemental cash flow information (See Note 10)


The accompanying notes are an integral part of these financial statements

<PAGE>F-3
</table>

                           AVALON ENERGY CORPORATION
                       (Formerly Avalon Gold Corporation)
                         (An Exploration Stage Company)
                     NOTES TO INTERIM FINANCIAL STATEMENTS
                                 MARCH 31, 2005
                                  (Unaudited)


NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION

The Company was incorporated as Venture Investments Inc. under the Laws of the
State of Nevada on November 29, 1983.  The Company underwent a name change to
Asdar Group on December 10, 1997, a name change to Precise Life Sciences Ltd. on
April 30, 2002, a name change to Iceberg Brands Corporation on March 3, 2003, a
name change to Avalon Gold Corporation on September 8, 2003 and a name change to
Avalon Energy Corporation on March 22, 2004.  The Company was dormant from 1991
to 1996 and currently has no revenue generating operations.  In accordance with
SFAS #7, the Company was considered a development stage company since January 1,
1996 and as a result of changing its business focus to acquisition and
exploration of oil and gas and mineral properties is considered to be an
exploration stage company.

Going Concern

The financial statements have been prepared on the basis of a going concern
which contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business.  The Company has not generated any revenues or
completed development of any commercially acceptable products or services to
date, has incurred losses of $19,538,172 since inception, and further
significant losses are expected to be incurred in the exploration and
development of its resource properties.  The Company will depend almost
exclusively on outside capital through the issuance of common shares to finance
ongoing operating losses and to fund the acquisition, exploration and
development of its resource properties.  The ability of the Company to continue
as a going concern is dependent on raising additional capital and ultimately on
generating future profitable operations.  There can be no assurance that the
Company will be able to raise the necessary funds when needed to finance its
ongoing costs.  These factors raise substantial doubt about the ability of the
Company to continue as a going concern.  The accompanying financial statements
do not include any adjustments relative to the recoverability and classification
of asset carrying amounts or the amount and classification of liabilities that
might result from the outcome of this uncertainty.

<page>F-4

Unaudited Interim Financial Statements

The accompanying unaudited interim financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB of Regulation S-B. They may
not include all information and footnotes required by generally accepted
accounting principles for complete financial statements. However, except as
disclosed herein, there has been no material changes from the information
disclosed in the notes to the financial statements for the year ended December
31, 2004 included in the Company's Annual Report on Form 10-KSB filed with the
Securities and Exchange Commission. The interim unaudited financial statements
should be read in conjunction with those financial statements included in the
Form 10-KSB. In the opinion of Management, all adjustments considered necessary
for a fair presentation, consisting solely of normal recurring adjustments, have
been made. Operating results for the three months ended March 31, 2005 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2005.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The accompanying financial statements are presented in United States dollars and
are prepared in accordance with accounting principles generally accepted in the
United States.

Use of Estimates and Assumptions

Preparation of the Company's financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures.  Accordingly,
actual results could differ from those estimates. Significant areas requiring
management's estimates and assumptions relate to the carrying value of the
Company's resource properties and the determination of the fair value for stock-
based compensation.

Mineral property costs

Mineral property acquisition, exploration and development costs are expensed as
incurred until such time as economic reserves are quantified.  To date the
Company has not established any proven or probable reserves on its mineral
properties.  The Company has adopted the provisions of SFAS No. 143 "Accounting
for Asset Retirement Obligations" which establishes standards for the initial
measurement and subsequent accounting for obligations associated with the sale,
abandonment, or other disposal of long-lived tangible assets arising from the
acquisition, construction or development and for normal operations of such
assets.  The adoption of this standard has had no effect on the Company's
financial position or results of operations.  As at March 31, 2005, any
potential costs relating to the retirement of the Company's mineral property
interest are not yet determinable.

<page>F-5

Oil and Gas Properties

The Company utilizes the full cost method to account for its investment in oil
and gas properties.  Accordingly, all costs associated with acquisition,
exploration and development of oil and gas reserves, including such costs as
leasehold acquisition costs, capitalized interest costs relating to unproved
properties, geological expenditures, tangible and intangible development costs
including direct internal costs are capitalized to the full cost pool.  As of
March 31, 2005, the Company has no properties with proven reserves.  When the
Company obtains proven oil and gas reserves, capitalized costs, including
estimated future costs to develop the reserves and estimated abandonment costs,
net of salvage, will be depleted on the units-of-production method using
estimates of proved reserves.  Investments in unproved properties and major
development projects including capitalized interest, if any, are not depleted
until proved reserves associated with the projects can be determined.  If the
future exploration of unproved properties are determined uneconomical the amount
of such properties are added to the capitalized cost to be depleted.  As of
March 31, 2005, all of the Company's oil and gas properties were unproved and
were excluded from depletion.  At March 31, 2005, management believes none of
the Company's unproved oil and gas properties were considered impaired.

The capitalized costs included in the full cost pool are subject to a "ceiling
test", which limits such costs to the aggregate of the estimated present value,
using a ten percent discount rate, of the future net revenues from proved
reserves, based on current economic and operating conditions plus the lower of
cost and estimated net realizable value of unproven properties.

Sales of proved and unproved properties are accounted for as adjustments of
capitalized costs with no gain or loss recognized, unless such adjustments would
significantly alter the relationship between capitalized costs and proved
reserves of oil and gas, in which case the gain or loss is recognized in the
statement of operations.

Fair Value of Financial Instruments

The following disclosure of the estimated fair value of financial instruments is
made in accordance with the requirements of SFAS No. 107. Disclosures about Fair
Value of Financial Instruments.  The estimated fair value amounts have been
determined by the Company, using available market information and appropriate
valuation methodologies.  The fair value of financial instruments classified as
current assets or liabilities approximate carrying value due to the short-term
maturity of the instruments.

<page>F-6

Foreign Currency Translation

The financial statements are presented in United States dollars.  In accordance
with SFAS No. 52, "Foreign Currency Translation", foreign denominated monetary
assets and liabilities are translated to their United States dollar equivalents
using foreign exchange rates which prevailed at the balance sheet date.  Revenue
and expenses are translated at average rates of exchange during the year.

Available For Sale Securities

The Company holds marketable equity securities which are available-for-sale and
as such, their carrying value is adjusted to market at the end of each quarter.
As required by SFAS 130, unrealized gains and losses on these investments are
recorded as a component of accumulated other comprehensive income (loss) and are
recorded as a component of net income (loss) when realized.  However, if there
is a permanent decline in the available-for-sale securities, this adjustment is
taken into income in the period.  During 2004 the Company has written its
investment in Legacy Mining Ltd. down to $1 because management has determined
that it is not recoverable within a reasonable period of time.

Stock-Based Compensation

In December 2002, the Financial Accounting Standards Board ("FASB") issued
Financial Accounting Standard No. 148, "Accounting for Stock-Based Compensation
- Transition and Disclosure" ("SFAS No. 148"), an amendment of Financial
Accounting Standard No. 123 "Accounting for Stock-Based Compensation" ("SFAS No.
123").  The purpose of SFAS No. 148 is to: (1) provide alternative methods of
transition for an entity that voluntarily changes to the fair value based method
of accounting for stock-based employee compensation, (2) amend the disclosure
provisions to require prominent disclosure about the effects on reported net
income of an entity's accounting policy decisions with respect to stock-based
employee compensation, and (3) to require disclosure of those effects in
financial information.  The disclosure provisions of SFAS No. 148 were effective
for the Company for the year ended December 31, 2003.

The Company has elected to continue to account for stock options granted to
employees and officers using the intrinsic value based method in accordance with
the provisions of Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees", ("APB No. 25") and comply with the disclosure
provisions of SFAS No. 123 as amended by SFAS No. 148 as described above.  Under
APB No. 25, compensation expense is recognized based on the difference, if any,
on the date of grant between the estimated fair value of the Company's stock and
the amount an employee must pay to acquire the stock.  Compensation expense is
recognized immediately for past services and pro-rata for future services over
the option-vesting period.  In addition, with respect to stock options granted
to employees, the Company provides pro-forma information as required by SFAS No.
123 showing the results of applying the fair value method using the Black-
Scholes option pricing model.

