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

                                  FORM 10-KSB

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                      THE SECURITIES EXCHANGE ACT OF 1934

                  For the fiscal year ended JULY 31, 2006

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

     For the transition period from _________________ to __________________

                       Commission file number: 333-119848


                                 AAA ENERGY, INC.
                 (Name of small business issuer in its charter)



             Nevada    				     Applied For
    (State or other jurisdiction of     (I.R.S. Employer Identification No.)
     incorporation or organization)

                                3841 Amador Way
                              Reno, Nevada, 89502
                    (Address of principal executive offices)

                                 (775) 827-2324
                           Issuer's telephone number

Securities to be registered pursuant to Section 12(b) of the Act:

	Title of each class           Name of each exchange on which
	to be so registered           each class is to be registered

              None	                           None

Securities to be registered pursuant to Section 12(g) of the Act:

                        	 Common Stock
                               (Title of Class)

Check whether the Issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.

              Yes    X                               	No _____

<PAGE>


Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.

              Yes    X	                                No _____

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).

	      Yes    X   				No _____

State issuer's revenues for its most recent fiscal year:    Nil

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days.  (See definition of affiliate in Rule
12b-2 of the Exchange Act.)

$10,560,528 as at October 27, 2006 based on the closing trading price of our
common stock

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.

      34,272,000  shares  of  common  stock as at October 27, 2006

























<PAGE>

                               TABLE OF CONTENTS

                                                                          PAGE

ITEM 1:  DESCRIPTION OF BUSINESS.............................................4

ITEM 2:  DESCRIPTION OF PROPERTY............................................12

ITEM 3:  LEGAL PROCEEDINGS..................................................12

ITEM 4:  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS................12

ITEM 5:  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS...........12

ITEM 6:  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION..........13

ITEM 7:  FINANCIAL STATEMENTS...............................................15

ITEM 8:  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND

FINANCIAL DISCLOSURES.......................................................25

ITEM 8A:  CONTROLS AND
PROCEDURES..................................................................25

ITEM 9:  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.......26

ITEM 10:  EXECUTIVE COMPENSATION............................................28

ITEM 11:  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT....28

ITEM 12:  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS....................29

ITEM 13:  EXHIBITS AND REPORTS..............................................29

ITEM 14:  PRINCIPAL ACCOUNTANT FEES AND SERVICES............................30




<PAGE>
PART I


ITEM 1:  DESCRIPTION OF BUSINESS

IN GENERAL

We commenced operations as a company involved in the acquisition and exploration
of resource properties.  During the fiscal year ended July 31, 2005, we held a
100% interest in five mineral claims comprising the BA property.  During the
fiscal year ended July 31, 2006, our interest in the BA property lapsed.

We are continuing to review other potential acquisitions in the resource sector.
Currently, we are in the process of completing a due diligence investigation of
various opportunities in the oil and gas sector, as well as the base and
precious metals sectors.  However, there is no guarantee that we will be able to
reach any agreement to acquire such assets.

EMPLOYEES

We have no employees as of the date of this annual report other than our two
directors.

RESEARCH AND DEVELOPMENT EXPENDITURES

We have not incurred any other research or development expenditures since our
incorporation.

SUBSIDIARIES

We do not have any subsidiaries.

PATENTS AND TRADEMARKS

We do not own, either legally or beneficially, any patents or trademarks.

RISK FACTORS

An investment in our common stock involves a high degree of risk.  You should
carefully consider the risks described below and the other information in this
annual report before investing in our common stock. If any of the following
risks occur, our business, operating results and financial condition could be
seriously harmed. The trading price of our common stock could decline due to any
of these risks, and you may lose all or part of your investment.

IF WE DO NOT OBTAIN ADDITIONAL FINANCING, OUR BUSINESS WILL FAIL.

Our current operating funds are less than necessary to complete any acquisition
of a business interest and fund its future development.  As of July 31, 2006, we
had cash in the amount of $60,910.  We currently do not have any operations and
we have no income.  We will require additional funds to review, acquire and
develop business assets.  We do not currently have any arrangements for
financing and we can provide no assurance to investors that we will be able to
find such financing if required.










<PAGE>
BECAUSE WE DO NOT HAVE ANY BUSINESS OPERATIONS, WE FACE A HIGH RISK OF BUSINESS
FAILURE.

We were incorporated on May 26, 2004 and have been involved in the acquisition
and exploration of mineral exploration properties.  We were unsuccessful in this
initial business plan and are now seeking to acquire an interest in alternative
assets.  We may not be able to identify and acquire any interest in suitable
business assets.

There is no history upon which to base any assumption as to the likelihood that
we will prove successful, and we can provide investors with no assurance that we
will generate any operating revenues or ever achieve profitable operations. If
we are unsuccessful in addressing these risks, our business will fail.

BECAUSE OUR CONTINUATION AS A GOING CONCERN IS IN DOUBT, WE WILL BE FORCED TO
CEASE BUSINESS OPERATIONS UNLESS WE CAN GENERATE PROFITABLE OPERATIONS IN THE
FUTURE.

We have incurred losses since our inception resulting in an accumulated deficit
of $50,617 at July 31, 2006.  Further losses are anticipated in the acquisition
and development of a business.  As a result, there is substantial doubt about
our ability to continue as a going concern. Our ability to continue as a going
concern is dependent upon our ability to generate profitable operations in the
future and/or to obtain the necessary financing to meet our obligations and
repay our liabilities arising from normal business operations when they come
due.  If we cannot raise financing to meet our obligations, we will be insolvent
and will cease business operations.

