UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-QSB

(X)   QUARTERLY  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
      EXCHANGE ACT OF 1934

                For the quarterly period ended October 31, 2005

                                       OR

(_)   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: 0-27659

                          CANWEST PETROLEUM CORPORATION
        (Exact name of small business issuer as specified in its charter)


         Colorado                                            98-0461154
-------------------------------                          -------------------
(State or other jurisdiction of                          (I.R.S. Employer
incorporation or organization)                           Identification No.)


        206-475 Howe Street, Vancouver, British Columbia, Canada V6C 2B3
        ----------------------------------------------------------------
                    (Address of principal executive offices)

                                 (604) 685-8355
                           ---------------------------
                           (Issuer's telephone number)

                           ---------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)

Check  whether  the  registrant  (1) filed all  reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter  period that the  registrant  was required to file such reports) and (2)
has been subject to such filing requirements for the past 90 days.
YES |X| NO |_|

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). YES |_| NO |X|

The number of shares outstanding of the issuer's classes of common equity, as of
December 13, 2005 was 99,564,394 shares of Common Stock.

Transitional Small Business Disclosure Format (check one): YES |_| NO |X|


<PAGE>

                          CANWEST PETROLEUM CORPORAITON
                                      Index

                                                                            Page

PART I. FINANCIAL INFORMATION

      Item 1. Financial Statements of CanWest Petroleum Corporation           1

            Consolidated Balance Sheets (U.S. Dollars) as at October
            31, 2005 (UNAUDITED) and April 30, 2005                           2

            Consolidated Statements of Operations (U.S. Dollars) for
            the six months ended October 31, 2005 and 2004 (UNAUDITED)        3

            Consolidated Statements of Stockholders' Equity
            (Deficiency) (U.S. Dollars) for the six months ended
            October 31, 2005 (UNAUDITED) and the year ended April 30,
            2005                                                              4

            Consolidated Statements of Cash Flows for the six months
            ended October 31, 2005 and 2004 (UNAUDITED)                       5

            Notes to Consolidated Financial Statements for the six
            months ended October 31, 2005 (UNAUDITED)                         6

      Item 2. Management's Discussion and Analysis of Financial
            Conditions and Plans of Operations                               24

      Item 3. Controls and Procedures                                        29

PART II. OTHER INFORMATION                                                   30

      Item 1. Legal Proceedings                                              30
      Item 2. Recent Sales of Unregistered Securities                        30
      Item 4.  Submission of Matters to Vote of Security Holders             30
      Item 6. Exhibits                                                       30

      Signatures                                                             31


<PAGE>

                          CANWEST PETROLEUM CORPORATION
                      (Formerly Uranium Power Corporation)
                         (An Exploration Stage Company)
                        Consolidated Financial Statements
                    For The Six Months Ended October 31, 2005
                      (Unaudited - Prepared by Management)
                                 (U.S. Dollars)



<PAGE>

                          CANWEST PETROLEUM CORPORATION
                         (An Exploration Stage Company)
                   Consolidated Balance Sheets (U.S. Dollars)

<TABLE>
<CAPTION>
                                                                               October 31,       April 30,
                                                                                   2005             2005
                          ASSETS                                               (UNAUDITED)       (AUDITED)
                                                                               ------------    ------------
<S>                                                                            <C>             <C>
Current

  Cash                                                                         $  8,344,176    $  1,022,175
  Accounts Receivable                                                                33,420          20,327
  Exploration Advances and Deposits                                                 122,937         167,283
  Prepaid expenses                                                                  430,000              --
                                                                               ------------    ------------
                                                                                  8,930,533       1,209,785
Properties (note 4)                                                               7,497,428       5,773,464
Earth Energy License Agreement (note 10)                                                  1               1
Investment in Energy 51 Inc. (note 13)                                              310,291         310,291
Investment in Uranium Holdings Corporation (note 4b)                                    815             815
                                                                               ------------    ------------
                                                                               $ 16,739,068    $  7,294,356
                                                                               ============    ============
                                  LIABILITIES

Current
  Accounts Payable (notes 2 and 9)                                             $  1,139,433    $  2,029,734
  Convertible Debentures (note 12)                                                4,644,153         876,073
  Due to Related Parties (note 8)                                                    58,062          69,689
                                                                               ------------    ------------
                                                                                  5,841,648       2,975,496
Future Income taxes (Note 15)                                                        36,574         142,594
Non-controlling shareholder interest (Note 4(d))                                  3,936,114         448,224
                                                                               ------------    ------------
                                                                                  9,814,336       3,566,314
                                                                               ------------    ------------

Commitments and contingencies (notes 2, 4, 5, 6, 7, 9, 11, 12,14,15, and 16)

                              STOCKHOLDERS' EQUITY

Capital Stock

Authorized
  250,000,000 Common stock with a par value of $0.001 each (note 5)
  10,000,000 Preferred stock with a par value of $0.001 each
Issued
  78,302,392 Common stock (note 5)                                                   78,302
  58,408,661 Common stock                                                                            58,409
Treasury Stock                                                                          (23)            (23)
Additional Paid-in Capital                                                       25,694,483      13,835,455
Deficit Accumulated During Exploration Stage                                    (18,766,236)     (9,999,965)
Other Comprehensive Loss                                                            (81,794)       (165,834)
                                                                               ------------    ------------
                                                                                  6,924,732       3,728,042
                                                                               ------------    ------------
                                                                               $ 16,739,068    $  7,294,356
                                                                               ============    ============
</TABLE>

                 See Notes to Consolidated Financial Statements


                                       2
<PAGE>

                          CANWEST PETROLEUM CORPORATION
                      (Formerly Uranium Power Corporation)
                         (An Exploration Stage Company)
              Consolidated Statements of Operations (U.S. Dollars)
                      (Unaudited - Prepared by Management)

<TABLE>
<CAPTION>
                                                                                                           From
                                                                                                       inception on
                                                                                                       April 3, 1998
                                            Three Months Ended               Six Months Ended             through
                                               October 31,                      October 31,             October 31,
                                           2005            2004            2005            2004             2005
                                       ------------    ------------    ------------    ------------    -------------
<S>                                    <C>             <C>             <C>             <C>             <C>
Expenditures
   Non-cash financing expenses         $  3,871,450    $  1,211,421    $  5,686,009    $  1,211,421    $   8,110,164
   Consulting                             1,147,371         740,606       1,966,647         973,845        4,277,003
   Exploration costs                        709,618          30,621       1,072,033         200,875        2,896,994
   Advertising and Promotion                357,196          47,207         625,257         115,940        1,499,187
   Professional Fees                        100,278          82,249         187,899         149,435          909,804
   Interest and Bank Charges                140,667          42,185         157,399          97,853          326,018
   Office                                    41,407          12,334          76,653          20,502          183,370
   Transfer Agent Fees                       44,169          16,049          55,190          23,883          134,449
   Travel                                    24,657           8,034          37,242          14,105          188,376
   Rent                                      15,177           8,494          29,582          12,570          105,501
   Management Fee                           (18,000)         18,000              --          36,000          414,602
   Equity loss from investment                   --              --              --              --           19,713
   Incorporation cost written off                --              --              --              --              700
   Write down of licence                         --              --              --              --          106,507
   Write-off of Exploration Property             --              --              --              --          856,359
                                       ------------    ------------    ------------    ------------    -------------
                                          6,433,990       2,217,200       9,893,911       2,856,429       20,028,747
Other items
   Recovery of exploration costs           (736,782)             --        (736,782)             --         (736,782)
   Interest Income                          (50,739)             --         (50,739)             --          (50,739)
                                       ------------    ------------    ------------    ------------    -------------
Net loss before income tax expense
  (recovery) and minority interest        5,646,469       2,217,200       9,106,390       2,856,429       19,241,226
Income tax expense (recovery)                23,181              --           5,700              --          (33,685)
                                       ------------    ------------    ------------    ------------    -------------
Net loss before minority interest         5,669,650       2,217,200       9,112,090       2,856,429       19,207,541
Minority interest                          (107,086)             --        (345,819)             --         (441,305)
                                       ------------    ------------    ------------    ------------    -------------
Net Loss for period                    $  5,562,564    $  2,217,200    $  8,766,271    $  2,856,429    $  18,766,236
                                       ============    ============    ============    ============    =============
Net Loss Per Share                     $      (0.08)   $      (0.08)   $      (0.14)   $      (0.12)
                                       ============    ============    ============    ============

Weighted Average Number of shares
  Outstanding                            69,140,286      26,678,698      64,746,753      23,791,006
                                       ============    ============    ============    ============
</TABLE>

                 See Notes to Consolidated Financial Statements


                                       3
<PAGE>

                          CANWEST PETROLEUM CORPORATION
                         (An Exploration Stage Company)
   Consolidated Statements of Stockholders' Equity (Deficiency) (U.S. Dollars)
              For the Six Months Ended October 31, 2005 (unaudited)
                          and Year Ended April 30, 2005

<TABLE>
<CAPTION>
                                                                                                                         Deficit
                                                                                                                       Accumulated
                                                                                       Additional         Other         During the
                                         Common Stock           Treasury Stock          Paid-in       Comprehensive    Exploration
                                      Shares     par Value   Shares     Par Value       Capital       income (loss)       Stage
                                    ----------   ---------   -------    ----------    ------------    -------------    ------------
<S>                                 <C>          <C>         <C>        <C>           <C>             <C>              <C>
Balance. April 30, 2004             20,784,838   $  20,785   (23,000)   $      (23)   $  2,955,768    $    (112,564)   $ (4,890,892)
Common stock issued for:
  Settlement of debt                16,607,161      16,607        --            --       3,752,292               --              --
  Cash                               3,801,972       3,802        --            --         998,555               --              --
  Services                           4,436,566       4,437        --            --       1,245,290               --              --
  Property                          12,778,124      12,778        --            --       2,855,441               --              --
Stock option compensation expense           --          --        --            --          68,552               --              --
Beneficial conversion feature of
  convertible debentures                    --          --        --            --       1,959,557               --              --
Other comprehensive (loss)                  --          --        --            --              --          (53,270)             --
Net loss                                    --          --        --            --              --               --      (5,109,073)
                                    ----------   ---------   -------    ----------    ------------    -------------    ------------
Balance. April 30, 2005             58,408,661      58,409   (23,000)          (23)     13,835,455         (165,834)     (9,999,965)
Common stock issued for:
  Settlement of debt                 3,626,712       3,627        --            --       1,659,573               --              --
  Cash                               4,429,583       4,429        --            --       1,914,974               --              --
  Cashless exercise of warrants      5,720,026       5,720        --            --          (5,720)              --              --
  Services                           6,117,410       6,117        --            --       1,766,087               --              --
Stock option compensation expense           --          --        --            --       1,072,056               --              --
Beneficial conversion feature of
  convertible debentures and
  warrants                                  --          --        --            --       5,452,058               --              --
Other comprehensive income                  --          --        --            --              --           84,040              --
Net loss                                    --          --        --            --              --               --      (8,766,271)
                                    ----------   ---------   -------    ----------    ------------    -------------    ------------
Balance. October 31, 2005           78,302,392   $  78,302   (23,000)   $      (23)   $ 25,694,483    $     (81,794)   $(18,766,236)
                                    ==========   =========   =======    ==========    ============    =============    ============
<CAPTION>