<page>F-7

The following table illustrates the pro forma effect on net income (loss) and
net income (loss) per share as if the Company had accounted for stock-based
employee compensation using the fair value provisions of SFAS No. 123 using the
assumptions as described in Note 8:

 <table>
 <caption>
 
                                       <c>             <c>            <c>


                                                        March 31, 2005    March 31, 2004
                                           ---------------------------------------------
 Net Loss as reported                       As reported   $    (633,179)   $    (433,064)
 SFAS 123 compensation expense               Pro-forma                -                -
                                                           ------------     ------------
 Pro forma a net loss under SFAS No. 123     Pro-forma    $    (633,179)   $    (433,064)
                                                           ============     ============
 basic net loss per share                    Pro-forma    $      (0.02)    $       (0.03)
                                                           ============     ============
 </table>

The Company accounts for equity instruments issued in exchange for the receipt
of goods or services from other than employees in accordance with SFAS No. 123
and the conclusions reached by the Emerging Issues Task Force ("EITF") in Issue
No. 96-18.  Costs are measured at the estimated fair market value of the
consideration received or the estimated fair value of the equity instruments
issued, whichever is more reliably measurable.  The value of equity instruments
issued for consideration other than employee services is determined on the
earliest of a performance commitment or completion of performance by the
provider of goods or services as defined by EITF 96-18.

The Company has also adopted the provisions of the FASB Interpretation No.44,
Accounting for Certain Transactions Involving Stock Compensation - An
Interpretation of APB Opinion No. 25 ("FIN 44"), which provides guidance as to
certain applications of APB No. 25.

Income Taxes

The Company follows the liability method of accounting for income taxes.  Under
this method, deferred income tax assets and liabilities are recognized for the
estimated tax consequences attributable to differences between the financial
statement carrying values and their respective income tax basis (temporary
differences).  The effect on deferred income tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.

<page>F-8

Recent accounting pronouncements

In December 2004, FASB issued SFAS No. 153, "Exchanges of Nonmonetary Assets -
An Amendment of APB Opinion No. 29". The guidance in APB Opinion No. 29,
"Accounting for Nonmonetary Transactions", is based on the principle that
exchanges of nonmonetary assets should be measured based on the fair value of
the assets exchanged. The guidance in that Opinion, however, included certain
exceptions to that principle.  SFAS No. 153 amends Opinion No. 29 to eliminate
the exception for nonmonetary exchanges of similar productive assets and
replaces it with a general exception for exchanges of nonmonetary assets that do
not have commercial substance. A nonmonetary exchange has commercial substance
if the future cash flows of the entity are expected to change significantly as a
result of the exchange.  The provisions of SFAS No. 153 are effective for
nonmonetary asset exchanges occurring in fiscal periods beginning after June 15,
2005. Early application is permitted and companies must apply the standard
prospectively. The adoption of this standard is not expected to have a material
effect on the Company's results of operations or financial position.

In December 2004, the FASB issued SFAS No. 123R, "Share Based Payment". SFAS
123R is a revision of SFAS No. 123 "Accounting for Stock-Based Compensation",
and supersedes APB Opinion No. 25, "Accounting for Stock Issued to Employees"
and its related implementation guidance. SFAS 123R establishes standards for the
accounting for transactions in which an entity exchanges its equity instruments
for goods or services. It also addresses transactions in which an entity incurs
liabilities in exchange for goods or services that are based on the fair value
of the entity's equity instruments or that may be settled by the issuance of
those equity instruments. SFAS 123R focuses primarily on accounting for
transactions in which an entity obtains employee services in share-based payment
transactions. SFAS 123R does not change the accounting guidance for share-based
payment transactions with parties other than employees provided in SFAS 123 as
originally issued and EITF Issue No. 96-18, "Accounting for Equity Instruments
That Are Issued to Other Than Employees for Acquiring, or in Conjunction with
Selling, Goods or Services".  SFAS 123R does not address the accounting for
employee share ownership plans, which are subject to AICPA Statement of Position
93-6, "Employers' Accounting for Employee Stock Ownership Plans".  SFAS 123R
requires a public entity to measure the cost of employee services received in
exchange for an award of equity instruments based on the grant-date fair value
of the award (with limited exceptions). That cost will be recognized over the
period during which an employee is required to provide service in exchange for
the award - the requisite service period (usually the vesting period). SFAS 123R
requires that the compensation cost relating to share-based payment transactions
be recognized in financial statements. That cost will be measured based on the
fair value of the equity or liability instruments issued. The scope of SFAS 123R
includes a wide range of share-based compensation arrangements including share
options, restricted share plans, performance-based awards, share appreciation
rights, and employee share purchase plans. Public entities (other than those
filing as small business issuers) will be required to apply SFAS 123R as of the
first interim or annual reporting period that begins after June 15, 2005. Public
entities that file as small business issuers will be required to apply SFAS 123R
in the first interim or annual reporting period that begins after December 15,
2005. For nonpublic entities, SFAS 123R must be applied as of the beginning of
the first annual reporting period beginning after December 15, 2005.  Management
is currently evaluating the impact, which the adoption of this standard will
have on the Company's results of operations or financial position.

<page>F-9

Comparative figures

Certain comparative figures have been reclassified in order to conform to the
current period's financial statement presentation relating to the fair value of
shares issued for consulting fees pursuant to multi-year contracts.  Previously,
the Company classified the unearned portion of these fees as prepaid service
contracts.  Effective in the fourth quarter of 2004 management determined that
these unearned amounts are more appropriately classified as deferred
compensation as a component of stockholders' equity.  The deferred compensation
continues to be amortized to operations as earned in accordance with the terms
of the contracts and accordingly there is no change in the reported losses for
any period presented and since inception as a result of this reclassification.

NOTE 3 - AVAILABLE FOR SALE SECURITIES

During 2004, the Company received 2,000,000 restricted Rule 144 shares of Golden
Spirit Minerals Ltd. ("Golden Spirit"), a public company with directors and
significant shareholders in common. The restricted shares were received as non-
refundable consideration pursuant to agreements dated November 10, 2004  and
December 10, 2004 with Golden Spirit. Effective December 31, 2004 the Company
recorded an unrealized loss in the carrying value of its available-for-sale
securities totalling $10,000 which was recorded as other comprehensive loss for
the year.  Effective March 31, 2005 the Company recorded an additional
unrealized loss in the carrying value of its available-for-sale securities
totalling $60,000 which was recorded as other comprehensive loss for the period.
As at March 31, 2005 the Company owned 2,000,000 shares of Golden Spirit common
stock.

NOTE 4 - INVESTMENT IN LEGACY MINING LTD.

On December 31, 2003, the Company agreed to settle an outstanding debt
receivable of $122,988 from Legacy Mining Ltd. ("Legacy") for the issue of
1,229,880 restricted shares of Legacy at a value of $0.10 per share representing
a 9.8% interest in Legacy. These restricted shares were issued to the Company on
February 20, 2004.  Legacy is a non-reporting entity with a director in common.
Legacy has applied to NASD for a listing on the pink sheets and intends to
become a fully reporting company in 2005.  The Company has written this
investment down to $1 because management has determined that it is not
recoverable within a reasonable period of time.

<page>F-10

NOTE 5 - MINERAL PROPERTIES

LSA Mineral Claims

By Agreement dated January 26, 2004 and subsequent amendments dated March 8,
2004 and August 11, 2004 the Company agreed to acquire a ninety-percent (90%)
interest in seven (7) lode mining claims known as the LSA claims, located in
Lander County, Nevada. The Company issued 1,000,000 restricted common shares
valued at $110,000 and paid $1,000 upon signing the agreement. Under the terms
of the agreement, the Company paid $2,500 by April 26, 2004.  Thereafter, on the
last day of each month from May, 2004 to February, 2005, the Company must pay an
additional $500 in cash.  In addition the Company is still required to issue
$17,500 in restricted shares on June 30, 2005 to earn its ninety-percent (90%)
interest.  As of March 31, 2005, the Company has issued shares valued at
$110,000 and paid $4,500 towards the acquisition which has been recorded as
exploration costs for fiscal 2004 and has received an extension to June 30, 2005
to pay an additional $4,500 in cash and issue the additional share
consideration.

The Company will be required to perform annual assessment work to keep the
claims in good standing. The Company plans on having an independent engineering
report prepared on the property.