BECAUSE OUR DIRECTORS OWN 52.5% OF OUR OUTSTANDING COMMON STOCK, THEY COULD MAKE
AND CONTROL CORPORATE DECISIONS THAT MAY BE DISADVANTAGEOUS TO OTHER MINORITY
SHAREHOLDERS.

Our directors own approximately 52.5% of the outstanding shares of our common
stock.  Accordingly, they will have a significant influence in determining the
outcome of all corporate transactions or other matters, including mergers,
consolidations, and the sale of all or substantially all of our assets.  They
will also have the power to prevent or cause a change in control. The interests
of our directors may differ from the interests of the other stockholders and
thus result in corporate decisions that are disadvantageous to other
shareholders.

BECAUSE OUR DIRECTORS HAVE OTHER BUSINESS INTERESTS, THEY MAY NOT BE ABLE OR
WILLING TO DEVOTE A SUFFICIENT AMOUNT OF TIME TO OUR BUSINESS OPERATIONS,
CAUSING OUR BUSINESS TO FAIL.

Our president, Dr. Abbott and our secretary and treasurer, Mr. LaPrairie, intend
to respectively devote 25% and 10% of their business time to our affairs.  It is
possible that the demands on Dr. Abbott and Mr. LaPrairie from their other
obligations could increase with the result that they would no longer be able to
devote sufficient time to the management of our business.  In addition, Dr.
Abbott and Mr. LaPrairie may not possess sufficient time for our business if the
demands of managing our business increased substantially beyond current levels.

OUR COMMON SHARES ARE CONSIDERED PENNY STOCK, WHICH LIMITS AN INVESTOR'S ABILITY
TO SELL THE STOCK.

Our shares of common stock constitute penny stock under the Securities and
Exchange Act.  The shares will remain penny stock for the foreseeable future.






<PAGE>
The classification of penny stock makes it more difficult for a broker-dealer to
sell the stock into a secondary market, which makes it more difficult for a
purchaser to liquidate his or her investment.  Any broker-dealer engaged by the
purchaser for the purpose of selling his or her shares in our company will be
subject to rules 15g-1 through 15g-10 of the Securities and Exchange Act.
Rather than creating a need to comply with those rules, some broker-dealers will
refuse to attempt to sell penny stock.

FORWARD-LOOKING STATEMENTS

This annual report contains forward-looking statements that involve risks and
uncertainties.  We use words such as anticipate, believe, plan, expect, future,
intend and similar expressions to identify such forward-looking statements.  You
should not place too much reliance on these forward-looking statements.  Our
actual results are most likely to differ materially from those anticipated in
these forward-looking statements for many reasons, including the risks faced by
us described in the "Risk Factors" section and elsewhere in this annual report.

ITEM 2:  DESCRIPTION OF PROPERTY

We do not have any ownership or leasehold interest in any property.  Our
president, Mr. Earl Abbott, provides us with office space and related office
services free of charge.

ITEM 3:  LEGAL PROCEEDINGS

There are no legal proceedings pending or threatened against us.


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

No matters were submitted during the fourth quarter of our fiscal year to a vote
of security holders, through the solicitation of proxies or otherwise.

PART II

ITEM 5: MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET INFORMATION

Our shares of common stock were quoted on the OTC Bulletin Board on February 13,
2006.   However,  during the fiscal year ended July 31, 2006, no trades  of  our
common stock occurred through the facilities of the OTC Bulletin Board.

The quotations on the  OTC  Bulletin  Board reflect inter-dealer prices, without
retail  mark-up,  mark-down  or  commission   and   may   not  represent  actual
transactions.

We had 39 shareholders of record as at the date of this annual report.

DIVIDENDS

There  are  no  restrictions  in our articles of incorporation  or  bylaws  that
prevent us from declaring dividends.  The  Nevada  Revised Statutes, however, do
prohibit  us  from  declaring  dividends  where,  after  giving  effect  to  the
distribution of the dividend:

1.    we would not be able to pay our debts as they become due in the usual
      course of business; or






<PAGE>

2.    our total assets would be less than the sum of our total  liabilities plus
      the amount that would be needed to satisfy the rights of shareholders  who
      have preferential rights superior to those receiving the distribution.

We  have not declared any dividends, and we do not plan to declare any dividends
in the foreseeable future.

ITEM 6: MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Our plan of operation for the twelve months following the date of this annual
report is to continue to review other potential acquisitions in the resource
sector.  Currently, we are in the process of completing a due diligence
investigation of various opportunities in the oil and gas sector, as well as the
base and precious metals sectors.

As well, we anticipate spending an additional $25,000 on administrative fees,
including fees we will incur in complying with reporting obligations.  Total
expenditures over the next 12 months are therefore expected to be $43,000.

While we have enough funds on hand to cover our administrative expenses for the
next 12 months, we will need additional funding for the review, acquisition and
development of business assets.  We anticipate that additional funding will be
required in the form of equity financing from the sale of our common stock.
However, we do not have any arrangements in place for any future equity
financing.