                                       Total
                                    Stockholders
                                       Equity
                                    (Deficiency)
                                    ------------
<S>                                 <C>
Balance. April 30, 2004             $ (2,026,926)
Common stock issued for:
  Settlement of debt                   3,768,899
  Cash                                 1,002,357
  Services                             1,249,727
  Property                             2,868,219
Stock option compensation expense         68,552
Beneficial conversion feature of
  convertible debentures               1,959,557
Other comprehensive (loss)               (53,270)
Net loss                              (5,109,073)
                                    ------------
Balance. April 30, 2005                3,728,042
Common stock issued for:
  Settlement of debt                   1,663,200
  Cash                                 1,919,403
  Cashless exercise of warrants               --
  Services                             1,772,204
Stock option compensation expense      1,072,056
Beneficial conversion feature of
  convertible debentures and
  warrants                             5,452,058
Other comprehensive income                84,040
Net loss                              (8,766,271)
                                    ------------
Balance. October 31, 2005           $  6,924,732
                                    ============
</TABLE>

                 See Notes to Consolidated Financial Statements


                                       4
<PAGE>

                          CANWEST PETROLEUM CORPORATION
                         (An Exploration Stage Company)
              Consolidated Statements of Cash Flows (U.S. Dollars)
                      (Unaudited - Prepared by Management)

<TABLE>
<CAPTION>
                                                For the Six Months Ended      on April 3, 1998
                                                       October 31,             to October 31,
                                                  2005            2004              2005
                                              ------------    ------------    ----------------
<S>                                           <C>             <C>             <C>
Operating Activities
Net loss                                      $ (8,766,271)   $ (2,856,429)   $    (18,766,236)
Adjustments to reconcile net
  loss to net cash used operating activites

  Stock option compensation expenses             1,072,056              --           1,383,672
  Consulting expenses acquired for shares          791,568         725,860           2,209,568
  Exploration costs acquired for shares            316,685          12,000             542,683
  Recovery of exploration costs                   (736,782)             --            (736,782)
  Equity loss from investment                           --              --              19,713
  Non cash financing expense                     5,686,009       1,211,421           8,110,164
  Write-down of exploration property                    --              --             856,359
  Write-down of licence                                 --              --             106,507
  Income tax expense (recovery)                      5,700              --             (33,685)
  Minority interest                               (345,819)             --            (441,305)
Changes in Non-cash Working Capital
  Accounts Recievable                               31,253        (166,941)           (156,357)
  Accounts Payable                                 296,521         299,322           2,840,900
                                              ------------    ------------    ----------------
                                                (1,649,080)       (774,767)         (4,064,799)
                                              ------------    ------------    ----------------
Investing Activity
  Earth Energy Licence                                  --              --            (106,508)
  Propertyacquisitions                          (1,723,964)     (1,092,280)         (5,176,953)
  Investment in Energy 51 Inc.                          --         (75,818)           (310,291)
                                              ------------    ------------    ----------------
                                                (1,723,964)     (1,168,098)         (5,593,752)
                                              ------------    ------------    ----------------
Financing Activities
  Issuance of shares for cash                    1,919,403          40,000           4,327,796
  Convertible debentures                         5,065,280       1,597,036           8,589,403
  Common stock returned to treasury                     --              --             (15,212)
  Advances from related parties                    (11,627)        (38,526)            653,062
  Future income taxes                             (111,720)             --              70,259
  Non-controling minority interest               3,833,709              --           4,377,419
                                              ------------    ------------    ----------------
                                                10,695,045       1,598,510          18,002,727
                                              ------------    ------------    ----------------
Inflow (Outflow) of Cash                         7,322,001        (344,355)          8,344,176
Cash, Beginning of period                        1,022,175         348,636                  --
                                              ------------    ------------    ----------------
Cash, End of Period                           $  8,344,176    $      4,281    $      8,344,176
                                              ============    ============    ================
Non-Cash Financing Activitites
  Common stock deemed to be issued
    for resource properties                   $         --    $     19,000    $      3,336,998
                                              ============    ============    ================
  Warrants granted on purchase of
    resource properties                       $         --    $         --    $         50,000
                                              ============    ============    ================
  Common stock issued for services            $  1,772,204    $    737,860    $      3,303,871
                                              ============    ============    ================
  Common stock issued for debt                $  1,663,200    $  1,943,186    $      5,432,099
                                              ============    ============    ================
</TABLE>

                 See Notes to Consolidated Financial Statements


                                       5
<PAGE>

                          CANWEST PETROLEUM CORPORATION
                         (An Exploration Stage Company)
            Notes to Consolidated Financial Statements (U.S. Dollars)
                    For the Six Months Ended October 31, 2005
                      (Unaudited - Prepared by Management)

1.    BASIS OF PRESENTATION

      These unaudited  consolidated  financial  statements have been prepared in
      accordance  with generally  accepted  accounting  principles in the United
      States of America  for  interim  financial  information.  These  financial
      statements are condensed and do not include all  disclosures  required for
      annual financial statements. The organization and business of the Company,
      accounting  policies  followed by the Company  and other  information  are
      contained in the notes to the  Company's  audited  consolidated  financial
      statements filed as part of the Company's April 30, 2005 Form 10KSB.

      In the opinion of the Company's management,  these consolidated  financial
      statements  reflect  all  adjustments  necessary  to  present  fairly  the
      Company's  financial  position  at October 31, 2005 and April 30, 2005 and
      the results of  operations  and the  statement of cash flows for the three
      and six months ended October 31, 2005.  The results of operations  for the
      six months ended  October 31, 2005 are not  necessarily  indicative of the
      results to be expected for the entire fiscal year.

      These  consolidated  financial  statements  include  the  accounts  of the
      Company, formerly called Uranium Power Corporation, and the following:

            -     its wholly owned subsidiary,  Anhydride  Petroleum (USA), Inc.
                  ("Anhydride  USA") and Anhydride USA's wholly owned subsidiary
                  Anhydride Petroleum (Canada) Inc. ("Anhydride  Canada"),  both
                  acquired April 30, 2002, until October 31, 2005 when Anhydride
                  Canada was sold to a third party for nominal cash proceeds. As
                  a result of the  disposal  of  Anhydride  Canada  the  Company
                  recorded  a  $736,782   recovery   of   exploration   expenses
                  pertaining to accounts payable of Anhydride Canada;

            -     Oilsands  Quest  Inc.  ("OQI")  in which the  Company  holds a
                  54.55% interest (note 4(d));

            -     Western  Petrochemicals  Corp.  ("Western  Petrochemicals") in
                  which the Company holds a 97.53% interest (note 4(c)); and

            -     Township Petroleum Corporation ("Township"), which the Company
                  holds a 100% interest.

      All intercompany transactions have been eliminated.


                                       6
<PAGE>

                          CANWEST PETROLEUM CORPORATION
                         (An Exploration Stage Company)
            Notes to Consolidated Financial Statements (U.S. Dollars)
                    For the Six Months Ended October 31, 2005
                      (Unaudited - Prepared by Management)

2.    GOING CONCERN

      These   financial   statements  have  been  prepared  in  accordance  with
      accounting  principles  generally accepted in the United States of America
      on a going-concern basis. This presumes funds will be available to finance
      on-going   development,   operations  and  capital  expenditures  and  the
      realization  of assets and the payment of liabilities in the normal course
      of operations  for the  foreseeable  future.  Management  intends to raise
      additional  capital  through  share  issuances to finance  operations  and
      invest in other business opportunities.

      These  financial  statements do not give effect to any  adjustments to the
      amounts  and  classification  of assets and  liabilities,  which  might be
      necessary should the Company be unable to continue as a going concern.

3.    LOSS PER SHARE

      Net loss per share computations is based on the weighted average number of
      shares  outstanding  during the period.  Common stock equivalents have not
      been included as their effects are anti-dilutive.

4.    PROPERTIES

<TABLE>
<CAPTION>
                           Hocking Lake and
                             Henday Lake       Pasquia Hills,      Firebag, Sask.       Eagles Nest,
                              Properties      Oil Shale Project   Tar Sands Project   Tar Sands Project
                             (note 4(a))         (note 4(c))         (note 4(d))         (note 4(e))        Total
                           ----------------   -----------------   -----------------   -----------------   ----------
<S>                        <C>                <C>                 <C>                 <C>                 <C>
Balance April 30, 2004     $              1   $         118,455   $              --   $              --   $  118,456
Acquisition of property                  --           3,294,237           2,360,771                  --    5,655,008
                           ----------------   -----------------   -----------------   -----------------   ----------
Balance April 30, 2005                    1           3,412,692           2,360,771                  --    5,773,464
Acquisition of property                  --              50,171             819,174             854,619    1,723,964
                           ----------------   -----------------   -----------------   -----------------   ----------
Balance October 31, 2005   $              1   $       3,462,863   $       3,179,945   $         854,619   $7,497,428
                           ================   =================   =================   =================   ==========
</TABLE>


                                       7
<PAGE>

                          CANWEST PETROLEUM CORPORATION
                         (An Exploration Stage Company)
            Notes to Consolidated Financial Statements (U.S. Dollars)
                    For the Six Months Ended October 31, 2005
                      (Unaudited - Prepared by Management)

4.    PROPERTIES (continued)

      (a)   Hocking Lake Property and Henday Lake Property

      By agreement dated April 13, 1998, the Company  acquired all the assets of
      Athabasca Uranium  Syndicate (a British Columbia,  Canada syndicate) which
      consisted of cash and the Hocking Lake Property and Henday Lake  Property.
      These  properties were acquired in 1997 by the syndicate for $59,459 being
      the  sellers'   historical  cost  as  the  sellers  were  the  controlling
      stockholders.

      Consideration  given to the members of the syndicate was 6,000,000  common
      stock of the Company at a par value of $0.001 each. The cost of the assets
      acquired totalled $97,834.

      The Henday Lake Property was transferred to Uranium  Holdings  Corporation
      in December 2000 (note 4(b)).  As of April 30, 2002 all claims  related to
      the Hocking Lake Property had lapsed.

      (b)   Uranium Holdings Corporation

      Pursuant  to a letter of  intent  dated  December  1, 2000 with one of its
      stockholders,  the Company  transferred  all its rights to the Henday Lake
      Property to a newly formed company,  Uranium Holdings Corporation ("UHC"),
      a Nevada  Corporation,  in exchange for $131,183 to be spent on the Henday
      Lake Property and 20% of the equity of UHC.