NOTE 6 - OIL AND GAS PROPERTIES

Harvester Property, California:

The Company owns a 2% royalty interest carried at a nominal value of $1 due to
the uncertainty of realization.

LAK Ranch Oil Project, Wyoming:

The Company owns a 0.7% gross overriding royalty interest on 6,360 acres of oil
and natural gas rights located in the Powder River Basin of eastern Wyoming
carried at a nominal value of $1 due to the uncertainty of realization.

Uinta Basin Property, Utah:

On October 26, 2004, the Company entered into a Letter of Intent with Pioneer
Oil and Gas ("Pioneer"), whereby the Company could acquire an undivided Eighty-
Five Percent (85%) working interest and an undivided Sixty-Eight (68%) net
revenue interest in 13,189 acres located in Wasatch County, Utah, known as the
"Uinta Basin".  The Company paid Pioneer a deposit of $50,000 for the exclusive
right to enter into a Participation Agreement with Pioneer on or before January
18, 2005 ("Exclusivity Period").

As part of the agreement, Pioneer has agreed to provide the Company with 2-D
seismic data crossing the acreage, on a confidential basis. Any additional
seismic that Pioneer or the Company may mutually agree to acquire over the
acreage shall be paid entirely by the Company with the parties owning the data
in the same proportion as their working interest in the acreage. In addition,
the Company will be required to drill an initial test well at a location on the
acreage mutually agreed upon by Pioneer and the Company. The Company will serve
as the Operator in drilling the acreage and must drill the initial well prior to
November 1, 2010.

<page>F-11

On November 10, 2004, the Company entered into an agreement with Golden Spirit,
a company with directors in common, to sell a 40% working interest in the Uinta
Basin Lease.  Upon signing of the agreement, Golden Spirit issued 1,000,000
restricted Rule 144 common shares  valued at $70,000 as a non-refundable deposit
to the Company. Golden Spirit had a right to acquire the 40% working interest in
the gas lease upon the Company receiving a payment of US$750,000 on or before
December 10, 2004. Upon receiving the $750,000, the Company was required to to
pay Pioneer $706,279 to acquire its 85% interest. On December 10, 2004, the
Company granted Golden Spirit an extension until December 24, 2004 to meet the
requirements of the initial agreement. The Company received an additional non-
refundable 1,000,000 restricted Rule 144 common shares valued at $60,000 as
consideration for the extension. In return, Avalon was to issue and deliver
2,000,000 shares of its common stock to Golden Spirit. The Company did not
receive the payment of US$750,000 and on January 4, 2005 the Company issued a
default notice to Golden Spirit for failure to meet the terms of the agreements
which were terminated. The 2,000,000 restricted Rule 144 common shares are
recorded as available for sale securities (see Note 3).

On January 18, 2005, the Company entered into the Participation Agreement with
Pioneer as described above.  The total consideration paid to Pioneer was
$706,279.  The Company had previously advanced Pioneer $50,000 as an initial
deposit as described above and the balance of $656,279 was paid to Pioneer to
complete the closing.  The Company also incurred consulting expenditures of
$1,255.  In addition, certain non -related parties were responsible for tabling
the Uinta Basin Overpressured Gas Project to the Company.  The Company issued
1,200,000 restricted common shares valued at $264,000 on February 7, 2005 to
these parties for finders' fees.

The Company shall pay One Hundred Percent (100%) of all costs of drilling the
first two wells drilled on the acreage along with 100% of all costs of logging
or testing the wells.  If either of the first two test wells is deemed a dry
hole, the Company shall pay 100% of all costs of plugging and abandoning such
well(s) and restoration of the surface upon which the well(s) reached its
authorized depth and completion of all tests deemed necessary by the Operator.

If the Company elects to complete either or both of the first two wells drilled
on the acreage, the Company shall pay One Hundred Percent (100%) of all
completion costs through the tanks along with any costs associated to hook up
the well(s) to pipeline for the well(s) to be capable of producing into a
commercial pipeline for sale.

After the first two wells are drilled and if productive are hooked-up to a
pipeline and capable of producing oil and gas in commercial quantities, the
Company shall pay 85% of all costs of operating the first two wells and Pioneer
shall pay 15% of the operation costs of such wells as reflected in their working
interest ownership in such wells.

<page>F-12

Subsequent wells drilled after the first two wells on the Contract Acreage shall
require Pioneer to either farmout its interest on a well by well basis or
participate or not participate for its interest in the well pursuant to the
provisions contained in the Operating Agreement.

NOTE 7 - DEFERRED COMPENSATION

On December 13, 2002, the Company entered into an agreement with Advantage
Nevada Corporation, ("Advantage") a private company, with a two and one-half
year term, whereby Advantage will provide consulting services to the Company
(valued at $270,000) in exchange for 562,500 restricted shares of the Company's
common stock.  The consultant will provide such services and advice to the
Company in business development, business strategy and corporate image. In
addition, the consultant will assist the Company in developing, studying and
evaluating acquisition proposals within North America.

On December 13, 2002, the Company entered into an agreement with Asiatic
Management Consultants Ltd., ("Asiatic") a private company controlled by a
significant shareholder, with a two and one-half year term, whereby Asiatic will
provide investment-banking services to the Company (valued at $300,000) in
exchange for 62,500 restricted shares of the Company's common stock. The
investment banker will provide access to investors and ongoing funding for the
Company's investments.

On December 13, 2002, the Company entered into an agreement with a shareholder,
with a two and one-half year term, whereby the shareholder will provide
consulting services to the Company (valued at $120,000) in exchange for 250,000
restricted shares of the Company's common stock. The consultant will provide
such services and advice to the Company in business development, business
strategy and corporate image. In addition, the consultant will assist the
Company in developing, studying and evaluating acquisition proposals outside of
North America.

On January 15, 2004, the Company entered into an agreement with Y.E.N.N. Asset
Management, ("Y.E.N.N.") a private company, for a two year term, whereby
Y.E.N.N. will provide investment-banking services to the Company (valued at
$54,000) in exchange for 450,000 restricted shares of the Company's common
stock. The investment banker will provide access to investors and ongoing
funding for the Company's investments.

<page>F-13

On January 15, 2004, the Company entered into an agreement with Inter-Orient
Investments Ltd., ("Inter-Orient") a private company, for a two year term,
whereby Inter-Orient will provide investor relations services to the Company
(valued at $72,000) in exchange for 600,000 restricted shares of the Company's
common stock. The investor relations individual will provide such services as
researching, editing and generating a company profile, relaying the Company's
business perspectives and distribution of corporate updates, including press
releases.

On October 1, 2004, the Company entered into an agreement with an individual,
with a 1-year term, whereby the individual will provide consulting services to
the Company (valued at $13,000) in exchange for 100,000 restricted shares of the
Company's common stock.

On February 1, 2005, the Company entered into an agreement with Holm Investments
Ltd.("Holm"), a private company, for a two year term, whereby Holm Investments
Ltd. will provide investor relations services to the Company (valued at $55,000)
in exchange for 250,000 restricted shares of the Company's common stock. Holm
will provide such services as researching, editing and generating a company
profile, relaying the Company's business perspectives and distribution of
corporate updates, including press releases.

The Company has been amortizing the costs of these services over the respective
terms of the contracts.  At March 31, 2005 the unamortized portion of the
deferred compensation totaled $192,541.  (Refer to Note 2.)

NOTE 8 - CAPITAL STOCK

On February 14, 2003, the Company held a Special Meeting whereby the Board of
Directors, by unanimous consent and with majority shareholder approval, adopted,
effective March 3, 2003, the following amendments to its Articles of
Incorporation:

1. Increased the authorized common shares that the Company shall have authority
   to issue from fifty million shares (50,000,000) shares of capital stock with
   par value of $0.001 per share to two hundred million (200,000,000) shares of
   capital stock with par value of $0.001 per share.

2. Created a new class of convertible preferred Class A voting capital stock.
   The aggregate number of preferred Class A voting shares that the Company
   shall have authority to issue is five million (5,000,000) shares with a par
   value of $0.001 per share.

3. Created a new class of convertible preferred Class B non-voting capital
   stock. The aggregate number of preferred Class B non-voting shares that the
   Company shall have authority to issue is five million (5,000,000) shares with
   a par value of $0.001 per share.