RESULTS OF OPERATIONS FOR THE FISCAL YEAR ENDED JULY 31, 2006

We did not earn any revenues during the fiscal year ended July 31, 2006.  We
incurred operating expenses in the amount of $36,042 for the fiscal year.  These
operating expenses were comprised of consulting fees of $12,500, accounting and
accounting and audit fees of $14,999, filing and transfer agent fees of $3,307,
legal fees of $5,000, office costs of $125 and bank charges of $111.

Our net loss in fiscal 2006 ($36,042) was slightly higher than in fiscal 2005
($21,511) primarily due to an increase in consulting fees ($500 in 2005 as
compared to $12,500) in 2006 and an increase in accounting and auditing feees
($9,341 in 2005 as compared to $1,999) in 2006.

We have not attained profitable operations and are dependent upon obtaining
financing to pursue future acquisitions.  For these reasons, there is
substantial doubt that we will be able to continue as a going concern.









<PAGE>
ITEM 7:  FINANCIAL STATEMENTS















                                AAA ENERGY, INC.

                         (AN EXPLORATION STAGE COMPANY)

                              FINANCIAL STATEMENTS

                                 JULY 31, 2006

                           (EXPRESSED IN US DOLLARS)













<PAGE>
AAA ENERGY, INC.
(A Nevada Corporation)
(An Exploration Stage Company)
BALANCE SHEETS
July 31, 2006, and 2005
(Expressed in US Dollars)
___________________________________________________________________________

<TABLE>
<CAPTION>

<S>                                                            <C>             <C>
                                                                    2006            2005

                                            ASSETS
Current Assets
 Cash                                                             $60,910         $15,503

Total Assets                                                      $60,910         $15,503


                                         LIABILITIES
Current Liabilities
 Accounts payable and accrued liabilities                         $17,027         $ 6,578

Total Liabilities                                                  17,027           6,578


                                     STOCKHOLDERS' EQUITY

Common Stock (Note 4)
 75,000,000 shares authorized, with $0.001 par value per share
   5,712,000 shares issued and outstanding
   (July31, 2005 - 5,512,000 shares)
   Par value                                                        5,712           5,512
     Additional Paid in Capital                                    88,788          28,988

                                                                   94,500          34,500

Deficit Accumulated During The Exploration Stage                  (50,617)        (25,575)

Total Stockholders' Equity                                         43,883           8,925

Total Liabilities and Stockholders' Equity                        $60,910         $15,503

</TABLE>

                                                Going Concern:  Note 1










The  accompanying notes are an integral part of these
financial statements





<PAGE>
AAA ENERGY, INC.
(A Nevada Corporation)
(An Exploration Stage Company)
STATEMENTS OF INCOME
(Expressed in US Dollars)
___________________________________________

<TABLE>
<CAPTION>

                                                                                   Cumulative From May 26,
                                                         Years ended		   2004 (Inception) to July
                                                          July 31,		   July 31, 2006
                                                 2006               2005
<S>                                         <C>             <C>                   <C>


Revenue                                        $      -        $      -           $         -

Expenses
 Accounting and audit fees                        8,999           9,341                21,875
 Bank charges                                       111             198                   338
 Consulting                                      12,500             500                13,000
 Filing and transfer agent fees                   3,307           2,442                 5,749
 Legal                                                -           2,030                 2,030
 Mineral property costs                               -           7,000                 7,500
 Office                                             125               -                   125

Total Expenses                                   25,042          21,511                38,076

Net loss for the period                        $(25,042)       $(21,511)          $   (50,617)

Basic and diluted loss per share               $  (0.00)          (0.00)

Basic and Diluted
Weighted average number of shares
outstanding                                   5,521,863       5,511,375

</TABLE>














The accompanying  notes  are an integral part of these
financial statements





<PAGE>
AAA ENERGY, INC.
(A Nevada Corporation)
(An Exploration Stage Company)
STATEMENTS OF CASH FLOWS
 (Expressed in US Dollars)
___________________________________________________________________________

<TABLE>
<CAPTION>



											Cumulative From
											May 26, 2004
                                                                    Years ended		(Inception) to
                                                                      July 31,		   July 31
                                                                   2006        2005          2006
<S>                                                        <C> <C>           <C>      <C>



Operating Activities

 Net loss for the period                                          $(25,042)  $(21,511)   $(50,617)

 Item not requiring use of cash
   Mineral property costs                                               -           -         500

 Change in non-cash working capital balance related to
 operations

   Accounts payable and accrued liabilities                        10,449       3,043      17,027

Net cash used in operating activities                             (14,593)    (18,468)    (33,090)


Net cash from investing activities                                      -           -           -

Financing Activities

 Capital stock issued for cash                                     60,000         3,000     94,000

Net cash from financing activities                                 60,000         3,000     94,000

Increase (decrease) in cash during the period                      45,407       (15,468)    60,910


Cash, beginning of the period                                      15,503        30,971          -


Cash, end of the period                                           $60,910       $15,503    $60,910


Supplemental Disclosure
    Interest paid                                                       -             -          -
    Income taxes paid                                                   -             -          -
    Shares issued for acquisition of mineral property                   -             -        500

</TABLE>





   The accompanying notes are an integral part of these financial statements





<PAGE>
AAA ENERGY, INC.
(A Nevada Corporation)
(An Exploration Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
From Date of Inception on May 26, 2004 to July 31, 2006
(Expressed in US Dollars)
___________________________________________________________________________