      The Company will continue to hold a 20% interest in the claims transferred
      to UHC regardless of the equity issued  subsequent to the incorporation of
      UHC.  The Company  shall have a carried  interest in the claims until such
      time as a total of $163,334 has been expended on the property.  Subsequent
      to such expenditure,  the Company shall retain the right to participate on
      the same  basis as the  investors  in  future  expenditure  programs  on a
      pro-rata basis.  Should the Company not provide the requested funds within
      30 days of written demand,  the Company's 20% interest shall be reduced in
      such manner as may  reasonably  be negotiated  between the parties.  As of
      April 30, 2005, $496,619 (2004 - $475,584) had been spent on the property.
      During the year ended April 30, 2005, the Company  expended $4,207 (2004 -
      $59,525) to maintain its 20% interest in the claims.  Subsequent  to April
      30,  2005 the  Company has not been called to expend any money to maintain
      its interest.


                                       8
<PAGE>

                          CANWEST PETROLEUM CORPORATION
                         (An Exploration Stage Company)
            Notes to Consolidated Financial Statements (U.S. Dollars)
                    For the Six Months Ended October 31, 2005
                      (Unaudited - Prepared by Management)

4.    PROPERTIES (continued)

      (c)   Pasquia Hills, Oil Shale Project

      During the year ended April 30,  2004,  the Company  acquired the right to
      acquire  a 60%  joint  venture  interest  in the  Pasquia  Hills oil shale
      project, covering approximately 700,000 acres located in the Pasquia Hills
      area  of  Saskatchewan,  from  Western  Petrochemicals.  Pursuant  to  the
      agreement   the   Company  has  made  a  payment  of  $26,090  to  Western
      Petrochemicals and has paid certain other costs on Western  Petrochemicals
      behalf which have been included in property acquisition costs. The Company
      also acquired the rights to a farm-in  agreement on the Pasquia Hills land
      from a non-related  company for 92,000 shares of common stock, with a cost
      of $36,114, and a cash payment of $29,923.

      On April 21, 2005 the Company issued 10,728,124 common shares for a 97.53%
      interest in Western  Petrochemicals  Corp., which holds the permits to the
      Pasquia  Hills,  Oil Shale  Project.  At the time the shares  were  issued
      Western  Petrochemicals  liabilities  exceeded  its assets by $926,200 and
      this along with  $2,209,219 for the common shares issued has been recorded
      as Pasquia Hills property acquisition costs.

      (d)   Firebag, Sask., Tar Sands Project

      During the year ended April 30, 2005 the Company  acquired a 49%  interest
      in the Firebag,  Saskatchewan  prospect  that covers  approximately  2,000
      square miles in northwestern  Saskatchewan  along the Alberta border.  The
      prospective  lands host Fort  McMurray  and Wabiskaw  Palo  channel  zones
      containing Athabasca Oil Sands. This interest was acquired for $769,125 in
      cash, 50,000 common shares with a deemed value of $19,000 and a 2.5% gross
      overriding royalty.

      The Company had another  agreement to purchase the  remaining 51% interest
      through the indirect purchase of 100% of the issued and outstanding shares
      of American Oilsands Company Inc., a private Alberta, Canada, company, for
      $1,202,131 plus 2 million common shares and $0.11 per barrel in royalties.
      Included  in  property  costs  for  the  year  ended  April  30,  2005  is
      non-refundable  payment of $437,962  that the Company  made  towards  this
      purchase  and  $640,000  related to the  issuance of the 2 million  common
      shares by the Company.

      The 49%  interest  in the  Firebag  Saskatchewan  prospect  is held by the
      Company's subsidiary OQI. The Company,  acquired OQI on September 24, 2004
      and held all 100 of the issued and outstanding shares. In order to finance
      the purchase  OQI  borrowed  $849,545 ($1 million CDN) from the Company by
      way of a  convertible  note.  This  convertible  note is due September 29,
      2008, bears interest at 3% and is convertible into common shares of OQI at
      $1.06 ($1.30 CND) per share.


                                       9
<PAGE>

                          CANWEST PETROLEUM CORPORATION
                         (An Exploration Stage Company)
            Notes to Consolidated Financial Statements (U.S. Dollars)
                    For the Six Months Ended October 31, 2005
                      (Unaudited - Prepared by Management)

4.    PROPERTIES (continued)

      (d)   Firebag, Sask., Tar Sands Project (continued)

      In order to secure  management,  raise  funds for the  exploration  of the
      project and the payment  required for the remaining 51% of the project OQI
      issued 3 million OQI shares to OQI  management and 6,999,900 OQI shares to
      the Company all at $.001 per share.

      Additional  private placements by OQI during the year ended April 30, 2005
      were as follows:

      -  Raised  by way of a  private  placement  $166,852  through  the sale of
      420,000 common shares;

      -  OQI  issued  315,000  common  shares,  pursuant  to  which  income  tax
      deductions  pertaining to exploration  equal to the proceeds are claimable
      by the investors  ("Flow-through Common Shares"), for proceeds of $500,556
      and 5,875  warrants  to finders in  relation  to the sale of these  shares
      whereby  each  warrant  may be  converted  into one common  share at $1.70
      ($2.00 CND) until June 30, 2006; and

      - OQI issued 15,000 common  shares and 37,500  Flow-through  Common Shares
      for cash  proceeds of $78,659.  OQI also issued 375 warrants to finders in
      relation to the sale of these shares whereby each warrant may be converted
      into one common share at $1.36  ($1.60 CND) until  October 1, 2006 and 625
      warrants to finders in relation to the sale of these  shares  whereby each
      warrant may be converted  into one common share at $1.70 ($2.00 CND) until
      October 1, 2006.

      OQI  also  issued  $934,500  ($1,100,000  CDN)  3%  unsecured  convertible
      debentures  which  mature as to $254,864  ($300,000  CDN) on February  28,
      2008,  $84,955 ($100,000 CDN) on April 1, 2008 and $594,682 ($700,000 CDN)
      on April 15, 2008. The notes are convertible  into common shares of OQI at
      a rate of $1.06 ($1.25 CDN) for one year following their issuance and then
      at $1.36 ($1.60 CND) per share until  maturity.  In conjunction  with this
      offering OQI also issued 343,750  warrants to purchase that same number of
      common  shares at a price of $1.36 ($1.60 CND) until the earlier of i) the
      Company being listed for trading on a recognized stock exchange or ii) the
      maturity date.

      In  conjunction  with the above noted  convertible  debentures and warrant
      issuances the Company incurred $404,812 in non-cash financing expense.


                                       10
<PAGE>

                          CANWEST PETROLEUM CORPORATION
                         (An Exploration Stage Company)
            Notes to Consolidated Financial Statements (U.S. Dollars)
                    For the Six Months Ended October 31, 2005
                      (Unaudited - Prepared by Management)

4.    PROPERTIES (continued)

      (d)   Firebag, Sask., Tar Sands Project (continued)

      OQI issued 300,000  options to acquire that same number of shares at $0.42
      ($0.50 CND) until  November 12, 2009,  subject to a vesting  period of one
      year.  During the six  months  ended  October  31,  2005  100,000 of these
      options  expired and were cancelled and 100,000 new options were issued at
      $2.55 ($3.00 CND) exercisable until August 15, 2010,  subject to a vesting
      period  of one  year.  Included  in  consulting  expense  is stock  option
      compensation expense of $58,539 related to these options.

      From the proceeds of the share  issuances and  convertible  debentures OQI
      made non-refundable  property payments of $406,629 towards the purchase of
      the remaining  51% of the project  leaving a commitment to pay $357,540 as
      at April 30, 2005.

      OQI reached  agreement  with its  President  and Chief  Financial  Officer
      whereby,  subject to certain conditions,  they each have agreed to provide
      their  services to OQI in return for $71,362  ($84,000 CND) per year until
      certain business targets are met and thereafter at $148,670 ($175,000 CND)
      per year.  These  conditions  were met during the six months ended October
      31, 2005.  These agreements also contain  termination  clauses whereby OQI
      has agreed to pay the officers,  subject to certain conditions,  an amount
      of up to one and one-half times their annual pay should they be terminated
      for reasons other than cause.

      The Company has the right of first offer on future financings.

      As  at  April  30,  2005  the  Company  held   7,000,000   common  shares,
      representing  64.89% of the  issued  and  outstanding  shares of OQI.  The
      non-controlling  shareholders 35.11% interest in OQI represented  $448,224
      of its net assets.

      During the six months ended  October 31, 2005,  OQI completed the purchase
      of the remaining 51% interest in the property by paying $357,540.  OQI now
      has a 100% interest in the property, subject to the above noted royalties.

      During  the six months  ended  October  31,  2005,  OQI  issued  1,524,875
      Flow-through Common Shares and 767,628 units under a private placement for
      gross proceeds of $3,490,464.  Each unit consisted of one common share and
      warrant  entitling  the holder to acquire one common share at $1.70 ($2.00
      CND).  These  warrants  expire as to 717,628  warrants on May 31, 2007 and
      50,000  warrants on June 15, 2007. In conjunction  with this financing OQI
      also issued  agents  warrants  whereby the agent may acquire up to 146,475
      common shares and 14,000 common shares both at $1.49 ($1.75 CND) until May
      31, 2008 and June 15, 2008  respectively  and  146,475  common  shares and
      14,000 common shares both at $1.70 ($2.00 CND) until May 31, 2008 and June
      15, 2008 respectively. The Company has recorded a non-cash financing


                                       11
<PAGE>

                          CANWEST PETROLEUM CORPORATION
                         (An Exploration Stage Company)
            Notes to Consolidated Financial Statements (U.S. Dollars)
                    For the Six Months Ended October 31, 2005
                      (Unaudited - Prepared by Management)

4.    PROPERTIES (continued)

      (d)   Firebag, Sask., Tar Sands Project (continued)

      expense of $124,001 relating to these warrants.

      Also during the six months ended October 31, 2005,  the Company  agreed to
      convert  the  non-refundable  payment of $437,962  that the  Company  made
      towards the  purchase of the 51%  interest in the  property  into  297,688
      common shares and a warrant to acquire up to an additional  647,688 common
      shares at $1.70  ($2.00 CND) until June 13,  2007.  As at October 31, 2005
      the Company  held  7,297,688  common  shares,  representing  54.55% of the
      issued and  outstanding  shares of OQI. The  non-controlling  shareholders
      45.45% interest in OQI represented $3,936,114 of its net assets.

      Subsequent to October 31, 2005 the Company  converted its convertible note
      in OQI  into  788,769  common  shares  increasing  its  holding  in OQI to
      8,086,457 common shares  representing 57.49% of the issued and outstanding
      shares of OQI.