<page>F-14

To date the Company has not issued any Class A or Class B preferred shares.

Reverse Stock Splits

Effective December 12, 2002 the Company completed a reverse stock split of one-
for-ten of the Company's outstanding common stock, resulting in a reduction of
the then outstanding common stock from 26,666,319 shares to 2,666,631 shares.
The par value and the number of authorized but unissued shares of the Company's
common stock was not changed as a result of the reverse stock split.

Effective September 8, 2003 the Company completed a reverse stock split of one-
for-four of the Company's outstanding common stock, resulting in a reduction of
the then outstanding common stock from 20,955,298 shares to 5,238,825 shares.
The par value and the number of authorized but unissued shares of the Company's
common stock was not changed as a result of the reverse stock split.

Unless otherwise noted, all references to common stock, common shares
outstanding, average numbers of common shares outstanding and per share amounts
in these Financial Statements and Notes to Financial Statements prior to the
effective dates of the reverse stock splits have been restated to reflect the
one-for-ten and the one-for-four reverse stock splits on a retroactive basis.

During the quarter ended March 31, 2005, the Company issued 1,078,000 common
shares pursuant to the Company's 2005 Stock Incentive and Option Plan at various
prices for proceeds of $269,340.

During 2004, the Company issued 1,050,000 restricted common shares for investor
relations and investment banking service contracts valued at $126,000 (Refer to
Note 7).

During 2004 the Company issued 1,550,000 shares with a fair value of $170,500 in
settlement of $88,550 of unpaid consulting fees, $14,350 of professional fees
and $5,600 in office and administrative salaries. The difference of $62,000 has
been recorded as a loss on settlement of debt.

During 2004 the Company issued 1,000,000 restricted common shares valued at
$110,000 towards the acquisition of a mineral property (Refer to Note 5).

During 2004 the Company issued 2,500,000 shares with a fair value of $200,000 in
settlement of $161,000 of consulting fees, $17,500 of professional fees and
$21,500 in office and administrative salaries.

<page>F-15

On July 9, 2004, a total of 210,000 shares of common stock previously issued for
consulting services to be rendered in the amount of $19,000 were cancelled and
returned to treasury.

On October 1, 2004, the Company issued 100,000 restricted shares of common stock
valued at $13,000 pursuant to a one year consulting agreement with an
individual. The consultant will provide such services and advice to the Company
in business development and strategy in connection with the Company's
properties.

On November 24, 2004, a total of 65,000 shares of common stock previously issued
for the acquisition of a mineral property in the amount of $10,500 were
cancelled and returned to treasury.

On December 1, 2004 the Company issued 100,000 shares with a fair value of
$20,000 in settlement of directors' salaries.

During the quarter ended March 31, 2005, the Company issued 150,000 restricted
common shares valued at $31,000 to two consultants as compensation for their
appointment to the advisory board.

During the quarter ended March 31, 2005, the Company completed a private
placement and issued 5,950,000 Series A Units at $0.15 per unit for total
proceeds of $892,500.  Each Series A Unit issued by the Company was comprised of
(i) one restricted share of the Company's $.001 par value common stock and (ii)
a series "A" warrant which will enable the subscriber to acquire from the
Company one share of the Company's $.001 par value common stock at a purchase
price of $.50 per share for a period of eighteen months.  A finders fee of ten
percent of the total proceeds was paid in the form of 595,000 restricted common
shares of the Company.  In addition, the finder who raised the majority of the
proceeds will also receive a 1.5% gross royalty of all revenue produced by the
Uinta Basin project and paid to the Company.  The proceeds from the sale of
these units were used to meet the terms of the Participation Agreement with
Pioneer and to provide general working capital.

<page>F-16

During the quarter ended March 31, 2005, the Company issued a total of 1,200,000
restricted common shares to four parties valued at $264,000 for their assistance
to the Company in acquiring the Uinta Basin project.

During the quarter ended March 31, 2005, the Company issued 250,000 restricted
common shares for a prepaid investor relations services contract valued at
$55,000 and recorded as deferred compensation.

Stock Options

On January 19, 2005, the Company filed a Registration Statement on Form S-8 to
cover 5,000,000 shares of common stock to be issued pursuant to the Company's
2005 Stock Incentive and Option Plan (the "Plan"). A total number of 1,078,000
options were granted to consultants during the period, all of which were
exercised at various prices for cash proceeds of $269,340. All the options
granted were to consultants for which a consulting expense of $250,560 was
recorded during the quarter representing the fair value of the options.  The
fair value was estimated using the Black-Scholes option pricing model assuming
an expected life of 5 years, a risk-free interest rate of 3% and expected
volatilities ranging from 157% to 160%.

The Company's stock option activity is as follows:
<table>

                                           <c>                   <c>
	 	                                                  Weighted
                                              Weighted Average  Average Remaining
                           Number of options   Exercise Price    Contractual Life
                   --------------------------------------------------------------
Balance, December 31, 2003, 	        - 	 $      - 	           -
Granted during 2004	       11,350,000 	     0.08 	     5 years
Exercised during 2004         (11,350,000)	    (0.08)	     5 years
---------------------------------------------------------------------------------
Balance, December 31, 2004	       - 	  $     - 	           -
Granted during 2005	       1,078,000	        -	     5 years
Exercised during 2005	      (1,078,000)		-            5 years
---------------------------------------------------------------------------------
Balance, March 31, 2005            	- 	  $     - 	           -
=================================================================================
</table>
<page>F-17

NOTE 9 - RELATED PARTY TRANSACTIONS

During the quarter ended March 31, 2005 the Company incurred $14,111 (2004
-$14,276) in management fees to directors. At March 31, 2005 the Company owes
$9,000 in management fees to a director.

During the quarter ended March 31, 2005, the Company incurred $5,116 (2004 -
$8,384) in rent and office expenses to a private company controlled by a
shareholder.

During the quarter ended March 31, 2005, the Company incurred $235,786 (2004 -
$Nil) in consulting fees to significant shareholders and $4,947 (2004 - $10,850)
in professional fees to an employee.

During the quarter ended March 31, 2005, three companies controlled by
significant shareholders earned $11,837 (2004 - $53,583) and a company
controlled by a shareholder earned $4,584 (2004 - $11,250) pursuant to prepaid
services agreements (See note 7).

At March 31, 2005 an amount of $75,312 (2004 - $42,086) is receivable from
Golden Spirit Minerals Ltd., a public company which have directors in common
with the Company.  These amounts are non-interest bearing and have no specific
terms of repayment.

At March 31, 2005, the following amounts are due to related parties:

                         March 31,      December 31,
		           2005		   2004
			--------------------------
Employee	          $    -	$ 15,381
Director		   9,000	   2,000
Significant Shareholder	  25,487	   9,677
	                -------------------------
	                 $34,487        $ 27,058

All related party transactions are in the normal course of business and are
measured at the exchange amount, which is the amount of consideration
established and agreed to by the related parties.

<page>F-18

NOTE 10 - SUPPLEMENTAL CASH FLOW INFORMATION

During the period ended March 31, 2005:

o The Company issued 250,000 restricted common shares for prepaid investor
  relations service contracts valued at $55,000 (Refer to Note 7).

o The Company issued 150,000 shares with a fair value of $31,000 in
  settlement of consulting fees to two advisory board members.

o The Company issued 1,200,000 restricted common shares valued at
  $264,000 as a finder's fee towards the acquisition of a mineral property.

o The Company issued 595,000 restricted common shares as a finder's fee
  towards the private placement of 5,950,000 restricted common shares.


NOTE 12 - CONTINGENCY

On February 21, 2002, the Company issued 350,000 shares valued at $119,000 to
Empire Sterling Corporation for services to be rendered with respect to the
acquisition of ACGT Corporation.  The shares were to be held in trust and not
sold until all necessary financing was in place to complete the ACGT
acquisition. Empire Sterling Corporation breached the trust agreement and the
Company placed a stop transfer on these shares and requested they be returned to
the Company. Empire Sterling Corporation failed to return the share certificate
and as such, the Company commenced court proceedings against the principals of
Empire Sterling Corporation. The Company argued for an interim injunction
against all parties and was successful. On May 9, 2002, the Court ordered Empire
Sterling Corporation to deposit the shares with the Court pending judicial
disposition.  The Company continued to file legal process claiming ownership of
the shares and breach of trust inter alia. The Company was successful and has
now applied to have the share certificate released and subsequently cancelled.
As of March 31, 2005, the Company is still in the process of having the
certificate released.