<TABLE>
<CAPTION>
<S>                                       <C>       <C>       <C>        <C>                 <C>


                                             Common Shares                 Deficit
                                           Number   Par Value  Additional  Accumulated During
                                                    @ $0.001   Paid-in     the Exploration
                                                    per share  Capital     Stage		Total
Balance May 26, 2004 (Date of Inception)          - $       - $       -  $       -            $       -
Capital stock issued for cash
 - June, 2004 at $0.001                   3,000,000     3,000         -          -                3,000
 - June, 2004 at $0.01                    1,800,000     1,800    16,200          -               18,000
 - July, 2004 at $0.05                      200,000       200     9,800          -               10,000
Capital stock issued for mineral
  property                                  500,000       500         -          -                  500
Net loss for the period from May 26,
  2004 (inception) to July 31, 2004               -         -         -    (4,064)               (4,064)
Balance, July 31, 2004                    5,500,000 $   5,500 $  26,000  $ (4,064)            $  27,436
Capital stock issued for cash
 - August, 2004 at $0.25                     12,000        12     2,988          -                3,000
Net loss for the year                             -         -         -    (21,511)             (21,511)
Balance, July 31, 2005                    5,512,000 $   5,512 $  28,988  $ (25,575)           $   8,925
Capital stock issued for cash
 - July, 2006 at $0.30                      200,000       200    59,800          -               60,000
Net loss for the period                           -         -         -    (25,042)             (25,042)
Balance, July 31, 2006                    5,712,000 $   5,712 $  88,788  $ (50,617)           $  43,883

</TABLE>







The accompanying notes are  an  integral part of these financial statements


<PAGE>
AAA ENERGY, INC.
(A Nevada Corporation)
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
July 31, 2006
(Expressed in U.S. Dollars)
________________________________________________________________________

Note 1  Nature and Continuance of Operations

AAA Energy, Inc. (the "Company") was incorporated under the  law of the State of
Nevada on May 26, 2004, and this is also the inception date. The  Company  is an
Exploration  Stage  Company  as  defined  by  Statement  of Financial Accounting
Standard ("SFAS") No. 7. The Company has acquired a mineral  property located in
the  Province  of  British Columbia, Canada, and has not yet determined  whether
this  property  contains   reserves   that  are  economically  recoverable.  The
recoverability of amounts from the property will be dependent upon the discovery
of economically recoverable reserves, confirmation  of the Company's interest in
the  underlying  property,  the  ability  of  the  Company to  obtain  necessary
financing to satisfy the expenditure requirements under  the  property agreement
and  to  complete  the  development of the property, and upon future  profitable
production or proceeds for the sale thereof.


Going Concern

These financial statements  have  been  prepared  in  accordance  with generally
accepted accounting principles in the United States of America applicable  to  a
going  concern  which  assume  that  the  Company  will  realize  its assets and
discharge  its  liabilities  in the normal course of business.  The Company  has
incurred losses since inception  of $50,617 to July 31, 2006, and might not have
sufficient operating funds for the  next  twelve  months.   These factors create
substantial  doubt  as  to  the ability of the Company to continue  as  a  going
concern.  Realization values  may  be  substantially different from the carrying
values as shown in these financial statements  should  the  Company be unable to
continue  as  a  going  concern.   Management  is in the process of  identifying
sources  for  additional  financing  to  fund  the ongoing  development  of  the
Company's business

Note 2   Summary of Significant Accounting Policies



Basis of Presentation

The financial statements of the Company have been  prepared  in  accordance with
generally accepted accounting principles in the United States of America and are
expressed in US dollars. The Company's fiscal year end is July 31.

Mineral Property Costs

The Company is in the exploration stage since its incorporation and inception on
May 26, 2004 and has not yet realized any revenues from its planned  operations.
It is primarily engaged in the acquisition and exploration of mining properties.
Mineral property acquisition and exploration costs are charged to operations  as
incurred.   When  it  has  been  determined  that  a  mineral  property  can  be
economically developed as a result of establishing proven and probable reserves,
the costs incurred to develop such property, are capitalized. Such costs will be
amortized using  the  units-of-production  method over the estimated life of the
probable reserve.








<PAGE>
AAA ENERGY, INC.
(A Nevada Corporation)
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
July 31, 2006
(Expressed in U.S. Dollars)
_______________________________________________________________________


Note 2   Summary of Significant Accounting Policies - (cont'd)


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

Foreign Currency Translation
The Company's functional and reporting currency is the United States dollar. The
financial statements of the Company  are  translated to United States dollars in
accordance with SFAS No. 52 "Foreign Currency  Translation". Monetary assets and
liabilities denominated in foreign currencies are  translated using the exchange
rate  prevailing  at  the  balance  sheet  date.  Gains and  losses  arising  on
translation  or  settlement  of  foreign  currency denominated  transactions  or
balances  are  included  in  the  determination   of  income.  Foreign  currency
transactions are primarily undertaken in Canadian dollars.  The Company has not,
to the date of these financials statements, entered into derivative  instruments
to  offset  the  impact  of  foreign currency fluctuations.  There is no foreign
currency translation adjustment to July 31, 2006.