      Also  subsequent to October 31, 2005 the Company  entered into a financing
      agreement with OQI whereby it may purchase up to $12,743,182  ($15 million
      CND) units prior to January 31,  2006.  Each unit is to be priced at $5.10
      ($6  CND) and will  consist  of one  common  share on one  share  purchase
      warrant.  Every two share  purchase  warrants  will entitle the Company to
      purchase an additional common share at $8.50 ($10 CND) for a period ending
      nine months from the closing date.  Pursuant to this agreement the Company
      has committed to financing OQI as to a minimum of $2,123,864 ($2.5 million
      CND) on or before  January 31, 2006 through the purchase of these units or
      by way of exercising existing securities.

      (e)   Eagles Nest, Tar Sands Project

      The  Company   entered  into  an  agreement   with  three  third   parties
      (collectively  the Triple 7 Joint Venture) to post,  acquire,  develop and
      produce oil sands  deposits  located in the  Athabasca  Region of Alberta,
      Canada (the Triple 7 Joint Venture Agreement) whereby in consideration for
      the expertise and industry  experience  provided by Triple 7 Joint Venture
      the  Company  has  agreed  to pay  the  Triple  7 Joint  Venture  $127,432
      ($150,000 CDN) payable in common shares for any leases  acquired  pursuant
      to a specific Alberta Crown sale of leases. The Company has also agreed to
      pay the  Triple  7 Joint  Venture  partners,  as  ongoing  fees,  $127,432
      ($150,000 CDN) in cash or common shares (at the discretion of the Company)
      on the first and second anniversary dates of the Agreement.  Shares issued
      under the agreement are subject to "piggyback" registration rights. On the
      third  anniversary  date of the  agreement  the  Company  shall pay to the
      Triple 7 Joint  Venture  $382,295  ($450,000  CDN) per parcel of  acquired
      leases


                                       12
<PAGE>

                          CANWEST PETROLEUM CORPORATION
                         (An Exploration Stage Company)
            Notes to Consolidated Financial Statements (U.S. Dollars)
                    For the Six Months Ended October 31, 2005
                      (Unaudited - Prepared by Management)

4.    PROPERTIES (continued)

      (e)   Eagles Nest, Tar Sands Project, (continued)

      that have not been  surrendered,  or for which no  commercial  project has
      been  identified.  In the event that the  Company  receives a  feasibility
      study,  conducted by an  independent  third party,  that  indicates that a
      commercial  project on one or more of the leases is economic and wishes to
      construct  a  commercial  project,  the  Company is required to notify the
      Triple  7 Joint  Venture.  Upon  commencement  of  construction  of such a
      commercial project the Company shall pay to the Triple 7 Joint Venture the
      sum of  $5,097,272  ($6,000,000  CDN).  In addition to such  payments  the
      Company has granted each of the Triple 7 Joint Venture  partners a royalty
      in the acquired  leases of $0.03  Canadian on each barrel of crude bitumen
      produced,  saved and sold from the Acquired Leases, or $382,295  ($450,000
      CDN) per year,  whichever  is  greater.  Such  royalty is  governed by the
      royalty procedure, which stipulates,  among other things, that the royalty
      will be  secured  by a lien,  first  charge or  security  interest  on the
      royalty lands, and that the royalty is assignable or transferable  subject
      to a right of first offer to Township.

      On August  24,  2005 the  Company  through  its wholly  owned  subsidiary,
      Township,  acquired one lease  pursuant to the Triple 7 Joint Venture at a
      cost of $727,187.  This prospect will be known as the Eagles Nest Project.
      To finance the  acquisition of the project the Company issued  convertible
      notes pursuant to which it also granted  royalties of $0.0073  Canadian on
      each barrel of crude  bitumen  produced,  saved and sold from the project.
      The Company then bought back $0.0015 Canadian of the royalties for 200,000
      common  shares at a deemed  cost  $80,000  which has been  recorded  as an
      exploration expense.

5.    COMMON STOCK

      (a)   Authorized common shares

      During the six months  ended  October  31, 2005 the  authorized  number of
      common shares was increased to 250,000,000 from 100,000,000.

      (b)   Treasury stock

      During the year ended April 30, 2000 the Company  purchased  23,000 shares
      of its common stock from the  original  owners who had acquired the shares
      prior to April  30,  2000 in a private  placement.  The  common  stock was
      purchased for the same amount as the proceeds from original issue.


                                       13
<PAGE>

                          CANWEST PETROLEUM CORPORATION
                         (An Exploration Stage Company)
            Notes to Consolidated Financial Statements (U.S. Dollars)
                    For the Six Months Ended October 31, 2005
                      (Unaudited - Prepared by Management)

5.    COMMON STOCK (continued)

      (c)   Shares issued for services

      During the six months ended October 31, 2005 the Company issued  2,000,000
      common  shares  pursuant to a  consulting  agreement,  at a deemed cost of
      $860,000,  whereby the shares are earned evenly over a twelve-month period
      ending  April 2006.  The deemed value of the  contracted  services not yet
      earned has been reflected in prepaid expenses. Also included in consulting
      expenses is 410,000 common shares issued to consultants  for services at a
      deemed cost of $139,300 and 555,670 common shares issued to finders of the
      convertible note financing at a deemed cost of $222,268.

      (d)   Settlement with Anhydride Canada Creditors

      During the year ended April 30, 2004, in an attempt to settle  outstanding
      liabilities of Anhydride Canada, the Company made an offer to creditors to
      settle  outstanding  debts for shares of the Company at a deemed  price of
      $0.10 per share for every $0.15 CDN of debt held. The Company has received
      acceptances  from  creditors   totalling   $336,037  ($416,484  CDN)  that
      represents  2,776,560 common shares.  During the year ended April 30, 2004
      the Company issued 287,638 shares pursuant to these  agreements and during
      the year ended  April 30,  2005 it issued an  additional  493,493  shares.
      During the six months  ended  October 31, 2005 the Company  issued  33,529
      common shares for deemed  proceeds of $3,353 that have been recorded as an
      exploration expense

      (e)   Anhydride Petroleum Limited Partnership

      Pursuant to an  agreement  between the  Company  and  Anhydride  Petroleum
      Limited  Partnership  (the "Limited  Partnership"),  the Company agreed to
      acquire the interests of the Limited Partnership in a property,  which the
      Company had an interest in but was written off as of April 30,  2003,  for
      3,220,000  common  shares of the Company.  During the year ended April 30,
      2005,  886,666 of these shares were issued and charged to  exploration  at
      $0.10 per share.  The  balances of the shares  were issued  during the six
      months  ended  October 31, 2005 and  $233,333  was charged to  exploration
      expense.

      (f)   Debt Settlement

      During the six months ended October 31, 2005 the Company settled  $366,000
      of debt owed by Western  Petrochemicals  through  the  issuance of 850,000
      common shares.


                                       14
<PAGE>

                          CANWEST PETROLEUM CORPORATION
                         (An Exploration Stage Company)
            Notes to Consolidated Financial Statements (U.S. Dollars)
                    For the Six Months Ended October 31, 2005
                      (Unaudited - Prepared by Management)

6.    STOCK OPTIONS

      As at October 31, 2005 the Company had the following options  outstanding,
      to purchase that same number of common shares:

      Stock option                                   Number of
           Plan       Expiry Date   Exercise price    Options
      -------------   -----------   --------------   ---------
        SOP 2000      21-Aug-06     $         0.27     350,000
        SOP 2002      01-Nov-06     $         0.36     225,000
        SOP 2005(a)   01-Nov-06     $         0.36   1,600,000
        SOP 2005(b)   20-Oct-07     $         1.50     400,000
        SOP 2005(b)   20-Oct-08     $         1.50     300,000
                                                     ---------
                                                     2,875,000
                                                     =========


      During the six months ended October 31, 2005 the Company had the following
      activity pursuant to its stock option plans:

            o     Under SOP 2000 plan 500,000 options at $0.27 were exercised on
                  a cashless  basis whereby the Company  issued  376,146  common
                  shares in satisfaction of the exercise;

            o     Under SOP 2002 plan 225,000  options with an exercise price of
                  $0.25 per share  expired and 225,000  options with an exercise
                  price of $0.36 and an  expiry  date of  November  1, 2006 were
                  issued.

            o     Under the SOP 2003c  plan the  remaining  100,000  options  at
                  $0.30 were  exercised on a cashless  basis whereby the Company
                  issued 76,924 common shares in satisfaction of the exercise;

            o     The  Company  also  issued  1,600,000  options  under  the SOP
                  2005(a) plan with an exercise price of $0.36 until November 1,
                  2006.

            o     On October 20,  2005,  the Company  adopted the 2005(b)  Stock
                  Option Plan,  whereby  1,500,000 shares of common stock may be
                  optioned. The 2005(b) Plan has not been adopted or ratified by
                  the  shareholders  of the  Company.  Incentive  options may be
                  granted at any price for a period of up to ten  years.  During
                  the six months  ended  October 31,  2005 the  Company  granted
                  consultants  400,000  options at $1.50 per share until October
                  20, 2007 and 300,000  options at $1.50 per share until October
                  20,  2008.

            o     Pursuant  to the  stock  option  plans  there  remain  800,000
                  options under the SOP 2005(b) plan available to be issued.


                                       15
<PAGE>

                          CANWEST PETROLEUM CORPORATION
                         (An Exploration Stage Company)
            Notes to Consolidated Financial Statements (U.S. Dollars)
                    For the Six Months Ended October 31, 2005
                      (Unaudited - Prepared by Management)

6.    STOCK OPTIONS, (continued)

      The  Company  has   recorded  in   consulting   expenses  a  stock  option
      compensation  expense of  $1,013,517  relating  to the  issuance  of these
      options.

      Subsequent  to October 31, 2005  100,000  options at $0.27 were  exercised
      under SOP 2000 on a cashless  basis  whereby  the  Company  issued  86,830
      common shares in satisfaction of the exercise.

7.    WARRANTS

      The Company had the following warrants outstanding,  to purchase that same
      number of common shares, at October 31, 2005:

                                     Number of
      Expiry Date   Exercise price    Warrants
      -----------   --------------   ----------

      03-Nov-05     $         0.35          555
      30-Apr-06     $         0.35      325,572
      14-Sep-06     $         0.34    2,380,000
      14-Sep-06     $         0.35    1,586,508
      19-Sep-06     $         1.30    2,370,206
      09-Jun-07     $         0.45      500,000
      09-Jun-07     $         0.55    1,467,250
      09-Jun-07     $         1.50    2,500,000
      19-Sep-07     $         0.55    1,817,967
                                     ----------
                                     12,948,058
                                     ==========


      During the six months ended October 31, 2005 the Company had the following
      transactions involving its warrants:

            -     The  2,380,000  warrents  with an expiry date of September 14,
                  2005 were  extended to  September  14,  2006.  The Company has
                  recorded a non-cash financing expense of $4,257,975.