NOTE 13 - SUBSEQUENT EVENTS

Stock Options

On January 19, 2005, the Company filed a Registration Statement on Form S-8 to
cover 5,000,000 shares of common stock to be issued pursuant to the Company's
2005 Stock Incentive and Option Plan (the "Plan").  Subsequent to March 31,
2005, 1,000,000 options were granted to consultants, all of which were exercised
at various prices for cash proceeds of $117,500.

<page>F-19

ITEM 2.  	Plan of Operation

THIS FOLLOWING INFORMATION SPECIFIES CERTAIN FORWARD-LOOKING STATEMENTS OF
MANAGEMENT OF THE COMPANY. FORWARD-LOOKING STATEMENTS ARE STATEMENTS THAT
ESTIMATE THE HAPPENING OF FUTURE EVENTS AND ARE NOT BASED ON HISTORICAL FACT.
FORWARD-LOOKING STATEMENTS MAY BE IDENTIFIED BY THE USE OF FORWARD-LOOKING
TERMINOLOGY, SUCH AS "MAY", "SHALL", "WILL", "COULD", "EXPECT", "ESTIMATE",
"ANTICIPATE", "PREDICT", "PROBABLE", "POSSIBLE", "SHOULD", "CONTINUE", OR
SIMILAR TERMS, VARIATIONS OF THOSE TERMS OR THE NEGATIVE OF THOSE TERMS.  THE
FORWARD-LOOKING STATEMENTS SPECIFIED IN THE FOLLOWING INFORMATION HAVE BEEN
COMPILED BY OUR MANAGEMENT ON THE BASIS OF ASSUMPTIONS MADE BY MANAGEMENT AND
CONSIDERED BY MANAGEMENT TO BE REASONABLE. OUR FUTURE OPERATING RESULTS,
HOWEVER, ARE IMPOSSIBLE TO PREDICT AND NO REPRESENTATION, GUARANTY, OR WARRANTY
IS TO BE INFERRED FROM THOSE FORWARD-LOOKING STATEMENTS.

THE ASSUMPTIONS USED FOR PURPOSES OF THE FORWARD-LOOKING STATEMENTS SPECIFIED IN
THE FOLLOWING INFORMATION REPRESENT ESTIMATES OF FUTURE EVENTS AND ARE SUBJECT
TO UNCERTAINTY AS TO POSSIBLE CHANGES IN ECONOMIC, LEGISLATIVE, INDUSTRY, AND
OTHER CIRCUMSTANCES. AS A RESULT, THE IDENTIFICATION AND INTERPRETATION OF DATA
AND OTHER INFORMATION AND THEIR USE IN DEVELOPING AND SELECTING ASSUMPTIONS FROM
AND AMONG REASONABLE ALTERNATIVES REQUIRE THE EXERCISE OF JUDGMENT. TO THE
EXTENT THAT THE ASSUMED EVENTS DO NOT OCCUR, THE OUTCOME MAY VARY SUBSTANTIALLY
FROM ANTICIPATED OR PROJECTED RESULTS, AND, ACCORDINGLY, NO OPINION IS EXPRESSED
ON THE ACHIEVABILITY OF THOSE FORWARD-LOOKING STATEMENTS. NO ASSURANCE CAN BE
GIVEN THAT ANY OF THE ASSUMPTIONS RELATING TO THE FORWARD-LOOKING STATEMENTS
SPECIFIED IN THE FOLLOWING INFORMATION ARE ACCURATE, AND WE ASSUME NO OBLIGATION
TO UPDATE ANY SUCH FORWARD-LOOKING STATEMENTS.

Our Background. Avalon Energy Corporation was formed under the laws of the State
of Nevada on November 29, 1983 under the name Venture Group, Inc. On February
11, 1986, an amendment to the Articles of Incorporation was filed changing the
corporate name to Asdar Corporation. On December 11, 1987, another amendment to
the Articles of Incorporation was filed changing the corporate name to Asdar
Group.  On February 18, 2001, Asdar Group filed a Certificate of Reinstatement
with the Secretary of State of Nevada. On April 30, 2002, another amendment to
the Articles of Incorporation was filed changing the corporate name to Precise
Life Sciences Ltd. Additional amendments to the Articles of Incorporation were
filed changing the corporate name as follows:

February 18, 2003 - Iceberg Brands Corporation
August 28, 2003   - Avalon Gold Corporation
March 22, 2005    - Avalon Energy Corporation

<page>2

Avalon Energy Corporation was originally incorporated to engage in any lawful
act or activity for which corporations may be organized under the General
Corporation Law of Nevada.  Avalon Energy Corporation, under former management,
from its inception in 1983 to 1986, was engaged primarily in the acquisition of
controlling equity positions in companies experiencing financial or operating
difficulties.  During 1985 and 1986, Avalon Energy Corporation sold its equity
positions in these companies.

Our Business.  Currently, we own certain interests in oil and gas properties.
(described more particularly below) and we are also pursuing opportunities in
mineral exploration and development. As of the date of this quarterly report on
Form 10QSB, we are in the process of researching potential partnerships and
acquisitions which may complement our new business direction. There is no
guarantee that we will be able to successfully enter into relationships which
will produce revenue.  To March 31, 2005, we have suffered an accumulated net
loss of $15,077,539. There is no guarantee that we will not continue to suffer
significant losses in the foreseeable future.

Our Oil and Gas Properties

1. The Wyoming Property. The Company owns a 0.7% gross overriding royalty
interest on 6,360 acres of oil and natural gas rights located in the Powder
River Basin of eastern Wyoming carried at a nominal value of $1 due to the
uncertainty of realization. During the year ended December 31, 2004, there was
no production from the Wyoming property.

In January of 2004, Derek Oil and Gas Corporation (DRKOF :OTC BB) and Ivanhoe
Energy (USA) Inc. (IVAN: NASDAQ SC) have formalized their agreement to jointly
develop the LAK Ranch field using thermal recovery technology.

Based on Avalon's ongoing agreement with respect to the LAK Ranch, if Derek
sells any or all of its interest in the LAK Ranch Property, it will pay to
Avalon, subject to adjustments, 7.5% of the net sales proceeds on the first
USD$7,500,000 and 1% on any balance over and above USD$7,500,000.

<page>3

Under terms of their agreement, Ivanhoe will become operator and earn a 30-per-
cent working interest in the project by financing the $1.1-million in capital
cost of pilot phase. Following the pilot phase, Ivanhoe has the option to
increase its working interest to 60 per cent by providing an additional $3.9-
million in capital costs toward the initial development phase. After the $5-
million (U.S.) threshold is reached, all future capital expenditures will be
shared on a working-interest basis.

In the first quarter of 2004, surface preparations were complete and steaming
operations began. Assuming successful development of the project, the companies
expect to recover between 30 and 70 million barrels of oil using thermal
recovery techniques. There is no assurance that these numbers are achievable
given such factors as fluctuations in world prices for oil, general market
conditions, risks inherent in operations and risks generally associated with
enhanced recovery projects.

The LAK Ranch field, originally discovered in the 1920s, covers approximately
7,500 acres in the Powder River basin. Historically, oil production has been
sporadic from a limited number of wells completed in the Newcastle Sand due to
the abnormally low reservoir temperature in this part of the basin. However, the
oil contains high levels of naphtha and the viscosity should respond
dramatically to the application of heat through steam injection. To date, Derek
has completed SAGD test well pair that was drilled to a depth of 1,000 feet and
1,800 feet horizontally into the Newcastle sand formation. Prior to 2004, more
than 5,000 barrels of oil were recovered in limited preliminary testing. Avalon,
through its predecessor Asdar has received royalty payments from the sale of
every barrel of oil sold to date.

Ivanhoe Energy (USA) Inc. received approval on April 13, 2004 from the Wyoming
Oil and Gas Commission to restart steam flooding of the LAK Field and the
associated environmental monitoring plan.