Financial Instruments

The  carrying  value  of cash, and  accounts  payable  and  accrued  liabilities
approximates  their  fair   value   because  of  the  short  maturity  of  these
instruments. The Company's operations  are  in  Canada  and virtually all of its
assets and liabilities are giving rise to significant exposure  to  market risks
from  changes in foreign currency rates. The financial risk is the risk  to  the
Company's  operations that arise from fluctuations in foreign exchange rates and
the degree of  volatility  of  these  rates. Currently, the Company does not use
derivative instruments to reduce its exposure to foreign currency risk.


Environmental Costs

Environmental expenditures that relate  to  current  operations  are  charged to
operations  or  capitalized  as  appropriate.  Expenditures  that  relate  to an
existing  condition  caused  by  past operations, and which do not contribute to
current or future revenue generation, are charged to operations. Liabilities are
recorded when environmental assessments  and/or  remedial  efforts are probable,
and  the  cost  can  be  reasonably  estimated. Generally, the timing  of  these
accruals coincides with the earlier of  completion of a feasibility study or the
Company's commitments to a plan of action based on the then known facts.












<PAGE>
AAA ENERGY, INC.
(A Nevada Corporation)
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
July 31, 2006
(Expressed in U.S. Dollars)
________________________________________________________________________


Note 2   Summary of Significant Accounting Policies - (cont'd)

Income Taxes

Potential benefits of income tax losses are not recognized in the accounts until
realization is more likely than not. The  Company has adopted SFAS No. 109 as of
its inception. Pursuant to SFAS No. 109 the  Company  is required to compute tax
asset benefits for net operating losses carried forward.  Potential  benefit  of
net  operating  losses  have  not  been recognized in these financial statements
because the Company cannot be assured it is more likely than not it will utilize
the net operating losses carried forward  in future years, and is reduced to Nil
by a valuation allowance.

Basic and Diluted Net Loss Per Share

The Company computes net income (loss) per  share  in  accordance  with SFAS No.
128, "Earnings per Share". SFAS No. 128 requires presentation of both  basic and
diluted earnings per share (EPS) on the face of the income statement. Basic  EPS
is  computed  by  dividing  net  income  (loss) available to common shareholders
(numerator) by the weighted average number  of  shares outstanding (denominator)
during  the period. Diluted EPS gives effect to all  dilutive  potential  common
shares outstanding  during  the  period  using  the  treasury  stock method.  In
computing  Diluted  EPS,  the  average  stock  price for the period is  used  in
determining the number of shares assumed to be purchased  from  the  exercise of
stock options or warrants. Diluted EPS excludes all dilutive potential shares if
their effect is anti dilutive.


Stock-based Compensation

In  December  2002,  the  Financial  Accounting Standards Board 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 July 31, 2004.

The  Company  has  elected  to  continue  to account  for  stock-based  employee
compensation  arrangements  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. In addition, in accordance with SFAS
No. 123  the  Company  applies  the  fair  value  method using the Black-Scholes
option-pricing model in accounting for options granted to consultants. Under APB
No.  25,  compensation  expense  for  employees  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. To April  30,  2006  the
Company has not granted any stock options.





<PAGE>
AAA ENERGY, INC.
(A Nevada Corporation)
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
July 31, 2006
(Expressed in U.S. Dollars)
________________________________________________________________________

Note 2   Summary of Significant Accounting Policies - (cont'd)



Stock-based Compensation (cont'd)

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  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  Financial  Accounting
Standards  Board  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 25.

Comprehensive Loss

SFAS  No. 130, "Reporting Comprehensive Income," establishes standards  for  the
reporting  and display of comprehensive loss and its components in the financial
statements.  As at April 30, 2006, the Company has no items that represent other
comprehensive  loss and, therefore, has not included a schedule of comprehensive
loss in the financial statements.

Cash and Cash Equivalents

Cash represents funds on deposit with the Company's banker.

Concentration of Credit Risk

Financial instruments  that  potentially  subject  the  Company  to  credit risk
consist  principally  of  cash.  Cash  is  deposited  with a high quality credit
institution.


















<PAGE>
AAA ENERGY, INC.
(A Nevada Corporation)
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
July 31, 2006
(Expressed in U.S. Dollars)
________________________________________________________________________


Note 3   Mineral Properties

Pursuant  to  a mineral property purchase agreement dated  June  23,  2004,  the
Company acquired  a  100%  undivided  right, title and interest in the BA claims
represented by five mineral claims, located  in  the Lillooet Mining Division of
British Columbia, Canada by issuance of 500,000 common  shares  of the Company's
capital stock at a deemed price of $0.001 per share for cost of $500.   This was
originally  stated  at  $5,000 and is restated in these financial statements  to
$500 as outlined in Note  5, below. This cost has been written off to operations
in the fiscal year ended July  31, 2004. During the year ended July 31, 2005 the
company incurred $7,000 in resource  property  expenditures that are expensed in
the statement of operations.

These  claims  will only be valid as long as the Company  spends  a  minimum  of
$2,000 in exploration  work on each claim each year.  Alternatively, the Company
may pay the same amount per claim to the Government of British Columbia, Canada,
in order to maintain the claimS in good standing; this exploration work, or cash
segments in lieu thereof, is due by November 14, 2006.

Note 4   Share Capital

The total number of common stock authorized that may be issued by the Company is
75,000,000 shares of stock  with  a  par value of one tenth of one cent ($0.001)
per share and no other class of shares is authorized.