            -     A total of 1,791,072  warrants  with a November 3, 2005 expiry
                  date were  exercised,  of which  451,855 of the warrants  were
                  exercised for cash proceeds of $158,149 and 1,339,217 warrants
                  were  exercised  pursuant  to  cashless  exercise  provisions,
                  whereby the Company issued 841,454 common shares;


                                       16
<PAGE>

                          CANWEST PETROLEUM CORPORATION
                         (An Exploration Stage Company)
            Notes to Consolidated Financial Statements (U.S. Dollars)
                    For the Six Months Ended October 31, 2005
                      (Unaudited - Prepared by Management)

7.    WARRANTS (continued)

            -     The Company issued,  as an inducement for early  exercising of
                  the  warrants  with  expiry  dates  of  November  3,  2005 and
                  September 14, 2006,  1,945,750  warrants to purchase that same
                  number of common  shares at $0.35 until April 30, 2006.  After
                  the issuance  1,620,178 of these  warrants were  exercised for
                  cash proceeds of $567,062;

            -     A total of 5,061,455 warrants with a September 14, 2006 expiry
                  date were  exercised  of which  512,300 of the  warrants  were
                  exercised for cash proceeds of $179,305 and 4,549,155 warrants
                  were  exercised  pursuant  to  cashless  exercise  provisions,
                  whereby the Company issued 2,813,960 common shares;

            -     In  conjunction  with the June 9,  2005  convertible  note the
                  Company issued  500,000  warrants to purchase that same number
                  of  common  shares  at $0.45  until  June 9,  2007,  5,000,000
                  warrants  to  purchase  that same  number of common  shares at
                  $0.55 per share until June 9, 2007 and  2,500,000  warrants to
                  purchase that same number of common shares at $1.50 until June
                  9, 2007.  Of the  5,000,000  warrants  to  purchase  that same
                  number of common  shares at $0.55 per share until June 9, 2007
                  1,845,250  were  exercised for cash proceeds of $1,014,888 and
                  1,687,500  were  exercised   pursuant  to  cashless   exercise
                  provisions,   whereby  the  Company  issued  1,611,542  common
                  shares;

            -     Finally in  conjunction  with the financing of the Eagles Nest
                  Project the Company issued 2,370,206 warrants to purchase that
                  same number of common shares until September 19, 2006 at $1.30
                  per share and 1,817,967  warrants to purchase that same number
                  of common shares until September 19, 2006 at $0.55 per share.

      Subsequent to October 31, 2005 the Company had the following  transactions
      involving its warrants:

            -     The 555  warrants  with an  expiry  date of  November  3, 2005
                  expired unexercised;

            -     A total of 325,572  warrants with a April 30, 2006 expiry date
                  were exercised for cash proceeds of $113,950;

            -     A total  of  362,500  warrants  at $0.45  with a June 9,  2007
                  expiry date were exercised for cash proceeds of $163,125; and

            -     A total  of  779,750  warrants  at $0.55  with a June 9,  2007
                  expiry date were  exercised  for cash proceeds of $428,862 and
                  687,500 warrants were exercised  pursuant to cashless exercise
                  provisions, whereby the Company issued 461,309 common shares;.

            -     A total  of  300,000  warrants  at $1.50  with a June 9,  2007
                  expiry date were exercised for cash proceeds of $450,000;

            -     In conjunction  with the cashless  exercise of warrants during
                  the six months ended October 31,2005 the Company has agreed to
                  pay a finders fee of 210,678 common shares.



                                       17
<PAGE>

                          CANWEST PETROLEUM CORPORATION
                         (An Exploration Stage Company)
            Notes to Consolidated Financial Statements (U.S. Dollars)
                    For the Six Months Ended October 31, 2005
                      (Unaudited - Prepared by Management)

8.    RELATED PARTY TRANSACTIONS

      The following non-arm's length transactions  occurred with parties who are
      directors, officers and stockholders of the Company.

      (a)   As of October 31, 2005, $58,062 was owed to October Sun and included
            in due to related  parties.  This  balance is  without  interest  or
            stated  terms of  repayment.  During the year ended  April 30,  2005
            October Sun converted a $400,000 note into  1,600,000  common shares
            and 1,600,000 warrants to purchase that same number of common shares
            at $0.34 per share until  September 14, 2005.  During the six months
            ended October 31, 2005 the Company  agreed to extend the expiry date
            of these  warrants to  September  14,  2006 and  recorded a non cash
            financing expense of $1,419,840.

      (b)   United  Corporate  Advisors ("UCA") is related to the Company by way
            of common  directors.  During the six months ended  October 31, 2005
            UCA was paid consulting fees of $46,462 and no amount remains owing.
            During the year ended April 30, 2005 UCA  converted a $195,000  note
            into 780,000  common  shares and 780,000  warrants to purchase  that
            same number of common shares at $0.34 per share until  September 30,
            2005.  During the six months  ended  October  31,  2005 the  Company
            agreed to extend the expiry date of these  warrants to September 14,
            2006 and recorded a non cash financing expense of $692,172.

      (c)   The Company paid a Director a consulting  fee of $14,000  during the
            six months ended October 31, 2005.

9.    ACCOUNTS PAYABLE

      Accounts payable as at October 31, 2005 includes  $111,407 (April 30, 2005
      - $130,555) in advances from third parties.


                                       18
<PAGE>

                          CANWEST PETROLEUM CORPORATION
                         (An Exploration Stage Company)
            Notes to Consolidated Financial Statements (U.S. Dollars)
                    For the Six Months Ended October 31, 2005
                      (Unaudited - Prepared by Management)

10.   EARTH ENERGY LICENCE AGREEMENT

      On August 12,  2003,  the Company  became  party to an  exclusive  license
      agreement  for  Canada,  Central  and  South  America  with  Earth  Energy
      Resources  Ltd.  ("Earth  Energy")  and West Peak  Ventures of Canada Ltd.
      ("West Peak") for the use of Earth Energy's proprietary catalytic process.
      The process includes a proprietary Catalyst in conjunction with processing
      equipment  to separate  hydrocarbons  from sand,  shale or oil.  Under the
      terms of the underlying  license agreement with Earth Energy,  the Company
      was to have paid $375,799, subject to certain conditions, of which it paid
      $106,508. The Company was also to pay a royalty of 5% and had the right to
      purchase  catalyst and processing  equipment  from Earth Energy  Resources
      Ltd. for cost plus 25%. In  conjunction  with this  agreement  the Company
      also had a three-year  option,  on the same terms,  on a Central and South
      American  license  agreement  with the exception that the license fee is a
      one-time payment of $500,000 US.

      During the year ended April 30, 2005 the above noted licence agreement was
      cancelled  and  replaced  with a new  agreement  whereby the Company is to
      receive a 2.5% of gross revenue and 12.5% of net profits from product sold
      and income earned (the "Royalty")  from products and processes  related to
      certain patented chemical  formulations  utilized for applications related
      to the extraction of oil from surface mines tar sands,  oil shale and soil
      reclamation  (the  "Catalyst")  in Canada.  The  Company may also elect to
      receive a similar  Royalty  from Central and South  America,  subject to a
      payment of $500,000  that may be paid by way of offset and  forfeiture  of
      the first  $500,000 in Royalties.  Earth Energy has the right to name four
      entities and their affiliates upon which the Company will only receive 50%
      of the Royalty.  The Company also has the right to purchase the  Catalyst,
      at cost,  and  equipment  from  Earth  Energy,  at cost plus  25%,  on any
      properties  that the  Company  has a  greater  than 15%  interest.  As the
      present  value  of  this  agreement  is  currently   undeterminable,   the
      previously  recorded  licence costs have been written down by $106,507 and
      the licence is now recorded as $1.


                                       19
<PAGE>

                          CANWEST PETROLEUM CORPORATION
                         (An Exploration Stage Company)
            Notes to Consolidated Financial Statements (U.S. Dollars)
                    For the Six Months Ended October 31, 2005
                      (Unaudited - Prepared by Management)

12.   CONVERTIBLE DEBENTURES

      On June 9, 2005 the Company issued 7%  convertible  notes for an aggregate
      principal  amount of  $2,000,000.  The Company has agreed to make  monthly
      payments equal to one-twelfth of the initial  principal amount of the note
      plus any other amounts due, including  interest.  The monthly payments for
      the first  three  months may be  deferred  until the fourth  month and are
      payable in either shares, subject to an effective registration  statement,
      or cash. Should the Company elect to make the monthly payment in cash then
      it must pay 130% of the  principal  plus  100% of any other  amounts  due,
      including interest. If the Company elects to have the monthly payment paid
      in shares then the note  holders may  convert at anytime  thereafter  into
      common  shares of the  Company at the lesser of i) $0.60,  ii) 135% of the
      average of the five  lowest  closing  bid prices of the  Company's  common
      stock  for  the  ten  trading  days  preceding  the  effective  date  of a
      registration  statement registering the underlying shares and warrants for
      resale and iii) 70% of the average of the five  lowest  closing bid prices
      of the Company's  common stock for the ten trading days preceding the date
      of conversion. Should the Company fail to make a timely election to pay in
      cash or shares or to actually  make the cash  payment  then the holders of
      the notes may determine  whether they want to be paid in cash or shares on
      the terms noted  above.  Pursuant  to this  offering  the  Company  issued
      500,000,  warrants to purchase  that same number of common shares at $0.45
      until June 9, 2007,  5,000,000  warrants to  purchase  that same number of
      common shares at $0.55 per share until June 9, 2007 and 2,500,000 warrants
      to purchase that same number of common shares at $1.50 until June 9, 2007.
      In conjunction with this offering the Company has paid $200,000 in finders
      fees and has agreed to pay a finders fee of 10% from any of the  5,000,000
      warrants to purchase  that same number of common shares at $0.55 per share
      until  June  9,  2007  that  are  exercised.  In  conjunction  with  these
      convertible  notes and  warrants  the  Company  has  recorded  a  non-cash
      financing expense of $1,722,950. The balance outstanding pursuant to these
      convertible  notes as at October  31,  2005 is $755,434 as a result of the
      conversion of $1,297,199 of principal and interest into  2,776,712  common
      shares. Subsequent to October 31, 2005, $280,418 of principal and interest
      was converted into 467,363 common shares.

      During the year ended April 30, 2005 OQI also issued $934,500  ($1,100,000
      CDN) 3%  unsecured  convertible  debentures  which  mature as to  $254,864
      ($300,000  CDN) on February 28, 2008,  $84,955  ($100,000 CDN) on April 1,
      2008 and  $594,682  ($700,000  CDN) on  April  15,  2008.  The  notes  are
      convertible into common shares of OQI at a rate of $0.1.06 ($1.25 CDN) for
      one year following  their issuance and then at $1.36 ($1.60 CND) per share
      until maturity.  In conjunction with this offering OQI also issued 343,750
      warrants to purchase that same number of common shares at a price of $1.36
      ($1.60 CND) until the earlier of i) the Company  being  listed for trading
      on a  recognized  stock  exchange or ii) the  maturity  date.  The balance
      outstanding pursuant to these convertible debentures is $950,748.