<page>4

Ivanhoe, as operator, reports that 13,000 barrels of steam were injected into
the reservoir from late April through the end of May, 2004, using the existing
horizontal production well, Derek 1-P. Approximately 70% of the steam has been
recovered to date and oil cuts are beginning to improve as anticipated. The oil
is high-quality 19-degree API gravity, and contains high levels of naphtha. The
second steam cycle began in July, 2004, using a larger quantity of steam at a
higher pressure to further stimulate oil production. The Wyoming Oil and Gas
Conservation Commission has approved the higher surface injection pressure for
the second cycle. The injection phase of the second round of cyclic steaming at
LAK Ranch has been completed, with about 13,000 barrels of steam having been
injected. As of October 12, about 20% of the load water has been recovered and
some oil production has begun. The performance of the second steaming cycle is
at approximately the same level as Ivanhoe's current reservoir model prediction.
Plans are to continue to produce the well and adjust the model based on the
newly acquired data. Depending on the results of the second steam cycle, a third
steam cycle is planned for late this year or early in 2005. To date the results
of the second steam cycle are positive and are similar to results observed in
other heavy oil steam flood

In November, 2004, the first part of the US$900,000 3-D seismic survey was begun
at LAK Ranch. Some 3,800 receiver stations were surveyed and surveying of the
source point locations was commenced. In December, 2004, Ivanhoe Energy (USA)
Inc. reported the successful completion of the data acquisition phase of the 3D
seismic survey, at the LAK Ranch project in NE Wyoming. The survey has yielded
excellent quality data. Processing and interpretation of the 3D data is underway
and is on course for defining high-resolution targets that should permit
continued development of the LAK Ranch.

Plans have begun for an additional vertical well, located approximately 200 feet
north of the existing horizontal well pair. This well will be used for pressure
and/or temperature monitoring of steam injection and for calibrating the seismic
survey with up-to-date sonic data. The vertical well location has been selected
so that it may be used as a future steam injector. Drilling of the well was
completed in March, 2005.

In addition, Pacific Geotechnical Associates, of Bakersfield, California has
been retained to prepare an independent geologic/reservoir model incorporating
all of the available LAK Ranch Project data. A great deal of this project data
is now available in digital format from Ivanhoe Energy (USA) Inc., the project
operator. New well data and 3-D seismic data will be integrated into the model
as it becomes available.

<page>5

As of the date of this report, the status of the project is as follows:

o Some oil production from existing production well in early April

o Recently drilled vertical injector/observation well 12-14 is providing
  reservoir information for LAK Ranch computer simulation model

o Third steam cycle continues at LAK Ranch with a cumulative 7,300 barrels
  injected between April 12th and April 29th

o Temperature observation in the up-dip horizontal well continues to show most
  of the heat increase in the heel section; consistent with previous steam cycle
  temperature observations

2. The California Property. The Company owns a 2% royalty interest in the
Harvester Property carried at a nominal value of $1 due to the uncertainty of
realization.

3. The Utah Property. On October 26, 2004, the Company entered in to a letter of
intent with Pioneer Oil and Gas ("Pioneer"), a Utah Corporation for the
exclusive right to enter into a Participation agreement with Pioneer on or
before January 18, 2005. The Company advanced Pioneer a $50,000 non-refundable
deposit and in return was pledged an exclusivity period to carry out its due
diligence with respect to acquiring certain overpressured gas leases in the
Uinta Basin, Utah.

On January 18, 2005, the Company entered into a Participation Agreement with
Pioneer to acquire an undivided Eighty-Five Percent (85%) working interest and
an undivided Sixty-Eight (68%) net revenue interest in 13,189 acres located in
Wasatch County, Utah, known as the "Uinta Basin".

The Company had an independent title search conducted on the acreage involved in
the Participation Agreement and determined that Pioneer had good and marketable
title to the leases. As such, on January 18, 2005, the Participation Agreement
was duly signed and the balance of $656,279 was delivered to Pioneer to complete
the closing. The total consideration paid to Pioneer to acquire the 13,189 acres
was $706,279..

In addition, certain non-related parties were responsible for tabling the Uinta
Basin Overpressured Gas Project to the Company.  The Company issued 1,200,000
restricted common shares valued at $264,000 on February 7, 2005 to these parties
for their efforts resulting in the acquisition of 13,189 acres in Wasatch
County, Utah.

<page>6

As part of the agreement, Pioneer has agreed to provide the Company with 2-D
seismic data crossing the acreage, on a confidential basis. Any additional
seismic that Pioneer or the Company may mutually agree to acquire over the
acreage shall be paid entirely by the Company with the parties owning the data
in the same proportion as their working interest in the acreage. In addition,
the Company will be required to drill an initial test well at a location on the
acreage mutually agreed upon by Pioneer and the Company. The Company will serve
as the Operator in drilling the acreage and must drill the initial well prior to
November 1, 2010.

The Company shall pay One Hundred Percent (100%) of all costs of drilling the
first two wells drilled on the  acreage along with 100% of all costs of logging
or testing the wells.  If either of the first two test wells is deemed a dry
hole, the Company shall pay One Hundred Percent (100%) of all costs of plugging
and abandoning such well(s) and restoration of the surface upon which the
well(s) reached its authorized depth and completion of all tests deemed
necessary by the Operator.

If the Company elects to complete either or both of the first two wells drilled
on the acreage, the Company shall pay One Hundred Percent (100%) of all
completion costs through the tanks along with any costs associated to hook up
the well(s) to pipeline for the well(s) to be capable of producing into a
commercial pipeline for sale.  If the Company does not wish to participate in an
attempted completion of a well, the Company shall so notify Pioneer within
Twenty-Four (24) hours (excluding Saturday, Sunday and legal holidays) after
reaching Casing Point and all electric logs have been received, at which time
the provisions of Article VI of the Operating Agreement shall govern such
completion attempt.

After the first two wells are drilled and if productive are hooked-up to a
pipeline and capable of producing oil and gas in commercial quantities, the
Company shall pay 85% of all costs of operating the first two wells and Pioneer
shall pay 15% of the operation costs of such wells as reflected in their working
interest ownership in such wells.

Subsequent wells drilled after the first two wells on the Contract Acreage shall
require Pioneer to either farmout its interest on a well by well basis under
Article VI herein or participate or not participate for its interest in the well
pursuant to the provisions contained in the Operating Agreement.

<page>7

On November 10, 2004, the Company entered into an agreement with Golden Spirit
Mining Ltd., ("Golden Spirit") a company with directors in common, to sell a 40%
working interest in the Uinta Basin Lease.  Upon signing of the agreement,
Golden Spirit issued 1,000,000 restricted Rule 144 common shares  valued at
$70,000 as a non-refundable deposit to the Company. Golden Spirit had a right to
acquire the 40% working interest in the gas lease upon the Company receiving a
payment of US$750,000 on or before December 10, 2004. Upon receiving the
$750,000, the Company was required to to pay Pioneer $706,279 to acquire its 85%
interest. On December 10, 2004, the Company granted Golden Spirit an extension
until December 24, 2004 to meet the requirements of the initial agreement. The
Company received an additional non-refundable 1,000,000 restricted Rule 144
common shares valued at $60,000 as consideration for the extension. In return,
Avalon agreed to issue and deliver 2,000,000 shares of its common stock to
Golden Spirit. The Company did not receive the payment of US$750,000 and on
January 4, 2005 the Company issued a default notice to Golden Spirit for failure
to meet the terms of the agreements which was terminated and the shares were not
issued. The 2,000,000 restricted Rule 144 common shares of Golden Spirit are
recorded as available for sale securities.

Our Mineral Properties

LSA Mineral Claims, Nevada. By Agreement dated January 26, 2004 and subsequent
amendments dated March 8, 2004 and August 11, 2004 the Company agreed to acquire
a ninety-percent (90%) interest in seven (7) lode mining claims known as the LSA
claims, located in Lander County, Nevada. The Company issued 1,000,000
restricted common shares valued at $110,000 and paid $1,000 upon signing the
agreement. Under the terms of the agreement(s), the Company paid $2,500 by April
26, 2004. Thereafter, on the last day of each month from May, 2004 to February,
2005, the Company must pay an additional $500 in cash. In addition the Company
is required to issue $17,500 in restricted shares on June 30, 2005 to earn its
ninety-percent (90%) interest. As of March 31, 2005, the Company has paid $4,500
towards the acquisition and has received an extension to June 30, 2005 to pay an
additional $4,500 in cash and issue the share consideration.