During the period from May 26, 2004 (Inception)  to  July  31,  2004 the Company
issued 5,000,000 common shares for total cash proceeds of $31,000.  In  addition
the  Company  issued 500,000 common shares at a price of $0.001 each for mineral
properties for  a  cost of $500. During the year ended July 31, 2005 the Company
issued 12,000 common shares for cash proceeds of $3,000.

During the year ended July 31, 2006, the Company issued 200,000 units at a price
of $0.30 per unit for  the  aggregate  purchase  price  of  $60,000.  Each  unit
consists  of  once share of common stock and one non-transferable share purchase
warrant entitling the holder to purchase an additional share of common stock for
$0.60 for a period of two years until July 12, 2008.

At July 31, 2006  there  are  200,000 outstanding share purchase warrants and no
outstanding stock options.


The Company filed an SB-2 Registration Statement to register 2,512,000 shares of
common stock for resale by existing  shareholders of the Company with the United
States Securities and Exchange Commission.   The  Company  will  not receive any
proceeds  from  the  resale  of  these  shares  of  common  stock by the selling
stockholders.  The registration statement was declared effective  on  August 22,
2005.


Note 5   Restatement of Figures for Fiscal Year Ended July 31, 2004

When  the  mineral  property  (in note 3) was acquired, capital stock in 500,000
shares  at  $0.001  per share was  issued  for  a  total  of  $500.   The  total
consideration was incorrectly  disclosed  as  $5,000  by way of $500 credited to
paid up capital and $4,500 credited to additional paid  in  capital.  The latter
$4,500  is  not  correct  and  is  deleted in these financial by restatement  of
financial statements for the year ended July 31, 2004 by a reduction in the paid
in capital initially recorded of $4,500  and  a  reduction  in  mineral property
costs expensed of $4,500.





<PAGE>
AAA ENERGY, INC.
(A Nevada Corporation)
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
July 31, 2006
(Expressed in U.S. Dollars)
________________________________________________________________________


Note 6   Income Taxes

The Company has losses forward for income tax purposes to July 31,  2006.  There
are no current or deferred tax expenses for the period ended July 31,  2006, due
to  the Company's loss position. The Company has fully reserved for any benefits
of these  losses.  The  deferred  tax  consequences  of temporary differences in
reporting items for financial statement and income tax  purposes are recognized,
as appropriate. Realization of the future tax benefits related  to  the deferred
tax  assets  is  dependent  on many factors, including the Company's ability  to
generate taxable income within  the  net  operating  loss  carryforward  period.
Management  has  considered  these  factors in reaching its conclusion as to the
valuation allowance for financial reporting  purposes.  The income tax effect of
temporary  differences  comprising  the  deferred tax assets  and  deferred  tax
liabilities on the accompanying consolidated  balance  sheets is a result of the
following:

                                    July 31,
                                   ----------
                            2006               2005
                        ------------        -----------

 Deferred tax assets       $17,210             $8,696
 Valuation allowance      $(17,210)           $(8,696)
                        ------------        -----------
 Net deferred tax assets      $-                 $-
                        ------------        -----------


A reconciliation between the statutory federal income tax rate and the effective
income rate of income tax expense for the period ended July 31, 2006 and 2005 is
as follows:

<TABLE>
<CAPTION>
                                          2006   2005
<S> <C> <C> <C> <C> <C> <C>   <C> <C>

Statutory federal income tax rate        -0.3%  -0.3%
Valuation allowance                       0.3%   0.3%
Effective income tax rate                 0.0%   0.0%
</TABLE>


The  benefit  of  a  potential  reduction in future income taxes  has  not  been
recorded as an asset at July 31,  2006  as  it  is reduced to nil by a valuation
allowance, due to uncertainty of the application of losses.







<PAGE>
ITEM  8:   CHANGES  IN  AND  DISAGREEMENTS WITH ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE

None.

ITEM 8A:  CONTROLS AND PROCEDURES


EVALUTION OF DISCLOSURE CONTROLS

We evaluated the effectiveness of our disclosure controls and procedures as of
the end of the 2006 fiscal year.  This evaluation was conducted with the
participation of our chief executive officer and our principal accounting
officer.

Disclosure controls are controls and other procedures that are designed to
ensure that information that we are required to disclose in the reports we file
pursuant to the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported.

LIMITATIONS ON THE EFFECTIVE OF CONTROLS

Our management does not expect that our disclosure controls or our internal
controls over financial reporting will prevent all error and fraud.  A control
system, no matter how well conceived and operated, can provide only reasonable,
but no absolute, assurance that the objectives of a control system are met.
Further, any control system reflects limitations on resources, and the benefits
of a control system must be considered relative to its costs.  These limitations
also include the realities that judgments in decision-making can be faulty and
that breakdowns can occur because of simple error or mistake.  Additionally,
controls can be circumvented by the individual acts of some persons, by
collusion of two or more people or by management override of a control.  A
design of a control system is also based upon certain assumptions about
potential future conditions; over time, controls may become inadequate because
of changes in conditions, or the degree of compliance with the policies or
procedures may deteriorate.  Because of the inherent limitations in a cost-
effective control system, misstatements due to error or fraud may occur and may
not be detected.