                                       20
<PAGE>

                          CANWEST PETROLEUM CORPORATION
                         (An Exploration Stage Company)
            Notes to Consolidated Financial Statements (U.S. Dollars)
                    For the Six Months Ended October 31, 2005
                      (Unaudited - Prepared by Management)

12.   CONVERTIBLE DEBENTURES, continued

      To finance the acquisition of the Eagles Nest Prospect the Company entered
      into a private  placement of its securities  whereby the Company issued 8%
      Convertible Notes (the "Notes") with stock purchase warrants for aggregate
      principal amount of $5,200,000 (the "Original Offering"),  all pursuant to
      a  Subscription   Agreement  (the   "Subscription   Agreement")  with  the
      purchasers.  Under  the  terms of the  Original  Offering,  the  Notes are
      convertible to shares of the Company's  common stock (the "Common  Stock")
      at $0.40 per share of Common Stock. However,  pursuant to the subscription
      agreement,  amounts not expended on successful bids,  associated costs and
      first year  rentals are to be refunded on a pro-rata  basis.  The refunded
      amount totals $4,472,813, as only $727,187 was used in connection with the
      acquisition of the Eagles Nest Parcel and related  costs.  Under the terms
      of the Original  Offering,  the purchasers  will also receive bonus shares
      equal  to  10%  of  the  refunded  amount   allocable  to  the  respective
      purchasers,  which  bonus  shares  will be issued at the rate of $0.40 per
      share.  Also,  purchasers  will receive  warrants based on one warrant per
      $0.40  invested  by a  purchaser,  after  the  refunded  amount  has  been
      distributed to the purchaser.  The warrants are  exercisable for two years
      from the issue date at an exercise price of $0.55 per share.

      Effective  August 31, 2005, some of the purchasers  elected not to receive
      their pro-rata  portion of the refund  amount.  Rather,  those  purchasers
      elected to be included  under amended terms to the Original  Offering (the
      "Amended Offering").  Under the terms of the Amended Offering, a purchaser
      will  receive a new  convertible  promissory  note in the  amount of their
      principal  investment  not refunded  (the "New  Note"),  which New Note is
      convertible  into  shares  of the  Company's  common  stock at a per share
      conversion  price of $0.90 per share.  The purchaser will also receive one
      warrant for each $0.90 of principal invested in the Amended Offering. Each
      warrant  is  exercisable  to  purchase  one  share of  common  stock at an
      exercise price of $1.30 per share for one year.

      Of  the  total  $5,200,000  raised  in  the  Original  Offering,  $727,187
      convertible  notes were  issued  under the  Original  Offering  along with
      1,817,967  warrants to purchase that same number of common shares at $0.55
      until  September  19, 2007,  $2,339,602  was  refunded  along with 584,878
      common  shares at a deemed cost of $233,951  which has been  recorded as a
      non-cash  financing  expense,  $2,133,186  convertible  notes were  issued
      pursuant to the amended  terms along with  2,370,206  warrants to purchase
      that same number of common  shares at $1.30 until  September  19, 2006 and
      555,670  common  shares  were  issued as finders  fees at a deemed cost of
      $222,268 which were included in consulting  expenses.  In conjunction with
      these  convertible  notes and warrants the Company has recorded a non-cash
      financing expense of $1,493,096.

      The subscription  agreements relating to the Original Offering and Amended
      offering  contains  certain  registration  rights for the shares of common
      stock  issuable  upon  conversion  of  the  notes,  the  exercise  of  the
      underlying warrants, bonus shares issued and finders fee shares issued. To
      date he Company has not filed its registration  statement and as such a 2%
      penalty has been accrued as at October 31, 2005.


                                       21
<PAGE>

                          CANWEST PETROLEUM CORPORATION
                         (An Exploration Stage Company)
            Notes to Consolidated Financial Statements (U.S. Dollars)
                    For the Six Months Ended October 31, 2005
                      (Unaudited - Prepared by Management)

13.   INVESTMENT IN ENERGY 51 INC.

      On April 7, 2004,  the Company  entered into an equity  participation  and
      farmout  agreement  with Energy 51 Inc.  ("Energy  51").  Pursuant to this
      agreement  the Company  purchased  750,000  common shares of Energy 51 for
      $152,800.  Energy 51 is a privately  held Alberta  company  engaged in the
      exploration  and  development  of oil and gas  primarily  in Alberta.  The
      agreement  granted the  Company  the right to  purchase a further  750,000
      common shares for $157,491 to bring its interest in Energy 51 to 25% which
      the Company exercised during the year ended April 30, 2005.  Subsequent to
      April 30, 2005,  Energy 51 completed a share  financing in which it raised
      $17,850,000 CND and the Company's interest in Energy 51 was reduced to 2%.

      As part of this  agreement  the  Company  must be  offered  the  right  to
      participate  on all prospects  generated by Energy 51 until April 1, 2006.
      During the year ended April 30, 2005 the Company  agreed to participate in
      the  Sylvan  Lake and  Barrhead  oil and gas  prospects  and  included  in
      exploration is $53,428 and $78,428  respectively,  in related  exploration
      costs.  During the six months  ended  October  31,  2005 the  Company  has
      incurred  exploration  costs  related  to  Sylvan  Lake in the  amount  of
      $359,120 and $28,993 related to Barrhead.

14.   COMMITMENTS

      The Company  entered into a joint venture with a major  Canadian  chemical
      company to jointly  determine the commercial value of the shale oil in the
      Pasquia Hills  prospect.  This  agreement is made up of a number of phases
      and each party may  decide  not to  proceed at any time by giving  notice.
      Phase one  consists of research at an  estimated  cost of $50,000,  which,
      along with the  information  gathered is to be split  equally  between the
      parties. Subsequent phases involve further research and feasibility geared
      ultimately towards a production contract where the major Canadian chemical
      company  would  purchase  petrochemical  feedstock  from the  Company  for
      further processing.

      The Company has entered into a joint venture agreement (the "Sulfoxy Joint
      Venture") whereby it has agreed to fund research and development  relating
      to the improvement of bitumen recovery from surface mineable oil sands ore
      and  in-situ   recovery  of  bitumen  and  heavy  oils  by  oxidation  and
      sulfonation  of asphaltens as to $174,343  ($205,220  CND) to obtain a 60%
      interest. Upon earning a 60% interest in the joint venture the Company may
      elect to purchase an additional 15% joint venture  interest for $1,274,318
      ($1,500,000 CND). During the six months ended October 31, 2005 the Company
      has incurred  $79,273 in costs to the Sulfoxy Joint Venture and these have
      been included in exploration costs.


                                       22
<PAGE>

                          CANWEST PETROLEUM CORPORATION
                         (An Exploration Stage Company)
            Notes to Consolidated Financial Statements (U.S. Dollars)
                    For the Six Months Ended October 31, 2005
                      (Unaudited - Prepared by Management)

15.   Future Income Taxes

      The following  summarizes the temporary  differences that give rise to the
      future income tax liability:

            Book Value of property in excess of tax value   $ 216,997
            Non-capital loss carry-forwards tax benefit       (72,530)
            Share issue costs tax benefit                    (107,893)
                                                            ---------
                                                            $  36,574
                                                            =========


16.   Subsequent Events

      Subsequent to October 31, 2005 the Company  completed a private  placement
      of 15,068,000  units at $1.50 per unit whereby each unit  consisted of one
      common  share and one  share  purchase  warrant.  Each two  warrants  will
      entitle the holder to purchase an  additional  common share of the Company
      at $2.00 until december 12, 2007. The Company has agreed to pay finders up
      to 6% in cash plus warrants equal to 6% of the warrants  issued on similar
      terms as the issued  warrants.  In  conjunction  with this  financing  the
      Company has also granted the  investors and finders  certain  registration
      rights  whereby the Company has  undertaken to file a resale  registration
      statement  covering the shares and shares  underlying the warrants  within
      sixty days of closing,  otherwise it shall pay a 2% penalty for each month
      and part of month that it is late in doing so. In  addition,  the  Company
      must respond to any queries to that resale  registration  statement within
      two weeks of receipt or else be subject to an additional  penalty as to 2%
      for each two weeks  thereafter.  The penalties  shall be payable in either
      shares  at a  deemed  price  of  $1.50  USD or  cash at the  unit  holders
      election. Any penalty shares will also be qualified for resale by the same
      SB2 registration statement.

      Also subsequent to October 31, 2005 the Company issued agreed to issue 3.2
      million common shares,  with piggyback  registration  rights, to financial
      advisors  of the  Company  at a  deemed  cost  of  $5,376,000  whereby  in
      consideration  for services  rendered  under their  respective  consulting
      agreements, the shares will be earned evenly over the six months ended May
      2006. The contracts with the financial  advisors may be canceled on thirty
      days notice.

      In a private  transaction,  the Company purchased 571,428 common shares of
      OQI and 571,428  share  purchase  warrants to purchase that same number of
      OQI common  shares at $1.70 ($2.00 CND) until May 31, 2007 for  $4,854,540
      ($5,714,280 CND) plus 1,500,000 share purchase  warrants which entitle the
      holder to  purchase  an  additional  common  share of the Company at $2.00
      until December 12, 2007.



                                       23
<PAGE>

Item 2. Management's Discussion and Analysis of Financial Condition and Plans of
Operations

The  following  information  should be read in  conjunction  with the  unaudited
consolidated  financial  statements  included  herein,  which  are  prepared  in
accordance with generally accepted accounting  principles ("GAAP") in the United
States for interim financial information. All dollar amounts are in U.S. dollars
unless otherwise stated.

All payments to be made in the future have been expressed in U.S.  dollars using
an exchange rate of $1 U.S. = $1.1771 Cdn.

Plan of Operations

The Company is in the  exploration  stage and does not currently have any income
from operating activities. The Company expect to use all of its existing working
capital  on  exploration  activities.  Management  intends  to raise  additional
capital  through the  issuance of equity and or debt to finance  operations  and
invest in other business opportunities,  however, no assurance can be given that
the  Company  will be  successful  in its  exploration  activities,  in  raising
additional capital or that other business opportunities will be found.

During the six months  ended  October  31,  2005 the  Company's  subsidiary  OQI
completed  the purchase of the  remaining  51% interest in the Firebag Tar Sands
Project by paying $357,540. OQI now has a 100% interest in the property, subject
to certain  royalties,  whereby it may explore and develop oil sands deposits in
an area comprising approximately 850,000 acres in the Province of Saskatchewan.

To finance  the  acquisition  of the  Firebag  Tar Sands  Project and to provide
funding for an  exploration  program OQI issued  1,524,875  Flow-through  Common
Shares  and  767,628  units  under a private  placement  for gross  proceeds  of
$3,490,464.  Each unit  consisted of one common share and warrant  entitling the
holder to acquire one common share at $1.70 ($2.00 CND).  These warrants  expire
as to 717,628  warrants on May 31, 2007 and 50,000 warrants on June 15, 2007. In
conjunction  with this  financing  OQI also issued agents  warrants  whereby the
agent may acquire up to 146,475  common  shares and 14,000 common shares both at
$1.49 ($1.75 CND) until May 31, 2008 and June 15, 2008  respectively and 146,475
common  shares and 14,000  common shares both at $1.70 ($2.00 CND) until May 31,
2008 and June 15,  2008  respectively.  The  Company  has  recorded  a  non-cash
financing expense of $124,001 relating to these warrants.