The Company will be required to perform annual assessment work to keep the
claims in good standing. The Company will have an independent engineering report
prepared on the property, which will contain recommendations for a work program

Available for sale securities

During 2004, the Company received 2,000,000 restricted Rule 144 shares of Golden
Spirit Minerals Ltd. ("Golden Spirit"), a public company with directors and
significant shareholders in common. The restricted shares were received as non-
refundable consideration pursuant to agreements dated November 10, 2004  and
December 10, 2004 with Golden Spirit. Effective December 31, 2004 the Company
recorded an unrealized loss in the carrying value of its available-for-sale
securities totaling $10,000 which was recorded as other comprehensive loss for
the year. As of March 31, 2005 the Company recorded as other comprehensive loss
for the period, an additional $60,000 for a total of $70,000 in other
comprehensive loss. As at March 31, 2005,the Company owned 2,000,000 shares of
Golden Spirit with a fair value of $60,000.

<page>8

Our Investment in Legacy Mining Ltd.  On December 31, 2003, the Company agreed
to settle $122,988 of its receivable from Legacy Mining Ltd. ("Legacy") for the
issue of 1,229,880 restricted shares of Legacy at a value of $0.10 per share
representing a 9.8% interest in Legacy. These restricted shares were issued to
the Company on February 20, 2004. Legacy is a non-reporting entity with a
director in common with the Company. Legacy has applied to NASD for a listing on
the pink sheets and intends to become a fully reporting company in 2005. The
Company has written this investment down to $1 as of December 31, 2004 because
management has determined that it is not recoverable within a reasonable period
of time.

Liquidity and Capital Resources

For the three month period ended March 31, 2005, we had total assets of
$1,304,071, including cash of $193,069, taxes recoverable of $466 and prepaid
expenses of 3,688.  We have a $971,536  invested in oil and gas properties,
which is represented by $971,534 for 13,189 acres of gas leases located in
Utah,$1 for an oil and gas interest located in Wyoming and $1 for an oil and gas
interest located in San Joaquin, California.  We have available for sale
securities with a fair value of $60,000 as at March 31, 2005, a long-term
investment in Legacy Mining Ltd. recorded at a nominal value of $1 and a long-
term receivable from Golden Spirit Minerals Ltd. at cost of $75,311. At December
31, 2004, we had total assets of $220,443. The  increase in assets was primarily
due the acquisition of the Uinta Basin property in Utah.

At March 31, 2005, we had current liabilities of $59,220, which was represented
by  accounts payable and accrued liabilities of $24,733 and $34,487 due to
related parties. At December 31, 2004 we had current liabilities of $45,733. The
increase in liabilities was due to an increase in funds due to related parties
and an increase in accounts payable.  At March 31,2005, we had total current
assets of $197,223.  At March 31, 2005, current assets exceeded current
liabilities by $138,003. At December 31, 2004, our total current liablilities
exceeded our total current assets by $41,105.

We do not believe that our current cash resources will be able to maintain our
current operations for an extended period of time.   We will be required to
raise additional funds or arrange for additional financing over the next 12
months to adhere to our development schedule.  No assurance can be given,
however, that we will have access to additional cash in the future, or that
funds will be available on acceptable terms to satisfy our working capital
requirements. If we are not able to arrange for additional funding or if our
officers, directors and shareholders stop advancing funds to us, we may be
forced to make other arrangements for financing such as loans or entering into
strategic alliances. We have not identified any alternative sources of
financing.

<page>9

Results of Operations.  We have not yet realized any revenue from operations to
date. Loss from operations increased from $433,064 in the first quarter of 2004
to $633,179 in the first quarter of 2005.  This increase in the loss was largely
because $250,560 in stock based compensation expenses were incurred.

The cash and equivalents constitute our present internal sources of liquidity.
Because we are not generating any significant revenues, our only external source
of liquidity is the sale of our capital stock and any advances from officers,
directors or shareholders.

Our Plan of Operation for the Next Twelve Months .  We anticipate that we will
need to raise additional capital within the next 12 months in order to continue
as a going concern.  Such additional capital may be raised through additional
public or private financings, as well as borrowings and other resources.  To the
extent that additional capital is raised through the sale of equity or equity-
related securities, the issuance of such securities could result in dilution of
our stockholders.  There can be no assurance that additional funding will be
available on favorable terms, if at all.  If adequate funds are not available
within the next 12 months, we may be required to curtail our operations
significantly or to obtain funds through entering into arrangements with
collaborative partners or others that may require us to relinquish rights to
certain of our assets that we would not otherwise relinquish.

Avalon Energy Corporation does anticipate some expenditures within the next 12
months for its new acquisition in the Uinta Basin, Utah that should not affect
its liquidity.  Avalon will be seeking drilling permits in Utah and will incur
costs towards an environmental study with respect to its 13,189 acres. However,
if Avalon decides to undertake a drilling program on its Uinta Basin leases, it
will be required to raise significant funding to drill. It is estimated that
drilling one well in the Uinta Basin requires $3,000,000 to $5,000,000 USD,
depending on the depth of the well. The Company may elect to raise funds for
potential drilling through equity financing or possible joint venture
partnerships. Avalon Energy Corporation does not anticipate any significant
mineral exploration costs within the next 12 months, nor does the Avalon Energy
Corporation anticipate that it will lease or purchase any significant equipment
within the next 12 months. Avalon Energy Corporation does not anticipate a
significant change in the number of its employees within the next 12 months.

<page>10

ITEM 3 Controls and Procedures

(a) Within 90 days prior to the filing date of this report, with the
participation of the Company's management, the Company's President and Chief
Executive Officer and Vice President - Finance and Chief Financial Officer,
evaluated the effectiveness of the Company's disclosure controls and procedures
in accordance with Rule 13a-14 of the Securities Exchange Act of 1934 (the
"Exchange Act"). Based upon that evaluation, the President and Chief Executive
Officer and Vice President - Finance and Chief Financial Officer concluded that
the Company's disclosure controls and procedures are effective in providing
reasonable assurance that information required to be disclosed by the Company in
reports that it files under the Exchange Act is recorded, processed, summarized
and reported within the time period specified in the Commission's rules and
procedures.

(b) Changes in Internal Controls. There were no significant changes in the
Company's internal controls or in other factors that could significantly affect
these controls subsequent to the date of the evaluation.

Code of Ethics:

We intend to adopt a code of ethics in 2005 that applies to our principle
executive officer, principal  financial officer, principle accounting officer or
controller, other persons  performing similar functions.  We intend to post the
text of our code of ethics on our website in connection with our "Investor
Relations" materials.  In addition, we intend to promptly disclose (1) the
nature of any amendment to our code of ethics that applies to our principle
executive officer principal  financial officer, principle accounting officer or
controller, other persons  performing similar functions (2) the nature of any
waiver, including an implicit wavier, from a provision of our code of ethics
that is granted to one of these specific officers, the name of such person who
is granted the waiver and the date of the waiver on our web site in the future.

We do not currently have a code of ethics as this is a new regulatory
requirement and we are examining the various form and contents of other
companies written code of ethics, discussing the merits and meaning of a code of
ethics to determine the best form for our Company.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

On February 21, 2002, the Company issued 350,000 shares valued at $119,000 to
Empire Sterling Corporation for services to be rendered with respect to the
acquisition of ACGT Corporation.  The shares were to be held in trust and not
sold until all necessary financing was in place to complete the ACGT
acquisition. Empire Sterling Corporation breached the trust agreement and the
Company placed a stop transfer on these shares and requested they be returned to
the Company. Empire Sterling Corporation failed to return the share certificate
and as such, the Company commenced court proceedings against the principals of
Empire Sterling Corporation. The Company argued for an interim injunction
against all parties and was successful. On May 9, 2002, the Court ordered Empire
Sterling Corporation to deposit the shares with the Court pending judicial
disposition.  The Company continued to file legal process claiming ownership of
the shares and breach of trust inter alia. The Company was successful and has
now applied to have the share certificate released and subsequently cancelled.
As of March 31, 2005, the Company is still in the legal process of having the
certificate released.