CONCLUSIONS

Based upon their evaluation of our controls, the chief executive officer and
principal accounting officer have concluded that, subject to the limitations
noted above, the disclosure controls are effective providing reasonable
assurance that material information relating to us is made known to management
on a timely basis during the period when our reports are being prepared.  There
were no changes in our internal controls that occurred during the quarter
covered by this report that have materially affected, or are reasonably likely
to materially affect our internal controls.

PART III

ITEM 9:  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS


Name                  Age      Position with Registrant       Served as a
							      Director or
							      Officer Since

Dr. Earl Abbott       63       President, C.E.O.,             May 26, 2004
			       promoter and director





<PAGE>



Dennis LaPrairie     52        Secretary, Treasurer,          May 26, 2004
                               principal accounting
                               officer, principal
                               financial officer and
                               director

The following describes the business  experience  of the Company's directors and
executive officers, including other directorships held in reporting companies:

DR. EARL ABBOTT has acted as our president, chief executive officer, promoter
and as a director since our incorporation on May 26, 2004.  Dr. Abbott received
his Ph.D. in geology from Rice University in 1972.  He is a member in good
standing of the Society of Mining Engineers of the American Institute of Mining,
Metallurgical and Petroleum Engineers and is a past president of the Nevada
chapter of the American Institute of Professional Geologists, the Geological
Society of Nevada and the Nevada Petroleum Society.  For the past 32 years, Dr.
Abbott has been self-employed as a consulting geologist.  During the past five
years, he has provided his geological consulting services to Tornado Gold
International Corp., Magnus International Resources, Gateway Gold Corporation,
MagmaChem LLC, Atna Resources Ltd., Mill City International Corporation, Mammoth
Gold Ltd., Graymont Western US Inc., Big Bar Gold Corporation, King Midas
Resources (US) Inc., Nucotec Inc., L.E.H. Ventures Ltd., Metallica Resources
Inc., Lightning Dock Geothermal, Duncan Park Holdings Ltd. and Onstream
Resources Inc. He has also acted as president and a director of Big Bar Gold
Corporation, an Alberta and British Columbia reporting company involved in
mineral exploration in China and Mexico, since November 2003.  Since April 2004,
he has also acted as president and a director of Tornado Gold International
Corp., a United States reporting company that is involved in mineral property
exploration.  Dr. Abbott is responsible for managing the day to day affairs of
the company, reviewing all geological data and evaluating and acquiring property
holdings.

Dr. Abbott devotes 25% of his business time to our affairs.

MR. DENNIS LAPRAIRIE has acted as our secretary, treasurer, principal accounting
officer and as a director since our incorporation on May 26, 2004.  In 1977, he
graduated from the University of Nevada (Reno) with a Bachelor of Science degree
in Mining Engineering.  From April 1984 to present, Mr. LaPrairie has acted as
president and owner of LaPrairie Mining Limited.  In this capacity, he has
provided geological project management and consulting services to mineral
exploration and production companies.  From April 1994 to July 2004, he was
employed as a supervisor with the State of Nevada's Division of Environmental
Protection.  In this capacity, he worked as an environmental engineer involved
in permitting, engineering and technical assistance in the solid waste branch.

He also previously acted as a director of Vanadium International Inc. from
August 1998 to November 2001, a United States reporting company involved in the
exploration of mineral properties.  During that time period, Vanadium
International Inc. held property interests in the Bisoni and Gibellini claims
located in Eureka County, Nevada and the Bisoni-McKay claims located in Nye
County, Nevada.  It was not involved in any merger or similar agreement during
this time.

Mr. LaPrairie devotes 10% of his business time to our affairs.

All directors are elected annually by our shareholders and hold office until the
next Annual General Meeting. Each officer holds office at the pleasure of the
board of directors.  No director or officer has any family relationship with






<PAGE>
any other director or officer.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires our executive officers and directors,
and persons who beneficially own more than 10% of our equity securities, to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission. Officers, directors and greater than 10% shareholders are required
by SEC regulation to furnish us with copies of all Section 16(a) forms they
file. Based on our review of the copies of such forms we received, we believe
that during the fiscal year ended December 31, 2003 all such filing requirements
applicable to our officers and directors were complied with exception that
reports were filed late by the following persons:

                                Number		Transactions  Known Failures
                                Of late 	Not Timely    To File a
Name and principal position     Reports 	Reported      Required Form
--------------------------- 	-----------    	------------  ---------------
Dr. Earl Abbott                   0                0		    0
(President and director)
Dennis LaPrairie                  0                0		    0
(Secretary, treasurer and director)

ITEM 10:  EXECUTIVE COMPENSATION

The table below summarizes all compensation awarded to, earned by, or paid to
our executive officers by any person for all services rendered in all capacities
to us for the fiscal year ended July 31, 2006.

<TABLE>
<CAPTION>
<S>              <C>       <C>  <C>    <C>   <C>                       <C>              <C>      <C>         <C>

                           Annual Compensation                         Long Term Compensation
Name (1)         Title     Year Salary Bonus Other Annual Compensation Restricted Stock Options/ LTIP
                                                                       Awarded          SARs (#) payouts ($) All Other
                                                                                                             Compensation
Earl             President 2006 $0     0     0                         0                0        0              0
Abbott
Dennis           Secretary 2006 $0     0     0                         0                0        0              0
LaPrairie        Treasurer
</TABLE>

ITEM 11:   SECURITY  OWNERSHIP  OF  CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

The following table sets forth information regarding the beneficial ownership of
our shares of common stock at October 27, 2006 by (i) each person known by us to
be the beneficial owner of more than  5%  of  our  outstanding  shares of common
stock, (ii) each of our directors, (iii) our executive officers, and (iv) by all
of our directors and executive officers as a group.  Each person  named  in  the
table,  has sole voting and investment power with respect to all shares shown as
beneficially  owned  by such person and can be contacted at our executive office
address.