Also during the six months ended October 31, 2005, the Company agreed to convert
the  non-refundable  payment of $437,962  that the Company  made  (through  OQI)
towards the  purchase of the 51% interest in the  property  into 297,688  common
shares and a warrant to acquire up to an  additional  647,688  common  shares at
$1.70 ($2.00 CND) until June 13,  2007.  As at October 31, 2005 the Company held
7,297,688  common  shares,  representing  54.55% of the issued  and  outstanding
shares  of  OQI.  The  non-controlling   shareholders  45.45%  interest  in  OQI
represented $3,936,114 of its net assets.

The focus of OQI  during  the six  months  ended  October  31,  2005 has been on
completing  the acquistion of the Firebag East  Prospect,  securing  funding and
preparing  for an estimated  $3,200,000  drill program that is expected to begin
shortly.


                                       24
<PAGE>

Subsequent to October 31, 2005 the Company converted its convertible note in OQI
into 788,769  common shares  increasing  its holding in OQI to 8,086,457  common
shares representing 57.49% of the issued and outstanding shares of OQI.

Also  subsequent  to October  31,  2005 the  Company  entered  into a  financing
agreement with OQI whereby it may purchase up to  $12,743,182  ($15 million CND)
units prior to January 31, 2006. Each unit is to be priced at $5.10 ($6 CND) and
will consist of one common share on one share purchase warrant.  Every two share
purchase  warrants  will  entitle the Company to purchase an  additional  common
share at $8.50 ($10 CND) for a period  ending nine months from the closing date.
Pursuant to this  agreement  the Company has  committed to financing OQI as to a
minimum of $2,123,864  ($2.5 million CND) on or before  January 31, 2006 through
the purchase of these units or by way of  exercising  existing  securities.  The
proceeds from this financing will be used by OQI to fund a spring drill program.

The Company entered into an agreement with three third parties (collectively the
Triple 7 Joint Venture) to post, acquire, develop and produce oil sands deposits
located in the Athabasca  Region of Alberta,  Canada (the Triple 7 Joint Venture
Agreement)  whereby in consideration  for the expertise and industry  experience
provided  by Triple 7 Joint  Venture  the Company has agreed to pay the Triple 7
Joint Venture  $127,432  ($150,000  CDN) payable in common shares for any leases
acquired  pursuant to a specific  Alberta Crown sale of leases.  The Company has
also  agreed  to pay the  Triple 7 Joint  Venture  partners,  as  ongoing  fees,
$127,432  ($150,000  CDN) in cash or common  shares  (at the  discretion  of the
Company)  on the first and second  anniversary  dates of the  Agreement.  Shares
issued under the agreement are subject to "piggyback"  registration  rights.  On
the third  anniversary date of the agreement the Company shall pay to the Triple
7 Joint Venture $382,295  ($450,000 CDN) per parcel of acquired leases that have
not been surrendered, or for which no commercial project has been identified. In
the event  that the  Company  receives  a  feasibility  study,  conducted  by an
independent third party, that indicates that a commercial project on one or more
of the leases is economic and wishes to construct a commercial project, they are
required to notify the Triple 7 Joint Venture. Upon commencement of construction
of such a commercial project the Company shall pay to the Triple 7 Joint Venture
the sum of $5,097,272 ($6,000,000 CDN). In addition to such payments the Company
has  granted  each of the  Triple 7 Joint  Venture  partners  a  royalty  in the
acquired  leases of $0.03  Canadian  on each barrel of crude  bitumen  produced,
saved and sold from the Acquired  Leases,  or $382,295  ($450,000 CDN) per year,
whichever is greater.  Such royalty is governed by the royalty procedure,  which
stipulates,  among other  things,  that the  royalty  will be secured by a lien,
first charge or security  interest on the royalty lands, and that the royalty is
assignable or transferable subject to a right of first offer to Township.

On August 24, 2005 the Company  through its wholly owned  subsidiary,  Township,
acquired one lease pursuant to the Triple 7 Joint Venture at a cost of $727,187.
This  prospect  will be  known  as the  Eagles  Nest  Project.  To  finance  the
acquisition  of the project the Company  issued  convertible  notes  pursuant to
which it also  granted  royalties  of $0.0073  Canadian  on each barrel of crude
bitumen produced,  saved and sold from the project. The Company then bought back
$0.0015  Canadian of the  royalties  for 200,000  common shares at a deemed cost
$80,000 which has been recorded as an exploration expense.

The Company  expects to do a winter  drill  program on the Eagles Nest  Prospect
which is estimated to cost around $2,000,000 and has incurred $91,371 in related
costs to October 31, 2005.


                                       25
<PAGE>

To finance the  acquisition of the Eagles Nest Prospect the Company entered into
a private placement of its securities  whereby the Company issued 8% Convertible
Notes (the "Notes") with stock purchase warrants for aggregate  principal amount
of  $5,200,000  (the  "Original  Offering"),  all  pursuant  to  a  Subscription
Agreement (the "Subscription Agreement") with the purchasers. Under the terms of
the Original  Offering,  the Notes are  convertible  to shares of the  Company's
common stock (the "Common  Stock") at $0.40 per share of Common Stock.  However,
pursuant to the subscription agreement, amounts not expended on successful bids,
associated  costs and first year rentals are to be refunded on a pro-rata basis.
The refunded amount totals  $4,472,813,  as only $727,187 was used in connection
with the  acquisition  of the Eagles Nest Parcel and  related  costs.  Under the
terms of the Original  Offering,  the purchasers  will also receive bonus shares
equal to 10% of the  refunded  amount  allocable to the  respective  purchasers,
which  bonus  shares  will be  issued  at the rate of  $0.40  per  share.  Also,
purchasers  will receive  warrants  based on one warrant per $0.40 invested by a
purchaser,  after the refunded amount has been distributed to the purchaser. The
warrants are  exercisable for two years from the issue date at an exercise price
of $0.55 per share.

Effective  August 31, 2005, some of the purchasers  elected not to receive their
pro-rata portion of the refund amount.  Rather,  those purchasers  elected to be
included under amended terms to the Original Offering (the "Amended  Offering").
Under  the  terms of the  Amended  Offering,  a  purchaser  will  receive  a new
convertible  promissory  note in the amount of their  principal  investment  not
refunded  (the "New  Note"),  which New Note is  convertible  into shares of the
Company's  common stock at a per share  conversion price of $0.90 per share. The
purchaser will also receive one warrant for each $0.90 of principal  invested in
the Amended  Offering.  Each  warrant is  exercisable  to purchase  one share of
common stock at an exercise price of $1.30 per share for one year.

Of the total $5,200,000 raised in the Original  Offering,  $727,187  convertible
notes were issued under the Original  Offering along with 1,817,967  warrants to
purchase  that same number of common  shares at $0.55 until  September 19, 2007,
$2,339,602  was refunded  along with 584,878  common  shares at a deemed cost of
$233,951  which has been recorded as a non-cash  financing  expense,  $2,133,186
convertible notes were issued pursuant to the amended terms along with 2,370,206
warrants to purchase that same number of common shares at $1.30 until  September
19, 2006 and 555,670  common shares were issued as finders fees at a deemed cost
of $222,268 which were included in consulting expenses.  In conjunction with the
issuance of these  convertible  notes and  warrants  the Company has  recorded a
non-cash financing expense of $1,493,096.

The  subscription  agreements  relating  to the  Original  Offering  and Amended
offering  contains  certain  registration  rights for the shares of common stock
issuable upon conversion of the notes, the exercise of the underlying  warrants,
bonus shares issued and finders fee shares  issued.  To date the Company has not
filed its registration statement and as such a 2% penalty has been accrued.

During the six months ended  October 31, 2005 the Company  continued to evaluate
its  Pasquia  Hill Oil Shale  Prospect  and has spent  $71,838 on a small  drill
program related to the prospect.


                                       26
<PAGE>

Also  during the six months  ended  October  31, 2005 the company was focused on
raising funding for general  working capital  purposes and issued 7% convertible
notes for an aggregate principal amount of $2,000,000. The Company has agreed to
make monthly  payments equal to one-twelfth of the initial  principal  amount of
the note plus any other amounts due,  including  interest.  The monthly payments
for the first  three  months  may be  deferred  until the  fourth  month and are
payable in either shares,  subject to an effective  registration  statement,  or
cash.  Should the Company elect to make the monthly payment in cash then it must
pay  130%  of the  principal  plus  100% of any  other  amounts  due,  including
interest.  If the Company elects to have the monthly payment paid in shares then
the note  holders may convert at anytime  thereafter  into common  shares of the
Company at the lesser of i) $0.60,  ii) 135% of the  average of the five  lowest
closing  bid  prices of the  Company's  common  stock for the ten  trading  days
preceding  the  effective  date  of a  registration  statement  registering  the
underlying  shares and  warrants  for resale and iii) 70% of the  average of the
five lowest closing bid prices of the Company's common stock for the ten trading
days preceding the date of conversion.  Should the Company fail to make a timely
election to pay in cash or shares or to actually  make the cash payment then the
holders  of the  notes  may  determine  whether  they want to be paid in cash or
shares on the terms noted above.  Pursuant to this  offering the Company  issued
500,000,  warrants to purchase  that same number of common shares at $0.45 until
June 9, 2007,  5,000,000  warrants to purchase that same number of common shares
at $0.55 per share until June 9, 2007 and  2,500,000  warrants to purchase  that
same number of common  shares at $1.50 until June 9, 2007. In  conjunction  with
this  offering  the Company has paid  $200,000 in finders fees and has agreed to
pay a finders fee of 10% from any of the  5,000,000  warrants  to purchase  that
same  number of common  shares  at $0.55 per share  until  June 9, 2007 that are
exercised.  In conjunction with these convertible notes and warrants the Company
has recorded a non-cash financing expense of $1,722,950. The balance outstanding
pursuant  to these  convertible  notes as at October  31,  2005 is $755,434 as a
result of the  conversion of $1,297,199 of principle and interest into 2,776,712
common  shares.  Subsequent to October 31, 2005, a further  $50,000 of principle
and interest was converted into 83,333 common shares.

During the six months ended October 31, 2005 Energy 51, a privately held oil and
gas  exploration  and  development  company,  in which  the  Company  held a 25%
interest  completed an equity  financing  whereby it raised  $14,182,000 and the
Company's interest was reduced to around 2%.