<page>11

Item 2. Changes in Securities.

2005 Transactions

During the quarter ended March 31, 2005, the Company issued 1,078,000 common
shares pursuant to the Company's 2005 Stock Incentive and Option Plan at various
prices for proceeds of $269,340.

During the quarter ended March 31, 2005, the Company issued 150,000 restricted
common shares valued at $31,000 to two consultants as compensation for their
appointment to the advisory board.

During the quarter ended March 31, 2005, the Company completed a private
placement and issued 5,950,000 Series A Units at $0.15 per unit for total
proceeds of $892,500.  Each Series A Unit issued by the Company was comprised of
(i) one restricted share of the Company's $.001 par value common stock and (ii)
a series "A" warrant which will enable the subscriber to acquire from the
Company one share of the Company's $.001 par value common stock at a purchase
price of $.50 per share for a period of eighteen months.

A finders fee of ten percent of the total proceeds was paid in the form of
595,000 restricted common shares of the Company, valued at $130,900 to the
finders. In addition, the finder who raised the majority of the proceeds,will
also receive a 1.5% gross royalty of all revenue produced by the Uinta Basin
project and paid to the Company. The proceeds from the sale of these units were
used to meet the terms of the Participation Agreement with Pioneer and to
provide general working capital.

During the quarter ended March 31, 2005, the Company issued a total of 1,200,000
restricted common shares to four parties valued at $264,000 for their assistance
to the Company in acquiring the Uinta Basin project.

During the quarter ended March 31, 2005, the Company issued 250,000 restricted
common shares for a prepaid investor relations services contract valued at
$55,000 and recorded as deferred compensation.

<page>12

2004 Transactions

During 2004, the Company issued 1,050,000 restricted common shares for investor
relations and investment banking service contracts valued at $126,000.

During 2004 the Company issued 1,550,000 shares with a fair value of $170,500 in
settlement of $88,550 of unpaid consulting fees, $14,350 of professional fees
and $5,600 in office and administrative salaries. The difference of $62,000 has
been recorded as a loss on settlement of debt.

During 2004 the Company issued 1,000,000 restricted common shares valued at
$110,000 towards the acquisition of a mineral property .

During 2004 the Company issued 2,500,000 shares with a fair value of $200,000 in
settlement of $161,000 of consulting fees, $17,500 of professional fees and
$21,500 in office and administrative salaries.

On July 9, 2004, a total of 210,000 shares of common stock previously issued for
consulting services to be rendered in the amount of $19,000 were cancelled and
returned to treasury.

On October 1, 2004, the Company issued 100,000 restricted shares of common stock
valued at $13,000 pursuant to a one year consulting agreement with an
individual. The consultant will provide such services and advice to the Company
in business development and strategy in connection with the Company's
properties.

On November 24, 2004, a total of 65,000 shares of common stock previously issued
for the acquisition of a mineral property in the amount of $10,500 were
cancelled and returned to treasury.

On December 1, 2004 the Company issued 100,000 shares with a fair value of
$20,000 in settlement of directors' salaries.

Item 3. Defaults Upon Senior Securities.

None.

Item 4.  Submission of Matters to Vote of Security Holders

None.

<page>13

Item 5.  Other Information

A. Security Ownership of Management

The following table sets forth information as of March 31, 2005 with respect to
the ownership of our common stock by each director and by all officers and
directors as a group.

                                            Amount and Nature of   Percent of
Title of Class  Name of Beneficial Owner      Beneficial Owner        Class
------------------------------------------------------------------------------
Common Stock     Robert Klein
                 4540 Woodgreen Place
                 West Vancouver, B.C., Canada     50,000              0.16 %
                 V7S 2V6

Common Stock	Carlton Parfitt
                #2025 -1358 W. Georgia Street
                Vancouver, B.C.  V7T 1A8          50,000              0.16 %

Directors' Compensation.  During the three months ended March 31, 2005, the
Company incurred $14,867 (2003 -$14,276) in management fees to two directors. At
March 31, 2005 the Company owes $9,000 in management fees to one director.

Stock Based Compensation. During the three months ended March 31, 2005 $250,560
(2003 - $Nil) in stock based compensation was recorded in our financial
statements.  Stock based compensation is an estimate of the intrinsic value
placed in respect to stock options granted to officers, directors, employees and
an estimate of the fair value of stock options granted to consultants using the
Black-Scholes option pricing model We do expect further stock based compensation
in 2005.

Transactions with promoters.

On February 1, 2005, the Company entered into an agreement with Holm Investments
Ltd., a private company, for a two year term, whereby Holm Investments Ltd. will
provide investor relations services to the Company (valued at $55,000) in
exchange for 250,000 restricted shares of the Company's common stock. Holm
Investments Ltd. will provide such services as researching, editing and
generating a company profile, relaying the Company's business perspectives and
distribution of corporate updates, including press releases. (See Exhibit 10-1)

B. Security Ownership of Certain Beneficial Holders of ten percent or more

T                                            Amount and Nature of   Percent of
Title of Class  Name of Beneficial Owner      Beneficial Owner        Class
------------------------------------------------------------------------------
Common Stock	CEDE & Co.
                The Depository Trust Co.
                P.O. Box 222 Bowling Green Station
                New York, New York 10274	    21,163,702       66.44 %

<page>14

C. Certain Relationships and Related Party Transactions

During the quarter ended March 31, 2005 the Company incurred $14,111 (2004
-$14,276) in management fees to directors. At March 31, 2005 the Company owes
$9,000 in management fees to a director.

During the quarter ended March 31, 2005, the Company incurred $5,116 (2004 -
$8,384) in rent and office expenses to a private company controlled by a
shareholder.

During the quarter ended March 31, 2005, the Company incurred $235,786 (2004 -
$Nil) in consulting fees to significant shareholders  and $4,947 (2004 -
$10,850) in professional fees to an employee.

During the quarter ended March 31, 2005, three companies controlled by
significant shareholders earned $11,837 (2004 - $53,583) and a company
controlled by a shareholder earned $4,584 (2003 - $11,250) pursuant to prepaid
services agreements.

At March 31, 2005 an amount of $84,312 (2004 - $42,086) is receivable from
Golden Spirit Minerals Ltd., a public company which have directors in common
with the Company.  These amounts are non-interest bearing and have no specific
terms of repayment.

At March 31, 2005, the following amounts are due to related parties:

		         2005	   2004
		       --------  --------
Employee	       $     -	$ 38,143
Director		 9,000	  56,000
Significant Shareholder	25,487	  15,257
	               =======    =======
	               $34,487	$109,400

All related party transactions are in the normal course of business and are
measured at the exchange amount, which is the amount of consideration
established and agreed to by the related parties.

<page>15

D. Description of Property

Property held by the Company.  As of the dates specified in the following table,
we held the following property in the following amounts:

                                 March 31   December 31,  December 31,
       Cash and Cash Equivalents   2005	      2004           2003
       ------------------------- --------- -----------   -------------
      	            Total	$ 193,069  $ (2,187)	   $ 2,262
                                 ========  ==========    =============

We define cash equivalents as all highly liquid investments with maturity of 3
months or less when purchased.   We do not presently own any interests in real
estate or own any inventory or equipment.


Item 6.  Exhibits and Form 8-K's.

Index to Exhibits

(i)	Exhibits

Exhibit 10.01 - Agreement between us and Holm Investments Ltd.

Exhibit 31.1 - Section 906 Certification of Periodic Report of the Chief
               Executive Officer.

Exhibit 31.2 - Section 906 Certification of Periodic Report of the Chief
               Financial Officer.

Exhibit 32.1 - Section 302 Certification of Periodic Report of the Chief
               Executive Officer.

Exhibit 32.2 - Section 302 Certification of Periodic Report of the Chief
               Financial Officer.

(ii)   The following documents are incorporated by reference in this Form 8-K

              None.

SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, we
have duly caused this Quarterly Report on Form 10-QSB to be signed on our behalf
by the undersigned; thereunto duly authorized, in the City of Vancouver, British
Columbia, Canada, on May 16, 2005.

Avalon Energy Corporation a Nevada Corporation

By:      /s/ Carlton Parfitt
    	--------------------
    	     Carlton Parfitt

Its:     President

<page>16