<PAGE>

TITLE OF      NAME AND ADDRESS                  BENEFICIAL     PERCENT
CLASS         OF BENEFICIAL OWNER               OWNERSHIP      OF CLASS

COMMON         Dr. Earl Abbott                  9,000,000       26.26%
STOCK          President, Chief
               Executive Officer
               and Director
               3841 Amador Way
               Reno, Nevada 89502

COMMON         Dennis LaPrairie                 9,000,000       26.26%
STOCK          Secretary, Treasurer
               Principal Accounting Officer
               and Director
               1855 Hunter Lake Drive
               Reno, Nevada 89509

COMMON         Albert Au                           Nil           0.00%
STOCK          Director
               6250 King's Lynn Street
               Vancouver, BC

COMMON         All Officers and Directors       18,000,000      52.52%
STOCK          as a Group that consists of        shares
               three people

The percent of class is based on 34,272,000 shares of common stock issued and
outstanding as of the date of this annual report.

ITEM 12:  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

None of our directors or officers, nor any proposed nominee for election as a
director, nor any person who beneficially owns, directly or indirectly, shares
carrying more than 10% of the voting rights attached to all of our outstanding
shares, nor any promoter, nor any relative or spouse of any of the foregoing
persons has any material interest, direct or indirect, in any transaction since
our incorporation or in any presently proposed transaction which, in either
case, has or will materially affect us.

Our management is involved in other business activities and may, in the future
become involved in other business opportunities. If a specific business
opportunity becomes available, such persons may face a conflict in selecting
between our business and their other business interests.  In the event that a
conflict of interest arises at a meeting of our directors, a director who has
such a conflict will disclose his interest in a proposed transaction and will
abstain from voting for or against the approval of such transaction.

ITEM 13:  EXHIBITS AND REPORTS

Exhibits

  3.1*            Articles of Incorporation
  3.2*            Bylaws
  5.1*            Legal opinion of Warren J. Soloski, with consent to use
 31.1             Certification pursuant to Rule 13a-14(a) under the






<PAGE>
                  Securities Exchange Act of 1934
 31.2             Certification pursuant to Rule 13a-14(a) under the
                  Securities Exchange Act of 1934
 32.1             Certification pursuant to 18 U.S.C. Section 1350, as
                  adopted pursuant to Section 906 of the Sarbanes-Oxley Act
                  of 2002
 32.2             Certification pursuant to 18 U.S.C. Section 1350, as
                  adopted pursuant to Section 906 of the Sarbanes-Oxley Act
                  of 2002
 99.1**           BA Property Location Map

 *  filed as an exhibit to our registration statement on Form SB-2
    dated October 20, 2004

 ** filed as an exhibit to our registration statement on Form SB-2
    dated December 10, 2004

Reports on Form 8-K

During and subsequent to the last quarter of fiscal 2006, we filed the following
current reports on Form 8-K:

   1.  On July 19, 2006, we announced that we had issued 200,000 pre-split units
       of our common stock for total proceeds of $60,000.

   2.  On August 1, 2006, we announced that Albert Au was appointed as a
       director of the company.

   3.  On August 14, 2006, we announced that we had engaged Dale Matheson Carr-
       Hilton LaBonte, Chartered Accountants as our new independent accountant,
       in place of Moen & Company, Chartered Accountants.

ITEM 14:  PRINCIPAL ACCOUNTANT FEES AND SERVICES

Our principal accountants, Moen & Company, Chartered Accountants, rendered
invoices to us during the fiscal periods indicated for the following fees and
services:



                                         Fiscal year ended   Fiscal year ended
                                          July 31, 2005        July 31, 2006

Audit fees                                    $5,000               $5,000
Audit-related fees                             Nil                  Nil
Tax fees                                       Nil                  Nil
All other fees                                 Nil                  Nil

Audit fees consist of fees related to professional services rendered in
connection with the audit of our annual financial statements, the review of the
financial statements included in each of our quarterly reports on Form 10-QSB.

Our policy is to pre-approve all audit and permissible non-audit services
performed by the independent accountants.  These services may include audit
services, audit-related services, tax services and other services.  Under our
audit committee's policy, pre-approval is generally provided for particular
services or categories of services, including planned services, project based
services and routine consultations.  In addition, we may also pre-approve
particular services on a case-by-case basis.  We approved all services






<PAGE>
that our independent accountants provided to us in the past two fiscal years.

SIGNATURES

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

AAA Energy, Inc.


By     /s/ Earl Abbott
       Dr. Earl Abbott
       President, CEO & Director
       Date: October 27, 2006

In  accordance  with the Securities Exchange Act, this report  has  been  signed
below by the following persons on behalf of the registrant and in the capacities
and on the dates indicated.



By     /s/ Earl Abbott____________
       Earl Abbott
       President, CEO & Director
       Date: October 27, 2006


By     /s/ Dennis LaPrairie___________
       Dennis LaPrairie
       Secretary and Director
       Date: October 27, 2006