As part of the  Company's  investment  in Energy 51 must be offered the right to
participate  on all  prospects  generated  by Energy 51 until  April  2006.  The
Company has elected to  participate  in the Sylvan Lake and Barrhead oil and gas
prospects   and  included  in   exploration   costs  is  $259,120  and  $28,993,
respectively,  in  related  exploration  costs.  To  date  the  results  of  the
exploration efforts on both prospects is unknown.  The Company intends to review
prospects  of merit as they  come  along and to  invest  in them  provided  that
financing is available.

Changes in Financial Condition

During the six months  ended  October 31, 2005 the primary  focus of the Company
was on  completing  the  purchase of the Firebag Tar Sands  Prospect,  obtaining
funding for  exploration  programs and accessing and  acquiring  other  possible
investment opportunities within the Athabasca Tar Sands region which resulted in
the Eagles  Nest  prospect.  During the six months  ended  October  31, 2004 the
primary focus of the Company was on the  exploration of its Pasquia  Hills,  Oil
Shale prospect,  completing  agreements to purchase the Firebag Sask., Tar Sands
prospect and finding funding for the Company.

As a result of the above noted financing the Company incurred non-cash financing
expenses of  $3,573,997(2004  - $1,211,421) for the six months ended October 31,
2005.  The Company also agreed  during the six months ended  October 31, 2005 to
extend the expiry date of 2,380,000  warrants for one year to September 14, 2006
and as a result  recorded an non-cash  financing  expense of $2,112,012  (2004 -
$nil).


                                       27
<PAGE>

Consulting  expenses  for the six months  ended  October 31, 2005 of  $1,315,767
(2004 - $973,845)  included  stock option  compensation  expenses of  $1,072,056
(2004 - $0) related to the  issuance of options to  employees  and  consultants.
Consulting fees also included fees related to successful financing attempts that
were paid in stock and cash and totaled  $580,456  (2004 - $0). The Company paid
its directors $60,262 (2004 - $138,000). OQI had consulting expenses of $206,583
that did not occur during the six months ended October 31, 2004.

Exploration  costs for the six months  ended  October 31,  2005 were  $1,073,033
(2004 - $200,875) and included  payments related to the Sylvan Lake and Barrhead
oil and gas  prospects  as to $359,120 and  $28,993,  respectively.  Included in
exploration  costs is $79,272 in  conjunction  with its  interest in the Sulfoxy
Joint  Venture,  $91,371  in costs  associated  with the Eagles  Nest  prospect,
$71,838  in costs  associated  with the  Pasquia  Hills Oil Shale  prospect  and
$97,668 in costs incurred by OQI related to the Firebag Tar Sands prospect. Also
in included in  exploration  is $233,333  related to property  acquired from the
Anhydride Limited Partnership which was subsequently  written off. The Company's
exploration  costs  during the three  months ended July 31, 2004 were related to
the exploration of its Pasquia Hills Oil Shale Project.

Advertising  and promotion costs during the six months ended October 31, 2005 of
$625,257 were up significantly  from the six months ended October 31, 2004 where
they were $115,940 as a result of the engagement of consulting firm whereby they
agreed to be paid in common  shares of the Company.  Pursuant to this  agreement
the  Company  issued  2,000,000  common  shares  and booked an  advertising  and
promotion  expense of $430,000 for the six months ended October 31, 2005. As the
agreement  calls for the  services to be provided  over the one year life of the
agreement the Company had a prepaid expense of $430,000 as at October 31, 2005.

Professional  fees for the three months ended July 31, 2005 of $187,899  (2004 -
$149,435)  continues  to be major  expense  of the  Company  as it inures  costs
related to business evaluation and financing issues.

As the Company is now significantly  more active and is maintaining two separate
offices,  one in Calgary  and one in  Vancouver,  its  office  costs for the six
months  ended  October  31,  2005 of $157,399  (2004 - $97,853)  have  increased
substantially  when compared to the six months ended October 31, 2004.  Likewise
its rent costs for the six months  ended  October  31,  2005 of $29,582  (2004 -
$12,570) have increased as a result of maintaining the two offices.

Interest and bank charges of $157,399  (2004 - $97,853) for the six months ended
October 31, 2005 are higher as a result of the timing when  various  convertible
notes and  interest  were issued.  Also during the six months ended  October 31,
2005 the  Company  had a  significant  cash  balance on hand as it was  awaiting
approvals for its fall exploration  program which resulted in interest income of
$50,739 (2004 - $nil).

During the six months  ended  October 31, 2005 the Company  sold its interest in
its  subsidiary  Anhydride  Petroleum  (Canada) Inc. for nominal  proceeds which
resulted in the Company  recording a $736,782  recovery of exploration  expenses
pertaining to accounts payable of the subsidiary.

In total the Company experienced a net loss of $8,766,271 or $0.14 per share for
the six months ended  October 31, 2005,  compared to a net loss of $2,856,429 or
$0.12 per share for the six months ended October 31, 2004.  The Company  expects
to continue to incur  operating  losses and will  continue  to be  dependent  on
additional  equity or debt  sales and or  property  joint  ventures  to fund its
activities in the future.


                                       28
<PAGE>

We have no revenues, and our operating results, profitability and future rate of
growth depend solely on our ability to successfully  implement our business plan
and our  ability to raise  further  funding,  as well as OQI's  ability to raise
funding for its projects. We currently have approximately  $8,000,000 in cash on
hand which we plan to utilize for current and or upcoming  exploration  programs
and general  working  capital  purposes.  It is expected  that the Company  will
continue to need further funding and we plan to fund future operations by way of
joint venture  agreements and or other forms of financing,  including the public
offering or private placement of equity or debt securities.  However,  we cannot
assure  you that  joint  venture  partners,  debt or  equity  financing  will be
available to us on acceptable terms to meet these requirements.  The Company has
no revenues.

Item 3. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Based on an  evaluation  as of the end of the period  covered by this  quarterly
report,  the  Company's  principal  executive  officer and  principal  financial
officer have concluded that the Company's disclosure controls and procedures (as
defined  in Rule  13a-15(e)  under  the  Securities  Exchange  Act of 1934  (the
"Exchange Act")) are effective for the purposes set forth in such definition.

Changes in Internal Control

There have not been any changes in the Company's internal control over financial
reporting  identified in connection  with the  evaluation  discussed  above that
occurred during the Company's last fiscal quarter that have materially affected,
or are reasonably likely to materially  affect,  the Company's  internal control
over financial reporting.

Forward-Looking Statements

These  statements  are based on certain  assumptions  and analyses made by us in
light  of our  experience  and our  perception  of  historical  trends,  current
conditions,  expected  future  developments  and other  factors we  believe  are
appropriate  in the  circumstances.  Such  statements are subject to a number of
assumptions,  risks and uncertainties,  including such factors as the volatility
and level of oil and natural gas prices,  uncertainties  in cash flow,  expected
acquisition  benefits,   production  rates  and  reserve  replacement,   reserve
estimates, drilling and operating risks, competition,  litigation, environmental
matters, the potential impact of government regulations, and other matters, many
of which are beyond our  control.  Readers are  cautioned  that  forward-looking
statements are not guarantees of future  performance  and that actual results or
developments  may  differ  materially  from  those  expressed  or implied in the
forward-looking statements.


                                       29
<PAGE>

                           PART II - OTHER INFORMATION

Item 1. Legal Proceedings

During the period  there were no  material  developments  in the status of legal
proceedings as reported in the April 30, 2005 10K-SB.

Item 2. Changes in Securities; Recent Sales of Unregistered Securities

No equity  securities were sold by the Company during the period covered by this
report that are not  registered  under the Securities Act and have not otherwise
been reported by the Company.

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

On September 19, 2005 the Company held an annual meeting of its shareholders.

The first item on which the  shareholders  voted was the re-election of Thornton
Donaldson and William Timmins, both of whom were re-elected. The votes were cast
as follows:

------------------------------------------------------
Name                     Shares FOR    Shares WITHHELD
------------------------------------------------------
Thornton J. Donaldson    34,579,423            137,767
------------------------------------------------------
William G. Timmins       34,601,923            115,267
------------------------------------------------------

The second item on which the shareholders  voted was approval of an amendment to
the  Company's  Articles of  Incorporation  to increase the number of authorized
shares of Common Stock from  100,000,000 to 250,000,000  shares.  The votes were
cast as follows:

------------------------------------------------------------
Shares FOR              Shares AGAINST               ABSTAIN
------------------------------------------------------------
33,489,341                     697,724                     0
------------------------------------------------------------

Item 6. Exhibits

      (a) Exhibits

      3.1(a) Articles of  Incorporation,  as amended  (1),  (2)
         (b) Articles of Amendment dated September 22, 2005. Filed herewith.

      3.2    Bylaws.(2)

      10.1   Subscription  Agreement  between the Company and purchasers,  dated
             August 15, 2005. Filed herewith.


                                       30
<PAGE>

      10.2   Amendment  to  Subscription   Agreement  between  the  Company  and
             purchasers, dated August 31, 2005. Filed herewith.

      10.3   Form of 8% Secured Convertible Promissory Note. Filed herewith.

      10.4   Joint  Venture  Agreement  dated August 9, 2005 between the Company
             and Triple 7 Energy,  Inc.,  West Peak Ventures of Canada Ltd., Dr.
             Michael Ranger and Township.(3)

      31.1   Certification  of CEO  Pursuant  to Exchange  Act Rules  13a-14 and
             15d-14,  as adopted  pursuant to Section 302 of the  Sarbanes-Oxley
             Act of 2002, filed herewith.

      31.2   Certification  of CFO  Pursuant  to Exchange  Act Rules  13a-14 and
             15d-14,  as adopted  pursuant to Section 302 of the  Sarbanes-Oxley
             Act of 2002, filed herewith.

      32.1   Certification of CEO Pursuant to 18 U.S.C. Section 1350, as adopted
             pursuant to Section 906 of the  Sarbanes-Oxley  Act of 2002,  filed
             herewith.

      32.2   Certification of CFO Pursuant to 18 U.S.C. Section 1350, as adopted
             pursuant to Section 906 of the  Sarbanes-Oxley  Act of 2002,  filed
             herewith.

------------
(1)   Incorporated by reference from Form 8-K, filed November 29, 2004.

(2)   Incorporated by reference from Form 10-SB, filed October 14, 1999.

(3)   Incorporated  by reference  from Form 8-K, filed August 10, 2005, and Form
      8-K/A No. 1 and No. 2, both filed August 11, 2005.

SIGNATURES

      Pursuant  to the  requirements  of Section  13 or 15(d) of the  Securities
Exchange  Act of 1934,  the  Registrant  has duly  caused this Form 10-QSB to be
signed on its behalf by the undersigned, thereunto duly authorized.

                                    CANWEST PETROLEUM CORPORATION

Date:  December 13, 2005            By: /s/ Thornton J. Donaldson
                                       -----------------------------------------
                                       Thornton J. Donaldson, President,
                                       Chief Executive Officer, Chief Financial
                                       Officer and Director


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